UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023.

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to ________

Commission File Number: 001-32188

ORAGENICS, INC.

(Exact name of registrant as specified in its charter)

florida

59-3410522

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

4902 Eisenhower Blvd., Suite 125

Tampa, Florida 33634

(Address of principal executive offices)

813-286-7900

(Issuer’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		OGEN		NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “accelerated filer”, “large accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:

As of August 10, 2023, there were 2,539,385 shares of Common Stock, $0.001 par value, outstanding.

Note Regarding Reverse Stock Splits

We filed an amendment to our Amended and Restated Articles of Incorporation with the Secretary of the State of Florida to effect a reverse split of our authorized and outstanding common stock at a ratio of one for sixty (60) effective January 20, 2023. All historical share and per share amounts reflected in this report have been adjusted to reflect the reverse stock split.

Note Regarding Prior Period Restatements

On April 4, 2023, the Company’s management and Audit Committee of the Company’s Board of Directors concluded that the unaudited consolidated financial statements for the three and six-month periods ended June 30, 2022 should be restated and should no longer be relied upon. Management reviewed the terms and conditions of the Company’s contracts and the payments and concluded that during the three and six-month period ending June 30, 2022 amounts were paid as part of a prepayment arrangement. Management reviewed Accounting Standards Codification Topic 730 Research and Development guidance related to recording initial upfront payments to vendors and determined that the unaudited consolidated financial statements originally reported for the three and six-month periods ended June 30, 2022 classified as research and development expense on the unaudited consolidated statement of operations should have been classified as prepaid expense on the Company’s unaudited consolidated balance sheet.

On April 14, 2023 the Company filed an amendment to the Quarterly Report (“Amendment 1”) on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) on May 13, 2022 (the “Original Form 10-Q”). Amendment 1 was filed for the sole purpose of restating certain financial statements included in the Original Form 10-Q. When referencing prior period comparisons for the three and six-month periods ended June 30, 2022 in this Form 10-Q for the three and six-month periods ended June 30, 2023 the financial information reflects the restated financials as reported in Amendment 1.

PART I – FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3

	Consolidated Balance Sheets as of June 30, 2023 (unaudited) and December 31, 2022	3

	Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022 (unaudited)	4

	Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2023 and 2022 (unaudited)	5

	Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022 (unaudited)	6

	Notes to Consolidated Financial Statements (unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	32

Item 4.	Controls and Procedures	32

PART II – OTHER INFORMATION		34

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities	35

Item 3.	Defaults Upon Senior Securities	35

Item 4.	Mine Safety Disclosures	35

Item 5.	Other Information	35

Item 6.	Exhibits	35

Signatures		38

PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

Oragenics, Inc.

Consolidated Balance Sheets

	June 30, 2023			December 31, 2022
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	6,473,822		$	11,426,785
Other receivables		13,163			-
Prepaid expenses and other current assets		1,611,849			2,844,798
Total current assets		8,098,834			14,271,583
Property and equipment, net		98,456			121,062
Operating lease right-of-use assets		249,256			347,440
Deposits		17,940			17,940
Total assets	$	8,464,486		$	14,758,025
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	951,019		$	1,124,197
Short-term notes payable		-			267,640
Operating lease liabilities - Current		190,242			204,447
Total current liabilities		1,141,261			1,596,284

Long-term liabilities:
Operating lease liabilities - Long Term		65,752			152,439
Total long-term liabilities		65,752			152,439

Shareholders’ equity:
Preferred stock, no par value; 50,000,000 shares authorized; 5,417,000 and 5,417,000 Series A shares, 4,050,000 and 4,050,000 Series B shares, -0- and -0- Series C shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		1,592,723			1,592,723
Common stock, $0.001 par value; 4,166,666 shares authorized 2,024,657 and 2,024,657 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		2,025			2,025
Additional paid-in capital		197,120,665			196,977,071
Accumulated deficit		(191,457,940	)		(185,562,517	)
Total shareholders’ equity		7,257,473			13,009,302
Total liabilities and shareholders’ equity	$	8,464,486		$	14,758,025

See accompanying notes.

Oragenics, Inc.

