Equity

12 Months Ended

Dec. 31, 2024

Equity

Equity

14. Equity

On May 26, 2023, the Company’s Board of Directors approved a reverse stock split of the Company’s common stock at a ratio of one-for-25 shares and a reduction in the total number of authorized shares of common stock of the Company from 350,000,000 shares to 28,000,000 shares, each effective on June 9, 2023. Accordingly, all common stock, equity award, warrant, and per share amounts have been adjusted to reflect the reverse stock split for all prior periods

presented. For additional information related to the reverse stock split, see Note 1, Basis of Preparation of Financial Statements and Nature of Operations.

On May 9, 2024, the Company’s shareholders approved an increase to the Company’s authorized shares from 28,000,000 shares to 100,000,000 shares. To effect the increase in authorized shares, the Company filed an amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware on May 13, 2024.

June 2023 Transactions

On June 26, 2023, the Company entered into a Securities Purchase Agreement with certain institutional investors providing for the issuance and sale by the Company in a registered direct offering (the “June 2023 Offering”) of an aggregate of 790,000 shares of the Company’s common stock at a purchase price of $1.45 per share and pre-funded warrants exercisable for up to 637,587 shares of the Company’s common stock (the “June 2023 Pre-Funded Warrants”) at a purchase price of $1.4499 per June 2023 Pre-Funded Warrant. In a concurrent private placement (the “June 2023 Private Placement” and, together with the June 2023 Offering, the “June 2023 Transactions”), the Company agreed to issue warrants to purchase up to 1,427,587 shares of the Company’s common stock at an exercise price of $1.90 (the “June 2023 Warrants”). The aggregate net proceeds from the June 2023 Transactions were approximately $1.9 million.  See – Common Stock Warrants for additional information about the June 2023 Pre-Funded Warrants and the June 2023 Warrants.

November 2023 Offering

On November 6, 2023, the Company entered into a Securities Purchase Agreement with certain institutional investors providing for the issuance and sale by the Company in a public offering (the “November 2023 Offering”) of (i) an aggregate of 4,712,488 shares of the Company’s common stock, par value $0.01 per share (the “Initial Shares”); (ii) Series A common warrants (the “November 2023 Series A Warrants”) to purchase 6,000,000 shares of common stock; (iii) Series B warrants (the “November 2023 Series B Warrants”) to purchase 3,000,000 shares of common stock; (iv) pre-funded warrants (the “November 2023 Pre-Funded Warrants”) to purchase 1,287,512 shares of the Company’s common stock for aggregate net proceeds of approximately $3.8 million. During the quarter ended March 31, 2024, the 488,572 November 2023 Pre-Funded Warrants were exercised for net proceeds of $48.86; 798,940 of these warrants were exercised in the fourth quarter 2023 for net proceeds of $70.89. See – Common Stock Warrants for additional information about the November 2023 Series A Warrants, the November 2023 Series B Warrants, and the November 2023 Pre-Funded Warrants.

At-the-Market Offering Agreement

During the year ended December 31, 2024, the Company did not sell any shares of common stock under the at-the-market program established pursuant to the Company’s At-the-Market Offering-Agreement with H.C. Wainwright, LLC (the “ATM Program”). The ATM Program has not been in effect since the related Registration Statement on Form S-3 expired on October 1, 2023. During the year ended December 31, 2023, the Company sold an aggregate of 308,930 shares of common stock under the ATM Program at an average price of $6.19 per share of common stock for net proceeds, after commissions and fees, of approximately $1,839,000.

There were no deferred ATM Program costs amortized during the year ended December 31, 2024. Approximately $45,000 of deferred ATM Program costs were amortized during the year ended December 31, 2023. At December 31, 2024 and December 31, 2023, there was no remaining balance of deferred ATM Program costs, recorded in Prepaid expenses and other assets on the interim Condensed Consolidated Balance Sheets.

Equity Incentive Plans

Under the Company’s Amended and Restated 2009 Equity Incentive Plan (the “2009 Plan”) awards of the Company’s common stock could be made to officers, directors, employees, consultants and agents of the Company and its subsidiaries. Following the adoption of the 2023 Plan, no further awards may be made under the 2009 Plan.

