☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 83-4284557 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
Title of Each Class | Trading Symbol(s) | Name of Registered |
N/A | N/A | N/A |
Large accelerated filer | ☐ | Accelerated filer ☐ | |||
Non-accelerated filer ☒ | Smaller reporting company ☒ | ||||
Emerging growth company | ☐ |
Item | Page | |
PART I – FINANCIAL INFORMATION | ||
1. | Financial Statements | 4 |
4 | ||
5 | ||
6 | ||
7 | ||
8 | ||
Notes to the Condensed Consolidated Financial Statements | 10 | |
2. | 30 | |
3. | 38 | |
4. | 38 | |
PART II – OTHER INFORMATION | ||
1. | 39 | |
1A. | Risk Factors | 39 |
2. | 39 | |
3. | 39 | |
4. | 39 | |
5. | 39 | |
6. | 39 | |
44 |
June 30, 2020 (unaudited) | December 31, 2019 | |||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 3,462 | $ | 2,361 | ||||
Restricted cash | 25 | 173 | ||||||
Accounts receivable, net | 4,203 | 5,824 | ||||||
Inventories, net | 5,420 | 6,580 | ||||||
Prepaid expenses and other current assets | 3,317 | 2,641 | ||||||
Total Current Assets | 16,427 | 17,579 | ||||||
Property and equipment, net | 321 | 417 | ||||||
Right-of-use assets, operating leases | 801 | 951 | ||||||
Intangible assets, net | 13,878 | 14,641 | ||||||
Goodwill | 18,614 | 18,614 | ||||||
Other assets | 687 | 1,330 | ||||||
Total Assets | $ | 50,728 | $ | 53,532 | ||||
Liabilities & Stockholders’ Deficit | ||||||||
Current Liabilities | ||||||||
Short term loan, net | $ | 18,157 | $ | 16,061 | ||||
Line of credit, net | 5,687 | 4,819 | ||||||
PPP loans | 333 | - | ||||||
Other liabilities | 209 | 500 | ||||||
Accounts payable | 4,044 | 4,049 | ||||||
Accrued liabilities | 4,731 | 4,721 | ||||||
Deferred revenue | 354 | 311 | ||||||
Operating lease liability, current portion | 341 | 345 | ||||||
Warrant derivative liability | 4,315 | 2,220 | ||||||
Total Current Liabilities | 38,171 | 33,026 | ||||||
Noncurrent Liabilities | ||||||||
Notes payable, net | 17,594 | 16,370 | ||||||
PPP loans | 519 | - | ||||||
Operating lease liability | 492 | 641 | ||||||
Total Noncurrent Liabilities | 18,605 | 17,011 | ||||||
Total Liabilities | 56,776 | 50,037 | ||||||
Redeemable Series E Convertible Preferred Stock | ||||||||
Redeemable Series E preferred stock, $0.001 par value, 2,900,000 shares authorized, 1,387,378 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively | 10,566 | 10,566 | ||||||
Stockholders’ Deficit | ||||||||
Common stock, $0.001 par value, 88,000,000 shares authorized, 48,939,708 and 47,977,390 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively | 49 | 48 | ||||||
Additional paid-in capital | 212,532 | 194,150 | ||||||
Accumulated deficit | (229,195 | ) | (201,269 | ) | ||||
Total Stockholders’ Deficit | (16,614 | ) | (7,071 | ) | ||||
Total Liabilities, Redeemable Preferred Stock and Stockholders’ Deficit | $ | 50,728 | $ | 53,532 |
6/30/2019 (Unaudited) | 12/31/2018 | |||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 5,019 | $ | 3,946 | ||||
Restricted cash | 6,243 | - | ||||||
Accounts receivable, net | 333 | 276 | ||||||
Inventories, net | 1,707 | 1,557 | ||||||
Prepaid expenses and other current assets | 1,134 | 269 | ||||||
Total Current Assets | 14,436 | 6,048 | ||||||
Property and equipment, net | 59 | 71 | ||||||
Right of use asset, operating lease, net of accumulated amortization | 840 | - | ||||||
Intangible assets, net | 961 | - | ||||||
Other assets | 182 | 28 | ||||||
Total Assets | $ | 16,478 | $ | 6,147 | ||||
Liabilities & Stockholders’ Deficit | ||||||||
Current Liabilities | ||||||||
Line of credit | $ | - | $ | 4,600 | ||||
Other liabilities | - | 1,899 | ||||||
Long-term debt, current portion | 6,200 | 1,600 | ||||||
Accounts payable | 2,413 | 765 | ||||||
Due to related parties | 134 | - | ||||||
Accrued liabilities | 2,198 | 244 | ||||||
Deferred revenue | 318 | 66 | ||||||
Operating lease liability, current portion | 262 | - | ||||||
Warrant derivative liability | 2,304 | - | ||||||
Total Current Liabilities | 13,829 | 9,174 | ||||||
Operating lease liability | 590 | - | ||||||
Deferred rent | 15 | 15 | ||||||
Total Liabilities | 14,434 | 9,189 | ||||||
Commitments and contingencies | - | - | ||||||
Redeemable Series E Convertible Preferred Stock, $0.001 par value, 2,900,000 & 0 shares authorized, 1,707,919 & 0 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively. | 13,007 | - | ||||||
Stockholders’ Deficit | ||||||||
Common Stock, $0.001 par value, 88,000,000 shares authorized, 43,168,161 & 11,661,485 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively. | 43 | 12 | ||||||
Convertible Series A Preferred Units, $0.001 par value, units equivalent to 0 & 2,391,403 Common Stock issued and outstanding at June 30, 2019 and December 31, 2018, respectively | - | 2 | ||||||
Additional paid-in capital | 170,017 | 13,642 | ||||||
Accumulated deficit | (181,023 | ) | (16,698 | ) | ||||
Total Stockholders’ Deficit | (10,963 | ) | (3,042 | ) | ||||
Total Liabilities, Redeemable Preferred Stock and Stockholders’ Deficit | $ | 16,478 | $ | 6,147 |
For the Six Months ended June 30, | For the Three Months ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net Sales | $ | 7,635 | $ | 7,064 | $ | 4,084 | $ | 3,817 | ||||||||
Cost of Goods Sold | 4,082 | 3,329 | 2,421 | 1,384 | ||||||||||||
Gross Profit | 3,553 | 3,735 | 1,663 | 2,433 | ||||||||||||
Operating Expenses: | ||||||||||||||||
General & Administrative Expense | 6,004 | 1,351 | 4,571 | 665 | ||||||||||||
Share-Based Compensation Expense | 4,212 | - | 4,006 | - | ||||||||||||
Sales & Marketing | 5,597 | 2,819 | 3,412 | 1,512 | ||||||||||||
Other Operating Expenses | 1,721 | 1,899 | 937 | 958 | ||||||||||||
Total Operating Expenses | 17,534 | 6,069 | 12,926 | 3,135 | ||||||||||||
Loss from Operations | (13,981 | ) | (2,334 | ) | (11,263 | ) | (702 | ) | ||||||||
Other Income (Expense) | ||||||||||||||||
Interest Expense | (124 | ) | (66 | ) | (62 | ) | (43 | ) | ||||||||
Loss on Acquisition | (149,988 | ) | - | (149,988 | ) | - | ||||||||||
Change in Fair Value of Derivative Liability | (193 | ) | - | (193 | ) | - | ||||||||||
Total Other Expenses | (150,305 | ) | (66 | ) | (150,243 | ) | (43 | ) | ||||||||
Net Loss | (164,286 | ) | (2,400 | ) | (161,506 | ) | (745 | ) | ||||||||
Preferred dividends | 27 | - | 27 | - | ||||||||||||
Net Loss Available to Common Stockholders | $ | (164,313 | ) | $ | (2,400 | ) | $ | (161,533 | ) | $ | (745 | ) | ||||
Weighted Average Number of Shares Outstanding | 21,202,188 | 11,497,128 | 30,638,048 | 11,497,128 | ||||||||||||
Loss per share, basic and diluted | $ | (7.75 | ) | $ | (0.21 | ) | $ | (5.27 | ) | $ | (0.06 | ) |
Six Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Net sales | $ | 22,167 | $ | 7,635 | $ | 9,941 | $ | 4,084 | ||||||||
