Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 25, 2024 | Jun. 30, 2023 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-36338 | ||
Entity Registrant Name | 22nd Century Group, Inc. | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001347858 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 98-0468420 | ||
Entity Address, Address Line One | 321 Farmington Road | ||
Entity Address, City or Town | Mocksville | ||
Entity Address, State or Province | NC | ||
Entity Address, Postal Zip Code | 27028 | ||
City Area Code | 716 | ||
Local Phone Number | 270-1523 | ||
Title of 12(b) Security | Common Stock, $0.00001 par value | ||
Security Exchange Name | NASDAQ | ||
Trading Symbol | XXII | ||
Entity Current Reporting Status | Yes | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 84 | ||
Entity Common Stock, Shares Outstanding | 55,722,442 | ||
Auditor Name | Freed Maxick, CPAs, P.C. | ||
Auditor Firm ID | 317 | ||
Auditor Location | Buffalo, New York |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 2,058 | $ 2,205 |
Short-term investment securities | 18,193 | |
Accounts receivable, net | 1,671 | 1,363 |
Inventories | 4,346 | 7,270 |
Insurance recoveries | 3,768 | |
GVB promissory note | 2,000 | |
Prepaid expenses and other current assets | 1,180 | 1,928 |
Current assets of discontinued operations held for sale | 1,254 | 13,646 |
Total current assets | 16,277 | 44,605 |
Property, plant and equipment, net | 3,393 | 3,692 |
Operating lease right-of-use assets, net | 1,894 | 943 |
Intangible assets, net | 5,924 | 7,212 |
Other assets | 15 | 3,417 |
Noncurrent assets of discontinued operations held for sale | 54,782 | |
Total assets | 27,503 | 114,651 |
Current liabilities: | ||
Notes and loans payable - current | 543 | 689 |
Current portion of long-term debt | 5,848 | |
Operating lease obligations | 231 | 252 |
Accounts payable | 4,445 | 2,051 |
Accrued expenses | 1,322 | 766 |
Accrued litigation | 3,768 | |
Accrued payroll | 883 | 2,662 |
Accrued excise taxes and fees | 2,234 | 1,423 |
Deferred income | 726 | 688 |
Other current liabilities | 1,849 | 349 |
Current liabilities of discontinued operations held for sale | 3,185 | 4,138 |
Total current liabilities | 25,034 | 13,018 |
Long-term liabilities: | ||
Operating lease obligations | 1,698 | 711 |
Long-term debt | 8,058 | |
Other long-term liabilities | 1,123 | 344 |
Noncurrent liabilities of discontinued operations held for sale | 4,603 | |
Total liabilities | 35,914 | 18,676 |
Commitments and contingencies (Note 12) | ||
Shareholders' equity (deficit) | ||
Preferred stock, $.00001 par value, 10,000,000 shares authorized | ||
Capital in excess of par value | 370,297 | 333,900 |
Accumulated other comprehensive loss | (111) | |
Accumulated deficit | (378,707) | (237,814) |
Total shareholders' equity (deficit) | (8,410) | 95,975 |
Total liabilities and shareholders' equity (deficit) | $ 27,503 | $ 114,651 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 66,666,667 | 66,666,667 |
Common stock, shares issued | 43,525,862 | 14,349,275 |
Common stock, shares outstanding | 43,525,862 | 14,349,275 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue: | ||
Revenues, net | $ 32,204 | $ 40,501 |
Cost of goods sold (exclusive of depreciation shown separately below): | ||
Cost of goods sold | 40,900 | 38,654 |
Gross (loss) profit | (8,696) | 1,847 |
Operating expenses: | ||
Sales, general and administrative | 31,064 | 32,231 |
Research and development | 2,644 | 3,578 |
Other operating expense (income), net | 2,527 | (327) |
Total operating expenses | 36,235 | 35,482 |
Operating loss from continuing operations | (44,931) | (33,635) |
Other income (expense): | ||
Realized loss on Panacea investment | (2,789) | |
Other income (expense), net | 334 | (366) |
Loss on transfer of promissory note | (895) | |
Interest income, net | 219 | 313 |
Interest expense | (9,366) | (55) |
Total other expense | (9,708) | (2,897) |
Loss from continuing operations before income taxes | (54,639) | (36,532) |
Provision for income taxes | 47 | 21 |
Net loss from continuing operations | (54,686) | (36,553) |
Discontinued operations: | ||
Loss from discontinued operations before income taxes | (85,634) | (23,703) |
Provision (benefit) for income taxes | 455 | (455) |
Net loss from discontinued operations | (86,089) | (23,248) |
Net loss | (140,775) | (59,801) |
Deemed dividends | (9,992) | |
Net loss available to common shareholders | $ (150,767) | $ (59,801) |
Basic loss per common share from continuing operations (in dollars per share) | $ (2.64) | $ (2.84) |
Diluted loss per common share from continuing operations (in dollars per share) | (2.64) | (2.84) |
Basic loss per common share from discontinued operations (in dollars per share) | (4.16) | (1.81) |
Diluted loss per common share from discontinued operations (in dollars per share) | (4.16) | (1.81) |
Earnings Per Share, Deemed Dividends, Basic (in dollars per share) | (0.48) | |
Earnings Per Share, Deemed Dividends, Diluted (in dollars per share) | (0.48) | |
Basic loss per common share (in dollars per share) | (7.28) | (4.65) |
Diluted loss per common share (in dollars per share) | $ (7.28) | $ (4.65) |
Weighted average common shares outstanding - basic (in shares) | 20,711 | 12,856 |
Weighted average common shares outstanding - diluted (in shares) | 20,711 | 12,856 |
Other comprehensive income: | ||
Unrealized gain (loss) on short-term investment securities | $ 71 | $ (316) |
Foreign currency translation | (1) | 1 |
Reclassification of realized losses to net loss | 41 | 366 |
Other comprehensive income | 111 | 51 |
Comprehensive loss | $ (140,664) | $ (59,750) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Shares Outstanding ATM | Common Shares Outstanding | Capital in Excess of Par Value ATM | Capital in Excess of Par Value | Other Comprehensive Income (Loss) | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment [Member] | Accumulated Deficit | Cumulative Effect, Period of Adoption, Adjustment [Member] | ATM | Total |
Beginning balance at Dec. 31, 2021 | $ 244,249 | $ (162) | $ (178,013) | $ 66,074 | ||||||
Beginning balance (in shares) at Dec. 31, 2021 | 10,858,237 | |||||||||
Stock issued in connection with option exercises | 174 | $ 174 | ||||||||
Stock issued in connection with option exercises (in shares) | 10,001 | 10,000 | ||||||||
Stock issued in connection with RSU vesting, net of shares withheld for taxes | (149) | $ (149) | ||||||||
Stock issued in connection with RSU vesting, net of shares withheld for taxes (in shares) | 149,482 | |||||||||
Stock issued in connection with acquisition | 51,653 | 51,653 | ||||||||
Stock issued in connection with acquisition (in shares) | 2,193,334 | |||||||||
Stock issued in connection with capital raise | 32,484 | 32,484 | ||||||||
Stock issued in connection with capital raise (in shares) | 1,138,221 | |||||||||
Equity-based compensation | 5,489 | 5,489 | ||||||||
Other comprehensive income | 51 | 51 | ||||||||
Net loss | (59,801) | (59,801) | ||||||||
Ending balance at Dec. 31, 2022 | 333,900 | (111) | (237,814) | 95,975 | ||||||
Ending balance (in shares) at Dec. 31, 2022 | 14,349,275 | |||||||||
Stock issued in connection with RSU vesting, net of shares withheld for taxes | (419) | (419) | ||||||||
Stock issued in connection with RSU vesting, net of shares withheld for taxes (in shares) | 114,786 | |||||||||
Stock issued in connection with acquisition | 503 | 503 | ||||||||
Stock issued in connection with acquisition (in shares) | 31,056 | |||||||||
Stock issued in connection with capital raise | $ 2,563 | 22,880 | $ 2,563 | 22,880 | ||||||
Stock issued in connection with capital raise (in shares) | 284,343 | 13,499,827 | 284 | |||||||
Stock issued in connection with licensing arrangement | 3,570 | 3,570 | ||||||||
Stock issued in connection with licensing arrangement (in shares) | 333,334 | |||||||||
Equity detachable warrants | 1,577 | 1,577 | ||||||||
Fractional shares issued for reverse stock split | 66,035 | |||||||||
Equity-based compensation | 2,679 | 2,679 | ||||||||
Other comprehensive income | $ 111 | 111 | ||||||||
Net loss | (140,775) | (140,775) | ||||||||
Stock issued in connection with warrant exercises | 3,044 | 3,044 | ||||||||
Stock issued in connection with warrant exercises (in shares) | 14,847,206 | |||||||||
Ending balance at Dec. 31, 2023 | $ 370,297 | $ (118) | $ (378,707) | $ (118) | $ (8,410) | |||||
Ending balance (in shares) at Dec. 31, 2023 | 43,525,862 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Stock issuance costs | $ 2,279 | $ 2,516 |
Stock issuance cost of warrant exercises | 292 | |
ATM | ||
Stock issuance costs | $ 178 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (140,775) | $ (59,801) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Impairment of long-lived assets | 3,297 | 1,488 |
Amortization and depreciation | 3,951 | 2,858 |
Amortization of right-of-use asset | 908 | 733 |
Amortization of inventory step-up | 978 | |
Unrealized loss on investment | 5 | |
GVB fire write-offs | 4,549 | |
Other non-cash (gains) and losses | (15) | 563 |
Provision for credit losses | 1,024 | 770 |
(Gain) loss on the sale of machinery and equipment | 73 | (368) |
Realized loss (gain) on Panacea investment | 2,789 | |
Inventory write-off | 237 | |
Debt related charges included in interest expense | 8,006 | |
Equity-based employee compensation expense | 2,679 | 5,489 |
Gain on change of contingent consideration | (1,138) | |
Change in fair value of warrant liabilities | (364) | |
Change in fair value of derivative liability | 557 | |
Loss on disposal of discontinued operations | 58,521 | |
Loss on transfer of promissory note | 895 | |
Deferred income taxes | 434 | (434) |
Increase in inventory reserves | 8,695 | |
Changes in operating assets and liabilities, net of acquisition: | ||
Accounts receivable | (18) | (2,881) |
Inventory | (5,925) | (8,789) |
Prepaid expenses and other assets | 451 | (920) |
Accounts payable | 4,752 | 416 |
Accrued expenses | 681 | (582) |
Accrued payroll | (2,153) | 748 |
Accrued excise taxes and fees | 811 | 153 |
Other liabilities | (334) | 285 |
Net cash used in operating activities | (54,987) | (51,714) |
Cash flows from investing activities: | ||
Acquisition of patents, trademarks, and licenses | (961) | (772) |
Acquisition of property, plant and equipment | (4,656) | (3,657) |
Proceeds from the sale of property, plant and equipment | 283 | 409 |
Acquisition, net of cash acquired | (254) | (1,297) |
Proceeds from sale of discontinued operations | 665 | |
Investment in Change Agronomy Ltd. | (682) | |
Property, plant and equipment insurance proceeds | 3,500 | |
Sales and maturities of short-term investment securities | 21,714 | 101,990 |
Purchase of short-term investment securities | (3,475) | (73,413) |
Net cash provided by investing activities | 16,816 | 22,578 |
Cash flows from financing activities: | ||
Payments on notes payable | (5,581) | (3,822) |
Proceeds from issuance of notes payable | 2,360 | 2,162 |
Other financing activities | (29) | |
Payments of long-term debt | (9,700) | |
Proceeds from issuance of long-term debt | 16,849 | |
Payment of debt issuance costs | (801) | |
Proceeds from issuance of detachable warrants | 6,016 | |
Net proceeds from option exercise | 174 | |
Net proceeds from warrant exercise | 3,044 | |
Taxes paid related to net share settlement of RSUs | (420) | (149) |
Net cash provided by financing activities | 37,209 | 30,820 |
Net (decrease) increase in cash and cash equivalents | (962) | 1,684 |
Cash and cash equivalents - beginning of period | 3,020 | 1,336 |
Cash and cash equivalents - end of period | 2,058 | 3,020 |
Net cash paid for: | ||
Cash paid during the period for interest | 1,313 | 34 |
Cash paid during the period for income taxes | 40 | 14 |
Non-cash transactions: | ||
Capital expenditures incurred but not yet paid | 118 | $ 94 |
Right-of-use assets and corresponding operating lease obligations | 5,166 | |
Non-cash assignment of PLSH Promissory Note | 2,600 | |
Insurance/litigation gross up | 3,768 | |
Non-cash proceeds from sale of discontinued operations | 2,000 | |
Deemed dividends | 9,801 | |
Stock issued in connection with acquisition | 51,653 | |
Non-cash consideration RXP acquisition | 1,641 | |
Non-cash licensing arrangement | 3,500 | |
ATM | ||
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 2,741 | |
Payment of common stock issuance costs | (178) | |
Registered Direct Offering | ||
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 25,158 | $ 35,000 |
Payment of common stock issuance costs | $ (2,279) | $ (2,516) |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 22nd Century Group, Inc. (together with its consolidated subsidiaries, “22 nd a tobacco products company with sales and distribution of the Company’s own proprietary new reduced nicotine tobacco products authorized as Modified Risk Tobacco Products by the FDA. Additionally, the Company provides contract manufacturing services for conventional combustible tobacco products for third-party brands. Basis of Presentation and Principles of Consolidation nd Century Group and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. As described in Note 2, on December 22, 2023, the Company divested substantially all of the assets of GVB Biopharma’s (“GVB”) business within its former hemp/cannabis segment. As a result of the divestiture of GVB and strategic shift away from hemp/cannabis, the Company has realigned its corporate and management reporting structure to focus solely on its tobacco business. As a result, during the fourth quarter of 2023, the Company reorganized its business to become a single reportable segment: (1) tobacco. The results of operations of the former hemp/cannabis segment are reported as discontinued operations in the Consolidated Statements of Operations and Comprehensive Loss for all periods presented and the related assets and liabilities associated with the discontinued operations are classified as held for sale in the Consolidated Balance Sheets as of December 31, 2023, and 2022, respectively. The Consolidated Statements of Cash Flows includes cash flows related to the discontinued operations due to 22 nd Use of Estimates Liquidity and Capital Resources The Company has incurred significant losses and negative cash flows from operations since inception and expects to incur additional losses until such time that it can generate significant revenue and profit in its tobacco business. The Company had negative cash flow from operations of $54,987 and $51,714 for the years ended December 31, 2023 and 2022, respectively, and an accumulated deficit of $378,707 and $237,814 as of December 31, 2023 and December 31, 2022, respectively. As of December 31, 2023, the Company had cash and cash equivalents of $2,058 . Subsequent to December 31, 2023, the Company completed a warrant inducement offering with gross proceeds to the Company of approximately $2,421 , before deducting the placement agent fees of $165 (see Note 21 “Subsequent Events”). Given the Company’s projected operating requirements and its existing cash and cash equivalents, there is substantial doubt about the Company’s ability to continue as a going concern through one year following the date that the Consolidated Financial Statements are issued. In response to these conditions, management is currently evaluating different strategies for reducing expenses, as well as pursuing financing strategies which include raising additional funds through the issuance of securities, asset sales, and through arrangements with strategic partners. If capital is not available to the Company when, and in the amounts needed, it could be required to liquidate inventory or assets, cease or curtail operations, or seek protection under applicable bankruptcy laws or similar state proceedings. There can be no assurance that the Company will be able to raise the capital it needs to continue operations. Management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern through one year following the date that the Consolidated Financial Statements are issued. The Consolidated Financial Statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. Other Significant Risks and Uncertainties - Reverse Stock Split – 1-for-15 Preferred stock authorized Concentration of Credit Risk Cash and cash equivalents – Short-term investment securities twenty-four Trade Accounts Receivable and Provision for Current Expected Credit Losses – Inventories Property, plant and equipment – Classification Estimated Useful Lives Leasehold improvements shorter of 20 years or lease term Manufacturing equipment 5 Office furniture, fixtures and equipment 3 Acquisitions - Discontinued Operations - The assets and liabilities of a discontinued operation held for sale, other than goodwill, are measured at the lower of carrying amount or fair value less cost to sell. The Company allocates interest to discontinued operations if the interest is directly attributable to the discontinued operations or is interest on debt that is required to be repaid as a result of the disposal transaction. Contingent Consideration - Goodwill - Intangible Assets The Company believes that costs associated with becoming a signatory to the master settlement agreement “MSA”, costs related to the acquisition of a predicate cigarette brand, and tobacco brand related trademarks have indefinite lives. At each reporting period, the Company evaluates whether the nature and use of the asset continue to support the indefinite-lived classification. Impairment of Long-Lived Assets Property, plant, and equipment Intangibles, Goodwill, and Other Definite lived intangible assets subject to amortization are reviewed for strategic importance and commercialization opportunity prior to expiration. If it is determined that the asset no longer supports the Company’s strategic objectives and/or will not be commercially viable prior to expiration, the asset is impaired. In addition, the Company will assess the expected future undiscounted cash flows for its intellectual property based on consideration of future market and economic conditions, competition, federal and state regulations, and licensing opportunities. If the carrying value of such assets are not recoverable, the carrying value will be reduced to fair value and the difference is recorded as impairment. Indefinite-lived intangible asset carrying values are reviewed at least annually or more frequently if events or changes in circumstances indicate that it is more likely than not that an impairment exists. The Company first performs a qualitative assessment and considers its current strategic objectives, future market and economic conditions, competition, and federal and state regulations to determine if an impairment is more likely than not. If it is determined that an impairment is more likely than not, a quantitative assessment is performed to compare the asset carrying value to fair value. Leases Any operating lease having a lease term greater than twelve months will be recognized on the Consolidated Balance Sheets as a right-of-use (ROU) asset with an associated lease obligation—all other leases are considered short-term in nature and will be expensed on a month-to-month basis. The ROU assets and lease obligations are recognized as of the commencement date at the net present value of the fixed minimum lease payments for the lease term. The lease term is determined based on the contractual conditions, including whether renewal options are reasonably certain to be exercised. The discount rate used is the interest rate implicit in the lease, if available, or the Company’s incremental borrowing rate which is determined using a base line rate plus an applicable spread. Refer to Note 6 “Right-of-use Assets, Lease Obligations, and Other Leases” for additional information. Fair Value of Financial Instruments – Fair Value Measurements and Disclosures ● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; ● Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and ● Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset’s or a financial liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The Company estimates that the carrying amounts reported on the Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, contract assets, promissory note receivable, accounts payable and accrued expenses, and notes and loans payable approximate their fair value due to the short-term nature of these items. Note 9 “Fair Value Measurements” contains additional information on assets and liabilities recorded at fair value in the Consolidated Financial Statements. Warrants - Distinguishing Liabilities from Equity Derivatives and Hedging Warrants that the Company may be required to redeem through payment of cash or other assets outside its control are classified as liabilities pursuant to ASC 480 and are initially and subsequently measured at their estimated fair values. Changes in subsequent measurement fair value are recorded in Other income (expense), net of the Company’s Consolidated Statements of Operations and Comprehensive Loss. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For additional discussion on warrants, see Note 9 “Fair Value Measurements” and Note 10 “Capital Raise and Warrants for Common Stock”. Deemed dividends associated with anti-dilution or down round provisions (commonly referred to as “ratchets”) represent the economic transfer of value to holders of equity-classified freestanding financial instruments when these provisions are triggered. These deemed dividends are presented as a reduction in net income or an increase in net loss available to common stockholders and a corresponding increase to additional paid-in-capital resulting in no change to stockholders’ equity/deficit. The incremental value of modifications to warrants as a result of the trigger of down round provisions in connection with equity financings was $3,029, the incremental value of replacement warrants was $6,596, and the incremental value of modifications to warrants as a result of the trigger of anti-dilution provisions of the JGB warrants was $367. Such amounts were determined using Monte-Carlo valuation models and are recorded as Deemed dividends for the year ended December 31, 2023 on the Consolidated Statement of Operations and Comprehensive Loss. Debt Issued with Detachable Warrants - Debt “Warrants” Interest Embedded Derivatives - Debt Issuance Costs and Discounts - Transfers of Financial Assets – The Company accounts for transfers of financial assets as sales when it has surrendered control over the related assets. Whether control has been relinquished requires, among other things, an evaluation of relevant legal considerations and an assessment of the nature and extent of the Company’s continuing involvement with the assets transferred. Gains and losses resulting from transfers reported as sales are included as a component of Other income (expense) in the Consolidated Statement of Operations and Comprehensive Loss. Gain/Loss on Debt Extinguishment – Gain or loss Gains and losses on debt extinguishment are included as a component of Interest expense in the Consolidated Statement of Operations and Comprehensive Loss. Revenue Recognition Research and Development Stock Based Compensation Income Taxes As a result of the Company’s history of cumulative net operating losses and the uncertainty of their future utilization, the Company has established a valuation allowance to fully offset its net deferred tax assets as of December 31, 2023, and December 31, 2022. The Company’s federal and state tax returns for the years ended December 31, 2020 through December 31, 2022 are currently open to audit under the statutes of limitations. There are no pending audits as of December 31, 2023. Loss Per Common Share Gain and Loss Contingencies The Company maintains general liability insurance policies for its facilities. Under the terms of our insurance policies, in the case of loss to a property, the Company follows the guidance in ASC 610-30, Other Income —Gains and Losses on Involuntary Conversions, Gain Contingencies. Refer to Note 12 “Commitments and Contingencies”. Severance charges - From time to time, the Company evaluates its resources and optimizes its business plan to align to changing needs of executing on its strategy. These actions may result in voluntary or involuntary employee termination benefits. Voluntary termination benefits are accrued when an employee accepts the related offer. Involuntary termination benefits are accrued upon the commitment to a termination plan and the benefit arrangement is communicated to affected employees, or when liabilities are determined to be probable and estimable, depending on the existence of a substantive plan for severance or termination. The following table summarizes the change in accrued liabilities, presented within Other current liabilities and Other long-term liabilities Consolidated Balance Sheets: Balance at January 1, 2022 $ 238 Accruals 692 Cash payments (296) Balance at December 31, 2022 634 Accruals 790 Reversal from settlement (168) Cash payments (870) Balance at December 31, 2023 $ 386 December 31, December 31, 2023 2022 Current $ 386 $ 349 Noncurrent — 285 Total severance liability $ 386 $ 634 Year Ended December 31, 2023 2022 Sales, general, and administrative $ 401 $ 692 Other operating expense, net 221 — Total severance charges $ 622 $ 692 Recent Accounting Pronouncement(s) – The Company adopted ASU 2016-13, or ASC 326 Financial Instruments-Credit Losses Accounting Guidance Not Yet Elected or Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280)-Improvements to Reportable Segment Disclosures . The ASU enhances disclosure of significant segment expenses by requiring disclosure of significant segment expenses regularly provided to the chief operating decision maker, extend certain annual disclosures to interim periods, and permits more than one measure of segment profit or loss to be reported under certain conditions. The amendments are effective for the Company in years beginning after December 15, 2023, and interim periods within years beginning after December 15, 2024. Early adoption of the ASU is permitted, including adoption in any interim period for which financial statements have not been issued. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)-Improvements to Income Tax Disclosures. The ASU requires additional quantitative and qualitative income tax disclosures to allow readers of the consolidated financial statements to assess how the Company’s operations, related tax risks and tax planning affect its tax rate and prospects for future cash flows. For public business entities, the ASU is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements. We consider the applicability and impact of all ASUs. If the ASU is not listed above, it was determined that the ASU was either not applicable or would have an immaterial impact on our financial statements and related disclosures. |
DISCONTINUED OPERATIONS AND DIV
DISCONTINUED OPERATIONS AND DIVESTITURES | 12 Months Ended |
Dec. 31, 2023 | |
DISCONTINUED OPERATIONS AND DIVESTITURES | |
