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. There were no warrants issued, exercised, or expired and canceled for the thirteen weeks ended April 30, 2023. As of April 30, 2023, 281,750 warrants remained outstanding with an average exercise price of $19.20 and a weighted average remaining contractual life of 0.16 years. On June 26, 2023, Roth Capital Partners, LLC performed a cashless exercise of all 281,750 remaining outstanding warrants resulting in 74,592 net shares issued. As of May 5, 2024, no warrants remain outstanding. Equity Incentive Plans The Company adopted the Second 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 based restricted stock 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 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. Time-Based Restricted Stock Units Time-based restricted stock units ("RSU awards") granted under the 2017 Equity Plan are generally subject to only a service-based vesting condition. RSU awards vest equally over three years on the anniversary date of the grant date if employed at the time of vesting. The valuation of these RSU awards is based solely on the fair value of the Company’s stock on the date of grant. Performance Based Restricted Stock Units Performance based restricted stock unites ("PSU awards") granted under the 2017 Equity Plan are generally subject to both a service-based vesting condition and a performance-based vesting condition. PSU awards will vest upon the achievement of specified performance targets and subject to continued service through the applicable vesting dates. The stock-based compensation expense relating to PSU awards is recognized over the requisite service period when it is probable that the performance condition will be satisfied. 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 for the thirteen weeks ended May 5, 2024 and April 30, 2023. As of May 5, 2024, 495,366 stock options remain outstanding with a weighted average exercise price of $38.10, a weighted average remaining contractual life of 5.08 years, and no intrinsic value. As of April 30, 2023, 495,366 stock options remain outstanding with a weighted average exercise price of $38.10, a weighted average remaining contractual life of 1.10 years and no intrinsic value. Time and Performance Based Restricted Stock Units The following table summarizes Company's RSU and PSU awards activity during the thirteen weeks ended May 5, 2024 and April 30, 2023: Number of shares Weighted average grant date fair value Unvested at February 4, 2024 1,032,408 $ 31.41 Granted 478,082 18.86 Forfeited (369,098) 34.47 Vested (56,161) 33.89 Unvested at May 5, 2024 1,085,231 $ 24.71 Number of shares Weighted average grant date fair value Unvested at January 29, 2023 640,256 $ 34.50 Granted 693,989 26.97 Forfeited (12,888) 35.17 Vested (37,908) 46.22 Unvested at April 30, 2023 1,283,449 $ 30.07 For the thirteen weeks ended May 5, 2024 and April 30, 2023, the Company recognized equity based compensation expense of $1.2 million and $0.7 million, respectively. The total unrecognized equity-based compensation cost related to unvested RSU and PSU awards was approximately $12.6 million as of May 5, 2024 and will be recognized in operations over a weighted average period of 3.41 years. |