STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

The Company has a shareholder-approved stock incentive plan (as amended, the “Plan”) allowing for the issuance of restricted stock units (“RSUs”), stock options (“Options”), performance units, and other equity awards (collectively “Awards”). As of December 31, 2023, the number of shares authorized for issuance under the Plan was 3,291,461 shares of Class B common stock and there were 1,030,940 shares available for future issuance under the Plan. RSU and Option awards generally vest based on continued service by the recipient of the Award to the Company over a period of up to three years.

The following table reflects stock-based compensation expense:


($ in millions)	2023		2022
Restricted stock units	$	12.0	$	9.4
Options	—		—
Total stock-based compensation	$	12.0	$	9.4

As of December 31, 2023, unamortized stock-based compensation expense and the related weighted-average period over which it is expected to be recognized is presented in the table below.


($ in millions)	Unamortized Expense for Outstanding Awards		Weighted-Average Amortization Period (in years)
Restricted stock units	$	4.5	1.3
Performance Options	3.6		4.8
Total unrecognized stock-based compensation expense	$	8.1	2.9

Restricted Stock Units

RSU activity and the corresponding weighted-average grant-date fair value per share during 2023 and 2022 were as follows:


	Number of RSUs	Weighted -Average Grant Date Fair Value
Outstanding at December 31, 2021	912,128	$	37.48
Granted	551,150	27.92
Vested	(271,596)	35.36
Forfeited	(162,734)	34.19
Cancellation of units under the Plan	(440,000)	35.47
Outstanding at December 31, 2022	588,948	31.92
Granted	1,194,947	8.58
Vested	(805,020)	16.86
Forfeited	(584,714)	14.92
Outstanding at December 31, 2023	394,161	$	14.82

Expected to vest	394,161	$	14.82

Stock Options

Stock options allow recipients to purchase shares of Class B common stock at a fixed exercise price. The fixed exercise price is equal to the price of a share of Class B common stock at the time of grant. The options generally expire 10 years after the grant date.

In connection with his appointment as Chief Executive Officer, the Company granted Michael W. Kennedy an award of performance-based stock options on December 13, 2023 to purchase 825,000 shares (“Performance Options”) of the Company’s Class B common stock, which will vest in installments over a maximum period of five years starting on the grant date, subject to meeting certain stock performance thresholds ranging from $12.00 to $40.00 for a period of 30 days and Mr. Kennedy’s continued service with the Company through each such vesting date. The award was granted as an inducement to Mr. Kennedy’s entry into employment and was approved by the Compensation Committee of the Company’s Board of Directors, in accordance with Nasdaq Listing Rule 5635(c)(4). The award was granted outside of the Plan, as amended.

The fair value of the Performance Options was determined using a Monte Carlo model and the following assumptions:


	2023
Exercise price	$	5.85
Fair value price per share of common stock	$	4.35
Volatility	95.0%
Expected term (years)	9.9
Risk-free interest rate	4.1%
Dividend yield	—
Fair value of award at initial valuation date ($ in millions)	$	3.6

The following is a summary of the stock options activity for the Company for the past two years:


	Number of Options	Weighted Average Exercise Price		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value ($ in millions)
Outstanding at December 31, 2021	2,551	$	79.62	8.7	—
Options granted	—	—			—
Options exercised	—	—			—
Options forfeited or expired	(171)	81.60			—
Outstanding at December 31, 2022	2,380	79.48		6.7	—
Options granted	825,000	5.85		10.0	—
Options exercised	—	—		—	—
Options forfeited or expired	(1,579)	78.40		—	—
Outstanding at December 31, 2023	825,801	$	5.92	9.8	$	1.9

Vested / exercisable at December 31, 2023	801	$	81.60	3.8	$	—
Expected to vest as of December 31, 2023	825,000	$	5.85	9.8	$	1.9

Rights Offering

The Company commenced a $100.0 million rights offering on November 13, 2023 that expired on December 5, 2023, as extended by the Company. To effect this rights offering, the Company’s existing shareholders were granted a dividend of subscription rights to purchase a designated number of shares of Class B common stock at a price of $5.50. Pursuant to the terms of a standby purchase agreement with related parties Mark Tkach, William Coulter, and Stone House Capital Management, LLC, a Delaware limited liability company (“Stone House”) and collectively, the “Standby Purchasers”, the Standby Purchasers acquired $18.9 million of Class B common stock that had not been purchased by other existing shareholders. Net proceeds after expenses incurred to effect the rights offering were $98.4 million, of which the Company used $50.0 million to pay down a portion of the outstanding term loan indebtedness under the Oaktree Credit Agreement. The transaction resulted in the issuance of 18.2 million new shares of Class B common stock.

Common Stock Warrants

In connection with entering into Amendment No. 5 (as defined in Note 9), on August 14, 2023 the Company issued warrants to Oaktree and the lenders to purchase up to 1,212,121 shares of Class B common stock at an exercise price of $12.00. Such warrants are exercisable for up to five years following the date of issuance.

The following table summarizes warrant activity in 2023 and 2022:


	2023	2022
Warrants outstanding at the beginning of the year(1)	1,228,651	1,228,651
New warrant issuances(2)	1,212,121	—
Warrants expiring during the year(1)	(1,228,651)	—
Warrants outstanding at the end of the year(2)	1,212,121	1,228,651

(1) The warrants outstanding in 2022 had a weighted-average exercise price of $34.22 and expired at various times during 2023.

(2) Warrants were granted in 2023 with an exercise price of $12.00, which was adjusted in accordance with the terms of the grant subsequent to the Rights Offering. The exercise price attributable to the Warrants outstanding at December 31, 2023 was $11.25.

The warrants are classified as equity, and the fair value of the warrants was determined at issuance date using the Black-Scholes option pricing model with the following assumptions:


	2023
Exercise price	$	12.00
Fair value per share	$	5.01
Volatility	100.0%
Expected term remaining (years)	5
Risk-free interest rate	4.27%
Dividend yield	—
Fair value at issuance date ($ in millions)	$	6.1

Preferred Stock

The Company has authorized 10 million shares of $0.001 par value preferred stock, with none issued or outstanding as of December 31, 2023 or 2022.