Note 12. Stockholders’ Equity

Reverse Stock Split

On February 23, 2024, the Board approved a one-for-six (1:6) reverse split of the Company’s issued and outstanding common stock, par value $0.001 per share, pursuant to which every six outstanding shares of common stock was converted into one share of common stock (the “Reverse Stock Split”). The Reverse Stock Split was effected by the filing of an amendment to our Certificate of Incorporation on March 7, 2024 which provided that the Reverse Stock Split become effective at 12:01 a.m. eastern time on March 12, 2024. The amendment provides that no fractional shares shall be issued and, in lieu thereof, any person who would otherwise be entitled to a fractional share of common stock as a result of the Reverse Stock Split will be entitled to receive one share of common stock. The Company’s common stock began trading on The Nasdaq Capital Market on a split-adjusted basis on March 12, 2024. The Company has retroactively adjusted all share amounts and per share data herein to give effect to the Reverse Stock Split.

At the Market Program

On June 26, 2023, we entered into an equity distribution agreement with Maxim Group LLC pursuant to which we may from time to time offer and sell shares of our common stock under our shelf registration statement having an aggregate offering price of up to $4.7 million (the “2023 ATM Program”) in “at-the-market” offerings as defined in Rule 415 under the Securities Act. The ATM was not utilized and expired on June 26, 2024.

Stock Issuance – 2025

December 2025 Offering

On December 19, 2025, the Company and institutional investors (the “December Purchasers”) entered into a securities purchase agreement (the “Securities Purchase Agreement”), pursuant to which the Company issued to the December Purchasers, in a registered direct offering (the “December RDO”), 1,822,535 shares (the “Shares”) of the Company’s common stock, pre-funded warrants to purchase 7,332,395 shares of common stock with an exercise price of $0.001 per share in lieu of Shares, and common warrants to purchase 9,154,930 shares of common stock with an exercise price of $0.71. The December RDO closed on December 22, 2025. The Company received aggregate gross proceeds from the December RDO of approximately $6.0 million, before deducting fees to the placement agent and other offering expenses payable by the Company.

Pursuant to the Securities Purchase Agreement, the Company agreed, contemporaneously with the closing of the December RDO, to reduce the exercise price of 3,472,740 outstanding common stock warrants issued on December 29, 2024 (the “Repriced Warrants”), held by an investor that participated in the December RDO, subject to stockholder approval. The Repriced Warrants had their exercise price reduced to $0.87 per share from $2.95 per share. In addition to the reduction in the exercise price of the Repriced Warrants, the Company agreed to extend the termination date of the Repriced Warrants to the five-year anniversary of the applicable stockholder approval date.

The price reset of the warrants was accounted for as an equity contract modification. The difference in fair value immediately before and after the price reset was determined to be $0.5 million and was recorded as a debit to issuance costs and a credit to APIC, with no net impact to equity.

Additionally, the outstanding August 2025 and 2021 public warrants to purchase an aggregate of 16,670,623 shares of Company common stock at an exercise price of $0.97 per share was reduced to $0.48 per share as a result of the offering. The price reset was accounted for as a deemed dividend. Loss attributable to common shareholders was increased by the calculated value transferred to the holder of $1.1 million in the basic and diluted EPS calculations for the year ended December 31, 2025.

October 2025 Stock Repurchase

On October 29, 2025, the Company entered into Securities Repurchase Agreements (the “Repurchase Agreements”) with seven institutional investors that participated in the Company’s private placement financing that closed on August 18, 2025 (the “Sellers”). Under the Repurchase Agreements, the Company agreed to repurchase from the Sellers an aggregate of 3,308,575 shares of Company common stock, together with warrants to purchase 3,308,575 shares of common stock that were issued in the August 2025 private placement and that were subsequently adjusted to represent the right to purchase an aggregate of 7,248,787 shares (the “Repurchase”). At the closing of the Repurchase, the Company paid $2.41 per unit of common stock and associated common stock purchase warrant (a “Unit”), with each Unit consisting of one share of common stock and a common stock purchase warrant to purchase approximately 2.19 shares of common stock (after giving effect to the above-described warrant adjustment), for an aggregate repurchase price of approximately $8 million. The closing of the Repurchase was completed on October 30, 2025.

As a result of the Company’s securities repurchase, the exercise price of the remaining August 2025 warrants was reduced to $0.97 per share, and the aggregate number of shares issuable upon exercise of such warrants was increased to 15,516,850 shares in the aggregate. The price reset of the August 2025 warrants was accounted for as an equity contract modification. The difference in fair value immediately before and after the price reset was determined to be $0.4 million and was recorded as a debit to issuance costs and a credit to APIC, with no net impact to equity.

Also on November 7, 2025 and as a result of the foregoing adjustment to the exercise price of the August 2025 Warrants, the exercise price of 1,153,774 warrants was reduced from $1.10 per share to $0.97 per share, which was treated as a deemed dividend. Loss attributable to common shareholders was increased by the calculated value transferred to the holder of $48 thousand in the basic and diluted EPS calculations for the year ended December 31, 2025.