In May 2023, the Company’s stockholders approved the Company’s 2023 Equity Incentive Plan (the “2023 Plan”) to replace the 2009 Plan. Under the 2023 Plan, awards of the Company’s common stock may be made to officers, directors, employees, consultants and agents of the Company and its subsidiaries. The 2023 Plan was amended in 2024 to increase the number of shares of common stock of the Company issuable under the plan to 1.4 million shares. The 2023 Plan expires on February 23, 2033. Permitted awards under the 2023 Plan include options, stock appreciation rights, restricted stock, restricted stock units, performance stock units, and other cash and stock-based awards. The Company recognizes stock-based compensation costs using a graded vesting attribution method whereby costs are recognized over the requisite service period for each separately vesting portion of the award.

Restricted Stock Grants

The following table summarizes the status and activity of the Company’s restricted stock grants at December 31, 2024 and 2023, and the changes during the years then ended:

	Year Ended December 31,
	2024			2023
		Weighted			Weighted
		Average			Average
		Grant Date			Grant Date
	Number of	Fair Value		Number of	Fair Value
Restricted Stock Grants	Shares	Per Share		Shares	Per Share
Outstanding at beginning of period	5,800	$	8.89	19,800	$	10.95
Granted during the period	—		—	—		—
Restrictions lifted during the period	(4,600)		9.21	(12,933)		11.97
Forfeited during the period	(534)		9.75	(1,067)		9.75
Outstanding at end of period	666	$	6.00	5,800	$	8.89

During the years ended December 31, 2024 and 2023, the Company recognized approximately $20,000 and $83,000 respectively of stock compensation expense related to the restricted stock grants.

Restricted Stock Units

The 2009 Plan permitted the Company to issue restricted stock units (“RSUs”), which entitle each recipient to receive one unrestricted share of common stock upon termination of the recipient’s employment or board service. Also, pursuant to the 2009 Plan, the Company’s Board of Directors adopted the Non-Employee Director’s Deferred Compensation and Equity Award Plan (the “Deferred Compensation Plan”). Pursuant to the Deferred Compensation Plan, non-employee directors receive a portion of their compensation in the form of RSUs issued under the 2009 Plan. The 2009 Plan RSUs generally vest on the first anniversary of the grant.

The 2023 Plan permits the Company to issue RSUs, which entitle each recipient to receive one unrestricted share of common stock upon termination of the recipient’s employment or board service. Under the 2023 Plan, one-half of the shares vest equally on the first and second anniversaries of the grant date.

The following table summarizes the status and activity of the Company’s RSUs at December 31, 2024 and 2023, and the changes during the years then ended:

	Year Ended December 31,
	2024			2023
		Weighted			Weighted
		Average			Average
		Grant Date			Grant Date
	Number of	Fair Value		Number of	Fair Value
Restricted Stock Units	Shares	Per Share		Shares	Per Share
Outstanding at beginning of period	272,409	$	13.09	232,409	$	15.06
Granted during the period	1,200,000		0.41	40,000		1.62
Shares issued during the period	(373,493)		3.08	—		—
Forfeited during the period	(28,837)		19.47	—		—
Outstanding at end of period	1,070,079	$	2.36	272,409	$	13.09

For the twelve months ended December 31, 2024 and 2023, the Company recognized approximately $381,000 and $329,000, respectively, of stock compensation expense related to the RSUs.

Key Employee Long-Term Incentive Plan

The Company’s 2013 Key Employee Long-Term Incentive Plan (the “KELTIP”) provided for the grant of units (“KELTIP Units”) to certain officers and key employees of the Company, which units, once vested, entitle such officers and employees to receive an amount, in cash or in Company common stock (such method of settlement at the sole discretion of the Board of Directors) issued pursuant to the Company’s stockholder approved equity incentive plans, measured generally by the price of the Company’s common stock on the settlement date. KELTIP Units were not an actual equity interest in the Company and are solely unfunded and unsecured obligations of the Company that were not transferable and do not provide the holder with any stockholder rights. Payment of the settlement amount of vested KELTIP Units was deferred generally until the earlier of a change of control of the Company or the date the grantee ceases to serve as an officer or employee of the Company.

The Company intended to settle all the KELTIP Units in common stock of the Company, an option that the Board of Directors holds in its sole discretion so long as sufficient shares remain available under the Company’s stockholder approved equity incentive plans. As a result, all outstanding KELTIP Units are recorded in equity at December 31, 2024 and 2023.