SCONTINUED OPERATIONS AND DIVESTITURES | NOTE 2. – DISCONTINUED OPERATIONS AND DIVESTITURES Provision for Impairment of GVB Hemp/Cannabis Business During the third quarter of 2023, the Company identified certain events and circumstances that could potentially be an impairment triggering event for both the tobacco and hemp/cannabis reporting units in connection with (1) the announcement of initiating a process to evaluate strategic alternatives for the Company’s assets, and (2) announcement of cost cut initiatives intended to yield significant cash savings on an annual basis. The initiation of these two processes was in response to the sustained decline in the Company's market capitalization, operating losses and negative cash flows from operations, and current liquidity position, and is intended to monetize the value or more effectively expand the market reach of our products. Accordingly, the Company evaluated the impact on each of its reporting units to assess whether there was an impairment triggering event requiring it to perform a goodwill impairment test. The Company had no recorded goodwill in its tobacco reporting unit. For the hemp/cannabis reporting unit, as part of this impairment test, the Company considered certain qualitative factors, such as the Company’s performance, business forecasts, and strategic plans. It reviewed key assumptions, including projected cash flows and future revenues. After reviewing the qualitative assessment, the Company determined a quantitative assessment was required to be performed. Using the income approach, with the discount rate selected considering and capturing the related risk associated with the forecast, the Company compared the fair value of the reporting unit to carrying value. Based on the results, the carrying value of the hemp/cannabis reporting unit exceeded its fair value and the goodwill was determined to be impaired and $33,360, representing the full amount of goodwill recorded to the hemp/cannabis reporting unit, was written off as impaired during the quarter ended September 30, 2023. The impairment charge is the result of the Company's Step-1 goodwill impairment test for the former hemp/cannabis reporting unit, which reflected a decrease in the future expected cash flows related to bulk ingredient and CDMO+D product sales, along with increases in discount rates to reflect the uncertainty of future cash flows. Estimating the fair value of goodwill requires the use of estimates and significant judgments that are based on a number of factors, including unobservable level 3 inputs. These estimates and judgments may not be within the control of the Company and accordingly it is reasonably possible that the judgments and estimates could change in future periods. The Company also evaluated the recoverability of its hemp/cannabis segment other intangible assets, net and long-lived assets to determine whether any assets or asset groups were impaired. The Company determined that the carrying value of certain tradenames, patents and license intangible assets, net were greater than their fair value, as these intangible assets related to hemp/cannabis operations. Therefore, the Company recorded additional provision for impairment in the amount of $10,879, the Cookies license acquired in the second quarter of 2023 was written-off and fully impaired in the amount of $3,037, and a loss on equity investments of $682. Additionally, through a similar analysis, the Company recorded provision for impairment of $7,418 for property, plant and equipment and $5,038 for operating lease right-of-use assets related to manufacturing and lab facilities. The undiscounted cash flow analysis and fair value determination requires the use of estimates and significant judgments that are based on a number of factors, including unobservable level 3 inputs. For the year ended December 31, 2023, total impairment charges for other intangibles and long-lived assets is $25,189. Discontinued Operations and Divestiture of GVB Hemp/Cannabis Business On November 20, 2023, the Company entered into an Equity Purchase Agreement (the “Purchase Agreement”) with Specialty Acquisition Corporation, a Nevada corporation (the “Buyer”) pursuant to which the Company agreed to sell substantially all of its equity interests in its GVB hemp/cannabis business (the “Purchased Interests”) for a purchase price of $2,250 (the “Purchase Price”). On December 22, 2023, the Company and the Buyer entered into an Amendment to Equity Purchase Agreement (the “GVB Amendment”) pursuant to which the Company and the Buyer increased the Purchase Price to $3,100 (the “New Purchase Price”) which consisted of (i) a cash payment of $1,100 to the Company’s senior lender, on behalf of and at the direction of the Company and (ii) a 12% secured promissory note issued by the Buyer to the Company’s senior lender, on behalf of and at the direction of the Company, in an aggregate principal amount of $2,000 (the “GVB Note”). Until repaid to the senior lender, the GVB Note is recorded as a current asset and corresponding amount is pledged as Current portion of long term debt on the Consolidated Balance Sheet as of December 31, 2023. The parties previously agreed that the Company would retain any insurance proceeds received in connection with the fire at the Grass Valley manufacturing facility, if any (the “Insurance Proceeds”) and up to the first $2,000 of the Insurance Proceeds would be used to offset the Buyer’s portion of certain shared liabilities. Pursuant to the terms of the GVB Amendment, the Buyer will be entitled to offset its portion of certain shared contingent liabilities up to $1,000; provided that, the Insurance Proceeds exceed $5,000. In connection with the closing of the transaction on December 22, 2023, but prior to any adjustments for Insurance Proceeds and certain shared liabilities, after selling expenses of $434, the Company recognized a loss on disposal of discontinued operations of $58,521 during the year ended December 31, 2023, which includes the third quarter impairment charges described above. For disposal transactions, a component of an entity that is anticipated to be sold in the future is reported in discontinued operations after it meets the criteria for held-for-sale classification, and if the disposition represents a strategic shift that has (or will have) a major effect on the entity's operations and financial results. The Company evaluated the quantitative and qualitative factors related to the expected sale of the GVB hemp/cannabis business and exit from the hemp/cannabis space, and concluded that it met the held-for-sale criteria and that all other conditions for discontinued operations presentation were not met until November 30, 2023. Property, plant and equipment are not depreciated, and intangibles assets are not amortized once classified as held-for-sale. As a result, the operating results of the hemp/cannabis disposal group have been classified as discontinued operations in the Consolidated Statements of Operations and Comprehensive Loss for all periods presented and the assets and liabilities of the hemp/cannabis disposal group have been classified as assets and liabilities of discontinued operations in the Consolidated Balance Sheets at December 31, 2023 and 2022, respectively. See additional information in Note 3, “Business Acquisitions” related to GVB And RXP, including the date of transactions and periods that operating results of the acquired business are included in the Consolidated Financial Statements. The assets and liabilities of a discontinued operation held for sale, other than goodwill, are measured at the lower of carrying amount or fair value less cost to sell. Following the provision for impairment charges recorded during the third quarter of 2023 as described above, the Company concluded the carrying value of assets and liabilities of the GVB hemp/cannabis business approximated fair value when deemed held for sale based on the purchase price consideration of $3,100. As of December 31, 2023, all assets and liabilities of the hemp/cannabis disposal group are presented as current in the Consolidated Balance Sheet as management believes the remaining disposal and exit from hemp/cannabis is deemed probable and will occur within one year. The carrying amounts of the hemp/cannabis disposal group assets and liabilities that were classified as assets and liabilities of discontinued operations held for sale were as follows: December 31, December 31, 2023 2022 Cash and cash equivalents $ — $ 815 Accounts receivable, net — 4,278 Inventories — 2,738 Insurance recoveries — 5,000 Prepaid expenses and other current assets 9 815 Property, plant and equipment, net - current 1,207 — Other current assets 38 — Current assets of discontinued operations held for sale $ 1,254 $ 13,646 Property, plant and equipment, net — 9,401 Operating lease right-of-use assets, net — 1,732 Goodwill — 33,160 Intangible assets, net — 9,641 Investments — 682 Other assets — 166 Noncurrent assets of discontinued operations held for sale $ — $ 54,782 Notes and loans payable - current $ 2 $ 219 Operating lease obligations 1,083 429 Accounts payable 2,013 2,117 Accrued expenses 79 662 Accrued payroll — 537 Deferred income 8 143 Other current liabilities — 31 Current liabilities of discontinued operations held for sale $ 3,185 $ 4,138 Notes and loans payable — 3,001 Operating lease obligations — 1,430 Other long-term liabilities — 172 Noncurrent liabilities of discontinued operations held for sale $ — $ 4,603 Net (liabilities) assets $ (1,931) $ 59,687 Net loss from discontinued operations for year ended December 31, 2023 and 2022 was as follows: Year Ended December 31, 2023 2022 Revenues, net $ 42,113 $ 21,610 Cost of goods sold 49,185 22,283 Gross loss (7,072) (673) Operating expenses: Sales, general and administrative 16,540 12,286 Research and development 3,010 2,983 Other operating expense, net (1) 118 7,529 Loss on disposal of discontinued operations 58,521 — Total operating expenses 78,189 22,798 Operating loss from discontinued operations (85,261) (23,471) Other income (expense): Other income, net 65 66 Interest expense (2) (438) (298) Total other expense (373) (232) Loss from discontinued operations before income taxes (85,634) (23,703) Provision (benefit) for income taxes 455 (455) Net loss from discontinued operations $ (86,089) $ (23,248) (1) The Company recorded $25,189 of impairment charges in Other operating expenses, net and recorded $33,360 of Goodwill impairment from discontinued operations during the three months ended September 30, 2023, which were reclassified to Loss on disposal of discontinued operations during the three months ended December 31, 2023. (2) The Company allocates interest to discontinued operations if the interest is directly attributable to the discontinued operations or is interest on debt that is required to be repaid as a result of the disposal transaction. Interest expense included in discontinued operations reflects an estimate of interest expense related to the $3,100 principal balance of debt that is required to be repaid with the proceeds from the sale of the GVB hemp/cannabis business. The components of discontinued operations “Other operating expenses, net” were as follows: Year Ended December 31, 2023 2022 Grass Valley fire: Fixed asset write-offs $ — $ 5,550 Inventory charges — 3,998 Lease obligations — 20 Professional services 407 36 Compensation & benefits — 195 Insurance recoveries — (5,000) Total Grass Valley fire 407 4,799 Severance 13 — Impairment of intangible assets — 1,453 Gain on change in contingent consideration (1,138) — Needlerock Farms settlement 769 — Impairment of inventory — 237 Gain on sale or disposal of property, plant and equipment (64) (6) Acquisition costs 131 1,046 Total other operating expenses, net $ 118 $ 7,529 Grass Valley fire In November 2022, there was a fire at our Grass Valley manufacturing facility in Oregon, which manufactures bulk ingredients, primarily CBD isolate and distillate. The Company has incurred continuous expenses throughout 2023 related to consulting, legal and demolition at this facility. Cash flow information from discontinued operations for years ended December 31, 2023 and 2022 was as follows: Year Ended December 31, 2023 2022 Cash used in operating activities $ 21,281 $ 17,274 Cash used in investing activities $ 799 $ 3,665 Depreciation and amortization $ 2,443 $ 1,566 Capital expenditures $ 3,752 $ 2,752 |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 12 Months Ended |
Dec. 31, 2023 | |
BUSINESS ACQUISITIONS | |
BUSINESS ACQUISITIONS | NOTE 3. – BUSINESS ACQUISITIONS The following acquisitions occurring during the years ended December 31, 2023, and 2022, respectively, are included in the Company’s former hemp/cannabis reportable segment. Accordingly, the results of operations are reported as discontinued operations in the Consolidated Statements of Operations and Comprehensive Loss for all periods presented. See Note 2 “Discontinued Operations and Divestitures” for additional information. RX Pharmatech, Ltd. On January 19, 2023, the Company acquired RX Pharmatech Ltd (“RXP”) pursuant to a share purchase agreement ("SPA”) a privately held distributor of cannabinoids with 1,276 novel food applications with the U.K. Food Standards Agency (“FSA”). RXP’s products include CBD isolate and numerous variations of finished products like gummies, oils, drops, candies, tinctures, sprays, capsules and others. The initial consideration paid to acquire RXP included $200 in cash and $503 in common stock (consisting of 31,056 unregistered shares of common stock), and an initial estimate of target working capital true-up of $286. The fair value of the Company’s common stock issued as part of the consideration was determined based upon the opening stock price of the Company’s shares as of the acquisition date. Additionally, the contingent consideration in the transaction represents the estimated fair value of the Company’s obligation, under the share purchase agreement, to make additional equity based payments of up to $1,550 over the next three years based on specified conditions being met, which has an initial fair value of contingent consideration of $1,138. The fair value of the aggregate consideration in the transaction is $2,127. Based on the preliminary purchase price allocation, the assets acquired and liabilities assumed principally comprise $1,744 of intangible assets, and other immaterial working capital items representing a net asset of $93 (net of cash acquired of $290). There was no excess purchase price and therefore no goodwill recorded as part of the business combination. The determination of estimated fair value required management to make significant estimates and assumptions based on information that was available at the time the Consolidated Financial Statements were prepared. Intangible assets include the intellectual property associated with the 1,276 novel food applications with the FSA, which is determined to be indefinite lived. The preliminary fair value was determined by utilizing the cost approach and considered market data to evaluate the replacement cost per application. The intellectual property is included in the former hemp/cannabis reportable segment. The Company utilizes third-party valuation experts to assist in estimating the fair value of the contingent consideration and develops estimates by considering weighted-average probabilities of likely outcomes and discounted cash flow analysis. These estimates require the Company to make various assumptions about forecasted revenues and discount rates, which are unobservable and considered Level 3 inputs in the fair value hierarchy. A change in these inputs to a different amount might result in a significantly higher or lower fair value measurement at the reporting date. The following table provides quantitative information associated with the initial fair value measurement of the Company’s liabilities for contingent consideration as of January 19, 2023: Maximum Payout Weighted Average Contingency Type (undiscounted) Fair Value Unobservable Inputs or Range Revenue-based payments $ 1,550 $ 1,138 Discount rate 16 % Projected year(s) of payment 2024-2026 During the third quarter of 2023, the Company finalized amounts recorded as purchase price allocation and recorded measurement period adjustments of $53 , resulting from an increase of the working capital true-up amount based on final payment made to the sellers. On December 22, 2023, concurrent with the GVB divestiture (as described in Note 2) which included RXP, the Company entered into a binding letter agreement to terminate its’ remaining contingent consideration obligation payable in shares under the SPA with the sellers of RXP. Accordingly, for the year-ended December 31, 2023, the Company recognized within discontinued operations a gain of $1,138 in Other operating expenses, net in connection with the change in fair value of the contingent consideration. GVB Biopharma On May 13, 2022, the Company entered into and closed the transactions contemplated by the Reorganization and Acquisition Agreement (the “Reorganization Agreement”) with GVB. Under the terms of the Reorganization Agreement, the Company acquired substantially all of the assets of GVB’s business dedicated to hemp-based cannabinoid extraction, refinement, contract manufacturing and product development (the “Transaction”). The aggregate consideration for the Transaction consisted of (i) the assumption of approximately The Transaction was structured as a tax-free re-organization pursuant to Internal Revenue Code Section 368(a)(1)(c). Accordingly, the tax basis of net assets acquired retain their carry over tax basis and holding period in purchase accounting. The Company recorded provisional estimated fair values for the assets purchased, liabilities assumed and purchase consideration as of the date of the acquisition during the second quarter of 2022, resulting in goodwill of $44,200. The determination of estimated fair value required management to make significant estimates and assumptions based on information that was available at the time the Consolidated Financial Statements were prepared. Following the initial acquisition accounting, the Company recorded final measurement period adjustments, in which the preliminary fair values of the assets acquired and liabilities assumed as of May 13, 2022 were adjusted to reflect the ongoing acquisition valuation analysis procedures of property and equipment, intangible assets, deferred taxes, and working capital adjustments. These adjustments resulted in a combined reduction to goodwill of $10,840. The impact of depreciation and amortization to Operating loss recorded in the third quarter of 2022 as a result of completing valuation procedures for property and equipment and intangible assets, that would have been recorded in the prior period since the date of acquisition was $70. The following table presents management’s purchase price allocation: Cash $ 456 Accounts receivable 2,944 Inventory 3,551 Other assets 519 Property, plant & equipment 11,189 Operating leases right-of-use assets, net 1,231 Goodwill 33,360 Tradename 4,600 Customer relationships 5,800 Accounts payable and accrued expenses (2,777) Other current liabilities (944) Lease liabilities (1,259) Auto loans (387) Deferred tax liability (627) Bridge loan (4,250) Fair value of net assets acquired $ 53,406 The fair values of the assets acquired were determined using one of three valuation approaches: market, income or cost. The selection of a particular method for a given asset depended on the reliability of available data and the nature of the asset, among other considerations. The market approach estimates the value for a subject asset based on available market pricing for comparable assets. The income approach estimates the value for a subject asset based on the present value of cash flows projected to be generated by the asset. The projected cash flows were discounted at a required rate of return that reflects the relative risk of the asset and the time value of money. The projected cash flows for each asset considered multiple factors from the perspective of a marketplace participant including revenue projections from existing customers, attrition trends, tradename life-cycle assumptions, marginal tax rates and expected profit margins giving consideration to historical and expected margins. The cost approach estimates the value for a subject asset based on the cost to replace the asset and reflects the estimated reproduction or replacement cost for the asset, less an allowance for loss in value due to depreciation or obsolescence, with specific consideration given to economic obsolescence if indicated. These fair value measurement approaches are based on significant unobservable inputs, including management estimates and assumptions. Current Assets and Liabilities The fair value of current assets and liabilities, excluding inventory, was assumed to approximate their carrying value as of the acquisition date due to the short-term nature of these assets and liabilities. The fair value of in-process and finished goods inventory acquired was estimated by applying a version of the income approach called the comparable sales method. This approach estimates the fair value of the assets by calculating the potential revenue generated from selling the inventory and subtracting from it the costs related to the completion and sale of that inventory and a reasonable profit allowance for these remaining efforts. Based upon this methodology, the Company recorded the inventory acquired at fair value resulting in an increase in inventory of $978, which was fully amortized in the three month period ended June 30, 2022 in the Consolidated Statement of Operations and Comprehensive Loss. Property, Plant and Equipment The fair value of PP&E acquired was estimated by applying the cost approach for personal property and leasehold improvements. The cost approach was applied by developing a replacement cost and adjusting for economic depreciation and obsolescence. Leases The Company recognized operating lease liabilities and operating lease right-of-use assets for office and manufacturing facilities in (i) Las Vegas, Nevada (ii) Grass Valley, Oregon (iii) Prineville, Oregon, and (iv) Tygh Valley, Oregon, accordance with ASC 842, Leases . All facilities were subsequently divested as part of the GVB sale discussed in Note 2 “Discontinued Operations and Divestitures.” The following table summarizes the Company’s discount rate and remaining lease terms as of the acquisition date: Weighted average remaining lease term in years 3.8 Weighted average discount rate 8.3 % The Company concluded there were no off-market lease intangibles on the date of acquisition based on an evaluation of market rents per square foot, geographic location and nature of use of the underlying asset, among other considerations. Intangible assets The purchase price was allocated to intangible assets as follows: Weighted Average Fair Value Amortization Period Weighted Average Definite-lived Intangible Assets Assigned (Years) Discount Rate Customer relationships $ 5,800 10 23.50% Tradename $ 4,600 Indefinite 23.50% Customer Relationships Customer relationships represent the estimated fair value of contractual and non-contractual customer relationships GVB had as of the acquisition date. These relationships were valued separately from goodwill at the amount that an independent third party would be willing to pay for these relationships. The fair value of customer relationships was determined using the multi-period excess-earnings method, a form of the income approach. The estimated useful life of the existing customer base was based upon the historical customer annual attrition rate of 20%, as well as management’s understanding of the industry and product life cycles. Tradename Tradename represents the estimated fair value of GVB’s corporate and product names. The acquired tradename was valued separately from goodwill at the amount that an independent third party would be willing to pay for use of these names. The fair value of the tradename was determined by utilizing the relief from royalty method, a form of the income approach, with a royalty rate of 1.0%. The GVB tradename was assumed to have an indefinite useful life based upon long-term management expectations and future operating plans. Deferred Taxes The Company determined the deferred tax position to be recorded at the time of the GVB acquisition in accordance with ASC Topic 740, Income Taxes The net deferred tax liabilities recorded as a result of the acquisition of GVB was determined by the Company to also provide future taxable temporary differences that allow for the Company to utilize certain previously fully reserved deferred tax assets. Accordingly, the Company recognized a reduction to its valuation allowance resulting in a net tax benefit of approximately $434 for the year ended December 31, 2022. Goodwill The excess of the purchase price over the fair value of net tangible and intangible assets acquired and liabilities assumed was allocated to goodwill. A variety of factors contributed to the goodwill recognized, including the value of GVB’s assembled work force, the incremental value resulting from GVB’s capabilities in hemp/cannabis, operational synergies across the plant science platform, and the expected revenue growth over time that is attributable to increased market share from future products and customers. Goodwill recorded in the transaction will be non-deductible. Acquisition costs During the year ended December 31, 2023, direct costs incurred as a result of the acquisition of RXP were $130, compared to direct costs incurred as a result of the acquisition of GVB of $1,046 during the year ended December 31, 2022. Acquisition costs are expensed as incurred and included in Other operating expenses, net in the Consolidated Statements of Operations and Comprehensive Loss. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2023 | |
INVENTORIES | |
INVENTORIES | NOTE 4. – INVENTORIES Inventories at December 31, 2023 and 2022 consisted of the following: December 31, December 31, 2023 2022 Raw materials $ 3,580 $ 7,090 Work in process — 3 Finished goods 766 177 $ 4,346 $ 7,270 During the year ended December 31, 2023, the Company reserved certain leaf inventory totaling $7,720 resulting from restructuring initiatives implemented, as described in Note 18 “Other Operating Expenses, Net”. Inventory charges are included within Cost of goods sold on the Company’s Consolidated Statement of Operations and Comprehensive Loss. |
PROPERTY, PLANT AND EQUIPMENT,
PROPERTY, PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2023 | |
PROPERTY, PLANT AND EQUIPMENT, NET. | |
PROPERTY, PLANT AND EQUIPMENT, NET | NOTE 5. – PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net at December 31, 2023 and 2022 consisted of the following: December 31, December 31, 2023 2022 Leasehold improvements $ 262 $ 232 Manufacturing equipment 7,254 6,780 Office furniture, fixtures and equipment 254 414 7,770 7,426 Less: accumulated depreciation (4,377) (3,734) Property, plant and equipment, net $ 3,393 $ 3,692 Depreciation expense was $852 and $673 for the year ended December 31, 2023 and 2022, respectively. |
RIGHT-OF-USE ASSETS, LEASE OBLI
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES | 12 Months Ended |
Dec. 31, 2023 | |
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES | |
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES | NOTE 6. – RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES The Company leases a manufacturing facility in Mocksville, North Carolina and an inventory storage facility in Winston-Salem, North Carolina. On January 1, 2023, the Company signed the lease agreement for the inventory storage facility. The lease has an initial monthly base rent of $15 (escalating 3.0% annually after the first year), an initial term of 36 months – with two twenty-four-month optional renewal options at the Company’s discretion. On March 31, 2023, the Company extended the lease terms for its manufacturing facility. As a result of this lease modification, the Company re-measured the lease liability and adjusted the ROU asset on the modification dates. The following table summarizes the Company’s discount rate and remaining lease terms as of December 31, 2023: Weighted average remaining lease term in years 5.9 Weighted average discount rate 9.0 % Future minimum lease payments as of December 31, 2023 are as follows: 2024 $ 396 2025 403 2026 422 2027 430 2028 449 Thereafter 414 Total lease payments 2,514 Less: imputed interest (585) Present value of lease liabilities 1,929 Less: current portion of lease liabilities (231) Total long-term lease liabilities $ 1,698 Operating lease costs for the year ended December 31, 2023 and 2022, were $475 and $288, respectively. Supplemental cash flow information for leases for fiscal years 2023 and 2022 are comprised of the following: December 31, December 31, 2023 2022 Cash paid for operating leases $ 436 $ 276 Assets acquired under operating leases $ 1,602 $ — |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2023 | |
INTANGIBLE ASSETS, NET | |
INTANGIBLE ASSETS, NET | NOTE 7. – INTANGIBLE ASSETS, NET Our intangible assets at December 31, 2023 and 2022 consisted of the following: Gross Accumulated Net Carrying December 31, 2023 Carrying Amount Amortization Impairment Amount Definite-lived: Patent $ 2,913 $ (1,622) $ (487) $ 804 License fees 4,165 (1,666) (65) 2,434 Total amortizing intangible assets $ 7,078 $ (3,288) $ (552) $ 3,238 Indefinite-lived: Trademarks $ 134 NA $ - $ 134 MSA signatory costs 2,202 NA - 2,202 License fee for predicate cigarette brand 350 NA - 350 Total indefinite-lived intangible assets $ 2,686 NA $ - $ 2,686 Total intangible assets, net $ 9,764 $ (3,288) $ (552) $ 5,924 Gross Accumulated Net Carrying December 31, 2022 Carrying Amount Amortization Amount Definite-lived: Patent $ 5,723 $ (3,588) $ 2,135 License fees 3,801 (1,417) 2,384 Total amortizing intangible assets $ 9,524 $ (5,005) $ 4,519 Indefinite-lived: Trademarks $ 141 MSA signatory costs 2,202 License fee for predicate cigarette brand 350 Total indefinite-lived intangible assets $ 2,693 Total intangible assets, net $ 7,212 Aggregate intangible asset amortization expense comprises of the following: Year Ended December 31, 2023 2022 Cost of goods sold $ 11 $ 10 Research and development 644 609 Total amortization expense $ 655 $ 619 During the years ended December 31, 2023 and 2022, the Company incurred impairment charges of $1,375 and $35, respectively, related to write-downs and disposals of patents, licenses and trademarks as a result of a shift in strategy related to the nature and use of the related assets. Impairment charges during the year-ended December 31, 2023 consisted of $552 for patents and trademarks the Company continues to hold but does not align with its current strategy, $772 was related to disposals of patents abandoned from future maintenance and renewal and $51 was related to disposals of trademarks abandoned. The Company also disposed of $1,501 of patents that had a net book value of $0. The impairment charges are included in Other operating expenses, net on the Company’s Consolidated Statements of Operations and Comprehensive Loss. Estimated future intangible asset amortization expense based on the carrying value as of December 31, 2023 is as follows: 2024 2025 2026 2027 2028 Thereafter Amortization expense $ 422 $ 410 $ 351 $ 365 $ 321 $ 1,369 |