August 2025 Offerings

On August 18, 2025, the Company issued to institutional investors an aggregate of 4,322,265 shares of the Company’s common stock and 4,322,265 warrants to purchase shares of common stock at an exercise price of $2.41 per share in an offering (the “PIPE Offering”). The combined purchase price for each share of common stock and common stock purchase warrant in the PIPE Offering was $2.41. The PIPE Offering closed on August 18, 2025, and the Company received aggregate gross proceeds from the PIPE Offering of approximately $10.4 million, before deducting fees to the placement agent and other offering expenses payable by the Company.

In addition, following the closing of the PIPE Offering, the Company issued to institutional investors an aggregate of 5,231,681 shares of the Company’s common stock and, in a concurrent private placement, 5,231,681 warrants to purchase shares of Common Stock at an exercise price of $2.41 per share (the “RD Offering”). The combined purchase price for each share of common stock and common stock purchase warrant in the RD Offering was $2.41. The Company aggregate gross proceeds from the RD Offering of approximately $12.6 million, before deducting fees to the placement agent and other offering expenses payable by the Company.

As a result of the August 2025 transactions the exercise price of 1,153,775 warrants was reduced from $2.88 per share to $1.10 per share, which was treated as a deemed dividend. Loss attributable to common shareholders was increased by the calculated value transferred to the holder of $0.4 million in the basic and diluted EPS calculations for the year ended December 31, 2025.

Stock Issuance - 2024

August 2024 offering

On August 16, 2024, the Company and an institutional investor (the “Investor”) entered into a securities purchase agreement, pursuant to which the Company agreed to issue to the Investor, (i) in a registered direct offering, 278,000 shares of the Company’s common stock and pre-funded warrants to purchase 590,185 shares of common stock (the “Pre-Funded Warrants”) with an exercise price of $0.0001 per share, and (ii) in a concurrent private placement, Series A warrants to purchase 868,185 shares of common stock (the “Series A Common Warrants”) and Series B warrants to purchase 868,185 shares of common stock (the “Series B Common Warrants” and together with the Series A Common Warrants, the (“2024 Warrants”), each with an exercise price of $2.98. Such registered direct offering and concurrent private placement are referred to herein as the “2024 Transactions”. The combined effective offering price for each share of common stock (or Pre-Funded Warrants in lieu thereof) and accompanying Series A Warrant and Series B Warrant in

the 2024 Transaction was $2.98. The 2024 Transactions closed on August 19, 2024.

Certain outstanding and exercisable warrants include price protection provisions requiring a reduction in the instrument's exercise price in the event that the Company subsequently issues shares at a purchase price, or warrants at an exercise price, lower than the instrument’s original exercise price. As a result of the 2024 Transactions, this provision was triggered and the exercise price for 1,247,807 warrants was reduced from $30.00 to $2.88. Loss attributable to common shareholders was increased by the calculated value transferred to the holder of $1.7 million in the basic and diluted EPS calculations for the year ended December 31, 2024.

In connection with the Transactions, on August 16, 2024, the Company entered into a placement agency agreement with Maxim Group LLC (the “Placement Agent”), pursuant to which the Company engaged the Placement Agent as the exclusive placement agent for the Company. The Company agreed to pay the Placement Agent a cash fee equal to 7.5% of the aggregate gross proceeds raised in the Transactions and reimburse the Placement Agent for certain of its expenses in an aggregate amount up to $60 thousand. The Company received aggregate proceeds from the Transactions of approximately $2.6 million, before deducting fees to the Placement Agent of approximately $0.3 million and other estimated offering expenses payable by the Company of approximately $0.2 million.

On December 8, 2024, the Purchaser agreed to exercise 1,736,370 outstanding common stock warrants (the “Existing Warrants”) to purchase an aggregate of 1,736,370 shares of common stock for cash at the exercise price of $2.98 per share. The Existing Warrants were previously issued in a private placement which closed in August 2024. In consideration for the immediate exercise of the Existing Warrants, the exercising holder received new unregistered common stock warrants (the “New Warrants”) to purchase an aggregate of 3,472,740 shares of common stock. The New Warrants have an exercise price of $2.95 per share and are immediately exercisable for a period of five years from the issuance date. The gross proceeds of the exercise of the Existing Warrants to the Company, before deducting expenses and fees, were $5.1 million.

As of December 31, 2025 and 2024, 590,185 of the Pre-Funded Warrants were exercised for $0.0001 per share.

Share Issuance to Service Providers

On August 20, 2025 the Company issued 188,000 shares of common stock as a retainer for advisory services to be rendered by a service provider. The total fair value of the shares at the time of issuance was $254 thousand. The retainer will be applied to future invoices over eighteen months beginning April 1, 2026, at a rate of 10,444 shares per month. Additionally, on August 20, 2025 the Company issued 131,600 shares of common stock as a retainer for financial reporting services to be rendered by a contractor. The total fair value of the shares at the time of issuance was $178 thousand, of which $178 thousand and nil was expensed during the year ended December 31, 2025 and 2024, respectively.