Consolidated Statements of Operations

(Unaudited)

	2023			2022			2023			2022
	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2023			2022			2023			2022
Grant revenue	$	13,163		$	30,391		$	30,187		$	45,474

Operating expenses:
Research and development		2,006,696			2,590,032			3,679,272			5,883,693
General and administrative		1,115,785			1,044,334			2,365,048			2,375,883
Local business tax		-			490			-			980
Total operating expenses		3,122,481			3,634,856			6,044,320			8,260,556
Loss from operations		(3,109,318	)		(3,604,465	)		(6,014,133	)		(8,215,082	)
Other income (expense):
Interest income		58,954			15,369			121,155			27,275
Interest expense		(843	)		(816	)		(4,190	)		(4,062	)
Miscellaneous income		621			369			1,745			11,333
Total other income, net		58,732			14,922			118,710			34,546
Loss before income taxes		(3,050,586	)		(3,589,543	)		(5,895,423	)		(8,180,536	)
Income tax benefit		—			—			—			—
Net loss	$	(3,050,586	)	$	(3,589,543	)	$	(5,895,423	)	$	(8,180,536	)
Basic and diluted net loss per share	$	(1.51	)	$	(1.85	)	$	(2.91	)	$	(4.22	)
Shares used to compute basic and diluted net loss per share		2,024,766			1,939,913			2,024,766			1,939,913

See accompanying notes.

Oragenics, Inc.

Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

	Shares		Amount		Shares		Amount		Capital		Deficit			Equity
									Additional					Total
	Common Stock				Preferred Stock				Paid In		Accumulated			Shareholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity
Balances at December 31, 2022		2,024,657	$	2,025		9,467,000	$	1,592,723	$	196,977,071	$	(185,562,517	)	$	13,009,302
Compensation expense relating to option issuances		—		—		—		—		79,966		—			79,966
Net loss		—		—		—		—		—		(2,844,837	)		(2,844,837	)
Balances at March 31, 2023		2,024,657		2,025		9,467,000		1,592,723		197,057,037		(188,407,354	)		10,244,431
Compensation expense relating to option issuances		—		—		—		—		63,628		—			63,628
Net loss		—		—		—		—		—		(3,050,586	)		(3,050,586	)
Balances at June 30, 2023		2,024,657	$	2,025		9,467,000	$	1,592,723	$	197,120,665	$	(191,457,940	)	$	7,257,473

									Additional					Total
	Common Stock				Preferred Stock				Paid In		Accumulated			Shareholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity
Balances at December 31, 2021		2,002,946	$	2,003		16,017,000	$	2,656,713	$	195,101,611	$	(171,274,128	)	$	26,486,199
Compensation expense relating to option issuances		—		—		—		—		90,247		—			90,247
Net loss		—		—		—		—		—		(4,590,993	)		(4,590,993	)
Balances at March 31, 2022		2,002,946	$	2,003		16,017,000	$	2,656,713	$	195,191,858	$	(175,865,121	)	$	21,985,453
Balance		2,002,946	$	2,003		16,017,000	$	2,656,713	$	195,191,858	$	(175,865,121	)	$	21,985,453
Compensation expense relating to option issuances		—		—		—		—		278,988		—			278,988
Net loss		—		—		—		—		—		(3,589,543	)		(3,589,543	)
Balances at June 30, 2022		2,002,946	$	2,003		16,017,000	$	2,656,713	$	195,470,846	$	(179,454,664	)	$	18,674,898
Balance		2,002,946	$	2,003		16,017,000	$	2,656,713	$	195,470,846	$	(179,454,664	)	$	18,674,898

See accompanying notes.