INVESTMENTS & OTHER ASSETS
INVESTMENTS & OTHER ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
INVESTMENTS & OTHER ASSETS | |
INVESTMENTS & OTHER ASSETS | NOTE 8. – INVESTMENTS & OTHER ASSETS Panacea Investment – Promissory Note: On June 30, 2021, the Company entered into a Promissory Note Exchange Agreement with Panacea Life Sciences Holdings, Inc. (“PLSH”) as a component of various investment transactions with PLSH. The promissory note was issued in the amount of $4,300 (the “Promissory note receivable”) with a maturity date of June 30, 2026 and a 0% interest rate. The Promissory note receivable is with J&N Real Estate Company, L.L.C., a related party of Panacea and is fully secured by a first priority lien on Panacea’s headquarters located in Golden, Colorado. The Promissory note receivable was originally valued at $3,684 ($4,300 face value less $616 discount) and is included within the Consolidated Balance Sheets as “Other Assets.” Subsequently, on December 31, 2022 the Company and PLSH entered into a settlement agreement in which the Company agreed to a reduction to the face value of the Promissory note receivable of , in exchange for resolution to all contractual requirements surrounding the investment and business relationship. Accordingly, the Company recognized an extinguishment charge of note receivable of $500 less adjusted discount of $51 during the year-ended December 31, 2022. As of October 16, 2023, the $3,800 Promissory note receivable was fully assigned in connection with the Senior Secured Credit Facility Amendment and Waiver. The remaining discount of recorded as a component of Other income (expense) on the Consolidated Statement of Operations and Comprehensive Loss. Refer to Note 13 “Debt.” Through the date of assignment, the C |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2023 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 9. – FAIR VALUE MEASUREMENTS Assets and Liabilities Measured at Fair Value on a Recurring Basis Fair value measurement standards apply to certain financial assets and liabilities that are measured at fair value on a recurring basis (each reporting period). For the Company, these financial assets and liabilities include its short-term investment securities and equity investments. The Company does not have any nonfinancial assets or liabilities that are measured at fair value on a recurring basis. The following table presents information about our assets and liabilities measured at fair value at December 31, 2023 and 2022, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value: Fair Value December 31, 2023 Level 1 Level 2 Level 3 Total Liabilities Detachable warrants $ — $ — $ 1,350 $ 1,350 Derivative liability — — 557 557 Total liabilities $ — $ — $ 1,907 $ 1,907 Fair Value December 31, 2022 Level 1 Level 2 Level 3 Total Assets Money market funds $ 10,163 $ — $ — $ 10,163 Corporate bonds — 7,031 — 7,031 U.S. treasury securities — 999 — 999 Total assets $ 10,163 $ 8,030 $ — $ 18,193 Money market mutual funds are valued at their daily closing price as reported by the fund. Money market mutual funds held by the Company are open-end mutual funds that are registered with the SEC that generally transact at a stable $1.00 Net Asset Value (“NAV”) representing its estimated fair value. On a daily basis the fund’s NAV is determined by the fund based on the amortized cost of the funds underlying investments. The Company classifies its money market funds within Level 1 because it uses quoted market prices to determine their fair value. The Company classifies its commercial paper, corporate notes, certificates of deposit, and U.S. government bonds within Level 2 because it uses quoted prices for similar assets or liabilities in active markets and each has a specified term and all level 2 inputs are observable for substantially the full term of each instrument. Corporate bonds are valued using pricing models maximizing the use of observable inputs for similar securities. The following tables set forth a summary of the Company’s available-for-sale debt securities from amortized cost basis to fair value as of December 31, 2022: Available for Sale Debt Securities December 31, 2022 Amortized Gross Gross Cost Unrealized Unrealized Fair Basis Gains Losses Value Corporate bonds $ 7,143 $ — $ (112) $ 7,031 The following table sets forth a summary of the Company’s available-for-sale debt securities at amortized cost basis and fair value by contractual maturity as of December 31, 2022: December 31, 2022 Amortized Cost Basis Fair Value Due in one year or less $ 7,143 $ 7,031 The Company recognized interest income on short-term investment securities recorded in Interest income, net on the Consolidated Statement of Operations and Comprehensive Loss during the years ended December 31, 2023 and 2022 of $52 and $546, respectively. Detachable Warrants The following table sets forth a summary of the changes in fair value of the Company’s stock warrants accounted for as liabilities (Level 3 asset) for the period ended December 31, 2023: Fair value measurement at January 1, 2023 $ — Initial measurement (see Note 1 and 10) 4,214 Fair value measurement adjustment (364) JGB redemption of 166,667 warrants (2,500) Fair value measurement at December 31, 2023 $ 1,350 The Omnia detachable warrants were measured at December 31, 2023 using a Monte Carlo valuation model with the following assumptions: Risk-free interest rate per year 4.6 % Expected volatility per year 90.9 % Expected dividend yield — % Contractual expiration 6.6 years Exercise price $ 12.828 Stock price $ 0.19 The detachable warrants are measured at fair value using certain estimated factors which are classified within Level 3 of the valuation hierarchy. Significant unobservable inputs that are used in the fair value measurement of the Company’s detachable warrants include the volatility factor, anti-dilution provisions, and contingent put option. Significant increases or decreases in the volatility factor would have resulted in a significantly higher or lower fair value measurement. Additionally, a change in probability regarding the anti-dilution provision or put option would have resulted in a significantly higher or lower fair value measurement. Derivative Liability The derivative liability related to the debentures and embedded conversion option using was measured at December 31, 2023 using a binomial lattice valuation model under a “with and without” approach and contained the following assumptions: Stock price volatility 104.1 % Expected term 2.2 years Stock price as of measurement date (per share) $ 0.19 Risk-free rate 4.3 % Credit rating CCC Market yield (credit risk) 13.8 % The debentures and derivative liability are measured at fair value using certain estimated factors which are classified within Level 3 of the valuation hierarchy. Significant unobservable inputs that are used in the fair value measurement of the Company’s derivative liability include a decrease/increase in our stock price, stock price volatility, credit rating, and simulated stock price upon conversion could significantly change the fair value measurement as either an increase or decrease. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Fair value standards also apply to certain assets and liabilities that are measured at fair value on a nonrecurring basis. During the years ended December 31, 2023 and 2022, the Company did not have any financial assets or liabilities measured at fair value on a nonrecurring basis. |
CAPITAL RAISE AND WARRANTS FOR
CAPITAL RAISE AND WARRANTS FOR COMMON STOCK | 12 Months Ended |
Dec. 31, 2023 | |
CAPITAL RAISE AND WARRANTS FOR COMMON STOCK | |
CAPITAL RAISE AND WARRANTS FOR COMMON STOCK | NOTE 10. – CAPITAL RAISES AND WARRANTS FOR COMMON STOCK The following tables summarize the Company’s warrant activity: Warrants outstanding at January 1, 2022 — Exercised — Issued 1,138,212 Warrants outstanding at December 31, 2022 1,138,212 Exercised (18,084,052) Abandoned (325,205) Issued 65,028,421 Warrants outstanding at December 31, 2023 47,757,376 # of warrants outstanding Exercise price Expiration date July 2022 RDO warrants 65,042 $ 30.75 July 25, 2027 Senior Secured Credit Facility - JGB 330,294 $ 12.828 September 3, 2028 Subordinated Note - Omnia 45,000 $ 12.828 September 3, 2030 July 6, 2023 RDO warrants 1,557,268 $ 0.2042 January 10, 2029 July 19, 2023 RDO warrants 1,225,000 $ 0.2042 July 20, 2028 October 2023 CMPO warrants 13,500,000 $ 0.2042 October 19, 2028 Inducement warrants 31,034,772 $ 0.2042 February 15, 2029 47,757,376 2022 Registered Direct Offering & Warrant Repricing On July 21, 2022, the Company and certain institutional investors (the “July 2022 Investors”) entered into a securities purchase agreement (the “July 2022 Securities Purchase Agreement”) relating to the issuance and sale of shares of common stock pursuant to a registered direct offering (the “July 2022 Registered Offering” and, together with the July 2022 Private Placement (as defined below), the “July 2022 Offerings”). The July 2022 Investors purchased approximately $35,000 of shares, consisting of an aggregate of 1,138,221 shares of common stock at a purchase price of $30.75 per share, subject to certain restrictions. The net proceeds to the Company from the July 2022 Offerings, after deducting the fees and the Company’s offering expenses, were $32,484. Pursuant to the July 2022 Securities Purchase Agreement, in a concurrent private placement, the Company issued and sold to the July 2022 Investors warrants (the “July 2022 Warrants”) to purchase up to 1,138,221 shares of common stock (the “July 2022 Private Placement”). The July 2022 Warrants were exercisable immediately upon issuance at an exercise price of $30.75 per share of common stock, subject to adjustment in certain circumstances, and expire on July 25, 2027. As a result of the June 19, 2023 offering described below, certain of the July 2022 Investors and the Company entered a warrant reprice letter (the “Warrant Repricing”) and agreed to reduce the exercise price on the previously issued 747,974 warrants owned by the investors participating in the June 19, 2023 offering from $30.75 to $7.05 and to add a provision in the warrants that upon any subsequent equity sales at a price per share lower than the then effective exercise price of such warrants, such exercise price shall be lowered to such price at which the shares were offered. The Warrant Repricing is accounted for as a modification of a freestanding equity-classified written call option, and therefore resulted in an immediate and incremental increase of approximately $2,025 in the estimated fair value of the related 747,974 warrants, recorded as a component of Capital in excess of par value, with an offsetting equal amount recorded as equity issuance costs. As a result of subsequent offerings, the exercise price on 747,974 warrants was automatically adjusted triggering non-cash deemed dividends as a result of the down-round adjustments. In July 2023 the exercise price was adjusted to . All of the outstanding warrants were subsequently exercised in connection with the Warrant Inducement The remaining 390,247 previously issued July 2022 Warrants were not repriced and on December 7, 2023, the Company was provided notice of irrevocable abandonment of 325,205 warrants. Accordingly, the Company has 65,042 remaining July 2022 Warrants with an exercise price of $30.75 and an expiration date of July 25, 2027. June 19, 2023 Registered Direct Offering On June 19, 2023, the Company and certain investors entered into a securities purchase agreement relating to the issuance and sale of shares of approximately $5,300 of shares and warrants, consisting of an aggregate of 747,974 shares of common stock and 747,974 warrants to purchase an equal number of shares, at a purchase price of $7.05 per unit. The net proceeds to the Company from the offering were approximately $4,800. The warrants were exercisable immediately upon issuance at an exercise price of $7.05 per share of common stock, expire on June 22, 2028 and are subject to adjustment in certain circumstances, including upon any subsequent equity sales at a price per share lower than the then effective exercise price of such warrants, then such exercise price shall be lowered to such price at which the shares were offered. As a result of the subsequent offerings, the exercise price on the 747,974 warrants was automatically adjusted triggering non-cash deemed dividends as a result of the down-round adjustments. In July 2023, the exercise price was adjusted to . July 6, 2023 Registered Direct Offering. On July 6, 2023, the Company and certain investors entered into a securities purchase agreement relating to the issuance and sale of approximately $3,000 of shares and warrants, consisting of an aggregate of 778,634 shares of common stock and 1,557,268 warrants to purchase an equal number of shares, at a purchase price of $3.80 per unit. The warrants became exercisable six months after issuance at an exercise price of $3.80 per share of common stock and expire on January 10, 2029. The net proceeds to the Company from the offering were approximately $2,722. As a result of subsequent offerings, warrants was automatically adjusted triggering non-cash deemed dividends as a result of the down-round adjustments. In July 2023, the exercise price was adjusted to December 31 July 19, 2023 Registered Direct Offering. On July 19, 2023, the Company and certain investors entered into a securities purchase agreement relating to the issuance and sale of approximately $11,700 of shares and warrants, consisting of an aggregate of 4,373,219 shares of common stock and 8,746,438 warrants to purchase an equal number of shares, at a purchase price of $2.67 per unit. The warrants were exercisable immediately at an exercise price of $2.42 per share of common stock and expire five years after issuance. The net proceeds to the Company from the offering were approximately $10,742. As a result of a subsequent offering, warrants was automatically adjusted triggering non-cash deemed dividends as a result of the down-round adjustment. In October 2023 the exercise price was adjusted to . October 2023- Public Equity Offering On October 17, 2023, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to sell and issue, in a registered public offering, (i) an aggregate of 7,600,000 shares of the Company’s common stock, par value $0.00001 per share, (ii) warrants to purchase 20,000,000 shares of common stock (the “October Warrants”) and (iii) pre-funded warrants to purchase 2,400,000 shares of common stock (the “Pre-Funded Warrants”). The Common Warrants had an exercise price of $0.525, are immediately exercisable and have a term of exercise equal to five years following the original issuance date. The Pre-Funded Warrants have an exercise price of $0.0001, are immediately exercisable and will be able to be exercised at any time after their original issuance until such Pre-Funded Warrants are exercised in full. The shares were offered at a combined public offering price of $0.525 per share and two accompanying October Warrants. The Pre-Funded Warrants were offered at a combined public offering price of $0.5249 per Pre-Funded Warrant and two accompanying October Warrants. In addition, the Company issued the placement agent warrants to purchase up to 1,000,000 shares of common stock (equal to 10% of the aggregate number of shares and Pre-Funded Warrants sold in the offering) at an exercise price of $0.65625, which represents 125% of the public offering price per share and accompanying October Warrant. The placement agent agreed not to exercise the such warrants until the Company subsequently increases its authorized shares of common stock. The offering closed on October 19, 2023 with gross proceeds to the Company of approximately $5,250, before deducting the placement agent fees of $367 and other offering expenses payable by the Company of approximately $288. As a result of the offering, the exercise price on 11,799,654 previously outstanding warrants were automatically adjusted from $2.42 per share to $0.525 per share. The Pre-Funded Warrants were subsequently exercised on a cashless basis in October 2023, resulting in issuance of 2,399,512 shares of common stock. 3,800,000 of the warrants were subsequently exercised in connection with the Warrant Inducement Offering through December 31, 2023. 13,500,000 warrants remained outstanding with an exercise price of $0.1765 and an expiration date of October 19, 2028, of which 10,800,000 were subsequently exercised in January 2024 (see Note 21 “Subsequent Events.”). Warrant Inducement Offering On November 28, 2023, the Company commenced a warrant inducement offering with the holders of the Company’s outstanding 31,779,654 warrants consisting of: (i) the common stock purchase warrants of the Company issued on or about June 22, 2023; (ii) the common stock purchase warrants of the Company issued on or about July 10, 2023; (iii) the common stock purchase warrants of the Company issued on or about July 21, 2023; and/or (iv) the common stock purchase warrants of the Company issued on or about October 19, 2023 (collectively, the “Existing Warrants”), which Existing Warrants were exercisable for an equal number of shares of common stock at an exercise price of $0.525. The Company agreed to issue new warrants (the “Inducement Warrants”) to purchase up to a number of shares of common stock equal to 200% of the number of shares of common stock issued pursuant to the exercise by the holders of the Existing Warrants during the inducement period, for cash, at a reduced exercise price equal to the Nasdaq Minimum Price (as defined in the as defined in Nasdaq Listing Rule 5635(d)). For the period from November 28, 2023 to December 31, 2023, the Company entered into warrant inducement agreements with certain holders of the Existing Warrants to purchase an aggregate of 15,517,386 shares of common stock at a reduced exercise price of $0.215. Pursuant to the warrant inducement agreements, the exercising holders of the Existing Warrants received 31,034,772 Inducement Warrants and the Company received aggregate gross proceeds of approximately $3,336 from the exercise of the Existing Warrants before deducting the placement agent fees of $234 and other offering expenses payable by the Company of approximately $58. As a result of the inducement and subsequent exercise, the Company determined the incremental fair value provided to the holders using Black Scholes and Monte Carlo models as (i) $883 increase in fair value due to the adjustment in exercise price of Existing Warrants attributable to down round pricing protection (ii) $6,596 fair value of Inducement Warrants issued to the holders that exercised Existing Warrants. The incremental fair value is recorded as non-cash deemed dividend. The proceeds of the warrant inducement and issuance of common stock are recorded as Capital in excess of par value. Refer to Note 21 “Subsequent Events.” March 2023 JGB Warrants In connection with the sale of the Debentures as described in Note 13 “Debt”, the Company issued the JGB Warrants to purchase up to 333,334 shares of common stock for an exercise price of $19.125 per share. The JGB Warrants are exercisable for five years from September 3, 2023, at an exercise price of $19.125 per share, determined as a 50% premium to the VWAP on the closing date, subject, with certain exceptions, to adjustments in the event of stock splits, dividends, subsequent dilutive offerings and certain fundamental transactions. The JGB warrants initial fair value of $4,475 net of issuance costs of $139 (see Note 9 “Fair Value Measurements”), of which half of the warrants meet the criteria for liability classification due to a contingent put option which allows the holder to require that the Company redeem the warrants in cash for a purchase price equal to $15.00 upon certain conditional events such as change in control or event of default. Accordingly, at issuance half of the warrants with the put provision are classified as Other long-term liabilities on the Consolidated Balance Sheets in the amount of whereas the remainder of the warrants without the put provision are equity classified and recorded as a component of Capital in excess of par value in the amount of As a result of the June 19, 2023 offering, the Company’s outstanding JGB warrants to purchase up to 333,334 shares of the Company’s common stock for an exercise price of $19.125 per share were automatically adjusted to be $12.828 exercise price for up to 496,960 shares of common stock. As a result of the anti-dilution provision being triggered, the Company recognized a non-cash deemed dividend of $367 in connection with these adjustments, recorded on the Consolidated Statement of Operations and Comprehensive Loss and within Capital in excess of par value (as the Company has an accumulated deficit and therefore the deemed dividend is treated as paid out of Capital in excess of par value). There are no further anti-dilution adjustments on such warrants. In connection with the Senior Secured Credit Facility Amendment and Waiver, the Company redeemed 166,667 of such warrants for an aggregate put price equal to $2,500. See Note 13 “Debt.” The JGB detachable warrants were valued at the closing dates of the Senior Secured Credit Facility using a Monte Carlo valuation model with the following assumptions: Risk-free interest rate per year 4.2 % Expected volatility per year 88.1 % Expected dividend yield — % Contractual expiration 5.5 years Exercise price $ 19.125 Stock price $ 13.65 March 2023 Omnia Warrants In connection with the Subordinated Note as described in Note 13 “Debt”, the Company issued to Omnia, the Omnia Warrants to purchase up to 45,000 shares of the Company’s common stock (the “Omnia Warrants”). The Omnia Warrants are exercisable for seven years from September 3, 2023, at an exercise price of $12.828 per share, subject, with certain exceptions, to adjustments in the event of stock splits, dividends, subsequent dilutive offerings and certain fundamental transactions. The Omnia warrants initial fair value was $1,316 (see Note 9 “Fair Value Measurements”), and meet the criteria for liability classification due to contingent put option which allows the holder to require that the Company redeem the warrants in cash for a purchase price equal to $30.00 upon certain conditional events such as change in control or event of default. The Omnia warrants are classified as Other long-term liabilities on the Consolidated Balance Sheets. The Omnia detachable warrants were valued at the closing dates of the Subordinated Note using a Monte Carlo valuation model with the following assumptions: Risk-free interest rate per year 4.1 % Expected volatility per year 83.8 % Expected dividend yield — % Contractual expiration 7.5 years Exercise price $ 12.828 Stock price $ 13.65 ATM Offering On March 31, 2023, the Company established an at-the-market common equity offering program (“ATM Program”), through which it may, through which it had the ability to offer and sell shares of common stock having an aggregate gross sales price of up to $50,000. The Company paid a 3.00% sales commission based on the gross proceeds of the sales price per share of common stock sold. On June 19, 2023, the Company terminated the ATM Program in connection with the June 2023 Capital Raise. The following table shows the number of shares sold under the ATM Program prior to its termination: Year Ended December 31, (in thousands, except for per-share data) 2023 Number of common shares issued 284 Weighted average sale price per share $ 9.65 Gross proceeds $ 2,741 Net proceeds $ 2,563 |
RETIREMENT PLAN
RETIREMENT PLAN | 12 Months Ended |
Dec. 31, 2023 | |
RETIREMENT PLAN | |
