In Fiscal 2018, the Company issued 947,870 shares of the Company’s common stock in a private placement to several investors, including certain of the Company’s directors, officers and large stockholders, to effect certain equity financings required by the Company’s former credit facility. The shares were issued for $4.22 per share and resulted in net cash proceeds to the Company of approximately $3.9 million. In connection with this private placement, the Company issued warrants to these investors to purchase shares of its common stock, as further described under “Stock Warrants” below.

In connection with the refinancing on August 3, 2018, the Company issued warrants to purchase 1,192,997 shares of the Company’s common stock to its term loan lenders at an exercise price of $0.45 per share and issued warrants to purchase 1,600,000 shares of the Company’s common stock to certain of its Junior Notes lenders at an exercise price of $0.50 per share. Each warrant is exercisable on issuance and has a seven-year life. Warrants to purchase 690,000 shares of the Company’s common stock were also issued to the Company’s term loan lenders in connection with the additional $5.3 million term loan on January 30, 2019 at an exercise price of $0.76 per share with a 7-year life. The fair values of these warrants were $1.2 million on their grant dates as determined using a Black Scholes option pricing model and were included as components of deferred financing costs in the Company’s balance sheet with an offset to equity. The following table shows the lenders, their relationship to the Company, the loan amounts provided at the time, and the stock warrants issued to such investors, if any:

(Dollars in thousands)	Term Loan and Junior Note Amounts		Stock Warrant Shares
Term Loan lenders, unrelated parties	$	40,000		1,192,997
Additional Term Loan lenders, unrelated parties		5,250		690,000
Cove Street Capital, LLC, large stockholder		9,000		1,245,000
Jess Ravich, board member and large stockholder		4,400		355,000
Henry Stupp, Chief Executive Officer and board member		100		—
	$	58,750		3,482,997

In connection with the purchase of junior participation interests in the Company’s former credit facility, the Company issued warrants in Fiscal 2018 to purchase 511,111 shares its common stock at an exercise price of $2.25 per share. Each warrant was exercisable on issuance and has a seven-year life. The warrants can be exercised in cash or on a “cashless” basis and are subject to customary adjustments in the event of stock dividends, stock splits, mergers, reclassifications or similar transactions. The fair value of these warrants was $0.6 million on their grant date as determined using a Black Scholes option pricing model and was charged to operating expenses during Fiscal 2018. The following table shows the investors, their relationship to the Company, the amount of their participation interests in the former credit facility and the number of stock warrants issued to such investors:

In connection with the private placement described above, the Company’s issued warrants in Fiscal 2018 to purchase 326,695 shares of its common stock at an exercise price of $4.22 per share. These warrants are exercisable from March 5, 2018 to August 17, 2024. The warrants can be exercised in cash or on a “cashless” basis and are subject to customary adjustments in the event of stock dividends, stock splits, mergers, reclassifications or similar transactions. The fair value of these warrants was $0.7 million on their grant date as determined using a Black Scholes option pricing model and was charged to operating expenses during Fiscal 2018. The following table shows the investors, their relationship to the Company, the amount and number of shares purchased by them in the private place and the number of stock warrant shares issued to such investors:

(Dollars in thousands)	Shares Purchased		Purchase Price of Shares Purchased		Stock Warrant Shares
Jess Ravich, Director and large stockholder		473,934	$	2,000		237,834
Robert Galvin, Chairman of the Board		23,697		100		5,924
Howard Siegel, President, Chief Operating Officer		23,697		100		—
Cove Street Capital, LLC, large stockholder		236,967		1,000		59,241
Other Investors		189,575		800		23,696
		947,870	$	4,000		326,695

The Company issued a warrant in Fiscal 2017 to one of its licensees to purchase 120,000 shares of its common stock in connection with the Hi-Tec Acquisition. (See Note 2.) The warrant vests in five tranches of 20,000 shares over the five-year initial term of the license agreement, plus a 6th tranche that vests only if the license agreement is renewed for a subsequent five-year period. The 6th tranche is assigned no value until the related contingency is resolved. The fair value of the first five tranches of the stock warrant was $0.6 million on issuance. Contra-revenue and additional paid-in capital of $0.1 million was recognized in both Fiscal 2019 and Fiscal 2018. As of February 2, 2019, total unrecognized expense related to the first five tranches of the stock warrant was approximately $0.4 million, which is being recognized over the remaining 3-year life of the related license agreement.

	Year Ended
	February 2, 2019				February 3, 2018
	Outstanding Stock Warrant Shares		Average Exercise Price Per Share		Outstanding Stock Warrant Shares		Average Exercise Price Per Share
Unexercisable warrants issued to licensee		80,000	$	10.00		100,000	$	10.00
Exercisable warrants issued to licensee		40,000		10.00		20,000		10.00
Warrants issued to junior note holders		1,756,111		1.01		511,111		2.25
Warrants issued in private placement		326,695		4.22		326,695		4.22
Warrants issued to term loan lenders		1,882,997		0.56
		4,085,803	$	1.32		957,806	$	3.81

Stock warrants of 355,000 shares were exercised in Fiscal 2019 at an exercise price of $0.50 per share, and stock warrants of 1,245,000 shares were exercised in March 2019 at an exercise price of $0.50 per share.