Cost of goods sold | 13,886 | 4,082 | 5,817 | 2,421 | ||||||||||||
Gross profit | 8,281 | 3,553 | 4,124 | 1,663 | ||||||||||||
Operating expenses: | ||||||||||||||||
General and administrative | 19,650 | 7,174 | 11,594 | 5,211 | ||||||||||||
Share-based compensation | 5,504 | 4,212 | 3,020 | 4,006 | ||||||||||||
Sales and marketing | 3,807 | 5,597 | 1,848 | 3,412 | ||||||||||||
Customer service and warehousing | 352 | 551 | 162 | 297 | ||||||||||||
Total operating expenses | 29,313 | 17,534 | 16,624 | 12,926 | ||||||||||||
Loss from operations | (21,032 | ) | (13,981 | ) | (12,500 | ) | (11,263 | ) | ||||||||
Other expense: | ||||||||||||||||
Interest expense, net | 4,731 | 124 | 2,430 | 62 | ||||||||||||
Loss on acquisitions | - | 149,988 | - | 149,988 | ||||||||||||
Change in fair value of warrant derivative liability | 2,095 | 193 | 3,474 | 193 | ||||||||||||
Total other expense, net | 6,826 | 150,305 | 5,904 | 150,243 | ||||||||||||
Net and comprehensive loss | (27,858 | ) | (164,286 | ) | (18,404 | ) | (161,506 | ) | ||||||||
Preferred dividends | 68 | 27 | 34 | 27 | ||||||||||||
Net and comprehensive loss available to common stockholders | (27,926 | ) | (164,313 | ) | (18,438 | ) | (161,533 | ) | ||||||||
Weighted average number of shares outstanding, basic and diluted | 48,733,052 | 21,202,188 | 48,939,708 | 30,638,048 | ||||||||||||
Loss per share, basic and diluted | $ | (0.57 | ) | $ | (7.75 | ) | $ | (0.38 | ) | $ | (5.27 | ) |
Common Stock | Series A Preferred Units | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Total | ||||||||||||||||||||||
Balance at December 31, 2017 | 11,497,128 | $ | 11,497 | $ | 8,545,446 | $ | (10,672,090 | ) | $ | (2,115,147 | ) | |||||||||||||||||
Net loss for the period | (1,655,302 | ) | (1,655,302 | ) | ||||||||||||||||||||||||
Subtotal - March 31, 2018 | 11,497,128 | 11,497 | 8,545,446 | (12,327,392 | ) | (3,770,449 | ) | |||||||||||||||||||||
Net loss for the period | (744,558 | ) | (744,558 | ) | ||||||||||||||||||||||||
Subtotal - June 30, 2018 | 11,497,128 | 11,497 | 8,545,446 | (13,071,950 | ) | (4,515,007 | ) | |||||||||||||||||||||
Shares issued pursuant to private placement | 2,391,403 | 2,391 | 4,665,609 | 4,668,000 | ||||||||||||||||||||||||
Stock compensation pursuant to services provided | 164,357 | 164 | 430,647 | 430,811 | ||||||||||||||||||||||||
Net loss for the period | (3,626,157 | ) | (3,626,157 | ) | ||||||||||||||||||||||||
Balance at December 31, 2018 | 11,661,485 | 11,661 | 2,391,403 | 2,391 | 13,641,701 | (16,698,107 | ) | (3,042,353 | ) | |||||||||||||||||||
Impact on Prior Year of Adoption of ASC 842 | (11,824 | ) | (11,824 | ) | ||||||||||||||||||||||||
Shares issued pursuant to private placement | 69,115 | 69 | 149,931 | 150,000 | ||||||||||||||||||||||||
Stock compensation pursuant to services provided | 18,964 | 19 | 206,147 | 206,166 | ||||||||||||||||||||||||
Net loss for the period | (2,780,082 | ) | (2,780,082 | ) | ||||||||||||||||||||||||
Subtotal - March 31, 2019 | 11,680,449 | 11,680 | 2,460,517 | 2,461 | 13,997,779 | (19,490,013 | ) | (5,478,093 | ) | |||||||||||||||||||
Stock compensation pursuant to services provided | 1,099,822 | 1,100 | 2,225,907 | 2,227,006 | ||||||||||||||||||||||||
Stock based commissions to third parties | 798,492 | 798 | 4,790,156 | 4,790,955 | ||||||||||||||||||||||||
Conversion of Series A Preferred Units to Common Stock | 2,460,517 | 2,461 | (2,460,517 | ) | (2,461 | ) | - | |||||||||||||||||||||
Retired TruPet Units | (1,011,748 | ) | (1,012 | ) | (2,198,988 | ) | (2,200,000 | ) | ||||||||||||||||||||
Subtotal - May 6, 2019 (Pre-Transaction) | 15,027,533 | 15,028 | - | - | 18,814,854 | (19,490,013 | ) | (660,132 | ) | |||||||||||||||||||
Acquisition of Better Choice Company | 3,117,364 | 3,117 | 18,701,067 | 18,704,184 | ||||||||||||||||||||||||
Acquisition of Bona Vida | 18,003,273 | 18,003 | 108,001,637 | 108,019,640 | ||||||||||||||||||||||||
PIPE (net of issuance costs) | 5,744,991 | 5,745 | 15,670,045 | 15,675,790 | ||||||||||||||||||||||||
Subtotal - May 6, 2019 (Post-Transaction) | 41,893,161 | 41,893 | 161,187,602 | (19,490,013 | ) | 141,739,482 | ||||||||||||||||||||||
Stock compensation pursuant to services provided | 100,000 | 100 | 599,900 | 600,000 | ||||||||||||||||||||||||
Conversion of Series E Preferred Stock | 1,175,000 | 1,175 | 7,050,678 | 7,051,853 | ||||||||||||||||||||||||
Vesting of stock options for services provided | 1,178,997 | 1,178,997 | ||||||||||||||||||||||||||
Net loss for the period | (161,533,182 | ) | (161,533,182 | ) | ||||||||||||||||||||||||
Balance at June 30, 2019 | 43,168,161 | $ | 43,168 | $ | 170,017,177 | $ | (181,023,195 | ) | $ | (10,962,849 | ) |
Common Stock | Redeemable Series E Convertible Preferred Stock | |||||||||||||||||||||||||||
Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Deficit | Shares | Amount | ||||||||||||||||||||||
Balance as of December 31, 2019 | 47,977,390 | $ | 48 | $ | 194,150 | $ | (201,269 | ) | $ | (7,071 | ) | 1,387,378 | $ | 10,566 | ||||||||||||||
Shares issued pursuant to a private placement | 308,642 | - | 500 | - | 500 | - | - | |||||||||||||||||||||
Share-based compensation | 455,956 | 1 | 2,484 | - | 2,485 | - | - | |||||||||||||||||||||
Shares and warrants issued to third party for contract termination | 72,720 | - | 198 | - | 198 | - | - | |||||||||||||||||||||
Shares issued to third parties for services | 125,000 | - | 125 | - | 125 | - | - | |||||||||||||||||||||
Warrants issued to third parties for services | - | - | 2,594 | - | 2,594 | - | - | |||||||||||||||||||||
Net and comprehensive loss available to common stockholders | - | - | - | (9,488 | ) | (9,488 | ) | - | - | |||||||||||||||||||
Balance as of March 31, 2020 | 48,939,708 | $ | 49 | $ | 200,051 | $ | (210,757 | ) | $ | (10,657 | ) | 1,387,378 | $ | 10,566 | ||||||||||||||
Warrants issued to third parties for services | - | - | 7,390 | - | 7,390 | - | - | |||||||||||||||||||||
Share-based compensation | - | - | 3,020 | - | 3,020 | - | - | |||||||||||||||||||||
Warrants issued in connection with June 2020 Notes | - | - | 337 | - | 337 | - | - | |||||||||||||||||||||
Beneficial conversion feature of June 2020 Notes | - | - | 1,163 | - | 1,163 | - | - | |||||||||||||||||||||
Modification of conversion feature for November 2019 Notes, Seller Notes, and ABG Notes | - | - | 528 | - | 528 | - | - | |||||||||||||||||||||
Modification of warrants | - | - | 43 | - | 43 | - | - | |||||||||||||||||||||
Net and comprehensive loss available to common stockholders | - | - | - | (18,438 | ) | (18,438 | ) | - | - | |||||||||||||||||||
Balance as of June 30, 2020 | 48,939,708 | $ | 49 | $ | 212,532 | $ | (229,195 | ) | $ | (16,614 | ) | 1,387,378 | $ | 10,566 |
