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Stockholders' Equity

12 Months Ended

Dec. 31, 2022

Stockholders' Equity Note [Abstract]

Stockholders' Equity

7.   Stockholders’ Equity

The Company has authority to issue up to 51,000,000 shares, consisting of 50,000,000 shares of common stock and 1,000,000 shares of preferred stock.

Equity Incentive Plans

The Company’s 2021 Equity Incentive Plan (the “2021 Plan”) is designed and utilized to enable the Company to provide its employees, officers, directors, consultants, and others whose past, present, and/or potential contributions to the Company have been, are, or will be important to the success of the Company, an opportunity to acquire a proprietary interest in the Company. A total of 4,000,000 shares of common stock are eligible for issuance under 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 $0.72 million in both the Current Year and Prior Year. Of the Current Year expense amount, approximately $0.41 million related to employees and approximately $0.31 million related to directors and consultants; approximately $0.62 million was recorded as an operating cost and approximately $0.10 million was recorded as a reduction to other income. Of the Prior Year expense amount, approximately $0.55 million related to employees and approximately $0.17 million related to directors and consultants; all of the Prior Year expense amount was recorded as an operating cost.

Stock Options

Options granted under the Company’s equity incentive plans expire at various times – either five, seven, or ten years from the date of grant, depending on the particular grant.

A summary of the Company’s stock option activity for the Current Year is as follows:

​

​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	Weighted	​	​	​
​	​	​	​	​	​	​	Average	​	​	​
​	​	​	​	Weighted		​	Remaining	​	​	​
​	​	​	​	Average		​	Contractual	​	Aggregate
​	​	Number of	​	Exercise		​	Life	​	Intrinsic
​		Options		Price			(in Years)		Value
Outstanding at January 1, 2022		5,630,970	​	$	2.25		5.46	​	$	—
Granted		605,850	​		1.61			​
Canceled		—	​		—			​
Exercised		—	​		—			​
Expired/Forfeited		(622,510)	​		2.81			​
Outstanding at December 31, 2022, and expected to vest		5,614,310	​	$	2.12		4.76	​	$	—
Exercisable at December 31, 2022		1,916,810	​	$	2.89		1.75	​	$	—

​

Current Year stock option grants were as follows:

On April 20, 2022, the Company granted options to purchase an aggregate of 380,850 shares of common stock to various employees. The exercise price of the options is $1.62 per share, and all options vested immediately on the date of grant.

On April 20, 2022 the Company granted options to purchase an aggregate of 125,000 shares of common stock to non-management directors. The exercise price of the options is $1.62 per share, and 50% of the options vest on each of April 20, 2023 and April 20, 2024.

On April 26, 2022, the Company granted options to purchase an aggregate of 100,000 shares of common stock to a consultant. The exercise price of the options is $1.58 per share, and all options vested immediately on the date of grant.

Prior Year stock option grants were as follows:

On March 15, 2021, the Company granted options to purchase an aggregate of 365,390 shares of common stock to various employees. The exercise price of the options is $1.86 per share, and all options vested immediately on the date of grant.

On April 1, 2021, the Company granted options to purchase an aggregate of 125,000 shares of common stock to non-management directors. The exercise price of the options is $1.93 per share. One-half of the options vested on April 1, 2022, and the remaining half of the options will vest on April 1, 2023.

On July 1, 2021, the Company granted options to purchase an aggregate of 20,000 shares of common stock to a member of management. The exercise price of the options is $2.76 per share. One-half of the options vested on June 1, 2022, and the remaining half of the options will vest on June 1, 2023.

On August 13, 2021, the Company granted options to purchase an aggregate of 10,000 shares of common stock to an employee. The exercise price of the options is $2.00 per share. One-half of the options were to vest on August 13, 2022, with the remaining half of the options to vest on August 13, 2023, but all of these options were forfeited when the employee left the Company in the Current Year.

The fair value of the options granted was estimated at the date of grant using the Black-Scholes option pricing model with the following assumptions:

​

​	​	​	​	​	​
​	​	Year Ended December 31,
​		2022		2021
Expected Volatility		57.14 – 92.65	%	29.49 – 82.99	%
Expected Dividend Yield		—	%	—	%
Expected Life (Term, in years)		0.67 – 3.25		2.5 – 3.25	​
Risk-Free Interest Rate		1.60 – 2.80	%	0.24 – 0.52	%

​

Compensation expense related to stock options for the Current Year and Prior Year was approximately $0.5 million and $0.3 million, respectively. Total unrecognized compensation expense related to unvested stock options (excluding stock options with performance-based vesting) at December 31, 2022 amounts to approximately $0.1 million and is expected to be recognized over a weighted average period of 1.12 years.

Of the total stock options outstanding at December 31, 2022, the vesting of 3,500,000 options is contingent upon the Company’s common stock achieving certain target prices as follows:

​

​	​	​
Target Prices		Number of Options Vesting
$3.00	​	1,000,000
$5.00	​	850,000
$7.00	​	700,000
$9.00	​	550,000
$11.00	​	400,000

​

As of December 31, 2022, none of these 3,500,000 performance-based stock options have vested, and no compensation expense has been recorded related to such options.

The following table summarizes the Company’s stock option activity for non-vested options for the Current Year:

​

​	​	​	​	​	​
​		​		Weighted
​	​	​	​	Average
​	​	Number of	​	Grant Date
​		Options		Fair Value
Balance at January 1, 2022		3,873,334	​	$	0.07
Granted		605,850	​		0.79
Vested		(771,684)	​	​	0.72
Forfeited or Canceled		(10,000)	​		1.09
Balance at December 31, 2022		3,697,500	​	$	0.05

​

​

Warrants

Warrants granted by the Company expire at various times – either five, seven, or ten years from the date of grant, depending on the particular grant.