Oragenics, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	2023			2022
	For the Six Months Ended June 30,
	2023			2022

Cash flows from operating activities:
Net loss	$	(5,895,423	)	$	(8,180,536	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		22,606			18,847
Gain on sale of property and equipment		-			(10,964	)
Stock-based compensation expense		143,594			369,235
Changes in operating assets and liabilities:
Other receivables		(13,163	)		6,987
Operating Lease Right of Use Assets		98,184			-
Prepaid expenses and other current assets		1,232,949			(1,555,350	)
Deposits		-			-
Accounts payable and accrued expenses		(274,070	)		332,024
Net cash used in operating activities		(4,685,323	)		(9,019,757	)
Cash flows from investing activities:
Proceeds from sale of property and equipment		-			12,000
Purchase of property and equipment		-			(87,047	)
Net cash used in investing activities		-			(75,047	)
Cash flows from financing activities:
Payments on short-term notes payable		(267,640	)		(303,416	)
Net cash used in financing activities		(267,640	)		(303,416	)
Net decrease in cash and cash equivalents		(4,952,963	)		(9,398,220	)
Cash and cash equivalents at beginning of period		11,426,785			27,265,703
Cash and cash equivalents at end of period	$	6,473,822		$	17,867,483
Supplemental disclosure of cash flow information:
Interest paid	$	3,347		$	4,062

See accompanying notes.

Oragenics, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1. Organization

Oragenics, Inc. (the “Company” or “we”, or “our”) is focused on the development of the NT-CoV2-1 intranasal vaccine candidate to combat the novel Severe Acute Respiratory Syndrome coronavirus (“SARS-CoV-2”) and further development of effective treatments for novel antibiotics against infectious disease.

2. Basis of Presentation

The accompanying unaudited interim consolidated financial statements as of June 30, 2023, the December 31, 2022, and the three and six-months ended June 30, 2023 and 2022, have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim consolidated financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete consolidated financial statements. In the opinion of management, the accompanying consolidated financial statements include all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the financial condition, results of operations and cash flows for the periods presented. The results of operations for the interim period ended June 30, 2023, are not necessarily indicative of the results of operations that may be expected for the year ended December 31, 2023, or any future period.

Prior Period Restatements

On April 4, 2023 the Company’s management and Audit Committee of the Company’s Board of Directors concluded that the unaudited consolidated financial statements for the three and six-month periods ended June 30, 2022 should be restated and should no longer be relied upon. Management reviewed the terms and conditions of the Company’s contracts and the payments and concluded that during the three and six-month periods ending June 30, 2022 amounts were paid as part of a prepayment arrangement. Management reviewed Accounting Standards Codification Topic 730 Research and Development guidance related to recording initial upfront payments to vendors; and determined that the unaudited consolidated financial statements originally reported for the three and six-month periods ended June 30, 2022 classified as research and development expense on the unaudited consolidated statement of operations that should be classified as prepaid expense on the Company’s unaudited consolidated balance sheet.

On April 14, 2023 the Company filed Amendment 1 on Form 10-Q/A with the SEC. Amendment 1 was filed for the sole purpose of restating certain financial statements included in the Original Form 10-Q. When referencing prior period comparisons for the three and six-month periods ended June 30, 2022 in this Form 10-Q the financial information reflects the restated financials as reported in Amendment 1.

Going Concern Consideration

These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2022, which are included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 17, 2023. The Company has incurred recurring losses and negative cash flows from operations since inception. To date, the Company has not generated significant revenues from operations. The Company incurred a net loss of $5,895,423 and used cash of $4,685,323 in its operating activities during the six months ended June 30, 2023. As of June 30, 2023, the Company had an accumulated deficit of $191,457,940.

The Company expects to incur substantial expenditures to further develop its technologies. The Company believes the working capital at June 30, 2023 will be sufficient to meet the business objectives as presently structured only through the fourth quarter of 2023. As such, there is substantial doubt that we can continue as a going concern beyond that date. As a result, the Company has implemented certain cost-saving initiatives, including reducing our efforts and staff focused on our lantibiotics program, which are expected to negatively impact the development of our lantibiotics program. See, “Risk Factors.”

The Company’s ability to continue operations after its current cash resources are exhausted depends on its ability to obtain additional financing or achieve profitable operations, as to which no assurances can be given. Cash requirements may vary materially from those now planned because of changes in the Company’s focus and direction of its research and development programs, competitive and technical advances, or other developments. Additional financing will be required to continue operations after the Company exhausts its current cash resources and to continue its long-term plans for clinical trials and new product development. There can be no assurance that any such financing can be realized by the Company, or if realized, what the terms thereof may be, or that any amount that the Company is able to raise will be adequate to support the Company’s working capital requirements until it achieves profitable operations.