Common Stock | Series A Preferred Units | Redeemable Series E Convertible Preferred Stock | ||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Additional paid-in capital | Accumulated deficit | Total Stockholders’ Deficit | Shares | Amount | ||||||||||||||||||||||||||||
Balance as of December 31, 2018 | 11,661,485 | $ | 12 | 2,391,403 | $ | 2 | $ | 13,642 | $ | (16,698 | ) | $ | (3,042 | ) | - | $ | - | |||||||||||||||||||
Shares issued pursuant to a private placement – net proceeds | - | - | 69,115 | - | 150 | - | 150 | |||||||||||||||||||||||||||||
Share-based compensation | 18,964 | - | - | - | 206 | - | 206 | - | - | |||||||||||||||||||||||||||
Net and comprehensive loss available to common stockholders | - | - | - | - | - | (2,776 | ) | (2,776 | ) | - | - | |||||||||||||||||||||||||
Balance as of March 31,2019 | 11,680,449 | $ | 12 | 2,460,518 | $ | 2 | $ | 13,998 | $ | (19,474 | ) | $ | (5,462 | ) | - | $ | - | |||||||||||||||||||
Share-based compensation | 1,199,822 | 2 | - | - | 4,006 | - | 4,008 | - | - | |||||||||||||||||||||||||||
Conversion of Series A shares to common stock | 2,460,518 | 2 | (2,460,518 | ) | (2 | ) | - | - | - | - | - | |||||||||||||||||||||||||
Acquisition of treasury shares | (1,011,748 | ) | (1 | ) | - | - | (2,199 | ) | - | (2,200 | ) | - | - | |||||||||||||||||||||||
Acquisition of Better Choice | 3,915,856 | 3 | - | - | 23,490 | - | 23,493 | 2,633,678 | 20,059 | |||||||||||||||||||||||||||
Acquisition of Bona Vida | 18,003,273 | 18 | - | - | 108,002 | - | 108,020 | - | - | |||||||||||||||||||||||||||
Shares and warrants issued pursuant to private issuance of public equity (PIPE) – net proceeds | 5,744,991 | 6 | - | - | 15,670 | - | 15,676 | - | - | |||||||||||||||||||||||||||
Conversion of Series E Preferred Stock | 1,175,000 | 1 | - | - | 7,050 | - | 7,051 | (925,758 | ) | (7,052 | ) | |||||||||||||||||||||||||
Net and comprehensive loss available to common stockholders | - | - | - | - | - | (161,533 | ) | (161,533 | ) | - | - | |||||||||||||||||||||||||
Balance as of June 30, 2019 | 43,168,161 | $ | 43 | - | $ | - | $ | 170,017 | $ | (181,007 | ) | $ | (10,947 | ) | 1,707,920 | $ | 13,007 |
Cash Flow from Operating Activities | June 30, 2019 | June 30, 2018 | ||||||
Net loss | $ | (164,286 | ) | $ | (2,400 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization | 45 | 7 | ||||||
Stock-based compensation expense | 4,212 | - | ||||||
Non-cash lease expense | 2 | - | ||||||
Change in fair value of derivative liability | 193 | - | ||||||
Loss on acquisition | 149,988 | - | ||||||
Other | (4 | ) | - | |||||
(Increase) decrease in operating assets | ||||||||
Accounts receivable | (27 | ) | (50 | ) | ||||
Inventories | 42 | (296 | ) | |||||
Prepaid expenses and other assets | (466 | ) | 48 | |||||
Change in operating lease right of use asset | (457 | ) | - | |||||
(Decrease) increase in current liabilities | ||||||||
Accounts payable | (32 | ) | 530 | |||||
Accrued liabilities | 1,600 | 76 | ||||||
Deferred revenue | 252 | 68 | ||||||
Deferred rent | - | (9 | ) | |||||
Change in Lease liability | 457 | - | ||||||
Cash Used in Operating Activities | $ | (8,481 | ) | $ | (2,026 | ) | ||
Cash Flow from Investing Activities | ||||||||
Cash spent for acquisition of fixed assets (Office Furniture) | (4 | ) | (31 | ) | ||||
Cash acquired in merger | 1,955 | - | ||||||
Security deposits paid | (81 | ) | - | |||||
Cash Provided by (Used in) Investing Activities | $ | 1,870 | $ | (31 | ) | |||
Cash Flow from Financing Activities | ||||||||
Repayment of advance | (1,899 | ) | - | |||||
Proceeds from private placement of Series A Preferred Units | 150 | - | ||||||
Proceeds from private issuance of public equity | 15,676 | - | ||||||
Payment of old debt | (6,200 | ) | - | |||||
Proceeds from the issuance of debt | 6,200 | 2,013 | ||||||
Cash Provided by Financing Activities | $ | 13,927 | $ | 2,013 | ||||
Net Changes in Cash, Cash Equivalents and Restricted Cash | $ | 7,316 | $ | (44 | ) | |||
Total Cash, Cash Equivalents and Restricted Cash, Beginning of Period | 3,946 | 157 | ||||||
Total Cash, Cash Equivalents and Restricted Cash, End of Period | $ | 11,262 | $ | 113 |
Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
Cash Flow from Operating Activities: | ||||||||
Net and comprehensive loss available to common stockholders | $ | (27,926 | ) | $ | (164,313 | ) | ||
Adjustments to reconcile net and comprehensive loss to net cash used in operating activities: | ||||||||
Non-cash expenses | ||||||||
Shares and warrants issued to third parties for services | 10,182 | - | ||||||
Modification of warrants | 43 | - | ||||||
Contract termination costs | 649 | - | ||||||
Depreciation and amortization | 866 | 45 | ||||||
Amortization of debt issuance costs and discounts | 2,353 | - | ||||||
Share-based compensation | 5,504 | 4,212 | ||||||
Lease expenses | (3 | ) | 2 | |||||
Change in fair value of warrant derivative liability | 2,095 | 193 | ||||||
Payment In Kind (PIK) interest expense on notes payable | 939 | - | ||||||
Loss on acquisitions | - | 149,988 | ||||||
Changes in operating assets and liabilities, net of effects of business acquisition: | ||||||||
Accounts receivable, net | 1,621 | (27 | ) | |||||
Inventories, net | 1,161 | 42 | ||||||
Prepaid expenses and other current assets | 176 | (466 | ) | |||||
Other assets | (84 | ) | (457 | ) | ||||
Accounts payable | (5 | ) | (32 | ) | ||||
Accrued liabilities | 10 | 1,627 | ||||||
Deferred revenue | 43 | 252 | ||||||
Change in lease liability | - | 457 | ||||||
Other | 208 | (4 | ) | |||||
Cash Used in Operating Activities | $ | (2,168 | ) | $ | (8,481 | ) | ||
Cash Flow from Investing Activities | ||||||||
Cash acquired in the May Acquisitions | $ | - | $ | 1,955 | ||||
Security deposits | - | (81 | ) | |||||
Acquisition of property and equipment, net | (6 | ) | (4 | ) | ||||
Cash (Used in) Provided by Investing Activities | $ | (6 | ) | $ | 1,870 | |||
Cash Flow from Financing Activities | ||||||||
Proceeds from shares issued pursuant to private placement, net | $ | - | $ | 15,826 | ||||
Payment of old debt | - | (6,200 | ) | |||||
Proceeds from issuance of debt | - | 6,200 | ||||||
Proceeds from revolving line of credit | 1,075 | - | ||||||
Payments on revolving line of credit | (300 | ) | - | |||||
Proceeds from PPP loans | 852 | - | ||||||
Proceeds from June 2020 Notes | 1,500 | - | ||||||
Cash advance, net | - | (1,899 | ) | |||||
Cash Provided by Financing Activities | $ | 3,127 | $ | 13,927 | ||||
Net Increase in Cash and cash equivalents and Restricted cash | $ | 953 | $ | 7,316 | ||||
Total Cash and cash equivalents, Beginning of Period | 2,534 | 3,946 | ||||||