RETIREMENT PLAN | NOTE 11. – RETIREMENT PLAN The Company sponsors a defined contribution plan under IRC Section 401(k). The plan covers all employees who meet the minimum eligibility requirements. Under the 401(k) plan eligible employees are allowed to make voluntary deferred salary contribution to the plan, subject to statutory limits. The Company has elected to make Safe Harbor Non-Elective Contributions to the plan for eligible employees in the amount of three percent (3%) of the employee’s compensation. Total employer contributions to the plan for the years ended December 31, 2023 and 2022 amounted to $231 and $198, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 12. – COMMITMENTS AND CONTINGENCIES License and growing agreements – Future Commitments Commitment Counter Party Commitment Type 2024 2025 2026 2027 2028 & After Total License Agreement NCSU Minimum annual royalty $ 100 $ 100 $ 100 $ 100 $ 3,575 $ 3,975 (1) License Agreement NCSU Contract fee 150 250 250 — — 650 (2) Consulting Agreements Various Contract fee 214 24 — — — 238 (3) Growing Agreements Various Contract fee 225 — — — — 225 (4) $ 689 $ 374 $ 350 $ 100 $ 3,575 $ 5,088 (1) The minimum annual royalty fee is credited against running royalties on sales of licensed products. The Company is also responsible for reimbursing NCSU for actual third-party patent costs incurred, including capitalized patent costs and patent maintenance costs. These costs vary from year to year and the Company has certain rights to direct the activities that result in these costs. (2) On November 1, 2023, the Company entered into a license agreement with NCSU for an exclusive sublicensable right and license under specific patent rights and plant variety rights for the field of use in specific licensed territories. Additional milestone fees could be required pending achievement of events pursuant to the agreement. (3) As a requirement for a modified risk tobacco product and a condition of the marketing authorization by the FDA, the Company engaged various consultants to conduct post-market studies and research. (4) Various R&D tobacco growing agreements. Litigation In connection with ongoing restructuring efforts and the hemp/cannabis disposal group (see Note 2 “Divestitures and discontinued operations,” the Company has received unasserted claims related to disputed contracts, which could result in accrual of an additional amount up to $1,314 on the Consolidated Balance Sheet. The Company is vigorously defending its position against these claims. Class Action On January 21, 2019, Matthew Jackson Bull, a resident of Denver, Colorado, filed a Complaint against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, and the Company’s then Chief Financial Officer, John T. Brodfuehrer, in the United States District Court for the Eastern District of New York entitled: Matthew Bull, Individually and on behalf of all others similarly situated, v. 22nd Century Group, Inc., Henry Sicignano III, and John T. Brodfuehrer, Case No. 1:19 cv 00409. On January 29, 2019, Ian M. Fitch, a resident of Essex County Massachusetts, filed a Complaint against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, and the Company’s then Chief Financial Officer, John T. Brodfuehrer, in the United States District Court for the Eastern District of New York entitled: Ian Fitch, Individually and on behalf of all others similarly situated, v. 22nd Century Group, Inc., Henry Sicignano III, and John T. Brodfuehrer, Case No. 2:19 cv 00553. On May 28, 2019, the plaintiff in the Fitch case voluntarily dismissed that action. On August 1, 2019, the Court in the Bull case issued an order designating Joseph Noto, Garden State Tire Corp, and Stephens Johnson as lead plaintiffs. On September 16, 2019, pursuant to a joint motion by the parties, the Court in the Bull case transferred the class action to federal district court in the Western District of New York, where it remains pending as Case No. 1:19-cv-01285. Plaintiffs in the Bull case filed an Amended Complaint on November 19, 2019 that alleges three counts: Count I sues the Company and Messrs. Sicignano and Brodfuehrer and alleges that the Company's quarterly and annual reports, SEC filings, press releases and other public statements and documents contained false statements in violation of Section 10(b) of the Securities Exchange Act and Rule 10b-5; Count II sues Messrs. Sicignano and Brodfuehrer pursuant to Section 10(b) of the Securities Exchange Act and Rule 10b5(a) and (c); and Count III sues Messrs. Sicignano and Brodfuehrer for the allegedly false statements pursuant to Section 20(a) of the Securities Exchange Act. The Amended Complaint seeks to certify a class, and unspecified compensatory and punitive damages, and attorney's fees and costs. On January 29, 2020, the Company and Messrs. Sicignano and Brodfuehrer filed a Motion to Dismiss the Amended Complaint. On January 14, 2021, the Court granted the motion, dismissing all claims with prejudice. The Plaintiffs filed a notice of appeal on February 12, 2021 to the Second Circuit Court of Appeals. On May 24, 2022, after briefing and oral argument, the Second Circuit issued an order affirming in part, and reversing in part, the District Court’s dismissal order. The Second Circuit affirmed the District Court’s dismissal of the claims relating to the non-disclosure of stock promotion articles, but reversed the District Court’s dismissal order of the claims alleging the non-disclosure of an SEC investigation. The Second Circuit noted in its opinion, however, that the District Court had not addressed certain arguments raised by the Company and Messrs. Sicignano and Brodfuehrer in the Motion to Dismiss the Amended Complaint as to these remaining claims, and remanded the case to the District Court to address these arguments for the dismissal of the remaining claims. On August 8, 2022, the Company and Messrs. Sicignano and Brodfuehrer filed a renewed motion to dismiss the remaining claims in the Amended Complaint to address the arguments not previously addressed by the District Court. On September 22, 2022, Plaintiffs filed a brief in opposition to the motion. On October 12, 2022, the Company and Messrs. Sicignano and Brodfuehrer filed a reply brief in further support of the motion. On January 6, 2023, the District Court denied the motion to dismiss. The parties participated in a mediation on March 21, 2023 and reached an initial memorandum of understanding for settlement in principle to resolve the litigation and release all claims against the Company. On April 25, 2023, the parties filed with the Court the Motion for Preliminary Approval of the Settlement, which includes the final terms of the proposed settlement. The Court preliminarily approved the settlement on June 30, 2023, and scheduled a further settlement hearing for October 3, 2023. The Court entered the Final Judgment and Order of Dismissal with Prejudice of the action on October 23, 2023. The settlement amount that the defendants paid is $3,000 and is fully covered by the Company’s insurance, which has been funded by the Company’s insurance carrier in an escrow account and anticipated to be disbursed in the first or second quarter of 2024. Accordingly, the Company has recorded an accrual for litigation settlement and corresponding indemnification receivable on the Consolidated Balance Sheets as of December 31, 2023. Shareholder Derivative Cases On February 6, 2019, Melvyn Klein, a resident of Nassau County New York, filed a shareholder derivative claim against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, the Company’s Chief Financial Officer, John T. Brodfuehrer, and each member of the Company’s Board of Directors in the United States District Court for the Eastern District of New York entitled: Melvyn Klein, derivatively on behalf of 22nd Century Group v. Henry Sicignano, III, Richard M. Sanders, Joseph Alexander Dunn, Nora B. Sullivan, James W. Cornell, John T. Brodfuehrer and 22nd Century Group, Inc., Case No. 1:19 cv 00748. Mr. Klein brings this action derivatively alleging that (i) the director defendants supposedly breached their fiduciary duties for allegedly allowing the Company to make false statements; (ii) the director defendants supposedly wasted corporate assets to defend this lawsuit and the other related lawsuits; (iii) the defendants allegedly violated Section 10(b) of the Securities Exchange Act and Rule 10b 5 promulgated thereunder for allegedly approving or allowing false statements regarding the Company to be made; and (iv) the director defendants allegedly violated Section 14(a) of the Securities Exchange Act and Rule 14a 9 promulgated thereunder for allegedly approving or allowing false statements regarding the Company to be made in the Company’s proxy statement. On February 11, 2019, Stephen Mathew filed a shareholder derivative claim against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, the Company’s Chief Financial Officer, John T. Brodfuehrer, and each member of the Company’s Board of Directors in the Supreme Court of the State of New York, County of Erie, entitled: Stephen Mathew, derivatively on behalf of 22nd Century Group, Inc. v. Henry Sicignano, III, John T. Brodfuehrer, Richard M. Sanders, Joseph Alexander Dunn, James W. Cornell, Nora B. Sullivan and 22nd Century Group, Inc., Index No. 801786/2019. Mr. Mathew brings this action derivatively generally alleging the same allegations as in the Klein case. The Complaint seeks declaratory relief, unspecified monetary damages, corrective corporate governance actions, and attorney’s fees and costs. On August 15, 2019, the Court consolidated the Mathew and Klein actions pursuant to a stipulation by the parties (Western District of New York, Case No. 1-19-cv-0513). On May 3, 2019, the Court ordered the Mathew believe that the claims are frivolous, meritless and that the Company and the individual defendants have substantial legal and factual defenses to the claims. We intend to vigorously defend the Company and the individual defendants against such claims. On June 10, 2019, Judy Rowley filed a shareholder derivative claim against the Company, the Company’s then Chief Executive Officer, Henry Sicignano III, the Company’s Chief Financial Officer, John T. Brodfuehrer, and each member of the Company’s Board of Directors in the Supreme Court of the State of New York, County of Erie, entitled: Judy Rowley, derivatively on behalf of 22nd Century Group, Inc. v. Henry Sicignano, III, Richard M. Sanders, Joseph Alexander Dunn, Nora B. Sullivan, James W. Cornell, John T. Brodfuehrer, and 22nd Century Group, Inc., Index No. 807214/2019. Ms. Rowley brought the action derivatively alleging that the director defendants supposedly breached their fiduciary duties by allegedly allowing the Company to make false statements. The Complaint sought declaratory relief, unspecified monetary damages, corrective corporate governance actions, and attorney’s fees and costs. We believe that the claims are frivolous, meritless and that the Company and the individual defendants have substantial legal and factual defenses to the claims. We intend to vigorously defend the Company and the individual defendants against such claims. On September 13, 2019, the Court ordered the litigation stayed pursuant to a joint stipulation by the parties. On August 3, 2022, Plaintiff dismissed the case with prejudice by filing a stipulation of discontinuance with the Court. This dismissal was not pursuant to a settlement. On January 15, 2020, Kevin Broccuto filed a shareholder derivative claim against the Company, the Company's then Chief Executive Officer, Henry Sicignano III, the Company's Chief Financial Officer, John T. Brodfuehrer, and certain members of the Company's prior Board of Directors in the District Court of the State of Nevada, County of Clark, entitled: Kevin Broccuto, derivatively on behalf of 22nd Century Group, Inc. v. James W. Cornell, Richard M. Sanders, Nora B. Sullivan, Henry Sicignano, III, and John T. Brodfuehrer, Case No. A-20-808599. Mr. Broccuto brings this action derivatively alleging three counts: Count I alleges that the defendants breached their fiduciary duties; Count II alleges they committed corporate waste; and Count III that they were unjustly enriched, by allegedly allowing the Company to make false statements. On February 11, 2020, Jerry Wayne filed a shareholder derivative claim against the Company, the Company's then Chief Executive Officer, Henry Sicignano III, the Company's Chief Financial Officer, John T. Brodfuehrer, and certain members of the Company's prior Board of Directors in the District Court of the State of Nevada, County of Clark, entitled: Jerry Wayne, derivatively on behalf of 22nd Century Group, Inc. v. James W. Cornell, Richard M. Sanders, Nora B. Sullivan, Henry Sicignano, III, and John T. Brodfuehrer, Case No. A-20-808599. Mr. Wayne brings this action derivatively alleging generally the same allegations as the Broccuto case. The Complaint seeks unspecified monetary damages, corrective corporate governance actions, disgorgement of alleged profits and imposition of constructive trusts, and attorney's fees and costs. The Complaint also seeks to declare as unenforceable the Company's Bylaw requiring derivative lawsuits to be filed in Erie County, New York, where the Company is headquartered. On March 25, 2020, the Court ordered the Broccuto and Wayne cases consolidated and stayed pursuant to a joint stipulation from the parties. On June 27, 2022, the Court ordered that the stay continue until thirty (30) days after the District Court rules on the renewed Motion to Dismiss the Amended Complaint in the Noto Class Action case. As a result of the Court’s denial of the Motion to Dismiss the Amended Complaint, the June 27, 2022 stay will be lifted if the case is not resolved. No trial date has been set. The parties participated in a mediation on March 21, 2023, and a subsequent mediation on October 17, 2023. On December 5, 2023, the parties entered into a Memorandum of Settlement to fully resolve all claims pending the Court’s approval of a motion for preliminary approval of settlement. The settlement amount is On September 1, 2023, Kenneth Troup filed a shareholder derivative claim against the Company, the Company's then Chief Executive Officer, Henry Sicignano III, the Company's Chief Financial Officer, John T. Brodfuehrer, and certain members of the Company's Board of Directors in the United States District Court for the Western District of New York entitled: Kenneth Troup, derivatively on behalf of 22nd Century Group v. Nora Sullivan, James Mish, Michael Koganov, Anthony Johnson, Richard Sanders, Lucille Salhany, Andy Arno, James W. Cornell, Henry Sicignano, III, and John T. Brodfuehrer, and 22nd Century Group, Inc., Case No. 1:23-cv-00916. Mr. Troup brings this action derivatively generally alleging the same allegations as in the Klein case. The Complaint seeks declaratory relief, unspecified monetary damages, corrective corporate governance actions, and attorney’s fees and costs. On February 9, 2024, defendants filed an unopposed Motion to Consolidate the Troup action with the consolidated derivative cases, which would include the Troup case in the preliminary settlement described above. We believe that the claims are frivolous, meritless and that the Company and the individual defendants have substantial legal and factual defenses to the claims. We intend to vigorously defend the Company and the individual defendants against such claims. Insurance Litigation In November 2022, there was a fire at the Company’s Grass Valley manufacturing facility in Oregon, which resulted in a total loss of the facility. The Company submitted an insurance claim with Dorchester Insurance Company, Ltd. (“Dorchester”) for casualty loss and business interruption coverage which was acknowledged on November 23, 2022. Dorchester funded $5,000 of casualty loss insurance but has failed to issue any payments in connection with the Company’s business interruption claim. On July 19, 2023, the Company filed a Complaint against Dorchester in the United States District Court for the District of Oregon, Pendleton Division, Case No. 2:23-cv-01057-HL. The Company is alleging breach of contract, breach of duty of good faith and fair dealing and negligence per se. The Company is seeking full recovery of its business interruption claim under the policy plus direct, indirect and consequential damages resulting from Dorchester’s continued delay in issuing coverage payments. Discovery is ongoing. No trial date has been set. Needle Rock Farms – Settlement Agreement During March 2023, the Company negotiated and entered into a settlement agreement related to water rights dispute with the adjacent property owner for Needle Rock Farms in which the Company agreed to pay $250 in cash upon execution of the settlement, transferred certain farm equipment with net book value of $272, and accrued an additional payment of $225 that is contingent on either the sale of the farm or will be paid within one year. The total charges of $747 recorded in connection with the settlement agreement is included in discontinued operations within Other operating expenses, net on the Consolidated Statements of Operations and Comprehensive Loss. KeyGene Dispute in the field related to the hops plant. On January 8, 2024, the Company formally terminated the new Framework Collaborative Agreement, as amended, related to hemp/cannabis and hops. KeyGene is seeking payment in the amount of Maison Dispute On January 23, 2024, the Company received a Notice of Intent to Arbitrate from Maison Placements Canada Inc. (“Maison”) in connection with the Company’s March 2023 Senior Secured Credit Facility transaction ( infra ). Maison claims it is owed fees for closure of the Senior Secured Credit Facility transaction as a result of discussions with former Company personnel and a purported letter of engagement dating from 2021. The Company believes it has substantial defenses to Maison’s claims and intends to defend itself vigorously. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2023 | |
DEBT | |
DEBT | NOTE 13. – DEBT The Company has a senior secured credit facility (the “Senior Secured Credit Facility”), which consists of three-year $21,053 Debentures (as defined below) and $2,865 subordinated promissory note (the “Subordinated Note). The Debentures were issued at a 5% original issuance discount and are subject to a 5% exit payment. Debt related to the Senior Secured Credit Facility and Subordinate Note as of December 31, 2023, consists of the following: December 31, December 31, 2023 2022 Senior Secured Credit Facility $ 11,805 $ — Subordinated Note 3,554 — Unamortized discount on loan and deferred debt issuance costs (1,453) — Total debt $ 13,906 $ — Current portion of long-term debt (5,848) — Total long-term debt $ 8,058 $ — Debentures On March 3, 2023, the Company entered into a Securities Purchase Agreement (the “SPA”) with JGB Partners, LP (“JGB Partners”), JGB Capital, LP (“JGB Capital”) and JGB Capital Offshore Ltd. (“JGB Offshore” and collectively with JGB Partners and JGB Capital, the “Holders”) and JGB Collateral, LLC, as collateral agent for the Holders (the “Agent”) which pursuant to the agreement, the Company sold 5% original issuance discount senior secured debentures with an aggregate principal amount of $21,053. The Debentures bear interest at a rate of 7% per annum, payable monthly in arrears as of the last trading day of each month and on the maturity date. The Debentures mature on March 3, 2026. At the Company’s election, subject to certain conditions, interest can be paid in cash, shares of the Company’s common stock, or a combination thereof. The Debentures are subject to an exit payment equal to 5% of the original principal amount, or $1,053, payable on the maturity date or the date the Debentures are paid in full (the “Exit Payment”). Any time after, March 3, 2024, the Company may irrevocably elect to redeem all of the then outstanding principal amount of the Debentures for cash in an amount equal to the entire outstanding principal balance, including accrued and unpaid interest, the Exit Payment and a prepayment premium in an amount equal to 3% of the outstanding principal balance as of the prepayment date (collectively, the “Prepayment Amount”). Upon the entry into a definitive agreement that would effect a change in control (as defined in the Debentures) of the Company, the Agent may require the Company to prepay the outstanding principal balance in an amount equal to the Prepayment Amount. Commencing on May 1, 2024, at its option, the holder of a Debenture may require the Company to redeem 2% of the original principal amount of the Debentures per calendar month which amount may at the Company’s election, subject to certain exceptions, be paid in cash, shares of the Company’s common stock, or a combination thereof. The Company’s obligations under the Debentures can be accelerated upon the occurrence of certain customary events of default. In the event of a default and acceleration of the Company’s obligations, the Company would be required to pay the Prepayment Amount, liquidated damages and other amounts owing in respect thereof through the date of acceleration. The Debentures contain customary representations, warranties and covenants including among other things and subject to certain exceptions, covenants that restrict the Company from incurring additional indebtedness, creating or permitting liens on assets, making or holding any investments, repaying outstanding indebtedness, paying dividends or distributions and entering into transactions with affiliates. Substantially all of the company’s assets, including intellectual property, are collateralized and at risk if Debenture obligation is not satisfied. In addition, the Company is required to maintain at least $7,500 on its balance sheet as restricted cash in a separate account and has financial covenants to maintain certain quarterly revenue targets. In connection with the sale of the Debentures, the Company issued warrants to purchase up to 333,334 shares of common stock for an exercise price of $19.125 per share (the “JGB Warrants”), which had an initial fair value of $4,475 net of issuance costs of $139 (see Note 9 “Fair Value Measurements” and Note 10 “Capital Raise and Warrants for Common Stock”). On June 22, 2023, as a result of the June 19, 2023 offering, the Company’s outstanding JGB warrants to purchase up to 333,334 shares of the Company’s common stock for an exercise price of $19.125 per share were automatically adjusted to be $12.828 exercise price for up to 496,960 shares of common stock. There are no further anti-dilution adjustments on such warrants. On October 16, 2023, the Company entered into a Waiver and Amendment Agreement (the “October Amendment”) with each of the subsidiaries of the Company executing the Debentures, the Holders and the Agent, pursuant to which, among other things, (a) the Holders waived an event of default under Section 7(d) of the Debentures which required the Company to achieve revenue of at least As additional consideration for the waiver, the Company agreed to assign, transfer and convey to the Agent, the Company’s entire right, title and interest in and to (i) the Promissory Note made by J&N Real Estate Company, L.L.C. (“J&N”) payable to the Company in the principal amount of $3,800 and (ii) the Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated June 30, 2021, between J&N, as borrower, for the benefit of the Company, as lender (collectively, the “Pledged Indebtedness”). Upon assignment of the Pledged Indebtedness, the Company recognized the $2,600 of consideration in exchange to be applied as a $2,000 reduction of the Put Price (as defined below), $600 reduction of the outstanding principal amount of Debentures and $895 loss on sale of financial asset. In connection with the waiver, the Company and Holders agreed to exercise the outstanding put provision to redeem 166,667 Warrants for an aggregate put price equal to $2,500 (the “Put Price”), which was concurrently reduced by $2,000, as described above, with the remaining $500 payable by the Company on the Maturity Date recorded as Other long-term liabilities on the Consolidated Balance Sheet. No cash was exchanged as a result of executing the October Amendment. Subsequently, on December 22, 2023, the Company, the Holders and the Agent entered into an Amendment Agreement (the “December Amendment”) pursuant to which the Holders and the Agent consented to the Purchase Agreement, as amended by the GVB Amendment (see Note 2 “Discontinued Operations and Divestitures”). In consideration of the Holders and the Agents’ consent, the Company agreed to (i) pay to the Agent, a cash payment of $2,200 to reduce the outstanding principal of the Debentures (which includes the cash portion of the New Purchase Price paid directly to Agent by Buyer which consists of a cash payment of $1,100 and an additional $1,100 paid by the Company), (ii) a 12% secured promissory note issued to the Company’s senior lender, on behalf of and at the direction of the Company, in an aggregate principal amount of $2,000 (the “GVB Promissory Note”), (iii) assign the GVB Insurance Proceeds to the Agent until the outstanding aggregate principal amount of the Debentures, plus accrued and unpaid interest, has been repaid in full; provided that the first $1,000 of Insurance Proceeds in excess of $5,000 shall be applied as stated above, and (iv) post-closing enter into a deed in lieu of foreclosure agreement with respect to 224 acres of real property in Delta County, Colorado commonly known as Needle Rock Farms, resulting in a non-monetary exchange yielding additional debt reduction of $1,000. As of December 31, 2023, the $2,000 GVB Promissory Note and $1,000 real estate farm asset are pledged to the senior lender for principal reduction and accordingly $3,000 of the Senior Secured Credit Facility is recorded as Current portion of long-term debt on the Consolidated Balance Sheets. Additionally, the Company, the Holders and the Agent agreed to amend the Debentures to (i) allow the Holders to voluntarily convert the Debentures, in whole or in part, into shares of the Company’s common stock (“Voluntary Conversion Option”) on the earlier of (i) June 30, 2024 and (ii) the public announcement of a Fundamental Transaction at a conversion price equal to the lower of (x) $1.00 per share and (y) the closing sale price of the Company’s common stock on June 29, 2024 (the “Conversion Price”), and (ii) include a mandatory prepayment of the outstanding principal of the Debentures in an amount equal to 20% of the net cash proceeds of any issuance by the Company of any of its stock, or other Equity Interests (as defined in the Debentures) or the incurrence or issuance of any indebtedness. The Voluntary Conversion Option remains subject to the approval of the Company’s stockholders and the Company is required pursuant to the December Amendment to use its commercially reasonable efforts to obtain such approval. Additional terms of the December Amendment include a financial covenant holiday through the third quarter of 2024 and revised certain covenants thereafter to reflect the sale of the Purchased Interests, including lowering the Company’s quarterly revenue targets. In accordance with ASC 470-60 Troubled Debt Restructurings by Debtors The October Amendment was concluded to be a modification, and not an extinguishment, based on an analysis of the present value of future cash flows. A new effective interest rate was determined, and the debt continued to be amortized. The December Amendment was concluded to be an extinguishment, due to the addition of a substantive conversion option. As a result, the pre-amended debt carrying value was extinguished and the new debt was recorded at fair value, which is subsequently amortized using the effective interest method. Extinguishment charges were $5,158 and recorded in Interest expense on the Consolidated Statements of Operations and Comprehensive Loss. The Company analyzed the conversion feature of the December Amendment for derivative accounting consideration under ASC 815-15 and determined that the embedded conversion features should be classified as a bifurcated derivative because the exercise price of these convertible notes are subject to a variable conversion rate. The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability Subordinated Note On March 3, 2023, the Company executed a Subordinated Promissory Note (the “Subordinated Note”) with a principal amount of $2,865 in favor of Omnia Ventures, LP (“Omnia”). The Subordinated Note refinanced the 12% Secured Promissory Note with a principal amount of $1,000 dated as of October 29, 2021 payable to Omnia (the “October Note”) and the 12% Secured Promissory Note with a principal amount of $1,500 dated as of January 14, 2022 payable to Omnia (the “January Note”, and together with the October Note, the “Original Notes”), which were assumed by the Company in connection with the acquisition of GVB Biopharma (see Note 3 “Business Acquisitions”). The accrued PIK interest refinanced from the Original Notes was $365. Under the terms of the Subordinated Note, the Company is obligated to make interest payments in-kind (the “PIK Interest”). The PIK Interest accrues monthly at a compounding rate of 26.5% per annum. For the year ended December 31, 2023 the PIK Interest accrual amounts were $695. The Company is not permitted to prepay all or any portion of the outstanding balance on the Subordinated Note prior to maturity. The maturity date of the Subordinated Note is May 1, 2024. The Subordinated Note includes customary event of default provisions. The Subordinated Note is subordinated to the Debenture pursuant to a Subordination Agreement between the Company, the Agent and Omnia. In connection with the Subordinated Note, the Company issued to Omnia, warrants to purchase up to 45,000 shares of the Company’s common stock (the “Omnia Warrants”). The Omnia Warrants are exercisable for seven years from September 3, 2023, at an exercise price of $12.828 per share, subject, with certain exceptions, to adjustments in the event of stock splits, dividends, subsequent dilutive offerings and certain fundamental transactions, as more fully described in the Omnia Warrants. The Omnia warrants initial fair value was $1,316 (see Note 9 “Fair Value Measurements” and 10 “Capital Raise and Warrants for Common Stock”). Contractual maturities under the Senior Secured Credit Facility and Subordinate Note through maturity, excluding any discounts or premiums, as of December 31, 2023 is as follows: 2024 2025 2026 2027 2028 Thereafter Future minimum principal payments $ 5,848 $ — $ 8,058 $ — $ — $ — The fair values of the warrants at issuance of $5,791, together with the Debentures original issuance discount of $1,053, Debentures exit payment of $1,053, and third-party debt issuance costs of $801, are being amortized using the effective interest method over the term of the respective debt instrument, recorded as Interest expense in the Consolidated Statement of Operations and Comprehensive Loss. The components and activity of unamortized discount and deferred debt issuance costs related to the Senior Secured Credit Facility and Subordinated Note is as follows: Total Issuance $ 8,698 Amortization during the year (2,087) Debt extinguishment charges (5,158) December 31, 2023 $ 1,453 |
NOTES AND LOANS PAYABLE
NOTES AND LOANS PAYABLE | 12 Months Ended |
Dec. 31, 2023 | |
NOTES AND LOANS PAYABLE | |
NOTES AND LOANS PAYABLE | NOTE 14. – NOTES AND LOANS PAYABLE The table below outlines our notes payable balances as of December 31, 2023 and 2022: December 31, December 31, 2023 2022 Insurance loans payable $ 543 $ 689 Total current notes and loans payable $ 543 $ 689 Insurance loans payable During the second quarter of 2023, the Company renewed its Director and Officer (“D&O”) insurance for a one-year policy premium totaling $1,626. The Company paid $285 as a premium down payment and financed the remaining $1,341 of policy premiums over ten months at a 7.88% annual percentage rate. Additionally, during the third quarter of 2023, the Company expanded its D&O coverage, resulting in additional financing of $143, at 9.38% annual percentage rate over six months. During the second quarter of 2022, the Company renewed its Director and Officer (“D&O”) insurance for a one-year policy premium totaling $2,394. The Company paid $400 as a premium down payment and financed the remaining $1,994 of policy premiums over ten months at a 3.25% annual percentage rate. Additionally, during the third quarter of 2022, the Company expanded its D&O coverage as a result of the acquisition of GVB, resulting in an additional premium down payment of $90 and financing of $168, under the same terms as the original one-year policy. The Company also has other insurance loans payables related to pollution, property, and general liability across the Company. As of December 31, 2023, all estimated future principal payments to be made under the above notes and loans payable will be paid in 2024. |
