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Stockholders' Equity

12 Months Ended

Dec. 31, 2023

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 $0.22 million and $0.72 million in the Current Year and Prior Year, respectively.

Of the Current Year expense amount, approximately $0.02 related to employees and approximately $0.20 related to directors and consultants; all of this expense was recorded as a direct operating cost in the accompanying statement of operations.

Of the Prior 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 a direct operating cost and approximately $0.10 million was recorded within other operating costs and expenses (income).

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, 2023		5,614,310	​	$	2.12		4.76	​	$	—
Granted		200,000	​		1.51			​
Exercised		(87,750)	​		0.80			​
Expired/Forfeited		(578,020)	​		2.96			​
Outstanding at December 31, 2023, and expected to vest		5,148,540	​	$	2.03		4.26	​	$	—
Exercisable at December 31, 2023		1,398,540	​	$	2.88		1.66	​	$	—

​

Current Year stock option grants were as follows:

In April 2023, the Company granted options to purchase an aggregate of 100,000 shares of common stock to a key individual. The exercise price of the options is $1.50 per share, and the vesting of such options is dependent upon the achievement of certain revenue targets. None of these options were vested as of December 31, 2023.

On August 23, 2023 the Company granted options to purchase an aggregate of 100,000 shares of common stock to non-management directors. The exercise price of the options is $1.51 per share, and 50% of the options vest on each of April 1, 2024 and April 1, 2025.

Prior 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. Half of the options vested on April 20, 2023, and the remaining half of the options will vest on 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.

The fair values of the options granted were estimated at the respective dates of grant using the Black-Scholes option pricing model with the following range of assumptions:

​

​	​	​	​	​	​
​	​	Year Ended December 31,
​		2023		2022
Expected Volatility		89 – 90	%	57 – 93	%
Expected Dividend Yield		—	%	—	%
Expected Life (Term, in years)		2.75 – 10		0.67 – 3.25	​
Risk-Free Interest Rate		4.0 – 4.7	%	1.6 – 2.8	%

​

Compensation expense related to stock options for the Current Year and Prior Year was approximately $0.1 million and $0.5 million, respectively. Total unrecognized compensation expense related to unvested stock options (excluding stock options with performance-based vesting) at December 31, 2023 amounts to approximately $0.1 million and is expected to be recognized over a weighted average period of 1.05 years.

​

Of the total stock options outstanding at December 31, 2023, 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, 2023, 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, 2023		3,697,500	​	$	0.05
Granted		200,000	​		0.68
Vested		(135,000)	​	​	0.68
Forfeited or Canceled		(12,500)	​		0.89
Balance at December 31, 2023		3,750,000	​	$	0.05

​

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, 2023		333,333	​	$	3.71
Granted		113,968	​		1.01
Vested		(108,968)	​		1.08
Expired/Forfeited		(5,000)	​		1.62
Outstanding at December 31, 2023		333,333	​	$	3.69

​

Current Year stock award grants were as follows:

On January 1, 2023, the Company issued 8,334 shares of common stock to a consultant, which vested immediately.

On April 17, 2023, the Company issued 8,334 shares of common stock to a consultant, which vested immediately.

On May 15, 2023, the Company issued 50,000 shares of common stock to a consultant, which vested immediately.

On July 20, 2023, the Company issued 7,300 shares of common stock to an employee, which vested immediately.

On August 23, 2023, the Company issued an aggregate of 40,000 shares of common stock to non-management directors, of which 50% shall vest on April 1, 2024, and 50% shall vest on April 1, 2025.

Prior 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. Half of these shares vested on April 20, 2023, and the remaining half 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 11 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 2021 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 $0.1 million and $0.3 million, respectively. Total unrecognized compensation expense related to unvested restricted stock grants at December 31, 2023 amounts to $0.1 million and is expected to be recognized over a weighted average period of 1.06 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
None		—	​		—		—	​		—
Total 2023		—	​	$	—		—	​	$	—
​	​	​	​	​	​	​	​	​	​	​
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

​

(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.

Restricted Stock Units

There were no restricted stock units outstanding as of December 31, 2023 and 2022, 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 December 31, 2023, there were 3,103,941 shares of common stock available for award grants under the 2021 Plan.

Shares Reserved for Issuance

At December 31, 2023, there were 8,368,546 shares of common stock reserved for issuance, including 4,771,255 shares reserved pursuant to unexercised warrants and stock options previously granted under the 2011 Plan, 493,350 shares reserved pursuant to unexercised stock options granted under the 2021 Plan, and 3,103,941 shares available for issuance under the 2021 Plan.

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, 2023		116,065	​	$	3.15		1.57	​	$	—
Granted		1,000,000	​		1.50		​	​
Exercised		—	​		—		​	​
Expired/Forfeited		—	​		—		​	​
Outstanding at December 31, 2023		1,116,065	​	$	1.67		8.46	​	$	—
Exercisable at December 31, 2023		116,065	​	$	3.15		0.57	​	$	—

​

See Note 5 for information regarding the warrant to purchase 1,000,000 shares of common stock granted during the Current Year in connection with the Halston Master License; the Company recognized contra-revenue of approximately $0.03 million in the Current Year with respect to this warrant. There was no compensation expense related to other warrants recognized in the Current Year or Prior Year.

​

Dividends

The Company has not paid any dividends to date.

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- Definition

The entire disclosure for equity.

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