Stockholders' Equity

3 Months Ended

Mar. 31, 2021

Equity [Abstract]

Stockholders' Equity

14. Stockholders’ Equity

	Shares		Amount		Paid-in Capital		Accumulated Deficit			Total Stockholders’ Equity (Deficit)
Balance, December 31, 2020		10,382	$	1	$	52,985	$	(54,094	)	$	(1,108	)
Stock-based compensation		-		-		19		-			19
Issuance of common stock for Azuñia initial earn-out		1,200		-		5,618		-			5,618
Issuance of common stock for services by third parties		51		-		78		-			78
Issuance of common stock for services by employees		4		-		-		-			-
Net income attributable to common shareholders		-		-		-		3,708			3,708
Balance, March 31, 2021		11,637	$	1	$	58,700	$	(50,386	)	$	8,315

During 2021, the Company issued 55,398 shares of common stock to directors and employees for stock-based compensation of $0.1 million. The shares were valued using the closing share price of the Company’s common stock on the date of grant, within the range of $1.28 to $1.85 per share. On February 10, 2021, the Company issued 1.2 million shares of its common stock (the “Shares”) to certain affiliates of Intersect pursuant to an Asset Purchase Agreement dated September 12, 2019 by and between the Company and Intersect in respect of the Azuñia Tequila acquisition at a weighted-average of $4.67 per share. The Shares constitute the “Fixed Shares” due to Intersect pursuant to the Asset Purchase Agreement.

During 2020, the Company issued 706,987 shares of common stock to directors, employees and consultants for stock-based compensation of $1.0 million. The shares were valued using the closing share price of the Company’s common stock on the date of grant, within the range of $1.08 to $3.20 per share.

Stock-Based Compensation

On September 8, 2016, the Company adopted the 2016 Equity Incentive Plan (the “2016 Plan”). Pursuant to the terms of the plan, on January 1, 2021, the number of shares available for grant under the 2016 Plan reset to 3,747,583 shares, equal to 8% of the number of outstanding shares of the Company’s capital stock, calculated on an as-converted basis, on December 31 of the preceding calendar year, and then added to the prior year plan amount. As of March 31, 2021, there were 102,710 options and 1,178,790 restricted stock units (“RSUs”) issued under the 2016 Plan, with vesting schedules varying between immediate or three (3) years from the grant date.

The Company also issues, from time to time, options that are not registered under a formal option plan. As of March 31, 2021, there were no options outstanding that were not issued under the Plans.

A summary of all stock option activity as of and for the three months ended March 31, 2021 is presented below:

	# of Options			Weighted-Average Exercise Price
Outstanding as of December 31, 2020		134,931		$	4.71
Options granted		5,000			0.53
Options canceled		(37,221	)		5.16
Outstanding as of March 31, 2021		102,710		$	4.00
Exercisable as of March 31, 2021		72,043		$	3.56

The aggregate intrinsic value of options outstanding as of March 31, 2021 was $0 million.

As of March 31, 2021, there were 30,667 unvested options with an aggregate grant date fair value of $0 million. The unvested options will vest in accordance with the vesting schedule in each respective option agreement, which varies between immediate and three (3) years from the grant date. The aggregate intrinsic value of unvested options as of March 31, 2021 was $0 million. During the three months ended March 31, 2021, 38,806 options vested.

The Company uses the Black-Scholes valuation model to measure the grant-date fair value of stock options. The grant-date fair value of stock options issued to employees is recognized on a straight-line basis over the requisite service period. Stock-based awards issued to nonemployees are recorded at fair value on the measurement date and are subject to periodic market adjustments as the underlying stock-based awards vest.

To determine the fair value of stock options using the Black-Scholes valuation model, the calculation takes into consideration the effect of the following:

● Exercise price of the option

● Fair value of the Company’s common stock on the date of grant

● Expected term of the option

● Expected volatility over the expected term of the option

● Risk-free interest rate for the expected term of the option

The calculation includes several assumptions that require management’s judgment. The expected term of the options is calculated using the simplified method described in GAAP. The simplified method defines the expected term as the average of the contractual term and the vesting period. Estimated volatility is derived from volatility calculated using historical closing prices of common shares of similar entities whose share prices are publicly available for the expected term of the options. The risk-free interest rate is based on the U.S. Treasury constant maturities in effect at the time of grant for the expected term of the options.

The following weighted-average assumptions were used in the Black-Scholes valuation model for options granted during the three months ended March 31, 2021:

Risk-free interest rate	1.69	%
Expected term (in years)	5.0
Dividend yield	-
Expected volatility	75	%

The weighted-average grant-date fair value per share of stock options granted during the year ended March 31, 2021was $1.17. The aggregate grant date fair value of the 5,000 options granted during the three months ended March 31, 2021 was $0 million.

For the three months ended March 31, 2021 and 2020, net compensation expense related to stock options was $0 million and $0.1 million, respectively. As of March 31, 2021, the total compensation expense related to stock options not yet recognized was approximately $0.1 million, which is expected to be recognized over a weighted-average period of approximately 1.04 years.

Warrants

During the year ended December 31, 2020, the Company issued an aggregate of 100,000 common stock in connection with the Secured Credit Facility from Live Oak.

No warrants were exercised during the three months ended March 31, 2021. A summary of activity in warrants was as follows:

	Warrants		Weighted- Average Remaining Life (Years)		Weighted- Average Exercise Price		Aggregate Intrinsic Value
Outstanding as of December 31, 2020		240,278		3.2	$	4.85	$	-
Outstanding as of March 31, 2021		240,278		3.2	$	4.85	$	-