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Stockholders' Equity
 6 Months Ended
Jun. 30, 2025
Stockholders' Equity Note [Abstract]  
Stockholders' Equity

7.    Stockholders’ Equity  

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Reverse Stock Split

At a special meeting of the Company’s stockholders on March 12, 2025, the stockholders approved a proposal granting the Company’s Board of Directors the discretion to effect a reverse stock split of the Company’s issued and outstanding common stock at a ratio in the range of 1-for-2 to 1-for-10, with such ratio to be determined by the Chairman of the Company’s Board of Directors. Following the special meeting, the Chairman of the Company’s Board of Directors approved a final split ratio of 1-for-10 (the “Reverse Stock Split”).

Subsequently, the Company filed with the Delaware Secretary of State a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation, which became effective at 5:00 p.m. on March 24, 2025, to effect such Reverse Stock Split. As a result of the Reverse Stock Split, every ten (10) shares (the “Reverse Stock Split Number”) of issued and outstanding Common Stock was automatically combined into one (1) issued and outstanding share of common stock, without any change in the par value per share. No fractional shares were issued as a result of the Reverse Stock Split. Instead, stockholders who otherwise would have been entitled to receive fractional shares were entitled to receive a cash payment (without interest and subject to applicable withholding taxes) in lieu of such fractional shares equal to the fraction of a share of common stock to which such stockholder would otherwise be entitled multiplied by (i) the closing price per share of the common stock on the Nasdaq Capital Market at the close of business on the trading day preceding the date of the Certificate of Amendment, multiplied by (ii) the Reverse Stock Split Number. The aggregate number of fractional shares resulting from the Reverse Stock Split was 1,120 shares of common stock (or 112 shares on a pre-Reverse Stock Split basis); the aggregate cash payments made to stockholders in lieu of fractional shares was less than $1,000. Immediately prior to the Reverse Stock Split there were 23,796,200 shares of common stock outstanding; immediately following the Reverse Stock Split there were 2,379,508 shares of common stock outstanding.

The shares of common stock underlying the Company’s outstanding stock options and warrants were also proportionately adjusted along with corresponding adjustments to their exercise prices.

All share and per share amounts presented in these condensed consolidated financial statements and accompanying notes, including but not limited to shares issued and outstanding, earnings/(loss) per share, and warrants and options, as well as the dollar amounts of common stock and paid-in capital, have been retroactively adjusted for all periods presented in order to reflect this change in capital structure.

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2024 Public Offering and Private Placement Transactions

On March 15, 2024, the Company entered into an underwriting agreement with Craig-Hallum Capital Group LLC (the “Representative”), as the representative of the underwriters, relating to a firm commitment underwritten public offering (the “2024 Offering”) of 328,427 shares of the Company’s common stock at a price to the public of $6.50 per share.

The closing of the 2024 Offering occurred on March 19, 2024. The net proceeds to the Company from the sale of the shares, after deducting the underwriting discounts and commissions and other estimated offering expenses payable by the Company, were approximately $1.7 million.

Upon closing of the 2024 Offering, the Company issued the Representative certain warrants to purchase up to 18,293 shares of common stock (the “Representative’s Warrants”) as compensation, which amount was offset against the proceeds received. The Representative’s Warrants will be exercisable at a per share exercise price of $8.125. The Representative’s Warrants are exercisable, in whole or in part, during the four and one-half-year period commencing 180 days from the commencement of sales of the shares of common stock in the 2024 Offering.

In connection with the 2024 Offering, on March 14, 2024, the Company entered into subscription agreements with each of Robert W. D’Loren, Chairman and Chief Executive Officer of the Company; an affiliate of Mark DiSanto, a director of the Company; and Seth Burroughs, Executive Vice President of Business Development and Treasury of the Company to purchase 13,258, 13,258, and 2,946 shares, respectively, at a price of $9.80 per share. The total number of shares purchased was 29,462. Net proceeds after payment of agent fees to the Representative were approximately $0.3 million. The purchase of such shares closed concurrently with the 2024 Offering.

The aggregate number of shares of common stock issued from the 2024 Public Offering and Private Placement Transactions was 357,889 shares and the total net proceeds received was approximately $1.9 million.

Equity Incentive Plans

A total of 400,000 shares of common stock are eligible for issuance under the Company’s 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan provides for the grant of any or all of the following types of awards: stock options (incentive or non-qualified), restricted stock, restricted stock units, performance awards, or cash awards. The 2021 Plan is administered by the Company’s Board of Directors, or, at the Board’s discretion, a committee of the Board.