EQUITY BASED COMPENSATION
EQUITY BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2023 | |
EQUITY BASED COMPENSATION | |
EQUITY BASED COMPENSATION | NOTE 15. – EQUITY BASED COMPENSATION Stock Compensation Plan On May 20, 2021, the stockholders of 22nd Century Group, Inc. (the “Company”) approved the 22nd Century Group, Inc. 2021 Omnibus Incentive Plan (the “2021 Plan”). The 2021 Plan allows for the granting of equity awards to eligible individuals over the life of the 2021 Plan, including the issuance of up to 333,334 shares of the Company’s common stock, in addition to any remaining shares under the Company’s 2014 Omnibus Incentive Plan pursuant to awards under the 2021 Plan. The 2021 Omnibus Incentive Plan was amended on June 16, 2023, increasing the authorized shares by 233,334. The 2021 Plan has a term of ten years and is administered by the Compensation Committee of the Company’s Board of Directors to determine the various types of incentive awards that may be granted to recipients under the 2021 Plan and the number of shares of common stock to underlie each such award under the 2021 Plan. As of December 31, 2023, the Company had available 606,406 shares remaining for future awards under the 2021 Plan. Compensation Expense The Company recognized the following compensation costs, net of actual forfeitures, related to RSUs and stock options: Year Ended December 31, 2023 2022 Sales, general, and administrative $ 2,052 $ 5,252 Research and development 179 182 Total equity based compensation - continuing operations 2,231 5,434 Total equity based compensation - discontinued operations 448 55 Total equity based compensation $ 2,679 $ 5,489 During the years ended December 31, 2023, and 2022, equity-based compensation expense reversals due to employee termination forfeitures amounted to $1,960 and $84 , respectively. Additionally, the Company recorded Restricted Stock Units (“RSUs”) Unvested RSUs Weighted Average Number of Grant-date Shares Fair Value in thousands $ per share Unvested at January 1, 2022 211 $ 37.50 Granted 236 29.40 Vested (154) 31.65 Forfeited (24) 35.85 Unvested at December 31, 2022 269 $ 31.88 Granted 293 12.44 Vested (147) 29.67 Forfeited (260) 20.86 Unvested at December 31, 2023 155 $ 15.69 The fair value of RSUs that vested during the years ended December 31, 2023 and 2022 was approximately $1,838 and $4,505, respectively, based on the stock price at the time of vesting. As of December 31, 2023, unrecognized compensation expense for RSUs amounted to $823 which is expected to be recognized over a weighted average period of approximately 1.7 years. In addition, there is approximately $786 of unrecognized compensation expense that requires the achievement of certain milestones which are not yet probable. Stock Options. Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term Value in thousands $ per share Outstanding at January 1, 2022 345 $ 24.75 Exercised (10) 17.40 Forfeited (7) 20.85 Expired (1) 41.40 Outstanding at December 31, 2022 327 24.82 Forfeited (101) 21.29 Expired (7) 41.40 Outstanding at December 31, 2023 219 $ 26.34 1.9 years $ — Exercisable at December 31, 2023 213 $ 25.95 1.8 years $ — The intrinsic value of a stock option is the amount by which the current market value or the market value upon exercise of the underlying stock exceeds the exercise price of the option. In addition, there is approximately $190 of unrecognized compensation expense for stock options that requires the achievement of certain milestones which are not yet probable. |
LOSS PER COMMON SHARE
LOSS PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2023 | |
LOSS PER COMMON SHARE | |
LOSS PER COMMON SHARE | NOTE 16. – LOSS PER COMMON SHARE The following table sets forth the computation of basic and diluted loss per common share for the years ended December 31, 2023 and 2022, respectively. Outstanding warrants, options, and restricted stock units were excluded from the calculation of diluted EPS as the effect was antidilutive. Year Ended December 31, 2023 2022 Net loss from continuing operations $ (54,686) $ (36,553) Net loss from discontinued operations (86,089) (23,248) Net loss $ (140,775) $ (59,801) Deemed dividends (9,992) — Net loss available to common shareholders $ (150,767) $ (59,801) Weighted average common shares outstanding - basic and diluted 20,711 12,856 Basic and diluted loss per common share from continuing operations $ (2.64) $ (2.84) Basic and diluted loss per common share from discontinued operations (4.16) (1.81) Basic and diluted loss per common share from deemed dividends (0.48) — Basic and diluted loss per common share $ (7.28) $ (4.65) Anti-dilutive shares are as follows as of December 31 (in thousands): Warrants 47,757 1,138 Options 219 327 Restricted stock units 155 269 48,131 1,734 |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2023 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | NOTE 17. – REVENUE RECOGNITION The Company’s revenues are derived primarily from contract manufacturing organization (“CMO”) customer contracts that consist of obligations to manufacture the customers’ branded filtered cigars and cigarettes. Additional revenues are generated from sale of the Company’s proprietary low nicotine content cigarettes, sold under the brand name VLN ® The Company recognizes revenue when it satisfies a performance obligation by transferring control of the product to a customer. For certain CMO contracts, the performance obligation is satisfied over time as the Company determines, due to contract restrictions, it does not have an alternative use of the product and it has an enforceable right to payment as the product is manufactured. The Company recognizes revenue under those contracts at the unit price stated in the contract based on the units manufactured. Revenue from the sale of the Company’s products, which include excise taxes and shipping and handling charges billed to customers, is recognized net of cash discounts, sales returns and allowances. There was no allowance for discounts or returns and allowances at December 31, 2023 and December 31, 2022. Excise taxes recorded in Cost of Goods Sold on the Consolidated Statement of Operations and Comprehensive Loss for the years ended December 31, 2023 and 2022 was $10,413 and $12,619, respectively. Disaggregation of Revenue The Company’s net revenue is derived from customers located primarily in the United States and is disaggregated by the timing of revenue. Revenue recognized from Tobacco products transferred to customers over time represented 63% and 74%, for the year ended December 31, 2023 and 2022, respectively. The following table presents net revenues by significant customers, which are defined as any customer who individually represents 10% or more of disaggregated product line net revenues: Year Ended December 31, 2023 2022 Customer A 31.49 % 23.61 % Customer B 23.92 % 23.22 % Customer C 21.70 % 35.20 % All other customers 22.89 % 17.97 % Contract Assets and Liabilities Unbilled receivables (contract assets) represent revenues recognized for performance obligations that have been satisfied but have not been billed. These receivables are included as Accounts receivable, net on the Consolidated Balance Sheets. Customer payment terms vary depending on the terms of each customer contract, but payment is generally due prior to product shipment or within extended credit terms up to twenty-one (21) days after shipment. Deferred Revenue (contract liabilities) relate to down payments received from customers in advance of satisfying a performance obligation. This deferred revenue is included as Deferred income on the Consolidated Balance Sheets. Total contract assets and contract liabilities are as follows: December 31, December 31, December 31, 2023 2022 2021 Unbilled receivables $ 1,053 $ 354 $ 178 Deferred income (726) (688) (119) Net contract assets (liabilities) $ 327 $ (334) $ 59 During the years ended December 31, 2023 and 2022, the Company recognized $688 and $119 of revenue that was included in the contract asset balance as of December 31, 2022 and 2021 respectively. |
OTHER OPERATING EXPENSES (INCOM
OTHER OPERATING EXPENSES (INCOME), NET | 12 Months Ended |
Dec. 31, 2023 | |
OTHER OPERATING EXPENSES (INCOME), NET | |
OTHER OPERATING EXPENSES (INCOME), NET | NOTE 18. – OTHER OPERATING EXPENSES (INCOME), NET The components of “Other operating expenses (income), net” were as follows: Year Ended December 31, 2023 2022 Restructuring costs: Impairment of intangible assets (see Note 7) $ 1,375 $ 35 Impairment of fixed assets 56 — Professional services 763 — Severance (see Note 1) 221 — Total Restructuring costs 2,415 35 Acquisition and transaction costs 223 - Gain on sale or disposal of property, plant and equipment (111) (362) Total other operating expenses (income), net $ 2,527 $ (327) Restructuring costs During the third quarter of 2023, the Company undertook various restructuring activities in an effort to better align its internal organizational structure and costs with its strategy, as well as preserve liquidity. As a component of the restructuring, the Company has initiated a process to evaluate strategic alternatives with respect to the Company’s tobacco assets. The process will include consideration of a range of strategic, operational and financial transactions and alternatives, such as business combinations, asset sales, licensing agreements, alternate financing strategies and other options. As a result, the Company incurred $2,415 in restructuring costs for the year ended December 31, 2023, which included costs related to employee termination, professional services and consulting, and long-lived asset impairment. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
INCOME TAXES | NOTE 19. – INCOME TAXES The following is a summary of the components giving rise to the (benefit) provision for income taxes from continuing operations for the years ended December 31, 2023 and 2022: 2023 2022 Current: Federal $ — $ — State 40 14 Foreign — — Total current provision $ 40 $ 14 Deferred: Federal (11,351) (6,610) State (736) (4,404) Foreign — — Total deferred benefit (12,087) (11,014) Change in valuation allowance 12,094 11,021 Total income tax provision $ 47 $ 21 The (benefit) provision for income tax from continuing operations varies from that which would be expected based on applying the statutory federal rate to pre-tax book loss, including the effect of the change in the U.S. corporate income tax rates, as follows: 2023 2022 Statutory federal rate 21.0 % 21.0 % Other items 0.2 (0.8) Stock based compensation (0.8) (1.3) Research and development credit carryforward 0.4 — State tax, net of federal benefit 1.3 12.0 162(m) limitation (0.2) (0.9) Valuation allowance (22.0) (30.1) Effective tax rate (0.1) % (0.1) % Individual components of deferred taxes consist of the following as of December 31: 2023 2022 Deferred tax assets: Net operating loss carry-forward $ 54,453 $ 34,029 Inventory 2,020 220 Stock-based compensation 862 1,144 Start-up expenditures 155 175 Research and development credit carryforward 1,424 1,205 Accrued bonus 133 458 Severance liability 95 151 Credit loss reserves 2 — Research and development costs 1,617 813 Operating lease obligations 476 229 Capital loss on investment 2,449 2,209 Note payable and warrant liability 581 — Other 1,758 50 $ 66,025 $ 40,683 Deferred tax liabilities: Machinery and equipment (283) (221) Patents and trademarks (193) (203) Operating lease right-of-use assets (467) (225) Other intangible assets (385) (334) (1,328) (983) Valuation allowance (64,763) (39,759) Net deferred taxes $ (66) $ (59) The Company has net operating loss (“NOL”) carryforwards of approximately $193,322 as of December 31, 2023 that do not expire. The Company had accumulated an NOL carryforward of approximately $46,920 through December 31, 2017 and this NOL carryforward begins to expire in 2030. As of December 31, 2023, the Company has a research and development credit carryforward of approximately $1,424 that begins to expire in 2030. The Company generated a capital loss carryover of approximately $9,932 as of December 31, 2023, that begins to expire in 2026. Utilization of these NOL carryforwards may be subject to an annual limitation in the case of equity ownership changes, as defined by law. Due to the uncertainty of the Company’s ability to generate sufficient taxable income in the future, the Company has recorded a valuation allowance to reduce the net deferred tax asset to zero. These carryforwards are included in the net deferred tax asset that has been fully offset by the valuation allowance. The valuation allowance increased for continuing operations by $12,094 and $11,021 for the years ended December 31, 2023, and 2022, respectively, and increased an additional $12,910 due to tax attributes that were generated as a part of discontinued operations but remain on a prospective basis with continuing operations due to the Company filing a consolidated US Federal return for the year ended December 31, 2023. ASC 740 provides guidance on the financial statement recognition and measurement for uncertain income tax positions that are taken or expected to be taken in a company’s income tax return. The Company has evaluated its tax positions and believes there are no uncertain tax positions as of December 31, 2023. |
QUARTERLY REVENUE AND EARNINGS
QUARTERLY REVENUE AND EARNINGS DATA - UNAUDITED | 12 Months Ended |
Dec. 31, 2023 | |
QUARTERLY REVENUE AND EARNINGS DATA - UNAUDITED | |
QUARTERLY REVENUE AND EARNINGS DATA - UNAUDITED | NOTE 20. – QUARTERLY REVENUE AND EARNINGS DATA – UNAUDITED Three Months Ended December 31, September 30, June 30, March 31, 2023 2023 2023 2023 Revenues, net $ 7,357 $ 7,871 $ 8,050 $ 8,926 Gross profit (loss) $ (7,829) $ 77 $ (961) $ 17 Net loss from continuing operations (2) $ (22,068) $ (8,081) $ (13,707) $ (10,830) Basic and diluted loss per common share from continuing operations (1) $ (0.66) $ (0.41) $ (0.92) $ (0.75) Three Months Ended December 31, September 30, June 30, March 31, 2022 2022 2022 2022 Revenues, net $ 9,951 $ 11,535 $ 9,970 $ 9,045 Gross profit $ (44) $ 636 $ 928 $ 328 Net loss from continuing operations (3) $ (11,114) $ (10,490) $ (7,699) $ (7,250) Basic and diluted loss per common share from continuing operations (1) $ (0.77) $ (0.75) $ (0.63) $ (0.67) (1) The quarterly per share data in this table has been rounded and therefore may not sum to total year-to-date EPS. (2) For the quarter ended December 31, 2023, net loss from continuing operations increased from the previous current year quarters, mainly due to an inventory leaf reserve charge of $7,720 and loss on extinguishment of debt in the amount of $5,158 . (3) For the quarter ended December 31, 2022, net loss from continuing operations increased from the previous current year quarters, mainly due to higher personnel and strategic consulting costs. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 21. – SUBSEQUENT EVENTS Increase in Authorized Shares On February 15, 2024, our stockholders approved an amendment (the “Articles Amendment”) to our Articles of Incorporation, as amended, to increase the number of authorized shares of common stock sixty-six million, six hundred sixty-six thousand six hundred and sixty-seven (66,666,667) to two hundred fifty million (250,000,000), which Articles Amendment was filed and effective with the Secretary of the State of Nevada on February 15, 2024. Warrant Inducement For the period from January 1, 2024 to February 15, 2024, the date of Stockholder Approval, the Company entered into warrant inducement agreements with certain holders of the Existing Warrants to purchase an aggregate of 13,132,268 shares of common stock at a reduced weighted average exercise price of approximately $0.1844 . Pursuant to the warrant inducement agreements, the exercising holders of the Existing Warrants received 26,264,536 Inducement Warrants and the Company received aggregate gross proceeds of approximately $2,421 from the exercise of the Existing Warrants. lowest Nasdaq Minimum Price (as defined in the as defined in Nasdaq Listing Rule 5635(d)) |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation nd Century Group and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. As described in Note 2, on December 22, 2023, the Company divested substantially all of the assets of GVB Biopharma’s (“GVB”) business within its former hemp/cannabis segment. As a result of the divestiture of GVB and strategic shift away from hemp/cannabis, the Company has realigned its corporate and management reporting structure to focus solely on its tobacco business. As a result, during the fourth quarter of 2023, the Company reorganized its business to become a single reportable segment: (1) tobacco. The results of operations of the former hemp/cannabis segment are reported as discontinued operations in the Consolidated Statements of Operations and Comprehensive Loss for all periods presented and the related assets and liabilities associated with the discontinued operations are classified as held for sale in the Consolidated Balance Sheets as of December 31, 2023, and 2022, respectively. The Consolidated Statements of Cash Flows includes cash flows related to the discontinued operations due to 22 nd |
Use of Estimates | Use of Estimates |
Liquidity and Capital Resources | Liquidity and Capital Resources The Company has incurred significant losses and negative cash flows from operations since inception and expects to incur additional losses until such time that it can generate significant revenue and profit in its tobacco business. The Company had negative cash flow from operations of $54,987 and $51,714 for the years ended December 31, 2023 and 2022, respectively, and an accumulated deficit of $378,707 and $237,814 as of December 31, 2023 and December 31, 2022, respectively. As of December 31, 2023, the Company had cash and cash equivalents of $2,058 . Subsequent to December 31, 2023, the Company completed a warrant inducement offering with gross proceeds to the Company of approximately $2,421 , before deducting the placement agent fees of $165 (see Note 21 “Subsequent Events”). Given the Company’s projected operating requirements and its existing cash and cash equivalents, there is substantial doubt about the Company’s ability to continue as a going concern through one year following the date that the Consolidated Financial Statements are issued. In response to these conditions, management is currently evaluating different strategies for reducing expenses, as well as pursuing financing strategies which include raising additional funds through the issuance of securities, asset sales, and through arrangements with strategic partners. If capital is not available to the Company when, and in the amounts needed, it could be required to liquidate inventory or assets, cease or curtail operations, or seek protection under applicable bankruptcy laws or similar state proceedings. There can be no assurance that the Company will be able to raise the capital it needs to continue operations. Management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern through one year following the date that the Consolidated Financial Statements are issued. The Consolidated Financial Statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. |
Other Significant Risks and Uncertainties | Other Significant Risks and Uncertainties - |
Reverse Stock Split | Reverse Stock Split – 1-for-15 |
Preferred stock authorized | Preferred stock authorized |
Concentration of Credit Risk | Concentration of Credit Risk |
Cash and cash equivalents | Cash and cash equivalents – |
Short-term investment securities | Short-term investment securities twenty-four |
Trade Accounts Receivable and Provision for Current Expected Credit Losses | Trade Accounts Receivable and Provision for Current Expected Credit Losses – |
Inventories | Inventories |
Property, plant and equipment | Property, plant and equipment – Classification Estimated Useful Lives Leasehold improvements shorter of 20 years or lease term Manufacturing equipment 5 Office furniture, fixtures and equipment 3 |
Acquisitions | Acquisitions - |
Discontinued Operations | Discontinued Operations - The assets and liabilities of a discontinued operation held for sale, other than goodwill, are measured at the lower of carrying amount or fair value less cost to sell. The Company allocates interest to discontinued operations if the interest is directly attributable to the discontinued operations or is interest on debt that is required to be repaid as a result of the disposal transaction. |
Contingent Consideration | Contingent Consideration - |
Goodwill | Goodwill - |
Intangible Assets | Intangible Assets The Company believes that costs associated with becoming a signatory to the master settlement agreement “MSA”, costs related to the acquisition of a predicate cigarette brand, and tobacco brand related trademarks have indefinite lives. At each reporting period, the Company evaluates whether the nature and use of the asset continue to support the indefinite-lived classification. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Property, plant, and equipment Intangibles, Goodwill, and Other Definite lived intangible assets subject to amortization are reviewed for strategic importance and commercialization opportunity prior to expiration. If it is determined that the asset no longer supports the Company’s strategic objectives and/or will not be commercially viable prior to expiration, the asset is impaired. In addition, the Company will assess the expected future undiscounted cash flows for its intellectual property based on consideration of future market and economic conditions, competition, federal and state regulations, and licensing opportunities. If the carrying value of such assets are not recoverable, the carrying value will be reduced to fair value and the difference is recorded as impairment. Indefinite-lived intangible asset carrying values are reviewed at least annually or more frequently if events or changes in circumstances indicate that it is more likely than not that an impairment exists. The Company first performs a qualitative assessment and considers its current strategic objectives, future market and economic conditions, competition, and federal and state regulations to determine if an impairment is more likely than not. If it is determined that an impairment is more likely than not, a quantitative assessment is performed to compare the asset carrying value to fair value. |
Leases | Leases Any operating lease having a lease term greater than twelve months will be recognized on the Consolidated Balance Sheets as a right-of-use (ROU) asset with an associated lease obligation—all other leases are considered short-term in nature and will be expensed on a month-to-month basis. The ROU assets and lease obligations are recognized as of the commencement date at the net present value of the fixed minimum lease payments for the lease term. The lease term is determined based on the contractual conditions, including whether renewal options are reasonably certain to be exercised. The discount rate used is the interest rate implicit in the lease, if available, or the Company’s incremental borrowing rate which is determined using a base line rate plus an applicable spread. Refer to Note 6 “Right-of-use Assets, Lease Obligations, and Other Leases” for additional information. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments – Fair Value Measurements and Disclosures ● Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; ● Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and ● Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset’s or a financial liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The Company estimates that the carrying amounts reported on the Consolidated Balance Sheets for cash and cash equivalents, accounts receivable, contract assets, promissory note receivable, accounts payable and accrued expenses, and notes and loans payable approximate their fair value due to the short-term nature of these items. Note 9 “Fair Value Measurements” contains additional information on assets and liabilities recorded at fair value in the Consolidated Financial Statements. |
Warrants | Warrants - Distinguishing Liabilities from Equity Derivatives and Hedging Warrants that the Company may be required to redeem through payment of cash or other assets outside its control are classified as liabilities pursuant to ASC 480 and are initially and subsequently measured at their estimated fair values. Changes in subsequent measurement fair value are recorded in Other income (expense), net of the Company’s Consolidated Statements of Operations and Comprehensive Loss. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For additional discussion on warrants, see Note 9 “Fair Value Measurements” and Note 10 “Capital Raise and Warrants for Common Stock”. Deemed dividends associated with anti-dilution or down round provisions (commonly referred to as “ratchets”) represent the economic transfer of value to holders of equity-classified freestanding financial instruments when these provisions are triggered. These deemed dividends are presented as a reduction in net income or an increase in net loss available to common stockholders and a corresponding increase to additional paid-in-capital resulting in no change to stockholders’ equity/deficit. The incremental value of modifications to warrants as a result of the trigger of down round provisions in connection with equity financings was $3,029, the incremental value of replacement warrants was $6,596, and the incremental value of modifications to warrants as a result of the trigger of anti-dilution provisions of the JGB warrants was $367. Such amounts were determined using Monte-Carlo valuation models and are recorded as Deemed dividends for the year ended December 31, 2023 on the Consolidated Statement of Operations and Comprehensive Loss. |
Debt Issued with Detachable Warrants | Debt Issued with Detachable Warrants - Debt “Warrants” Interest |
Embedded Derivatives | Embedded Derivatives - |
Debt Issuance Costs and Discounts | Debt Issuance Costs and Discounts - |
Transfers of Financial Assets | Transfers of Financial Assets – The Company accounts for transfers of financial assets as sales when it has surrendered control over the related assets. Whether control has been relinquished requires, among other things, an evaluation of relevant legal considerations and an assessment of the nature and extent of the Company’s continuing involvement with the assets transferred. Gains and losses resulting from transfers reported as sales are included as a component of Other income (expense) in the Consolidated Statement of Operations and Comprehensive Loss. |
Gain/Loss on Debt Extinguishment | Gain/Loss on Debt Extinguishment – Gain or loss Gains and losses on debt extinguishment are included as a component of Interest expense in the Consolidated Statement of Operations and Comprehensive Loss. |
Revenue Recognition | Revenue Recognition |
Research and Development | Research and Development |
Stock Based Compensation | Stock Based Compensation |
Income Taxes | Income Taxes As a result of the Company’s history of cumulative net operating losses and the uncertainty of their future utilization, the Company has established a valuation allowance to fully offset its net deferred tax assets as of December 31, 2023, and December 31, 2022. The Company’s federal and state tax returns for the years ended December 31, 2020 through December 31, 2022 are currently open to audit under the statutes of limitations. There are no pending audits as of December 31, 2023. |
Loss Per Common Share | Loss Per Common Share |
Gain and Loss Contingencies | Gain and Loss Contingencies The Company maintains general liability insurance policies for its facilities. Under the terms of our insurance policies, in the case of loss to a property, the Company follows the guidance in ASC 610-30, Other Income —Gains and Losses on Involuntary Conversions, Gain Contingencies. Refer to Note 12 “Commitments and Contingencies”. |
