Concentration of Credit Risk Accounts receivable potentially subject the Company to concentrations of credit risk. As of December 31, 2022, three customers accounted for a total of 69% of the Company’s accounts receivable balance, or 36%, 24%, and 9%, respectively. As of December 31, 2021, three customers accounted for a total of 50% of the Company’s accounts receivable balance, or 25%, 13%, and 13%, respectively. The Company’s customers are predominantly retailers who sell the Company’s products to end consumers. Given that, along with the Company’s customers being major U.S. retailers, the Company does not consider the concentration of its trade account receivables to be a significant risk. NOTE 14. EQUITY BASED COMPENSATION Restricted Stock Units issued to Officers and Employees On October 11, 2021, the Company’s board of directors approved the Company’s 2021 Stock Incentive Plan (the “Plan”). The Plan provides for the issuance of equity compensation grants to employees, as well as members of its board of directors, in the form of stock options, restricted stock, restricted stock units (“RSU”), and stock appreciation rights (“SARS”), for up to 3,700,000 shares of the Company’s Class A common stock. In addition, the Plan provides for an employee stock purchase program (“ESPP”), also included as part of the 3,700,000 shares authorized under the Plan. As of December 31, 2022, the Company has issued RSUs to certain directors, officers and consultants. Each RSU granted constitutes a right to receive one share of the Company’s Class A common stock, subject to the vesting terms specific to each agreement. The shares of the Company’s common stock underlying the number of vested RSUs are intended to be delivered as soon as practicable after vesting occurs. During the period between grant and vesting, the RSUs may not be transferred, and the grantee has no rights as a shareholder until vesting has occurred. If the grantee’s employment is terminated for any reason (other than following a change in control of the Company or a termination of an officer other than for cause), then any unvested RSUs under the award will automatically terminate and be forfeited. If a grantee’s employment is terminated by the Company without cause or by the grantee for good reason, then, provided that the RSUs have not been previously forfeited, the remaining unvested portion of the RSUs will immediately vest as of the grantee’s termination date. In the event of a change in control, the Company’s obligations regarding outstanding RSUs shall, on such terms as may be approved by the Company’s Compensation Committee prior to such event, immediately vest, be assumed by the surviving or continuing company or cancelled in exchange for property (including cash). As of December 31, 2022, there were 1,343,086 shares available under the Plan for future equity grants. Restricted Stock Units issued to Officers and Employees The following table details the activity related to RSUs during 2022: Restricted Stock Units GrantDate FairValue Outstanding/Unvested at December 31, 2021 . . . . . . . . . . 1,113,410 9.50 Granted ....................................... 1,393,395 6.26 Forfeited ...................................... (26,494) 6.26 Vested ........................................ (95,415) 9.19 Outstanding/Unvested at December 31, 2022 . . . . . . . . . . 2,384,896 Of the total RSUs issued during 2022, 1,306,323 were issued to employees and consultants of the Company and 87,072 were issued to the Company’s Directors. The RSUs issued to the Company’s officers cliff vest 100% on the 3rd anniversary date of the grant. The RSUs issued to Company’s directors vest 50% on the first anniversary date of the grant, and 50% on the second. Those granted to non-officer employees generally vest one-third over three years on the first, second and third anniversary dates of the grant. All vesting related to RSUs is subject to continued service, with the exception of involuntary terminations for reasons other than cause. 73
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