Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity

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Stockholders' Equity
 12 Months Ended
Feb. 04, 2024
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Stockholders' Equity
Common Stock Warrants
On June 29, 2018, the Company issued 281,750 warrants with a five-year term to Roth Capital Partners, LLC as part of the underwriting agreement in connection with the Company's IPO. Warrants may be exercised on a cashless basis, where the holders receive fewer shares of common stock in lieu of a cash payment to the Company. In fiscal 2022, 12,125 warrants were exercised, with 5,625 warrants exercised on a cashless basis, which resulted in the issuance of 10,956 common shares. There were 98 warrants that expired as of January 30, 2022. There were no warrants issued, exercised, or expired and canceled in fiscal 2023. In fiscal 2024, Roth Capital Partners, LLC performed a cashless exercise of all 281,750 remaining outstanding warrants resulting in 74,592 net shares issued. As of February 4, 2024, no warrants remain outstanding.
The following represents warrant activity during fiscal 2024, 2023, and 2022:
Average exercise price Number of warrants Weighted average remaining contractual life (in years)
Outstanding at January 31, 2021 $ 19.07 293,973  2.57
Issued — —  —
Expired and canceled 9.83 (98) —
Exercised 16.00 (12,125) 0.09
Outstanding at January 30, 2022 19.20 281,750  1.41
Issued — —  —
Expired and canceled — —  —
Exercised — —  —
Outstanding at January 29, 2023 19.20 281,750  0.41
Issued — —  —
Expired and canceled — —  —
Exercised 19.20 (281,750) —
Outstanding at February 4, 2024 $ —  —  —
Equity Incentive Plans
The Company adopted the Amended and Restated 2017 Equity Incentive Plan (the "2017 Equity Plan") which provides for awards in the form of stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, performance units, cash-based awards and other stock-based awards. All awards shall be granted within 10 years from the effective date of the 2017 Equity Plan. In fiscal 2024, the 2017 Equity Plan was amended and restated to increase the shares of our common stock authorized and reserved for issuance by 225,000 shares, which increased the number of shares of common stock reserved for issuance under the 2017 Equity Plan to 2,879,889 shares of common stock.
Stock Options
In June 2019, the Company granted 495,366 non-statutory stock options to certain officers of the Company with an exercise price of $38.10 per share. 100% of the stock options are subject to vesting on the third anniversary of the date of grant if the officers are still employed by the Company and the average closing price of the Company’s common stock for the prior 40 consecutive trading days has been at least $75 by the third anniversary of the grant. Both the employment and the market condition were originally to be satisfied no later than June 5, 2022 or the options would terminate. These options were valued using a Monte Carlo simulation model to account for the path dependent market conditions that stipulate when and whether or not the options shall vest. The 495,366 stock options were modified in fiscal 2022 to extend the term of the options through June 5, 2024. This resulted in additional compensation of approximately $0.9 million, of which, $0.3 million was recorded upon modification with the remaining expense to be recognized over the remaining expected term. The market condition was met on June 5, 2021, which was the date on which the average closing price of the Company’s common stock had been at least $75 for 40 consecutive trading days. The options vested and became exercisable on June 5, 2022 as the officers were still employed on that date.
There were no stock options issued, exercised, or expired and canceled during fiscal 2024, 2023, and 2022.
The following represents stock option activity during fiscal 2024, 2023, and 2022 :
Number of options Weighted average exercise price Weighted average remaining contractual life (in years) Average intrinsic value
Outstanding at January 31, 2021 495,366  $ 38.10  3.35 $ 9,135 
Issued —  — 
Canceled and forfeited —  — 
Exercised —  — 
Outstanding at January 30, 2022 495,366  38.10  2.35 6,162 
Issued —  — 
Canceled and forfeited —  — 
Exercised —  — 
Outstanding at January 29, 2023 495,366  38.10  1.35 — 
Issued —  — 
Canceled and forfeited —  — 
Exercised —  — 
Outstanding and exercisable at February 4, 2024 495,366  $ 38.10  5.34 $ — 
Time and Performance Based Restricted Stock Units
The following table summarizes the activity for the Company's unvested restricted stock units activity during fiscal 2024, 2023, and 2022:
Number of shares Weighted average grant date fair value
Unvested at January 31, 2021 655,558  $ 18.86 
Granted 94,985  78.53 
Forfeited (42,516) 22.67 
Vested (174,694) 19.57 
Unvested at January 30, 2022 533,333  28.41 
Granted 289,625  44.20 
Forfeited (62,186) 29.09 
Vested (120,516) 36.03 
Unvested at January 29, 2023 640,256  34.50 
Granted 836,678  26.50 
Forfeited (63,298) 34.93 
Vested (381,228) 25.24 
Unvested at February 4, 2024 1,032,408  $ 31.41 
In March 2023, Shawn Nelson, our Chief Executive Officer, received a one-time performance and retention long-term incentive grant of 235,000 Restricted Stock Units (the “RSU Grant”) pursuant to the 2017 Equity Plan and Mr. Nelson’s Restricted Stock Units Agreement and Grant Notice (the “RSU Agreement”). The RSU Grant vests on the later to occur of (i) the fifth anniversary of the date of grant so long as, (x) on or prior to such date (subject to certain limited extensions), the Company has achieved a specified level of performance with respect to share price and net sales, and (y) Mr. Nelson remains in continuous service with the Company as Chief Executive Officer through such date; or (ii) if the specified level of performance with respect to net sales is not achieved on or prior to the fifth anniversary of the date of grant, but the other conditions in subclause (i) are achieved, the first date that such specified level of performance with respect to net sales is achieved, so long as it is achieved on or prior to the seventh anniversary of the date of grant and so long as Mr. Nelson remains in continuous service with the Company through such date. Except in the event of termination of employment as defined in the 2017 Equity Plan, the RSU Grant will be settled in shares of common stock of the Company on the first anniversary of the applicable vesting date. The RSU grant was valued using a Monte Carlo simulation model to account for the path dependent market conditions that stipulate when and whether or not the options shall vest. The grant date fair value of the RSU Grant was $4.4 million. The expense will be recognized on a straight-line basis over the longest of the derived, explicit, or implicit service period.

Equity-based compensation expense was approximately $4.2 million, $10.5 million, and $5.9 million for fiscal 2024, 2023, and 2022 respectively. In fiscal 2023, the Company recognized $4.3 million related to performance stock units granted in fiscal 2021 with a three year term, which met the performance target of $550 million in net sales and $50 million in Adjusted EBITDA for fiscal 2023.

The total unrecognized equity based compensation cost related to unvested restricted stock unit awards was approximately $8.5 million as of February 4, 2024 and will be recognized in operations over a weighted average period of 3.76 years.