8. Shareholders’ Equity

Common Stock

Approval of a Reverse Stock Split

On December 22, 2022, the Board of Directors approved an amendment to our Amended and Restated Articles of Incorporation to effect a reverse stock split of our common stock by a ratio of one for sixty. The Company’s common stock began trading on a split-adjusted basis on January 23, 2023. All references to common stock for the comparative three-month period ended March 31, 2022, have been adjusted to reflect the effect of the reverse split.

Shares issued under At-The-Market (“ATM”) program

For the three-month periods ended March 31, 2022 and 2023 the Company did not issue any shares of common stock under its ATM program.

During the six- and nine- month periods ending June 30, 2022 and September 30, 2022 the Company did not issue any shares of common stock under its ATM program. During the three-month period ended December 31, 2022, the Company issued 6,544 shares of common stock under its ATM Program which generated gross proceeds of approximately $72,000, The Company intends to use the net proceeds of the offering primarily to continue funding its pre-clinical development of its SARS-CoV-2 vaccine candidates, Terra CoV-2 and NT-CoV2-1, and its lantibiotics program and for general corporate purposes, including research and development activities, capital expenditures and working capital.

On December 19, 2022, the Company sent written notice of termination to A.G.P./Alliance Global Partners (“AGP”), pursuant to the terms of the Company’s Sales Agreement with AGP in connection with the Company’s ATM Program. The termination took effect on December 29, 2022. As a result of the termination, the Company will not, and during the three months ended March 31, 2023 did not, consummate any further sale of its common stock through the AGP Sales Agreement.

On February 24, 2023 the Company entered into an ATM with Ladenburg Thalmann & Co. Inc (“Ladenburg”) to sell shares of its common stock. The Company intends to use the proceeds from the ATM to continue funding its pre-clinical development of its SARS-CoV-2 vaccine candidates, Terra CoV-2 and NT-CoV2-1 and its lantibiotics program and for the general corporate purposes, including capital expenditures, working capital, and research and development activities.

Other Share Issuances

During the three-month periods ended March 31, 2022 and 2023 the Company issued no additional shares of common stock.

During the three-month period ended September 30, 2022 the holders of 4,000,000 shares of the Company’s Series A Convertible Preferred Stock, and 2,550,000 shares of the Company’s Series B Convertible Preferred Stock converted the Series A Convertible Preferred Stock into an aggregate of approximately 15,000 shares of commons stock.

During the twelve-months ended December 31, 2022, the Company issued 13,019 shares of common stock in connection with the exercise of stock options which generated gross proceeds of $363,139.

Preferred Stock

Issuance of Series A Convertible Preferred Stock Financing

 In May of 2017 we entered into a securities purchase agreement to sell up to $3 million of Series A Convertible Preferred Stock. The full $3 million of Preferred Stock, after giving effect to the reverse stock splits and previous conversions, is convertible into 9,029 shares of our common stock based on a fixed conversion price of $150.00 per share on an as-converted basis. In addition, and after giving effect to the reverse stock split, we issued warrants to purchase an aggregate of approximately 17,742 shares of common stock. The warrants have a term of seven years from the date of issuance and have an exercise price of $186.00 per share. Proceeds from the Series A Preferred Stock and any cash proceeds from the exercise of any warrants will be used for general corporate purposes, including working capital.

The Series A Preferred Stock also includes certain demand registration rights, piggyback registration rights and liquidation preference rights. On May 10, 2017, we filed a Certificate of Designations of Preferences, Rights and Limitations of Series A Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Florida. Except as otherwise required by law, as long as any shares of Series A Preferred Stock are outstanding, we shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series A Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series A Preferred Stock or alter or amend the Certificate of Designation, (b) amend its articles of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series A Preferred Stock, (c) increase the number of authorized shares of Series A Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing. Upon any liquidation, dissolution or winding-up by us, whether voluntary or involuntary that is not a Fundamental Transaction (as defined in the Certificate of Designation), the holders of Series A Preferred Stock shall be entitled to receive out of the assets, the greater of (i) the product of the number of shares of Series A Preferred Stock then held by such holder, multiplied by the Original Issue Price; and (ii) the amount that would be payable to such holder in the Liquidation in respect of Common Stock issuable upon conversion of such shares of Series A Preferred Stock if all outstanding shares of Series A Preferred Stock were converted into Common Stock immediately prior to the Liquidation. The Series A Preferred Stock is classified as permanent equity.

The Series B Non-Voting, Convertible Preferred Stock Financing

On November 8, 2017, we completed a private placement of $3.3 million of Series B Non-Voting, Convertible Preferred Stock (the “Series B Convertible Preferred Stock”).

The full $3.3 million of Series B Convertible Preferred Stock, and after giving effect to the reverse stock splits and the previous conversions, is convertible into 13,500 shares of our common stock, based on a conversion of one share of Series B Preferred Stock into two shares of Common Stock. The purchase price per share of the Series B Preferred Stock is represented by $150.00 per share of the Common Stock on an as converted basis. In addition, and after giving effect to the reverse stock split, we issued to the investors in the private placement accompanying common stock purchase warrants to purchase an aggregate of approximately 17,742 shares of Common Stock. The warrants have a term of seven years from the date of issuance, and after giving effect to the reverse stock split, have an exercise price of $186.00 per share.

In connection with the Series B Preferred Financing, we filed a Certificate of Designation and Rights of Series B Convertible Preferred Stock with the Secretary of State of the State of Florida, to be effective November 8, 2017.

Except as otherwise required by law, the Series B Preferred Stock shall have no voting rights. However, as long as any shares of Series B Preferred Stock are outstanding, we shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series B Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series B Preferred Stock or alter or amend the Certificate of Designation, (b) amend its articles of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series B Preferred Stock, (c) increase the number of authorized shares of Series B Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing.

The Series B Preferred Stock shall rank (i) on par with the Common Stock and Series A Preferred Stock and junior to Series C Preferred Stock as to dividend rights and (ii) junior to Series C Preferred Stock, on par with Series A Preferred Stock and senior to the Common Stock as to distribution of assets upon liquidation, dissolution or winding-up by us, whether voluntary or involuntary.

Upon any liquidation, dissolution or winding-up by us, whether voluntary or involuntary, the holders of Series B Preferred Stock shall be entitled to receive out of the assets, after payment to the holders of Series C Preferred Stock but on par with the holders of Series A Preferred Stock and in preference to the holders of the Common Stock, an amount of cash equal to the greater of (i) the product of the number of shares of Series B Preferred Stock then held by such holder, multiplied by the Original Issue Price; and (ii) the amount that would be payable to such holder in the Liquidation in respect of Common Stock issuable upon conversion of such shares of Series B Preferred Stock if all outstanding shares of Series B Preferred Stock were converted into Common Stock immediately prior to the Liquidation. The Series B Preferred Stock is classified as permanent equity.