Total Cash and cash equivalents and Restricted cash, End of Period | $ | 3,487 | $ | 11,262 |
Right-of-use assets and operating lease liability acquired under operating leases | ||||
Right-of-use assets recorded upon adoption of ASC 842 | $ | 421 | ||
Operating lease liability recorded upon adoption of ASC 842 | (429 | ) | ||
Noncash acquisition of right-of-use assets for leases entered into during period | 607 | |||
Noncash acquisition of operating lease liability for leases entered into during the period | (594 | ) |
Assets | ||||
Current Assets | ||||
Accounts receivable, net | $ | 30 | ||
Inventories, net | 193 | |||
Prepaid expenses and other current assets | 399 | |||
Total Current Assets | 622 | |||
Intangible Assets | 986 | |||
Other assets | 74 | |||
Total Assets | $ | 1,682 | ||
Liabilities | ||||
Current Liabilities | ||||
Accounts payable | $ | (1,814 | ) | |
Accrued liabilities | (325 | ) | ||
Total Current Liabilities | (2,139 | ) | ||
Warrant derivative liability | (2,111 | ) | ||
Total Liabilities | $ | (4,250 | ) | |
Redeemable Series E Preferred Stock | $ | 20,059 | ||
On January 1, 2019, the Company adopted ASC 842 which resulted in the acquisition of right of use assets and lease liabilities as follow: | ||||
Right of use asset and lease liability acquired under operating leases | ||||
Right of Use asset recorded upon adoption of ASC 842 | $ | 477 | ||
Lease liability recorded upon adoption of ASC 842 | (489 | ) |
Dollars in thousands | June 30, 2019 | December 31, 2018 | ||||||
Cash and cash equivalents | $ | 5,019 | $ | 3,946 | ||||
Restricted cash | 6,243 | 0 | ||||||
Total cash, cash equivalents and restricted cash | $ | 11,262 | $ | 3,946 |
Dollars in thousands | ||||
Total Purchase Price | $ | 38,244 | ||
Assets | ||||
Property and equipment | $ | 260 | ||
Accounts receivable | 5,540 | |||
Inventories | 5,160 | |||
Intangible assets | 14,690 | |||
Other assets | 329 | |||
Total assets | 25,979 | |||
Liabilities | ||||
Accounts payable | 4,628 | |||
Accrued liabilities | 1,553 | |||
Long term liability | 168 | |||
Total liabilities | 6,349 | |||
Net assets acquired | 19,630 | |||
Goodwill | $ | 18,614 |
Dollars in thousands | Better Choice Company | Bona Vida | Total | |||||||||
Total Purchase Price | $ | 37,949 | $ | 108,620 | $ | 146,569 | ||||||
Net Assets (Liabilities) Acquired: | ||||||||||||
Assets | ||||||||||||
Cash and cash equivalents | 7 | 384 | 391 | |||||||||
Restricted cash | - | 25 | 25 | |||||||||
Accounts receivable | - | 69 | 69 | |||||||||
Inventories | - | 95 | 95 | |||||||||
Prepaid expenses and other current assets | 32 | 348 | 380 | |||||||||
Intangible assets | 986 | - | 986 | |||||||||
Other assets | - | 74 | 74 | |||||||||
Total Assets | 1,025 | 995 | 2,020 | |||||||||
Liabilities | ||||||||||||
Warrant derivative liability | (2,130 | ) | - | (2,130 | ) | |||||||
Accounts payable & accrued liabilities | (544 | ) | (153 | ) | (697 | ) | ||||||
Total Liabilities | (2,674 | ) | (153 | ) | (2,827 | ) | ||||||
Net Assets (Liabilities) Acquired | (1,649 | ) | 842 | (807 | ) | |||||||
Loss on Acquisitions | $ | (39,598 | ) | $ | (107,778 | ) | $ | (147,376 | ) | |||
Correction recorded in the third quarter of 2019 | (2,612 | ) | ||||||||||
Loss on acquisitions as reported for the six months ended June 30, 2019 | $ | (149,988 | ) |
Dollars in thousands | Better Choice Company | Bona Vida | Total | |||||||||
Assets | ||||||||||||
Current Assets | ||||||||||||
Cash and cash equivalents | $ | 1,546 | $ | 384 | $ | 1,930 | ||||||
Restricted cash | 25 | 25 | ||||||||||
Accounts receivable | 30 | 30 | ||||||||||
Intercompany receivables | 6,161 | 38 | 6,199 | |||||||||
Inventories | 193 | 193 | ||||||||||
Prepaid expenses and other current assets | 52 | 347 | 399 | |||||||||
Total Current Assets | 7,759 | 1,017 | 8,776 | |||||||||
Intangible assets, net of amortization | 986 | 986 | ||||||||||
Other assets | 74 | 74 | ||||||||||
Total Assets | $ | 8,745 | $ | 1,091 | $ | 9,836 | ||||||
Liabilities and Redeemable Preferred Stock | ||||||||||||
Current Liabilities | ||||||||||||
Warrant derivative liability | $ | 2,111 | $ | - | $ | 2,111 | ||||||
Accounts payable & accrued liabilities | 2,071 | 69 | 2,140 | |||||||||
Long term debt, current portion | 6,200 | 6,200 | ||||||||||
Total Current Liabilities | $ | 10,382 | $ | 69 | $ | 10,451 | ||||||
Total Liabilities | $ | 10,382 | $ | 69 | $ | 10,451 | ||||||
Redeemable Series E Preferred Stock | $ | 20,059 | $ | - | $ | 20,059 |
Dollars in thousands | June 30, 2019 | December 31, 2018 | June 30, 2020 | December 31, 2019 | ||||||||||||
Food, treats and supplements | $ | 1,682 | $ | 1,301 | $ | 5,454 | $ | 6,425 | ||||||||
Inventory packaging and supplies | 512 | 504 | ||||||||||||||
Other products and accessories | 87 | 191 | 17 | 73 | ||||||||||||
Inventory packaging and supplies | 168 | 133 | ||||||||||||||
1,937 | 1,625 | |||||||||||||||
Total Inventories | 5,983 | 7,002 | ||||||||||||||
Inventory reserve | (230 | ) | (68 | ) | (563 | ) | (422 | ) | ||||||||
$ | 1,707 | $ | 1,557 | |||||||||||||
Inventories, net | $ | 5,420 $ | $ | 6,580 |
Dollars in thousands | June 30, 2019 | December 31, 2018 | June 30, 2020 | December 31, 2019 | ||||||||||||
Warehouse equipment | $ | 49 | $ | 49 | ||||||||||||
Equipment | $ | 225 | $ | 222 | ||||||||||||
Furniture and fixtures | 164 | 138 | ||||||||||||||
Computer software | 115 | 115 | ||||||||||||||
Computer equipment | 14 | 14 | 4 | 4 | ||||||||||||
Furniture and fixtures | 76 | 46 | ||||||||||||||
Total property and equipment | 139 | 109 | 508 | 479 | ||||||||||||
Accumulated depreciation | (80 | ) | (38 | ) | (187 | ) | (62 | ) | ||||||||
$ | 59 | $ | 71 | |||||||||||||
Property and equipment, net | $ | 321 | $ | 417 |
Dollars in thousands | June 30,2020 | December 31, 2019 | ||||||
Accrued professional fees | $ | 2,039 | $ | 1,695 | ||||
Accrued sales tax | 1,028 | 1,233 | ||||||
Accrued payroll and benefits | 916 | 994 | ||||||
Accrued trade promotions | 186 | 357 | ||||||
Accrued dividends | 324 | 256 | ||||||
Accrued interest | 228 | 109 | ||||||
Other | 10 | 77 | ||||||
Total accrued liabilities | $ | 4,731 | $ | 4,721 |
For the Six Months Ended | For the Three Months Ended | |||||||||||||||
Dollars in thousands | June 30, 2020 | June 30, 2019 | June 30, 2020 | June 30, 2019 | ||||||||||||
Operating lease costs | $ | 221 | $ | 124 | $ | 111 | $ | 80 | ||||||||
Variable lease costs | 16 | 16 | 8 | 8 | ||||||||||||
Total operating lease costs | $ | 237 | $ | 140 | $ | 119 | $ | 88 |
Remainder of 2020 | $ | 226 | ||
2021 | 464 | |||
2022 | 246 | |||
2023 | 7 | |||
Total minimum lease payments | $ | 943 | ||
Less: amount of lease payments representing interest | 110 | |||
Present value of future minimum lease payments | $ | 833 | ||