The Company intends to seek additional funding through sublicensing arrangements, joint venturing or partnering, sales of rights to technology, government grants and public or private financings. The Company’s future success depends on its ability to raise capital and ultimately generate revenue and attain profitability. The Company cannot be certain that additional capital, whether through selling additional debt or equity securities or obtaining a line of credit or other loan, will be available to it or, if available, will be on terms acceptable to the Company. If the Company issues additional securities to raise funds, these securities may have rights, preferences, or privileges senior to those of its common stock, and the Company’s current shareholders may experience dilution. If the Company is unable to obtain funds when needed or on acceptable terms, the Company may be required to curtail its current development programs, cut operating costs and forego future development and other opportunities.

3. Significant Accounting Policies

Basis of Consolidation

The consolidated financial statements include the accounts of Oragenics, Inc. and our wholly-owned subsidiary Noachis Terra, Inc.(“NTI”). All intercompany balances and transactions have been eliminated.

New Accounting Standards

There are no additional accounting pronouncements issued or effective during the three months ended June 30, 2023, that have had, or are expected to have, a material impact on our consolidated financial statements.

Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. The principal area of estimation reflected in the consolidated financial statements are estimates for research and development expenses and related prepaid and accrued expenses, which are based on the percentage of completion of the Company’s contracts with Contract Research Organizations.

Reclassification

Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. Adjustments to the Consolidated Balance Sheet and Consolidated Statement of Cash Flows for the six-month period ended June 30, 2022 were as follows:

	●	Deposits of $17,940 were reclassified from Prepaid Expenses and other current assets to Other Assets.
	●	Changes in Operating Lease Right of Use Assets of $45,921 was reclassified from Accounts Payable and Accrued Expenses into its own account.
	●	Changes in Operating Lease Liabilities of ($47,327) was reclassified from Accounts Payable and Accrued Expenses into its own account.

Stock-Based Payment Arrangements

Generally, all forms of stock-based payments, including stock option grants, and warrants are measured at their fair value on the awards’ grant date using a Black-Scholes Option Pricing Model. Stock-based compensation awards issued to all employees and non-employees for services rendered are recorded at the fair value of the stock-based payment. The expense resulting from stock-based payments are recorded in research and development expense or general and administrative expense in the consolidated statement of operations, depending on the nature of the services provided. Stock-based payment expense is recorded over the requisite service period in which the grantee provides services to us. To the extent the stock option grants, or warrants do not vest at the grant date they are subject to forfeiture.

Stock-Based Compensation

US GAAP requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the consolidated financial statements based on their fair values as of the grant date. Stock-based compensation expense is recorded over the requisite service period in which the grantee provides services to us, to the extent the options do not vest at the grant date and are subject to forfeiture. For performance-based awards that do not include market-based conditions, we record share-based compensation expense only when the performance-based milestone is deemed probable of achievement. We utilize both quantitative and qualitative criteria to judge whether milestones are probable of achievement. For awards with market-based performance conditions, we recognize the grant-date fair value of the award over the derived service period regardless of whether the underlying performance condition is met. In connection with adopting ASU 2016-09, the Company made an accounting policy election to account for forfeitures in compensation expense as they occur.

Warrants

The Company used the Black-Scholes Option Pricing Model in calculating the fair value of any warrants that have been issued.

Net Loss Per Share

During all periods presented, the Company had securities outstanding that could potentially dilute basic earnings per share in the future but were excluded from the computation of diluted net loss per share, as their effect would have been antidilutive because the Company reported a net loss for all periods presented. All references to common stock for the comparative three and six-month periods ended June 30, 2022, have been adjusted to reflect the effect of the reverse split. Net loss per share is computed using the weighted average number of shares of common stock outstanding.

Concentrations

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains cash accounts in commercial banks, which may, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes there is a minimal credit risk on cash and cash equivalents. Cash and cash equivalents could be adversely impacted, including the loss of uninsured deposits and other uninsured financial assets, if one or more of the financial institutions in which the Company holds its cash or cash equivalents fails or is subject to other adverse conditions in the financial or credit markets.