Effective July 16, 2013, the Company’s stockholders approved the Cherokee Inc. 2013 Stock Incentive Plan, which was amended and restated effective June 6, 2016 (the “2013 Plan”), and which generally replaced the Company’s previous stock option plans to provide for the issuance of stock‑based awards to officers, other employees and directors. The 2013 Plan authorizes 1,200,000 shares of common stock to be issued and 472,487 shares of common stock previously reserved but unissued under previous plans.

Stock options issued to employees are granted at the market price on the date of grant, generally vest over a three-year period, and generally expire seven to ten years from the date of grant. The Company has also granted non‑plan stock options to certain executives as a material inducement for employment. The Company estimates the fair value of stock‑based payment awards on the date of grant using the Black-Scholes option‑pricing model. The compensation expense recognized for all stock‑based awards is net of estimated forfeitures over the award’s service period. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service period as a component of operating expenses in the statements of operations, and amounted to 0.9 million and 1.2 million for Fiscal 2019 and Fiscal 2018, respectively.

The estimated fair value of stock options granted was estimated using the following assumptions:

	Year Ended
	February 2, 2019				February 3, 2018
Expected dividend yield	—			%	—			%
Expected volatility	67.8	to	84.5		39.8	to	58.9
Risk-free interest rate	2.4%	to	2.6	%	1.9%	to	2.3	%
Expected life (in years)	3.0	to	3.7		4.8	to	4.9
Estimated forfeiture rate	—%	to	10.0	%	—%	to	10.0	%

The expected dividend yield is based on past dividends paid and the current dividend yield at the time of grant, and the expected stock price volatility is based on the historical volatility of the Company’s stock price. The risk‑free interest rate is based on the U.S. Treasury yield in effect at the time of grant with an equivalent remaining term. The expected life of the stock options is based on historical experience of similar options, giving consideration to the contractual terms, vesting schedules and expectations of future employee behavior.

(Dollar amounts in thousands, except per share amounts)	Shares			Weighted Average Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding, at January 28, 2017		1,092,502		$	16.59		3.7		—
Granted		143,000		$	3.61
Exercised		—		$	—
Canceled/forfeited		(860,168	)	$	17.05
Outstanding, at February 3, 2018		375,334		$	10.59		4.2		—
Granted		106,000		$	0.59
Exercised		—		$	—
Canceled/forfeited		(64,833	)	$	11.34
Outstanding, at February 2, 2019		416,501		$	7.93		3.5		—
Vested and Exercisable at February 2, 2019		230,165		$	12.47		2.6		—

The weighted-average grant date fair value of stock options granted under the 2013 Plan was $0.32 and $1.51 for Fiscal 2019 and Fiscal 2018, respectively. The aggregate intrinsic values shown in the table above represent the difference between the Company’s closing stock price on February 2, 2019 and the exercise price, multiplied by the number of shares subject to in‑the‑money stock options that would have been received by the option holders if all option holders exercised their stock options on February 1, 2019 (the last trading day of Fiscal 2019). There were no stock option exercises in Fiscal 2019 or Fiscal 2018.

As of February 2, 2019, total unrecognized stock‑based compensation expense related to nonvested stock options was approximately $0.1 million, which is expected to be recognized over a weighted-average period of approximately 1.3 years. The total fair value of all stock options that vested was approximately $0.1 million and $0.3 million during Fiscal 2019 and Fiscal 2018, respectively.

The Compensation Committee of the Board of Directors has granted performance stock units, restricted stock units and stock options to members of the Board of Directors and to each of the Company’s executive officers under the 2013 Plan. No performance stock units were granted in Fiscal 2019, and previously granted performance stock units are not expected to vest because share price targets are not expected to be met during the 3-year performance period. These equity awards typically vest in equal annual installments over three years, such that all shares subject to each award will be vested on the third anniversary of the grant date. Restricted units granted in lieu of cash compensation vest on issuance. The fair value of the restricted stock unit awards was measured on the effective date of grant using the price of the Company’s common stock.

Stock-based compensation expense for performance stock units and restricted stock units is reported as a component of operating expenses and was approximately $0.7 million and $1.3 million for Fiscal 2019 and Fiscal 2018, respectively.

Changes in performance stock units and restricted stock units are summarized as follows:

	Number of Shares			Weighted Average Grant-Date Fair Value
Unvested stock at January 28, 2017		157,169		$	19.71
Granted		185,951			2.23
Vested		(101,468	)		13.69
Forfeited		(28,667	)		17.31
Unvested stock at February 3, 2018		212,985		$	7.64
Granted		984,617			0.76
Vested		(348,753	)		3.77
Forfeited		(144,894	)		3.25
Unvested stock at February 2, 2019		703,955		$	0.83

As of February 2, 2019, total unrecognized stock‑based compensation expense related to performance stock units and restricted stock units was approximately $0.5 million, which is expected to be recognized over a weighted-average period of approximately 2.6 years.