Less: current obligations under leases | 341 | |||
Long-term lease obligations | $ | 492 |
June 30, 2020 | |||||||||||||||
Weighted-Average Remaining Useful Lives (in years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||
Customer relationships | 7 | $ | 7,500 | $ | (577 | ) | $ | 6,923 | |||||||
Trade name | 15 | 7,190 | (235 | ) | 6,955 | ||||||||||
Total intangible assets | $ | 14,690 | $ | (812 | ) | $ | 13,878 |
December 31, 2019 | |||||||||||||||
Weighted-Average Remaining Useful Lives (in years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||
Customer relationships | 7 | $ | 7,500 | $ | (35 | ) | $ | 7,465 | |||||||
Trade name | 15 | 7,190 | (14 | ) | 7,176 | ||||||||||
Total intangible assets | $ | 14,690 | $ | (49 | ) | $ | 14,641 |
Dollars in thousands Years ended December 31, | ||||
Remainder of 2020 | $ | 739 | ||
2021 | 1,551 | |||
2022 | 1,551 | |||
2023 | 1,551 | |||
2024 | 1,551 | |||
Thereafter | 6,935 | |||
$ | 13,878 |
June 30, 2020 | December 31, 2019 | |||||||||||||||||||||
Amount | Rate | Maturity Date | Amount | Rate | Maturity Date | |||||||||||||||||
Short term loan, net | $ | 18,157 | (1 | ) | 12/19/2020 | $ | 16,061 | (1 | ) | 12/19/2020 | ||||||||||||
Line of credit, net | 5,687 | (1 | ) | 12/19/2020 | 4,819 | (1 | ) | 12/19/2020 | ||||||||||||||
November 2019 notes payable, net (November 2019 Notes) | 2,644 | 10 | % | 6/30/2023 | 2,769 | 10 | % | 11/4/2021 | ||||||||||||||
December 2019 senior notes payable, net (Seller Notes) | 9,664 | 10 | % | 6/30/2023 | 9,191 | 10 | % | 6/30/2023 | ||||||||||||||
December 2019 junior notes payable, net (Seller Notes) | 4,626 | 10 | % | 6/30/2023 | 4,410 | 10 | % | 6/30/2023 | ||||||||||||||
ABG Notes | 660 | 10 | % | 6/30/2023 | - | - | - | |||||||||||||||
June 2020 notes payable, net (June 2020 Notes) | - | 10 | % | 6/30/2023 | - | - | - | |||||||||||||||
Halo PPP Loan | 431 | 1 | % | 5/3/2022 | - | - | ||||||||||||||||
TruPet PPP Loan | 421 | .98 | % | 4/6/2022 | - | - | - | |||||||||||||||
Total debt | $ | 42,290 | $ | 37,250 |
(1) | Interest at Bank of Montreal Prime plus 8.05% |
Dollars in thousands Leases | Balance Sheet Classification | June 30, 2019 | |||
Assets | |||||
Non-current assets | Operating lease right-of-use assets, net of accumulated amortization | $ | 840 | ||
Total operating lease assets | $ | 840 | |||
Liabilities | |||||
Current | |||||
Operating | Operating lease liabilities | (262 | ) | ||
Non-current | |||||
Operating | Operating lease liabilities | (590 | ) | ||
Total operating lease liabilities | $ | (852 | ) |
Dollars in thousands Lease payments | Operating Leases | |||
Remainder of 2019 | $ | 147 | ||
2020 | 299 | |||
2021 | 303 | |||
2022 | 169 | |||
Total undiscounted minimum future lease payments | 918 | |||
Less: imputed interest | 66 | |||
Present value of lease liabilities | $ | 852 |
Dollars in thousands | Guaranteed Minimum Royalty | ||||
2019-2020 | $ | 1,500 | |||
2021 | $ | 1,000 | |||
2022 | $ | 1,125 | |||
2023 | $ | 1,250 | |||
2024 | $ | 1,500 | |||
2025 | $ | 1,750 |
Dollars in thousands | Warrant Liability | Warrant derivative liability | ||||||
Assumption of warrants pursuant to May 6, 2019 acquisition of Better Choice Company | $ | 2,110 | ||||||
Balance as of December 31, 2019 | $ | 2,220 | ||||||
Change in fair value of derivative liability | 193 | (1,379 | ) | |||||
Balance as of June 30, 2019 | $ | 2,304 | ||||||
Balance as of March 31, 2020 | $ | 841 | ||||||
Change in fair value of derivative liability | 3,474 | |||||||
Balance as of June 30, 2020 | $ | 4,315 |
May 6, 2019 | June 30, 2019 | |||||||
Warrant Liability | ||||||||
Stock Price | $ | 6.00 | $ | 6.35 | ||||
Exercise Price | $ | 3.90 | $ | 3.90 | ||||
Remaining term (in years) | 1.60 – 1.68 | 1.45 – 1.53 | ||||||
Volatility | 64 | % | 65 | % | ||||
Risk-free interest rate | 2.39 | % | 1.98 | % |
Warrant derivative liability | May 6, 2019 | December 31, 2019 | June 30, 2020 | |||||||||
Stock price | $ | 6.00 | $ | 2.70 | $ | 1.90 | ||||||
Exercise price | $ | 3.90 | $ | 1.62 | $ | 0.75 | ||||||
Expected remaining term (in years) | 1.60 - 1.68 | 0.95 - 1.02 | 0.472 | |||||||||
Volatility | 64 | % | 69 | % | 85 | % | ||||||
Risk-free interest rate | 2.39 | % | 1.60 | % | 0.18 | % |
Dollars in thousands | Advance #1 | Advance #2 | Advance #3 | Total | ||||||||||||
Opening balance – January 1, 2018 | $ | - | $ | - | $ | - | $ | - | ||||||||
Advance of outstanding amounts | 399 | 965 | 1,050 | 2,414 | ||||||||||||
2018 Payments | (429 | ) | (256 | ) | (102 | ) | (787 | ) | ||||||||
Rollover to Advance #3 | (824 | ) | 824 | |||||||||||||
Advance fixed fee | 30 | 115 | 126 | 271 | ||||||||||||
Closing Balance – December 31, 2018 | - | - | 1,899 | 1,899 | ||||||||||||
Payments | (1,899 | ) | (1,899 | ) | ||||||||||||
Balance June 30, 2019 | $ | - | $ | - | $ | - | $ | - |
Number | Amount | |||||||
Dollars in thousands | ||||||||
Issued on October 18, 2018 | 2,846,356 | $ | 2,023 | |||||
Converted to Common Stock | (212,678 | ) | (152 | ) | ||||
Balance on May 6, 2019 | 2,633,678 | 1,871 | ||||||
Purchase price adjustment | 18,188 | |||||||
Outstanding at May 6, 2019 | 2,633,678 | 20,059 | ||||||
Converted to Common Stock | (925,758 | ) | (7,052 | ) | ||||
Balance at June 30, 2019 | 1,707,920 | $ | 13,007 |
June 30, 2020 December 31, 2019 | ||||||||
Conversion of Series E | 1,760,903 | 1,760,903 | ||||||
Exercise of options to purchase common stock | 7,471,608 | 7,791,833 | ||||||
Warrants to purchase common stock | 17,087,976 | 16,981,854 | ||||||
Notes payable | 7,163,589 | 4,437,500 | ||||||
Total | 33,484,076 | 30,972,090 |
Warrants | Weighted Average Exercise Price | |||||||
Warrants outstanding as of December 31, 2019 | 16,981,854 | $ | 3.23 | |||||
Issued | 3,064,456 | 1.15 | ||||||
Terminated | (2,958,334 | ) | (5.12 | ) | ||||
Warrants outstanding as of June 30, 2020 | 17,087,976 | $ | 2.37 |
Dollars in thousands except per share amounts | Date of grant(s) | Vesting period (years) | Number | Exercise price ($) | Share-based payment expense ($) | Risk-free rate | Volatility | Dividend yield | Expiry (yrs) | Remaining Life (yrs) | ||||||||||||||||||||||||
Option grant | 5/21/2019 | 2 | 60,000 | $ | 7.50 | 9 | 2.28 | % | 55.00 | % | Nil | 10 | 9.9 | |||||||||||||||||||||
Option grant | 5/21/2019 | 3 | 30,000 | $ | 7.50 | 5 | 2.28 | % | 55.00 | % | Nil | 10 | 9.9 | |||||||||||||||||||||
Option grant | 6/29/2019 | 3 | 3,000 | $ | 7.50 | 0 | 1.84 | % | 56.00 | % | Nil | 10 | 10.0 | |||||||||||||||||||||
93,000 | $ | 14 |
Range of exercise prices | Number of options outstanding | Weighted average remaining contractual life (years) | Weighted average exercise price of outstanding options | number of options exercisable | Weighted average exercise price of exercisable options | |||||||||||||||||