In addition, stock-based awards (including options, warrants, and restricted stock) previously granted under the Company’s 2011 Equity Incentive Plan (the “2011 Plan”) remain outstanding and shares of common stock may be issued to satisfy options or warrants previously granted under the 2011 Plan, although no new awards may be granted under the 2011 Plan.

Stock-based Compensation

Total expense recognized for all forms of stock-based compensation was approximately $0.18 million and $0.03 million for the current quarter and prior year quarter, respectively. Of the current quarter expense amount, approximately $0.15 million related to employees and approximately $0.03 million related to directors and consultants. Of the prior year quarter expense amount, substantially all of the expense was related to directors and consultants.  

Total expense recognized for all forms of stock-based compensation was approximately $0.33 million and $0.17 million for the current six months and prior year six months, respectively. Of the current six months expense amount, approximately $0.27 million related to employees and approximately $0.06 million related to directors and consultants. Of the prior year six months expense amount, substantially all of the expense was related to directors and consultants.  

Stock Options

A summary of the Company’s stock options activity for the current six months is as follows:

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Weighted

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Average

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Weighted

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Remaining

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Average

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Contractual

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Aggregate

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Number of

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Exercise

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Life

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Intrinsic

​

    

Options

    

Price

    

(in Years)

    

Value

Outstanding at January 1, 2025

 

472,392

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$

19.01

 

3.65

​

$

—

Granted

 

37,500

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2.71

 

  

​

 

  

Exercised

 

—

​

 

—

 

  

​

 

  

Expired/Forfeited

 

(45,898)

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24.22

 

  

​

 

  

Outstanding at June 30, 2025, and expected to vest

 

463,994

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$

17.18

 

3.78

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$

—

Exercisable at June 30, 2025

 

83,994

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$

20.44

 

3.57

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$

—

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On April 7, 2025, the Company granted options to purchase an aggregate of 10,000 shares of common stock to certain key individuals. The exercise price of the options is $2.91316 per share, and the vesting of such options is dependent upon the achievement of certain revenue targets.

On May 28, 2025, the Company granted options to purchase an aggregate of 10,000 shares of common stock to non-management directors. The exercise price of the options is $2.6321 per share; 50% of the options vested on May 28, 2025 and the remaining 50% will vest on May 1, 2026.

On May 28, 2025, the Company granted options to purchase an aggregate of 17,500 shares of common stock to Messrs. D’Loren, DiSanto, and Burroughs. The exercise price of the options is $2.6321 per share, and the options vested immediately upon grant.

Compensation expense related to stock options for the current quarter and the prior year quarter was approximately $0.04 million and $0.02 million, respectively. Compensation expense related to stock options for the current six months and the prior year six months was approximately $0.06 million and $0.03 million, respectively. Total unrecognized compensation expense related to unvested stock options at June 30, 2025 was approximately $0.02 million and is expected to be recognized over a weighted average period of approximately 0.76 years.

A summary of the Company’s non-vested stock options activity for the current six months is as follows:

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Weighted

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 Average 

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Number of

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Grant Date 

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Options

    

Fair Value

Balance at January 1, 2025

 

375,000

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$

0.24

Granted

 

37,500

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1.00

Vested

 

(32,500)

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​

3.09

Forfeited or Canceled

 

—

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—

Balance at June 30, 2025

 

380,000

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$

0.07

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Of the total stock options outstanding at June 30, 2025, the vesting of 350,000 options is contingent upon the Company’s common stock achieving certain target prices, and the vesting of 20,000 options is dependent upon the achievement of

certain revenue targets. None of these 370,000 performance-based stock options have vested, and no compensation expense has been recorded related to such options.

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Stock Awards

A summary of the Company’s restricted stock activity for the current six months is as follows:  

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Weighted

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Number of

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Average

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Restricted

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Grant Date

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Shares

    

Fair Value

Outstanding at January 1, 2025

 

35,333

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$

34.80

Granted

 

69,485

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2.58

Vested

 

(47,985)

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2.56

Expired/Forfeited

 

—

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—

Outstanding at June 30, 2025

 

56,833

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$

22.63

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On May 28, 2025, the Company issued an aggregate of 4,000 shares of common stock to non-management directors, of which 50% vests on each of April 1, 2026 and April 1, 2027.

On May 28, 2025, the Company issued an aggregate of 17,500 shares of common stock to Messrs. D’Loren, DiSanto, and Burroughs, which vest on November 1, 2025.

In accordance with the amended employment agreements with each of Mr. D’Loren and Mr. Burroughs, effective July 16, 2024 and through December 31, 2025, the Company is paying 40% of each such executive officer’s base salary via the issuance of shares of the Company’s common stock, issued on the last day of each month. Each of Mr. D’Loren and Mr. Burroughs are permitted to pay the withholding tax through the exchange of a portion of the shares. Under the terms of these amended agreements, the Company issued an aggregate of 47,985 shares of common stock (which vested immediately) to executives for the current six months.