Grant Revenue

Grant revenues are derived from a small business innovation research grant in the amount of $250,000 (“Computer-aided Design for Improved Lantibiotics” R41GM136034. The Company recognizes grant revenue as reimbursable grant costs are incurred up to the pre-approved award limits within the budget period. The costs associated with these reimbursements are reflected as a component of research and development expenses in the accompanying consolidated statement of operations. The remainder of the grant will be recognized in July of 2023.

4. Property and Equipment, net

Property and equipment, net consists of the following as of June 30, 2023 and December 31, 2022:

Summary of Property and Equipment, Net

	June 30, 2023			December 31, 2022
Furniture and fixtures	$	20,742		$	20,742
Laboratory equipment		676,744			676,744
Leasehold improvements		487,871			487,871
Office and computer equipment		298,944			298,944
Property and equipment, gross		1,484,301			1,484,301
Accumulated depreciation and amortization		(1,385,845	)		(1,363,239	)
Property and equipment, net	$	98,456		$	121,062

Depreciation and amortization expense for the three months ended June 30, 2023 and 2022 was $11,303 and $10,379 respectively. Depreciation and amortization expense for the six months ended June 30, 2023 and 2022 was $22,606 and $18,847 respectively.

5. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following as of June 30, 2023, and December 31, 2022:

	June 30, 2023		December 31, 2022
Accounts payable trade	$	590,576	$	246,690
Accrued Expense		334,441		812,861
Professional fees		-		31,101
Vacation		26,002		33,545
Total accounts payable and accrued expenses	$	951,019	$	1,124,197

6. Short-Term Notes Payable

The Company had the following short-term notes payable as of June 30, 2023 and December 31, 2022:

Summary of Short-Term Notes Payable

	June 30, 2023		December 31, 2022
Directors’ and officers’ liability insurance financing of $528,429 and $600,169 due in monthly installments of $54,366 and $61,496 including principal and interest at 6.24% and 5.34% through May 24, 2024 and May 24, 2023, respectively	$	-	$	267,640
		-		267,640

The Company’s policy renewals will be completed in subsequent periods and the Company will evaluate if premium financing is necessary at that time. The Company also maintains a product liability insurance policy which has been renewed in subsequent periods without premium financing.

7. Prepaid Expense and Other Current Assets

Schedule of Prepaid Expense and Other Current Assets at June 30, 2023 and December 31, 2022:

	June 30, 2023		December 31, 2022
Prepaid research and expense	$	1,455,456	$	2,471,809
Prepaid insurance		56,393		372,989
Prepaid financing costs		75,000		-
Other prepaid costs		25,000		-
Total accounts payable and accrued expenses	$	1,611,849	$	2,844,798

As of June 30, 2023 and December 31, 2022, the Company had approximately $1.6 million and $2.8 million in prepaid expenses, respectively. The balance at June 30, 2023 reflects approximately $1.5 million of prepaid expense to third-party vendors for research and development to be completed.

8. Shareholders’ Equity

Common Stock

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 and six-month periods ended June 30, 2022, have been adjusted to reflect the effect of the reverse split. The stock split was also reflected in the December 31, 2022 stock amounts. As a result of the reverse stock split, the Company’s common stock began trading on a split-adjusted basis on January 23, 2023.

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

For the three and six-month periods ended June 30, 2022 and 2023 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 net proceeds of the offering were for use in connection with the Company’s 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 six months ended June 30, 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 and six-month periods ended June 30, 2022 and 2023 the Company issued no additional shares of common stock.

During the three-month period ended September 30, 2022 and prior to the reverse stock split, 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 common 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 ranks (i) on par with the Common Stock and Series A Preferred Stock as to dividend rights and (ii) 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, 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.

9. Warrants

The Company’s outstanding and exercisable warrants as of June 30, 2023 are presented below:

Exercise Price				Total Warrants Outstanding				Exercisable Warrants Outstanding				Expiration Date
$	54.00				32,033				32,033

SEC Form 10-Q filed by Oragenics Inc.