$ | 5.00 – 7.50 | 5,381,462 | 9.8 | $ | 5.06 | 260,545 | 5.04 |
Number of Options | Weighted Average Exercise Price | |||||||
Acquired on May 6, 2019 | 5,288,462 | $ | 5.00 | |||||
Granted | 93,000 | $ | 7.50 | |||||
Options outstanding at June 30, 2019 | 5,381,462 | $ | 5.04 |
Number of Warrants | Weighted Average Exercise Price | |||||||
Warrants Acquired on May 6, 2019 | 913,310 | $ | 3.70 | |||||
Issued | 5,744,991 | $ | 4.50 | |||||
Exercised | - | - | ||||||
Canceled / expired | - | - | ||||||
Warrants outstanding at June 30, 2019 | 6,658,301 | $ | 4.39 |
Dollars in thousands except per share amounts | Six Months Ended June 30 | Three Months Ended June 30 | ||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Common Stockholders | ||||||||||||||||
Numerator: | ||||||||||||||||
Net loss | $ | (164,286 | ) | $ | (2,400 | ) | $ | (161,506 | ) | $ | (745 | ) | ||||
Less: Preferred Stock Dividends | (27 | ) | - | (27 | ) | - | ||||||||||
Net loss attributable to Common Stockholders | $ | (164,313 | ) | $ | (2,400 | ) | $ | (161,533 | ) | $ | (745 | ) | ||||
Denominator: | ||||||||||||||||
Weighted average shares used in computing net loss per share attributable to Common Stockholders, basic and diluted | 21,202,188 | 11,497,128 | 30,638,048 | 11,497,128 | ||||||||||||
Net loss per share attributable to Common Stockholders, basic and diluted | $ | (7.75 | ) | $ | (0.21 | ) | $ | (5.27 | ) | $ | (0.06 | ) |
Six Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Common stockholders | ||||||||||||||||
Numerator: | ||||||||||||||||
Net and comprehensive loss | $ | (27,858 | ) | $ | (164,286 | ) | $ | (18,404 | ) | $ | (161,506 | ) | ||||
Less: Preferred stock dividends | 68 | 27 | 34 | 27 | ||||||||||||
Net and comprehensive loss available to common stockholders | $ | (27,926 | ) | $ | (164,313 | ) | $ | (18,438 | ) | $ | (161,533 | ) | ||||
Denominator: | ||||||||||||||||
Weighted average shares used in computing net loss per share attributable to common stockholders, basic and diluted | 48,733,052 | 21,202,188 | 48,939,708 | 30,638,048 | ||||||||||||
Net loss per share attributable to common stockholders, basic and diluted | $ | (0.57 | ) | $ | (7.75 | ) | $ | (0.38 | ) | $ | (5.27 | ) |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Six Months Ended | Three Months Ended | |||||||||||||||||||||||
Dollars in thousands | 2019 | 2018 | % Change | 2019 | 2018 | % Change | ||||||||||||||||||
Net Sales | $ | 7,635 | $ | 7,064 | 8 | % | $ | 4,084 | $ | 3,818 | 7 | % | ||||||||||||
Cost of Goods Sold | 4,082 | 3,329 | 23 | % | 2,420 | 1,384 | 75 | % | ||||||||||||||||
Gross Profit | 3,553 | 3,735 | -5 | % | 1,663 | 2,433 | -32 | % | ||||||||||||||||
General & Administrative | 6,004 | 1,351 | 344 | % | 4,571 | 665 | 587 | % | ||||||||||||||||
Share-Based Compensation | 4,212 | 0 | - | 4,006 | 0 | - | ||||||||||||||||||
Sales & Marketing | 5,597 | 2,819 | 99 | % | 3,412 | 1,512 | 126 | % | ||||||||||||||||
Other Operating | 1,721 | 1,899 | -9 | % | 936 | 958 | -2 | % | ||||||||||||||||
Loss from operations | $ | (13,981 | ) | $ | (2,334 | ) | 499 | % | $ | (11,263 | ) | $ | (702 | ) | 1,505 | % |
$ in thousands | 2020 | 2019 | Change | % | ||||||||||||
Net sales | $ | 22,167 | $ | 7,635 | $ | 14,532 | 190 | % | ||||||||
Cost of goods sold | 13,886 | 4,082 | 9,804 | 240 | % | |||||||||||
Gross profit | 8,281 | 3,553 | 4,728 | 133 | % | |||||||||||
Operating expenses: | ||||||||||||||||
General and administrative expense | 19,650 | 7,174 | 12,476 | 174 | % | |||||||||||
Share-based compensation | 5,504 | 4,212 | 1,292 | 31 | % | |||||||||||
Sales and marketing | 3,807 | 5,597 | (1,790 | ) | (32 | %) | ||||||||||
Customer service and warehousing | 352 | 551 | (199 | ) | (36 | %) | ||||||||||
Total operating expenses | 29,313 | 17,534 | 11,779 | 67 | % | |||||||||||
Loss from operations | $ | (21,032 | ) | $ | (13,981 | ) | $ | (7,051 | ) | 50 | % |
$ in thousands | 2020 | 2019 | Change | % | ||||||||||||
Net sales | $ | 9,941 | $ | 4,084 | $ | 5,857 | 143 | % | ||||||||
Cost of goods sold | 5,817 | 2,421 | 3,396 | 140 | % | |||||||||||
Gross profit | 4,124 | 1,663 | 2,461 | 148 | % | |||||||||||
Operating expenses: | ||||||||||||||||
General and administrative expense | 11,594 | 5,211 | 6,383 | 122 | % | |||||||||||
Share-based compensation | 3,020 | 4,006 | (986 | ) | (25 | %) | ||||||||||
Sales and marketing | 1,848 | 3,412 | (1,564 | ) | (46 | %) | ||||||||||
Customer service and warehousing | 162 | 297 | (135 | ) | (45 | %) | ||||||||||
Total operating expenses | 16,624 | 12,926 | 3,698 | 29 | % | |||||||||||
Loss from operations | $ | (12,500 | ) | $ | (11,263 | ) | $ | (1,237 | ) | 11 | % |
Dollars in thousands | June 30, 2019 | June 30, 2018 | ||||||||||||||
Cash flows provided by (used in): | ||||||||||||||||
Six Months Ended June 30, | ||||||||||||||||
$ in thousands | 2020 | 2019 | ||||||||||||||
Cash flows (used in) provided by: | ||||||||||||||||
Operating activities | $ | (8,481 | ) | $ | (2,026 | ) | $ | (2,168 | ) | $ | (8,481 | ) | ||||
Investing activities | 1,870 | (31 | ) | (6 | ) | 1,870 | ||||||||||
Financing activities | 13,927 | (2,031 | ) | 3,127 | 13,927 | |||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 7,316 | $ | (44 | ) | |||||||||||
Net increase in cash and cash equivalents and restricted cash | $ | 953 | $ | 7,316 |
ITEM 6. | EXHIBITS |
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed/Furnished Herewith | |
Agreement and Plan of Merger, dated February 28, 2019, by and among the Better Choice Company Inc., BBC Merger Sub, Inc. and Bona Vida, Inc. | 8-K | 333-161943 | 2.1 | 5/10/2019 | |||
First Amendment to Agreement and Plan of Merger, dated February 28, 2019, by and among the Better Choice Company Inc., BBC Merger Sub, Inc., and Bona Vida, Inc., dated May 3, 2019. | 8-K | 333-161943 | 2.1 | 5/10/2019 | |||
Securities Exchange Agreement, dated February 2, 2019, by and among Better Choice Company Inc., TruPet LLC and the members of TruPet LLC. | 8-K | 333-161943 | 2.3 | 5/10/2019 | |||
First Amendment to Securities Exchange Agreement, dated February 2, 2019, by and among Better Choice Company Inc., TruPet LLC and the members of TruPet LLC, dated May 6, 2019. | 8-K | 333-161943 | 2.4 | 5/10/2019 |
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed/Furnished Herewith | |
Certificate of Incorporation. | 10-Q | 333-161943 | 3.1 | 4/15/2019 | |||
Bylaws. | 10-Q | 333-161943 | 3.5 | 4/15/2019 | |||
Certificate of Amendment to Certificate of Incorporation. | 10-Q | 333-161943 | 3.2 | 7/14/2017 | |||
Certificate of Amendment to Certificate of Incorporation. | 8-K | 333-161943 | 3.2 | 3/22/2018 | |||