On August 9, 2024, the Company issued 29,674 shares of common stock pursuant to a termination agreement with a service provider which required the delivery of such shares and a cash payment of $100 thousand. The total fair value of the shares at the time of issuance was approximately $100 thousand, of which we expensed nil and $100 thousand for the year ended December 31, 2025 and 2024, respectively.

Restricted Shares

On April 20, 2023 (the “Grant Date”), the board of directors of the Company approved the grant of 260,000 shares of restricted stock (“Restricted Shares”) to management and employees.

The Restricted Shares vest in twelve substantially equal installments on each monthly anniversary of the Grant Date for twelve months following the Grant Date (subject to accelerated vesting upon a change of control of the Company), provided that the employee is in continuous employment or service to the Company through the applicable vesting date.

The total fair value of the stock at the time of issuance was approximately $1.2 million which was based on the closing market price on the Grant Date of $4.51. The Company expensed approximately nil and $76 thousand of compensation costs for the years December 31, 2025 and 2024, respectively. There was nil unrecognized compensation cost associated with unvested restricted stock as of December 31, 2025 and 2024.

Stock Warrants

The aggregate intrinsic value of the outstanding common stock warrants as of December 31, 2025 and 2024 was approximately $3.2 million and nil. The remaining weighted average life of the warrants as of December 31, 2025 and 2024 was 3.75 years and 4.07 years.

As of December 31, 2025, there were warrants exercisable to purchase 36,630,689 shares of common stock in the Company and there were no warrants that were unvested. All outstanding warrants contain provisions allowing a cashless exercise at their respective exercise prices.

Stock Options

The 2015 Omnibus Incentive Plan provided for the issuance of stock options, stock appreciation rights, performance shares, performance units, restricted stock, restricted stock units, shares of our common stock, dividend equivalent units, incentive cash awards or other awards based on our common stock. This plan was reconstituted into a new 2021 Omnibus Plan. The 2021 Omnibus Plan is intended to allow us to continue to use equity awards as part of our ongoing compensation strategy for our key employees. Awards under the Plan will support the creation of long-term value and returns for our stockholders.

Awards may be granted alone or in addition to, in tandem with, or (subject to the 2021 Omnibus Incentive Plan’s prohibitions on repricing) in substitution for any other award (or any other award granted under another plan of ours or of any of our affiliates).

The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions. The model requires the use of subjective assumptions. Expected volatility for each award was based on the historical and expected volatility of the Company. The expected life (in years) is determined using historical data to estimate options exercise patterns. The Company does not expect to pay any dividends for the foreseeable future thus a value of zero was used in the calculations. The risk-free interest rate was based on the rate for US Treasury bonds commensurate with the expected term of the granted options. The Company recognizes the determined value as an expense over the period in which the stock options vest.

The maximum term of an option is 10 years from the date of grant.

Option Awards - Fiscal Year 2025

On August 27, 2025, the Company granted options to purchase an aggregate of 733,320 shares of common stock of the Company to non-employee members of the Board of Directors. The Company used the Black-Scholes model to value these options using a 10 year life, annualized volatility of 118.7%, annual risk free interest rate of 4.26% and a strike price of $1.26 per share which resulted a total fair value for these options of $879 thousand. The grant date fair value of the options was $1.20.

The options grant each recipient the right to purchase shares of Company common stock at a price of $1.26 per share, the fair market value of the Company’s common stock on the grant date. These awards will vest over a twelve month period with 50% after 6 months and the remaining 50% at end of twelve months.

On September 30, 2025, the Board of Directors of the Company approved the grant of options to purchase an aggregate of 453,500 shares of common stock of the Company to management and employees. The Company used the Black-Scholes model to value these options using a 10 year life, annualized volatility of 118.7%, annual risk free interest rate of 4.16% and a strike price of $1.14 per share which resulted a total fair value for these options of $492 thousand. The grant date fair value of the options was $1.08.

The options grant each recipient the right to purchase shares of Company common stock at a price of $1.14 per share, the fair market value of the Company’s common stock on the grant date. The Options vest as to 50% of the total amount of the award on the one-year anniversary of the grant date and 50% of the total amount of the award on the two-year anniversary of the grant date (subject to accelerated vesting upon a change of control of the Company), provided that the executive is in continuous employment or service to the Company through the applicable vesting date.

Stock compensation expense recognized for the year ended December 31, 2025 and 2024 related to stock options was approximately $0.7 million and $0.5 million, respectively. There was $0.8 million of unrecognized compensation cost associated with unvested stock options remaining as of December 31, 2025.

The aggregate intrinsic value of the outstanding common stock options as of December 31, 2025 and December 31, 2024 was nil. The remaining weighted average life of the options as of December 31, 2025 and 2024 was approximately 8.83 years and 8.1 years, respectively.