Severance charges | Severance charges - From time to time, the Company evaluates its resources and optimizes its business plan to align to changing needs of executing on its strategy. These actions may result in voluntary or involuntary employee termination benefits. Voluntary termination benefits are accrued when an employee accepts the related offer. Involuntary termination benefits are accrued upon the commitment to a termination plan and the benefit arrangement is communicated to affected employees, or when liabilities are determined to be probable and estimable, depending on the existence of a substantive plan for severance or termination. The following table summarizes the change in accrued liabilities, presented within Other current liabilities and Other long-term liabilities Consolidated Balance Sheets: Balance at January 1, 2022 $ 238 Accruals 692 Cash payments (296) Balance at December 31, 2022 634 Accruals 790 Reversal from settlement (168) Cash payments (870) Balance at December 31, 2023 $ 386 December 31, December 31, 2023 2022 Current $ 386 $ 349 Noncurrent — 285 Total severance liability $ 386 $ 634 Year Ended December 31, 2023 2022 Sales, general, and administrative $ 401 $ 692 Other operating expense, net 221 — Total severance charges $ 622 $ 692 |
Recent Accounting Pronouncement(s) | Recent Accounting Pronouncement(s) – The Company adopted ASU 2016-13, or ASC 326 Financial Instruments-Credit Losses Accounting Guidance Not Yet Elected or Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280)-Improvements to Reportable Segment Disclosures . The ASU enhances disclosure of significant segment expenses by requiring disclosure of significant segment expenses regularly provided to the chief operating decision maker, extend certain annual disclosures to interim periods, and permits more than one measure of segment profit or loss to be reported under certain conditions. The amendments are effective for the Company in years beginning after December 15, 2023, and interim periods within years beginning after December 15, 2024. Early adoption of the ASU is permitted, including adoption in any interim period for which financial statements have not been issued. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740)-Improvements to Income Tax Disclosures. The ASU requires additional quantitative and qualitative income tax disclosures to allow readers of the consolidated financial statements to assess how the Company’s operations, related tax risks and tax planning affect its tax rate and prospects for future cash flows. For public business entities, the ASU is effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements. We consider the applicability and impact of all ASUs. If the ASU is not listed above, it was determined that the ASU was either not applicable or would have an immaterial impact on our financial statements and related disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of estimated useful lives of property plant and equipment | Classification Estimated Useful Lives Leasehold improvements shorter of 20 years or lease term Manufacturing equipment 5 Office furniture, fixtures and equipment 3 |
Schedule of change in accrued liabilities | Balance at January 1, 2022 $ 238 Accruals 692 Cash payments (296) Balance at December 31, 2022 634 Accruals 790 Reversal from settlement (168) Cash payments (870) Balance at December 31, 2023 $ 386 |
Schedule of accrued liabilities | Balance at January 1, 2022 $ 238 Accruals 692 Cash payments (296) Balance at December 31, 2022 634 Accruals 790 Reversal from settlement (168) Cash payments (870) Balance at December 31, 2023 $ 386 December 31, December 31, 2023 2022 Current $ 386 $ 349 Noncurrent — 285 Total severance liability $ 386 $ 634 Year Ended December 31, 2023 2022 Sales, general, and administrative $ 401 $ 692 Other operating expense, net 221 — Total severance charges $ 622 $ 692 |
DISCONTINUED OPERATIONS AND D_2
DISCONTINUED OPERATIONS AND DIVESTITURES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
DISCONTINUED OPERATIONS AND DIVESTITURES | |
Schedule of Discontinued Operations and Divestitures | December 31, December 31, 2023 2022 Cash and cash equivalents $ — $ 815 Accounts receivable, net — 4,278 Inventories — 2,738 Insurance recoveries — 5,000 Prepaid expenses and other current assets 9 815 Property, plant and equipment, net - current 1,207 — Other current assets 38 — Current assets of discontinued operations held for sale $ 1,254 $ 13,646 Property, plant and equipment, net — 9,401 Operating lease right-of-use assets, net — 1,732 Goodwill — 33,160 Intangible assets, net — 9,641 Investments — 682 Other assets — 166 Noncurrent assets of discontinued operations held for sale $ — $ 54,782 Notes and loans payable - current $ 2 $ 219 Operating lease obligations 1,083 429 Accounts payable 2,013 2,117 Accrued expenses 79 662 Accrued payroll — 537 Deferred income 8 143 Other current liabilities — 31 Current liabilities of discontinued operations held for sale $ 3,185 $ 4,138 Notes and loans payable — 3,001 Operating lease obligations — 1,430 Other long-term liabilities — 172 Noncurrent liabilities of discontinued operations held for sale $ — $ 4,603 Net (liabilities) assets $ (1,931) $ 59,687 Year Ended December 31, 2023 2022 Revenues, net $ 42,113 $ 21,610 Cost of goods sold 49,185 22,283 Gross loss (7,072) (673) Operating expenses: Sales, general and administrative 16,540 12,286 Research and development 3,010 2,983 Other operating expense, net (1) 118 7,529 Loss on disposal of discontinued operations 58,521 — Total operating expenses 78,189 22,798 Operating loss from discontinued operations (85,261) (23,471) Other income (expense): Other income, net 65 66 Interest expense (2) (438) (298) Total other expense (373) (232) Loss from discontinued operations before income taxes (85,634) (23,703) Provision (benefit) for income taxes 455 (455) Net loss from discontinued operations $ (86,089) $ (23,248) Year Ended December 31, 2023 2022 Grass Valley fire: Fixed asset write-offs $ — $ 5,550 Inventory charges — 3,998 Lease obligations — 20 Professional services 407 36 Compensation & benefits — 195 Insurance recoveries — (5,000) Total Grass Valley fire 407 4,799 Severance 13 — Impairment of intangible assets — 1,453 Gain on change in contingent consideration (1,138) — Needlerock Farms settlement 769 — Impairment of inventory — 237 Gain on sale or disposal of property, plant and equipment (64) (6) Acquisition costs 131 1,046 Total other operating expenses, net $ 118 $ 7,529 Year Ended December 31, 2023 2022 Cash used in operating activities $ 21,281 $ 17,274 Cash used in investing activities $ 799 $ 3,665 Depreciation and amortization $ 2,443 $ 1,566 Capital expenditures $ 3,752 $ 2,752 |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
BUSINESS ACQUISITIONS | |
Schedule of management's purchase price allocation | Cash $ 456 Accounts receivable 2,944 Inventory 3,551 Other assets 519 Property, plant & equipment 11,189 Operating leases right-of-use assets, net 1,231 Goodwill 33,360 Tradename 4,600 Customer relationships 5,800 Accounts payable and accrued expenses (2,777) Other current liabilities (944) Lease liabilities (1,259) Auto loans (387) Deferred tax liability (627) Bridge loan (4,250) Fair value of net assets acquired $ 53,406 |
Schedule of discount rate and remaining lease terms | Weighted average remaining lease term in years 3.8 Weighted average discount rate 8.3 % |
Schedule of purchase price allocated to intangible assets | Weighted Average Fair Value Amortization Period Weighted Average Definite-lived Intangible Assets Assigned (Years) Discount Rate Customer relationships $ 5,800 10 23.50% Tradename $ 4,600 Indefinite 23.50% |
RX Pharmatech Ltd | |
BUSINESS ACQUISITIONS | |
Schedule of quantitative information associated with fair value measurement | The following table provides quantitative information associated with the initial fair value measurement of the Company’s liabilities for contingent consideration as of January 19, 2023: Maximum Payout Weighted Average Contingency Type (undiscounted) Fair Value Unobservable Inputs or Range Revenue-based payments $ 1,550 $ 1,138 Discount rate 16 % Projected year(s) of payment 2024-2026 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INVENTORIES | |
Schedule of Inventories | December 31, December 31, 2023 2022 Raw materials $ 3,580 $ 7,090 Work in process — 3 Finished goods 766 177 $ 4,346 $ 7,270 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
PROPERTY, PLANT AND EQUIPMENT, NET. | |
Schedule of Property, plant and equipment, net | December 31, December 31, 2023 2022 Leasehold improvements $ 262 $ 232 Manufacturing equipment 7,254 6,780 Office furniture, fixtures and equipment 254 414 7,770 7,426 Less: accumulated depreciation (4,377) (3,734) Property, plant and equipment, net $ 3,393 $ 3,692 |
RIGHT-OF-USE ASSETS, LEASE OB_2
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES | |
Schedule of discount rate and remaining lease term | Weighted average remaining lease term in years 5.9 Weighted average discount rate 9.0 % |
Schedule of future minimum lease payments | 2024 $ 396 2025 403 2026 422 2027 430 2028 449 Thereafter 414 Total lease payments 2,514 Less: imputed interest (585) Present value of lease liabilities 1,929 Less: current portion of lease liabilities (231) Total long-term lease liabilities $ 1,698 |
Schedule of supplemental cash flow information | December 31, December 31, 2023 2022 Cash paid for operating leases $ 436 $ 276 Assets acquired under operating leases $ 1,602 $ — |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INTANGIBLE ASSETS, NET | |
Schedule of total intangible assets | Gross Accumulated Net Carrying December 31, 2023 Carrying Amount Amortization Impairment Amount Definite-lived: Patent $ 2,913 $ (1,622) $ (487) $ 804 License fees 4,165 (1,666) (65) 2,434 Total amortizing intangible assets $ 7,078 $ (3,288) $ (552) $ 3,238 Indefinite-lived: Trademarks $ 134 NA $ - $ 134 MSA signatory costs 2,202 NA - 2,202 License fee for predicate cigarette brand 350 NA - 350 Total indefinite-lived intangible assets $ 2,686 NA $ - $ 2,686 Total intangible assets, net $ 9,764 $ (3,288) $ (552) $ 5,924 Gross Accumulated Net Carrying December 31, 2022 Carrying Amount Amortization Amount Definite-lived: Patent $ 5,723 $ (3,588) $ 2,135 License fees 3,801 (1,417) 2,384 Total amortizing intangible assets $ 9,524 $ (5,005) $ 4,519 Indefinite-lived: Trademarks $ 141 MSA signatory costs 2,202 License fee for predicate cigarette brand 350 Total indefinite-lived intangible assets $ 2,693 Total intangible assets, net $ 7,212 |
Schedule of aggregate intangible asset amortization expense | Year Ended December 31, 2023 2022 Cost of goods sold $ 11 $ 10 Research and development 644 609 Total amortization expense $ 655 $ 619 |
Schedule of estimated future intangible asset amortization expense | 2024 2025 2026 2027 2028 Thereafter Amortization expense $ 422 $ 410 $ 351 $ 365 $ 321 $ 1,369 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of assets and liabilities measured at fair value | Fair Value December 31, 2023 Level 1 Level 2 Level 3 Total Liabilities Detachable warrants $ — $ — $ 1,350 $ 1,350 Derivative liability — — 557 557 Total liabilities $ — $ — $ 1,907 $ 1,907 Fair Value December 31, 2022 Level 1 Level 2 Level 3 Total Assets Money market funds $ 10,163 $ — $ — $ 10,163 Corporate bonds — 7,031 — 7,031 U.S. treasury securities — 999 — 999 Total assets $ 10,163 $ 8,030 $ — $ 18,193 |
Schedule of available-for-sale securities reconciliation | Available for Sale Debt Securities December 31, 2022 Amortized Gross Gross Cost Unrealized Unrealized Fair Basis Gains Losses Value Corporate bonds $ 7,143 $ — $ (112) $ 7,031 |
Schedule of available for sale securities classified by contractual maturity | December 31, 2022 Amortized Cost Basis Fair Value Due in one year or less $ 7,143 $ 7,031 |
Schedule of the changes in fair value of Level 3 investments | Fair value measurement at January 1, 2023 $ — Initial measurement (see Note 1 and 10) 4,214 Fair value measurement adjustment (364) JGB redemption of 166,667 warrants (2,500) Fair value measurement at December 31, 2023 $ 1,350 |
Schedule of valuation technique used for measuring liability | Stock price volatility 104.1 % Expected term 2.2 years Stock price as of measurement date (per share) $ 0.19 Risk-free rate 4.3 % Credit rating CCC Market yield (credit risk) 13.8 % |
Omnia Warrants | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of valuation technique used for measuring liability | The Omnia detachable warrants were measured at December 31, 2023 using a Monte Carlo valuation model with the following assumptions: Risk-free interest rate per year 4.6 % Expected volatility per year 90.9 % Expected dividend yield — % Contractual expiration 6.6 years Exercise price $ 12.828 Stock price $ 0.19 |
CAPITAL RAISE AND WARRANTS FO_2
CAPITAL RAISE AND WARRANTS FOR COMMON STOCK (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Class of Warrant or Right [Line Items] | |
Schedule of valuation technique used for measuring liability | Stock price volatility 104.1 % Expected term 2.2 years Stock price as of measurement date (per share) $ 0.19 Risk-free rate 4.3 % Credit rating CCC Market yield (credit risk) 13.8 % |
Schedule of sale of stock | Year Ended December 31, (in thousands, except for per-share data) 2023 Number of common shares issued 284 Weighted average sale price per share $ 9.65 Gross proceeds $ 2,741 Net proceeds $ 2,563 |
Warrants activity | Warrants outstanding at January 1, 2022 — Exercised — Issued 1,138,212 Warrants outstanding at December 31, 2022 1,138,212 Exercised (18,084,052) Abandoned (325,205) Issued 65,028,421 Warrants outstanding at December 31, 2023 47,757,376 |
JGB warrants | Senior secured debentures | |
Class of Warrant or Right [Line Items] | |
Schedule of valuation technique used for measuring liability | The JGB detachable warrants were valued at the closing dates of the Senior Secured Credit Facility using a Monte Carlo valuation model with the following assumptions: Risk-free interest rate per year 4.2 % Expected volatility per year 88.1 % Expected dividend yield — % Contractual expiration 5.5 years Exercise price $ 19.125 Stock price $ 13.65 |
Omnia Warrants | |
Class of Warrant or Right [Line Items] | |
Schedule of valuation technique used for measuring liability | The Omnia detachable warrants were measured at December 31, 2023 using a Monte Carlo valuation model with the following assumptions: Risk-free interest rate per year 4.6 % Expected volatility per year 90.9 % Expected dividend yield — % Contractual expiration 6.6 years Exercise price $ 12.828 Stock price $ 0.19 |
Omnia Warrants | Senior secured debentures | |
Class of Warrant or Right [Line Items] | |
Schedule of valuation technique used for measuring liability | The Omnia detachable warrants were valued at the closing dates of the Subordinated Note using a Monte Carlo valuation model with the following assumptions: Risk-free interest rate per year 4.1 % Expected volatility per year 83.8 % Expected dividend yield — % Contractual expiration 7.5 years Exercise price $ 12.828 Stock price $ 13.65 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of future commitments | Future Commitments Commitment Counter Party Commitment Type 2024 2025 2026 2027 2028 & After Total License Agreement NCSU Minimum annual royalty $ 100 $ 100 $ 100 $ 100 $ 3,575 $ 3,975 (1) License Agreement NCSU Contract fee 150 250 250 — — 650 (2) Consulting Agreements Various Contract fee 214 24 — — — 238 (3) Growing Agreements Various Contract fee 225 — — — — 225 (4) $ 689 $ 374 $ 350 $ 100 $ 3,575 $ 5,088 (1) The minimum annual royalty fee is credited against running royalties on sales of licensed products. The Company is also responsible for reimbursing NCSU for actual third-party patent costs incurred, including capitalized patent costs and patent maintenance costs. These costs vary from year to year and the Company has certain rights to direct the activities that result in these costs. (2) On November 1, 2023, the Company entered into a license agreement with NCSU for an exclusive sublicensable right and license under specific patent rights and plant variety rights for the field of use in specific licensed territories. Additional milestone fees could be required pending achievement of events pursuant to the agreement. (3) As a requirement for a modified risk tobacco product and a condition of the marketing authorization by the FDA, the Company engaged various consultants to conduct post-market studies and research. (4) Various R&D tobacco growing agreements. |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
DEBT | |
Schedule of long-term debt | December 31, December 31, 2023 2022 Senior Secured Credit Facility $ 11,805 $ — Subordinated Note 3,554 — Unamortized discount on loan and deferred debt issuance costs (1,453) — Total debt $ 13,906 $ — Current portion of long-term debt (5,848) — Total long-term debt $ 8,058 $ — |
Schedule of future principal payments | 2024 2025 2026 2027 2028 Thereafter Future minimum principal payments $ 5,848 $ — $ 8,058 $ — $ — $ — |
Schedule of components and activity of unamortized discount and debt issuance costs | Total Issuance $ 8,698 Amortization during the year (2,087) Debt extinguishment charges (5,158) December 31, 2023 $ 1,453 |
NOTES AND LOANS PAYABLE (Tables
NOTES AND LOANS PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
NOTES AND LOANS PAYABLE | |
Schedule of notes payable balances | December 31, December 31, 2023 2022 Insurance loans payable $ 543 $ 689 Total current notes and loans payable $ 543 $ 689 |
EQUITY BASED COMPENSATION (Tabl
EQUITY BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
EQUITY BASED COMPENSATION | |
Schedule of compensation costs related to restricted stock and stock options | Year Ended December 31, 2023 2022 Sales, general, and administrative $ 2,052 $ 5,252 Research and development 179 182 Total equity based compensation - continuing operations 2,231 5,434 Total equity based compensation - discontinued operations 448 55 Total equity based compensation $ 2,679 $ 5,489 |
Summary of changes in unvested restricted stock | Unvested RSUs Weighted Average Number of Grant-date Shares Fair Value in thousands $ per share Unvested at January 1, 2022 211 $ 37.50 Granted 236 29.40 Vested (154) 31.65 Forfeited (24) 35.85 Unvested at December 31, 2022 269 $ 31.88 Granted 293 12.44 Vested (147) 29.67 Forfeited (260) 20.86 Unvested at December 31, 2023 155 $ 15.69 |
Schedule of stock option activity | Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Options Price Term Value in thousands $ per share Outstanding at January 1, 2022 345 $ 24.75 Exercised (10) 17.40 Forfeited (7) 20.85 Expired (1) 41.40 Outstanding at December 31, 2022 327 24.82 Forfeited (101) 21.29 Expired (7) 41.40 Outstanding at December 31, 2023 219 $ 26.34 1.9 years $ — Exercisable at December 31, 2023 213 $ 25.95 1.8 years $ — |
LOSS PER COMMON SHARE (Tables)
LOSS PER COMMON SHARE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
LOSS PER COMMON SHARE | |
Schedule of computation of basic and diluted loss per common share | Year Ended December 31, 2023 2022 Net loss from continuing operations $ (54,686) $ (36,553) Net loss from discontinued operations (86,089) (23,248) Net loss $ (140,775) $ (59,801) Deemed dividends (9,992) — Net loss available to common shareholders $ (150,767) $ (59,801) Weighted average common shares outstanding - basic and diluted 20,711 12,856 Basic and diluted loss per common share from continuing operations $ (2.64) $ (2.84) Basic and diluted loss per common share from discontinued operations (4.16) (1.81) Basic and diluted loss per common share from deemed dividends (0.48) — Basic and diluted loss per common share $ (7.28) $ (4.65) Anti-dilutive shares are as follows as of December 31 (in thousands): Warrants 47,757 1,138 Options 219 327 Restricted stock units 155 269 48,131 1,734 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
REVENUE RECOGNITION | |
Schedule of concentration of risk | Year Ended December 31, 2023 2022 Customer A 31.49 % 23.61 % Customer B 23.92 % 23.22 % Customer C 21.70 % 35.20 % All other customers 22.89 % 17.97 % |
Schedule of contract assets and liabilities | December 31, December 31, December 31, 2023 2022 2021 Unbilled receivables $ 1,053 $ 354 $ 178 Deferred income (726) (688) (119) Net contract assets (liabilities) $ 327 $ (334) $ 59 |
OTHER OPERATING EXPENSES (INC_2
OTHER OPERATING EXPENSES (INCOME), NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
OTHER OPERATING EXPENSES (INCOME), NET | |
Components of "Other operating expenses, net" | Year Ended December 31, 2023 2022 Restructuring costs: Impairment of intangible assets (see Note 7) $ 1,375 $ 35 Impairment of fixed assets 56 — Professional services 763 — Severance (see Note 1) 221 — Total Restructuring costs 2,415 35 Acquisition and transaction costs 223 - Gain on sale or disposal of property, plant and equipment (111) (362) Total other operating expenses (income), net $ 2,527 $ (327) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
INCOME TAXES | |
Summary of the components giving rise to the income tax provision (benefit) | 2023 2022 Current: Federal $ — $ — State 40 14 Foreign — — Total current provision $ 40 $ 14 Deferred: Federal (11,351) (6,610) State (736) (4,404) Foreign — — Total deferred benefit (12,087) (11,014) Change in valuation allowance 12,094 11,021 Total income tax provision $ 47 $ 21 |
Schedule of effective income tax rate reconciliation | 2023 2022 Statutory federal rate 21.0 % 21.0 % Other items 0.2 (0.8) Stock based compensation (0.8) (1.3) Research and development credit carryforward 0.4 — State tax, net of federal benefit 1.3 12.0 162(m) limitation (0.2) (0.9) Valuation allowance (22.0) (30.1) Effective tax rate (0.1) % (0.1) % |
Schedule of deferred tax assets and liabilities | 2023 2022 Deferred tax assets: Net operating loss carry-forward $ 54,453 $ 34,029 Inventory 2,020 220 Stock-based compensation 862 1,144 Start-up expenditures 155 175 Research and development credit carryforward 1,424 1,205 Accrued bonus 133 458 Severance liability 95 151 Credit loss reserves 2 — Research and development costs 1,617 813 Operating lease obligations 476 229 Capital loss on investment 2,449 2,209 Note payable and warrant liability 581 — Other 1,758 50 $ 66,025 $ 40,683 Deferred tax liabilities: Machinery and equipment (283) (221) Patents and trademarks (193) (203) Operating lease right-of-use assets (467) (225) Other intangible assets (385) (334) (1,328) (983) Valuation allowance (64,763) (39,759) Net deferred taxes $ (66) $ (59) |
QUARTERLY REVENUE AND EARNING_2
QUARTERLY REVENUE AND EARNINGS DATA - UNAUDITED (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
QUARTERLY REVENUE AND EARNINGS DATA - UNAUDITED | |
Schedule of quarterly revenue and earnings data | Three Months Ended December 31, September 30, June 30, March 31, 2023 2023 2023 2023 Revenues, net $ 7,357 $ 7,871 $ 8,050 $ 8,926 Gross profit (loss) $ (7,829) $ 77 $ (961) $ 17 Net loss from continuing operations (2) $ (22,068) $ (8,081) $ (13,707) $ (10,830) Basic and diluted loss per common share from continuing operations (1) $ (0.66) $ (0.41) $ (0.92) $ (0.75) Three Months Ended December 31, September 30, June 30, March 31, 2022 2022 2022 2022 Revenues, net $ 9,951 $ 11,535 $ 9,970 $ 9,045 Gross profit $ (44) $ 636 $ 928 $ 328 Net loss from continuing operations (3) $ (11,114) $ (10,490) $ (7,699) $ (7,250) Basic and diluted loss per common share from continuing operations (1) $ (0.77) $ (0.75) $ (0.63) $ (0.67) (1) The quarterly per share data in this table has been rounded and therefore may not sum to total year-to-date EPS. (2) For the quarter ended December 31, 2023, net loss from continuing operations increased from the previous current year quarters, mainly due to an inventory leaf reserve charge of $7,720 and loss on extinguishment of debt in the amount of $5,158 . (3) For the quarter ended December 31, 2022, net loss from continuing operations increased from the previous current year quarters, mainly due to higher personnel and strategic consulting costs. |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 2 Months Ended | 3 Months Ended | 12 Months Ended | |||
Oct. 19, 2023 USD ($) | Jul. 05, 2023 shares | Feb. 15, 2024 USD ($) | Dec. 31, 2023 USD ($) segment | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||
Maximum maturity date of securities | 24 months | |||||
Number of reportable segments | segment | 1 | |||||
Goodwill | $ 0 | $ 0 | ||||
Deemed dividend related to down-round features | 3,029 | |||||
Value of replacement warrants | 6,596 | |||||
Deemed dividend related to down-round provisions and anti-dilution provisions | 367 | |||||
Accelerated equity compensation expense | 523 | $ 1,237 | ||||
Allowance for discounts or returns and allowances | 8 | 8 | 0 | |||
Cash and cash equivalents | 2,058 | $ 2,058 | 2,205 | |||
Substantial Doubt about Going Concern, within One Year [true false] | true | |||||
Reverse stock split, ratio | 0.0667 | |||||
Cash flow from operations | $ (54,987) | (51,714) | ||||
Proceeds from Issuance of Common Stock | $ 5,250 | |||||
Placement agent fees | 367 | $ 165 | ||||
Other general expense | $ 288 | |||||
Accumulated deficit | $ (378,707) | (378,707) | $ (237,814) | |||
Shares issued for reverse stock split | shares | 66,035 | |||||
Subsequent Event | ||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||
Proceeds from Issuance of Common Stock | $ 2,421 | |||||
Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||
Provision for credit losses | $ 118 | |||||
Directors | ||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||
Vesting period | 1 year | |||||
Officers and employees | ||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||
Vesting period | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Estimated useful lives of property, plant and equipment (Details) | Dec. 31, 2023 |
Leasehold improvements | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Property, Plant and Equipment, Useful Life | 20 years |
Manufacturing equipment | Maximum | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Property, Plant and Equipment, Useful Life | 15 years |
Manufacturing equipment | Minimum | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Property, Plant and Equipment, Useful Life | 5 years |
Office furniture, fixtures and equipment | Maximum | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Property, Plant and Equipment, Useful Life | 10 years |
Office furniture, fixtures and equipment | Minimum | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Property, Plant and Equipment, Useful Life | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Change in accrued liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Beginning balance | $ 634 | $ 238 |
Accruals | 790 | 692 |
Reversal from settlement | (168) | |
Cash payments | (870) | (296) |
Ending balance | 386 | 634 |
Current | 386 | 349 |
Noncurrent | 285 | |
Total severance liability | $ 386 | $ 634 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Severance Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Severance Charges | ||
Total severance charges | $ 622 | $ 692 |
Sales, general, and administrative | ||
Severance Charges | ||
Total severance charges | 401 | $ 692 |
Other operating expense, net | ||
Severance Charges | ||
Total severance charges | $ 221 |
DISCONTINUED OPERATIONS AND D_3
DISCONTINUED OPERATIONS AND DIVESTITURES - Provision for Impairment (Details) - GVB Hemp/Cannabis Business - Held for sale - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2023 | |
DISCONTINUED OPERATIONS AND DIVESTITURES | |||
Goodwill impairment | $ 33,360 | ||
Impairment of intangible assets | $ 10,879 | ||
Impairment of intangible assets | 3,037 | ||
Loss on equity investments | (682) | ||
Impairment of Property plant and equipment | 7,418 | ||
Impairment of right-of-use assets | $ 5,038 | ||
Total impairment charges for other intangibles and long-lived assets | $ 25,189 |
DISCONTINUED OPERATIONS AND D_4
DISCONTINUED OPERATIONS AND DIVESTITURES (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 22, 2023 | Nov. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2023 | Nov. 20, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | |
DISCONTINUED OPERATIONS AND DIVESTITURES | ||||||||
Rate of interest | 12% | 9.38% | 9.38% | 7.88% | 3.25% | |||
Insurance proceeds | $ 1,000 | $ 5,000 | ||||||
Loss on disposal of discontinued operations | $ (58,521) | |||||||
GVB Hemp/Cannabis Business | Held for sale | ||||||||
DISCONTINUED OPERATIONS AND DIVESTITURES | ||||||||
Impairment charges in Other operating expenses, net | 25,189 | |||||||
Goodwill impairment | $ 33,360 | |||||||
Total consideration | 3,100 | $ 3,100 | $ 3,100 | $ 2,250 | ||||
Cash consideration | 1,100 | |||||||
Consideration in the form of secured promissory note | $ 2,000 | |||||||
Rate of interest | 12% | |||||||
Maximum amount of insurance proceeds used to offset certain share liabilities | $ 2,000 | |||||||