For the twelve months ended December 31, 2024, the Company recognized approximately $3,000 of stock compensation expense related to the KELTIP grants. For the twelve months ended December 31, 2023, the Company recognized approximately $7,000 of stock compensation income due to KELTIP Units being forfeited upon departure of an officer of the Company.

There were zero and 168,000 KELTIP Units outstanding at December 31, 2024 and 2023, respectively. The Company discontinued the KELTIP in June 2023 when the 2023 Plan was adopted and will no longer issue KELTIP Units.

Common Stock Warrants

The following table summarizes the status and activity of the Company’s common stock warrants at December 31, 2024 and 2023, and the changes during the twelve months then ended:

	Year Ended December 31,
	2024			2023
		Weighted			Weighted
	Number of	Average		Number of	Average
	Underlying	Exercise Price		Underlying	Exercise Price
Common Stock Warrants	Shares	Per Share		Shares	Share
Outstanding at beginning of period	11,308,314	$	1.09	392,155	$	8.58
Granted during period
June 2023 Pre-Funded Warrants	—		—	637,587		0.0001
June 2023 Warrants	—		—	1,427,587		1.90
November 2023 Series A Warrants	—		—	6,000,000		0.70
November 2023 Series B Warrants	—		—	3,000,000		0.70
November 2023 Pre-Funded Warrants	—		—	1,287,512		0.0001
Exercised during period
June 2023 Pre-Funded Warrants	—		—	(637,587)		0.0001
November 2023 Pre-Funded Warrants	(488,572)		0.0001	(798,940)		0.0001
Expired during the period	—		—	—
Outstanding at end of period	10,819,742	$	1.14	11,308,314	$	1.09

The warrants relate to prior registered offerings and private placements of the Company’s stock.

July 2019 Series A Warrants

On July 17, 2019, the Company issued 346,155 registered shares of common stock in a registered direct offering. In connection with the offering, each investor received an unregistered series A warrant to purchase a share of common stock for each share of common stock purchased at an exercise price of $8.75 per share. Each series A warrant is exercisable six months from the date of issuance and has a term expiring in January 2025. During the year ended December 31, 2021, 8,000 series A warrants were exercised, for net proceeds of $0.1 million, leaving a balance of 338,155 series A warrants outstanding as of December 31, 2024 and 2023.

April 2020 Warrants

On April 20, 2020, the Company entered into a securities purchase agreement with certain institutional investors providing for the issuance and sale of 600,000 shares of the Company’s common stock and in a concurrent private placement transaction, the issuance of an aggregate of 450,000 warrants, ultimately consisting of 300,000 series A warrants and 150,000 series B warrants. During the year ended December 31, 2020, 200,000 series A warrants and 140,000 Series B warrants were exercised, for net proceeds of $2.6 million, leaving a balance of 100,000 and 10,000 series A and series B warrants outstanding, respectively, as of December 31, 2020. During the year ended December 31, 2021, 56,000 series A warrants were exercised, for net proceeds of $0.4 million, leaving a balance of 44,000 and 10,000 series A and series B warrants outstanding, respectively, as of December 31, 2021. There were no April 2020 Warrants exercised during the years ended December 31, 2024 or 2023.

Warrants outstanding as of December 31, 2024 are as follows:

	Number of	Exercise
Common Stock Warrants	Warrants	Price		Expiration Date
July 2019 Series A Warrants	338,155	$	8.75	January 17, 2025
April 2020 Series A Warrants	44,000	$	0.70	October 22, 2025
April 2020 Series B Warrants	10,000	$	6.50	October 22, 2025
June 2023 Warrants	1,427,587	$	1.90	December 26, 2028
November 2023 Series A Warrants	6,000,000	$	0.70	November 6, 2028
November 2023 Series B Warrants	3,000,000	$	0.70	May 6, 2025
	10,819,742

All outstanding warrants are recorded in equity at December 31, 2024 and 2023 following the guidance established by ASC 815-40 “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”. The Company’s warrants allow for the potential settlement in cash if certain extraordinary events are affected by the Company, including a 50% or greater change of control in the Company’s common stock. Since those events have been deemed to be within the Company’s control, the Company continues to apply equity treatment for these warrants.