Certificate of Amendment to Certificate of Incorporation. | 10-KT | 333-161943 | 3.5 | 7/24/2019 | |||
Form of Registration Rights Agreement dated May 6, 2019, by and among Better Choice Company Inc. and the former stockholders of Bona Vida listed on the signature pages thereto. | 8-K | 333-161943 | 4.1 | 5/10/2019 | |||
Form of Registration Rights Agreement dated May 6, 2019, by and among Better Choice Company Inc. and the former member of TruPet listed on the signature pages thereto. | 8-K | 333-161943 | 4.2 | 5/10/2019 | |||
Form of First Amendment to Registration Rights Agreement, dated June 10, 2019, by and among the Company and the stockholders party thereto | 8-K | 333-161943 | 10.1 | 6/13/2019 | |||
Tranche 1 Warrant, dated September 17, 2019, by and between Better Choice Company Inc. and Bruce Linton | 8-K | 333-161943 | 4.1 | 9/23/2019 | |||
Tranche 2 Warrant, dated September 17, 2019, by and between Better Choice Company Inc. and Bruce Linton | 8-K | 333-161943 | 4.2 | 9/23/2019 | |||
Additional Warrant, dated September 17, 2019, by and between Better Choice Company Inc. and Bruce Linton | 8-K | 333-161943 | 4.3 | 9/23/2019 | |||
Form of Subscription Agreements dated April 25, 2019, between Better Choice Company Inc. and the purchaser named in the signature pages thereto. | 8-K | 333-161943 | 10.1 | 4/30/2019 | |||
Loan Agreement dated May 6, 2019, between Better Choice Company Inc. and Franklin Synergy Bank. | 8-K | 333-161943 | 10.1 | 5/10/2019 | |||
Security Agreement dated May 6, 2019, between Better Choice Company Inc. and Franklin Synergy Bank. | 8-K | 333-161943 | 10.2 | 5/10/2019 | |||
Form of Revolving Line of Credit Promissory Note. | 8-K | 333-161943 | 10.3 | 5/10/2019 | |||
Independent Contractor Agreement, dated September 17, 2019, by and between Better Choice Company Inc. and Bruce Linton | 8-K | 333-161943 | 10.1 | 9/23/2019 |
Exhibit | Exhibit Description | Form | File No. | Exhibit | Filing date | Filed / Furnished Herewith |
Agreement and Plan of Merger, dated February 28, 2019, by and among the Company, BBC Merger Sub, Inc. and Bona Vida, Inc. | 8-K | 333-161943 | 2.1 | 05/10/2019 | ||
First Amendment to Agreement and Plan of Merger, dated February 28, 2019, by and among the Company, BBC Merger Sub, Inc., and Bona Vida, Inc., dated May 3, 2019 | 8-K | 333-161943 | 2.2 | 05/10/2019 | ||
Securities Exchange Agreement, dated February 2, 2019, by and among the Company, TruPet LLC and the members of TruPet LLC | 8-K | 333-161943 | 2.3 | 05/10/2019 | ||
First Amendment to Securities Exchange Agreement, dated February 2, 2019, by and among the Company, TruPet LLC and the members of TruPet LLC, dated May 6, 2019 | 8-K | 333-161943 | 2.4 | 05/10/2019 | ||
Amended and Restated Stock Purchase Agreement, dated December 18, 2019, by and among the Company, Halo, Purely For Pets, Inc., Thriving Paws, LLC and HH-Halo LP | 8-K | 333-161943 | 2.1 | 12/26/2019 | ||
Certificate of Incorporation, dated January 1, 2019 | 10-Q | 333-161943 | 3.1 | 04/15/2019 | ||
Certificate of Amendment to Certificate of Incorporation, dated February 1, 2019 | 10-Q | 333-161943 | 3.2 | 04/15/2019 | ||
Certificate of Amendment to Certificate of Incorporation, dated March 13, 2019 | 8-K | 333-161943 | 3.1 | 03/20/2019 | ||
Certificate of Amendment to Certificate of Incorporation, dated April 18, 2019 | 10-KT | 333-161943 | 3.5 | 07/25/2019 | ||
3.5 | Certificate of Amendment to Certificate of Incorporation, dated July 30, 2020 | 8-K | 333-161943 | 99.1 | 07/30/2020 | |
Certificate of Merger of Sport Endurance, Inc. with and into the Company | 10-Q | 333-161943 | 3.4 | 04/15/2019 | ||
Bylaws | 10-Q | 333-161943 | 3.5 | 04/15/2019 | ||
Amended and Restated Certificate of Designation for Series E Convertible Preferred Stock | 8-K | 333-161943 | 3.1 | 05/23/2019 | ||
Form of Common Stock Purchase Warrant in connection with the May 2019 private placement | 8-K | 333-161943 | 4.1 | 04/30/2019 | ||
Form of Tranche 1 Common Stock Purchase Warrant, dated September 17, 2019, by and between the Registrant and Bruce Linton | 8-K | 333-161943 | 4.1 | 09/23/2019 | ||
Form of Tranche 2 Common Stock Purchase Warrant, dated September 17, 2019, by and between the Company and Bruce Linton | 8-K | 333-161943 | 4.2 | 09/23/2019 |
Exhibit | Exhibit Description | Form | File No. | Exhibit | Filing date | Filed / Furnished Herewith |
Form of Additional Common Stock Purchase Warrant, dated September 17, 2019, by and between the Company and Bruce Linton | 8-K | 333-161943 | 4.3 | 09/23/2019 | ||
Form of Subordinated Convertible Promissory Note in connection with the November 2019 private placement | 8-K | 333-161943 | 4.1 | 11/15/2019 | ||
Form of Common Stock Purchase Warrant in connection with the November 2019 private placement | 8-K | 333-161943 | 4.2 | 11/15/2019 | ||
Form of Subordinated Convertible Promissory Note, dated December 19, 2019, by and among the Company and the Halo Sellers listed on the signature pages thereto | 10-Q | 333-161943 | 4.7 | 01/31/2020 | ||
Form of Common Stock Purchase Warrant, dated December 19, 2019, by and among the Company and the Halo Sellers | 10-Q | 333-161943 | 4.8 | 01/31/2020 | ||
Form of Common Stock Purchase Warrant, dated December 19, 2019, by and among the Company and the Shareholder Personal Guarantors | 10-Q | 333-161943 | 4.10 | 01/31/2020 | ||
Form of Common Stock Purchase Warrant Agreement in connection with the December 2018 private placement | 8-K | 333-161943 | 4.1 | 12/13/2018 | ||
Form of Common Stock Purchase Warrant in connection with the June 2020 private placement. | 10-Q | 333-161943 | 4.11 | 06/25/2020 | ||
4.12 | Form of Subordinated Convertible Promissory Note in connection with the June 2020 private placement. | 10-Q | 333-161943 | 4.12 | 06/25/2020 | |
4.13 | Form of Subscription Agreement in connection with the June 2020 private placement. | 10-Q | 333-161943 | 4.13 | 06/25/2020 | |
4.14 | Form of Registration Rights Agreement by and among the Company and the persons listed on the signature pages thereto in connection with the June 2020 private placement. | 10-Q | 333-161943 | 4.14 | 06/25/2020 | |
4.15 | Form of Amendment to November 2019 Notes, Seller Notes and ABG Notes | * | ||||
4.16 | Form of July 2020 Common Stock Purchase Warrants | 8-K | 333-161943 | 10.5 | 07/21/2020 | |
Loan Agreement dated May 6, 2019, between the Company and Franklin Synergy Bank | 8-K | 333-161943 | 10.1 | 05/10/2019 | ||
Security Agreement dated May 6, 2019, between the Company and Franklin Synergy Bank | 8-K | 333-161943 | 10.2 | 05/10/2019 | ||
Guaranty Agreement, dated April 8, 2019, by TruPet LLC in favor of Franklin Synergy Bank | S-1 | 333-234349 | 10.17 | 10/28/2019 | ||