A summary of the Company’s warrant activity for the Current Year is as follows:

​

​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	Weighted	​	​	​
​	​	​	​	​	​	​	Average	​	​	​
​	​	​	​	Weighted		​	Remaining	​	​	​
​	​	​		Average			Contractual	​	Aggregate
​	​	Number of	​	Exercise			Life	​	Intrinsic
​		Warrants		Price			(in Years)		Value
Outstanding and exercisable at January 1, 2022		116,065	​	$	3.15		2.57	​	$	—
Granted		—	​		—		​	​
Canceled		—	​		—		​	​
Exercised		—	​		—		​	​
Expired/Forfeited		—	​		—		​	​
Outstanding and exercisable at December 31, 2022		116,065	​	$	3.15		1.57	​	$	—

​

No compensation expense was recorded in the Current Year or Prior Year related to warrants.

Stock Awards

A summary of the Company’s restricted stock activity for the Current Year is as follows:

​

​	​	​	​	​	​
​	​	​	​	Weighted
​	​	Number of	​	Average
​	​	Restricted	​	Grant Date
​		Shares		Fair Value
Outstanding at January 1, 2022		815,833	​	$	4.00
Granted		347,623	​		1.58
Canceled		—	​		—
Vested		(830,123)	​		3.11
Expired/Forfeited		—	​		—
Outstanding at December 31, 2022		333,333	​	$	3.71

​

Current Year stock award grants were as follows:

On April 20, 2022, the Company issued an aggregate of 50,000 shares of common stock to non-management directors, which vest evenly over two years, of which 50% shall vest on April 20, 2023, and 50% shall vest on April 20, 2024.

On April 20, 2022, the Company issued 20,064 shares of common stock to a consultant, which vested immediately.

On May 31, 2022, the Company issued 65,275 shares of common stock to a consultant in connection with the transaction related to the Isaac Mizrahi Brand (see Note 3); these shares vested immediately.

On May 31, 2022, the Company issued 33,557 shares of common stock to Isaac Mizrahi, which vested immediately (see Note 3 for additional details).

Additionally, on April 20, 2022, the Company issued 178,727 shares of common stock to a member of senior management as payment for a performance bonus earned in 2021. These shares vested immediately. The Company had previously recognized compensation expense of approximately $0.28 million in the Prior Year to accrue for this performance bonus.

Prior Year stock award grants were as follows:

On April 1, 2021, the Company issued an aggregate of 50,000 shares of stock to non-management directors, which vest evenly over two years. One-half of the shares vested on April 1, 2022, and the remaining half shall vest on April 1, 2023.

On April 26, 2021, the Company issued 14,045 shares of stock to a consultant, which vested immediately.

On July 1, 2021, the Company issued 9,399 shares of stock to a consultant, which vested immediately.

On October 1, 2021, the Company issued 16,892 shares of stock to a consultant, which vested immediately.

On October 29, 2021, the Company issued 12,489 shares of stock to an employee pursuant to the terms of a contractual agreement, which vested immediately.

Additionally, on May 7, 2021, the Company issued 181,179 shares of common stock to a member of senior management as payment for a performance bonus earned 2020. These shares vested immediately. The Company recognized compensation expense of approximately $0.3 million in 2020 to accrue for this performance bonus.

Notwithstanding the foregoing, each grantee may extend the first anniversary of all or a portion of the restricted stock by six months and, thereafter one or more times may further extend such date with respect to all or a portion of the restricted stock until the next following date exactly six months thereafter, by providing written notice of such election to extend such date with respect to all or a portion of the restricted stock prior to such date.

Total compensation expense related to stock awards for the Current Year and Prior Year (inclusive of the amounts detailed above) was approximately $0.3 million and $0.4 million, respectively. Total unrecognized compensation expense related to unvested restricted stock grants at December 31, 2022 amounts to $0.1 million and is expected to be recognized over a weighted average period of 1.10 years.

The following table provides information with respect to restricted stock purchased and retired by the Company during the Current Year and Prior Year:

​

​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	Number of	​	​	​
​	​	​	​	​	​	​	Shares	​	​	​
​	​	​	​	​	​	​	Purchased as	​	​	​
​	​	​	​	​	​	​	Part of	​	​	​
​	​	Total Number	​	Actual		​	Publicly	​	Fair value of
​	​	of Shares	​	Price Paid		​	Announced	​	Re-Purchased
Date		Purchased		per Share			Plan		Shares
April 20, 2022 (i)	​	53,882	​		1.57		—	​		84,000
May 31, 2022 (i)		240,000	​		1.49		—	​		358,000
Total 2022		293,882	​	$	1.50		—	​	$	442,000
​	​	​	​	​	​	​	​	​	​	​
October 29, 2021 (i)		9,187	​		1.73		—	​		16,000
Total 2021		9,187	​	$	1.73		—	​	$	16,000

(i) The shares were exchanged from employees and directors in connection with the income tax withholding obligations on behalf of such employees and directors from the vesting of restricted stock or the receipt of stock awards. The 2011 Plan and 2021 Plan allow for award holders to surrender vested shares to cover withholding tax liabilities.

Shares Available Under the Company’s Equity Incentive Plans

At December 31, 2022, there were 3,291,909 shares of common stock available for award grants under the 2021 Plan.

Shares Reserved for Issuance

At December 31, 2022, there were 9,022,284 shares of common stock reserved for issuance, including 5,316,025 shares reserved pursuant to unexercised warrants and stock options previously granted under the 2011 Plan, 414,350 shares reserved pursuant to unexercised stock options granted under the 2021 Plan, and 3,291,909 shares available for issuance under the 2021 Plan.

Dividends

The Company has not paid any dividends to date.

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- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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