Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.21.2
Stockholders' Equity
 6 Months Ended
Aug. 01, 2021
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS' EQUITY

NOTE 8 – STOCKHOLDERS’ EQUITY

 

Common Stock Warrants

 

The following represents warrant activity during the twenty-six weeks ended August 1, 2021 and August 2, 2020:

 

    Average  exercise price     Number of warrants     Weighted  average  remaining contractual life (in years)  
Warrants Outstanding at February 2, 2020   $ 16.83       1,039,120       1.93  
Warrants issued    
-
      
-
      
-
  
Expired and canceled    
-
      
-
      
-
  
Exercised    
-
      
-
      
-
  
Outstanding at August 2, 2020   $ 16.83       1,039,120       1.43  
                         
Warrants Outstanding at January 31, 2021   $ 19.07       293,973       2.57  
Warrants issued    
-
      
-
      
-
  
Expired and canceled     9.83       (98 )    
-
  
Exercised     16.00       (12,125 )     (0.09 )
Outstanding at August 1, 2021   $ 19.20       281,750       1.91  

 

In the twenty-six weeks ended August 1, 2021, a total of 5,625 warrants were exercised on a cashless basis, whereby the holders received fewer shares of common stock in lieu of a cash payment to the Company. Warrants exercised in the twenty-six weeks ended August 1, 2021 resulted in the issuance of 10,956 common shares. There were 98 warrants that expired in the twenty-six weeks ended August 1, 2021.

 

Equity Incentive Plan

 

The Company adopted the 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. The number of shares of common stock reserved for issuance under the 2017 Equity Plan was 2,104,889 at August 1, 2021.

 

Stock Options

 

In June 2019, the Company granted 495,366 non-statutory stock options to certain officers of the Company with an option 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 is 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 must be satisfied no later than June 5, 2024 or the options will 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 2021 to extend the term of the options through June 5, 2024. This resulted in additional compensation of approximately $874,000, of which, $315,000 was recorded upon modification and 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 will vest and become exercisable on June 5, 2022 as long as the officers are still employed on that date. As a result of the market condition being met, the Company accelerated the amortization and recognized additional stock-based compensation expense during the thirteen weeks ended August 1, 2021 of approximately $0.2 million.

 

A summary of the status of our stock options as of August 1, 2021 and August 2, 2020, and the changes during the twenty-six weeks ended August 1, 2021 and August 2, 2020 is presented below:

 

    Number of options     Weighted average exercise price     Weighted  average  remaining contractual life (in years)     Average intrinsic value  
Outstanding at February 2, 2020     495,366     $ 38.10       2.34      
              -
  
Exercised    
-
                          
Expired and canceled    
-
                          
Outstanding at August 2, 2020     495,366     $ 38.10       3.84      
-
  
Exercisable at the end of the period    
-
      
-
      
-
      
-
  
                                 
    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      
-
  
Granted    
-
      
-
                  
Canceled and forfeited    
-
      
-
                  
Outstanding at August 1, 2021     495,366     $ 38.10       2.85     $ 35.32  
Exercisable at the end of the period    
-
      
-
      
-
      
-
  

 

Restricted Stock Units

 

A summary of the status of our unvested restricted stock units as of August 1, 2021 and August 2, 2020, and changes during the twenty-six weeks then ended, is presented below:

 

    Number of shares     Weighted average grant date fair value  
Unvested at February 2, 2020     183,053     $ 21.34  
Granted     607,656       17.67  
Forfeited     (782 )     13.49  
Vested     (82,611 )     14.83  
Unvested at August 2, 2020     707,316     $ 19.07  

 

    Number of shares     Weighted average grant date fair value  
Unvested at January 31, 2021     655,558     $ 18.86  
Granted     63,456       80.40  
Forfeited     (7,904 )     19.27  
Vested     (153,089 )     20.20  
Unvested at August 1, 2021     558,021     $ 25.52  

  

Equity based compensation expense was approximately $1.1 million and $1.8 million for the thirteen and twenty-six weeks ended August 1, 2021 and $0.7 million and $1.6 million and for the thirteen and twenty-six weeks ended August 2, 2020, respectively.

 

The total unrecognized equity-based compensation cost related to unvested restricted stock awards was approximately $6.1 million as of August 1, 2021 and will be recognized in operations over a weighted average period of 1.89 years.