Maximum amount of certain shared liabilities entitled to offset | 1,000 | |||||||
Insurance proceeds | 5,000 | |||||||
Selling expenses | $ 434 | |||||||
Loss on disposal of discontinued operations | $ 58,521 | |||||||
GVB Biopharma | Held for sale | ||||||||
DISCONTINUED OPERATIONS AND DIVESTITURES | ||||||||
Impairment charges in Other operating expenses, net | 25,189 | |||||||
Goodwill impairment | $ 33,360 |
DISCONTINUED OPERATIONS AND D_5
DISCONTINUED OPERATIONS AND DIVESTITURES - Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
DISCONTINUED OPERATIONS AND DIVESTITURES | ||
Current assets of discontinued operations held for sale | $ 1,254 | $ 13,646 |
Noncurrent assets of discontinued operations held for sale | 54,782 | |
Current liabilities of discontinued operations held for sale | 3,185 | 4,138 |
Noncurrent liabilities of discontinued operations held for sale | 4,603 | |
Held for sale | ||
DISCONTINUED OPERATIONS AND DIVESTITURES | ||
Cash and cash equivalents | 815 | |
Accounts receivable, net | 4,278 | |
Inventories | 2,738 | |
Insurance recoveries | 5,000 | |
Prepaid expenses and other current assets | 815 | |
Current assets of discontinued operations held for sale | 13,646 | |
Property, plant and equipment, net | 9,401 | |
Operating lease right-of-use assets, net | 1,732 | |
Goodwill | 33,160 | |
Intangible assets, net | 9,641 | |
Investments | 682 | |
Other assets | 166 | |
Noncurrent assets of discontinued operations held for sale | 54,782 | |
Notes and loans payable - current | 219 | |
Operating lease obligations | 429 | |
Accounts payable | 2,117 | |
Accrued expenses | 662 | |
Accrued payroll | 537 | |
Deferred income | 143 | |
Other current liabilities | 31 | |
Current liabilities of discontinued operations held for sale | 4,138 | |
Notes and loans payable | 3,001 | |
Operating lease obligations | 1,430 | |
Other long-term liabilities | 172 | |
Noncurrent liabilities of discontinued operations held for sale | 4,603 | |
Net (liabilities) assets | $ 59,687 | |
GVB Hemp/Cannabis Business | Held for sale | ||
DISCONTINUED OPERATIONS AND DIVESTITURES | ||
Prepaid expenses and other current assets | 9 | |
Property, plant and equipment, net - current | 1,207 | |
Other current assets | 38 | |
Current assets of discontinued operations held for sale | 1,254 | |
Notes and loans payable - current | 2 | |
Operating lease obligations | 1,083 | |
Accounts payable | 2,013 | |
Accrued expenses | 79 | |
Deferred income | 8 | |
Current liabilities of discontinued operations held for sale | 3,185 | |
Net (liabilities) assets | $ (1,931) |
DISCONTINUED OPERATIONS AND D_6
DISCONTINUED OPERATIONS AND DIVESTITURES - Net loss from discontinued operations (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Operating expenses: | |||
Loss on disposal of discontinued operations | $ (58,521) | ||
Other income (expense): | |||
Loss from discontinued operations before income taxes | (85,634) | $ (23,703) | |
Provision (benefit) for income taxes | 455 | (455) | |
Net loss from discontinued operations | (86,089) | (23,248) | |
GVB Hemp/Cannabis Business | Held for sale | |||
DISCONTINUED OPERATIONS AND DIVESTITURES | |||
Revenues, net | 42,113 | 21,610 | |
Cost of goods sold | 49,185 | 22,283 | |
Gross loss | (7,072) | (673) | |
Operating expenses: | |||
Sales, general and administrative | 16,540 | 12,286 | |
Research and development | 3,010 | 2,983 | |
Other operating expense, net | 118 | 7,529 | |
Loss on disposal of discontinued operations | 58,521 | ||
Goodwill impairment | $ 33,360 | ||
Total operating expenses | 78,189 | 22,798 | |
Operating loss from discontinued operations | (85,261) | (23,471) | |
Other income (expense): | |||
Other income, net | 65 | 66 | |
Interest expense | 438 | 298 | |
Total other expense | (373) | (232) | |
Loss from discontinued operations before income taxes | (85,634) | (23,703) | |
Provision (benefit) for income taxes | 455 | (455) | |
Net loss from discontinued operations | $ (86,089) | $ (23,248) |
DISCONTINUED OPERATIONS AND D_7
DISCONTINUED OPERATIONS AND DIVESTITURES - Other operating expenses, net (Details) - GVB Biopharma - Held for sale - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Grass Valley fire: | ||
Fixed asset write-offs | $ 5,550 | |
Inventory charges | 3,998 | |
Lease obligations | 20 | |
Professional services | $ 407 | 36 |
Compensation & benefits | 195 | |
Insurance recoveries | (5,000) | |
Total Grass Valley fire | 407 | 4,799 |
Restructuring costs: | ||
Severance | 13 | |
Impairment of intangible assets | 1,453 | |
Gain on change in contingent consideration | (1,138) | |
Needlerock Farms settlement | 769 | |
Impairment of inventory | 237 | |
Gain on sale or disposal of property, plant and equipment | (64) | (6) |
Acquisition costs | 131 | 1,046 |
Total other operating expenses, net | $ 118 | $ 7,529 |
DISCONTINUED OPERATIONS AND D_8
DISCONTINUED OPERATIONS AND DIVESTITURES - Cash flow information from discontinued operations (Details) - GVB Hemp/Cannabis Business - Held for sale - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
DISCONTINUED OPERATIONS AND DIVESTITURES | ||
Cash used in operating activities | $ 21,281 | $ 17,274 |
Cash used in investing activities | 799 | 3,665 |
Depreciation and amortization | 2,443 | 1,566 |
Capital expenditures | $ 3,752 | $ 2,752 |
BUSINESS ACQUISITIONS (Details)
BUSINESS ACQUISITIONS (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jan. 19, 2023 USD ($) item shares | Dec. 31, 2022 USD ($) | May 13, 2022 USD ($) shares | Sep. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) | |
BUSINESS ACQUISITIONS | ||||||
Number of novel food applications | item | 1,276 | |||||
Contingent consideration | $ 1,138 | |||||
Goodwill | $ 0 | |||||
Deferred Tax Assets, Valuation Allowance | $ 39,759 | 64,763 | ||||
Measurement period adjustments | $ 53 | |||||
Gain on change of contingent consideration | (1,138) | |||||
GVB Biopharma | ||||||
BUSINESS ACQUISITIONS | ||||||
Debt assumed | $ 4,637 | |||||
Transaction costs | $ 1,753 | |||||
Shares issued | shares | 2,193,334 | |||||
Fair value of shares issued | $ 51,653 | |||||
Increase (decrease) in inventory | $ 978 | |||||
Goodwill | 44,200 | 33,360 | ||||
Reduction to goodwill | 10,840 | |||||
Deferred tax liability | 627 | 627 | ||||
Deferred Tax Assets, Valuation Allowance | 434 | |||||
Valuation of property plant and equipment | $ 70 | |||||
GVB Biopharma | Sales, general, and administrative | ||||||
BUSINESS ACQUISITIONS | ||||||
Acquisition related costs | $ 1,046 | |||||
GVB Biopharma | Tradename | ||||||
BUSINESS ACQUISITIONS | ||||||
Royalty rate | 1% | |||||
GVB Biopharma | Off-market lease | ||||||
BUSINESS ACQUISITIONS | ||||||
Intangible assets | $ 0 | |||||
GVB Biopharma | Customer relationships | ||||||
BUSINESS ACQUISITIONS | ||||||
Historical customer annual attrition rate | 20% | |||||
RX Pharmatech Ltd | ||||||
BUSINESS ACQUISITIONS | ||||||
Number of novel food applications | item | 1,276 | |||||
Cash consideration | $ 200 | |||||
Equity consideration | 503 | |||||
Target working capital, true up | 286 | |||||
Contingent consideration | 1,138 | |||||
Fair value of contingent consideration | 2,127 | |||||
Intangible assets | 1,744 | |||||
Net asset | 93 | |||||
Excess purchase price | $ 0 | |||||
Contingent consideration, earn out period | 3 years | |||||
Shares issued | shares | 31,056 | |||||
Cash acquired | $ 290 | |||||
Goodwill | 0 | |||||
RX Pharmatech Ltd | Sales, general, and administrative | ||||||
BUSINESS ACQUISITIONS | ||||||
Acquisition related costs | $ 130 | |||||
RX Pharmatech Ltd | Maximum | ||||||
BUSINESS ACQUISITIONS | ||||||
Contingent consideration | $ 1,550 |
BUSINESS ACQUISITIONS - Initial
BUSINESS ACQUISITIONS - Initial fair value measurements (Details) $ in Thousands | Dec. 31, 2023 | Jan. 19, 2023 USD ($) |
BUSINESS ACQUISITIONS | ||
Maximum Payout | $ 1,550 | |
Fair Value | $ 1,138 | |
Measurement Inputs | 16 | |
Business Combination, Contingent Consideration, Liability, Measurement Input [Extensible Enumeration] | us-gaap:MeasurementInputDiscountRateMember |
BUSINESS ACQUISITIONS - Purchas
BUSINESS ACQUISITIONS - Purchase price allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | May 13, 2022 |
BUSINESS ACQUISITIONS | ||
Goodwill | $ 0 | |
GVB Biopharma | ||
BUSINESS ACQUISITIONS | ||
Cash | 456 | |
Accounts receivable | 2,944 | |
Inventory | 3,551 | |
Other assets | 519 | |
Property, plant & equipment | 11,189 | |
Operating leases right-of-use assets, net | 1,231 | |
Goodwill | 33,360 | $ 44,200 |
Accounts payable and accrued expenses | (2,777) | |
Other current liabilities | (944) | |
Lease liabilities | (1,259) | |
Auto loans | (4,637) | |
Deferred tax liability | (627) | $ (627) |
Fair value of net assets acquired | 53,406 | |
GVB Biopharma | Auto loans | ||
BUSINESS ACQUISITIONS | ||
Auto loans | (387) | |
GVB Biopharma | Bridge Loan. | ||
BUSINESS ACQUISITIONS | ||
Auto loans | (4,250) | |
GVB Biopharma | Tradename | ||
BUSINESS ACQUISITIONS | ||
Intangible assets | 4,600 | |
GVB Biopharma | Customer relationships | ||
BUSINESS ACQUISITIONS | ||
Intangible assets | $ 5,800 |
BUSINESS ACQUISITIONS - Discoun
BUSINESS ACQUISITIONS - Discount rate and remaining lease terms (Details) | Dec. 31, 2023 | May 13, 2022 |
BUSINESS ACQUISITIONS | ||
Weighted average remaining lease term in years | 5 years 10 months 24 days | |
Weighted average discount rate | 9% | |
GVB Biopharma | ||
BUSINESS ACQUISITIONS | ||
Weighted average remaining lease term in years | 3 years 9 months 18 days | |
Weighted average discount rate | 8.30% |
BUSINESS ACQUISITIONS - Purch_2
BUSINESS ACQUISITIONS - Purchase price allocated to intangible assets (Details) - GVB Biopharma $ in Thousands | May 13, 2022 USD ($) |
Customer relationships | |
BUSINESS ACQUISITIONS | |
Fair Value Assigned | $ 5,800 |
Weighted Average Amortization Period (Years) | 10 years |
Weighted Average Discount Rate | 23.50% |
Tradename | |
BUSINESS ACQUISITIONS | |
Fair Value Assigned | $ 4,600 |
Weighted Average Discount Rate | 23.50% |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
INVENTORIES | ||
Raw materials | $ 3,580 | $ 7,090 |
Work in process | 3 | |
Finished goods | 766 | 177 |
Inventory, Net | 4,346 | 7,270 |
Inventory write-off | $ 237 | |
Grass Valley Fire [Member] | ||
INVENTORIES | ||
Inventory write-off | $ 7,720 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
PROPERTY, PLANT AND EQUIPMENT, NET | ||
Property, plant and equipment, gross | $ 7,770 | $ 7,426 |
Less: accumulated depreciation | (4,377) | (3,734) |
Property, plant and equipment, net | 3,393 | 3,692 |
Depreciation expense | 852 | 673 |
Leasehold improvements | ||
PROPERTY, PLANT AND EQUIPMENT, NET | ||
Property, plant and equipment, gross | 262 | 232 |
Manufacturing equipment | ||
PROPERTY, PLANT AND EQUIPMENT, NET | ||
Property, plant and equipment, gross | 7,254 | 6,780 |
Office furniture, fixtures and equipment | ||
PROPERTY, PLANT AND EQUIPMENT, NET | ||
Property, plant and equipment, gross | $ 254 | $ 414 |
RIGHT-OF-USE ASSETS, LEASE OB_3
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES (Details) $ in Thousands | 12 Months Ended | ||
Jan. 01, 2023 USD ($) item | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES | |||
Weighted average remaining lease term in years | 5 years 10 months 24 days | ||
Weighted average discount rate | 9% | ||
Future minimum lease payments | |||
2024 | $ 396 | ||
2025 | 403 | ||
2026 | 422 | ||
2027 | 430 | ||
2028 | 449 | ||
Thereafter | 414 | ||
Total lease payments | 2,514 | ||
Less: imputed interest | (585) | ||
Present value of lease liabilities | 1,929 | ||
Less: current portion of lease liabilities | (231) | $ (252) | |
Total long-term lease liabilities | 1,698 | 711 | |
Operating lease cost | $ 475 | $ 288 | |
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | ||
Monthly base rent | $ 15 | ||
Base Rent Annual Increase, as a percent | 3% | ||
Initial term | 36 months | ||
Number of renewal options | item | 2 | ||
Period of renewal options | 24 months |
RIGHT-OF-USE ASSETS, LEASE OB_4
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES - Schedule of supplemental cash flow information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
RIGHT-OF-USE ASSETS, LEASE OBLIGATIONS, AND OTHER LEASES | ||
Cash paid for operating leases | $ 436 | $ 276 |
Assets acquired under operating leases | $ 1,602 |
INTANGIBLE ASSETS, NET - Other
INTANGIBLE ASSETS, NET - Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Intangible assets, net | ||
Gross Carrying Amount, Finite-lived | $ 7,078 | $ 9,524 |
Accumulated Amortization, Finite-lived | (3,288) | (5,005) |
Impairment , Finite-lived | $ (552) | |
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Operating Income (Expense), Net | |
Net Carrying Amount, Finite-lived | $ 3,238 | 4,519 |
Gross Carrying Amount, Indefinite-lived | 2,686 | |
Net Carrying Amount, Indefinite-lived | 2,686 | 2,693 |
Total intangible assets, net | 9,764 | |
Impairment of intangible assets, Total | (1,375) | (35) |
Total intangible assets, net | 5,924 | 7,212 |
Trademarks | ||
Intangible assets, net | ||
Gross Carrying Amount, Finite-lived | 134 | |
Net Carrying Amount, Indefinite-lived | 134 | 141 |
MSA signatory costs | ||
Intangible assets, net | ||
Gross Carrying Amount, Indefinite-lived | 2,202 | |
Net Carrying Amount, Indefinite-lived | 2,202 | 2,202 |
License fee for predicate cigarette brand | ||
Intangible assets, net | ||
Gross Carrying Amount, Indefinite-lived | 350 | |
Net Carrying Amount, Indefinite-lived | 350 | 350 |
Patent | ||
Intangible assets, net | ||
Gross Carrying Amount, Finite-lived | 2,913 | 5,723 |
Accumulated Amortization, Finite-lived | (1,622) | (3,588) |
Impairment , Finite-lived | (487) | |
Net Carrying Amount, Finite-lived | 804 | 2,135 |
Impairment of intangible assets, Total | (552) | |
License fee for predicate cigarette brand | ||
Intangible assets, net | ||
Gross Carrying Amount, Finite-lived | 4,165 | 3,801 |
Accumulated Amortization, Finite-lived | (1,666) | (1,417) |
Impairment , Finite-lived | (65) | |
Net Carrying Amount, Finite-lived | $ 2,434 | $ 2,384 |
INTANGIBLE ASSETS, NET - Aggreg
INTANGIBLE ASSETS, NET - Aggregate intangible asset amortization expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
INTANGIBLE ASSETS, NET | ||
Total amortization expense | $ 655 | $ 619 |
Impairment, Intangible Asset, Indefinite-Lived (Excluding Goodwill), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Operating Income (Expense), Net | Other Operating Income (Expense), Net |
Impairment of intangible assets | $ 1,375 | $ 35 |
Patents and trademarks | ||
INTANGIBLE ASSETS, NET | ||
Impairment of intangible assets | 772 | |
Patent | ||
INTANGIBLE ASSETS, NET | ||
Impairment of intangible assets | 552 | |
Finite lived intangible assets disposed | 1,501 | |
Net book value disposed | 0 | |
Trademarks abandoned | ||
INTANGIBLE ASSETS, NET | ||
Impairment of intangible assets | 51 | |
Cost of goods sold | ||
INTANGIBLE ASSETS, NET | ||
Total amortization expense | 11 | 10 |
Research and development | ||
INTANGIBLE ASSETS, NET | ||
Total amortization expense | $ 644 | $ 609 |
INTANGIBLE ASSETS, NET - Estima
INTANGIBLE ASSETS, NET - Estimated future intangible asset amortization expense (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Estimated future intangible asset amortization expense | |
2024 | $ 422 |
2025 | 410 |
2026 | 351 |
2027 | 365 |
2028 | 321 |
Thereafter | $ 1,369 |
INVESTMENTS & OTHER ASSETS (Det
INVESTMENTS & OTHER ASSETS (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Oct. 16, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2021 | |
INVESTMENTS & OTHER ASSETS | ||||
Note receivable | $ 3,800 | |||
Extinguishment of Discount | 305 | |||
Non-cash assignment of PLSH Promissory Note | 2,600 | $ 2,600 | ||
Loss on transfer of promissory note | $ 895 | $ (895) | ||
Investment in Panacea | ||||
INVESTMENTS & OTHER ASSETS | ||||
Note receivable | $ 4,300 | |||
Notes receivable issued value | 3,684 | |||
Note receivable, face amount | 4,300 | |||
Note receivable, discount | $ 616 | |||
Decrease in related party notes receivable | $ 500 | |||
Extinguishment of related party notes receivable | 500 | |||
Note receivable interest rate | 0% | |||
Related party notes receivable discount | $ 51 |
FAIR VALUE MEASUREMENTS - Recur
FAIR VALUE MEASUREMENTS - Recurring (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Money market funds | ||
Assets | ||
Net Asset Value | $ 1 | |
Fair Value, Recurring | ||
Assets | ||
Assets at fair value | $ 18,193 | |
Liabilities at fair value | $ 1,907 | |
Fair Value, Recurring | Detachable warrants | ||
Assets | ||
Liabilities at fair value | 1,350 | |
Fair Value, Recurring | Derivative liabilities | ||
Assets | ||
Liabilities at fair value | 557 | |
Fair Value, Recurring | Money market funds | ||
Assets | ||
Assets at fair value | 10,163 | |
Fair Value, Recurring | Corporate bonds | ||
Assets | ||
Assets at fair value | 7,031 | |
Fair Value, Recurring | U.S. treasury securities | ||
Assets | ||
Assets at fair value | 999 | |
Fair Value, Recurring | Fair Value, Inputs, Level 1 | ||
Assets | ||
Assets at fair value | 10,163 | |
Fair Value, Recurring | Fair Value, Inputs, Level 1 | Money market funds | ||
Assets | ||
Assets at fair value | 10,163 | |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | ||
Assets | ||
Assets at fair value | 8,030 | |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | Corporate bonds | ||
Assets | ||
Assets at fair value | 7,031 | |
Fair Value, Recurring | Fair Value, Inputs, Level 2 | U.S. treasury securities | ||
Assets | ||
Assets at fair value | $ 999 | |
Fair Value, Recurring | Fair Value, Inputs, Level 3 | ||
Assets | ||
Liabilities at fair value | 1,907 | |
Fair Value, Recurring | Fair Value, Inputs, Level 3 | Detachable warrants | ||
Assets | ||
Liabilities at fair value | 1,350 | |
Fair Value, Recurring | Fair Value, Inputs, Level 3 | Derivative liabilities | ||
Assets | ||
Liabilities at fair value | $ 557 |
FAIR VALUE MEASUREMENTS - Avail
FAIR VALUE MEASUREMENTS - Available-for-sale debt securities (Details) - Corporate Bonds $ in Thousands | Dec. 31, 2022 USD ($) |
FAIR VALUE MEASUREMENTS | |
Available-for-sale Securities - Amortized Cost Basis | $ 7,143 |
Available-for-sale Securities - Gross Unrealized Losses | (112) |
Available-for-sale Securities - Fair Value | $ 7,031 |
FAIR VALUE MEASUREMENTS - Matur
FAIR VALUE MEASUREMENTS - Maturity of available-for-sale securities by contractual maturity (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
FAIR VALUE MEASUREMENTS | |
Available for sale, maturities one year or less, Amortized Cost | $ 7,143 |
Available for sale, maturities one year or less, Fair Value | $ 7,031 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | ||
Interest income on short-term investment securities | $ 52 | $ 546 |
FAIR VALUE MEASUREMENTS - Estim
FAIR VALUE MEASUREMENTS - Estimated fair values of company's liabilities (Details) - Detachable warrants $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) shares | |
Estimated fair value of company's liability | |
Initial measurement | $ 4,214 |
Fair value measurement adjustment | (364) |
JGB redemption of warrants | (2,500) |
Fair value measurement ending balance | $ 1,350 |
Number of Warrants Redeemed | shares | 166,667 |
FAIR VALUE MEASUREMENTS - Warra
FAIR VALUE MEASUREMENTS - Warrant liability - Valuation technique (Details) | Dec. 31, 2023 $ / shares Y | Mar. 03, 2023 Y $ / shares |
Risk-free interest rate per year | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Derivative Liability, Measurement Input | 0.043 | |
Expected volatility per year | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Derivative Liability, Measurement Input | 1.041 | |
Contractual expiration | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Derivative Liability, Measurement Input | Y | 2.2 | |
Stock price | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Derivative Liability, Measurement Input | 0.19 | |
Market yield (credit risk) | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Derivative Liability, Measurement Input | 0.138 | |
JGB warrants | Risk-free interest rate per year | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants measurement input | 0.042 | |
JGB warrants | Expected volatility per year | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants measurement input | 0.881 | |
JGB warrants | Contractual expiration | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants measurement input | Y | 5.5 | |
JGB warrants | Exercise price | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants measurement input | 19.125 | |
JGB warrants | Stock price | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants measurement input | 13.65 | |
Omnia Warrants | Risk-free interest rate per year | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants measurement input | 0.046 | 0.041 |
Omnia Warrants | Expected volatility per year | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants measurement input | 0.909 | 0.838 |
Omnia Warrants | Contractual expiration | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants measurement input | Y | 6.6 | 7.5 |
Omnia Warrants | Exercise price | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants measurement input | 12.828 | 12.828 |
Omnia Warrants | Stock price | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Warrants measurement input | 0.19 | 13.65 |
CAPITAL RAISE AND WARRANTS FO_3
CAPITAL RAISE AND WARRANTS FOR COMMON STOCK - Direct Offering & Warrant Repricing (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | 12 Months Ended | ||||||||||||||||||
Dec. 07, 2023 | Oct. 31, 2023 | Oct. 19, 2023 | Oct. 17, 2023 | Jul. 19, 2023 | Jul. 06, 2023 | Jun. 19, 2023 | Jul. 21, 2022 | Jan. 31, 2024 | Dec. 31, 2023 | Oct. 31, 2023 | Feb. 15, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Nov. 28, 2023 | Oct. 20, 2023 | Oct. 18, 2023 | Oct. 16, 2023 | Jul. 31, 2023 | Jun. 18, 2023 | Jul. 31, 2022 | |
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Stock issued in connection with capital raise | $ 22,880 | $ 32,484 | |||||||||||||||||||
Other general expense | $ 288 | ||||||||||||||||||||
Net proceeds from direct offering | 5,250 | ||||||||||||||||||||
Payments of Stock Issuance Costs | $ 367 | $ 165 | |||||||||||||||||||
Shares represented by warrants | 166,667 | 390,247 | |||||||||||||||||||
Exercise price | $ 0.1765 | $ 0.1765 | |||||||||||||||||||
Exercised | (18,084,052) | ||||||||||||||||||||
Warrant outstanding balance | 47,757,376 | 47,757,376 | 1,138,212 | ||||||||||||||||||
Abandoned | 325,205 | ||||||||||||||||||||
Issued | 65,028,421 | 1,138,212 | |||||||||||||||||||
Number of warrants repriced | 747,974 | ||||||||||||||||||||
Change in fair value of warrant liabilities | $ (364) | ||||||||||||||||||||
Aggregate number of pre-funded warrants in percentage | 10% | ||||||||||||||||||||
Percentage of public offering accompanying common warrant | 125% | ||||||||||||||||||||
Subsequent Event | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Net proceeds from direct offering | $ 2,421 | ||||||||||||||||||||
Shares represented by warrants | 13,132,268 | ||||||||||||||||||||
Exercise price | $ 0.1844 | ||||||||||||||||||||
Warrant outstanding balance | 57,299,308 | ||||||||||||||||||||
Prefunded Warrants | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Stock issued in connection with capital raise (in shares) | 2,399,512 | ||||||||||||||||||||
Exercise price | $ 0.5249 | ||||||||||||||||||||
Exercised | 3,800,000 | ||||||||||||||||||||
Warrant outstanding balance | 13,500,000 | 13,500,000 | |||||||||||||||||||
Combined public offering price, per share | 0.0001 | ||||||||||||||||||||
Prefunded Warrants | Subsequent Event | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Exercised | 10,800,000 | ||||||||||||||||||||
Common Warrants | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Exercise price | $ 0.525 | ||||||||||||||||||||
Placement Agent Warrants | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Stock issued in connection with capital raise (in shares) | 1,000,000 | ||||||||||||||||||||
Shares issue price | $ 0.65625 | ||||||||||||||||||||
Private placement | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Stock issued in connection with capital raise | $ 35,000 | ||||||||||||||||||||
Stock issued in connection with capital raise (in shares) | 1,138,221 | ||||||||||||||||||||
Shares issue price | $ 30.75 | ||||||||||||||||||||
Net proceeds from direct offering | $ 32,484 | ||||||||||||||||||||
Registered Direct Offering | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Stock issued in connection with capital raise | $ 11,700 | $ 3,000 | $ 5,300 | ||||||||||||||||||
Stock issued in connection with capital raise (in shares) | 4,373,219 | 778,634 | 747,974 | ||||||||||||||||||
Shares issue price | $ 2.67 | $ 3.80 | $ 7.05 | ||||||||||||||||||
Net proceeds from direct offering | $ 10,742 | $ 2,722 | $ 4,800 | 25,158 | $ 35,000 | ||||||||||||||||
Payments of Stock Issuance Costs | $ 2,279 | $ 2,516 | |||||||||||||||||||
Shares represented by warrants | 8,746,438 | 1,557,268 | 747,974 | ||||||||||||||||||
Exercise price | $ 0.525 | $ 2.42 | $ 2.42 | $ 3.80 | $ 7.05 | $ 0.525 | $ 0.525 | $ 3.80 | $ 2.42 | $ 30.75 | |||||||||||
Warrant outstanding balance | 11,799,654 | 65,042 | |||||||||||||||||||
Abandoned | 325,205 | ||||||||||||||||||||
Issued | 0 | ||||||||||||||||||||
Number of warrants repriced | 8,746,438 | 1,557,268 | |||||||||||||||||||
Public Equity Offering | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Stock issued in connection with capital raise (in shares) | 7,600,000 | ||||||||||||||||||||
Shares issue price | $ 0.00001 | ||||||||||||||||||||
Shares represented by warrants | 20,000,000 | ||||||||||||||||||||
Public Equity Offering | Prefunded Warrants | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Shares represented by warrants | 2,400,000 | ||||||||||||||||||||
Class Of warrant Or right exercise price one | Registered Direct Offering | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Exercise price | 3.80 | ||||||||||||||||||||
Class Of warrant Or right exercise price two | Registered Direct Offering | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Exercise price | $ 2.42 | ||||||||||||||||||||
Private Placement Warrants | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Exercise price | $ 7.05 | $ 30.75 | |||||||||||||||||||
Number of warrants repriced | 747,974 | ||||||||||||||||||||
Change in fair value of warrant liabilities | $ 2,025 | ||||||||||||||||||||
Private Placement Warrants | Private placement | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Exercise price | $ 30.75 | ||||||||||||||||||||
Private Placement Warrants | Private placement | Maximum | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Shares represented by warrants | 1,138,221 | ||||||||||||||||||||
July 19, 2023 RDO warrants | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Exercise price | $ 0.2042 | $ 0.2042 | |||||||||||||||||||
Warrant outstanding balance | 1,225,000 | 1,225,000 | |||||||||||||||||||
July 19, 2023 RDO warrants | Registered Direct Offering | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Exercise price | $ 0.525 | $ 0.1765 | $ 0.525 | ||||||||||||||||||
Exercised | 7,521,438 | ||||||||||||||||||||
Warrant outstanding balance | 1,225,000 | 1,225,000 | |||||||||||||||||||
July 19, 2023 RDO warrants | Registered Direct Offering | Subsequent Event | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Exercised | 775,000 | ||||||||||||||||||||
Inducement warrants | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Other general expense | $ 58 | ||||||||||||||||||||
Shares represented by warrants | 15,517,386 | 15,517,386 | |||||||||||||||||||
Exercise price | $ 0.2042 | $ 0.2042 | $ 0.525 | ||||||||||||||||||
Warrant outstanding balance | 31,034,772 | 31,034,772 | 31,779,654 | ||||||||||||||||||
Issued | 31,034,772 | ||||||||||||||||||||
Change in fair value of warrant liabilities | $ 883 | ||||||||||||||||||||
Percentage of public offering accompanying common warrant | 200% | ||||||||||||||||||||
Inducement warrants | Common Warrants | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Exercise price | $ 0.215 | $ 0.215 | |||||||||||||||||||
October 2023 CMPO warrants | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Exercise price | $ 0.2042 | $ 0.2042 | |||||||||||||||||||
Warrant outstanding balance | 13,500,000 | 13,500,000 | |||||||||||||||||||
July 6, 2023 RDO warrants | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Exercise price | $ 0.2042 | $ 0.2042 | |||||||||||||||||||
Warrant outstanding balance | 1,557,268 | 1,557,268 | |||||||||||||||||||
July 6, 2023 RDO warrants | Registered Direct Offering | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Exercised | 1,557,368 | ||||||||||||||||||||