Form of Revolving Line of Credit Promissory Note dated 2019 | 8-K | 333-161943 | 10.3 | 05/10/2019 | ||
Guaranty Agreement, dated April 8, 2019, by Bona Vida, Inc. in favor of Franklin Synergy Bank | S-1 | 333-234349 | 10.16 | 10/28/2019 | ||
Loan Facilities Credit Letter Agreement, dated December 19, 2019, by and among the Better Choice Company Inc., Halo, Purely for Pets, Inc., Bona Vida Inc., TruPet LLC and Bridging Finance Inc., as agent. | 10-Q | 333-161943 | 10.1 | 01/31/2020 | ||
Pledge and Security Agreement, dated December 19, 2019, by and among the Company, Halo, Purely or Pets, Inc., Bona Vida, Inc., TruPet LLC and Bridging Finance Inc., as Administrative Agent | 10-Q | 333-161943 | 10.2 | 01/31/2020 | ||
Continuing Guaranty of Halo, Purely for Pets, Inc., Bona Vida Inc., TruPet LLC, dated December 19, 2019 | 10-Q | 333-161943 | 10.3 | 01/31/2020 | ||
Form of Subscription Agreement, dated December 19, 2019, by and among the Company and the Halo Sellers | 10-Q | 333-161943 | 10.6 | 01/31/2020 |
Exhibit | Exhibit Description | Form | File No. | Exhibit | Filing date | Filed / Furnished Herewith |
Continuing Personal Guaranty of John Word, Lori Taylor and Michael Young, dated December 19, 2019 | 10-Q | 333-161943 | 10.4 | 01/31/2020 | ||
Registration Rights Agreement, dated May 6, 2019, by and among the Company and the persons listed on the signature pages thereto in connection with the May 2019 private placement | S-1 | 333-234349 | 10.2 | 10/28/2019 | ||
First Amendment, dated June 10, 2019, to Registration Rights Agreement, dated May 6, 2019, by and among the Company and the stockholders party thereto | S-1 | 333-234349 | 10.3 | 10/28/2019 | ||
Form of Subscription Agreement dated April 25, 2019 in connection with the May 2019 private placement | 8-K | 333-161943 | 10.1 | 04/30/2019 | ||
Registration Rights Agreement, dated as of May 6, 2019, by and among Better Choice Company Inc. and the former stockholders of Bona Vida listed on the signature pages thereto | 8-K | 333-161943 | 4.1 | 05/10/2019 | ||
Registration Rights Agreement, dated as of May 6, 2019, by and among Better Choice Company Inc. and the former member of TruPet listed on the signature pages thereto | 8-K | 333-161943 | 4.2 | 05/10/2019 | ||
Form of Registration Rights Agreement by and among the Company and the persons listed on the signature pages thereto in connection with the November 2019 private placement | 8-K | 333-161943 | 4.3 | 11/15/2019 | ||
Form of Subscription Agreement in connection with the November 2019 private placement | 8-K | 333-161943 | 10.1 | 11/15/2019 | ||
10.18 | Business Loan Agreement, dated as of July 16, 2020, by and among the Company, Halo, TruPet, Bona Vida (the “Credit Parties”), and Citizens Bank | 8-K | 333-161943 | 10.1 | 07/21/2020 | |
10.19 | Promissory Note, dated as of July 16, 2020, issued by the Credit Parties in favor of Citizens Bank | 8-K | 333-161943 | 10.2 | 07/21/2020 | |
10.20 | Commercial Security Agreement, dated as of July 16, 2020, by and among the Credit Parties and Citizens Bank | 8-K | 333-161943 | 10.3 | 07/21/2020 | |
10.21 | Commercial Guaranty, dated as of July 16, 2020, by and between Citizens Bank and John M. Word, III | 8-K | 333-161943 | 10.4 | 07/21/2020 | |
Better Choice Company Inc. Amended and Restated 2019 Incentive Award Plan | 10-K | 333-161943 | 10.19 | 5/4/2020 | ||
Form of 2019 Incentive Aware Plan Stock Option Agreement | S-1 | 333-234349 | 10.7 | 10/28/2019 | ||
Form of Indemnification Agreement by and among the Company and its officers and directors | S-1 | 333-234349 | 10.8 | 10/28/2019 | ||
Independent Contractor Agreement, dated September 17, 2019, by and between the Company and Bruce Linton | 8-K | 333-161943 | 10.1 | 09/23/2019 | ||
Employment Agreement, dated February 1, 2019, for David Lelong | 8-K | 333-161943 | 10.1 | 02/07/2019 | ||
Employment Agreement, dated as of May 6, 2019, by and between the Company and Damian Dalla-Longa | 10-Q | 333-161943 | 10.6 | 10/09/2019 | ||
Resignation Letter from Damian Dalla-Longa, dated February 5, 2020 | 8-K | 333-161943 | 10.3 | 02/11/2020 |
Exhibit | Exhibit Description | Form | File No. | Exhibit | Filing date | Filed / Furnished Herewith |
Amendment to Employment Agreement, dated February 10, 2020, by and between Damian Dalla-Longa and the Company | 8-K | 333-161943 | 10.4 | 02/11/2020 | ||
Employment Agreement, dated as of May 6, 2019, by and between the Company and Lori Taylor | 10-Q | 333-161943 | 10.7 | 10/09/2019 | ||
Separation Agreement, dated as of September 13, 2019, by and between the Company and Lori Taylor | 10-K | 333-161943 | 10.28 | 5/4/2020 | ||
Employment Agreement, dated May 6, 2019, by and among the Company and Anthony Santarsiero | S-1 | 333-234349 | 10.11 | 10/28/2019 | ||
Employment Agreement, dated June 29, 2019, by and among the Company and Andreas Schulmeyer | S-1 | 333-234349 | 10.12 | 10/28/2019 | ||
Employment Agreement, dated December 19, 2019, by and between the Company, Werner von Pein, and Halo | 8-K | 333-161943 | 10.1 | 02/11/2020 | ||
Amendment to Employment Agreement, dated February 10, 2020, by and between Werner von Pein and the Company | 8-K | 333-161943 | 10.2 | 02/11/2020 | ||
Subsidiaries of the Company | 10-K | 333-161943 | 21.1 | 5/4/2020 | ||
Certification of Principal Executive Officer Pursuant to Rules 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002. | * | |||||
Certification of Principal Financial Officer Pursuant to Rules 13a‑14(a) and 15d‑14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002. | * | |||||
Certifications of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002 | * | |||||
101.INS | XBRL Instance Document | * | ||||
101.SCH | XBRL Taxonomy Extension Schema Document | * | ||||
101.CAL | XBRL Taxonomy Extension Calculation Document | * | ||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | * | ||||
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document. | * | ||||
101.PRE | XBRL Taxonomy Extension Presentation Link Document. | * |
Exhibit | Exhibit Description | Form | File No. | Exhibit | date | Filed / Furnished Herewith | ||
† | Indicates a management contract or any compensatory plan, contract or arrangement. |
# | Certain schedules and similar attachments to this agreement have been omitted in accordance with Item 601(b)(5) of Regulation S-K. The Company will furnish copies of any schedules or similar attachments to the SEC upon request. |
*** | Certain information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed. |
BETTER CHOICE COMPANY INC. | ||
Date: | By: | /s/ |
Chief (Principal Executive Officer) | ||
Date: August 14, 2020 | By: | /s/ SHARLA COOK |
Sharla Cook | ||
Principal Financial and Accounting Officer |