Compensation expense related to stock awards was approximately $0.14 million for the current quarter and approximately $0.02 million for the prior year quarter. Compensation expense related to stock awards was approximately $0.27 million for the current six months and approximately $0.13 million for the prior year six months. Total unrecognized compensation expense related to unvested restricted stock grants at June 30, 2025 was approximately $0.06 million and is expected to be recognized over a weighted average period of approximately 0.66 years.

Restricted Stock Units

There were no restricted stock units outstanding as of June 30, 2025 and December 31, 2024, and no restricted stock units have been issued since the inception of the 2021 Plan.

Shares Available Under the Company’s Equity Incentive Plans

At June 30, 2025, there were 176,975 shares of common stock available for future award grants under the 2021 Plan.

Shares Reserved for Issuance

As of June 30, 2025, there were 640,969 shares of common stock reserved for issuance under the Company’s Equity Incentive Plans, including 381,494 shares reserved pursuant to unexercised warrants and stock options previously granted

under the 2011 Plan, 82,500 shares reserved pursuant to unexercised stock options granted under the 2021 Plan, and 176,975 shares available for issuance under the 2021 Plan.

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As of June 30, 2025, there were also 1,395,664 shares of common stock reserved for issuance that were unrelated to the Company’s Equity Incentive Plans, including 100,000 shares reserved pursuant to unexercised warrants related to the Halston Master License (as described below), 18,293 shares reserved pursuant to unexercised Representative’s Warrants related to the March 19, 2024 Offering (as described above), 139,916 shares reserved pursuant to unexercised warrants related to the December 12, 2024 debt refinancing transaction (see Note 6), and 1,137,455 shares reserved pursuant to unexercised warrants related to the April 21, 2025 debt refinancing transaction (see Note 6).

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Warrants

A summary of the Company’s warrants activity for the current six months is as follows:

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Weighted

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Average

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Weighted

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Remaining

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Average

 

Contractual

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Aggregate

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Number of

​

Exercise

 

Life

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Intrinsic

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Warrants

    

Price

    

(in Years)

    

Value

Outstanding and exercisable at January 1, 2025

 

263,957

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$

9.73

 

8.96

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$

—

Issued

 

1,137,455

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11.67

 

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Amended

​

(5,748)

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​

92.21

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Exercised

 

—

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—

 

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Expired/Forfeited

 

—

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—

 

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Outstanding at June 30, 2025

 

1,395,664

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$

10.97

 

7.11

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$

—

Exercisable at June 30, 2025

 

1,295,664

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$

10.66

 

7.06

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$

—

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In connection with the April 21, 2025 refinancing of the Company’s term loan debt (see Note 6), the Company issued an aggregate of 1,107,455 shares of the common stock to UTG and warrants to purchase 30,000 shares of common stock to Restore Capital (EQ-W), LLC. The warrants issued to UTG are exercisable for a period of seven years from the date of issuance at the following exercise prices: 131,100 shares at $6.60 per share, and 195,271 shares at each of $7.50, $10.00, $12.50, $15.00, and $17.50 per share. The warrants issued to Restore Capital (EQ-W), LLC are exercisable for a period of seven years from the date of issuance at an exercise price of $6.67 per share.

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Also in connection with the April 21, 2025 refinancing, the Company and certain holders amended certain warrants that had been previously issued on December 12, 2024: (i) the exercise price of previously outstanding warrants to purchase 107,333 shares of common stock was reduced from $6.315 per share to $2.2477 per share, and (ii) the number of shares issuable under previously outstanding warrants to purchase an aggregate of 22,998 shares of common stock was reduced to 17,250 shares of common stock, and the exercise price of such warrants was reduced from $6.315 per share to $3.00 per share.

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In connection with the entrance into the Halston Master License in 2023 (see Note 4), the Company issued to G-III a ten-year warrant to purchase up to 100,000 shares of the Company’s common stock at an exercise price of $15.00 per share, which vests based upon certain annual royalty targets being satisfied under the license agreement. The fair value of this warrant is being recognized as a reduction of revenue over the term of the related license agreement, with an offsetting increase to stockholders’ equity as additional paid-in capital. The amount of contra-revenue recognized related to this warrant during the current quarter and prior year quarter was approximately $0.01 million in each period, and the amount of contra-revenue recognized was during the current six months end prior year six months was approximately $0.02 million in each period. As of June 30, 2025, no portion of this warrant had vested.