July 6, 2023 RDO warrants | Registered Direct Offering | Subsequent Event | |||||||||||||||||||||
CAPITAL RAISE AND WARRANT ACTIVITY | |||||||||||||||||||||
Warrant outstanding balance | 1,557,368 |
CAPITAL RAISE AND WARRANTS FO_4
CAPITAL RAISE AND WARRANTS FOR COMMON STOCK - Warrants and ATM Offerings (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 2 Months Ended | 12 Months Ended | ||||||||||||
Oct. 19, 2023 | Oct. 16, 2023 | Jun. 22, 2023 | Jun. 19, 2023 | Mar. 03, 2023 | Dec. 31, 2023 | Mar. 31, 2023 | Feb. 15, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Nov. 28, 2023 | Oct. 31, 2023 | Oct. 17, 2023 | Jul. 31, 2023 | Jan. 31, 2023 | |
Class of Warrant or Right [Line Items] | |||||||||||||||
Net proceeds from warrant exercise | $ 3,044 | ||||||||||||||
Warrant outstanding beginning balance | 47,757,376 | 1,138,212 | |||||||||||||
Exercised | (18,084,052) | ||||||||||||||
Abandoned | (325,205) | ||||||||||||||
Issued | 65,028,421 | 1,138,212 | |||||||||||||
Warrant outstanding ending balance | 47,757,376 | 47,757,376 | 1,138,212 | ||||||||||||
Shares represented by warrants | 166,667 | 390,247 | |||||||||||||
Exercise price | $ 0.1765 | ||||||||||||||
Percentage of public offering accompanying common warrant | 125% | ||||||||||||||
Fair value of warrants | $ 5,791 | $ 5,791 | |||||||||||||
Other general expense | $ 288 | ||||||||||||||
Change in fair value of warrant liabilities | (364) | ||||||||||||||
Warrant aggregate put price | $ 2,500 | ||||||||||||||
issuance of the warrants without the put provision | $ 1,577 | ||||||||||||||
Subsequent Event | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Net proceeds from warrant exercise | $ 2,421 | ||||||||||||||
Warrant outstanding ending balance | 57,299,308 | ||||||||||||||
Shares represented by warrants | 13,132,268 | ||||||||||||||
Exercise price | $ 0.1844 | ||||||||||||||
Senior Secured Credit Facility | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Warrant outstanding beginning balance | 330,294 | ||||||||||||||
Warrant outstanding ending balance | 330,294 | 330,294 | |||||||||||||
Exercise price | $ 12.828 | $ 12.828 | |||||||||||||
Inducement Warrants[Member] | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Net proceeds from warrant exercise | $ 3,336 | ||||||||||||||
Warrant outstanding beginning balance | 31,034,772 | ||||||||||||||
Issued | 31,034,772 | ||||||||||||||
Warrant outstanding ending balance | 31,034,772 | 31,034,772 | |||||||||||||
Shares represented by warrants | 15,517,386 | 15,517,386 | |||||||||||||
Exercise price | $ 0.2042 | $ 0.2042 | $ 0.525 | ||||||||||||
Percentage of public offering accompanying common warrant | 200% | ||||||||||||||
Fair value of warrants | $ 6,596 | $ 6,596 | |||||||||||||
Warrants issuance costs | 234 | 234 | |||||||||||||
Other general expense | 58 | ||||||||||||||
Change in fair value of warrant liabilities | 883 | ||||||||||||||
JGB warrants | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Shares represented by warrants | 496,960 | 333,334 | |||||||||||||
Exercise price | $ 12.828 | $ 19.125 | $ 15 | ||||||||||||
Warrants term | 5 years | ||||||||||||||
Premium percentage | 50% | ||||||||||||||
Fair value of warrants | $ 4,475 | ||||||||||||||
Warrants issuance costs | $ 139 | ||||||||||||||
Deemed dividend from trigger of anti-dilution provision feature | $ 367 | ||||||||||||||
Anti-dilution adjustments on warrants | $ 0 | ||||||||||||||
Issuance of the warrants with the put provision | $ 2,898 | 2,898 | |||||||||||||
issuance of the warrants without the put provision | $ 1,577 | ||||||||||||||
JGB warrants | Senior secured debentures | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Shares represented by warrants | 496,960 | 333,334 | |||||||||||||
Exercise price | $ 12.828 | $ 19.125 | |||||||||||||
Fair value of warrants | $ 4,475 | ||||||||||||||
Anti-dilution adjustments on warrants | $ 0 | ||||||||||||||
Omnia Warrants | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Warrant outstanding beginning balance | 45,000 | ||||||||||||||
Warrant outstanding ending balance | 45,000 | 45,000 | |||||||||||||
Shares represented by warrants | 45,000 | ||||||||||||||
Exercise price | $ 12.828 | $ 12.828 | $ 12.828 | $ 30 | |||||||||||
Warrants term | 7 years | ||||||||||||||
Fair value of warrants | $ 1,316 | ||||||||||||||
July 2022 Warrants | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Warrant outstanding beginning balance | 65,042 | ||||||||||||||
Warrant outstanding ending balance | 65,042 | 65,042 | |||||||||||||
Exercise price | $ 30.75 | $ 30.75 | |||||||||||||
ATM Offering | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Authorized amount | $ 50,000 | ||||||||||||||
Percentage of sales commission | 3% |
CAPITAL RAISE AND WARRANTS FO_5
CAPITAL RAISE AND WARRANTS FOR COMMON STOCK - Schedule of warrant activity (Details) - $ / shares | Dec. 31, 2023 | Nov. 28, 2023 | Oct. 31, 2023 | Mar. 03, 2023 | Jan. 31, 2023 |
Class of Warrant or Right [Line Items] | |||||
Exercise price | $ 0.1765 | ||||
Senior Secured Credit Facility - JGB | |||||
Class of Warrant or Right [Line Items] | |||||
Exercise price | $ 12.828 | ||||
July 2022 RDO warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Exercise price | 30.75 | ||||
Subordinated Note - Omnia | |||||
Class of Warrant or Right [Line Items] | |||||
Exercise price | 12.828 | $ 12.828 | $ 30 | ||
July 6, 2023 RDO warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Exercise price | 0.2042 | ||||
July 19, 2023 RDO warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Exercise price | 0.2042 | ||||
October 2023 CMPO warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Exercise price | 0.2042 | ||||
Inducement warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Exercise price | $ 0.2042 | $ 0.525 |
CAPITAL RAISE AND WARRANTS FO_6
CAPITAL RAISE AND WARRANTS FOR COMMON STOCK - Valuation Techniques (Details) | Dec. 31, 2023 $ / shares Y | Mar. 03, 2023 Y $ / shares |
JGB warrants | Risk-free interest rate per year | ||
Class of Warrant or Right [Line Items] | ||
Warrants measurement input | 0.042 | |
JGB warrants | Expected volatility per year | ||
Class of Warrant or Right [Line Items] | ||
Warrants measurement input | 0.881 | |
JGB warrants | Contractual expiration | ||
Class of Warrant or Right [Line Items] | ||
Warrants measurement input | Y | 5.5 | |
JGB warrants | Exercise price | ||
Class of Warrant or Right [Line Items] | ||
Warrants measurement input | 19.125 | |
JGB warrants | Stock price | ||
Class of Warrant or Right [Line Items] | ||
Warrants measurement input | 13.65 | |
Omnia Warrants | Risk-free interest rate per year | ||
Class of Warrant or Right [Line Items] | ||
Warrants measurement input | 0.046 | 0.041 |
Omnia Warrants | Expected volatility per year | ||
Class of Warrant or Right [Line Items] | ||
Warrants measurement input | 0.909 | 0.838 |
Omnia Warrants | Contractual expiration | ||
Class of Warrant or Right [Line Items] | ||
Warrants measurement input | Y | 6.6 | 7.5 |
Omnia Warrants | Exercise price | ||
Class of Warrant or Right [Line Items] | ||
Warrants measurement input | 12.828 | 12.828 |
Omnia Warrants | Stock price | ||
Class of Warrant or Right [Line Items] | ||
Warrants measurement input | 0.19 | 13.65 |
CAPITAL RAISE AND WARRANTS FO_7
CAPITAL RAISE AND WARRANTS FOR COMMON STOCK - Schedule of sale of stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Oct. 19, 2023 | Dec. 31, 2023 | |
Subsidiary, Sale of Stock [Line Items] | ||
Proceeds from issuance of common stock | $ 5,250 | |
ATM | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of common shares issued | 284 | |
Weighted average sale price per share | $ 9.65 | |
Proceeds from issuance of common stock | $ 2,741 | |
Net proceeds | $ 2,563 |
RETIREMENT PLAN (Details)
RETIREMENT PLAN (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
RETIREMENT PLAN | ||
Employer match of employee contribution, as a percent | 3% | |
Employer contribution | $ 231 | $ 198 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Licenses (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Future Commitments | |
2024 | $ 689 |
2025 | 374 |
2026 | 350 |
2027 | 100 |
2028 & After | 3,575 |
Contractual Obligation, Total | 5,088 |
License Agreement | North Carolina State University | |
Future Commitments | |
2024 | 100 |
2025 | 100 |
2026 | 100 |
2027 | 100 |
2028 & After | 3,575 |
Contractual Obligation, Total | 3,975 |
License Agreement | North Carolina State University | |
Future Commitments | |
2024 | 150 |
2025 | 250 |
2026 | 250 |
Contractual Obligation, Total | 650 |
Consulting Agreements | Various | |
Future Commitments | |
2024 | 214 |
2025 | 24 |
Contractual Obligation, Total | 238 |
Growing Agreements | Various | |
Future Commitments | |
2024 | 225 |
Contractual Obligation, Total | $ 225 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - MRTP, litigation (Details) $ in Thousands | Oct. 23, 2023 USD ($) | Dec. 31, 2023 USD ($) | Jan. 15, 2020 item | Nov. 19, 2019 item |
COMMITMENTS AND CONTINGENCIES | ||||
Number of counts | item | 3 | 3 | ||
Damages sought, Value | $ 3,000 | |||
Maximum | ||||
COMMITMENTS AND CONTINGENCIES | ||||
Accrual of an additional amount | $ 1,314 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Insurance recoveries (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Dec. 22, 2023 | Nov. 30, 2022 | Dec. 05, 2023 | |
COMMITMENTS AND CONTINGENCIES | |||
Insurance settlements receivable | $ 768 | ||
Insurance proceeds | $ 1,000 | $ 5,000 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES - Needle Rock Farms and KeyGene Dispute (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Jan. 08, 2024 | Mar. 20, 2022 | Mar. 31, 2023 | |
Needle Rock Farms | |||
Other Commitments [Line Items] | |||
Cash agreed to pay | $ 250 | ||
Net book value | 272 | ||
Accrued additional payment | $ 225 | ||
Contingent payment period | 1 year | ||
Litigation settlement | $ 747 | ||
KeyGene Dispute | KeyGene | |||
Other Commitments [Line Items] | |||
Collaboration research agreement | 3 years | ||
Payment amount | $ 1,885 | ||
Services performed | $ 881 |
DEBT - (Details)
DEBT - (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||||||
Dec. 22, 2023 USD ($) a | Oct. 16, 2023 USD ($) shares | Jun. 22, 2023 USD ($) $ / shares shares | Jun. 19, 2023 USD ($) $ / shares shares | Mar. 03, 2023 USD ($) $ / shares shares | Nov. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) $ / shares | Oct. 31, 2023 $ / shares | Sep. 30, 2023 | Sep. 03, 2023 $ / shares shares | Jul. 31, 2023 shares | Jun. 30, 2023 | Jan. 31, 2023 $ / shares | Jun. 30, 2022 | |
DEBT | ||||||||||||||
Principal balance | $ 3,800 | |||||||||||||
Rate of interest | 12% | 9.38% | 7.88% | 3.25% | ||||||||||
Shares represented by warrants | shares | 166,667 | 390,247 | ||||||||||||
Exercise price | $ / shares | $ 0.1765 | |||||||||||||
Fair value of warrants | $ 5,791 | |||||||||||||
Debt issuance costs | 1,053 | |||||||||||||
Debt exit payments | 1,053 | |||||||||||||
Third party debt issuance costs | 801 | |||||||||||||
Restricted cash | 7,500 | |||||||||||||
Revenue Debentures agreement amount | $ 18,500 | |||||||||||||
Amended revenue Debentures agreement amount | 15,500 | |||||||||||||
Amount required in escrow fund | 7,500 | |||||||||||||
Pledged Indebtedness nonmonetary transaction | 2,600 | |||||||||||||
Reduction of Put Price amount | 2,000 | |||||||||||||
Balance reduction of Debentures | 600 | |||||||||||||
Loss on sale of financial asset | 895 | |||||||||||||
Warrant aggregate put price | 2,500 | |||||||||||||
Note payable amount on the Maturity Date | $ 500 | |||||||||||||
Outstanding principal amount | $ 2,200 | |||||||||||||
Cash payment | 1,100 | |||||||||||||
Cash outflow made by buyer | 1,100 | |||||||||||||
Unusual or Infrequent Item, or Both, Insurance Proceeds | 1,000 | $ 5,000 | ||||||||||||
Limit for insurance proceeds | $ 5,000 | |||||||||||||
Area of real estate property | a | 224 | |||||||||||||
Additional debt reduction | $ 1,000 | |||||||||||||
Current portion of long-term debt | $ 5,848 | |||||||||||||
Convertible conversion price | $ / shares | $ 1 | |||||||||||||
Redemption price percentage | 20% | |||||||||||||
Debt extinguishment charges | $ (5,158) | |||||||||||||
Derivative liability at fair value amount | $ 557 | |||||||||||||
JGB warrants | ||||||||||||||
DEBT | ||||||||||||||
Shares represented by warrants | shares | 496,960 | 333,334 | ||||||||||||
Warrants term | 5 years | |||||||||||||
Exercise price | $ / shares | $ 12.828 | $ 19.125 | $ 15 | |||||||||||
Fair value of warrants | $ 4,475 | |||||||||||||
Anti-dilution adjustments on warrants | $ 0 | |||||||||||||
Omnia Warrants | ||||||||||||||
DEBT | ||||||||||||||
Shares represented by warrants | shares | 45,000 | |||||||||||||
Warrants term | 7 years | |||||||||||||
Exercise price | $ / shares | $ 12.828 | $ 12.828 | $ 30 | |||||||||||
Fair value of warrants | $ 1,316 | |||||||||||||
Real estate farm assets | Borrowings | ||||||||||||||
DEBT | ||||||||||||||
Collateral amount | $ 2,000 | |||||||||||||
Senior secured debentures | ||||||||||||||
DEBT | ||||||||||||||
Principal balance | $ 21,053 | $ 21,053 | ||||||||||||
Rate of interest | 7% | |||||||||||||
Exit payment | $ 1,053 | |||||||||||||
Original issue discount (as a percent) | 5% | 5% | ||||||||||||
Redemption price (as a percent) | 5% | 5% | ||||||||||||
Senior secured debentures | Company's option, any time after March 3, 2024 | ||||||||||||||
DEBT | ||||||||||||||
Redemption price (as a percent) | 3% | |||||||||||||
Senior secured debentures | Holders option, commencing on March 3, 2024 | ||||||||||||||
DEBT | ||||||||||||||
Redemption price (as a percent) | 2% | |||||||||||||
Senior secured debentures | JGB warrants | ||||||||||||||
DEBT | ||||||||||||||
Shares represented by warrants | shares | 496,960 | 333,334 | ||||||||||||
Exercise price | $ / shares | $ 12.828 | $ 19.125 | ||||||||||||
Fair value of warrants | $ 4,475 | |||||||||||||
Debt issuance costs | 139 | |||||||||||||
Anti-dilution adjustments on warrants | $ 0 | |||||||||||||
Subordinated note | ||||||||||||||
DEBT | ||||||||||||||
Principal balance | $ 2,865 | $ 2,865 | ||||||||||||
PIK Interest rate | 26.50% | |||||||||||||
Paid In Kind Interest Accrual | 695 | |||||||||||||
Accrued paid in kind interest refinanced | $ 365 | |||||||||||||
Subordinated note | Omnia Warrants | ||||||||||||||
DEBT | ||||||||||||||
Shares represented by warrants | shares | 45,000 | |||||||||||||
Warrants term | 7 years | |||||||||||||
Exercise price | $ / shares | $ 12.828 | |||||||||||||
Fair value of warrants | 1,316 | |||||||||||||
October note | ||||||||||||||
DEBT | ||||||||||||||
Principal balance | $ 1,000 | |||||||||||||
Rate of interest | 12% | |||||||||||||
January note | ||||||||||||||
DEBT | ||||||||||||||
Principal balance | $ 1,500 | |||||||||||||
Rate of interest | 12% | |||||||||||||
GVB Promissory note | ||||||||||||||
DEBT | ||||||||||||||
Principal balance | $ 2,000 | |||||||||||||
GVB Promissory note | Borrowings | ||||||||||||||
DEBT | ||||||||||||||
Collateral amount | $ 1,000 | |||||||||||||
Senior Secured Credit Facility | ||||||||||||||
DEBT | ||||||||||||||
Exercise price | $ / shares | $ 12.828 | |||||||||||||
Current portion of long-term debt | $ 3,000 |
DEBT - Long-term debt (Details)
DEBT - Long-term debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
DEBT | ||
Unamortized discount on loan and deferred debt issuance costs | $ (1,453) | $ (8,698) |
Total | 13,906 | |
Current portion of long-term debt | (5,848) | |
Long-term debt | 8,058 | |
Senior Secured Credit Facility | ||
DEBT | ||
Total debt | 11,805 | |
Current portion of long-term debt | (3,000) | |
Subordinated Note | ||
DEBT | ||
Total debt | $ 3,554 |
DEBT - Contractual maturities (
DEBT - Contractual maturities (Details) - Senior Secured Credit Facility $ in Thousands | Dec. 31, 2023 USD ($) |
Future minimum principal payments | |
2024 | $ 5,848 |
2026 | $ 8,058 |
DEBT - Unamortized discount and
DEBT - Unamortized discount and deferred debt issuance costs (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
DEBT | |
Issuance | $ 8,698 |
Amortization during the period | (2,087) |
Debt extinguishment charges | (5,158) |
Unamortized discount and deferred debt issuance costs, at the end | $ 1,453 |
NOTES AND LOANS PAYABLE (Detail
NOTES AND LOANS PAYABLE (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 22, 2023 | Oct. 16, 2023 | |
NOTES AND LOANS PAYABLE | ||||||||
Directors And Officers insurance, policy term | 1 year | 1 year | 1 year | |||||
Annual premium | $ 1,626 | $ 2,394 | ||||||
Premium paid | $ 143 | 285 | $ 90 | 400 | ||||
Proceeds from note payable issuance | $ 1,341 | $ 168 | $ 1,994 | |||||
Debt instrument term | 6 months | 10 months | 10 months | |||||
Rate of interest | 9.38% | 7.88% | 3.25% | 12% | ||||
Principal balance | $ 3,800 | |||||||
Repayments of notes payable | $ 5,581 | $ 3,822 | ||||||
Insurance loans payable | 543 | 689 | ||||||
Total current notes and loans payable | $ 543 | $ 689 |
EQUITY BASED COMPENSATION (Deta
EQUITY BASED COMPENSATION (Details) - shares | May 20, 2021 | Dec. 31, 2023 | Dec. 31, 2021 |
EQUITY BASED COMPENSATION | |||
Number of shares authorized as of date | 233,334 | ||
Additional shares authorized during the period | 333,334 | ||
Plan term | 10 years | ||
Number of shares remaining for future awards | 606,406 |
EQUITY BASED COMPENSATION - Com
EQUITY BASED COMPENSATION - Compensation expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
EQUITY BASED COMPENSATION | ||
Total equity based compensation - continuing operations | $ 2,231 | $ 5,434 |
Total equity based compensation - discontinued operations | 448 | 55 |
Total equity based compensation | 2,679 | 5,489 |
Employee termination forfeitures | 1,960 | 84 |
Accelerated equity compensation expense | 523 | 1,237 |
Sales, general, and administrative | ||
EQUITY BASED COMPENSATION | ||
Total equity based compensation - continuing operations | 2,052 | 5,252 |
Research and development | ||
EQUITY BASED COMPENSATION | ||
Total equity based compensation - continuing operations | $ 179 | $ 182 |
EQUITY BASED COMPENSATION - RSU
EQUITY BASED COMPENSATION - RSUs (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
RSUs, Number of shares | ||
Unvested, Ending Balance | 269 | 211 |
Granted | 293 | 236 |
Vested | (147) | (154) |
Forfeited | (260) | (24) |
Forfeited | 155 | 269 |
RSUs, Weighted average grant-date fair value | ||
Nonvested, Weighted Average Grant Date Fair Value, Beginning Balance | $ 31.88 | $ 37.50 |
RSUs granted, Weighted average grant-date fair value | 12.44 | 29.40 |
RSUs vested, grant-date fair value | 29.67 | 31.65 |
RSUs forfeited, grant-date fair value | 20.86 | 35.85 |
Nonvested, Weighted Average Grant Date Fair Value, Ending Balance | $ 15.69 | $ 31.88 |
Fair value of RSUs that vested during the period | $ 1,838 | $ 4,505 |
Restricted Stock Units | ||
RSUs, Weighted average grant-date fair value | ||
Unrecognized compensation, RSUs | $ 823 | |
Unrecognized compensation, period for recognition | 1 year 8 months 12 days | |
Share based payment arrangement, Non vested award cost not yet recognized | $ 786 |
EQUITY BASED COMPENSATION - Sto
EQUITY BASED COMPENSATION - Stock option activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number of Options | ||
Outstanding, Beginning of Period | 327,000 | 345,000 |
Exercised | (10,000) | |
Expired | (7,000) | (1,000) |
Forfeited | (101,000) | (7,000) |
Outstanding, End of Period | 219,000 | 327,000 |
Exercisable, number, End of Period | 213,000 | |
Options, Weighted Average Exercise Price | ||
Options, Beginning of Period, weighted average exercise price | $ 24.82 | $ 24.75 |
Options exercised, weighted average exercise price | 17.40 | |
Options expired, weighted average exercise price | 41.40 | 41.40 |
Options forfeited, weighted average exercise price | 21.29 | 20.85 |
Options, End of Period, weighted average exercise price | 26.34 | $ 24.82 |
Options exercisable, End of Period, weighted average exercise price | $ 25.95 | |
Weighted Average Remaining Contractual Term | ||
Options, End of Period, weighted average remaining contractual term | 1 year 10 months 24 days | |
Options exercisable, End of Period, weighted average remaining contractual term | 1 year 9 months 18 days | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock option activity | 0 | 0 |
Weighted Average Remaining Contractual Term | ||
unrecognized compensation expense | $ 190 |
LOSS PER COMMON SHARE (Details)
LOSS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
EARNINGS PER SHARE | ||||||||||
Net loss from continuing operations | $ (22,068) | $ (8,081) | $ (13,707) | $ (10,830) | $ (11,114) | $ (10,490) | $ (7,699) | $ (7,250) | $ (54,686) | $ (36,553) |
Net loss from discontinued operations | (86,089) | (23,248) | ||||||||
Net loss | (140,775) | (59,801) | ||||||||
Deemed dividends | (9,992) | |||||||||
Net loss available to common shareholders | $ (150,767) | $ (59,801) | ||||||||
Weighted average common shares outstanding - basic (in shares) | 20,711 | 12,856 | ||||||||
Weighted average common shares outstanding - diluted (in shares) | 20,711 | 12,856 | ||||||||
Basic loss per common share from continuing operations (in dollars per share) | $ (0.66) | $ (0.41) | $ (0.92) | $ (0.75) | $ (0.77) | $ (0.75) | $ (0.63) | $ (0.67) | $ (2.64) | $ (2.84) |
Diluted loss per common share from continuing operations (in dollars per share) | $ (0.66) | $ (0.41) | $ (0.92) | $ (0.75) | $ (0.77) | $ (0.75) | $ (0.63) | $ (0.67) | (2.64) | (2.84) |
Basic loss per common share from discontinued operations (in dollars per share) | (4.16) | (1.81) | ||||||||
Diluted loss per common share from discontinued operations (in dollars per share) | (4.16) | (1.81) | ||||||||
Basic loss per common share from deemed dividends | (0.48) | |||||||||
Diluted loss per common share from deemed dividends | (0.48) | |||||||||
Basic loss per common share (in dollars per share) | (7.28) | (4.65) | ||||||||
Diluted loss per common share (in dollars per share) | $ (7.28) | $ (4.65) | ||||||||
Effect of dilutive securities: | ||||||||||
Anti-dilutive shares | 48,131 | 1,734 | ||||||||
Warrants | ||||||||||
Effect of dilutive securities: | ||||||||||
Anti-dilutive shares | 47,757 | 1,138 | ||||||||
Options | ||||||||||
Effect of dilutive securities: | ||||||||||
Anti-dilutive shares | 219 | 327 | ||||||||
Restricted Stock Units | ||||||||||
Effect of dilutive securities: | ||||||||||
Anti-dilutive shares | 155 | 269 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
REVENUE RECOGNITION | |||
Allowance amount for discounts or returns and allowances | $ 0 | $ 0 | |
Excise taxes | 10,413 | 12,619 | |
Unbilled receivables | 1,053 | 354 | $ 178 |
Deferred income | (726) | (688) | (119) |
Net contract assets (liabilities) | 327 | (334) | $ 59 |
Revenue recorded in contract asset | $ 688 | $ 119 | |
Maximum | |||
REVENUE RECOGNITION | |||
Payment period | 21 days | ||
Tobacco | |||
REVENUE RECOGNITION | |||
Revenue Recognized Over Time, Percent | 63% | 74% |
REVENUE RECOGNITION - Concentra
REVENUE RECOGNITION - Concentration of risk (Details) - Revenue from Contract with Customer Benchmark - Customer Concentration Risk | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Customer A | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 31.49% | 23.61% |
Customer B | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 23.92% | 23.22% |
Customer C | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 21.70% | 35.20% |
All other customers | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 22.89% | 17.97% |
OTHER OPERATING EXPENSES (INC_3
OTHER OPERATING EXPENSES (INCOME), NET - Components (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Restructuring costs: | ||
Impairment of intangible assets (see Note 7) | $ 1,375 | $ 35 |
Impairment of fixed assets | 56 | |
Professional services | 763 | |
Severance (see Note 1) | 221 | |
Total Restructuring costs | 2,415 | 35 |
Acquisition and transaction costs | 223 | |
Gain on sale or disposal of property, plant and equipment | $ (111) | $ (362) |
INCOME TAXES - Provision (Detai
INCOME TAXES - Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current: | ||
State | $ 40 | $ 14 |
Total current provision | 40 | 14 |
Deferred: | ||
Federal | (11,351) | (6,610) |
State | (736) | (4,404) |
Total deferred benefit | (12,087) | (11,014) |
Change in valuation allowance | 12,094 | 11,021 |
Total income tax provision | $ 47 | $ 21 |
INCOME TAXES - Rate reconciliat
INCOME TAXES - Rate reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
INCOME TAXES | ||
Statutory federal rate | 21% | 21% |
Other items | 0.20% | (0.80%) |
Stock based compensation | (0.80%) | (1.30%) |
Research and development credit carryforward | 0.40% | |
State tax, net of federal benefit | 1.30% | 12% |
162(m) limitation | (0.20%) | (0.90%) |
Valuation allowance | (22.00%) | (30.10%) |
Effective tax rate | (0.10%) | (0.10%) |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Net operating loss carry-forward | $ 54,453 | $ 34,029 |
Inventory | 2,020 | 220 |
Stock-based compensation | 862 | 1,144 |
Start-up expenditures | 155 | 175 |
Research and development credit carryforward | 1,424 | 1,205 |
Accrued bonus | 133 | 458 |
Severance liability | 95 | 151 |
Allowance for doubtful accounts | 2 | |
Research and development costs | 1,617 | 813 |
Operating lease obligations | 476 | 229 |
Capital loss on investment | 2,449 | 2,209 |
Capitalized legal fees | 581 | |
Other | 1,758 | 50 |
Total deferred tax assets | 66,025 | 40,683 |
Deferred tax liabilities: | ||
Machinery and equipment | (283) | (221) |
Patents and trademarks | (193) | (203) |
Operating lease right-of-use assets | (467) | (225) |
Other intangible assets | (385) | (334) |
Total deferred tax liabilities | (1,328) | (983) |
Valuation allowance | (64,763) | (39,759) |
Net deferred taxes | $ (66) | $ (59) |
INCOME TAXES - NOLs, Unrecogniz
INCOME TAXES - NOLs, Unrecognized (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2017 | |
INCOME TAXES | |||
Net operating loss carryforward | $ 193,322 | ||
Accumulated an net operating loss carryforward | $ 46,920 | ||
Research and development credit carryforward | 1,424 | $ 1,205 | |
Capital loss carryover | 9,932 | ||
Increased in valuation allowance | 12,094 | $ 11,021 | |
Due to tax attributes | 12,910 | ||
Liability for uncertain tax positions | $ 0 |
QUARTERLY REVENUE AND EARNING_3
QUARTERLY REVENUE AND EARNINGS DATA - UNAUDITED (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
QUARTERLY REVENUE AND EARNINGS DATA - UNAUDITED | ||||||||||
Total Revenue, net | $ 7,357 | $ 7,871 | $ 8,050 | $ 8,926 | $ 9,951 | $ 11,535 | $ 9,970 | $ 9,045 | $ 32,204 | $ 40,501 |
Gross profit (loss) | (7,829) | 77 | (961) | 17 | (44) | 636 | 928 | 328 | (8,696) | 1,847 |
Net loss from continuing operations | $ (22,068) | $ (8,081) | $ (13,707) | $ (10,830) | $ (11,114) | $ (10,490) | $ (7,699) | $ (7,250) | $ (54,686) | $ (36,553) |
Basic loss per common share from continuing operations (in dollars per share) | $ (0.66) | $ (0.41) | $ (0.92) | $ (0.75) | $ (0.77) | $ (0.75) | $ (0.63) | $ (0.67) | $ (2.64) | $ (2.84) |
Diluted loss per common share from continuing operations (in dollars per share) | $ (0.66) | $ (0.41) | $ (0.92) | $ (0.75) | $ (0.77) | $ (0.75) | $ (0.63) | $ (0.67) | $ (2.64) | $ (2.84) |
(Decrease) increase in inventory reserve | $ 7,720 | |||||||||
Loss on extinguishment of debt | $ (5,158) |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Thousands | 2 Months Ended | 12 Months Ended | |||||||
Feb. 15, 2024 | Oct. 19, 2023 | Feb. 15, 2024 | Dec. 31, 2023 | Feb. 14, 2024 | Oct. 31, 2023 | Oct. 16, 2023 | Jul. 31, 2023 | Dec. 31, 2022 | |
SUBSEQUENT EVENTS | |||||||||
Common stock, shares authorized | 66,666,667 | 66,666,667 | |||||||
Shares represented by warrants | 166,667 | 390,247 | |||||||
Exercise price | $ 0.1765 | ||||||||
Net proceeds from direct offering | $ 5,250 | ||||||||
Proceeds from Warrant Exercises | $ 3,044 | ||||||||
Warrant outstanding balance | 47,757,376 | 1,138,212 | |||||||
Subsequent Event | |||||||||
SUBSEQUENT EVENTS | |||||||||
Additional authorized stock issued during period (in shares) | 250,000,000 | ||||||||
Common stock, shares authorized | 66,666,667 | ||||||||
Shares represented by warrants | 13,132,268 | 13,132,268 | |||||||
Exercise price | $ 0.1844 | $ 0.1844 | |||||||
Net proceeds from direct offering | $ 2,421 | ||||||||
Inducement Warrants Issued | 26,264,536 | ||||||||
Proceeds from Warrant Exercises | $ 2,421 | ||||||||
Warrant outstanding balance | 57,299,308 | 57,299,308 | |||||||
Lowest Nasdaq minimum price | $ 0.1765 | $ 0.1765 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (140,775) | $ (59,801) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |