Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2019 | |
Cover [Abstract] | |
Entity Registrant Name | Better Choice Co Inc. |
Entity Central Index Key | 0001471727 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Document Type | S-1 |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2019 |
CONSOLIDATED BALANCE SHEETS (FY
CONSOLIDATED BALANCE SHEETS (FY) - USD ($) | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 |
Current assets | |||
Cash and cash equivalents | $ 3,946,000 | $ 199,674 | $ 1,442 |
Inventory | 1,557,000 | 9,402 | 14,882 |
Total current assets | 6,048,000 | 209,076 | 16,324 |
Investment in TruPet | 0 | 0 | |
Total Assets | 6,147,000 | 209,076 | 16,324 |
Current liabilities | |||
Accounts payable and accrued liabilities | 137,994 | 106,445 | 132,566 |
Dividends payable | 20,280 | ||
Derivative liability | 0 | 2,317,412 | 312,878 |
Accrued officer salary | 140,000 | 120,000 | |
Notes payable and accrued interest - related party | 1,600,000 | 0 | 233,011 |
Convertible notes, net of unamortized debt discounts of $752,990 and $153,234, respectively | 274,214 | 400,743 | |
Total Current Liabilities | 9,174,000 | 2,858,351 | 1,199,198 |
Commitments and contingencies | |||
Common stock, $0.001 par value, 580,000,000 shares authorized; 3,415,859, 3,064,763, and 3,008,730 shares issued and outstanding as of December 31, 2018, August 31, 2018, and August 31, 2017, respectively | 12,000 | 3,065 | 3,009 |
Additional paid-in capital | 13,642,000 | 3,406,146 | 1,927,960 |
Subscription receivable | 0 | (5,372) | |
Accumulated deficit | (16,698,000) | 6,059,291 | (3,108,472) |
Total stockholders' equity (deficit) | (3,042,000) | (2,649,275) | (1,182,874) |
Total Liabilities, Redeemable Preferred Stock and Stockholders' Deficit | 6,147,000 | 209,076 | 16,324 |
Previously Reported [Member] | |||
Current assets | |||
Cash and cash equivalents | 355,104 | ||
Inventory | 9,402 | ||
Total current assets | 364,506 | ||
Investment in TruPet | 2,200,000 | ||
Total Assets | 2,564,506 | ||
Current liabilities | |||
Accounts payable and accrued liabilities | 137,994 | ||
Dividends payable | 53,501 | ||
Derivative liability | 7,379,893 | ||
Accrued officer salary | 124,000 | ||
Notes payable and accrued interest - related party | 0 | ||
Convertible notes, net of unamortized debt discounts of $752,990 and $153,234, respectively | 0 | ||
Total Current Liabilities | 7,695,388 | ||
Commitments and contingencies | |||
Common stock, $0.001 par value, 580,000,000 shares authorized; 3,415,859, 3,064,763, and 3,008,730 shares issued and outstanding as of December 31, 2018, August 31, 2018, and August 31, 2017, respectively | 3,416 | ||
Additional paid-in capital | 5,335,004 | ||
Subscription receivable | 0 | ||
Accumulated deficit | (10,472,149) | ||
Total stockholders' equity (deficit) | (5,130,882) | ||
Total Liabilities, Redeemable Preferred Stock and Stockholders' Deficit | 2,564,506 | ||
Series A Preferred Stock [Member] | |||
Current liabilities | |||
Preferred stock | 2,000 | 1 | 1 |
Total stockholders' equity (deficit) | 2,391 | 1 | 1 |
Series A Preferred Stock [Member] | Previously Reported [Member] | |||
Current liabilities | |||
Preferred stock | 1 | ||
Total stockholders' equity (deficit) | 1 | ||
Series B Preferred Stock [Member] | |||
Current liabilities | |||
Dividends payable | 20,280 | ||
Preferred stock | 804 | 0 | |
Total stockholders' equity (deficit) | 804 | ||
Series B Preferred Stock [Member] | Previously Reported [Member] | |||
Current liabilities | |||
Preferred stock | 0 | ||
Total stockholders' equity (deficit) | 0 | ||
Series E Preferred Stock [Member] | |||
Current liabilities | |||
Dividends payable | 53,501 | ||
Preferred stock | $ 0 | $ 0 | |
Series E Preferred Stock [Member] | Previously Reported [Member] | |||
Current liabilities | |||
Preferred stock | 2,846 | ||
Total stockholders' equity (deficit) | $ 2,846 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) (FY) | Dec. 31, 2018USD ($)$ / sharesshares |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares designated | 20,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 |
Common stock, shares authorized | 580,000,000 |
Common stock, shares issued | 11,661,485 |
Common stock, shares outstanding | 11,661,485 |
Previously Reported [Member] | |
Convertible Notes, unamortized debt discounts (in Dollars) | $ | $ 0 |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares designated | 20,000,000 |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 |
Common stock, shares authorized | 580,000,000 |
Common stock, shares issued | 3,415,859 |
Common stock, shares outstanding | 3,415,859 |
Series A Preferred Stock [Member] | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares issued | 1,000 |
Series A Preferred Stock [Member] | Previously Reported [Member] | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares designated | 1,000 |
Preferred stock, shares issued | 1,000 |
Preferred stock, shares outstanding | 1,000 |
Series B Preferred Stock [Member] | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares designated | 805,000 |
Preferred stock, shares outstanding | 0 |
Series B Preferred Stock [Member] | Previously Reported [Member] | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares designated | 805,000 |
Preferred stock, shares issued | 0 |
Preferred stock, shares outstanding | 0 |
Series E Preferred Stock [Member] | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares designated | 2,900,000 |
Preferred stock, shares outstanding | 2,846,355.54 |
Series E Preferred Stock [Member] | Previously Reported [Member] | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 |
Preferred stock, shares designated | 2,900,000 |
Preferred stock, shares issued | 2,846,355.54 |
Preferred stock, shares outstanding | 2,846,355.54 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (FY) - USD ($) | 4 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
Revenue | $ 0 | $ 214 | $ 475 | $ 1,734 |
Cost of goods sold | 0 | 27 | 211 | 334 |
Gross profit | 0 | 187 | 264 | 1,400 |
Operating expenses: | ||||
Selling, general and administrative | 292,060 | 105,734 | 528,151 | 525,438 |
Total operating expenses | 292,060 | 105,734 | 528,151 | 525,438 |
Operating loss | (292,060) | (105,547) | (527,887) | (524,038) |
Other income (expense): | ||||
Interest on notes payable | (14,184) | (24,221) | (111,407) | (48,372) |
Interest on notes payable - related parties | 0 | (1,516) | (2,291) | (2,011) |
Interest expense - amortization of discount on notes payable | (118,708) | (177,573) | (532,907) | (780,293) |
Interest expense - fair value of derivative in excess of notes payable | 0 | 0 | (447,680) | 0 |
Gain on exchange/restructuring of debt | 472,267 | 0 | 1,033,669 | 0 |
Loss on restructuring of debt | 0 | (122,878) | (6,409) | 0 |
Loss on conversion of debt | 0 | 0 | (474,648) | 0 |
Excess value of derivative liabilities over net proceeds of sale of common stock at inception | (3,638,849) | 0 | 0 | 0 |
(Loss) gain on change in fair value of derivative liability | (821,324) | 28,523 | (45,348) | (388,544) |
Total other expense | (4,120,798) | (297,665) | (587,021) | (1,219,220) |
Net loss from continuing operations before tax | (4,412,858) | (403,212) | (1,114,908) | (1,743,258) |
Provision for income tax | 0 | 0 | 0 | 0 |
Net loss from continuing operations after tax | (4,412,858) | (403,212) | (1,114,908) | (1,743,258) |
Net loss from discontinued operations, net of taxes | 0 | 0 | (1,835,911) | 0 |
Net loss | (4,412,858) | (403,212) | (2,950,819) | (1,743,258) |
Preferred stock dividend | (64,840) | 0 | (20,280) | 0 |
Net loss attributable to Common Stockholders | $ (4,477,698) | $ (403,212) | $ (2,971,099) | $ (1,743,258) |
Net loss per share - continuing operations: basic and diluted (in Dollars per share) | $ (1.47) | $ (0.13) | $ (0.37) | $ (0.58) |
Net loss per share - discontinued operations: basic and diluted (in Dollars per share) | 0 | 0 | (0.60) | 0 |
Net loss per share - available to common shareholders: basic and diluted (in Dollars per share) | $ (1.49) | $ (0.13) | $ (0.98) | $ (0.58) |
Weighted average shares outstanding - basic (in Shares) | 2,999,076 | 3,018,450 | 3,046,232 | 2,996,871 |
Weighted average shares outstanding - diluted (in Shares) | 2,999,076 | 3,018,450 | 3,046,232 | 2,996,871 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (FY) - USD ($) | Common Stock [Member] | Common Stock [Member]Previously Reported [Member] | Common Stock [Member]Series E Preferred Stock [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member]Previously Reported [Member] | Additional Paid-in Capital [Member]Series B Preferred Stock [Member] | Additional Paid-in Capital [Member]Series E Preferred Stock [Member] | Receivables from Stockholder [Member] | Receivables from Stockholder [Member]Previously Reported [Member] | Retained Earnings [Member] | Retained Earnings [Member]Previously Reported [Member] | Total | Previously Reported [Member] | Series A Preferred Stock [Member] | Series A Preferred Stock [Member]Previously Reported [Member] | Series B Preferred Stock [Member] | Series B Preferred Stock [Member]Previously Reported [Member] | Series E Preferred Stock [Member] | Series E Preferred Stock [Member]Previously Reported [Member] |
Balance at Aug. 31, 2016 | $ 2,992 | $ 793,270 | $ (5,372) | $ (1,365,214) | $ (574,323) | $ 1 | |||||||||||||
Balance (in shares) at Aug. 31, 2016 | 2,991,358 | 1,000 | |||||||||||||||||
Issuance of commitment shares | $ 1 | 68,949 | 68,950 | ||||||||||||||||
Issuance of commitment shares (in Shares) | 1,346 | ||||||||||||||||||
Derivative reclass from liability to equity upon redemption | 1,015,757 | 1,015,757 | |||||||||||||||||
Issuance of shares for conversion of note payable and accrued interest | $ 16 | 49,984 | 50,000 | ||||||||||||||||
Issuance of shares for conversion of note payable and accrued interest (in Shares) | 16,026 | ||||||||||||||||||
Net loss for the period | (1,743,258) | (1,743,258) | |||||||||||||||||
Balance at Aug. 31, 2017 | $ 3,009 | 1,927,960 | (5,372) | (3,108,472) | (1,182,874) | $ 1 | |||||||||||||
Balance (in shares) at Aug. 31, 2017 | 3,008,730 | 1,000 | |||||||||||||||||
Net loss for the period | (403,212) | ||||||||||||||||||
Balance at Dec. 31, 2017 | $ 11,497 | 8,545,446 | (10,672,090) | (2,115,147) | |||||||||||||||
Balance (in shares) at Dec. 31, 2017 | 11,497,128 | ||||||||||||||||||
Balance at Aug. 31, 2017 | $ 3,009 | 1,927,960 | (5,372) | (3,108,472) | (1,182,874) | $ 1 | |||||||||||||
Balance (in shares) at Aug. 31, 2017 | 3,008,730 | 1,000 | |||||||||||||||||
Issuance of shares for conversion of note payable and accrued interest | $ 56 | 702,538 | 702,594 | $ 804 | |||||||||||||||
Issuance of shares for conversion of note payable and accrued interest | $ 795,928 | $ 796,732 | |||||||||||||||||
Issuance of shares for conversion of note payable and accrued interest (in Shares) | 56,034 | 803,969.73 | |||||||||||||||||
Write-off subscriptions receivable | 5,372 | 5,372 | |||||||||||||||||
Preferred stock dividend | (20,280) | (20,280) | |||||||||||||||||
Net loss for the period | (2,950,819) | (2,950,819) | |||||||||||||||||
Balance at Aug. 31, 2018 | $ 3,065 | 3,406,146 | 0 | (6,059,291) | (2,649,275) | $ 1 | $ 804 | ||||||||||||
Balance (in shares) at Aug. 31, 2018 | 3,064,764 | 1,000 | 803,969.73 | ||||||||||||||||
Balance at Dec. 31, 2017 | $ 11,497 | 8,545,446 | (10,672,090) | (2,115,147) | |||||||||||||||
Balance (in shares) at Dec. 31, 2017 | 11,497,128 | ||||||||||||||||||
Net loss for the period | (1,655,302) | (1,655,302) | |||||||||||||||||
Balance at Mar. 31, 2018 | $ 11,497 | 8,545,446 | (12,327,392) | (3,770,449) | |||||||||||||||
Balance (in shares) at Mar. 31, 2018 | 11,497,128 | ||||||||||||||||||
Balance at Dec. 31, 2017 | $ 11,497 | 8,545,446 | (10,672,090) | (2,115,147) | |||||||||||||||
Balance (in shares) at Dec. 31, 2017 | 11,497,128 | ||||||||||||||||||
Net loss for the period | (2,400,000) | ||||||||||||||||||
Balance at Jun. 30, 2018 | $ 11,497 | 8,545,446 | (13,071,950) | (4,515,007) | |||||||||||||||
Balance (in shares) at Jun. 30, 2018 | 11,497,128 | ||||||||||||||||||
Balance at Mar. 31, 2018 | $ 11,497 | 8,545,446 | (12,327,392) | (3,770,449) | |||||||||||||||
Balance (in shares) at Mar. 31, 2018 | 11,497,128 | ||||||||||||||||||
Net loss for the period | (744,558) | (745,000) | |||||||||||||||||
Balance at Jun. 30, 2018 | $ 11,497 | 8,545,446 | (13,071,950) | (4,515,007) | |||||||||||||||
Balance (in shares) at Jun. 30, 2018 | 11,497,128 | ||||||||||||||||||
Sale of common stock | 4,665,609 | 4,668,000 | $ 2,391 | ||||||||||||||||
Sale of common stock (in Shares) | 2,391,403 | ||||||||||||||||||
Net loss for the period | (3,626,157) | (3,626,157) | |||||||||||||||||
Balance at Dec. 31, 2018 | $ 11,661 | $ 3,416 | 13,641,701 | $ 5,335,004 | $ 0 | (16,698,107) | $ (10,472,149) | (3,042,000) | $ (5,130,882) | $ 2,391 | $ 1 | $ 0 | $ 2,846 | ||||||
Balance (in shares) at Dec. 31, 2018 | 11,661,485 | 3,415,859 | 2,391,403 | 1,000 | 0 | 2,846,355.54 | |||||||||||||
Balance at Aug. 31, 2018 | $ 3,065 | 3,406,146 | $ 0 | (6,059,291) | (2,649,275) | $ 1 | $ 804 | ||||||||||||
Balance (in shares) at Aug. 31, 2018 | 3,064,764 | 1,000 | 803,969.73 | ||||||||||||||||
Exchange agreement | 2,019,920 | 2,021,962 | $ (804) | $ 2,846 | |||||||||||||||
Exchange agreement (in Shares) | 803,969.73 | 2,846,355.54 | |||||||||||||||||
Purchase and retirement of common stock | $ (1,049) | (26,222) | (27,271) | ||||||||||||||||
Purchase and retirement of common stock (in shares) | (1,048,904) | ||||||||||||||||||
Sale of common stock | $ 1,400 | 0 | $ 1,400 | ||||||||||||||||
Sale of common stock (in Shares) | 1,400,000 | 1,400,000 | |||||||||||||||||
Preferred stock dividend | (64,840) | $ (64,840) | |||||||||||||||||
Net loss for the period | (4,412,858) | (4,412,858) | |||||||||||||||||
Balance at Dec. 31, 2018 | $ 11,661 | $ 3,416 | 13,641,701 | 5,335,004 | 0 | (16,698,107) | (10,472,149) | (3,042,000) | (5,130,882) | $ 2,391 | $ 1 | $ 0 | $ 2,846 | ||||||
Balance (in shares) at Dec. 31, 2018 | 11,661,485 | 3,415,859 | 2,391,403 | 1,000 | 0 | 2,846,355.54 | |||||||||||||
Sale of common stock | 149,931 | 150,000 | $ 69 | ||||||||||||||||
Sale of common stock (in Shares) | 69,115 | ||||||||||||||||||
Net loss for the period | (2,780,082) | (2,780,082) | |||||||||||||||||
Balance at Mar. 31, 2019 | $ 11,680 | 13,997,779 | (19,490,013) | (5,478,093) | $ 2,461 | ||||||||||||||
Balance (in shares) at Mar. 31, 2019 | 11,680,449 | 2,460,517 | |||||||||||||||||
Balance at Dec. 31, 2018 | $ 11,661 | $ 3,416 | 13,641,701 | $ 5,335,004 | $ 0 | (16,698,107) | $ (10,472,149) | (3,042,000) | $ (5,130,882) | $ 2,391 | $ 1 | $ 0 | $ 2,846 | ||||||
Balance (in shares) at Dec. 31, 2018 | 11,661,485 | 3,415,859 | 2,391,403 | 1,000 | 0 | 2,846,355.54 | |||||||||||||
Purchase and retirement of common stock | $ (2,200,000) | ||||||||||||||||||
Purchase and retirement of common stock (in shares) | (1,011,748) | ||||||||||||||||||
Net loss for the period | $ (164,286,000) | ||||||||||||||||||
Balance at Jun. 30, 2019 | $ 43,168 | 170,017,177 | (181,023,195) | (10,963,000) | |||||||||||||||
Balance (in shares) at Jun. 30, 2019 | 43,168,161 | ||||||||||||||||||
Balance at Mar. 31, 2019 | $ 11,680 | 13,997,779 | (19,490,013) | (5,478,093) | $ 2,461 | ||||||||||||||
Balance (in shares) at Mar. 31, 2019 | 11,680,449 | 2,460,517 | |||||||||||||||||
Purchase and retirement of common stock | $ (1,012) | (2,198,988) | (2,200,000) | ||||||||||||||||
Purchase and retirement of common stock (in shares) | (1,011,748) | ||||||||||||||||||
Issuance of shares for conversion of note payable and accrued interest | $ 2,461 | 0 | $ (2,461) | ||||||||||||||||
Issuance of shares for conversion of note payable and accrued interest (in Shares) | 2,460,517 | (2,460,517) | |||||||||||||||||
Balance at May. 05, 2019 | $ 15,028 | 18,814,854 | (19,490,013) | (660,132) | $ 0 | ||||||||||||||
Balance (in shares) at May. 05, 2019 | 15,027,533 | 0 | |||||||||||||||||
Balance at Mar. 31, 2019 | $ 11,680 | 13,997,779 | (19,490,013) | (5,478,093) | $ 2,461 | ||||||||||||||
Balance (in shares) at Mar. 31, 2019 | 11,680,449 | 2,460,517 | |||||||||||||||||
Net loss for the period | (161,506,000) | ||||||||||||||||||
Balance at Jun. 30, 2019 | $ 43,168 | 170,017,177 | (181,023,195) | (10,963,000) | |||||||||||||||
Balance (in shares) at Jun. 30, 2019 | 43,168,161 | ||||||||||||||||||
Balance at May. 05, 2019 | $ 15,028 | 18,814,854 | (19,490,013) | (660,132) | $ 0 | ||||||||||||||
Balance (in shares) at May. 05, 2019 | 15,027,533 | 0 | |||||||||||||||||
Sale of common stock | $ 5,745 | 15,670,045 | 15,675,790 | ||||||||||||||||
Sale of common stock (in Shares) | 5,744,991 | ||||||||||||||||||
Balance at May. 06, 2019 | $ 41,893 | 161,187,602 | (19,490,013) | 141,739,482 | |||||||||||||||
Balance (in shares) at May. 06, 2019 | 41,893,161 | ||||||||||||||||||
Issuance of shares for conversion of note payable and accrued interest | $ 1,175 | $ 7,050,678 | $ 7,051,853 | ||||||||||||||||
Issuance of shares for conversion of note payable and accrued interest (in Shares) | 1,175,000 | ||||||||||||||||||
Net loss for the period | (161,533,182) | (161,533,182) | |||||||||||||||||
Balance at Jun. 30, 2019 | $ 43,168 | $ 170,017,177 | $ (181,023,195) | $ (10,963,000) | |||||||||||||||
Balance (in shares) at Jun. 30, 2019 | 43,168,161 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (FY) - USD ($) | 4 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net loss - continuing operations | $ (4,412,858) | $ (403,212) | $ (1,114,908) | $ (1,743,258) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Gain on restructure of debt | (472,267) | 0 | (1,033,669) | 0 |
Loss on restructure of debt | 0 | 122,878 | 6,409 | 0 |
Loss on conversion of debt to equity | 0 | 474,648 | 0 | |
Penalty on debt extension | 0 | 0 | 0 | 306,345 |
Subscription receivable write-off | 0 | 2,172 | ||
Change in fair market value of derivative liabilities | 821,324 | (28,523) | 45,348 | 388,544 |
Excess value of derivative liabilities | 3,638,849 | 0 | 447,680 | 0 |
Amortization of discount on convertible debt | 118,708 | 177,573 | 532,907 | 780,293 |
Changes in operating assets and liabilities: | ||||
Accounts receivable | 0 | 0 | 0 | 45 |
Inventory | 0 | 27 | 5,480 | (8,484) |
Accrued officer salary | (16,000) | 32,000 | 20,000 | 96,000 |
Interest payable - related party | 0 | 566 | (2,011) | 2,011 |
Accounts payable and accrued liabilities | 97,846 | (30,859) | (226,502) | 138,749 |
Net cash used in operating activities - continuing operations | (224,398) | (129,550) | (842,446) | (39,755) |
Net cash provided by operating activities - discontinued operations | 0 | 0 | 39,178 | 0 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Investment in TruPet | (2,200,000) | 0 | 0 | 0 |
Cash Provided by (Used in) Investing Activities | (2,200,000) | 0 | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from notes payable - related party | 0 | 35,500 | 35,500 | 0 |
Repayments of notes payable - related party | 0 | (75,000) | (266,500) | 186,000 |
Proceeds from convertible debt | 0 | 241,250 | 1,232,500 | 0 |
Principal payments made on convertible debt | 0 | 0 | 0 | (155,000) |
Cash paid for the purchase of common stock | (27,271) | 0 | 0 | |
Cash from the sale of common stock | 2,607,099 | 0 | 0 | 0 |
Net cash provided by financing activities | 2,579,828 | 201,750 | 1,001,500 | 31,000 |
Net increase in cash and cash equivalents - continuing operations | 155,430 | 72,200 | 159,054 | (8,755) |
Net increase in cash and cash equivalents - discontinued operations | 0 | 0 | 39,178 | 0 |
Cash and cash equivalents at beginning of year | 199,674 | 1,442 | 1,442 | 10,197 |
Cash and cash equivalents at end of year | 3,946,000 | 73,642 | 199,674 | 1,442 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
Interest paid | 0 | 950 | 4,302 | 0 |
Income taxes paid | 0 | 0 | 0 | 0 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||
Common stock issued for conversion of notes payable | 0 | 55,000 | 702,592 | 50,000 |
Accrued interest capitalized into principal of convertible notes | 0 | 0 | 15,823 | 39,382 |
Note payable for loan of BTC | 0 | 0 | 5,000,000 | 0 |
BTC loan to third party | 0 | 0 | 5,500,000 | 0 |
Discount on Convertible Debt and Accrued Interest | 0 | 126,557 | 1,132,663 | 677,437 |
Settlement of derivative | 2,003,390 | 23,447 | 0 | 1,015,757 |
Stock issued for commitment fee | 0 | 0 | 0 | 68,950 |
Accrued preferred stock dividends | 64,840 | 0 | 20,280 | 0 |
Fair value of warrants issued with sale of common stock allocated to additional paid in capital | 2,605,699 | 0 | 0 | 0 |
Previously Reported [Member] | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Cash and cash equivalents at end of year | 355,104 | |||
Series B Preferred Stock [Member] | ||||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||
Preferred Stock Series E issued for cancellation of convertible notes payable, accrued interest, Series B Preferred Stock and warrants | 0 | 0 | 1,860,249 | 0 |
Series E Preferred Stock [Member] | ||||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||
Preferred Stock Series E issued for cancellation of convertible notes payable, accrued interest, Series B Preferred Stock and warrants | 2,022,766 | $ 0 | $ 0 | $ 0 |
Accrued preferred stock dividends | $ 53,501 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Q2) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 |
Current Assets | ||||
Cash and cash equivalents | $ 5,019,000 | $ 3,946,000 | $ 199,674 | $ 1,442 |
Restricted cash | 6,243,000 | 0 | ||
Accounts receivable, net | 333,000 | 276,000 | ||
Inventories, net | 1,707,000 | 1,557,000 | 9,402 | 14,882 |
Prepaid expenses and other current assets | 1,134,000 | 269,000 | ||
Total current assets | 14,436,000 | 6,048,000 | 209,076 | 16,324 |
Property and equipment, net | 59,000 | 71,000 | ||
Right of use asset, operating lease, net of accumulated amortization | 840,000 | 0 | ||
Intangible assets, net | 961,000 | 0 | ||
Other assets | 182,000 | 28,000 | ||
Total Assets | 16,478,000 | 6,147,000 | 209,076 | 16,324 |
Current Liabilities | ||||
Line of credit | 0 | 4,600,000 | ||
Other liabilities | 0 | 1,899,000 | ||
Long-term debt, current portion | 6,200,000 | 1,600,000 | 0 | 233,011 |
Accounts payable | 2,413,000 | 765,000 | 39,052 | 106,726 |
Due to related parties | 134,000 | 0 | ||
Accrued liabilities | 2,198,000 | 244,000 | ||
Deferred revenue | 318,000 | 66,000 | ||
Operating lease liability, current portion | 262,000 | 0 | ||
Warrant derivative liability | 2,304,000 | 0 | 2,317,412 | 312,878 |
Total Current Liabilities | 13,829,000 | 9,174,000 | 2,858,351 | 1,199,198 |
Operating lease liability | 590,000 | 0 | ||
Deferred rent | 15,000 | 15,000 | ||
Total Liabilities | 14,434,000 | 9,189,000 | ||
Commitments and Contingencies | ||||
Stockholders' Deficit | ||||
Common Stock, $0.001 par value, 88,000,000 shares authorized, 43,168,161 & 11,661,485 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively. | 43,000 | 12,000 | 3,065 | 3,009 |
Additional paid-in capital | 170,017,000 | 13,642,000 | 3,406,146 | 1,927,960 |
Accumulated deficit | (181,023,000) | (16,698,000) | 6,059,291 | (3,108,472) |
Total Stockholders' Deficit | (10,963,000) | (3,042,000) | (2,649,275) | (1,182,874) |
Total Liabilities, Redeemable Preferred Stock and Stockholders' Deficit | 16,478,000 | 6,147,000 | 209,076 | 16,324 |
Series E Preferred Stock [Member] | ||||
Current Liabilities | ||||
Redeemable Preferred Stock | 13,007,000 | 0 | ||
Stockholders' Deficit | ||||
Preferred Stock | 0 | 0 | ||
Convertible Series A Preferred Stock [Member] | ||||
Stockholders' Deficit | ||||
Preferred Stock | $ 0 | 2,000 | 1 | 1 |
Total Stockholders' Deficit | $ 2,391 | $ 1 | $ 1 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Q2) (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Preferred Stock [Member] | Convertible Series A Preferred Stock [Member] | ||
Preferred stock, shares issued (in shares) | 0 | 2,391,403 |
Preferred stock, shares outstanding (in shares) | 0 | 2,391,403 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 88,000,000 | 580,000,000 |
Common stock, shares issued (in shares) | 43,168,161 | 11,661,485 |
Common stock, shares outstanding (in shares) | 43,168,161 | 11,661,485 |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Preferred stock, shares outstanding (in shares) | 1,707,920 | |
Series E Preferred Stock [Member] | ||
Redeemable convertible preferred, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Redeemable convertible preferred, shares authorized (in shares) | 2,900,000 | 0 |
Redeemable convertible preferred, shares issued (in shares) | 1,707,919 | 0 |
Redeemable convertible preferred, shares outstanding (in shares) | 1,707,919 | 0 |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Preferred stock, shares outstanding (in shares) | 1,707,920 | 2,846,355.54 |
Convertible Series A Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares issued (in shares) | 1,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Q2) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Net Sales | $ 4,084,000 | $ 3,817,000 | $ 7,635,000 | $ 7,064,000 |
Cost of Goods Sold | 2,421,000 | 1,384,000 | 4,082,000 | 3,329,000 |
Gross profit | 1,663,000 | 2,433,000 | 3,553,000 | 3,735,000 |
Operating Expenses: | ||||
General & Administrative Expense | 4,571,000 | 665,000 | 6,004,000 | 1,351,000 |
Share-Based Compensation Expense | 4,006,000 | 0 | 4,212,000 | 0 |
Sales & Marketing | 3,412,000 | 1,512,000 | 5,597,000 | 2,819,000 |
Other Operating Expenses | 937,000 | 958,000 | 1,721,000 | 1,899,000 |
Total operating expenses | 12,926,000 | 3,135,000 | 17,534,000 | 6,069,000 |
Operating loss | (11,263,000) | (702,000) | (13,981,000) | (2,334,000) |
Other Income (Expense) | ||||
Interest Expense | (62,000) | (43,000) | (124,000) | (66,000) |
Loss on Acquisition | (149,988,000) | 0 | (149,988,000) | 0 |
Change in Fair Value of Derivative Liability | (193,000) | 0 | (193,000) | 0 |
Total other expense | (150,243,000) | (43,000) | (150,305,000) | (66,000) |
Net loss | (161,506,000) | (745,000) | (164,286,000) | (2,400,000) |
Preferred stock dividend | 27,000 | 0 | 27,000 | 0 |
Net loss attributable to Common Stockholders | $ (161,533,000) | $ (745,000) | $ (164,313,000) | $ (2,400,000) |
Weighted Average Number of Shares Outstanding (in dollars per share) | 30,638,048 | 11,497,128 | 21,202,188 | 11,497,128 |
Loss per share, basic and diluted (in dollars per share) | $ (5.27) | $ (0.06) | $ (7.75) | $ (0.21) |
Condensed Statements of Changes
Condensed Statements of Changes in Stockholders' Deficit (Q2) - USD ($) | Common Stock [Member] | Common Stock [Member]Better Choice Company [Member] | Common Stock [Member]Bona Vida, Inc. [Member] | Common Stock [Member]Series E Preferred Stock [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member]Better Choice Company [Member] | Additional Paid-in Capital [Member]Bona Vida, Inc. [Member] | Additional Paid-in Capital [Member]Series E Preferred Stock [Member] | Accumulated Deficit [Member] | Total | Better Choice Company [Member] | Bona Vida, Inc. [Member] | Series A Preferred Stock [Member] | Series E Preferred Stock [Member] |
Balance at Aug. 31, 2016 | $ 2,992 | $ 793,270 | $ (1,365,214) | $ (574,323) | $ 1 | |||||||||
Balance (in shares) at Aug. 31, 2016 | 2,991,358 | 1,000 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Conversion of Series Preferred Stock | $ 16 | 49,984 | 50,000 | |||||||||||
Conversion of Series Preferred Stock (in shares) | 16,026 | |||||||||||||
Net loss for the period | (1,743,258) | (1,743,258) | ||||||||||||
Balance at Aug. 31, 2017 | $ 3,009 | 1,927,960 | (3,108,472) | (1,182,874) | $ 1 | |||||||||
Balance (in shares) at Aug. 31, 2017 | 3,008,730 | 1,000 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net loss for the period | (403,212) | |||||||||||||
Balance at Dec. 31, 2017 | $ 11,497 | 8,545,446 | (10,672,090) | (2,115,147) | ||||||||||
Balance (in shares) at Dec. 31, 2017 | 11,497,128 | |||||||||||||
Balance at Aug. 31, 2017 | $ 3,009 | 1,927,960 | (3,108,472) | (1,182,874) | $ 1 | |||||||||
Balance (in shares) at Aug. 31, 2017 | 3,008,730 | 1,000 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Conversion of Series Preferred Stock | $ 56 | 702,538 | 702,594 | |||||||||||
Conversion of Series Preferred Stock (in shares) | 56,034 | |||||||||||||
Net loss for the period | (2,950,819) | (2,950,819) | ||||||||||||
Balance at Aug. 31, 2018 | $ 3,065 | 3,406,146 | (6,059,291) | (2,649,275) | $ 1 | |||||||||
Balance (in shares) at Aug. 31, 2018 | 3,064,764 | 1,000 | ||||||||||||
Balance at Dec. 31, 2017 | $ 11,497 | 8,545,446 | (10,672,090) | (2,115,147) | ||||||||||
Balance (in shares) at Dec. 31, 2017 | 11,497,128 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net loss for the period | (1,655,302) | (1,655,302) | ||||||||||||
Balance at Mar. 31, 2018 | $ 11,497 | 8,545,446 | (12,327,392) | (3,770,449) | ||||||||||
Balance (in shares) at Mar. 31, 2018 | 11,497,128 | |||||||||||||
Balance at Dec. 31, 2017 | $ 11,497 | 8,545,446 | (10,672,090) | (2,115,147) | ||||||||||
Balance (in shares) at Dec. 31, 2017 | 11,497,128 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net loss for the period | (2,400,000) | |||||||||||||
Balance at Jun. 30, 2018 | $ 11,497 | 8,545,446 | (13,071,950) | (4,515,007) | ||||||||||
Balance (in shares) at Jun. 30, 2018 | 11,497,128 | |||||||||||||
Balance at Mar. 31, 2018 | $ 11,497 | 8,545,446 | (12,327,392) | (3,770,449) | ||||||||||
Balance (in shares) at Mar. 31, 2018 | 11,497,128 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net loss for the period | (744,558) | (745,000) | ||||||||||||
Balance at Jun. 30, 2018 | $ 11,497 | 8,545,446 | (13,071,950) | (4,515,007) | ||||||||||
Balance (in shares) at Jun. 30, 2018 | 11,497,128 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Shares issued pursuant to private placement | 4,665,609 | 4,668,000 | $ 2,391 | |||||||||||
Shares issued in private placement offering (in shares) | 2,391,403 | |||||||||||||
Stock compensation pursuant to services provided | $ 164 | 430,647 | 430,811 | |||||||||||
Stock compensation pursuant to services provided (in shares) | 164,357 | |||||||||||||
Net loss for the period | (3,626,157) | (3,626,157) | ||||||||||||
Balance at Dec. 31, 2018 | $ 11,661 | 13,641,701 | (16,698,107) | (3,042,000) | $ 2,391 | |||||||||
Balance (in shares) at Dec. 31, 2018 | 11,661,485 | 2,391,403 | ||||||||||||
Balance at Aug. 31, 2018 | $ 3,065 | 3,406,146 | (6,059,291) | (2,649,275) | $ 1 | |||||||||
Balance (in shares) at Aug. 31, 2018 | 3,064,764 | 1,000 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Shares issued pursuant to private placement | $ 1,400 | 0 | $ 1,400 | |||||||||||
Shares issued in private placement offering (in shares) | 1,400,000 | 1,400,000 | ||||||||||||
Retired TruPet Units | $ (1,049) | (26,222) | $ (27,271) | |||||||||||
Retired TruPet Units (in shares) | (1,048,904) | |||||||||||||
Net loss for the period | (4,412,858) | (4,412,858) | ||||||||||||
Balance at Dec. 31, 2018 | $ 11,661 | 13,641,701 | (16,698,107) | (3,042,000) | $ 2,391 | |||||||||
Balance (in shares) at Dec. 31, 2018 | 11,661,485 | 2,391,403 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Impact on Prior Year of Adoption of ASC 842 | ASC 842 [Member] | (11,824) | (11,824) | ||||||||||||
Shares issued pursuant to private placement | 149,931 | 150,000 | $ 69 | |||||||||||
Shares issued in private placement offering (in shares) | 69,115 | |||||||||||||
Stock compensation pursuant to services provided | $ 19 | 206,147 | 206,166 | |||||||||||
Stock compensation pursuant to services provided (in shares) | 18,964 | |||||||||||||
Net loss for the period | (2,780,082) | (2,780,082) | ||||||||||||
Balance at Mar. 31, 2019 | $ 11,680 | 13,997,779 | (19,490,013) | (5,478,093) | $ 2,461 | |||||||||
Balance (in shares) at Mar. 31, 2019 | 11,680,449 | 2,460,517 | ||||||||||||
Balance at Dec. 31, 2018 | $ 11,661 | 13,641,701 | (16,698,107) | (3,042,000) | $ 2,391 | |||||||||
Balance (in shares) at Dec. 31, 2018 | 11,661,485 | 2,391,403 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Retired TruPet Units | $ (2,200,000) | |||||||||||||
Retired TruPet Units (in shares) | (1,011,748) | |||||||||||||
Net loss for the period | $ (164,286,000) | |||||||||||||
Balance at Jun. 30, 2019 | $ 43,168 | 170,017,177 | (181,023,195) | (10,963,000) | ||||||||||
Balance (in shares) at Jun. 30, 2019 | 43,168,161 | |||||||||||||
Balance at Mar. 31, 2019 | $ 11,680 | 13,997,779 | (19,490,013) | (5,478,093) | $ 2,461 | |||||||||
Balance (in shares) at Mar. 31, 2019 | 11,680,449 | 2,460,517 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Stock compensation pursuant to services provided | $ 1,100 | 2,225,907 | 2,227,006 | |||||||||||
Stock compensation pursuant to services provided (in shares) | 1,099,822 | |||||||||||||
Stock based commissions to third parties | $ 798 | 4,790,156 | 4,790,955 | |||||||||||
Stock based commissions to third parties (in shares) | 798,492 | |||||||||||||
Conversion of Series Preferred Stock | $ 2,461 | 0 | $ (2,461) | |||||||||||
Conversion of Series Preferred Stock (in shares) | 2,460,517 | (2,460,517) | ||||||||||||
Retired TruPet Units | $ (1,012) | (2,198,988) | (2,200,000) | |||||||||||
Retired TruPet Units (in shares) | (1,011,748) | |||||||||||||
Balance at May. 05, 2019 | $ 15,028 | 18,814,854 | (19,490,013) | (660,132) | $ 0 | |||||||||
Balance (in shares) at May. 05, 2019 | 15,027,533 | 0 | ||||||||||||
Balance at Mar. 31, 2019 | $ 11,680 | 13,997,779 | (19,490,013) | (5,478,093) | $ 2,461 | |||||||||
Balance (in shares) at Mar. 31, 2019 | 11,680,449 | 2,460,517 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Net loss for the period | (161,506,000) | |||||||||||||
Balance at Jun. 30, 2019 | $ 43,168 | 170,017,177 | (181,023,195) | (10,963,000) | ||||||||||
Balance (in shares) at Jun. 30, 2019 | 43,168,161 | |||||||||||||
Balance at May. 05, 2019 | $ 15,028 | 18,814,854 | (19,490,013) | (660,132) | $ 0 | |||||||||
Balance (in shares) at May. 05, 2019 | 15,027,533 | 0 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Shares issued pursuant to private placement | $ 5,745 | 15,670,045 | $ 15,675,790 | |||||||||||
Shares issued in private placement offering (in shares) | 5,744,991 | |||||||||||||
Acquisition | $ 3,117 | $ 18,003 | $ 18,701,067 | $ 108,001,637 | $ 18,704,184 | $ 108,019,640 | ||||||||
Acquisition (in shares) | 3,117,364 | 18,003,273 | 15,027,533 | 18,003,273 | ||||||||||
Balance at May. 06, 2019 | $ 41,893 | 161,187,602 | (19,490,013) | $ 141,739,482 | ||||||||||
Balance (in shares) at May. 06, 2019 | 41,893,161 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Stock compensation pursuant to services provided | $ 100 | 599,900 | 600,000 | |||||||||||
Stock compensation pursuant to services provided (in shares) | 100,000 | |||||||||||||
Conversion of Series Preferred Stock | $ 1,175 | $ 7,050,678 | $ 7,051,853 | |||||||||||
Conversion of Series Preferred Stock (in shares) | 1,175,000 | |||||||||||||
Vesting of stock options for services provided | 1,178,997 | 1,178,997 | ||||||||||||
Net loss for the period | (161,533,182) | (161,533,182) | ||||||||||||
Balance at Jun. 30, 2019 | $ 43,168 | $ 170,017,177 | $ (181,023,195) | $ (10,963,000) | ||||||||||
Balance (in shares) at Jun. 30, 2019 | 43,168,161 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Q2) - USD ($) | May 06, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Cash Flow from Operating Activities | ||||
Net loss | $ (164,286,000) | $ (2,400,000) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 45,000 | 7,000 | ||
Stock-based compensation expense | 4,212,000 | 0 | ||
Non-cash lease expense | 2,000 | 0 | ||
Change in fair value of derivative liability | 193,000 | 0 | ||
Loss on acquisition | 149,988,000 | 0 | ||
Other | (4,000) | 0 | ||
(Increase) decrease in operating assets | ||||
Accounts receivable | (27,000) | (50,000) | ||
Inventories | 42,000 | (296,000) | ||
Prepaid expenses and other assets | (466,000) | 48,000 | ||
Change in operating lease right of use asset | (457,000) | 0 | ||
(Decrease) increase in current liabilities | ||||
Accounts payable | (32,000) | 530,000 | ||
Accrued liabilities | 1,600,000 | 76,000 | ||
Deferred revenue | 252,000 | 68,000 | ||
Deferred rent | 0 | (9,000) | ||
Change in lease liability | 457,000 | 0 | ||
Net cash used in operating activities - continuing operations | (8,481,000) | (2,026,000) | ||
Cash Provided by (Used in) Investing Activities | ||||
Cash spent for Acquisition of fixed assets (Office Furniture) | (4,000) | (31,000) | ||
Cash acquired in merger | 1,955,000 | 0 | ||
Security deposits paid | (81,000) | 0 | ||
Cash Provided by (Used in) Investing Activities | 1,870,000 | (31,000) | ||
Cash Provided by Financing Activities | ||||
Repayment of advance | (1,899,000) | 0 | ||
Proceeds from private placement of Series A Preferred Units | 150,000 | 0 | ||
Proceeds from private issuance of public equity | 15,676,000 | 0 | ||
Payment of old debt | (6,200,000) | 0 | ||
Proceeds from the issuance of debt | 6,200,000 | 2,013,000 | ||
Cash Provided by Financing Activities | 13,927,000 | 2,013,000 | ||
Net Changes in Cash, Cash Equivalents and Restricted Cash | 7,316,000 | (44,000) | ||
Total Cash, Cash Equivalents and Restricted Cash, Beginning of Period | 3,946,000 | 157,000 | $ 157,000 | |
Total Cash, Cash Equivalents and Restricted Cash, End of Period | 11,262,000 | 113,000 | 3,946,000 | |
Current Assets | ||||
Accounts receivable, net | $ 30,000 | |||
Inventories, net | 193,000 | |||
Prepaid expenses and other current assets | 399,000 | |||
Total Current Assets | 622,000 | |||
Intangible Assets | 986,000 | |||
Other assets | 74,000 | |||
Total Assets | 1,682,000 | |||
Current Liabilities | ||||
Accounts payable | (1,814,000) | |||
Accrued liabilities | (325,000) | |||
Total Current Liabilities | (2,139,000) | |||
Warrant derivative liability | (2,111,000) | |||
Total Liabilities | (4,250,000) | |||
Redeemable Series E Preferred Stock | $ 20,059,000 | |||
Right of Use asset recorded upon adoption of ASC 842 | 477,000 | |||
Lease liability recorded upon adoption of ASC 842 | $ (489,000) | |||
Income taxes paid | 0 | 0 | ||
Cash interest paid | $ 123,000 | $ 66,000 |
Nature of Business and Signific
Nature of Business and Significant Accounting Policies (FY) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Nature of Business and Summary of Significant Accounting Policies [Abstract] | ||
Nature of Business and Significant Accounting Policies | Note 1 – Nature of Business and Significant Accounting Policies Nature of Business Better Choice Company, Inc. (the “Company”) was originally incorporated in the State of Nevada on January 3, 2001 (“Inception”). The Company was dormant until it was revived in 2009 with a name change to Sport Endurance, Inc. on August 6, 2009. Effective March 11, 2019, we changed our name to Better Choice Company Inc. after reincorporating in Delaware. The Company previously marketed for sale three sport nutritional products which it suspended in March 2018. On March 14, 2018, the Company, through its wholly-owned subsidiary Yield Endurance, Inc. (“Yield”), entered into a series of agreements under which Yield borrowed $5 million of bitcoin (“BTC”). The Company simultaneously entered into transactions with Madison Partners LLC and Prism Funding Co. LP to lend the BTC to third parties. On August 21, 2018, the Company entered into a series of restructuring agreements to unwind the BTC transactions thereby exiting the BTC and cryptocurrency markets; see note 3. Effective March 11, 2019, Sport Endurance, Inc. merged into its wholly-owned subsidiary, Better Choice Company Inc., a Delaware corporation. As a result, the name of Sport Endurance, Inc. was changed to Better Choice Company Inc. Pursuant to the merger, each outstanding share of common stock of Sport Endurance, Inc. converted into one share of common stock of Better Choice Company Inc. and each outstanding share of Series E Convertible Preferred Stock (the “Series E”) of Sport Endurance, Inc. converted into one share of Series E Convertible Preferred Stock of Better Choice Company Inc. On December 17, 2018, the Company made a $2,200,000 investment in TruPet LLC, an online seller of pet foods, flea and tick products, pet nutritional products and related pet supplies. On February 2, 2019 and February 28, 2019, respectively, the Company entered into definitive agreements to acquire the remainder of TruPet LLC and all of the outstanding shares of Bona Vida, Inc., an emerging hemp based CBD platform focused on developing a portfolio of brand and product verticals within the animal health and wellness space. The definitive agreements are based on various conditions being met including completion of a financing (See Note 4). On March 14, 2019, the Company filed a certificate of amendment of certificate of incorporation (the “Amendment”) with the Delaware Secretary of State to effect a one-for-26 reverse split of the Company’s common stock. The Amendment took effect on March 15, 2019. No fractional shares will be issued or distributed as a result of the Amendment. These financial statements give retroactive effect to the reverse stock split for all periods presented, unless otherwise specified. On April 22, 2019, the Company filed a certificate of amendment of certificate of incorporation with the Delaware Secretary of State which reduced its number of authorized shares of common stock from 580,000,000 to 88,000,000 and authorized shares of preferred stock from 20,000,000 to 4,000,000. Basis of Presentation The audited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles and applicable rules and regulations of the United States Securities and Exchange Commission (“SEC”). Effective March 15, 2019, the board of directors of the Company approved a change in our fiscal year end from August 31 to December 31. As a result of this change, we are filing this Transition Report on Form 10-KT for the four month transition period ended December 31, 2018. References to any of our previous fiscal years mean the fiscal years ending on August 31. All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management utilizes various other estimates, including but not limited to determining the collectability of accounts receivable, the fair value of warrants issued, the fair value of conversion features, the recognition of revenue, the valuation allowance for deferred tax assets and other legal claims and contingencies. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period that they are determined to be necessary. Cash and Cash Equivalents Cash and equivalents include investments with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Deposits with these banks may exceed the amount of insurance provided on such deposits; however, these deposits typically may be redeemed upon demand and, therefore, bear minimal risk. At December 31, 2018 and August 31, 2018, the uninsured balances amounted to $95,412 and $0, respectively. Inventory Inventory consists of finished goods and is stated at the lower of cost by the first-in, first-out method or net realizable value. The Company currently has approximately 2,432 containers of “Ultra Peak T” included in inventory at December 31, 2018 and August 31, 2018. Revenue Recognition Adoption of ASU 2014-09, Revenue from Contracts with Customers On September 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”) using the modified retrospective (cumulative effect) transition method. Under this transition method, results for reporting periods beginning September 1, 2018 or later are presented under ASC 606, while prior period results continue to be reported in accordance with previous guidance. The cumulative effect of the initial application of ASC 606 was immaterial, no adjustment was recorded to the opening balance of retained earnings. The timing of revenue recognition for our revenue stream was not materially impacted by the adoption of this standard. The Company believes its business processes, systems and controls are appropriate to support recognition and disclosure under ASC 606. Overall, the adoption of ASC 606 did not have a material impact on the Company’s balance sheet, statement of operations and statement of cash flows for the period ended December 31, 2018. ASC 606 also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. As described below, the analysis of contracts under ASC 606 supports the recognition of revenue at a point in time, resulting in revenue recognition timing that is materially consistent with the Company’s historical practice of recognizing product revenue when title and risk of loss pass to the customer. Policy The Company recognizes revenue upon product delivery. All of our products are shipped through a third party fulfillment center to the customer and the customer takes title to product and assumes risk and ownership of the product when it is delivered. Shipping charges to customers and sales taxes collectible from customers, if any, are included in revenues. For revenue from product sales, the Company recognizes revenue in accordance with ASC 606. A five-step analysis must be met as outlined in Topic 606: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. Contract Assets The Company does not have any contract assets such as work-in-process. All trade receivables on the Company’s balance sheet are from contracts with customers. Contract Costs Costs incurred to obtain a contract are capitalized unless short term in nature. As a practical expedient, costs to obtain a contract that are short term in nature are expensed as incurred. The Company does not have any contract costs capitalized as of December 31, 2018. Contract Liabilities - Deferred Revenue The Company’s contract liabilities may consist of advance customer payments and deferred revenue. Deferred revenue results from transactions in which the Company has been paid for products by customers, but for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the deferred revenues are recognized. Income Taxes The Company utilizes ASC 740, Accounting for Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740, “Income Taxes”. Accounting guidance addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements, under which a company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Accordingly, the Company would report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company elects to recognize any interest and penalties, if any, related to unrecognized tax benefits in tax expense. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%. As of the completion of these consolidated financial statements and related disclosures, we have made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act, and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the fourth quarter of fiscal year 2019. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined. See Note 12 for additional information. Based on the new tax law that lowers corporate tax rates, the Company revalued its deferred tax assets. Future tax benefits are expected to be lower, with the corresponding one time charge being recorded as a component of income tax expense. Fair Value of Financial Instruments Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash and accrued expenses reported on the balance sheet are estimated by management to approximate fair value primarily due to the short term nature of the instruments. Fair Value Measurements The Company follows Accounting Standards Codification (“ASC”) 820–10 “Fair Value Measurement” of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820–10 establishes a framework for measuring fair value and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820–10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by ASC 820–10 are described below: Level 1- fair value measurements are those derived from quoted prices (unadjusted in active markets for identical assets or liabilities); Level 2- fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and Level 3- fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). Financial instruments classified as Level 1 - quoted prices in active markets include cash. These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments. Changes in such judgments could have a material impact on fair value estimates. In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic conditions may also dramatically affect the estimated fair values. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2018 and August 31, 2018. The respective carrying value of certain financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, accounts payable and accrued expenses. Derivative Financial Instruments ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re- measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described. The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option and warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. The pricing model we use for determining fair value of our derivatives is the Lattice Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income (see note 11). Conversion options are recorded as debt discount and are amortized as interest expense over the life of the underlying debt instrument using effective interest method. Basic and Diluted Loss Per Share The basic net loss per common share is computed by dividing the net loss by the weighted average number of common stock outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common stock outstanding plus potential dilutive securities. Following shares were not included in the calculation of diluted loss per share because the effect would be anti-dilutive. December 31, 2018 August 31, 2018 August 31, 2017 Conversion of notes payable - 82,974 44,245 Conversion of Series B Convertible Preferred Stock - 1,046,423 - Conversion of Series E Convertible Preferred Stock 3,681,273 - - Options 38,462 Warrants to purchase common stock 700,000 463,631 - 4,419,735 1,593,028 44,245 Related Parties Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. All transactions with related parties are recorded at fair value of the goods or services exchanged. Discontinued Operations ASC 360-10-45-9 requires that a long-lived asset (disposal group) to be sold shall be classified as held for sale in the period in which a set of criteria have been met, including criteria that the sale of the asset (disposal group) is probable and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. This criteria was achieved on August 21, 2018. Since the business was started and discontinued during the year ended August 31, 2018, there was no impact on the comparable consolidated financial statements. Investments The Company records minority interest equity investments at cost. Recently Issued Accounting Pronouncements In February 2016, FASB issued ASU No. 2016–02, “Leases (Topic 842)”, which creates new accounting and reporting guidelines for leasing arrangements. The new guidance requires organizations that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases, regardless of whether they are classified as finance or operating leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. The guidance also requires new disclosures to help financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early application permitted. The Company is currently evaluating the impact of the new pronouncement on its consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception”. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. ASU 2017-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company expects to implement ASU 2017-11 on January 1, 2019 and does not believe it will have a material impact on its consolidated financial statements. ASU 2018-02 - On December 22, 2017, the U.S. federal government enacted a tax bill, H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (the “Tax Cuts and Jobs Act”). Stakeholders raised a narrow-scope financial reporting issue that arose as a consequence of the Tax Cuts and Jobs Act of 2017. The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement-Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by the Generally Adopted Accounting Principles (“GAAP”). The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2018-210—Income Statement—Reporting Comprehensive Income (Topic 220), which has been deleted. We are currently evaluating the impact of adopting ASU 2017-13 on our consolidated financial statements. ASU 2018-05 Accounting Standards Update adds SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No. 118, which expresses the view of the staff regarding application of Topic 740, Income Taxes, in the reporting period that includes December 22, 2017 - the date on which the Tax Cuts and Jobs Act was signed into law. We are currently evaluating the impact of adopting ASU 2017-13 on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance is effective for public entities, certain not-for-profit entities, and certain employee benefit plans for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other entities, ASU 2018-07 is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company is evaluating the impact of adopting this pronouncement. In July 2018, the FASB issued ASU 2018-10 Leases (Topic 842), Codification Improvements and ASU 2018-11 Leases (Topic 842), Targeted Improvements, to provide additional guidance for the adoption of Topic 842. ASU 2018-10 clarifies certain provisions and correct unintended applications of the guidance such as the application of implicit rate, lessee reassessment of lease classification, and certain transition adjustments that should be recognized to earnings rather than to stockholders’ equity. ASU 2018-11 provides an alternative transition method and practical expedient for separating contract components for the adoption of Topic 842. In February 2016, the FASB issued ASU 2016-02 Leases (Topic 842) which requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases with terms greater than 12 months. ASU 2018-11, ASU 2018-10 and ASU 2016-02 (collectively, “the new lease standards”) are effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect the new lease standards will have on its Condensed Consolidated Financial Statements; however, the Company anticipates recognizing assets and liabilities arising from any leases that meet the requirements under the new lease standards on the adoption date and including qualitative and quantitative disclosures in the Company’s Notes to the Condensed Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. Removals The following disclosure requirements were removed from Topic 820: 1. The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy 2. The policy for timing of transfers between levels 3. The valuation processes for Level 3 fair value measurements 4. For nonpublic entities, the changes in unrealized gains and losses for the period included in earnings for recurring Level 3 fair value measurements held at the end of the reporting period. Modifications The following disclosure requirements were modified in Topic 820: 1. In lieu of a rollforward for Level 3 fair value measurements, a nonpublic entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities. 2. For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only 3. The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. Additions The following disclosure requirements were added to Topic 820; however, the disclosures are not required for nonpublic entities: 1. The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period 2. The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. In addition, the amendments eliminate at a minimum an entity shall disclose at a minimum The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. The impact of this ASU on the Company’s consolidated financial statements is not expected to be material. There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on our consolidated financial position, results of operations or cash flows. | Note Nature of the Business Better Choice Company, Inc. (the “Company”) is a holistic pet wellness company providing high quality, hemp-based, raw cannabidiol (“CBD”) infused and non-CBD infused food, treats and supplements, dental care products, and accessories for pets and their human parents. Our products are formulated and manufactured using only high-quality ingredients manufactured, tested and packaged to our specifications. On May 6, 2019, the Company acquired TruPet LLC and Bona Vida Inc. in a pair of all-stock transactions (the “acquisitions”). The acquisition of TruPet LLC is a reverse acquisition for accounting purposes, with TruPet as the accounting acquirer. The majority of our products are sold online directly to consumers with additional sales through online retailers and pet specialty stores. We have a limited selection of CBD infused canine products available on our Bona Vida website. The information contained in, or accessible through, these websites does not constitute a part of this Quarterly Report. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10–Q and Article 10 of Regulation S–X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and operating results have been included. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for any subsequent quarters or for the year ending December 31, 2019. The significant accounting policies applied by the Company are described below. We present our tables, except for the Statements of Stockholders’ Deficit, in dollars (thousands), numbers in the text in dollars (millions) and % as rounded up or down. Basis of Measurement The unaudited condensed consolidated financial statements of the Company are presented on a going concern basis, under the historical cost convention except for certain financial instruments that are measured at fair value, as explained in the accounting policies below. Historical cost is measured as the fair value of the consideration provided in exchange for goods and services. The Company’s functional and presentation currency is United States dollars (“USD”). Consolidation The consolidated financial statements and related notes include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Cash and Cash Equivalents Cash and cash equivalents include demand deposits held with banks and highly liquid investments with remaining maturities of ninety days or less at acquisition date. For purposes of reporting cash flows, the Company considers all cash accounts that are not subject to withdrawal restrictions or penalties to be cash and cash equivalents. Restricted Cash As part of the revolving credit agreement with Franklin Synergy Bank, the Company is required to maintain a cash balance of $6.2 million in its account. Any withdrawals from the account require an equal reduction to the funds available under the revolving credit agreement. Dollars in thousands June 30, 2019 December 31, 2018 Cash and cash equivalents $ 5,019 $ 3,946 Restricted cash 6,243 0 Total cash, cash equivalents and restricted cash $ 11,262 $ 3,946 Accounts Receivable Accounts receivable represents amounts due from customers less an allowance for doubtful accounts. A provision is recorded for impairment when there is objective evidence (such as significant financial difficulties of the debtor) that the Company will not be able to collect all amounts due according to the original terms of the receivable. A provision is recorded as the difference between the carrying value of the receivable and the present value of future cash flows expected from the debtor, with an offsetting amount recorded as an allowance, reducing the carrying value of the receivable. The provision is included in general and administrative expense in the statements of operations. As of the period ended June 30, 2019 and December 31, 2018, the Company considers accounts receivable to be fully collectible and, accordingly, no allowance for doubtful accounts has been recorded. Inventories Inventories are recorded at the lower of cost and net realizable value. The net realizable value represents the estimated selling price for inventories in the ordinary course of business, less all estimated costs of completion and costs necessary to make the sale. Cost is determined on a standard cost basis and includes the purchase price and other costs, such as transportation costs. Inventory average cost is determined on a first‑in, first‑out (“FIFO”) basis and trade discounts are deducted from the purchase price. Property and Equipment Property and equipment are carried at cost and includes expenditures for new additions and other additions, which substantially increase the useful lives of existing assets. Depreciation is computed at various rates by use of the straight-line method. Depreciable lives are generally as follows: Furniture and Fixtures 5 to 7 years Equipment 7 years Expenditures for normal repairs and maintenance are charged to operations as incurred. The cost of property or equipment retired or otherwise disposed of and the related accumulated depreciation are removed from the accounts in the year of disposal with the resulting gain or loss reflected in earnings. The Company assesses potential impairments of its property and equipment whenever events or changes in circumstances indicate that the asset’s carrying value may not be recoverable. An impairment charge would be recognized when the carrying amount of property and equipment is not recoverable and exceeds its fair value. The carrying amount of property and equipment is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the property and equipment. Income Taxes No provision has been made for federal and state income taxes prior to the date of the acquisitions since the proportionate share of TruPet’s income or loss was included in the personal tax returns of its members because TruPet was a limited liability company. Subsequent to the acquisitions, the Company, as a corporation, is required to provide for income taxes. The Company utilizes Accounting Standards Codification (“ASC 740”), “Accounting for Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The effective tax rate for each of the three months and the six months ended June 30, 2019 is 0%. The effective tax rate differs from the U.S. Federal statutory rate of 21% primarily because our previously reported losses have been offset by a valuation allowance due to uncertainty as to the realization of those losses. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. Accounting guidance addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements, under which a company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Accordingly, the Company would report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company elects to recognize any interest and penalties, if any, related to unrecognized tax benefits in tax expense. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%. As of the completion of these unaudited condensed financial statements, we have made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the end of the fourth quarter of fiscal year 2019. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined. Based on the new tax law that lowers corporate tax rates, the Company revalued its deferred tax assets. Future tax benefits are expected to be lower, with the corresponding one-time charge being recorded as a component of income tax expense. Revenue The Company recognizes revenue to depict the transfer of promised goods to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. In order to recognize revenue, the Company applies the following five (5) steps: • Identify a customer along with a corresponding contract; • Identify the performance obligation(s) in the contract to transfer goods to a customer; • Determine the transaction price the Company expects to be entitled to in exchange for transferring promised goods to a customer; • Allocate the transaction price to the performance obligation(s) in the contract; and • Recognize revenue when or as the Company satisfies the performance obligation(s). A description of the Company’s revenue generating activities is listed below: Direct-to-consumer (“DTC”) – Our products are offered through our online stores where customers place orders online or through our customer service number. Revenue is recorded, net of discounts, at the time the order is received by the customer. Revenue is deferred for orders that have been placed, and paid for, but have not yet been received by the customer during the reporting period. As our customers have a 60-day guarantee on the product purchased, the Company records a liability for two months of estimated returns based on historical experience. Loyalty Program - The Company offers a loyalty program to all of its direct-to-consumer customers. There are two tiers to the program. Tier 1: the customer will earn 6 points for every $1 spent Tier 2: the customer can earn points at a much faster rate and will also have opportunities to earn bonus points for different events, such as a birthday. This tier is known as the TruDog Love Club, and the customer accumulates twelve points for every $1 spent. The redemption requirements are the same under both levels and, for every five hundred points earned, customers receive a $5 gift code which can be redeemed for goods purchased in the future. The Company records a reduction to sales revenue and deferred revenue when the customer accumulates loyalty points. Wholesale Sales – This channel includes the sale of our products to wholesale customers for resale. The Company’s policy is to recognize revenue at the time the product is shipped to the wholesale customer, net of estimated returns and allowances. Consignment – The Company partners with an Amazon channel partner to market and sell TruDog products. Revenue is recognized, net of returns, when our partner ships the product to the end customer. The commission, selling, marketing and storage fees are recognized at the time the services are rendered by the channel partner and are recorded by the Company, as follows: • Commission, selling and marketing fees as sales and marketing expenses • Storage fees as cost of goods sold. Cost of Goods Sold Cost of goods sold consists primarily of the cost of product obtained from the contract manufacturing plants, packaging materials and CBD oils directly sourced by the Company, and freight for shipping product from our contract manufacturing plants to our warehouse. We review inventory on hand periodically to identify damages, slow moving inventory, and/or aged inventory. Based on the analysis, we record inventories on the lower of cost and net realizable value, with any reduction in value expensed as cost of goods sold. Advertising The Company charges advertising costs to expense as incurred and such charges are included in sales and marketing expenses. Advertising costs, consisting primarily of Facebook advertising, search costs and email advertising, were $2.3 million and $1.2 million for the three-month periods ended June 30, 2019 and 2018, respectively. For the six-month periods ended June 30, 2019 and 2018, advertising costs were $3.5 million and $2.2 million, respectively. Research and Development Research is a planned search or a critical investigation aimed at discovering new knowledge and information with the hope that such knowledge will be useful in developing a new product or service (referred to as a “product”) or a new process or technique (referred to as a “process”) or bringing about a significant improvement to an existing product or process. Development is the translation of research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or use. It includes the conceptual formulation, design and testing of product alternatives, construction of prototypes and operation of pilot plants. No research and development costs were incurred during the three or six month period ended June 30, 2019 and June 30, 2018. Shipping and Handling / Freight Out The Company recognizes shipping and handling costs as a fulfillment cost, included in other operating expenses as they are incurred prior to the customer obtaining control of the products. Shipping and handling costs primarily consist of costs associated with moving finished products to customers through third-party carriers. Shipping and handling costs were $0.6 million and $0.7 million for the three-month periods ended June 30, 2019 and 2018, respectively. For the six-month periods ended June 30, 2019 and 2018, shipping and handling costs were $1.2 million and $1.3 million, respectively. Additionally, for direct to consumer customers, the Company may recover such costs by passing them onto the customer. In these instances, the Company includes the freight charges billed to customers in total revenue. The amount included in revenue related to such recoveries was $0.2 million and $0.3 million for the three-month periods ended June 30, 2019 and 2018, respectively. For the six-month periods ended June 30, 2019 and 2018, the amounts included in revenue related to such recoveries was $0.4 million and $0.6 million, respectively. Fair Value of Financial Instruments A financial instrument is defined as cash, evidence of an ownership interest in an entity, or a contract that both: • Imposes on one entity a contractual obligation either: o To deliver cash or another financial instrument to a second entity; or o To exchange other financial instruments on potentially unfavorable terms with the second entity. • Conveys to that second entity a contractual right either: o To receive cash or another financial instrument from the first entity; or o To exchange other financial instruments on potentially favorable terms with the first entity. The Company’s financial instruments recognized in the balance sheet consist of cash and cash equivalents, restricted cash accounts, accounts receivable, deposits, accounts payable, line of credit, due to related party, accrued and other liabilities, warrant derivative liability and long-term debt. Warrant derivative liability is measured at fair value each reporting period. The fair values of the remaining financial instruments approximate their carrying values. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has applied the framework for measuring fair value which requires a fair value hierarchy to be applied to all fair value measurements. The fair value of the warrant derivative liability is considered a Level 3 financial instrument. All financial instruments recognized at fair value in the balance sheet are classified into one of three levels in the fair value hierarchy as follows: • Level 1 – valuation based on quoted prices (unadjusted) observed in active markets for identical assets or liabilities. Cash is measured based on Level 1 inputs. • Level 2 – valuation techniques based on inputs that are quoted prices of similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; inputs other than quoted prices used in a valuation model that are observable for that instrument; and inputs that are derived from or corroborated by observable market data by correlation or other means. • Level 3 – valuation techniques with significant unobservable market inputs. Derivative Financial Instruments Financial Accounting Standards Board (“FASB”) ASC Topic 815, “Derivatives and Hedging”, generally provides three criteria that, if met, require companies to bifurcate conversion options from its host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described. The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option and warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. The pricing model we use for determining fair value of our derivatives is the Lattice Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income (see Note 8). Basic and Diluted Loss Per Share Basic and diluted loss per share has been determined by dividing the net loss available to stockholders for the applicable period by the basic and diluted weighted average number of shares outstanding, respectively. Common Stock equivalents and incentive shares are excluded from the computation of diluted loss per share when their effect is anti-dilutive. Stock-Based Compensation The Company recognizes a compensation expense for all equity–based payments in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”. The Company accounts for share–based payments granted to non–employees in accordance with FASB ASC Topic 505–50, “Equity Based Payments to Non–Employees.” The Company follows the fair value method of accounting for stock awards granted to employees, directors, officers and consultants. Stock-based awards to employees are measured at the fair value of the related stock-based awards. Stock-based payments to others are valued based on the related services rendered or goods received or if this cannot be reliably measured, on the fair value of the instruments issued. Issuances of such awards are valued using the fair value of the awards at the time of grant. The Company recognizes stock-based payment expenses over the vesting period based on the number of awards expected to vest over that period on a straight-line basis. Forfeitures are accounted for as they occur. The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is calculated based on the analysis of other public companies within the pet wellness sector. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. The Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. Use of Estimates The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of expenses during the reporting periods. The Company evaluates its estimates on an ongoing basis. The Company bases its estimates on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. To date, the Company has viewed its operations and manages its business as one segment operating in the United States of America. The Company’s chief operating decision-maker does not review operating results on a disaggregated basis; rather, the chief operating decision-maker reviews operating results on an aggregate basis. License Intangibles License intangibles are recorded at fair value at the date of acquisition and are amortized ratably over the life of the license agreement. Commitments and Contingencies We may be involved in legal proceedings, claims, and regulatory, tax, or government inquiries and investigations that arise in the ordinary course of business resulting in loss contingencies. We accrue for loss contingencies when losses become probable and are reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. We do not accrue for contingent losses that are considered to be reasonably possible, but not probable; however, we disclose the range of such reasonably possible losses. Loss contingencies considered remote are generally not disclosed. We have entered into debt, royalty and lease agreements for which we are committed to pay certain amounts over a period of time. See Notes 5, 6 and 7. Reclassification of Prior Period Presentation Certain reclassifications have been made to conform the prior period data to the current presentations. These reclassifications had no effect on the reported results. Recently Issued Accounting Pronouncements The Company has reviewed the Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof issued by the FASB that have effective dates during the reporting period and in future periods. New Standards and Interpretations: Adoption of FASB ASC Topic 842 “Leases” The amendments in this update establish a comprehensive new lease accounting model. The new standard: (a) clarifies the definition of a lease; (b) requires a dual approach to lease classification similar to current lease classifications; and (c) causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease term of more than twelve months. The new standard is effective for fiscal years and interim periods beginning after December 15, 2018, with early adoption permitted. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, including a number of optional practical expedients that entities may elect to apply. In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements”, an update which provides another transition method, the prospective transition method, which allows entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted the new standard on January 1, 2019 using the prospective transition method. The Company has identified all leases to determine the impact of ASC 842 on its consolidated financial statements. The Company has elected to apply the practical expedient to certain classes of leases, whereby the separation of components of leases into lease and non-lease components is not required, and all of the practical expedients to all leases, (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any existing leases. The adoption of the new standard resulted in the recording on the consolidated balance sheet as of January 1, 2019 a right-of-use asset of $0.5 million, a lease liability of $0.5 million and a corresponding cumulative adjustment to accumulated deficit of an immaterial amount in accordance with ASC 842. Adoption of FASB ASU No. 2018-07 “Improvements to Nonemployee Share-Based Payment Accounting” On January 1, 2019, the Company adopted ASU No. 2018-07 “Improvements to Nonemployee Share-Based Payment Accounting”. The amendments in this update expanded the scope of ASC 718 to include share-based payment transactions for acquiring goods and services from non-employees. The requirements of ASC 718 are applied to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. The amendments specify that ASC 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that ASC 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606, “Revenue from Contracts with Customers.” The Company is treating the inclusion of share-based payments to non-employees as a change in accounting principle prospectively beginning in the period ending June 30, 2019. As the Company did not make any share-based payments to non-employees in prior periods, there was no impact on the results of operations in prior periods. Adoption of ASU 2018-13 “Fair Value Measurement” In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) Changes to the Disclosure Requirement for Fair Value Measurement” which amends ASC 820 to expand the disclosures required for items subject to Level 3, fair value remeasurement, including the underlying assumptions. ASU 2018-13 is effective for public companies for fiscal years beginning after December 15, 2019. The Company has early adopted the disclosures as permitted under the ASU. New and Revised Standards not Yet Adopted: In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326)”. ASU 2016-13 changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019. The Company does not anticipate any material impact from the implementation of this ASU. The Company has carefully considered other new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the Company’s reported balance sheet or operations in 2019. |
Going Concern (FY)
Going Concern (FY) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Going Concern [Abstract] | ||
Going Concern | Note 2 – Going Concern Going Concern Evaluation In connection with preparing consolidated financial statements for the transition period ended December 31, 2018, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to continue as a going concern within one year from the date that the financial statements are issued. The Company considered the following: ● Net loss of $4,412,858 for the transition period ended December 31, 2018. ● At December 31, 2018, the Company had an accumulated deficit of $10,472,149. ● At December 31, 2018, the Company had working capital deficit of $7,330,882. Ordinarily, conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern relate to the entity’s ability to meet its obligations as they become due. The Company evaluated its ability to meet its obligations as they become due within one year from the date that the financial statements are issued by considering the following: On April 25, 2019, the Company entered into Subscription Agreements with accredited investors for the sale by the Company in a private placement (the “Private Placement”) of (i) 4,946,640 shares of the Company’s common stock at a purchase price of $3.00 per share and (ii) warrants to purchase up to 4,946,640 shares of Common Stock, exercisable at any time after issuance at an exercise price equal to $4.25 per share, subject to adjustments as provided under the terms of the warrants. The warrants are exercisable for 24 months from the initial issue date. On May 6, 2019, the Company closed the Private Placement. At the closing of the Private Placement, the Company issued 5,744,991 shares of its Common Stock at a purchase price of $3.00 per share and warrants to purchase up to 5,744,991 shares of its Common Stock at an exercise price of $4.25 per share (the “Warrants”). The Warrants are exercisable for 24 months from the Closing. The aggregate gross proceeds for the Private Placement were approximately $17.2 million. On May 6, 2019, the Company entered into a Loan Agreement (the “Loan Agreement”) by and between the Company and Franklin Synergy Bank, a Tennessee banking corporation (the “Lender”), pursuant to which, at the Company’s option and subject to the occurrence of the certain funding conditions, the Lender is obligated to provide advances to the Company in an aggregate amount less than or equal to $6,200,000 (the “Loan”). On May 6, 2019, the Company completed the acquisition of (i) Bona Vida, Inc. in accordance with the terms of the Agreement and Plan of Merger, dated as of February 28, 2019, by and among the Company, BCC Merger Sub, Inc. (“Merger Sub”), and Bona Vida, Inc., as amended by Amendment No. 1 thereto made and entered into as of May 3, 2019, pursuant to which Merger Sub merged with and into Bona Vida, with Bona Vida surviving as a wholly owned subsidiary of the Company and (ii) TruPet LLC in accordance with the terms of the Securities Exchange Agreement, dated as of February 2, 2019, by and between the Company and TruPet LLC, as amended by Amendment No. 1 thereto made and entered into as of May 6, 2019, pursuant to which the Company agreed to acquire 93.3% of the outstanding TruPet membership interests with TruPet remaining as a wholly-owned subsidiary of the Company (the “Acquisitions”). Following the completion of the Acquisitions, the business conducted by the Company became primarily the businesses conducted by TruPet and Bona Vida, which is as an online seller of pet foods, pet nutritional products and related pet supplies and as an emerging hemp-based CBD platform focused on developing a portfolio of brand and product verticals within the animal health and wellness space, respectively. Under the terms of the Bona Vida Merger Agreement, the Company issued 18,003,273 shares of its common stock, par value $0.001 per share (“Common Stock”), to Bona Vida’s stockholders for all shares of Bona Vida’s common stock outstanding immediately prior to the Bona Vida Acquisition. The Company also offered to purchase each warrant held by Bona Vida warrant holders for CAD $0.75 per share, with any outstanding warrants at closing being cancelled. Under the terms of the TruPet Merger Agreement, the Company issued 15,027,533 shares of its Common Stock to TruPet’s members for 93.3% of the issued and outstanding membership interests of TruPet outstanding immediately prior to the TruPet Acquisition. Following the completion of the Acquisitions, the business conducted by the Company became primarily the businesses conducted by TruPet and Bona Vida, which is as an online seller of pet foods, pet nutritional products and related pet supplies and as an emerging hemp-based CBD platform focused on developing a portfolio of brand and product verticals within the animal health and wellness space, respectively. Management concluded that above factors alleviates doubts about the Company’s ability to generate enough cash from operations and other available sources to satisfy its obligations for the next twelve months from the issuance date. The Company will take the following actions if it starts to trend unfavorably to its internal profitability and cash flow projections, in order to mitigate conditions or events that would raise substantial doubt about its ability to continue as a going concern: ● Raise additional capital through line of credit and/or loans financing for future mergers and acquisition. ● Implement additional restructuring and cost reductions. ● Raise additional capital through a private placement. At July 1, 2019 and December 31, 2018, the Company had $10,739,705 and $355,104, respectively in cash and cash equivalents. | Note 17 - Going Concern The Company has incurred significant losses over the last three years and has a significant accumulated deficit. These operating losses create an uncertainty about the Company’s ability to continue as a going concern for a period of twelve months from the date these unaudited condensed consolidated financial statements are issued. Management has evaluated whether the unaudited condensed consolidated financial statements should be presented as a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The unaudited condensed consolidated financial statements have been prepared on a going concern basis. In making this assessment, management conducted a comprehensive review of the Company’s affairs including, but not limited to: • The Company’s financial position at June 30, 2019 which includes $0.6 million of working capital; • Significant events and transactions the Company has entered into, including and through the date the unaudited condensed consolidated financial statements were available to be issued; • The loss from operations includes $4.2 million related to non-cash stock compensation; • Sales and profitability forecasts for the Company for the next financial year; • The continued support of the Company’s members and lenders; and • The repayment of the line of credit with proceeds from a new $6.2 million loan. To address the future additional funding requirements members have undertaken the following initiatives: o To continue to monitor the Company’s ongoing working capital requirements and minimum expenditure commitments; and o Continue their focus on maintaining an appropriate level of corporate overhead in line with the Company’s available cash resources. Management is confident that it will be able to meet its minimum expenditure commitments and support its planned level of overhead expenditures. There can be no assurance however that the Company will be able to raise additional capital when needed, or at terms deemed acceptable, if at all. The accompanying unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Discontinued Operations (FY)
Discontinued Operations (FY) | 4 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | Note 3 – Discontinued Operations On August 21, 2018, the Company at the request of other parties to the March 2018 agreements cancelled all of the business agreements, related to Yield. The Company’s guaranty of the $5.5 million Note payable was cancelled and the warrants were modified. As a result, the Company entered into a Restructuring Agreement and conveyed to Madison its ownership interest in Yield, including the right to continue the business and affairs of Yield stemming from the March 2018 bitcoin transaction in which the Company sought to enter into bitcoin and other cryptocurrency lending arrangements. Pursuant to the terms of the Restructuring Agreement, the parties agreed to modify the terms of the Former Agreements by (a) assigning to Madison all of the capital stock of Yield to provide for the continuation of the business of Yield as a subsidiary of Madison, (b) terminating the Guaranty Agreement by and between the Company and Prism, and (c) canceling 576,923 of the 961,538 warrants issued to Prism in connection with the NPA. On the Effective Date, the Company transferred its capital stock of Yield to Madison (the “Transfer”) and terminated the Guaranty Agreement, thus, the Company’s liability for the Senior Note, as defined below, issued pursuant to the NPA, was extinguished upon the Transfer. In connection with the Restructuring Agreement, the Company entered into a Securities Purchase Agreement with Madison pursuant to which the Company transferred to Madison all of the capital stock of Yield. Further, the parties released each other from claims with respect to the original purchase of the BTC and the Former Agreements. No payments under the Bitcoin Agreement will be required to be made to the Company. There are no continuing cash inflows or outflows to or from the discontinued operations. The following information presents the major classes of line items constituting the after-tax loss from discontinued operations in the consolidated statements of operations for the year ended August 31, 2018: Share income $ (48,593 ) Sales, general and administrative 368,032 Interest expense – accrued interest 117,534 Interest expense – excess value of warrants 2,988,090 Interest expense – amortization of discount on note payable 5,500,000 Mark to market BTC 509,730 Mark to market derivative liability (4,051,087 ) Reserve for uncollectible note receivable 4,490,270 Gain on disposal of discontinued operations (8,038,065 ) Loss from discontinued operations, net of tax $ 1,835,911 The following table presents the calculation of the gain on the sale of discontinued operations: Assets of discontinued operations disposed in sale $ (9,415 ) Liabilities of discontinued operations disposed in sale 9,648,488 Fair value of warrants to purchase 384,615 shares of common stock to buyer (1,601,008 ) Gain on disposal of discontinued operations $ 8,038,065 |
Investment in TruPet (FY)
Investment in TruPet (FY) | 4 Months Ended |
Dec. 31, 2018 | |
Investment in TruPet [Abstract] | |
Investment in TruPet | Note 4 – Investment in TruPet On December 17, 2018 the Company acquired a minority interest in TruPet. The Company invested $2,200,000 into TruPet and acquired a Series A Membership Interest equal to approximately 6.7% of the Membership Interests. The Company is entitled to appoint one of the five managers and certain preferential informational rights. The Company entered into a definitive agreement to acquire the remainder of TruPet in February 2019. The definitive agreement is based on various conditions being met including completion of a financing. On May 6, 2019, the Company acquired the remaining 93.3% of the outstanding TruPet membership interests for 15,027,533 shares of its common stock. See note 13. |
Dividends Payable (FY)
Dividends Payable (FY) | 4 Months Ended |
Dec. 31, 2018 | |
Dividends Payable [Abstract] | |
Dividends Payable | Note 5 – Dividends Payable On May 30, 2018, the Company issued 803,969.73 shares of its Series B Preferred Stock with a stated value of $0.99 per share for a total stated value of $795,930 (the “Series B Preferred Stock”). The Series B Preferred Stock accrued dividends at the rate of 10% per annum on the stated value. During the year ended August 31, 2018, the Company accrued dividends payable in the amount of $20,280 on the Series B Preferred Stock. At October 22, 2018, the Company had accrued dividends payable on the Series B Preferred stock in the amount of $31,619. On October 22, 2018, the Company entered into an exchange agreement whereby, in part, the Series B Preferred Stock and accrued dividends were exchanged for Series E Preferred Stock (see note 10). The Series E Preferred Stock also accrued dividends at the rate of 10% per annum on the stated value. During the Transition Period ended December 31, 2018, the Company accrued dividends in the amount of $53,501 on the Series E Preferred Stock. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities (FY) | 4 Months Ended |
Dec. 31, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Accounts Payable and Accrued Liabilities | Note 6 – Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consist of the following: December 31, 2018 August 31, 2018 August 31, 2017 Trade accounts payable $ 120,774 $ 39,052 $ 106,726 Payroll and related 17,220 15,931 9,179 Accrued interest - 51,462 16,661 $ 137,994 $ 106,445 $ 132,566 |
Related Party Transactions (FY)
Related Party Transactions (FY) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | Note 7 – Related Party Transactions On April 29, 2016, the Company’s Board ratified an oral agreement with Mr. Lelong, effective February 1, 2016, pursuant to which he will receive an annual salary of $96,000 for serving as an executive officer of the Company. During the year ended August 31, 2017, the Company received loans in the aggregate amount of $231,000 from Mr. Lelong. The Company recorded imputed interest in the amount of $2,011 during the year ended August 31, 2017 related to the advances from Mr. Lelong. During the year ended August 31, 2018, the Company paid salary to Mr. Lelong in the amount of $76,000, and accrued an additional $20,000 in salary payable; at August 31, 2018, the amount of accrued salary payable to Mr. Lelong was $140,000. During the Transition Period ended December 31, 2018, the Company paid salary to Mr. Lelong in the amount of $32,000 and paid accrued salary in the amount of $16,000; at December 31, 2018, the amount of accrued salary payable to Mr. Lelong was $124,000. During the year ended August 31, 2018, the Company received loans in the aggregate amount of $35,500 from Mr. Lelong, and accrued interest in the amount $2,291; the Company also repaid to Mr. Lelong principal and interest in the amounts of $266,500 and $4,302, respectively. At August 31, 2018, the balance due to Mr. Lelong under these loans is $0. | Note 10 – Other Liabilities Other liabilities include outstanding amounts on bank issued revolving credit cards. Interest rates on the issued credit cards was 22% for purchases and 24.24% for cash advances for the three and six months ended June 30, 2019 and 2018. Under the terms of a Business Cash Advance Agreement, during 2018, the Company sold $2.0 million of future receivables for proceeds of $1.9 million. Future receivables are defined as all future payments made by cash, check, ACH, direct or pre-authorized debit, wire transfer, credit card, debit card, charge card or other form of payment related to the business of the Company. The creditor had the right to decline to purchase any future receivables and/or adjust the amount of the advance. In the event of a sale, disposition, assignment, transfer or otherwise of all or substantially all of the business assets, the creditor’s consent was required or repayment in full of the amount of future receivables remaining. The future receivables were remitted to the creditor based on a percentage of daily cash receipts. All remaining advances were repaid as of June 30, 2019. Dollars in thousands Advance #1 Advance #2 Advance #3 Total Opening balance – January 1, 2018 $ - $ - $ - $ - Advance of outstanding amounts 399 965 1,050 2,414 2018 Payments (429 ) (256 ) (102 ) (787 ) Rollover to Advance #3 (824 ) 824 Advance fixed fee 30 115 126 271 Closing Balance – December 31, 2018 - - 1,899 1,899 Payments (1,899 ) (1,899 ) Balance June 30, 2019 $ - $ - $ - $ - |
Derivative Liability (FY)
Derivative Liability (FY) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Derivative Liability [Abstract] | ||
Derivative Liability | Note 8 – Derivative Liability The Company entered into convertible note agreements containing beneficial conversion features. One of the features is a ratchet reset provision which allows the note holders to reduce the conversion price should the Company issue equity with an effective price per share that is lower than the stated conversion price in the note agreement (see note 9). The Company accounts for the fair value of the conversion feature in accordance with ASC 815, Accounting for Derivatives and Hedging and EITF 07-05, the embedded derivatives should be bundled and valued as a single, compound embedded derivative, bifurcate treated as a derivative liability. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for any unrealized change in fair value as a component in its results of operations. The Company recognized that the conversion feature embedded within its convertible debts is a financial derivative. GAAP required that the Company’s embedded conversion option be accounted for at fair value. During the period ended December 31, 2018, the Company sold 1,400,000 shares of common stock and 700,000 two-year warrants to purchase one share of common stock at a price of $3.90 per share for total proceeds of $2,607,099, net of issuance costs. The warrant holders have an option to settle in cash in the event of a change of control of the Company. The Company considers these warrants a derivative liability, and calculated the fair value of this liability utilizing a Lattice Model that values the warrant based upon a probability weighted discounted cash flow model. The following schedule shows the change in fair value of the derivative liabilities for the period ended December 31, 2018, August 31, 2018 and August 31, 2017: Derivative Liability Liabilities Measured at Fair Value Balance as of August 31, 2016 $ 254,952 Issuances 685,139 Redemptions / conversions (1,015,757 ) Revaluation loss 388,544 Balance as of August 31, 2017 $ 312,878 Issuances 1,565,487 Redemptions / conversions (1,207,308 ) Reclass from sale of discontinued operations 1,601,007 Revaluation loss 45,348 Balance as of August 31, 2018 $ 2,317,412 Issuances 6,244,548 Redemptions / conversions - Revaluation loss 1,135,345 Balance as of December 31, 2018 $ 7,379,893 Derivative liabilities incurred during the period ended August 31, 2018 were valued based upon the following assumptions and key inputs: August 31, August Assumption 2018 2017 Expected dividends: 0 % 0 % Expected volatility: 121.1-246.8 % 37.8-276.9 % Expected term (years): 0.21-1.00 years 0.04-0.50 years Risk free interest rate: 0.97-2.08. % 0.26-0.98 % Stock price $ 0.35-1.11 $ 0.51-1.97 Derivative liabilities incurred during the period ended December 31, 2018 were valued based upon the following assumptions and key inputs: - The quoted stock price ranged from of $6.76 to $11.18 and would fluctuate with the Company's historic volatility. - The projected volatility curve from an annualized analysis for each valuation period was based on the historical volatility of the Company and the term remaining for each Warrant – the volatility ranged from 198.1-207.8%. - The full reset events projected to occur based on future financing events on March 31, 2019 and December 31, 2019 resulting in a potential reset exercise price. - Adjustments to warrant exercise prices have not occurred to date due to reset events. - A fundamental transaction was projected to potentially occur on 4/30/19 or 12/31/19. The likelihood of such an event was estimated at 85% for the 4/30/19 event as of December/January 2019 increasing to 95% by 12/31/18. The 12/31/19 event was estimated at 50% for all dates. - The option to force early exercise was estimated at 0% since it was unlikely that the Company would meet the registration and trading volume requirements necessary to trigger the option. | Note 8 – Warrant Derivative Liability On December 12, 2018, the Company closed a private placement offering (the “December Offering”) of 1,425,641 units (the “Units”), each unit consisting of (i) one share of the Company’s Common Stock and (ii) a warrant to purchase one half of a share of Common Stock. The Units were offered at a fixed price of $1.95 per Unit for gross proceeds of $2.8 million. Costs associated with the December Offering were $0.1 million, and net proceeds were $2.7 million. $2.6 million of the net proceeds were received by the Company during the period ended December 31, 2018 for the sale of 1,400,000 common shares, and $0.1 million of the net proceeds were received on January 8, 2019 for the sale of 25,641 common shares. The warrants are exercisable over a two-year period at the initial exercise price of $3.90 per share. The warrant holders have an option to settle in cash in the event of a change of control of the Company. The Company considers these warrants a derivative liability and calculated the fair value of this liability utilizing a Lattice Model that values the warrant based upon a probability weighted discounted cash flow model. At May 6, 2019, the derivative liability was recorded at fair value as part of the purchase price of Better Choice Company by TruPet. The following schedule shows the change in fair value of the derivative liabilities for the period from May 6, 2019 through June 30, 2019. Dollars in thousands Warrant Liability Assumption of warrants pursuant to May 6, 2019 acquisition of Better Choice Company $ 2,110 Change in fair value of derivative liability 193 Balance as of June 30, 2019 $ 2,304 May 6, 2019 June 30, 2019 Warrant Liability Stock Price $ 6.00 $ 6.35 Exercise Price $ 3.90 $ 3.90 Remaining term (in years) 1.60 – 1.68 1.45 – 1.53 Volatility 64 % 65 % Risk-free interest rate 2.39 % 1.98 % The warrants feature provisions to reset the exercise price in the event of certain fundamental transactions. Such a transaction is considered a likelihood of 50% for December 31, 2019. Additionally, the warrants feature provisions to force an early exercise in the event of the Company’s stock trading above a certain threshold for a specified period. The Company considers the likelihood of meeting these conditions to be zero. If all shares were redeemed at June 30, 2019, the Company would be required to pay $2.3 million if all warrants were settled in cash as a result of a fundamental transaction or issue 712,823 shares if all warrants were settled in shares. |
Convertible Notes Payable (FY)
Convertible Notes Payable (FY) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Convertible Notes Payable [Abstract] | ||
Convertible Notes Payable | Note 9 – Convertible Notes Payable December 31, 2018 August 31, 2018 August 31, 2017 May 2016 Convertible Notes On May 11, 2016 the Company entered into Securities Purchase Agreements with certain purchasers (“the May 2016 Convertible Noteholders”). The Company issued 3.5% original issue discount (“OID”) senior secured convertible promissory notes having an aggregate face amount of $440,000 (the “May 2016 Convertible Notes”). These notes bear interest at a rate of 10% per annum and mature in six months. The Company received cash proceeds of $424,600 net of the 3.5% original issue discount of $15,400. At the Holders option the principal and accrued interest under the Notes are convertible into common stock at a rate of $13 per share and have a full reset feature. The Notes are secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 125% during the first 90 days and 130% for the period from the 91st day through maturity. During November 2016, the Company entered into forbearance agreements with the May 2016 Convertible Noteholders extending its time to pay the Notes until December 16, 2016. In December 2016, the Company entered into agreements with the May 2016 Convertible Noteholders to substantially restructure the terms of the May 2016 Convertible Notes; see January and February 2017 Convertible Notes below. During the years ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $0 and $172,735, respectively, in connection with the amortization of the discount on these notes. $ - $ - $ - January and February 2017 Convertible Notes In December 2016, the Company entered into restructuring agreements with the May 2016 Convertible Noteholders in connection with the May 2016 Convertible Notes (see above) under the following terms: new notes (the “January and February 2017 Convertible Notes”) would be issued for the amounts due under the May 2016 Convertible Notes; penalties, fees, and accrued interest in the aggregate amount of $212,702 were added to the principal amount due under the January and February 2017 Convertible Notes; 1,346 shares of common stock were issued as a commitment fee; the January and February 2017 Convertible Notes were issued at a discount of 3.5%, bear interest at the rate of 10% per annum, are convertible at a rate of $13.00 per share, and contain a variable conversion rate whereby, should the Company subsequently sell common stock at a price less than the conversion price, the conversion price of the January and February 2017 Convertible Notes will be reduced to match the lower conversion price. In addition, the proceeds from one of the January and February 2017 Convertible Notes were used to fully redeem one of the May 2016 Convertible Notes. The aggregate original amount of principal due under the January and February 2017 Convertible Notes was $614,258. Two of the January and February 2017 Convertible Notes in the aggregate amount of $494,340 were due on March 31, 2017, and one of the January and February 2017 Convertible Notes in the amount of $119,918 was due on August 17, 2017. In April 2017, the Company received forbearance letters from the Note Purchasers of the January and February 2017 Convertible Notes that were due on March 31, 2017 to extend the due date to April 17, 2017 in exchange for principal payments in the aggregate amount of $75,000; on April 18, 2017, the Company received forbearance letters to further extend the due date to May 1, 2017 in exchange for principal payments in the aggregate amount of $45,000; and on May 1 and 2, 2017, the company entered into forbearance agreements with the holders of the January and February 2017 Convertible Notes to extend the due date to June 2, 2017. On June 5 and June 13, 2017, the Company entered into forbearance agreements with the holders of two of the three January and February 2017 Convertible Notes to extend the due dates to December 27, 2017 in exchange for increase in principal in the aggregate amount of $78,907. On August 17, 2017, the Company entered into a forbearance agreement with the holders of the third January and February Convertible Note to extend the due date to December 27, 2017 in exchange for $10. At August 31, 2017, three of the January and February 2017 Convertible Notes were outstanding in the aggregate amount of $553,976; these notes are due December 27, 2017. During the year ended December 31, 2017, the holders of the January and February 2017 Convertible Notes converted an aggregate of $33,865 in principal and $21,135 in accrued interest into 17,628 shares of common stock; the Company recorded an aggregate loss in the amount of $122,878 on these conversions. On January 17, 2018, the Note Purchasers of one of the January and February 2017 Convertible Notes in the principal amount of $241,802 purchased the remaining two January and February 2017 Convertible Notes in the aggregate principal amount of $278,309. The Company then entered into an agreement with the Note Purchasers to exchange the three January and February 2017 Convertible Notes (the “January 2018 Note Exchange”) in the aggregate principal amount of $520,111 for a new Convertible Note in the principal amount of $542,343 (the “January 2018 Convertible Note”). The Company revalued the derivative liability associated with the conversion feature associated with January and February 2017 notes and compared it with the derivative liability on the January 2018 convertible note, and recorded an expense in the amount of $396,611 related to the change in value. The Company recorded a loss in the amount of $6,409 on the January 2018 Note Exchange related to modification of notes. During the year ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $153,234 and $154,848, respectively in connection with the amortization of the discount on these notes. $ - $ - $ 553,977 December 31, 2018 August 31, 2018 August 31, 2017 November 2017 Convertible Note On November 17, 2017, the Company entered into a Securities Purchase Agreement with the Note Purchaser. The Company issued a 3.5% original issue discount (“OID”) senior secured convertible promissory note having an aggregate face amount of $250,000 (the “November 2017 Convertible Note”). This note bears interest at a rate of 10% per annum and matures in six months. The Company received cash proceeds of $241,250 net of the 3.5% original issue discount of $8,750. At the Note Purchaser’s option, the principal and accrued interest under the note are convertible into common stock at a rate of $13.00 per share and have a full reset feature. The note is secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. In addition, the Company granted the investor the Option to lend the Company $48,250 on or before January 15, 2018. If the Option is exercised, the Company would issue the investor a $50,000 3.5% original issue discount senior secured convertible promissory note. During the three months ended May 31, 2018, the Company accrued interest in the amount of $12,283 on this note. On May 31, 2018, the Company converted the outstanding balance of principal and interest in the amounts of $250,000 and $13,125, respectively, into a total of 265,782.83 shares of Series B Preferred Stock; the Company recorded a gain on settlement of notes payable in the amount of $130,252 in connection with this transaction. During the years ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $135,307 and $0 respectively, in connection with the amortization of the discount on these notes. $ - $ - $ - January 2018 Convertible Note On January 17, 2018, the Company entered into an agreement with the Note Purchaser to exchange the three January and February 2017 Convertible Notes for a new Convertible Note (the “January 2018 Convertible Note”). The Company exchanged outstanding principal in the amount of $520,111 and accrued interest of $15,823 for the January 2018 Convertible Note with a face amount of $542,343, and an original issue discount of $18,982; the Company revalued the derivative liability associated with the conversion feature associated with January and February 2017 notes and compared it with the derivative liability on the January 2018 convertible notes, and recorded an expense in the amount of $396,611 related to the change in value. A non-cash loss on restructuring of debt in the amount of $6,409 was recognized on this transaction during the year ended August 31, 2018. The January 2018 Convertible Note is a senior secured promissory note, bears interest at a rate of 10% per annum, and matures in 12 months. At the Note Purchaser’s option, the principal and accrued interest under the January 2018 Convertible Note are convertible into common stock at a rate of $0.78 per share and have a full reset feature. The note is secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. On January 29, 2018, the Note Purchaser converted $28,148 in principal and $1,808 in accrued interest into 38,405 shares of common stock. The Company recorded a loss of $351,769 on the conversion of note payable and accrued interest. During the three months ended May 31, 2018, the Company accrued interest in the amount of $13,125 on this note. On May 31, 2018, the Company converted the outstanding balance of principal and interest in the amounts of $514,195 and $18,610, respectively, into a total of 538,186.87 shares of Series B Preferred Stock; the Company recorded a gain in the amount of $933,263 on this transaction, and amortized the remaining discount in the amount of $68,855 to interest expense. During the years ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $0 and $0, respectively, in connection with the amortization of the discount on these notes. $ - $ - $ - December 31, 2018 August 31, 2018 August 31, 2017 February 2018 Convertible Note On February 15, 2018, the Company entered into a Securities Purchase Agreement with the Note Purchaser. The Company issued a 3.5% OID senior secured convertible promissory note with a face amount of $250,000 (the “February 2018 Convertible Note”). The February 2018 Convertible Note bears interest at a rate of 10% per annum and matures in nine months. The Company received cash proceeds of $241,250 net of the 3.5% original issue discount of $8,750. At the Note Purchaser’s option, the principal and accrued interest under the note are convertible into common stock at a rate of $13.00 per share and have a full reset feature. The February 2018 Convertible Note is secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. In addition, the Company granted the Note Purchaser 19,231 warrants to purchase 19,231 shares of the Company’s common stock with an exercise price of $0.26. The warrants have a five-year term. A derivative liability in the amount of $667,470 was created with regard to the conversion features and warrants associated with this note; $241,250 was charged to discount on notes payable, and the balance of $426,220 was charged to interest expense during the three months ended February 28, 2018. On March 26, 2018, the Company and the Note Purchaser agreed to eliminate the reset feature of this note. During the year ended August 31, 2018, the Company accrued interest in the amount of $13,681 on this note; as of August 31, 2018, principal in the amount of $250,000 was outstanding under the February 2018 Convertible Note. During the three months ended November 30, 2018, the Company accrued interest in the amount of $3,611 on this note. In October 2018, the February 2018 Convertible Note, accrued interest and warrants were converted to a new series of the Company’s preferred stock; see note 10. During the Transition Period ended December 31, 2018, the Company charged to interest expense the amounts of $16,298 in connection with the amortization of the discount on these notes. During the years ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $51,388 and $0, respectively, in connection with the amortization of the discount on these notes. $ - $ 250,000 $ - March 2018 Convertible Note On March 9, 2018, the Company issued a 3.5% OID senior secured convertible promissory note with a face amount of $777,202 (the “March 2018 Convertible Note”). The March 2018 Convertible Note bears interest at a rate of 10% per annum and matures in nine months. The Company received cash proceeds of $750,000 net of the 3.5% original issue discount of $27,202. At the Note Purchaser’s option, the principal and accrued interest under the note are convertible into common stock at a rate of $13.00 per share. The March 2018 Convertible Note is secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. In addition, the Company granted the Note Purchaser 59,785 warrants to purchase 59,785 shares of the Company’s common stock with an exercise price of $0.26. The warrants have a five-year term. A derivative liability in the amount of $771,460 was created with regard to the conversion features and warrants associated with this note, which was charged to discount on notes payable. On May 9, 2018, the Note Purchaser transferred their ownership in $497,458 of principal and $18,042 of accrued interest in the March 2018 Convertible Note to a third party. The Company revalued the derivative liability associated with the conversion feature of the March 2018 note at the time of this restructure, and recorded a gain on revaluation in the amount of $40,072. During the year ended August 31, 2018, the Company accrued interest in the amount of $37,780 on the March 2018 Convertible. As of August 31, 2018, principal in the amount of $777,202 was outstanding under the March 2018 Convertible Note. During the three months ended November 30, 2018, the Company accrued interest in the amount of $11,226 on this note. In October 2018, the March 2018 convertible note, accrued interest and warrants were converted to a new series of the Company’s preferred stock; see note 10. During the Transition Period ended December 31, 2018, the Company charged to interest expense the amounts of $102,410, in connection with the amortization of the discount on these notes. During the years ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $192,978 and $0, respectively, in connection with the amortization of the discount on these notes. $ - $ 777,202 $ - December 31, 2018 August 31, 2018 August 31, 2017 Total $ - $ 1,027,202 $ 553,977 Less: Unamortized discount - (752,988 ) (153,234 ) Total, net of discount $ - $ 274,214 $ 400,743 Current portion $ - $ 1,027,202 $ 553,977 Long term - - - Total $ - $ 1,027,202 $ 553,977 March 2018 Note to Prism Under the terms of a series of agreements (the “Former Agreements”), Yield issued Prism Funding Co, LP (“Prism”) a 10% OID Senior Secured Convertible Note (the “Senior Note”) in the principal amount of $5,500,000 and received the BTC. The Senior Note was payable 30 days following written demand from Prism (the “Maturity Date”) and with interest at 10% per annum. Pursuant to the terms of the restructuring agreement entered into in August 2018, the Company’s liability for the Senior Note was extinguished upon the restructuring of the BTC loan (see note 3). | Note 7 - Line of Credit and Debt In May 2017, the Company along with the majority owners serving as co-borrowers entered into a credit facility providing for up to $2 million of borrowings. Through various amendments, the maximum borrowings under the line increased to $4.6 million with a maturity of May 2019. Borrowings bear interest at LIBOR plus 3%. At June 30, 2019 and December 31, 2018, outstanding borrowings amounted to $0 and $4.6 million, respectively. The line of credit was secured by personal assets of the co-borrowers. Covenants under the line of credit required the Company to be within a certain quarterly and annual loss limitation threshold, and certain other restrictions. As of December 31, 2018, the Company was in compliance with its covenants and/or obtained waivers from the lien holders. At June 30, 2019 and December 31, 2018, outstanding borrowings amounted to $0 and $1.6 million, respectively. At December 31, 2018, our long-term debt consisted of an unsecured note payable to a director of the Company bearing 26.6% interest with principal and interest due within 30 days after change of control. No interest was paid during 2019. On May 6, 2019, Better Choice Company refinanced the $4.6 million line of credit and the $1.6 million note payable to the director with a $6.2 million revolving credit agreement with Franklin Synergy Bank. All advances relating to this revolving credit agreement bear a fixed rate of interest equal to 3.7% per annum , TruPet and Bona Vida became guarantors of the Company’s obligations under the Loan Agreement after the closing of the acquisitions. In addition, pursuant to a Security Agreement by and between the Company and Lender dated the date of the Loan Agreement (the “Security Agreement”), the Company has granted the Lender a security interest in all assets of the Company owned or later acquired. The Loan Agreement also contains certain events of default, representations, warranties and covenants of the Company and its subsidiaries. For example, the Loan Agreement contains representations and covenants that, subject to exceptions, restrict the Company’s ability to do the following, among things: incur additional indebtedness, engage in certain asset sales, or undergo a change in ownership. Interest expense of approximately $0.1 million and $0.1 million was recorded in the statements of operations related to the lines of credit and director note for the three and six months ended June 30, 2019, respectively. Interest expense of approximately an immaterial amount and approximately $0.1 million was recorded in the statements of operations related to the line of credit and the director note for the three and six months ended June 30, 2018, respectively. |
Stockholders' Deficit (FY)
Stockholders' Deficit (FY) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Stockholders' Deficit [Abstract] | ||
Stockholders' Deficit | Note 10 – Stockholders’ Deficit Preferred stock The Company is authorized to issue 20,000,000 shares of $0.001 par value preferred stock as of December 31, 2018, August 31, 2018, and August 31, 2017. The Company has 1,000 shares of Series A preferred stock issued and outstanding as of December 31, 2018, August 31, 2018, and August 31, 2017. Series B Convertible P referred S tock On May 30, 2018, the Company authorized 805,000 shares of Series B Convertible Preferred Stock. The Series B Convertible Preferred Stock has a stated value of $0.99 per share; is convertible to common stock at a price of $0.78 per share, based upon stated value; and accrues dividends at the rate of 10% per annum on the stated value. The Series B Convertible Preferred Stock has voting rights equal to those of the underlying common stock. Under certain default condition, the Series B Convertible Preferred Stock is subject to mandatory redemption at 125%, and the conversion price resets to 75% of the market price of the Company’s common stock. On May 30, 2018, the Company issued 803,969.73 shares of Series B Convertible Preferred Stock for the conversion of debt. The Company began to accrue dividends on the Series B Convertible Preferred Stock on June 1, 2018. From June 1, 2018 through August 31, 2018, the Company accrued dividends in the amount of $20,280 on the Series B Convertible Preferred Stock; from September 1, 2018 through October 22, 2018, the Company accrued dividends in the amount of $11,339 on the Series B Convertible Preferred Stock. On October 22, 2018, all 803,969.73 outstanding shares of the Series B Convertible Preferred Stock and accrued dividends in the amount of $31,619 were exchanged for shares of the Company’s Series E Convertible Preferred Stock. At December 31, 2018, August 31, 2018, and August 31, 2017, there were 0, 803,969.73 and 0 shares of the Series B Convertible Preferred Stock outstanding, respectively. Series E Convertible Preferred Stock On October 22, 2018, the Company authorized 2,900,000 shares of its Series E Convertible Preferred Stock. The Series E Convertible Preferred Stock has a stated value of $0.99 per share; is convertible to common stock at a price of $0.78 per share, based upon stated value; and accrues dividends at the rate of 10% per annum on the stated value. The Series E Convertible Preferred Stock has voting rights equal to those of the underlying common stock. Under certain default condition, the Series E Convertible Preferred Stock is subject to mandatory redemption at 125%, and the conversion price resets to 75% of the market price of the Company’s common stock. On October 22, 2018, the Company entered into an Exchange Agreement whereby the following were exchanged for 2,846,355.54 shares of Series E Convertible Preferred Stock: (i) Convertible debt and accrued interest in the amounts of $1,027,202 and $66,299, respectively; (ii) 803,969.73 shares of Series B Convertible Preferred Stock; (iii) accrued dividends in the amount $31,619 on the Series B Convertible Preferred Stock; and (iv) outstanding warrants to purchase 463,631 shares of the Company’s common stock. A derivative liability in the amount of $2,003,390 related to the convertible debt and was also settled pursuant to the Exchange Agreement. The Company valued the 2,846,355.14 shares of Series E Convertible Preferred Stock at $2,022,766, and recorded a gain in the amount of $472,267 on the Exchange Agreement during the Transition Period ended December 31, 2018. The Company accrued dividends in the amount of $53,501 on the Series E Preferred Stock during the Transition Period ended December 31, 2018. At December 31, 2018, August 31, 2018, and August 31,2017, there were 2,846,355.54, 0 and 0 shares of the Series E Convertible Preferred Stock outstanding, respectively. Common stock The Company was authorized to issue 580,000,000 shares of $0.001 par value common stock as of December 31, 2018, August 31, 2018, and August 31, 2017. On April 22, 2019, the Company filed a certificate of amendment of certificate of incorporation with the State of Delaware which reduced the number of authorized shares of common stock to 88,000,000. The Company has 3,415,859, 3,064,763 and 3,008,730 shares of common stock issued and outstanding as of December 31, 2018, August 31, 2018 and August 31, 2017, respectively. On March 14, 2019, the Company filed a certificate of amendment of Certificate of Incorporation with the Delaware Secretary of State to effect a one-for-26 reverse split of common stock effective March 15, 2019. All of the common stock amounts and per share amounts in these financial statements and footnotes have been retroactively adjusted to reflect the effect of this reverse split. Transition Period Ended December 31, 2018: On November 28, 2018, the Company repurchased 1,048,904 shares of the Company’s common stock from two shareholders in a series of private transactions. The Shares were repurchased by the Company for the par value of the Shares or a total of $27,271. On December 12, 2018, the Company closed a private placement offering (the “December Offering”) of 1,425,641 units (the “Units”), each unit consisting of (i) one share of the Company’s common stock, par value $0.001 per share and (ii) a warrant to purchase one half of a share of Common Stock. The Units were offered at a fixed price of $1.95 per Unit for gross proceeds of $2,779,840. Costs associated with the December Offering were $122,741, and net proceeds were $2,657,099. $2,607,099 of the net proceeds were received by the Company during the period ended December 31, 2018 for the sale of 1,400,000 common shares, and $50,000 of the net proceeds were received on January 8, 2019 for the sale of 25,641 common shares. The Warrants are exercisable over a two-year period at the initial exercise price of $3.90 per share. The Company entered into a Securities Purchase Agreement, dated as of the Closing Date (the “SPA”) with each investor in the December Offering. In connection with the December Offering, the Company also entered into a Registration Rights Agreement, dated as of the Closing Date (the “Registration Rights Agreement”) with each investor in the Offering. Pursuant to the Registration Rights Agreement, the Company agreed to use commercially reasonable efforts to file with the Securities and Exchange Commission a registration statement on Form S-1 (or other applicable form) within 60 days following the Closing Date to register the resale of the shares of Common Stock sold in the Offering and shares of Common Stock issuable upon exercise of the Warrants. Year Ended August 31, 2018: On September 28, 2017, the Company issued 8,013 shares of common stock, for the conversion of $16,347 of principal and $8,653 of accrued interest of convertible notes payable. On November 15, 2017, the Company issued 9,615 shares of common stock, for the conversion of $17,518 of principal and $12,482 of accrued interest of convertible notes payable. On January 29, 2018, the Company issued 38,405 shares of common stock, for the conversion of $28,148 of principal and $1,808 of accrued interest of convertible notes payable. Year ended August 31, 2017 On January 4, 2017, the Company issued 1,346 shares of common stock, valued at $68,950 as commitment shares to convertible note holders. These shares were issued at fair value based on the market price at issuance of $46.80 per share. On May 2, 2017, the Company issued 8,013 shares of common stock, for the conversion of $15,000 of principal and $10,000 of accrued interest of convertible notes payable. On June 2, 2017, the Company issued 8,013 shares of common stock, for the conversion of $25,000 of principal of convertible notes payable. Warrants The following table summarizes the significant terms of warrants outstanding at December 31, 2018: Range of exercise Prices Number of warrants Outstanding Weighted average remaining contractual life (years) Weighted average exercise price of outstanding Warrants Number of warrants Exercisable Weighted average exercise price of exercisable Warrants $ 3.90 700,000 1.96 $ 3.90 700,000 $ 3.90 Total 700,000 1.96 $ 3.90 700,000 $ 3.90 Transactions involving warrants are summarized as follows: Number of Weighted Average Warrants Exercise Price Warrants outstanding at August 31, 2016 - $ - Issued - - Exercised - - Cancelled / Expired - - Warrants outstanding at August 31, 2017 - - Issued 1,040,554 $ 0.26 Exercised - Cancelled / Expired (576,923 ) 0.26 Warrants outstanding at August 31, 2018 463,631 $ 0.26 Issued 700,000 3.90 Exercised Cancelled / Expired (463,631 ) 0.26 Warrants outstanding at December 31, 2018 700,000 $ 3.90 During the year ended August 31, 2018, the Company issued an aggregate of 79,016 five-year warrants at an exercise price of $0.26 in connection with convertible debt. The Company also issued 961,538 five-year warrants at an exercise price of $0.26 in connection with discontinued operations; of these, 576,923 were cancelled pursuant to the restructuring of discontinued operations; see note 3. On October 22, 2018, the Company exchanged 463,631 warrants along with certain additional securities for shares of Series E Convertible Preferred Stock. On December 12, 2018, the Company closed the December Offering which included the issuance of 700,000 warrants (the “December Warrants”) with an exercise price of $3.90 per share. The holders of the December Warrants have an option to settle in cash in the event of a change of control of the Company. The Company considers the December 2018 warrants to be derivative liabilities, and calculated the fair value of the December 2018 warrants by utilizing a Lattice Model that values the warrant based upon a probability weighted discounted cash flow model. At December 31, 2018, outstanding warrants had an intrinsic value of $5,095,996. Intrinsic value is the difference between the exercise price of the warrants and the market price of the Company’s stock, which was $11.18 at December 31, 2018. Stock Options On December 21, 2018, the Company issued 19,231 options to each of Michael Young, the Company’s chairman, and to David Lelong, the Company’s President, Chief Financial Officer and Secretary (an aggregate of 38,462 options). These options have a five-year term, an exercise price of $6.76 and vest quarterly over a one-year period beginning January 1, 2019. The fair value of each grant of 19,231 options was $154,983. The Company used the Black-Scholes pricing model to determine the fair value of the options. The following table summarizes the significant terms of options outstanding at December 31, 2018: Weighted Weighted Weighted average average average exercise exercise Range of Number of remaining price of Number of price of exercise options contractual outstanding options exercisable prices outstanding life (years) options exercisable options $ 6.76 38,462 4.98 $ 6.76 0 N/A Aggregate intrinsic value of options outstanding and exercisable at December 31, 2018 was $170,002. Aggregate intrinsic value represents the difference between the Company’s closing stock price on the last trading day of the fiscal period, which was $11.18 as of December 31, 2018, and the exercise price multiplied by the number of options outstanding. Transactions involving options are summarized as follows: Number of Weighted Average Options Exercise Price Options outstanding at August 31, 2016 - $ - Granted - - Exercised - - Cancelled / Expired - - Options outstanding at August 31, 2017 - $ - Granted - - Exercised - - Cancelled / Expired - - Options outstanding at August 31, 2018 - $ - Granted 38,462 6.76 Exercised - - Cancelled / Expired - - Options outstanding at December 31, 2018 38,462 $ 6.76 | Note 12 - Stockholders’ Deficit On May 6, 2019, Better Choice Company completed the acquisition of TruPet pursuant to a Stock Exchange Agreement dated February 2, 2019 and amended May 6, 2019. At the closing of the transaction, Better Choice Company issued 15,027,533 shares of its Common Stock in exchange for 93% of the outstanding ownership units of TruPet. Additionally, on May 6, 2019, Better Choice Company also completed the acquisition of Bona Vida pursuant to an Agreement and Plan of Merger dated February 28, 2019 and amended May 3, 2019. At the closing of the transaction, Better Choice Company issued 18,003,273 shares of its Common Stock in exchange for all outstanding shares of Bona Vida. The operations of Better Choice Company subsequent to the acquisitions are those of TruPet and Bona Vida. For accounting purposes, the transaction is considered a reverse merger whereby TruPet is considered the accounting acquirer of Better Choice Company. As a result of the transaction the historical TruPet members’ equity (units and incentive units) has been recast to reflect the equivalent Better Choice Common Stock for all periods presented after the transaction. Prior to the transaction, TruPet was a Limited Liability Company and as such, the concept of authorized shares was not relevant. Series A Preferred Units In December 2018, the Company completed a private placement and issued 2,162,536 Series A Preferred Units (no par value) to unrelated parties for $2.40 per unit. The proceeds were approximately $4.7 million, net of $0.5 million of share issuance costs. Additionally, on February 12, 2019, an additional private placement of 62,500 Series A Preferred Units at $2.40 per unit was completed. The proceeds were approximately $0.2 million, net of share issuance costs. On May 6, 2019, all Series A Preferred Units were converted to 2,460,517 shares of Common Stock. Series E Preferred Stock On May 6, 2019, the Company acquired 2,633,678 shares of Series E Preferred Stock issued by Better Choice Company in the transaction. Series E Preferred Stock is treated as mezzanine equity as it has redemption features that can be exercised by the holder under certain instances outside the control of the Company. 925,758 shares of Series E Preferred Stock were converted to Common Stock in the three- and six-month period ended June 30, 2019. As of June 30, 2019, 1,707,920 shares of Series E Preferred Stock remain outstanding. Full conversion of the remaining Series E Preferred Stock would result in the issuance of 2,167,745 shares of Common Stock. Common Stock The Company was authorized to issue 580,000,000 shares of Common Stock as of December 31, 2018. On April 22, 2019, the Company filed a certificate of amendment of certificate of incorporation with the State of Delaware which reduced the number of authorized shares of Common Stock to 88,000,000. The Company has 43,168,161 and 11,661,485 shares of Common Stock issued and outstanding as of June 30, 2019 and December 31, 2018, respectively. On March 14, 2019, the Company filed a certificate of amendment of Certificate of Incorporation with the Delaware Secretary of State to effect a one-for-26 reverse split of Common Stock effective March 15, 2019. All of the Common Stock amounts and per share amounts in these financial statements and footnotes have been retroactively adjusted to reflect the effect of this reverse split. On December 12, 2018, Better Choice Company closed a private placement offering (the “December Offering”) of 1,425,641 units (the “Units”), each unit consisting of (i) one share of the Company’s Common Stock and (ii) a warrant to purchase one half of a share of Common Stock. The Units were offered at a fixed price of $1.95 per Unit for gross proceeds of $2.8 million. Costs associated with the December Offering were $0.1 million, and net proceeds were $2.7 million. Net proceeds of $2.6 million were received by the Company during the period ended December 31, 2018 for the sale of 1,400,000 common shares, and $0.1 million of the net proceeds were received on January 8, 2019 for the sale of 25,641 common shares. The Warrants are exercisable over a two-year period at the initial exercise price of $3.90 per share. (See In connection with the December Offering, Better Choice Company also entered into a registration rights agreement (the “Registration Rights Agreement”) with each investor in the Offering. Pursuant to the Registration Rights Agreement, the Company agreed to use commercially reasonable efforts to file with the Securities and Exchange Commission a registration statement on Form S-1 (or other applicable form) within 60 days following the closing date to register the resale of the shares of Common Stock sold in the Offering and shares of Common Stock issuable upon exercise of the Warrants. On November 18, 2018 the Company entered into a consulting agreement for management services. The consultant was awarded the equivalent of 303,427 shares of Common Stock, half which vested on November 18, 2018 and the remainder on a monthly schedule over 2 years. During the period from January 1, 2019 through May 5, 2019, equity awards for the equivalent of 979,716 shares were issued to employees and consultants and were valued at a weighted average value per share of $2.26, the fair value at the date of award. The awards vested over three years. However, on May 6, 2019, all equity incentive awards issued prior to May 6, 2019 immediately vested. As a result of the immediate vesting of these awards, share-based compensation expense equal to $2.2 million and $2.4 million has been recorded during the three and six-months ended June 30, 2019. There were no equity awards issued or outstanding during the three and six months ended June 30, 2018. The Company retired 914,919 member units (equivalent to 1,011,748 Common Shares) in TruPet representing the 7% Better Choice Company ownership of TruPet valued at $2.2 million which was recorded as part of loss on acquisition. The Company also issued 5,744,991 million units for gross proceeds of $3.00 per unit, also closing on May 6, 2019 (the “PIPE Transaction”). Each unit included one common share of Better Choice Company stock, and a warrant to purchase an additional share. The funds raised from the PIPE Transaction will be used to fund the operations of the combined company. Net proceeds of $15.7 million were received in the private placement, allocable between shares of Common Stock and warrants. Pursuant to Damian Dalla-Longa’s (“Mr. Dalla-Longa”) employment agreement with Bona Vida dated October 29, 2018, he was entitled to a $500,000 Change of Control payment. It was later agreed to and included in Mr. Dalla-Longa’s Better Choice Company employment agreement dated May 6, 2019, that he would receive 100,000 common shares in the Company in consideration for the $500,000 Change of Control payment. The 100,000 common shares were valued at $6.00 per share, which was the market value as of the date of Mr. Dalla-Longa’s employment agreement. Stock Options On May 6, 2019, the Company acquired the Better Choice Company, Inc. 2019 Incentive Award Plan (“2019 Incentive Award Plan”) which became effective as of April 29, 2019. The 2019 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, other stock or cash-based awards or a dividend equivalent award (each an “Award”). Non-employee directors of the Company and employees and consultants of the Company or any of its subsidiaries are eligible to receive awards under the 2019 Plan. The 2019 Plan authorizes the issuance of (i) 6,000,000 shares of common stock plus (ii) an annual increase on the first day of each calendar year beginning on January 1, 2020 and ending on and including January 1, 2029, equal to the lesser of (A) 10% of the shares of common stock outstanding (on an as-converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of shares of common stock as determined by the Board. At the time of acquisition, the following grants had been issued under the 2019 Incentive Award Plan: On May 6, 2019, as part of the merger, the Company acquired options to purchase an aggregate of 3,750,000 shares of the Company’s Common Stock at an exercise price of $5.00 per share. These options had been granted to management of Better Choice Company on May 2, 2019. Subject to the holder’s continued service to the Company, each such option vests with respect to 1/24th of the underlying shares on each monthly anniversary of the grant date such that the option is fully vested on the second anniversary of the grant date. On May 6, 2019, as part of the merger, the Company acquired options to purchase an aggregate of 1,500,000 shares of the Company’s Common Stock at an exercise price of $5.00 per share. These options had been granted to non-employee directors of Better Choice Company on May 2, 2019. Subject to the holder’s continued service to the Company, each such option vests with respect to 1/24th of the underlying shares on each monthly anniversary of the grant date such that the option is fully vested on the second anniversary of the grant date. After the acquisition, the following stock option awards were granted under the 2019 Incentive Award Plan, subject to stockholder approval of the 2019 Incentive Award Plan: On May 21, 2019, the Company granted to third-party consultants options to purchase an aggregate of 60,000 shares of the Company’s Common Stock at an exercise price of $7.50 per share. Subject to the holder’s continued service to the Company, each such option vests with respect to 1/36th of the underlying shares on each monthly anniversary of the grant date, such that the option is fully vested on the third anniversary of the grant date. On May 21, 2019, the Company granted to employees options to purchase an aggregate of 30,000 shares of the Company’s Common Stock at an exercise price of $7.50 per share. Subject to the holder’s continued service to the Company, each such option vests with respect to 25% of the underlying shares on the first anniversary of the grant date and the remainder vests in 24 equal installments on each monthly anniversary of the grant date following the first anniversary of the grant date, such that the option is fully vested on the third anniversary of the grant date. On June 29, 2019, the Company granted to employees options to purchase an aggregate of 3,000 shares of the Company’s Common Stock options at an exercise price of $7.50 per share. Subject to the holder’s continued service to the Company, each such option vests with respect to 25% of the underlying shares on the first anniversary of the grant date and the remainder vests in 24 equal installments on each monthly anniversary of the grant date following the first anniversary of the grant date, such that the option is fully vested on the third anniversary of the grant date. Following the stockholder approval of the 2019 Incentive Award Plan, all vested options described herein will become exercisable and may be exercised through the ten-year anniversary of the grant date (or such earlier date described in the applicable award agreement following a holder’s termination of service). Dollars in thousands except per share amounts Date of grant(s) Vesting period (years) Number Exercise price ($) Share-based payment expense ($) Risk-free rate Volatility Dividend yield Expiry (yrs) Remaining Life (yrs) Option grant 5/21/2019 2 60,000 $ 7.50 9 2.28 % 55.00 % Nil 10 9.9 Option grant 5/21/2019 3 30,000 $ 7.50 5 2.28 % 55.00 % Nil 10 9.9 Option grant 6/29/2019 3 3,000 $ 7.50 0 1.84 % 56.00 % Nil 10 10.0 93,000 $ 14 Pursuant to ASC 718-10-35-8, the Company recognizes compensation cost for stock and option awards with only service conditions that have a graded vesting schedule on a straight-line basis over the service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards. The following table summarizes the significant terms of options outstanding at June 30, 2019: Range of exercise prices Number of options outstanding Weighted average remaining contractual life (years) Weighted average exercise price of outstanding options number of options exercisable Weighted average exercise price of exercisable options $ 5.00 – 7.50 5,381,462 9.8 $ 5.06 260,545 5.04 Transactions involving options are summarized below: Number of Options Weighted Average Exercise Price Acquired on May 6, 2019 5,288,462 $ 5.00 Granted 93,000 $ 7.50 Options outstanding at June 30, 2019 5,381,462 $ 5.04 The intrinsic value of outstanding options is $34.2 million as of June 30, 2019. Warrants On May 6, 2019, the Company acquired 913,310 warrants with a weighted average exercise price of $3.70 with the acquisition of Better Choice Company. The Company also issued 5,744,991 warrants with an exercise price of $4.25 on May 6, 2019 as part of the PIPE. No warrants were exercised in the six months ending June 30, 2019. Number of Warrants Weighted Average Exercise Price Warrants Acquired on May 6, 2019 913,310 $ 3.70 Issued 5,744,991 $ 4.25 Exercised - - Canceled / expired - - Warrants outstanding at June 30, 2019 6,658,301 $ 4.39 The intrinsic value of outstanding warrants is $13.0 million as of June 30, 2019. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments (FY) | 4 Months Ended |
Dec. 31, 2018 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Note 11 – Fair Value of Financial Instruments Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, accounts payable and accrued expenses reported on the balance sheet are estimated by management to approximate fair value primarily due to the short term nature of the instruments. The Company had no other items that required fair value measurement on a recurring basis. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows: Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability. The following summarized the Company’s financial liabilities that are recorded at fair value on a recurring basis at December 31, 2018, August 31, 2018 and August 31, 2017. December 31, 2018 Level 1 Level 2 Level 3 Total Liabilities Derivative liabilities $ - $ - $ 7,379,893 $ 7,379,893 August 31, 2018 Level 1 Level 2 Level 3 Total Liabilities Derivative liabilities $ - $ - $ 2,317,412 $ 2,317,412 August 31, 2017 Level 1 Level 2 Level 3 Total Liabilities Derivative liabilities $ - $ - $ 312,878 $ 312,878 |
Income Taxes (FY)
Income Taxes (FY) | 4 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | Note 12 – Income Taxes Deferred income taxes result from the temporary differences primarily attributable to amortization of intangible assets and debt discount and an accumulation of net operating loss carryforwards for income tax purposes with a valuation allowance against the carryforwards for book purposes. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Included in deferred tax assets are Federal, State and Local net operating loss carryforwards of approximately $2,970,000, the majority of which will expire in 2037. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Due to significant changes in the Company’s ownership, the Company’s future use of its existing net operating losses may be limited. The provision (benefit) for income taxes differs from the amount of income tax determined by applying the applicable Federal statutory income tax rates (21% for the period ended December 31, 2018 and year ended August 31, 2018 and 34% for the year ended August 31, 2017) to the loss before taxes as a result of the following differences: December 31, 2018 August 31, 2018 August 31, 2017 Federal income tax (benefit) at statutory rate $ (926,700 ) $ (619,672 ) $ (592,708 ) State income tax (benefit), net of Federal (441,286 ) (295,082 ) (191,758 ) Permanent differences – change in value of derivative liability and other 1,314,116 619,000 Effect of change in Federal statutory rate - 230,616 - Changes in valuation allowance 53,870 65,138 784,466 Total $ - $ - $ - Deferred income taxes reflect the tax impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations. Deferred income taxes include the net tax effects of net operating loss (NOL) carryforwards and the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. As of December 31, 2018, August 31, 2018 and August 31, 2017 significant components of the Company’s deferred tax assets are as follows: December 31, 2018 August 31, 2018 August 31, 2017 Deferred Tax Assets (Liabilities): Net operating loss carryforwards $ 920,390 $ 820,494 $ 741,267 Accrued compensation 39,680 44,800 54,000 Valuation allowance (960,070 ) (865,294 ) (795,267 ) Net deferred tax assets (liabilities) $ - $ - $ - |
Subsequent Events (FY)
Subsequent Events (FY) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Subsequent Events [Abstract] | ||
Subsequent Events | Note 13 – Subsequent Events On January 4, 2019, the Company repurchased 935,897 shares of the Company’s common stock from David Lelong, the Company’s former Chief Executive Officer, in a private transaction. The Shares were repurchased by the Company for the par value of the pre-reverse split shares of $0.001 per share or a total of $24,333. Prior to the repurchase, the shares represented approximately 38% of the Company’s outstanding common stock. On January 8, 2019, the Company issued 25,641 shares of common stock for cash of $50,000 pursuant to the December Offering. On January 17, 2019, the Company adopted the 2019 Equity Incentive Plan which covers the potential issuance of 180,769 shares of common stock. On January 18, 2019, an investor converted 49,155 shares of the Company’s Series E Convertible Preferred Stock into 62,389 shares of common stock. On February 1, 2019, the four holders of the Series E Convertible Preferred Stock, in exchange for $10 each (a total of $40), agreed to waive the right to receive any dividends which would accrue on the Series E for a one year period beginning on October 22, 2018. On February 2, 2019, the Company approved the Company’s entry into a six-month Employment Agreement, effective February 1, 2019, with its Chief Executive Officer Mr. David Lelong. Mr. Lelong shall accrue monthly at a rate of 18% per annum. On February 6, 2019, an investor converted 49,523 shares of the Company’s Series E Convertible Preferred Stock into 62,856 shares of common stock. On February 11, 2019, an investor converted 54,000 shares of the Company’s Series E Convertible Preferred Stock into 68,538 shares of common stock. On February 12, 2019 the Company filed a Certificate of Withdrawal of Certificate of Designation for the Company’s Series B Preferred Stock. On February 19, 2019, the Company filed a Certificate of Amendment to Articles of Incorporation permitting the Company’s Board of Directors to amend the certificate of designation for any class or series of the Company’s preferred stock without the vote of such class or series, unless such certificate of designation specifically prohibits the Board from amending such certificate of designation. On February 20, 2019, the Company filed a Certificate of Amendment to Certificate of Designation for the Company’s Series A Preferred Stock permitting the Board to convert all outstanding shares of Series A into shares of the Company’s common stock at the Board’s discretion. On February 22, 2019, the Company issued 115 shares of common stock in exchange for 1,000 shares of Series A. On March 4, 2019, Mr. David Lelong resigned from his position as the Company’s Chief Executive Officer effective immediately. Mr. Lelong remains as the President, Chief Financial Officer, Secretary and Treasurer of the Company. On March 4, 2019, the Board of Directors of the Company appointed Mr. Damian Dalla-Longa and Ms. Lori Taylor as the Company’s Co-Chief Executive Officers. On March 7, 2019, the Company filed a Certificate of Withdrawal of Certificate of Designation for the Company’s Series A Preferred Stock. The filing of the Amendment in Nevada was approved by the Company’s Board of Directors and there were no shares of Series A outstanding on the Effective Date. On March 8, 2019, the Company issued a Canadian investment banker 141,026 shares of the Company’s common stock for advisory services rendered. Effective March 11, 2019, Sport Endurance, Inc. merged into its wholly-owned subsidiary, Better Choice Company Inc., a Delaware corporation. As a result, the name of Sport Endurance, Inc. was changed to Better Choice Company Inc. Pursuant to the merger, each outstanding share of common stock of Sport Endurance, Inc. converted into one share of common stock of Better Choice Company Inc. and each outstanding share of Series E Convertible Preferred Stock of Sport Endurance, Inc. converted into one share of Series E of Better Choice Company Inc. On March 14, 2019, Mr. David Lelong notified the Company of his resignation as a member of the Company’s Board of Directors effective immediately. On March 15, 2019, the Board appointed the Company’s Co-Chief Executive Officers, Mr. Damian Dalla-Longa and Ms. Lori Taylor, to the Board, as well as Mr. Jeff Davis and Michael Galego. Mr. Galego will be the Chairman of the Board. On March 15, 2019, the Company effected a 1 for 26 reverse split of its common stock. An additional 682 shares of common stock were issued as a result of rounding up of any fractional shares as a result of the reverse split. On April 1, 2019, the Company issued 200,000 shares of common stock in connection with a licensing agreement. On April 22, 2019, the Company filed a certificate of amendment of certificate of incorporation with the State of Delaware which reduced the number of authorized shares of common stock to 88,000,000. On April 25, 2019, the Company entered into Subscription Agreements with accredited investors for the sale by the Company in a private placement (the “Private Placement”) of (i) 4,946,640 shares of the Company’s common stock at a purchase price of $3.00 per share and (ii) warrants to purchase up to 4,946,640 shares of Common Stock, exercisable at any time after issuance at an exercise price equal to $4.25 per share, subject to adjustments as provided under the terms of the warrants. The warrants are exercisable for 24 months from the initial issue date. On May 6, 2019, the Company closed the Private Placement. At the closing of the Private Placement, the Company issued 5,744,991 shares of its Common Stock at a purchase price of $3.00 per share and warrants to purchase up to 5,744,991 shares of its Common Stock at an exercise price of $4.25 per share (the “Warrants”). The Warrants are exercisable for 24 months from the Closing. The aggregate gross proceeds for the Private Placement were approximately $17.2 million. On April 29, 2019, the board of directors of the Company approved the Company’s New 2019 Incentive Award Plan (the “2019 Plan”) which became effective on such date (the “Effective Date”), subject to the approval by the Company’s stockholders. The 2019 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, other stock or cash-based awards or a dividend equivalent award (each an “Award”). Non-employee directors of the Company and employees and consultants of the Company or any of its subsidiaries are eligible to receive awards under the 2019 Plan. The 2019 Plan authorizes the issuance of (i) 6,000,000 shares of common stock plus (ii) an annual increase on the first day of each calendar year beginning on January 1, 2020 and ending on and including January 1, 2029, equal to the lesser of (A) 10% of the shares of common stock outstanding (on an as-converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of shares of common stock as determined by the Board. On May 2, 2019, the board of directors approved the grant to certain executives of the Company of non-qualified stock options to purchase shares of the Company’s common stock under the 2019 Plan at a per-share exercise price equal to the fair market value of a share of the Company’s common stock on the date of grant. In accordance with an agreement with the Company, the stock options vest and become exercisable monthly over 2 years in equal installments of 1/24 each month. The stock options will be accelerated upon a Change of Control, as defined in the 2019 Plan. Any exercise of stock options may, at the election of the executives, be exercised with a “cashless exercise” by using shares from any such exercise to pay the exercise price, which shares, for such purpose, being valued at the fair market value, as determined under the 2019 Plan, on the date of exercise. On May 2, 2019, an investor converted 60,000 shares of the Company’s Series E Convertible Preferred Stock into 76,154 shares of common stock. The following executive officers of the Company were granted the number of stock options under the 2019 Plan, in each case as listed after their names: Damian Dalla-Longa, 1,200,000 stock options; Lori Taylor, 1,150,000 stock options; and Anthony Santarsiero, 1,000,000 stock options. On May 6, 2019, the Company entered into a Loan Agreement (the “Loan Agreement”) by and between the Company and Franklin Synergy Bank, a Tennessee banking corporation (the “Lender”), pursuant to which, at the Company’s option and subject to the occurrence of the funding conditions described below and other customary funding conditions, the Lender is obligated to provide advances to the Company in an aggregate amount less than or equal to $6,200,000 (the “Loan”). Under the Revolving Line of Credit Promissory Note entered into by the Company (the “Note”), all advances bear interest from the date of such advance until such amount is due and payable (whether on any payment date, at maturity, by acceleration or otherwise), at a fixed rate of interest equal to 3.70% per annum, which may be adjusted from time to time subject to certain conditions. In addition, the Company paid a fee of $10,000 upon closing. The Company is also required to pay a late charge equal to 5% of the aggregate amount of any payments of principal and/or interest that are paid more than 10 days after the due date. The Note may be permanently prepaid at any time in whole or in part without penalty or premium in accordance with, and subject to any limitations on prepayments set forth in, the Loan Agreement. The Company is also required to make mandatory prepayments of the Loan and interest and expenses thereon, subject to specified exceptions, upon defaulting on any payments of principal or interest on the Loan, the occurrence of certain specified defaults of the covenants in the Loan Agreement, the occurrence of a material adverse change in the business, operations or conditions of the Company and specified other events. TruPet LLC and Bona Vida, Inc. became guarantors of the Company’s obligations under the Loan Agreement after the closing of the acquisitions described below. In addition, pursuant to a Security Agreement by and between the Company and Lender dated the date of the Loan Agreement (the “Security Agreement”), the Company has granted the Lender a security interest in all assets of the Company owned or later acquired. The Loan Agreement also contains certain events of default, representations, warranties and covenants of the Company and its subsidiaries. For example, the Loan Agreement contains representations and covenants that, subject to exceptions, restrict the Company’s ability to do the following, among other things: incur additional indebtedness, engage in certain asset sales or undergo a change in ownership. On May 6, 2019, the Company completed the acquisition of (i) Bona Vida, Inc. in accordance with the terms of the Agreement and Plan of Merger, dated as of February 28, 2019, by and among the Company, BCC Merger Sub, Inc. (“Merger Sub”), and Bona Vida, Inc. , as amended by Amendment No. 1 thereto made and entered into as of May 3, 2019, pursuant to which Merger Sub merged with and into Bona Vida, with Bona Vida surviving as a wholly owned subsidiary of the Company and (ii) TruPet LLC in accordance with the terms of the Securities Exchange Agreement, dated as of February 2, 2019, by and between the Company and TruPet LLC, as amended by Amendment No. 1 thereto made and entered into as of May 6, 2019, pursuant to which the Company agreed to acquire 93.3% of the outstanding TruPet membership interests with TruPet remaining as a wholly-owned subsidiary of the Company (the “Acquisitions”). Following the completion of the Acquisitions, the business conducted by the Company became primarily the businesses conducted by TruPet and Bona Vida, which is as an online seller of pet foods, pet nutritional products and related pet supplies and as an emerging hemp-based CBD platform focused on developing a portfolio of brand and product verticals within the animal health and wellness space, respectively. Under the terms of the Bona Vida Merger Agreement, the Company issued 18,003,273 shares of its common stock, par value $0.001 per share (“Common Stock”), to Bona Vida’s stockholders for all shares of Bona Vida’s common stock outstanding immediately prior to the Bona Vida Acquisition. The Company also offered to purchase each warrant held by Bona Vida warrant holders for CAD $0.75 per share, with any outstanding warrants at closing being cancelled. Under the terms of the TruPet Merger Agreement, the Company issued 15,027,533 shares of its Common Stock to TruPet’s members for 93.3% of the issued and outstanding membership interests of TruPet outstanding immediately prior to the TruPet Acquisition. Following the completion of the Acquisitions, the business conducted by the Company became primarily the businesses conducted by TruPet and Bona Vida, which is as an online seller of pet foods, pet nutritional products and related pet supplies and as an emerging hemp-based CBD platform focused on developing a portfolio of brand and product verticals within the animal health and wellness space, respectively. On May 6, 2019, the Company entered into executive employment agreements with each of Damian Dalla-Longa, Co-Chief Executive Officer, Lori Taylor, Co-Chief Executive Officer, and Anthony Santarsiero, President and Director of Operations, each of which is effective as of May 6, 2019. On May 10, 2019, an investor converted 689,394 shares of the Company’s Series E Convertible Preferred Stock into 682,500 shares of common stock. On May 13, 2019, the Company issued 100,000 shares of common stock to Damian Dalla-Longa, Co-Chief Executive Officer, pursuant to a change-of-control provision in the employment agreement between Mr. Dalla-Longa and Bona Vida. On May 17, 2019, the Company filed an Amended and Restated Certificate of Designations, Preferences and Rights of the Series E Convertible Preferred Stock of Better Choice Company Inc. with the Delaware Secretary of State to increase the limit on beneficial ownership of certain holders of Series E Convertible Preferred Stock. On May 21, 2019, the Board of Directors of the Company approved a change to the Company’s fiscal year end from August 31 to December 31 of each year. The fiscal year change for the Company is effective beginning with the Company’s 2019 fiscal year, which now began January 1, 2019 and ends December 31, 2019. On May 22, 2019, an investor converted 236,364 shares of the Company’s Series E Convertible Preferred Stock into 300,000 shares of common stock. On May 28, 2019, David Lelong resigned as Chief Financial Officer, President, Secretary and Treasurer of the Company, effective immediately. On May 28, 2019, Anthony Santarsiero, 35, has been appointed as President and Director of Operations of the Company. On June 10, 2019, the Company entered into a First Amendment to Registration Rights Agreement (the “Registration Rights Agreement Amendment”) with the stockholders signatory thereto, which amends the Registration Rights Agreement, dated as of May 6, 2019, by and among the Company and the stockholders named therein (the “Private Placement Investors”), entered into in connection with the previously announced private placement of shares of the Company’s commons stock and warrants to purchase common stock (the “Original Registration Rights Agreement”). Pursuant to the terms of the Original Registration Rights Agreement, the Company, among other things, granted certain registration rights to the Private Placement Investors. The Registration Rights Agreement Amendment extends the deadline by which the Company must file with the Securities and Exchange Commission (“SEC”) a Registration Statement covering the resale of the shares of the Company’s common stock purchased in the private placement, including the shares issuable upon exercise of the warrants to purchase common stock, by 42 days from July 5, 2019 to August 16, 2019, and extends the applicable deadline for seeking to have such Registration Statement declared effective by the SEC by the same amount. On June 29, 2019, the Company appointed Andreas Schulmeyer as Chief Financial Officer to serve as the Company’s principal financial officer and principal accounting officer, effective June 29, 2019, and to commence full-time employment on July 29, 2019. On July 12, 2019, the Company filed a Form 8-K disclosing the following: that as a result of the issuance of shares of our common stock pursuant to the Bona Vida Merger Agreement and TruPet Merger Agreement, a change in control from the legacy stockholders of the Company occurred on May 6, 2019; that the Bona Vida Merger and TruPet Merger are being accounted for as a reverse acquisition and recapitalization of the Company for financial accounting purposes, whereby TruPet is deemed to be the acquirer for accounting purposes, and the Company’s historical financial statements before the Acquisitions will be replaced with the historical financial statements of TruPet before the Acquisitions in future filings with the SEC; that the Company intends to appoint a new auditor for the combined entity; and that the Company also intends to file the historical financial statements of Bona Vida and TruPet, along with a pro forma presentation illustrating the effects of the Acquisitions, to comply with Rule 8-04 and Rule 8-05 of Regulation S-X and Item 9.01 of Form 8-K. On July 23, 2019, the Company filed a Form 8-K/A which included the audited financial statements of TruPet LLC as of and for the years ended December 31, 2018 and December 31, 2017 and the notes related thereto and the related independent auditor’s report of MNP LLC; the unaudited interim financial statements of TruPet LLC as of and for the three months ended March 31, 2019 and March 31, 2018 and the notes related thereto; the audited financial statements of Bona Vida, Inc. from the date of incorporation, March 29, 2018, to December 31, 2018 and the notes related thereto and the related independent auditor’s report of MNP LLC; the unaudited interim financial statements of Bona Vida, Inc. as of and for the three months ended March 31, 2019 and the notes related thereto; the audited financial statements of TruPet LLC; and the unaudited pro forma combined financial statements of Better Choice Company Inc. as of and for the three months ended March 31, 2019 and for the twelve months ended December 31, 2018 and the related notes thereto. We evaluated subsequent events after the balance sheet date through the date the financial statements were issued. We did not identify any additional material events or transactions occurring during this subsequent event reporting period that required further recognition or disclosure in these financial statements. | Note 18 - Subsequent Events Management has evaluated subsequent events through the date on which the unaudited condensed consolidated financial statements were issued. On June 28, 2019, the Company granted 500,000 options to Andreas Schulmeyer, the Company’s Chief Financial Officer, subject to commencement of employment on July 29, 2019. The options have an exercise price of $6.35 and vest over a two-year period beginning with commencement of employment. On July 23, 2019, the Audit Committee of the Board of Directors of the Company appointed Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal periods on or after January 1, 2019. On July 29, 2019, Mr. Schulmeyer received a grant of 6,042 common shares as a consulting fee pursuant to his employment agreement dated June 28, 2019. On August 14, 2019, the Company granted 30,000 options to an employee of the Company. The options have an exercise price of $4.00 and vest over a three-year period. On August 28, 2019, the Company entered into a radio advertising agreement with iHeartMedia + Entertainment, Inc. The Company issued 1,000,000 common shares which shall be entirely paid for by iHeartMedia in the form of a commitment from iHeartMedia to provide to Company advertising media inventory having an aggregate value of $5,000,000. Company has committed to using $2,500,000 of the media inventory by August 28, 2020 with the remainder of the inventory available through August 28, 2021 On August 30, 2019, the Company granted 100,000 stock options to Mr. Schulmeyer. These options have an exercise price of $3.90 and vest over a two-year period. On September 6, 2019, the Audit Committee notified RBSM LLP of the Audit Committee’s approval to dismiss RBSM as the Company’s independent registered public accounting firm upon filing of this Quarterly Report. On September 9, 2019, the Company granted 30,000 options to an employee of the Company. The options have an exercise price of $3.70 and vest over a three-year period. On September 13, 2019, Lori R. Taylor notified the Company of her decision to resign as Co-Chief Executive Officer of the Company effective as of September 13, 2019. The Company also entered into a separation agreement with Ms. Taylor, in connection with her resignation as an officer of the Company, effective as of the date thereof. Pursuant to the separation agreement all outstanding stock option awards will become fully vested on November 12, 2019, subject to Ms. Taylor’s continued cooperation with the Company through such date and subject to the effectiveness and irrevocability of the release of claims. Ms. Taylor will continue to serve as a member of the board of directors of the Company. On September 17, 2019, the Company entered into a 5-year consulting agreement with Bruce Linton. As compensation for the services rendered, the Company has issued 2,500,000 share purchase warrants to acquire one share each of Company Common Stock with an exercise price of $0.10. An additional 1,500,000 share purchase warrants to acquire one share each of Company Common Stock with an exercise price of $10.00. The Warrants will vest as follows: (i) 50% (or 1,250,000) of the Warrants (the “Tranche 1 Warrants”), will vest and be exercisable upon the earlier of (Y) September 17, 2020 or (Z) immediately prior to a Change in Control (as such term is defined under the Company’s 2019 Incentive Award Plan) (a “Change in Control”) and (ii) the remaining 50% (or 1,250,000) of the Warrants (the “Tranche 2 Warrants”) will vest and be exercisable upon the earlier of (Y) March 17, 2021 or (Z) immediately prior to a Change in Control, in each case, subject to Mr. Linton’s continued service to the Company through the applicable vesting date or Change in Control. The Warrants have a term expiring on September 17, 2029 (the “Expiry Date”) and will be subject to such other terms and conditions as may be determined by the Board. The Additional Warrants will be exercisable on the earlier of (Y) March 17, 2021 or (Z) immediately prior to a Change in Control, in each case, subject to Mr. Linton’s continued service to the Company through the applicable date. The Additional Warrants have a term expiring on the Expiry Date and will be subject to such other terms and conditions as may be determined by the Board. If Mr. Linton should cease to be engaged by the Company for any reason, other than as a result of a termination by reason of Just Cause (as such term is defined in the Independent Contractor Agreement) or as a result of Mr. Linton’s resignation as an independent contractor of the Company, the Incentive Warrants which have not then vested will immediately prior to the date Mr. Linton ceases to be engaged with the Company be deemed to become vested and such Incentive Warrants will remain exercisable until the Expiry Date. During the month of September 2019 several warrant holders converted 1,144,999 warrants to 1,259,498 Common Stock shares. The Company received $4.0 million in return for the common shares issued. |
Nature of Business and Summary
Nature of Business and Summary of Significant Accounting Policies (Q2) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Nature of Business and Summary of Significant Accounting Policies [Abstract] | ||
Nature of Business and Summary of Significant Accounting Policies | Note 1 – Nature of Business and Significant Accounting Policies Nature of Business Better Choice Company, Inc. (the “Company”) was originally incorporated in the State of Nevada on January 3, 2001 (“Inception”). The Company was dormant until it was revived in 2009 with a name change to Sport Endurance, Inc. on August 6, 2009. Effective March 11, 2019, we changed our name to Better Choice Company Inc. after reincorporating in Delaware. The Company previously marketed for sale three sport nutritional products which it suspended in March 2018. On March 14, 2018, the Company, through its wholly-owned subsidiary Yield Endurance, Inc. (“Yield”), entered into a series of agreements under which Yield borrowed $5 million of bitcoin (“BTC”). The Company simultaneously entered into transactions with Madison Partners LLC and Prism Funding Co. LP to lend the BTC to third parties. On August 21, 2018, the Company entered into a series of restructuring agreements to unwind the BTC transactions thereby exiting the BTC and cryptocurrency markets; see note 3. Effective March 11, 2019, Sport Endurance, Inc. merged into its wholly-owned subsidiary, Better Choice Company Inc., a Delaware corporation. As a result, the name of Sport Endurance, Inc. was changed to Better Choice Company Inc. Pursuant to the merger, each outstanding share of common stock of Sport Endurance, Inc. converted into one share of common stock of Better Choice Company Inc. and each outstanding share of Series E Convertible Preferred Stock (the “Series E”) of Sport Endurance, Inc. converted into one share of Series E Convertible Preferred Stock of Better Choice Company Inc. On December 17, 2018, the Company made a $2,200,000 investment in TruPet LLC, an online seller of pet foods, flea and tick products, pet nutritional products and related pet supplies. On February 2, 2019 and February 28, 2019, respectively, the Company entered into definitive agreements to acquire the remainder of TruPet LLC and all of the outstanding shares of Bona Vida, Inc., an emerging hemp based CBD platform focused on developing a portfolio of brand and product verticals within the animal health and wellness space. The definitive agreements are based on various conditions being met including completion of a financing (See Note 4). On March 14, 2019, the Company filed a certificate of amendment of certificate of incorporation (the “Amendment”) with the Delaware Secretary of State to effect a one-for-26 reverse split of the Company’s common stock. The Amendment took effect on March 15, 2019. No fractional shares will be issued or distributed as a result of the Amendment. These financial statements give retroactive effect to the reverse stock split for all periods presented, unless otherwise specified. On April 22, 2019, the Company filed a certificate of amendment of certificate of incorporation with the Delaware Secretary of State which reduced its number of authorized shares of common stock from 580,000,000 to 88,000,000 and authorized shares of preferred stock from 20,000,000 to 4,000,000. Basis of Presentation The audited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles and applicable rules and regulations of the United States Securities and Exchange Commission (“SEC”). Effective March 15, 2019, the board of directors of the Company approved a change in our fiscal year end from August 31 to December 31. As a result of this change, we are filing this Transition Report on Form 10-KT for the four month transition period ended December 31, 2018. References to any of our previous fiscal years mean the fiscal years ending on August 31. All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management utilizes various other estimates, including but not limited to determining the collectability of accounts receivable, the fair value of warrants issued, the fair value of conversion features, the recognition of revenue, the valuation allowance for deferred tax assets and other legal claims and contingencies. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period that they are determined to be necessary. Cash and Cash Equivalents Cash and equivalents include investments with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Deposits with these banks may exceed the amount of insurance provided on such deposits; however, these deposits typically may be redeemed upon demand and, therefore, bear minimal risk. At December 31, 2018 and August 31, 2018, the uninsured balances amounted to $95,412 and $0, respectively. Inventory Inventory consists of finished goods and is stated at the lower of cost by the first-in, first-out method or net realizable value. The Company currently has approximately 2,432 containers of “Ultra Peak T” included in inventory at December 31, 2018 and August 31, 2018. Revenue Recognition Adoption of ASU 2014-09, Revenue from Contracts with Customers On September 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”) using the modified retrospective (cumulative effect) transition method. Under this transition method, results for reporting periods beginning September 1, 2018 or later are presented under ASC 606, while prior period results continue to be reported in accordance with previous guidance. The cumulative effect of the initial application of ASC 606 was immaterial, no adjustment was recorded to the opening balance of retained earnings. The timing of revenue recognition for our revenue stream was not materially impacted by the adoption of this standard. The Company believes its business processes, systems and controls are appropriate to support recognition and disclosure under ASC 606. Overall, the adoption of ASC 606 did not have a material impact on the Company’s balance sheet, statement of operations and statement of cash flows for the period ended December 31, 2018. ASC 606 also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. As described below, the analysis of contracts under ASC 606 supports the recognition of revenue at a point in time, resulting in revenue recognition timing that is materially consistent with the Company’s historical practice of recognizing product revenue when title and risk of loss pass to the customer. Policy The Company recognizes revenue upon product delivery. All of our products are shipped through a third party fulfillment center to the customer and the customer takes title to product and assumes risk and ownership of the product when it is delivered. Shipping charges to customers and sales taxes collectible from customers, if any, are included in revenues. For revenue from product sales, the Company recognizes revenue in accordance with ASC 606. A five-step analysis must be met as outlined in Topic 606: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. Contract Assets The Company does not have any contract assets such as work-in-process. All trade receivables on the Company’s balance sheet are from contracts with customers. Contract Costs Costs incurred to obtain a contract are capitalized unless short term in nature. As a practical expedient, costs to obtain a contract that are short term in nature are expensed as incurred. The Company does not have any contract costs capitalized as of December 31, 2018. Contract Liabilities - Deferred Revenue The Company’s contract liabilities may consist of advance customer payments and deferred revenue. Deferred revenue results from transactions in which the Company has been paid for products by customers, but for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the deferred revenues are recognized. Income Taxes The Company utilizes ASC 740, Accounting for Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740, “Income Taxes”. Accounting guidance addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements, under which a company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Accordingly, the Company would report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company elects to recognize any interest and penalties, if any, related to unrecognized tax benefits in tax expense. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%. As of the completion of these consolidated financial statements and related disclosures, we have made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act, and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the fourth quarter of fiscal year 2019. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined. See Note 12 for additional information. Based on the new tax law that lowers corporate tax rates, the Company revalued its deferred tax assets. Future tax benefits are expected to be lower, with the corresponding one time charge being recorded as a component of income tax expense. Fair Value of Financial Instruments Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash and accrued expenses reported on the balance sheet are estimated by management to approximate fair value primarily due to the short term nature of the instruments. Fair Value Measurements The Company follows Accounting Standards Codification (“ASC”) 820–10 “Fair Value Measurement” of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820–10 establishes a framework for measuring fair value and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820–10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by ASC 820–10 are described below: Level 1- fair value measurements are those derived from quoted prices (unadjusted in active markets for identical assets or liabilities); Level 2- fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and Level 3- fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). Financial instruments classified as Level 1 - quoted prices in active markets include cash. These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments. Changes in such judgments could have a material impact on fair value estimates. In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic conditions may also dramatically affect the estimated fair values. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2018 and August 31, 2018. The respective carrying value of certain financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, accounts payable and accrued expenses. Derivative Financial Instruments ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re- measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described. The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option and warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. The pricing model we use for determining fair value of our derivatives is the Lattice Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income (see note 11). Conversion options are recorded as debt discount and are amortized as interest expense over the life of the underlying debt instrument using effective interest method. Basic and Diluted Loss Per Share The basic net loss per common share is computed by dividing the net loss by the weighted average number of common stock outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common stock outstanding plus potential dilutive securities. Following shares were not included in the calculation of diluted loss per share because the effect would be anti-dilutive. December 31, 2018 August 31, 2018 August 31, 2017 Conversion of notes payable - 82,974 44,245 Conversion of Series B Convertible Preferred Stock - 1,046,423 - Conversion of Series E Convertible Preferred Stock 3,681,273 - - Options 38,462 Warrants to purchase common stock 700,000 463,631 - 4,419,735 1,593,028 44,245 Related Parties Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. All transactions with related parties are recorded at fair value of the goods or services exchanged. Discontinued Operations ASC 360-10-45-9 requires that a long-lived asset (disposal group) to be sold shall be classified as held for sale in the period in which a set of criteria have been met, including criteria that the sale of the asset (disposal group) is probable and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. This criteria was achieved on August 21, 2018. Since the business was started and discontinued during the year ended August 31, 2018, there was no impact on the comparable consolidated financial statements. Investments The Company records minority interest equity investments at cost. Recently Issued Accounting Pronouncements In February 2016, FASB issued ASU No. 2016–02, “Leases (Topic 842)”, which creates new accounting and reporting guidelines for leasing arrangements. The new guidance requires organizations that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases, regardless of whether they are classified as finance or operating leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. The guidance also requires new disclosures to help financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early application permitted. The Company is currently evaluating the impact of the new pronouncement on its consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception”. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. ASU 2017-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company expects to implement ASU 2017-11 on January 1, 2019 and does not believe it will have a material impact on its consolidated financial statements. ASU 2018-02 - On December 22, 2017, the U.S. federal government enacted a tax bill, H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (the “Tax Cuts and Jobs Act”). Stakeholders raised a narrow-scope financial reporting issue that arose as a consequence of the Tax Cuts and Jobs Act of 2017. The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement-Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by the Generally Adopted Accounting Principles (“GAAP”). The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2018-210—Income Statement—Reporting Comprehensive Income (Topic 220), which has been deleted. We are currently evaluating the impact of adopting ASU 2017-13 on our consolidated financial statements. ASU 2018-05 Accounting Standards Update adds SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No. 118, which expresses the view of the staff regarding application of Topic 740, Income Taxes, in the reporting period that includes December 22, 2017 - the date on which the Tax Cuts and Jobs Act was signed into law. We are currently evaluating the impact of adopting ASU 2017-13 on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance is effective for public entities, certain not-for-profit entities, and certain employee benefit plans for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other entities, ASU 2018-07 is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company is evaluating the impact of adopting this pronouncement. In July 2018, the FASB issued ASU 2018-10 Leases (Topic 842), Codification Improvements and ASU 2018-11 Leases (Topic 842), Targeted Improvements, to provide additional guidance for the adoption of Topic 842. ASU 2018-10 clarifies certain provisions and correct unintended applications of the guidance such as the application of implicit rate, lessee reassessment of lease classification, and certain transition adjustments that should be recognized to earnings rather than to stockholders’ equity. ASU 2018-11 provides an alternative transition method and practical expedient for separating contract components for the adoption of Topic 842. In February 2016, the FASB issued ASU 2016-02 Leases (Topic 842) which requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases with terms greater than 12 months. ASU 2018-11, ASU 2018-10 and ASU 2016-02 (collectively, “the new lease standards”) are effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect the new lease standards will have on its Condensed Consolidated Financial Statements; however, the Company anticipates recognizing assets and liabilities arising from any leases that meet the requirements under the new lease standards on the adoption date and including qualitative and quantitative disclosures in the Company’s Notes to the Condensed Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. Removals The following disclosure requirements were removed from Topic 820: 1. The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy 2. The policy for timing of transfers between levels 3. The valuation processes for Level 3 fair value measurements 4. For nonpublic entities, the changes in unrealized gains and losses for the period included in earnings for recurring Level 3 fair value measurements held at the end of the reporting period. Modifications The following disclosure requirements were modified in Topic 820: 1. In lieu of a rollforward for Level 3 fair value measurements, a nonpublic entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities. 2. For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only 3. The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. Additions The following disclosure requirements were added to Topic 820; however, the disclosures are not required for nonpublic entities: 1. The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period 2. The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. In addition, the amendments eliminate at a minimum an entity shall disclose at a minimum The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. The impact of this ASU on the Company’s consolidated financial statements is not expected to be material. There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on our consolidated financial position, results of operations or cash flows. | Note Nature of the Business Better Choice Company, Inc. (the “Company”) is a holistic pet wellness company providing high quality, hemp-based, raw cannabidiol (“CBD”) infused and non-CBD infused food, treats and supplements, dental care products, and accessories for pets and their human parents. Our products are formulated and manufactured using only high-quality ingredients manufactured, tested and packaged to our specifications. On May 6, 2019, the Company acquired TruPet LLC and Bona Vida Inc. in a pair of all-stock transactions (the “acquisitions”). The acquisition of TruPet LLC is a reverse acquisition for accounting purposes, with TruPet as the accounting acquirer. The majority of our products are sold online directly to consumers with additional sales through online retailers and pet specialty stores. We have a limited selection of CBD infused canine products available on our Bona Vida website. The information contained in, or accessible through, these websites does not constitute a part of this Quarterly Report. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10–Q and Article 10 of Regulation S–X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and operating results have been included. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for any subsequent quarters or for the year ending December 31, 2019. The significant accounting policies applied by the Company are described below. We present our tables, except for the Statements of Stockholders’ Deficit, in dollars (thousands), numbers in the text in dollars (millions) and % as rounded up or down. Basis of Measurement The unaudited condensed consolidated financial statements of the Company are presented on a going concern basis, under the historical cost convention except for certain financial instruments that are measured at fair value, as explained in the accounting policies below. Historical cost is measured as the fair value of the consideration provided in exchange for goods and services. The Company’s functional and presentation currency is United States dollars (“USD”). Consolidation The consolidated financial statements and related notes include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Cash and Cash Equivalents Cash and cash equivalents include demand deposits held with banks and highly liquid investments with remaining maturities of ninety days or less at acquisition date. For purposes of reporting cash flows, the Company considers all cash accounts that are not subject to withdrawal restrictions or penalties to be cash and cash equivalents. Restricted Cash As part of the revolving credit agreement with Franklin Synergy Bank, the Company is required to maintain a cash balance of $6.2 million in its account. Any withdrawals from the account require an equal reduction to the funds available under the revolving credit agreement. Dollars in thousands June 30, 2019 December 31, 2018 Cash and cash equivalents $ 5,019 $ 3,946 Restricted cash 6,243 0 Total cash, cash equivalents and restricted cash $ 11,262 $ 3,946 Accounts Receivable Accounts receivable represents amounts due from customers less an allowance for doubtful accounts. A provision is recorded for impairment when there is objective evidence (such as significant financial difficulties of the debtor) that the Company will not be able to collect all amounts due according to the original terms of the receivable. A provision is recorded as the difference between the carrying value of the receivable and the present value of future cash flows expected from the debtor, with an offsetting amount recorded as an allowance, reducing the carrying value of the receivable. The provision is included in general and administrative expense in the statements of operations. As of the period ended June 30, 2019 and December 31, 2018, the Company considers accounts receivable to be fully collectible and, accordingly, no allowance for doubtful accounts has been recorded. Inventories Inventories are recorded at the lower of cost and net realizable value. The net realizable value represents the estimated selling price for inventories in the ordinary course of business, less all estimated costs of completion and costs necessary to make the sale. Cost is determined on a standard cost basis and includes the purchase price and other costs, such as transportation costs. Inventory average cost is determined on a first‑in, first‑out (“FIFO”) basis and trade discounts are deducted from the purchase price. Property and Equipment Property and equipment are carried at cost and includes expenditures for new additions and other additions, which substantially increase the useful lives of existing assets. Depreciation is computed at various rates by use of the straight-line method. Depreciable lives are generally as follows: Furniture and Fixtures 5 to 7 years Equipment 7 years Expenditures for normal repairs and maintenance are charged to operations as incurred. The cost of property or equipment retired or otherwise disposed of and the related accumulated depreciation are removed from the accounts in the year of disposal with the resulting gain or loss reflected in earnings. The Company assesses potential impairments of its property and equipment whenever events or changes in circumstances indicate that the asset’s carrying value may not be recoverable. An impairment charge would be recognized when the carrying amount of property and equipment is not recoverable and exceeds its fair value. The carrying amount of property and equipment is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the property and equipment. Income Taxes No provision has been made for federal and state income taxes prior to the date of the acquisitions since the proportionate share of TruPet’s income or loss was included in the personal tax returns of its members because TruPet was a limited liability company. Subsequent to the acquisitions, the Company, as a corporation, is required to provide for income taxes. The Company utilizes Accounting Standards Codification (“ASC 740”), “Accounting for Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The effective tax rate for each of the three months and the six months ended June 30, 2019 is 0%. The effective tax rate differs from the U.S. Federal statutory rate of 21% primarily because our previously reported losses have been offset by a valuation allowance due to uncertainty as to the realization of those losses. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. Accounting guidance addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements, under which a company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Accordingly, the Company would report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company elects to recognize any interest and penalties, if any, related to unrecognized tax benefits in tax expense. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%. As of the completion of these unaudited condensed financial statements, we have made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the end of the fourth quarter of fiscal year 2019. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined. Based on the new tax law that lowers corporate tax rates, the Company revalued its deferred tax assets. Future tax benefits are expected to be lower, with the corresponding one-time charge being recorded as a component of income tax expense. Revenue The Company recognizes revenue to depict the transfer of promised goods to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. In order to recognize revenue, the Company applies the following five (5) steps: • Identify a customer along with a corresponding contract; • Identify the performance obligation(s) in the contract to transfer goods to a customer; • Determine the transaction price the Company expects to be entitled to in exchange for transferring promised goods to a customer; • Allocate the transaction price to the performance obligation(s) in the contract; and • Recognize revenue when or as the Company satisfies the performance obligation(s). A description of the Company’s revenue generating activities is listed below: Direct-to-consumer (“DTC”) – Our products are offered through our online stores where customers place orders online or through our customer service number. Revenue is recorded, net of discounts, at the time the order is received by the customer. Revenue is deferred for orders that have been placed, and paid for, but have not yet been received by the customer during the reporting period. As our customers have a 60-day guarantee on the product purchased, the Company records a liability for two months of estimated returns based on historical experience. Loyalty Program - The Company offers a loyalty program to all of its direct-to-consumer customers. There are two tiers to the program. Tier 1: the customer will earn 6 points for every $1 spent Tier 2: the customer can earn points at a much faster rate and will also have opportunities to earn bonus points for different events, such as a birthday. This tier is known as the TruDog Love Club, and the customer accumulates twelve points for every $1 spent. The redemption requirements are the same under both levels and, for every five hundred points earned, customers receive a $5 gift code which can be redeemed for goods purchased in the future. The Company records a reduction to sales revenue and deferred revenue when the customer accumulates loyalty points. Wholesale Sales – This channel includes the sale of our products to wholesale customers for resale. The Company’s policy is to recognize revenue at the time the product is shipped to the wholesale customer, net of estimated returns and allowances. Consignment – The Company partners with an Amazon channel partner to market and sell TruDog products. Revenue is recognized, net of returns, when our partner ships the product to the end customer. The commission, selling, marketing and storage fees are recognized at the time the services are rendered by the channel partner and are recorded by the Company, as follows: • Commission, selling and marketing fees as sales and marketing expenses • Storage fees as cost of goods sold. Cost of Goods Sold Cost of goods sold consists primarily of the cost of product obtained from the contract manufacturing plants, packaging materials and CBD oils directly sourced by the Company, and freight for shipping product from our contract manufacturing plants to our warehouse. We review inventory on hand periodically to identify damages, slow moving inventory, and/or aged inventory. Based on the analysis, we record inventories on the lower of cost and net realizable value, with any reduction in value expensed as cost of goods sold. Advertising The Company charges advertising costs to expense as incurred and such charges are included in sales and marketing expenses. Advertising costs, consisting primarily of Facebook advertising, search costs and email advertising, were $2.3 million and $1.2 million for the three-month periods ended June 30, 2019 and 2018, respectively. For the six-month periods ended June 30, 2019 and 2018, advertising costs were $3.5 million and $2.2 million, respectively. Research and Development Research is a planned search or a critical investigation aimed at discovering new knowledge and information with the hope that such knowledge will be useful in developing a new product or service (referred to as a “product”) or a new process or technique (referred to as a “process”) or bringing about a significant improvement to an existing product or process. Development is the translation of research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or use. It includes the conceptual formulation, design and testing of product alternatives, construction of prototypes and operation of pilot plants. No research and development costs were incurred during the three or six month period ended June 30, 2019 and June 30, 2018. Shipping and Handling / Freight Out The Company recognizes shipping and handling costs as a fulfillment cost, included in other operating expenses as they are incurred prior to the customer obtaining control of the products. Shipping and handling costs primarily consist of costs associated with moving finished products to customers through third-party carriers. Shipping and handling costs were $0.6 million and $0.7 million for the three-month periods ended June 30, 2019 and 2018, respectively. For the six-month periods ended June 30, 2019 and 2018, shipping and handling costs were $1.2 million and $1.3 million, respectively. Additionally, for direct to consumer customers, the Company may recover such costs by passing them onto the customer. In these instances, the Company includes the freight charges billed to customers in total revenue. The amount included in revenue related to such recoveries was $0.2 million and $0.3 million for the three-month periods ended June 30, 2019 and 2018, respectively. For the six-month periods ended June 30, 2019 and 2018, the amounts included in revenue related to such recoveries was $0.4 million and $0.6 million, respectively. Fair Value of Financial Instruments A financial instrument is defined as cash, evidence of an ownership interest in an entity, or a contract that both: • Imposes on one entity a contractual obligation either: o To deliver cash or another financial instrument to a second entity; or o To exchange other financial instruments on potentially unfavorable terms with the second entity. • Conveys to that second entity a contractual right either: o To receive cash or another financial instrument from the first entity; or o To exchange other financial instruments on potentially favorable terms with the first entity. The Company’s financial instruments recognized in the balance sheet consist of cash and cash equivalents, restricted cash accounts, accounts receivable, deposits, accounts payable, line of credit, due to related party, accrued and other liabilities, warrant derivative liability and long-term debt. Warrant derivative liability is measured at fair value each reporting period. The fair values of the remaining financial instruments approximate their carrying values. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has applied the framework for measuring fair value which requires a fair value hierarchy to be applied to all fair value measurements. The fair value of the warrant derivative liability is considered a Level 3 financial instrument. All financial instruments recognized at fair value in the balance sheet are classified into one of three levels in the fair value hierarchy as follows: • Level 1 – valuation based on quoted prices (unadjusted) observed in active markets for identical assets or liabilities. Cash is measured based on Level 1 inputs. • Level 2 – valuation techniques based on inputs that are quoted prices of similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; inputs other than quoted prices used in a valuation model that are observable for that instrument; and inputs that are derived from or corroborated by observable market data by correlation or other means. • Level 3 – valuation techniques with significant unobservable market inputs. Derivative Financial Instruments Financial Accounting Standards Board (“FASB”) ASC Topic 815, “Derivatives and Hedging”, generally provides three criteria that, if met, require companies to bifurcate conversion options from its host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described. The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option and warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. The pricing model we use for determining fair value of our derivatives is the Lattice Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income (see Note 8). Basic and Diluted Loss Per Share Basic and diluted loss per share has been determined by dividing the net loss available to stockholders for the applicable period by the basic and diluted weighted average number of shares outstanding, respectively. Common Stock equivalents and incentive shares are excluded from the computation of diluted loss per share when their effect is anti-dilutive. Stock-Based Compensation The Company recognizes a compensation expense for all equity–based payments in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”. The Company accounts for share–based payments granted to non–employees in accordance with FASB ASC Topic 505–50, “Equity Based Payments to Non–Employees.” The Company follows the fair value method of accounting for stock awards granted to employees, directors, officers and consultants. Stock-based awards to employees are measured at the fair value of the related stock-based awards. Stock-based payments to others are valued based on the related services rendered or goods received or if this cannot be reliably measured, on the fair value of the instruments issued. Issuances of such awards are valued using the fair value of the awards at the time of grant. The Company recognizes stock-based payment expenses over the vesting period based on the number of awards expected to vest over that period on a straight-line basis. Forfeitures are accounted for as they occur. The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is calculated based on the analysis of other public companies within the pet wellness sector. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. The Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. Use of Estimates The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of expenses during the reporting periods. The Company evaluates its estimates on an ongoing basis. The Company bases its estimates on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. To date, the Company has viewed its operations and manages its business as one segment operating in the United States of America. The Company’s chief operating decision-maker does not review operating results on a disaggregated basis; rather, the chief operating decision-maker reviews operating results on an aggregate basis. License Intangibles License intangibles are recorded at fair value at the date of acquisition and are amortized ratably over the life of the license agreement. Commitments and Contingencies We may be involved in legal proceedings, claims, and regulatory, tax, or government inquiries and investigations that arise in the ordinary course of business resulting in loss contingencies. We accrue for loss contingencies when losses become probable and are reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. We do not accrue for contingent losses that are considered to be reasonably possible, but not probable; however, we disclose the range of such reasonably possible losses. Loss contingencies considered remote are generally not disclosed. We have entered into debt, royalty and lease agreements for which we are committed to pay certain amounts over a period of time. See Notes 5, 6 and 7. Reclassification of Prior Period Presentation Certain reclassifications have been made to conform the prior period data to the current presentations. These reclassifications had no effect on the reported results. Recently Issued Accounting Pronouncements The Company has reviewed the Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof issued by the FASB that have effective dates during the reporting period and in future periods. New Standards and Interpretations: Adoption of FASB ASC Topic 842 “Leases” The amendments in this update establish a comprehensive new lease accounting model. The new standard: (a) clarifies the definition of a lease; (b) requires a dual approach to lease classification similar to current lease classifications; and (c) causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease term of more than twelve months. The new standard is effective for fiscal years and interim periods beginning after December 15, 2018, with early adoption permitted. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, including a number of optional practical expedients that entities may elect to apply. In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements”, an update which provides another transition method, the prospective transition method, which allows entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted the new standard on January 1, 2019 using the prospective transition method. The Company has identified all leases to determine the impact of ASC 842 on its consolidated financial statements. The Company has elected to apply the practical expedient to certain classes of leases, whereby the separation of components of leases into lease and non-lease components is not required, and all of the practical expedients to all leases, (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any existing leases. The adoption of the new standard resulted in the recording on the consolidated balance sheet as of January 1, 2019 a right-of-use asset of $0.5 million, a lease liability of $0.5 million and a corresponding cumulative adjustment to accumulated deficit of an immaterial amount in accordance with ASC 842. Adoption of FASB ASU No. 2018-07 “Improvements to Nonemployee Share-Based Payment Accounting” On January 1, 2019, the Company adopted ASU No. 2018-07 “Improvements to Nonemployee Share-Based Payment Accounting”. The amendments in this update expanded the scope of ASC 718 to include share-based payment transactions for acquiring goods and services from non-employees. The requirements of ASC 718 are applied to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. The amendments specify that ASC 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that ASC 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606, “Revenue from Contracts with Customers.” The Company is treating the inclusion of share-based payments to non-employees as a change in accounting principle prospectively beginning in the period ending June 30, 2019. As the Company did not make any share-based payments to non-employees in prior periods, there was no impact on the results of operations in prior periods. Adoption of ASU 2018-13 “Fair Value Measurement” In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) Changes to the Disclosure Requirement for Fair Value Measurement” which amends ASC 820 to expand the disclosures required for items subject to Level 3, fair value remeasurement, including the underlying assumptions. ASU 2018-13 is effective for public companies for fiscal years beginning after December 15, 2019. The Company has early adopted the disclosures as permitted under the ASU. New and Revised Standards not Yet Adopted: In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326)”. ASU 2016-13 changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019. The Company does not anticipate any material impact from the implementation of this ASU. The Company has carefully considered other new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the Company’s reported balance sheet or operations in 2019. |
Acquisition of TruPet LLC and B
Acquisition of TruPet LLC and Bona Vida, Inc. (Q2) | 6 Months Ended |
Jun. 30, 2019 | |
Acquisition of TruPet LLC and Bona Vida, Inc. [Abstract] | |
Acquisition of TruPet LLC and Bona Vida, Inc. | Note 2 - Acquisition of TruPet LLC and Bona Vida, Inc. On May 6, 2019, the Company completed the acquisitions through the issuance of shares of Common Stock, par value $0.001 of the Company (the “Common Stock”). Following the completion of the acquisitions, the business conducted by the Company became primarily the businesses conducted by TruPet and Bona Vida. TruPet is a North American online seller of pet foods, pet nutritional products and related pet supplies. Bona Vida is an emerging hemp based CBD platform focused on developing a portfolio of brand and product verticals within the animal health and wellness space. The completion of the acquisitions has created a vertically integrated pet wellness company providing high-quality raw CBD infused and non-CBD infused food, treats and supplements in addition to dental care products and accessories for pets and their human parents. Based upon the guidance described in ASC 805-10-25-4 and 5, TruPet LLC has been determined to be the accounting acquirer. As such, the historical financial statements are those of TruPet, and TruPet’s equity has been re-cast to reflect shares of Common Stock received in the acquisitions. At the closing of the TruPet transaction, the Company issued 15,027,533 shares of Common Stock in exchange for the remaining 93% of the outstanding interests in TruPet. BCC had acquired the initial 7% of TruPet in December 2018. Immediately after the consummation of the acquisitions, the TruPet members, in the aggregate, owned 38% of the combined company. The Company retired 914,919 TruPet Member Units (equivalent to 1,011,748 Common Shares) owned by Better Choice Company as part of the acquisition. Bona Vida did not meet the definition of a business and therefore asset acquisition accounting was applied. At the closing of the Bona Vida transaction, the Company issued 18,003,274 shares of Common Stock in exchange for 100% of the outstanding shares of Bona Vida. Immediately after the consummation of the acquisitions, the Bona Vida stockholders, in the aggregate, owned 46% of the combined company. Better Choice Company did not meet the definition of a business and therefore asset acquisition accounting was applied. The fair value of Better Choice Company’s net liabilities and redeemable preferred stock acquired by TruPet is estimated to be $19.5 million. The estimated purchase price has been allocated based on a preliminary estimate of the fair value of Better Choice Company assets acquired and liabilities assumed and redeemable preferred stock assumed with the remainder recorded as an expense. The loss on acquisition of Better Choice Company assets was $38.2 million. The fair value of Bona Vida’s net assets acquired is estimated to be $1.0 million. The estimated purchase price has been allocated based on a preliminary estimate of the fair value of assets acquired and liabilities. The excess of the consideration paid over the net assets acquired has been recorded as an expense. The loss on acquisition of Bona Vida’s assets was $107.0 million. On May 6, 2019, the fair value of the following assets and liabilities were acquired: Dollars in thousands Better Choice Company Bona Vida Total Assets Current Assets Cash and cash equivalents $ 1,546 $ 384 $ 1,930 Restricted cash 25 25 Accounts receivable 30 30 Intercompany receivables 6,161 38 6,199 Inventories 193 193 Prepaid expenses and other current assets 52 347 399 Total Current Assets 7,759 1,017 8,776 Intangible assets, net of amortization 986 986 Other assets 74 74 Total Assets $ 8,745 $ 1,091 $ 9,836 Liabilities and Redeemable Preferred Stock Current Liabilities Warrant derivative liability $ 2,111 $ - $ 2,111 Accounts payable & accrued liabilities 2,071 69 2,140 Long term debt, current portion 6,200 6,200 Total Current Liabilities $ 10,382 $ 69 $ 10,451 Total Liabilities $ 10,382 $ 69 $ 10,451 Redeemable Series E Preferred Stock $ 20,059 $ - $ 20,059 |
Inventories (Q2)
Inventories (Q2) | 6 Months Ended |
Jun. 30, 2019 | |
Inventories [Abstract] | |
Inventories | Note 3 - Inventories Inventories reflected on the accompanying balance sheets are summarized as follows: Dollars in thousands June 30, 2019 December 31, 2018 Food, treats and supplements $ 1,682 $ 1,301 Other products and accessories 87 191 Inventory packaging and supplies 168 133 1,937 1,625 Inventory reserve (230 ) (68 ) $ 1,707 $ 1,557 |
Property and Equipment (Q2)
Property and Equipment (Q2) | 6 Months Ended |
Jun. 30, 2019 | |
Property and Equipment [Abstract] | |
Property and Equipment | Note 4 - Property and Equipment Property and equipment consist of the following: Dollars in thousands June 30, 2019 December 31, 2018 Warehouse equipment $ 49 $ 49 Computer equipment 14 14 Furniture and fixtures 76 46 Total property and equipment 139 109 Accumulated depreciation (80 ) (38 ) $ 59 $ 71 Depreciation expense was immaterial for the three and six-month periods ended June 30, 2019 and 2018, respectively. Depreciation expense is included as a component of general and administrative expenses. |
Operating Leases (Q2)
Operating Leases (Q2) | 6 Months Ended |
Jun. 30, 2019 | |
Operating Leases [Abstract] | |
Operating Leases | Note 5 – Operating Leases The Company adopted Topic 842 “Leases” effective January 1, 2019. A modified retrospective transition approach was followed by applying the new standard to all leases existing at the date of initial application. We chose to use January 1, 2019 as our date of initial application of the standard. Since we adopted the new standard on January 1, 2019 and use the effective date as our date of initial application, financial information will not be updated, and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides a number of optional practical expedients in transition. We elected the ‘package of practical expedients’, which permits us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs. We did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter not being applicable to us. We elected all of the new standard’s available transition practical expedients. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Operating lease right-of-use assets and liabilities were recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, an incremental borrowing rate based on the information available at the commencement date was used in determining the present value. The Company will use the implicit rate when readily determinable. This standard did not have a material effect on our financial statements. The adoption of Topic 842 resulted in an immaterial cumulative effect adjustment to accumulated deficit and the Company recognized operating lease right-of-use assets of $0.5 million and operating lease liabilities of $0.5 million on January 1, 2019. The most significant future effects relate to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our real estate operating leases and (2) providing significant new disclosures about our leasing activities. The Company leases its office and warehouse facilities under operating leases which originally expired in November 2018. These agreements were modified in October 2017 for additional space leased. With this modification, the rent term was also revised and extended until October 2022, at a base prices of $13.02 per square foot for the existing lease and $15.50 per square foot for the additional space leased, with a 3.5% annual escalation clause and a one-time option to renew the leases for an additional 5-year term. In addition to base monthly rent, the agreement requires the Company to pay its proportionate share of real estate taxes, insurance, and common area maintenance expenses. In February and May 2019, the Company entered into two additional operating leases for office and warehouse facilities under three- year lease agreements at base monthly rental rates of $8,856 and $4,492, respectively. The monthly rent shall increase each year which will be based on the Consumer Price Index promulgated by the United States Bureau of Labor Statistics. The rent adjustment will not be less than two percent or exceed five percent per year. The Company determines if an arrangement contains a lease at inception based on the ability to control a physically distinct asset. Operating and finance lease right-of-use assets are recorded in the consolidated balance sheets based on the initial measurement of the lease liability as adjusted to include prepaid rent and initial direct costs less any lease incentives received. Lease liabilities are measured at the commencement date based on the present value of the lease payments over the lease term. Lease payments are generally fixed but may include provisions for future rent increases. The Company separately accounts for variable components within lease agreements including common area maintenance, insurance and real estate taxes. The Company uses its incremental borrowing rate to present value the lease liability as key inputs to determine the interest rate implicit in the lease are not shared by lessors. Operating lease expense is recorded on a straight-line basis over the lease term. Right-of-use assets and lease liabilities for short-term leases are not recognized in the consolidated balance sheets. Payments for leases with a term of one month or less are recognized in the consolidated statements of operations as incurred. We have no leases that are considered short term (one year or less). Rent expenses related to our real estate leases for which a right of use asset has been recognized totaled $0.1 million and $0.1 million for the three and six months ended June 30, 2019, respectively. Estimated expenses for variable lease costs are immaterial for the three and six months period ended June 30, 2019. Rent expense for operating leases in effect and recorded prior to the adoption of ASC 842. Leases amount to an immaterial amount and $0.1 million for the three and six-month periods ended June 30, 2018, respectively. The table below presents the operating lease-related assets and liabilities recorded on the consolidated balance sheets: Dollars in thousands Leases Balance Sheet Classification June 30, 2019 Assets Non-current assets Operating lease right-of-use assets, net of accumulated amortization $ 840 Total operating lease assets $ 840 Liabilities Current Operating Operating lease liabilities (262 ) Non-current Operating Operating lease liabilities (590 ) Total operating lease liabilities $ (852 ) The table below presents the maturity of lease liabilities as of June 30, 2019: Dollars in thousands Lease payments Operating Leases Remainder of 2019 $ 147 2020 299 2021 303 2022 169 Total undiscounted minimum future lease payments 918 Less: imputed interest 66 Present value of lease liabilities $ 852 |
License Intangibles and Royalti
License Intangibles and Royalties (Q2) | 6 Months Ended |
Jun. 30, 2019 | |
License Intangibles and Royalties [Abstract] | |
License Intangibles and Royalties | Note 6 – License Intangibles and Royalties On May 6, 2019, the Company entered into a licensing agreement with Elvis Presley Enterprises, LLC which is fairly valued at $1 million and related to an April 2019 agreement between Better Choice Company, Authentic Brands and Elvis Presley Enterprises focused on the development of hemp-derived CBD products under the Elvis Presley Hound Dog name. Product development is expected to be complete in late 2019. The initial term of the licensing agreement ends on December 31, 2025. The license agreement is amortized on a straight-line basis over the life of the agreement. During the period from May 6, 2019 through June 30, 2019, an immaterial amount in amortization was expensed related to the Hound Dog license. Royalties are required to be paid quarterly at a rate of 5% of net retail sales and 10% of net wholesale sales. The contract includes Guaranteed Minimum Royalty Payments for each of the contract years as per the table below: Dollars in thousands Guaranteed Minimum Royalty 2019-2020 $ 1,500 2021 $ 1,000 2022 $ 1,125 2023 $ 1,250 2024 $ 1,500 2025 $ 1,750 As of June 30, 2019, the Company had paid $0.6 million of the 2019-2020 Guaranteed Minimum Royalty Payments which were recorded as prepaid expenses. There were no sales related to Hound Dog products during the three and six-month periods ended June 30, 2019. The Company entered into an agreement for the payment of royalties related to sales of the Orapup brand dental system in November 2015. The agreement called for a 10% royalty to be paid on the first $2.5 million of related sales for a term of three years. Thereafter, commencing on the earlier of the end of the three-year term or having reached $2.5 million in sales, a 2% royalty was to be paid thereafter. Royalty expense was minimal during 2017 and 2018. In November 2018, the parties reached a settlement whereby the Company paid $0.1 million to fulfill all of its present and future obligations related to this agreement. Due to the settlement by the parties, the Company no longer has any royalty obligation related to the Orapup brand dental system. |
Line of Credit and Debt (Q2)
Line of Credit and Debt (Q2) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Line of Credit and Debt [Abstract] | ||
Line of Credit and Debt | Note 9 – Convertible Notes Payable December 31, 2018 August 31, 2018 August 31, 2017 May 2016 Convertible Notes On May 11, 2016 the Company entered into Securities Purchase Agreements with certain purchasers (“the May 2016 Convertible Noteholders”). The Company issued 3.5% original issue discount (“OID”) senior secured convertible promissory notes having an aggregate face amount of $440,000 (the “May 2016 Convertible Notes”). These notes bear interest at a rate of 10% per annum and mature in six months. The Company received cash proceeds of $424,600 net of the 3.5% original issue discount of $15,400. At the Holders option the principal and accrued interest under the Notes are convertible into common stock at a rate of $13 per share and have a full reset feature. The Notes are secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 125% during the first 90 days and 130% for the period from the 91st day through maturity. During November 2016, the Company entered into forbearance agreements with the May 2016 Convertible Noteholders extending its time to pay the Notes until December 16, 2016. In December 2016, the Company entered into agreements with the May 2016 Convertible Noteholders to substantially restructure the terms of the May 2016 Convertible Notes; see January and February 2017 Convertible Notes below. During the years ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $0 and $172,735, respectively, in connection with the amortization of the discount on these notes. $ - $ - $ - January and February 2017 Convertible Notes In December 2016, the Company entered into restructuring agreements with the May 2016 Convertible Noteholders in connection with the May 2016 Convertible Notes (see above) under the following terms: new notes (the “January and February 2017 Convertible Notes”) would be issued for the amounts due under the May 2016 Convertible Notes; penalties, fees, and accrued interest in the aggregate amount of $212,702 were added to the principal amount due under the January and February 2017 Convertible Notes; 1,346 shares of common stock were issued as a commitment fee; the January and February 2017 Convertible Notes were issued at a discount of 3.5%, bear interest at the rate of 10% per annum, are convertible at a rate of $13.00 per share, and contain a variable conversion rate whereby, should the Company subsequently sell common stock at a price less than the conversion price, the conversion price of the January and February 2017 Convertible Notes will be reduced to match the lower conversion price. In addition, the proceeds from one of the January and February 2017 Convertible Notes were used to fully redeem one of the May 2016 Convertible Notes. The aggregate original amount of principal due under the January and February 2017 Convertible Notes was $614,258. Two of the January and February 2017 Convertible Notes in the aggregate amount of $494,340 were due on March 31, 2017, and one of the January and February 2017 Convertible Notes in the amount of $119,918 was due on August 17, 2017. In April 2017, the Company received forbearance letters from the Note Purchasers of the January and February 2017 Convertible Notes that were due on March 31, 2017 to extend the due date to April 17, 2017 in exchange for principal payments in the aggregate amount of $75,000; on April 18, 2017, the Company received forbearance letters to further extend the due date to May 1, 2017 in exchange for principal payments in the aggregate amount of $45,000; and on May 1 and 2, 2017, the company entered into forbearance agreements with the holders of the January and February 2017 Convertible Notes to extend the due date to June 2, 2017. On June 5 and June 13, 2017, the Company entered into forbearance agreements with the holders of two of the three January and February 2017 Convertible Notes to extend the due dates to December 27, 2017 in exchange for increase in principal in the aggregate amount of $78,907. On August 17, 2017, the Company entered into a forbearance agreement with the holders of the third January and February Convertible Note to extend the due date to December 27, 2017 in exchange for $10. At August 31, 2017, three of the January and February 2017 Convertible Notes were outstanding in the aggregate amount of $553,976; these notes are due December 27, 2017. During the year ended December 31, 2017, the holders of the January and February 2017 Convertible Notes converted an aggregate of $33,865 in principal and $21,135 in accrued interest into 17,628 shares of common stock; the Company recorded an aggregate loss in the amount of $122,878 on these conversions. On January 17, 2018, the Note Purchasers of one of the January and February 2017 Convertible Notes in the principal amount of $241,802 purchased the remaining two January and February 2017 Convertible Notes in the aggregate principal amount of $278,309. The Company then entered into an agreement with the Note Purchasers to exchange the three January and February 2017 Convertible Notes (the “January 2018 Note Exchange”) in the aggregate principal amount of $520,111 for a new Convertible Note in the principal amount of $542,343 (the “January 2018 Convertible Note”). The Company revalued the derivative liability associated with the conversion feature associated with January and February 2017 notes and compared it with the derivative liability on the January 2018 convertible note, and recorded an expense in the amount of $396,611 related to the change in value. The Company recorded a loss in the amount of $6,409 on the January 2018 Note Exchange related to modification of notes. During the year ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $153,234 and $154,848, respectively in connection with the amortization of the discount on these notes. $ - $ - $ 553,977 December 31, 2018 August 31, 2018 August 31, 2017 November 2017 Convertible Note On November 17, 2017, the Company entered into a Securities Purchase Agreement with the Note Purchaser. The Company issued a 3.5% original issue discount (“OID”) senior secured convertible promissory note having an aggregate face amount of $250,000 (the “November 2017 Convertible Note”). This note bears interest at a rate of 10% per annum and matures in six months. The Company received cash proceeds of $241,250 net of the 3.5% original issue discount of $8,750. At the Note Purchaser’s option, the principal and accrued interest under the note are convertible into common stock at a rate of $13.00 per share and have a full reset feature. The note is secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. In addition, the Company granted the investor the Option to lend the Company $48,250 on or before January 15, 2018. If the Option is exercised, the Company would issue the investor a $50,000 3.5% original issue discount senior secured convertible promissory note. During the three months ended May 31, 2018, the Company accrued interest in the amount of $12,283 on this note. On May 31, 2018, the Company converted the outstanding balance of principal and interest in the amounts of $250,000 and $13,125, respectively, into a total of 265,782.83 shares of Series B Preferred Stock; the Company recorded a gain on settlement of notes payable in the amount of $130,252 in connection with this transaction. During the years ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $135,307 and $0 respectively, in connection with the amortization of the discount on these notes. $ - $ - $ - January 2018 Convertible Note On January 17, 2018, the Company entered into an agreement with the Note Purchaser to exchange the three January and February 2017 Convertible Notes for a new Convertible Note (the “January 2018 Convertible Note”). The Company exchanged outstanding principal in the amount of $520,111 and accrued interest of $15,823 for the January 2018 Convertible Note with a face amount of $542,343, and an original issue discount of $18,982; the Company revalued the derivative liability associated with the conversion feature associated with January and February 2017 notes and compared it with the derivative liability on the January 2018 convertible notes, and recorded an expense in the amount of $396,611 related to the change in value. A non-cash loss on restructuring of debt in the amount of $6,409 was recognized on this transaction during the year ended August 31, 2018. The January 2018 Convertible Note is a senior secured promissory note, bears interest at a rate of 10% per annum, and matures in 12 months. At the Note Purchaser’s option, the principal and accrued interest under the January 2018 Convertible Note are convertible into common stock at a rate of $0.78 per share and have a full reset feature. The note is secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. On January 29, 2018, the Note Purchaser converted $28,148 in principal and $1,808 in accrued interest into 38,405 shares of common stock. The Company recorded a loss of $351,769 on the conversion of note payable and accrued interest. During the three months ended May 31, 2018, the Company accrued interest in the amount of $13,125 on this note. On May 31, 2018, the Company converted the outstanding balance of principal and interest in the amounts of $514,195 and $18,610, respectively, into a total of 538,186.87 shares of Series B Preferred Stock; the Company recorded a gain in the amount of $933,263 on this transaction, and amortized the remaining discount in the amount of $68,855 to interest expense. During the years ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $0 and $0, respectively, in connection with the amortization of the discount on these notes. $ - $ - $ - December 31, 2018 August 31, 2018 August 31, 2017 February 2018 Convertible Note On February 15, 2018, the Company entered into a Securities Purchase Agreement with the Note Purchaser. The Company issued a 3.5% OID senior secured convertible promissory note with a face amount of $250,000 (the “February 2018 Convertible Note”). The February 2018 Convertible Note bears interest at a rate of 10% per annum and matures in nine months. The Company received cash proceeds of $241,250 net of the 3.5% original issue discount of $8,750. At the Note Purchaser’s option, the principal and accrued interest under the note are convertible into common stock at a rate of $13.00 per share and have a full reset feature. The February 2018 Convertible Note is secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. In addition, the Company granted the Note Purchaser 19,231 warrants to purchase 19,231 shares of the Company’s common stock with an exercise price of $0.26. The warrants have a five-year term. A derivative liability in the amount of $667,470 was created with regard to the conversion features and warrants associated with this note; $241,250 was charged to discount on notes payable, and the balance of $426,220 was charged to interest expense during the three months ended February 28, 2018. On March 26, 2018, the Company and the Note Purchaser agreed to eliminate the reset feature of this note. During the year ended August 31, 2018, the Company accrued interest in the amount of $13,681 on this note; as of August 31, 2018, principal in the amount of $250,000 was outstanding under the February 2018 Convertible Note. During the three months ended November 30, 2018, the Company accrued interest in the amount of $3,611 on this note. In October 2018, the February 2018 Convertible Note, accrued interest and warrants were converted to a new series of the Company’s preferred stock; see note 10. During the Transition Period ended December 31, 2018, the Company charged to interest expense the amounts of $16,298 in connection with the amortization of the discount on these notes. During the years ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $51,388 and $0, respectively, in connection with the amortization of the discount on these notes. $ - $ 250,000 $ - March 2018 Convertible Note On March 9, 2018, the Company issued a 3.5% OID senior secured convertible promissory note with a face amount of $777,202 (the “March 2018 Convertible Note”). The March 2018 Convertible Note bears interest at a rate of 10% per annum and matures in nine months. The Company received cash proceeds of $750,000 net of the 3.5% original issue discount of $27,202. At the Note Purchaser’s option, the principal and accrued interest under the note are convertible into common stock at a rate of $13.00 per share. The March 2018 Convertible Note is secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. In addition, the Company granted the Note Purchaser 59,785 warrants to purchase 59,785 shares of the Company’s common stock with an exercise price of $0.26. The warrants have a five-year term. A derivative liability in the amount of $771,460 was created with regard to the conversion features and warrants associated with this note, which was charged to discount on notes payable. On May 9, 2018, the Note Purchaser transferred their ownership in $497,458 of principal and $18,042 of accrued interest in the March 2018 Convertible Note to a third party. The Company revalued the derivative liability associated with the conversion feature of the March 2018 note at the time of this restructure, and recorded a gain on revaluation in the amount of $40,072. During the year ended August 31, 2018, the Company accrued interest in the amount of $37,780 on the March 2018 Convertible. As of August 31, 2018, principal in the amount of $777,202 was outstanding under the March 2018 Convertible Note. During the three months ended November 30, 2018, the Company accrued interest in the amount of $11,226 on this note. In October 2018, the March 2018 convertible note, accrued interest and warrants were converted to a new series of the Company’s preferred stock; see note 10. During the Transition Period ended December 31, 2018, the Company charged to interest expense the amounts of $102,410, in connection with the amortization of the discount on these notes. During the years ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $192,978 and $0, respectively, in connection with the amortization of the discount on these notes. $ - $ 777,202 $ - December 31, 2018 August 31, 2018 August 31, 2017 Total $ - $ 1,027,202 $ 553,977 Less: Unamortized discount - (752,988 ) (153,234 ) Total, net of discount $ - $ 274,214 $ 400,743 Current portion $ - $ 1,027,202 $ 553,977 Long term - - - Total $ - $ 1,027,202 $ 553,977 March 2018 Note to Prism Under the terms of a series of agreements (the “Former Agreements”), Yield issued Prism Funding Co, LP (“Prism”) a 10% OID Senior Secured Convertible Note (the “Senior Note”) in the principal amount of $5,500,000 and received the BTC. The Senior Note was payable 30 days following written demand from Prism (the “Maturity Date”) and with interest at 10% per annum. Pursuant to the terms of the restructuring agreement entered into in August 2018, the Company’s liability for the Senior Note was extinguished upon the restructuring of the BTC loan (see note 3). | Note 7 - Line of Credit and Debt In May 2017, the Company along with the majority owners serving as co-borrowers entered into a credit facility providing for up to $2 million of borrowings. Through various amendments, the maximum borrowings under the line increased to $4.6 million with a maturity of May 2019. Borrowings bear interest at LIBOR plus 3%. At June 30, 2019 and December 31, 2018, outstanding borrowings amounted to $0 and $4.6 million, respectively. The line of credit was secured by personal assets of the co-borrowers. Covenants under the line of credit required the Company to be within a certain quarterly and annual loss limitation threshold, and certain other restrictions. As of December 31, 2018, the Company was in compliance with its covenants and/or obtained waivers from the lien holders. At June 30, 2019 and December 31, 2018, outstanding borrowings amounted to $0 and $1.6 million, respectively. At December 31, 2018, our long-term debt consisted of an unsecured note payable to a director of the Company bearing 26.6% interest with principal and interest due within 30 days after change of control. No interest was paid during 2019. On May 6, 2019, Better Choice Company refinanced the $4.6 million line of credit and the $1.6 million note payable to the director with a $6.2 million revolving credit agreement with Franklin Synergy Bank. All advances relating to this revolving credit agreement bear a fixed rate of interest equal to 3.7% per annum , TruPet and Bona Vida became guarantors of the Company’s obligations under the Loan Agreement after the closing of the acquisitions. In addition, pursuant to a Security Agreement by and between the Company and Lender dated the date of the Loan Agreement (the “Security Agreement”), the Company has granted the Lender a security interest in all assets of the Company owned or later acquired. The Loan Agreement also contains certain events of default, representations, warranties and covenants of the Company and its subsidiaries. For example, the Loan Agreement contains representations and covenants that, subject to exceptions, restrict the Company’s ability to do the following, among things: incur additional indebtedness, engage in certain asset sales, or undergo a change in ownership. Interest expense of approximately $0.1 million and $0.1 million was recorded in the statements of operations related to the lines of credit and director note for the three and six months ended June 30, 2019, respectively. Interest expense of approximately an immaterial amount and approximately $0.1 million was recorded in the statements of operations related to the line of credit and the director note for the three and six months ended June 30, 2018, respectively. |
Warrant Derivative Liability (Q
Warrant Derivative Liability (Q2) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Warrant Derivative Liability [Abstract] | ||
Warrant Derivative Liability | Note 8 – Derivative Liability The Company entered into convertible note agreements containing beneficial conversion features. One of the features is a ratchet reset provision which allows the note holders to reduce the conversion price should the Company issue equity with an effective price per share that is lower than the stated conversion price in the note agreement (see note 9). The Company accounts for the fair value of the conversion feature in accordance with ASC 815, Accounting for Derivatives and Hedging and EITF 07-05, the embedded derivatives should be bundled and valued as a single, compound embedded derivative, bifurcate treated as a derivative liability. The Company is required to carry the embedded derivative on its balance sheet at fair value and account for any unrealized change in fair value as a component in its results of operations. The Company recognized that the conversion feature embedded within its convertible debts is a financial derivative. GAAP required that the Company’s embedded conversion option be accounted for at fair value. During the period ended December 31, 2018, the Company sold 1,400,000 shares of common stock and 700,000 two-year warrants to purchase one share of common stock at a price of $3.90 per share for total proceeds of $2,607,099, net of issuance costs. The warrant holders have an option to settle in cash in the event of a change of control of the Company. The Company considers these warrants a derivative liability, and calculated the fair value of this liability utilizing a Lattice Model that values the warrant based upon a probability weighted discounted cash flow model. The following schedule shows the change in fair value of the derivative liabilities for the period ended December 31, 2018, August 31, 2018 and August 31, 2017: Derivative Liability Liabilities Measured at Fair Value Balance as of August 31, 2016 $ 254,952 Issuances 685,139 Redemptions / conversions (1,015,757 ) Revaluation loss 388,544 Balance as of August 31, 2017 $ 312,878 Issuances 1,565,487 Redemptions / conversions (1,207,308 ) Reclass from sale of discontinued operations 1,601,007 Revaluation loss 45,348 Balance as of August 31, 2018 $ 2,317,412 Issuances 6,244,548 Redemptions / conversions - Revaluation loss 1,135,345 Balance as of December 31, 2018 $ 7,379,893 Derivative liabilities incurred during the period ended August 31, 2018 were valued based upon the following assumptions and key inputs: August 31, August Assumption 2018 2017 Expected dividends: 0 % 0 % Expected volatility: 121.1-246.8 % 37.8-276.9 % Expected term (years): 0.21-1.00 years 0.04-0.50 years Risk free interest rate: 0.97-2.08. % 0.26-0.98 % Stock price $ 0.35-1.11 $ 0.51-1.97 Derivative liabilities incurred during the period ended December 31, 2018 were valued based upon the following assumptions and key inputs: - The quoted stock price ranged from of $6.76 to $11.18 and would fluctuate with the Company's historic volatility. - The projected volatility curve from an annualized analysis for each valuation period was based on the historical volatility of the Company and the term remaining for each Warrant – the volatility ranged from 198.1-207.8%. - The full reset events projected to occur based on future financing events on March 31, 2019 and December 31, 2019 resulting in a potential reset exercise price. - Adjustments to warrant exercise prices have not occurred to date due to reset events. - A fundamental transaction was projected to potentially occur on 4/30/19 or 12/31/19. The likelihood of such an event was estimated at 85% for the 4/30/19 event as of December/January 2019 increasing to 95% by 12/31/18. The 12/31/19 event was estimated at 50% for all dates. - The option to force early exercise was estimated at 0% since it was unlikely that the Company would meet the registration and trading volume requirements necessary to trigger the option. | Note 8 – Warrant Derivative Liability On December 12, 2018, the Company closed a private placement offering (the “December Offering”) of 1,425,641 units (the “Units”), each unit consisting of (i) one share of the Company’s Common Stock and (ii) a warrant to purchase one half of a share of Common Stock. The Units were offered at a fixed price of $1.95 per Unit for gross proceeds of $2.8 million. Costs associated with the December Offering were $0.1 million, and net proceeds were $2.7 million. $2.6 million of the net proceeds were received by the Company during the period ended December 31, 2018 for the sale of 1,400,000 common shares, and $0.1 million of the net proceeds were received on January 8, 2019 for the sale of 25,641 common shares. The warrants are exercisable over a two-year period at the initial exercise price of $3.90 per share. The warrant holders have an option to settle in cash in the event of a change of control of the Company. The Company considers these warrants a derivative liability and calculated the fair value of this liability utilizing a Lattice Model that values the warrant based upon a probability weighted discounted cash flow model. At May 6, 2019, the derivative liability was recorded at fair value as part of the purchase price of Better Choice Company by TruPet. The following schedule shows the change in fair value of the derivative liabilities for the period from May 6, 2019 through June 30, 2019. Dollars in thousands Warrant Liability Assumption of warrants pursuant to May 6, 2019 acquisition of Better Choice Company $ 2,110 Change in fair value of derivative liability 193 Balance as of June 30, 2019 $ 2,304 May 6, 2019 June 30, 2019 Warrant Liability Stock Price $ 6.00 $ 6.35 Exercise Price $ 3.90 $ 3.90 Remaining term (in years) 1.60 – 1.68 1.45 – 1.53 Volatility 64 % 65 % Risk-free interest rate 2.39 % 1.98 % The warrants feature provisions to reset the exercise price in the event of certain fundamental transactions. Such a transaction is considered a likelihood of 50% for December 31, 2019. Additionally, the warrants feature provisions to force an early exercise in the event of the Company’s stock trading above a certain threshold for a specified period. The Company considers the likelihood of meeting these conditions to be zero. If all shares were redeemed at June 30, 2019, the Company would be required to pay $2.3 million if all warrants were settled in cash as a result of a fundamental transaction or issue 712,823 shares if all warrants were settled in shares. |
Loyalty Program Provision (Q2)
Loyalty Program Provision (Q2) | 6 Months Ended |
Jun. 30, 2019 | |
Loyalty Program Provision [Abstract] | |
Loyalty Program Provision | Note 9 - Loyalty Program Provision The Company offers a loyalty program to all of its direct-to-consumer customers. The loyalty program is designed to increase customer visits and spending. There are two tiers to the program as outlined below: Tier 1: the customer earns six points for every $1 spent Tier 2: the customer earns points at a much faster rate and will also have opportunities to earn bonus points for different events, such as a birthday. This tier is known as the TruDog Love Club (TLC), and the customer accumulates twelve points for every $1 spent. The redemption requirements are the same under both levels, for every five hundred points earned, customers receive a $5 gift code which can be redeemed for goods purchased in the future. The Company records a liability provision of 45% of all accrued and unredeemed points based on historical redemption rates. The redemption rate is consistent with the redemption rate used for the period ending December 31, 2018. We have included the redemption amounts as deferred revenue on the Condensed Consolidated Balance Sheets. As of June 30, 2019 and December 31, 2018, earned, but not redeemed, loyalty program awards are estimated to be $0.2 million and $0.1 million, respectively, and are recorded as a deferred revenues. |
Other Liabilities (Q2)
Other Liabilities (Q2) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Other Liabilities [Abstract] | ||
Other Liabilities | Note 7 – Related Party Transactions On April 29, 2016, the Company’s Board ratified an oral agreement with Mr. Lelong, effective February 1, 2016, pursuant to which he will receive an annual salary of $96,000 for serving as an executive officer of the Company. During the year ended August 31, 2017, the Company received loans in the aggregate amount of $231,000 from Mr. Lelong. The Company recorded imputed interest in the amount of $2,011 during the year ended August 31, 2017 related to the advances from Mr. Lelong. During the year ended August 31, 2018, the Company paid salary to Mr. Lelong in the amount of $76,000, and accrued an additional $20,000 in salary payable; at August 31, 2018, the amount of accrued salary payable to Mr. Lelong was $140,000. During the Transition Period ended December 31, 2018, the Company paid salary to Mr. Lelong in the amount of $32,000 and paid accrued salary in the amount of $16,000; at December 31, 2018, the amount of accrued salary payable to Mr. Lelong was $124,000. During the year ended August 31, 2018, the Company received loans in the aggregate amount of $35,500 from Mr. Lelong, and accrued interest in the amount $2,291; the Company also repaid to Mr. Lelong principal and interest in the amounts of $266,500 and $4,302, respectively. At August 31, 2018, the balance due to Mr. Lelong under these loans is $0. | Note 10 – Other Liabilities Other liabilities include outstanding amounts on bank issued revolving credit cards. Interest rates on the issued credit cards was 22% for purchases and 24.24% for cash advances for the three and six months ended June 30, 2019 and 2018. Under the terms of a Business Cash Advance Agreement, during 2018, the Company sold $2.0 million of future receivables for proceeds of $1.9 million. Future receivables are defined as all future payments made by cash, check, ACH, direct or pre-authorized debit, wire transfer, credit card, debit card, charge card or other form of payment related to the business of the Company. The creditor had the right to decline to purchase any future receivables and/or adjust the amount of the advance. In the event of a sale, disposition, assignment, transfer or otherwise of all or substantially all of the business assets, the creditor’s consent was required or repayment in full of the amount of future receivables remaining. The future receivables were remitted to the creditor based on a percentage of daily cash receipts. All remaining advances were repaid as of June 30, 2019. Dollars in thousands Advance #1 Advance #2 Advance #3 Total Opening balance – January 1, 2018 $ - $ - $ - $ - Advance of outstanding amounts 399 965 1,050 2,414 2018 Payments (429 ) (256 ) (102 ) (787 ) Rollover to Advance #3 (824 ) 824 Advance fixed fee 30 115 126 271 Closing Balance – December 31, 2018 - - 1,899 1,899 Payments (1,899 ) (1,899 ) Balance June 30, 2019 $ - $ - $ - $ - |
Redeemable Preferred Stock (Q2)
Redeemable Preferred Stock (Q2) | 6 Months Ended |
Jun. 30, 2019 | |
Redeemable Preferred Stock [Abstract] | |
Redeemable Preferred Stock | Note 11 – Redeemable Preferred Stock On October 22, 2018, the Board of Directors of Better Choice Company approved a resolution to designate a series of 2,900,000 shares of its Series E Convertible Preferred Stock pursuant to its articles of incorporation. The Series E Convertible Preferred Stock has a stated value of $0.99 per share; is convertible to Common Stock at a price of $0.78 per share and accrues dividends at the rate of 10% per annum on the stated value. The Series E Convertible Preferred Stock has voting rights equal to those of the underlying Common Stock. Under certain default conditions, the Series E Convertible Preferred Stock is subject to mandatory redemption in cash equal to 125% of the greater of $0.99 per share ($1.23 per share) or 75% of the market price of the Common Stock. As the redemption is outside the control of the Company, the Series E Convertible Preferred Stock has been recorded as mezzanine equity between liabilities and equity in the balance sheet. On May 6, 2019, the Series E Convertible Preferred Stock was recorded at its fair value based on the $6.00 per share closing price of Better Choice Company’s common shares as they remained outstanding after the reverse acquisitions discussed in Note 2 above. On May 10, 2019 and May 13, 2019, holders of the Company’s Series E Convertible Preferred Stock converted 689,394 and 236,364 preferred shares into 875,000 and 300,000 shares of the Company’s Common Stock, respectively. Pursuant to waiver letters executed by each investor, the holders of the Company’s Series E Convertible Preferred Stock agreed to waive their right to the distribution of dividends until October 22, 2019. The below table summarizes changes in the balance of Series E Convertible Preferred Stock for the periods ended June 30, 2019 and December 31, 2018 including its value prior to acquisition by the Company. Number Amount Dollars in thousands Issued on October 18, 2018 2,846,356 $ 2,023 Converted to Common Stock (212,678 ) (152 ) Balance on May 6, 2019 2,633,678 1,871 Purchase price adjustment 18,188 Outstanding at May 6, 2019 2,633,678 20,059 Converted to Common Stock (925,758 ) (7,052 ) Balance at June 30, 2019 1,707,920 $ 13,007 |
Stockholders' Deficit (Q2)
Stockholders' Deficit (Q2) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Stockholders' Deficit [Abstract] | ||
Stockholders' Deficit | Note 10 – Stockholders’ Deficit Preferred stock The Company is authorized to issue 20,000,000 shares of $0.001 par value preferred stock as of December 31, 2018, August 31, 2018, and August 31, 2017. The Company has 1,000 shares of Series A preferred stock issued and outstanding as of December 31, 2018, August 31, 2018, and August 31, 2017. Series B Convertible P referred S tock On May 30, 2018, the Company authorized 805,000 shares of Series B Convertible Preferred Stock. The Series B Convertible Preferred Stock has a stated value of $0.99 per share; is convertible to common stock at a price of $0.78 per share, based upon stated value; and accrues dividends at the rate of 10% per annum on the stated value. The Series B Convertible Preferred Stock has voting rights equal to those of the underlying common stock. Under certain default condition, the Series B Convertible Preferred Stock is subject to mandatory redemption at 125%, and the conversion price resets to 75% of the market price of the Company’s common stock. On May 30, 2018, the Company issued 803,969.73 shares of Series B Convertible Preferred Stock for the conversion of debt. The Company began to accrue dividends on the Series B Convertible Preferred Stock on June 1, 2018. From June 1, 2018 through August 31, 2018, the Company accrued dividends in the amount of $20,280 on the Series B Convertible Preferred Stock; from September 1, 2018 through October 22, 2018, the Company accrued dividends in the amount of $11,339 on the Series B Convertible Preferred Stock. On October 22, 2018, all 803,969.73 outstanding shares of the Series B Convertible Preferred Stock and accrued dividends in the amount of $31,619 were exchanged for shares of the Company’s Series E Convertible Preferred Stock. At December 31, 2018, August 31, 2018, and August 31, 2017, there were 0, 803,969.73 and 0 shares of the Series B Convertible Preferred Stock outstanding, respectively. Series E Convertible Preferred Stock On October 22, 2018, the Company authorized 2,900,000 shares of its Series E Convertible Preferred Stock. The Series E Convertible Preferred Stock has a stated value of $0.99 per share; is convertible to common stock at a price of $0.78 per share, based upon stated value; and accrues dividends at the rate of 10% per annum on the stated value. The Series E Convertible Preferred Stock has voting rights equal to those of the underlying common stock. Under certain default condition, the Series E Convertible Preferred Stock is subject to mandatory redemption at 125%, and the conversion price resets to 75% of the market price of the Company’s common stock. On October 22, 2018, the Company entered into an Exchange Agreement whereby the following were exchanged for 2,846,355.54 shares of Series E Convertible Preferred Stock: (i) Convertible debt and accrued interest in the amounts of $1,027,202 and $66,299, respectively; (ii) 803,969.73 shares of Series B Convertible Preferred Stock; (iii) accrued dividends in the amount $31,619 on the Series B Convertible Preferred Stock; and (iv) outstanding warrants to purchase 463,631 shares of the Company’s common stock. A derivative liability in the amount of $2,003,390 related to the convertible debt and was also settled pursuant to the Exchange Agreement. The Company valued the 2,846,355.14 shares of Series E Convertible Preferred Stock at $2,022,766, and recorded a gain in the amount of $472,267 on the Exchange Agreement during the Transition Period ended December 31, 2018. The Company accrued dividends in the amount of $53,501 on the Series E Preferred Stock during the Transition Period ended December 31, 2018. At December 31, 2018, August 31, 2018, and August 31,2017, there were 2,846,355.54, 0 and 0 shares of the Series E Convertible Preferred Stock outstanding, respectively. Common stock The Company was authorized to issue 580,000,000 shares of $0.001 par value common stock as of December 31, 2018, August 31, 2018, and August 31, 2017. On April 22, 2019, the Company filed a certificate of amendment of certificate of incorporation with the State of Delaware which reduced the number of authorized shares of common stock to 88,000,000. The Company has 3,415,859, 3,064,763 and 3,008,730 shares of common stock issued and outstanding as of December 31, 2018, August 31, 2018 and August 31, 2017, respectively. On March 14, 2019, the Company filed a certificate of amendment of Certificate of Incorporation with the Delaware Secretary of State to effect a one-for-26 reverse split of common stock effective March 15, 2019. All of the common stock amounts and per share amounts in these financial statements and footnotes have been retroactively adjusted to reflect the effect of this reverse split. Transition Period Ended December 31, 2018: On November 28, 2018, the Company repurchased 1,048,904 shares of the Company’s common stock from two shareholders in a series of private transactions. The Shares were repurchased by the Company for the par value of the Shares or a total of $27,271. On December 12, 2018, the Company closed a private placement offering (the “December Offering”) of 1,425,641 units (the “Units”), each unit consisting of (i) one share of the Company’s common stock, par value $0.001 per share and (ii) a warrant to purchase one half of a share of Common Stock. The Units were offered at a fixed price of $1.95 per Unit for gross proceeds of $2,779,840. Costs associated with the December Offering were $122,741, and net proceeds were $2,657,099. $2,607,099 of the net proceeds were received by the Company during the period ended December 31, 2018 for the sale of 1,400,000 common shares, and $50,000 of the net proceeds were received on January 8, 2019 for the sale of 25,641 common shares. The Warrants are exercisable over a two-year period at the initial exercise price of $3.90 per share. The Company entered into a Securities Purchase Agreement, dated as of the Closing Date (the “SPA”) with each investor in the December Offering. In connection with the December Offering, the Company also entered into a Registration Rights Agreement, dated as of the Closing Date (the “Registration Rights Agreement”) with each investor in the Offering. Pursuant to the Registration Rights Agreement, the Company agreed to use commercially reasonable efforts to file with the Securities and Exchange Commission a registration statement on Form S-1 (or other applicable form) within 60 days following the Closing Date to register the resale of the shares of Common Stock sold in the Offering and shares of Common Stock issuable upon exercise of the Warrants. Year Ended August 31, 2018: On September 28, 2017, the Company issued 8,013 shares of common stock, for the conversion of $16,347 of principal and $8,653 of accrued interest of convertible notes payable. On November 15, 2017, the Company issued 9,615 shares of common stock, for the conversion of $17,518 of principal and $12,482 of accrued interest of convertible notes payable. On January 29, 2018, the Company issued 38,405 shares of common stock, for the conversion of $28,148 of principal and $1,808 of accrued interest of convertible notes payable. Year ended August 31, 2017 On January 4, 2017, the Company issued 1,346 shares of common stock, valued at $68,950 as commitment shares to convertible note holders. These shares were issued at fair value based on the market price at issuance of $46.80 per share. On May 2, 2017, the Company issued 8,013 shares of common stock, for the conversion of $15,000 of principal and $10,000 of accrued interest of convertible notes payable. On June 2, 2017, the Company issued 8,013 shares of common stock, for the conversion of $25,000 of principal of convertible notes payable. Warrants The following table summarizes the significant terms of warrants outstanding at December 31, 2018: Range of exercise Prices Number of warrants Outstanding Weighted average remaining contractual life (years) Weighted average exercise price of outstanding Warrants Number of warrants Exercisable Weighted average exercise price of exercisable Warrants $ 3.90 700,000 1.96 $ 3.90 700,000 $ 3.90 Total 700,000 1.96 $ 3.90 700,000 $ 3.90 Transactions involving warrants are summarized as follows: Number of Weighted Average Warrants Exercise Price Warrants outstanding at August 31, 2016 - $ - Issued - - Exercised - - Cancelled / Expired - - Warrants outstanding at August 31, 2017 - - Issued 1,040,554 $ 0.26 Exercised - Cancelled / Expired (576,923 ) 0.26 Warrants outstanding at August 31, 2018 463,631 $ 0.26 Issued 700,000 3.90 Exercised Cancelled / Expired (463,631 ) 0.26 Warrants outstanding at December 31, 2018 700,000 $ 3.90 During the year ended August 31, 2018, the Company issued an aggregate of 79,016 five-year warrants at an exercise price of $0.26 in connection with convertible debt. The Company also issued 961,538 five-year warrants at an exercise price of $0.26 in connection with discontinued operations; of these, 576,923 were cancelled pursuant to the restructuring of discontinued operations; see note 3. On October 22, 2018, the Company exchanged 463,631 warrants along with certain additional securities for shares of Series E Convertible Preferred Stock. On December 12, 2018, the Company closed the December Offering which included the issuance of 700,000 warrants (the “December Warrants”) with an exercise price of $3.90 per share. The holders of the December Warrants have an option to settle in cash in the event of a change of control of the Company. The Company considers the December 2018 warrants to be derivative liabilities, and calculated the fair value of the December 2018 warrants by utilizing a Lattice Model that values the warrant based upon a probability weighted discounted cash flow model. At December 31, 2018, outstanding warrants had an intrinsic value of $5,095,996. Intrinsic value is the difference between the exercise price of the warrants and the market price of the Company’s stock, which was $11.18 at December 31, 2018. Stock Options On December 21, 2018, the Company issued 19,231 options to each of Michael Young, the Company’s chairman, and to David Lelong, the Company’s President, Chief Financial Officer and Secretary (an aggregate of 38,462 options). These options have a five-year term, an exercise price of $6.76 and vest quarterly over a one-year period beginning January 1, 2019. The fair value of each grant of 19,231 options was $154,983. The Company used the Black-Scholes pricing model to determine the fair value of the options. The following table summarizes the significant terms of options outstanding at December 31, 2018: Weighted Weighted Weighted average average average exercise exercise Range of Number of remaining price of Number of price of exercise options contractual outstanding options exercisable prices outstanding life (years) options exercisable options $ 6.76 38,462 4.98 $ 6.76 0 N/A Aggregate intrinsic value of options outstanding and exercisable at December 31, 2018 was $170,002. Aggregate intrinsic value represents the difference between the Company’s closing stock price on the last trading day of the fiscal period, which was $11.18 as of December 31, 2018, and the exercise price multiplied by the number of options outstanding. Transactions involving options are summarized as follows: Number of Weighted Average Options Exercise Price Options outstanding at August 31, 2016 - $ - Granted - - Exercised - - Cancelled / Expired - - Options outstanding at August 31, 2017 - $ - Granted - - Exercised - - Cancelled / Expired - - Options outstanding at August 31, 2018 - $ - Granted 38,462 6.76 Exercised - - Cancelled / Expired - - Options outstanding at December 31, 2018 38,462 $ 6.76 | Note 12 - Stockholders’ Deficit On May 6, 2019, Better Choice Company completed the acquisition of TruPet pursuant to a Stock Exchange Agreement dated February 2, 2019 and amended May 6, 2019. At the closing of the transaction, Better Choice Company issued 15,027,533 shares of its Common Stock in exchange for 93% of the outstanding ownership units of TruPet. Additionally, on May 6, 2019, Better Choice Company also completed the acquisition of Bona Vida pursuant to an Agreement and Plan of Merger dated February 28, 2019 and amended May 3, 2019. At the closing of the transaction, Better Choice Company issued 18,003,273 shares of its Common Stock in exchange for all outstanding shares of Bona Vida. The operations of Better Choice Company subsequent to the acquisitions are those of TruPet and Bona Vida. For accounting purposes, the transaction is considered a reverse merger whereby TruPet is considered the accounting acquirer of Better Choice Company. As a result of the transaction the historical TruPet members’ equity (units and incentive units) has been recast to reflect the equivalent Better Choice Common Stock for all periods presented after the transaction. Prior to the transaction, TruPet was a Limited Liability Company and as such, the concept of authorized shares was not relevant. Series A Preferred Units In December 2018, the Company completed a private placement and issued 2,162,536 Series A Preferred Units (no par value) to unrelated parties for $2.40 per unit. The proceeds were approximately $4.7 million, net of $0.5 million of share issuance costs. Additionally, on February 12, 2019, an additional private placement of 62,500 Series A Preferred Units at $2.40 per unit was completed. The proceeds were approximately $0.2 million, net of share issuance costs. On May 6, 2019, all Series A Preferred Units were converted to 2,460,517 shares of Common Stock. Series E Preferred Stock On May 6, 2019, the Company acquired 2,633,678 shares of Series E Preferred Stock issued by Better Choice Company in the transaction. Series E Preferred Stock is treated as mezzanine equity as it has redemption features that can be exercised by the holder under certain instances outside the control of the Company. 925,758 shares of Series E Preferred Stock were converted to Common Stock in the three- and six-month period ended June 30, 2019. As of June 30, 2019, 1,707,920 shares of Series E Preferred Stock remain outstanding. Full conversion of the remaining Series E Preferred Stock would result in the issuance of 2,167,745 shares of Common Stock. Common Stock The Company was authorized to issue 580,000,000 shares of Common Stock as of December 31, 2018. On April 22, 2019, the Company filed a certificate of amendment of certificate of incorporation with the State of Delaware which reduced the number of authorized shares of Common Stock to 88,000,000. The Company has 43,168,161 and 11,661,485 shares of Common Stock issued and outstanding as of June 30, 2019 and December 31, 2018, respectively. On March 14, 2019, the Company filed a certificate of amendment of Certificate of Incorporation with the Delaware Secretary of State to effect a one-for-26 reverse split of Common Stock effective March 15, 2019. All of the Common Stock amounts and per share amounts in these financial statements and footnotes have been retroactively adjusted to reflect the effect of this reverse split. On December 12, 2018, Better Choice Company closed a private placement offering (the “December Offering”) of 1,425,641 units (the “Units”), each unit consisting of (i) one share of the Company’s Common Stock and (ii) a warrant to purchase one half of a share of Common Stock. The Units were offered at a fixed price of $1.95 per Unit for gross proceeds of $2.8 million. Costs associated with the December Offering were $0.1 million, and net proceeds were $2.7 million. Net proceeds of $2.6 million were received by the Company during the period ended December 31, 2018 for the sale of 1,400,000 common shares, and $0.1 million of the net proceeds were received on January 8, 2019 for the sale of 25,641 common shares. The Warrants are exercisable over a two-year period at the initial exercise price of $3.90 per share. (See In connection with the December Offering, Better Choice Company also entered into a registration rights agreement (the “Registration Rights Agreement”) with each investor in the Offering. Pursuant to the Registration Rights Agreement, the Company agreed to use commercially reasonable efforts to file with the Securities and Exchange Commission a registration statement on Form S-1 (or other applicable form) within 60 days following the closing date to register the resale of the shares of Common Stock sold in the Offering and shares of Common Stock issuable upon exercise of the Warrants. On November 18, 2018 the Company entered into a consulting agreement for management services. The consultant was awarded the equivalent of 303,427 shares of Common Stock, half which vested on November 18, 2018 and the remainder on a monthly schedule over 2 years. During the period from January 1, 2019 through May 5, 2019, equity awards for the equivalent of 979,716 shares were issued to employees and consultants and were valued at a weighted average value per share of $2.26, the fair value at the date of award. The awards vested over three years. However, on May 6, 2019, all equity incentive awards issued prior to May 6, 2019 immediately vested. As a result of the immediate vesting of these awards, share-based compensation expense equal to $2.2 million and $2.4 million has been recorded during the three and six-months ended June 30, 2019. There were no equity awards issued or outstanding during the three and six months ended June 30, 2018. The Company retired 914,919 member units (equivalent to 1,011,748 Common Shares) in TruPet representing the 7% Better Choice Company ownership of TruPet valued at $2.2 million which was recorded as part of loss on acquisition. The Company also issued 5,744,991 million units for gross proceeds of $3.00 per unit, also closing on May 6, 2019 (the “PIPE Transaction”). Each unit included one common share of Better Choice Company stock, and a warrant to purchase an additional share. The funds raised from the PIPE Transaction will be used to fund the operations of the combined company. Net proceeds of $15.7 million were received in the private placement, allocable between shares of Common Stock and warrants. Pursuant to Damian Dalla-Longa’s (“Mr. Dalla-Longa”) employment agreement with Bona Vida dated October 29, 2018, he was entitled to a $500,000 Change of Control payment. It was later agreed to and included in Mr. Dalla-Longa’s Better Choice Company employment agreement dated May 6, 2019, that he would receive 100,000 common shares in the Company in consideration for the $500,000 Change of Control payment. The 100,000 common shares were valued at $6.00 per share, which was the market value as of the date of Mr. Dalla-Longa’s employment agreement. Stock Options On May 6, 2019, the Company acquired the Better Choice Company, Inc. 2019 Incentive Award Plan (“2019 Incentive Award Plan”) which became effective as of April 29, 2019. The 2019 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, other stock or cash-based awards or a dividend equivalent award (each an “Award”). Non-employee directors of the Company and employees and consultants of the Company or any of its subsidiaries are eligible to receive awards under the 2019 Plan. The 2019 Plan authorizes the issuance of (i) 6,000,000 shares of common stock plus (ii) an annual increase on the first day of each calendar year beginning on January 1, 2020 and ending on and including January 1, 2029, equal to the lesser of (A) 10% of the shares of common stock outstanding (on an as-converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of shares of common stock as determined by the Board. At the time of acquisition, the following grants had been issued under the 2019 Incentive Award Plan: On May 6, 2019, as part of the merger, the Company acquired options to purchase an aggregate of 3,750,000 shares of the Company’s Common Stock at an exercise price of $5.00 per share. These options had been granted to management of Better Choice Company on May 2, 2019. Subject to the holder’s continued service to the Company, each such option vests with respect to 1/24th of the underlying shares on each monthly anniversary of the grant date such that the option is fully vested on the second anniversary of the grant date. On May 6, 2019, as part of the merger, the Company acquired options to purchase an aggregate of 1,500,000 shares of the Company’s Common Stock at an exercise price of $5.00 per share. These options had been granted to non-employee directors of Better Choice Company on May 2, 2019. Subject to the holder’s continued service to the Company, each such option vests with respect to 1/24th of the underlying shares on each monthly anniversary of the grant date such that the option is fully vested on the second anniversary of the grant date. After the acquisition, the following stock option awards were granted under the 2019 Incentive Award Plan, subject to stockholder approval of the 2019 Incentive Award Plan: On May 21, 2019, the Company granted to third-party consultants options to purchase an aggregate of 60,000 shares of the Company’s Common Stock at an exercise price of $7.50 per share. Subject to the holder’s continued service to the Company, each such option vests with respect to 1/36th of the underlying shares on each monthly anniversary of the grant date, such that the option is fully vested on the third anniversary of the grant date. On May 21, 2019, the Company granted to employees options to purchase an aggregate of 30,000 shares of the Company’s Common Stock at an exercise price of $7.50 per share. Subject to the holder’s continued service to the Company, each such option vests with respect to 25% of the underlying shares on the first anniversary of the grant date and the remainder vests in 24 equal installments on each monthly anniversary of the grant date following the first anniversary of the grant date, such that the option is fully vested on the third anniversary of the grant date. On June 29, 2019, the Company granted to employees options to purchase an aggregate of 3,000 shares of the Company’s Common Stock options at an exercise price of $7.50 per share. Subject to the holder’s continued service to the Company, each such option vests with respect to 25% of the underlying shares on the first anniversary of the grant date and the remainder vests in 24 equal installments on each monthly anniversary of the grant date following the first anniversary of the grant date, such that the option is fully vested on the third anniversary of the grant date. Following the stockholder approval of the 2019 Incentive Award Plan, all vested options described herein will become exercisable and may be exercised through the ten-year anniversary of the grant date (or such earlier date described in the applicable award agreement following a holder’s termination of service). Dollars in thousands except per share amounts Date of grant(s) Vesting period (years) Number Exercise price ($) Share-based payment expense ($) Risk-free rate Volatility Dividend yield Expiry (yrs) Remaining Life (yrs) Option grant 5/21/2019 2 60,000 $ 7.50 9 2.28 % 55.00 % Nil 10 9.9 Option grant 5/21/2019 3 30,000 $ 7.50 5 2.28 % 55.00 % Nil 10 9.9 Option grant 6/29/2019 3 3,000 $ 7.50 0 1.84 % 56.00 % Nil 10 10.0 93,000 $ 14 Pursuant to ASC 718-10-35-8, the Company recognizes compensation cost for stock and option awards with only service conditions that have a graded vesting schedule on a straight-line basis over the service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards. The following table summarizes the significant terms of options outstanding at June 30, 2019: Range of exercise prices Number of options outstanding Weighted average remaining contractual life (years) Weighted average exercise price of outstanding options number of options exercisable Weighted average exercise price of exercisable options $ 5.00 – 7.50 5,381,462 9.8 $ 5.06 260,545 5.04 Transactions involving options are summarized below: Number of Options Weighted Average Exercise Price Acquired on May 6, 2019 5,288,462 $ 5.00 Granted 93,000 $ 7.50 Options outstanding at June 30, 2019 5,381,462 $ 5.04 The intrinsic value of outstanding options is $34.2 million as of June 30, 2019. Warrants On May 6, 2019, the Company acquired 913,310 warrants with a weighted average exercise price of $3.70 with the acquisition of Better Choice Company. The Company also issued 5,744,991 warrants with an exercise price of $4.25 on May 6, 2019 as part of the PIPE. No warrants were exercised in the six months ending June 30, 2019. Number of Warrants Weighted Average Exercise Price Warrants Acquired on May 6, 2019 913,310 $ 3.70 Issued 5,744,991 $ 4.25 Exercised - - Canceled / expired - - Warrants outstanding at June 30, 2019 6,658,301 $ 4.39 The intrinsic value of outstanding warrants is $13.0 million as of June 30, 2019. |
Related Party Transactions and
Related Party Transactions and Material Service Agreements (Q2) | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions and Material Service Agreements [Abstract] | |
Related Party Transactions and Material Service Agreements | Note 13 - Related Party Transactions and Material Service Agreements Related Party Transactions Management Services A related party provided management services during 2018. Payments related to this arrangement were immaterial for the three and six-month period ended June 30, 2018. No payments were made to the related party during 2019. Outstanding balances were immaterial amounts for the periods ending June 30, 2019 and December 31, 2018, respectively. Marketing Services A related party provides online traffic acquisition marketing services for the Company. The Company paid immaterial amounts for their services during the three and six months ended June 30, 2019, respectively. The Company did not use this related party’s services in 2018. The service contract has a 30-day termination clause. Outstanding balances were $0.1 million and an immaterial amount for the periods ending June 30, 2019 and December 31, 2018, respectively. Financial and Accounting Personnel The Company entered into an agreement in December 2018 for assistance and support regarding its financial operation and capital raise efforts and can be terminated at any time by either party with a 60-day notice with an affiliate of the managing member. The agreement requires payments amounting to $21,160 every four weeks through December 2020. Payments related to this agreement amounted to $0.1 million and $0.2 million for the three and six-month period ended June 30, 2019, respectively. The Company entered into an employment agreement in February 2019 with a previous executive for a term of six months. Payments related to this agreement amounted to $0.1 million and $0.2 million for the three and six-month period ended June 30, 2019. Finder’s Fee and Other Services The Company paid a finders’ fee of $0.3 million during the year ended December 31, 2018 to an entity owned by one of its members. Additionally, the Company paid approximately $0.4 million to this entity for other professional services rendered. No amounts have been paid in 2019. Material Service Agreements Consummated with Third Parties: Financial and Accounting Personnel The Company entered into a new agreement in December 2018 for accounting management services for a fee of $8,370 to be paid every two weeks. Prior to this entering into this agreement, the same company was performing similar services in 2018 for $2,600 every two weeks. Payments related to this agreement amounted to $0.1 million and an immaterial amount for the three-month period ended June 30, 2019 and 2018, respectively. Payments related to this agreement amounted to $0.2 million and an immaterial amount for the six-month period ended June 30, 2019 and 2018, respectively. Marketing Services The Company entered into multiple agreements with marketing services with independent contractors during 2018 and 2019. Payments related to the marketing agreements amounted to $0.2 million and an immaterial amount for the three-month period ended June 30, 2019 and 2018, respectively. Payments related to the marketing agreements amounted to $0.4 million and $0.2 million for the six-month period ended June 30, 2019 and 2018, respectively. Placement and Selling Agent In December 2018, the Company executed an agreement with a third party to assist the Company in identifying and negotiating with potential investors, assisting in due diligence, and other capital market functions for a term of six months. The agreement calls for a $0 base fee and a 5% commission on cash proceeds obtained in exchange for shares or equity interest in the Company. The commissions can be paid in cash or equity in the Company. This agreement has an initial six-month term and, thereafter, the Company at its option may elect to extend this agreement for one successive twelve-month term upon a sixty-day notice prior to the end of the initial term. Payments related to this agreement amounted to $0.1 million for the year ended December 31, 2018 and was capitalized to related private placement as costs of issuance. On May 6, 2019, the Company expensed the issuance costs of $0.1 million. No other amounts were paid under this agreement in 2019. On May 6, 2019, the Company issued the equivalent of 798,492 shares of its Common Stock to the Placement and Selling Agent. As a cost associated with the merger, this amount is presented as a loss on acquisition of $4.8 million. |
Major Suppliers (Q2)
Major Suppliers (Q2) | 6 Months Ended |
Jun. 30, 2019 | |
Major Suppliers [Abstract] | |
Major Suppliers | Note 14 - Major Suppliers The Company purchased approximately 83% and 72% of its inventories from one vendor for the six months ended June 30, 2019 and 2018, respectively. Additionally, the Company primarily utilized one vendor for outsourced manufacturing of meals for the six-month periods ended June 30, 2019 and the year ended June 30, 2018. |
Concentration of Credit Risk (Q
Concentration of Credit Risk (Q2) | 6 Months Ended |
Jun. 30, 2019 | |
Concentration of Credit Risk [Abstract] | |
Concentration of Credit Risk | Note 15 - Concentration of Credit Risk The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivables. The Company places its cash and cash equivalents with primarily one financial institution. At times, such amounts may be in excess of the FDIC insured limit. The Company has never experienced any losses related to these balances. As of June 30, 2019 and December 31, 2018 the Company had deposits in excess of the FDIC insured limits of $10.3 million and $3.4 million, respectively. The Company routinely assesses the financial strength of its customers and, consequently, believes that its accounts receivable credit risk exposure is limited. |
Net Loss per Share (Q2)
Net Loss per Share (Q2) | 6 Months Ended |
Jun. 30, 2019 | |
Net Loss per Share [Abstract] | |
Net Loss per Share | Note 16 - Net Loss per Share Basic and diluted net loss per share attributable to Common Stockholders is presented using the treasury stock method. Under the treasury stock method, the amount the employee must pay for exercising stock options and the amount of compensation cost for future service that has not yet recognized are collectively assumed to be used to repurchase shares. Basic and diluted net loss per share is calculated by dividing net loss attributable to Common Stockholders by the weighted-average shares outstanding during the period. For the six months ended June 30, 2019 and 2018, the Company’s basic and diluted net loss per share attributable to Common Stockholders are the same, because the Company has generated a net loss to Common Stockholders and Common Stock equivalents are excluded from diluted net loss per share as they have an antidilutive impact. The following table sets forth basic and diluted net loss per share attributable to Common Stockholders for the three and six months ended June 30, 2019 and 2018: Dollars in thousands except per share amounts Six Months Ended June 30 Three Months Ended June 30 2019 2018 2019 2018 Common Stockholders Numerator: Net loss $ (164,286 ) $ (2,400 ) $ (161,506 ) $ (745 ) Less: Preferred Stock Dividends (27 ) - (27 ) - Net loss attributable to Common Stockholders $ (164,313 ) $ (2,400 ) $ (161,533 ) $ (745 ) Denominator: Weighted average shares used in computing net loss per share attributable to Common Stockholders, basic and diluted 21,202,188 11,497,128 30,638,048 11,497,128 Net loss per share attributable to Common Stockholders, basic and diluted $ (7.75 ) $ (0.21 ) $ (5.27 ) $ (0.06 ) |
Going Concern (Q2)
Going Concern (Q2) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Going Concern [Abstract] | ||
Going Concern | Note 2 – Going Concern Going Concern Evaluation In connection with preparing consolidated financial statements for the transition period ended December 31, 2018, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to continue as a going concern within one year from the date that the financial statements are issued. The Company considered the following: ● Net loss of $4,412,858 for the transition period ended December 31, 2018. ● At December 31, 2018, the Company had an accumulated deficit of $10,472,149. ● At December 31, 2018, the Company had working capital deficit of $7,330,882. Ordinarily, conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern relate to the entity’s ability to meet its obligations as they become due. The Company evaluated its ability to meet its obligations as they become due within one year from the date that the financial statements are issued by considering the following: On April 25, 2019, the Company entered into Subscription Agreements with accredited investors for the sale by the Company in a private placement (the “Private Placement”) of (i) 4,946,640 shares of the Company’s common stock at a purchase price of $3.00 per share and (ii) warrants to purchase up to 4,946,640 shares of Common Stock, exercisable at any time after issuance at an exercise price equal to $4.25 per share, subject to adjustments as provided under the terms of the warrants. The warrants are exercisable for 24 months from the initial issue date. On May 6, 2019, the Company closed the Private Placement. At the closing of the Private Placement, the Company issued 5,744,991 shares of its Common Stock at a purchase price of $3.00 per share and warrants to purchase up to 5,744,991 shares of its Common Stock at an exercise price of $4.25 per share (the “Warrants”). The Warrants are exercisable for 24 months from the Closing. The aggregate gross proceeds for the Private Placement were approximately $17.2 million. On May 6, 2019, the Company entered into a Loan Agreement (the “Loan Agreement”) by and between the Company and Franklin Synergy Bank, a Tennessee banking corporation (the “Lender”), pursuant to which, at the Company’s option and subject to the occurrence of the certain funding conditions, the Lender is obligated to provide advances to the Company in an aggregate amount less than or equal to $6,200,000 (the “Loan”). On May 6, 2019, the Company completed the acquisition of (i) Bona Vida, Inc. in accordance with the terms of the Agreement and Plan of Merger, dated as of February 28, 2019, by and among the Company, BCC Merger Sub, Inc. (“Merger Sub”), and Bona Vida, Inc., as amended by Amendment No. 1 thereto made and entered into as of May 3, 2019, pursuant to which Merger Sub merged with and into Bona Vida, with Bona Vida surviving as a wholly owned subsidiary of the Company and (ii) TruPet LLC in accordance with the terms of the Securities Exchange Agreement, dated as of February 2, 2019, by and between the Company and TruPet LLC, as amended by Amendment No. 1 thereto made and entered into as of May 6, 2019, pursuant to which the Company agreed to acquire 93.3% of the outstanding TruPet membership interests with TruPet remaining as a wholly-owned subsidiary of the Company (the “Acquisitions”). Following the completion of the Acquisitions, the business conducted by the Company became primarily the businesses conducted by TruPet and Bona Vida, which is as an online seller of pet foods, pet nutritional products and related pet supplies and as an emerging hemp-based CBD platform focused on developing a portfolio of brand and product verticals within the animal health and wellness space, respectively. Under the terms of the Bona Vida Merger Agreement, the Company issued 18,003,273 shares of its common stock, par value $0.001 per share (“Common Stock”), to Bona Vida’s stockholders for all shares of Bona Vida’s common stock outstanding immediately prior to the Bona Vida Acquisition. The Company also offered to purchase each warrant held by Bona Vida warrant holders for CAD $0.75 per share, with any outstanding warrants at closing being cancelled. Under the terms of the TruPet Merger Agreement, the Company issued 15,027,533 shares of its Common Stock to TruPet’s members for 93.3% of the issued and outstanding membership interests of TruPet outstanding immediately prior to the TruPet Acquisition. Following the completion of the Acquisitions, the business conducted by the Company became primarily the businesses conducted by TruPet and Bona Vida, which is as an online seller of pet foods, pet nutritional products and related pet supplies and as an emerging hemp-based CBD platform focused on developing a portfolio of brand and product verticals within the animal health and wellness space, respectively. Management concluded that above factors alleviates doubts about the Company’s ability to generate enough cash from operations and other available sources to satisfy its obligations for the next twelve months from the issuance date. The Company will take the following actions if it starts to trend unfavorably to its internal profitability and cash flow projections, in order to mitigate conditions or events that would raise substantial doubt about its ability to continue as a going concern: ● Raise additional capital through line of credit and/or loans financing for future mergers and acquisition. ● Implement additional restructuring and cost reductions. ● Raise additional capital through a private placement. At July 1, 2019 and December 31, 2018, the Company had $10,739,705 and $355,104, respectively in cash and cash equivalents. | Note 17 - Going Concern The Company has incurred significant losses over the last three years and has a significant accumulated deficit. These operating losses create an uncertainty about the Company’s ability to continue as a going concern for a period of twelve months from the date these unaudited condensed consolidated financial statements are issued. Management has evaluated whether the unaudited condensed consolidated financial statements should be presented as a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The unaudited condensed consolidated financial statements have been prepared on a going concern basis. In making this assessment, management conducted a comprehensive review of the Company’s affairs including, but not limited to: • The Company’s financial position at June 30, 2019 which includes $0.6 million of working capital; • Significant events and transactions the Company has entered into, including and through the date the unaudited condensed consolidated financial statements were available to be issued; • The loss from operations includes $4.2 million related to non-cash stock compensation; • Sales and profitability forecasts for the Company for the next financial year; • The continued support of the Company’s members and lenders; and • The repayment of the line of credit with proceeds from a new $6.2 million loan. To address the future additional funding requirements members have undertaken the following initiatives: o To continue to monitor the Company’s ongoing working capital requirements and minimum expenditure commitments; and o Continue their focus on maintaining an appropriate level of corporate overhead in line with the Company’s available cash resources. Management is confident that it will be able to meet its minimum expenditure commitments and support its planned level of overhead expenditures. There can be no assurance however that the Company will be able to raise additional capital when needed, or at terms deemed acceptable, if at all. The accompanying unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Subsequent Events (Q2)
Subsequent Events (Q2) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Subsequent Events [Abstract] | ||
Subsequent Events | Note 13 – Subsequent Events On January 4, 2019, the Company repurchased 935,897 shares of the Company’s common stock from David Lelong, the Company’s former Chief Executive Officer, in a private transaction. The Shares were repurchased by the Company for the par value of the pre-reverse split shares of $0.001 per share or a total of $24,333. Prior to the repurchase, the shares represented approximately 38% of the Company’s outstanding common stock. On January 8, 2019, the Company issued 25,641 shares of common stock for cash of $50,000 pursuant to the December Offering. On January 17, 2019, the Company adopted the 2019 Equity Incentive Plan which covers the potential issuance of 180,769 shares of common stock. On January 18, 2019, an investor converted 49,155 shares of the Company’s Series E Convertible Preferred Stock into 62,389 shares of common stock. On February 1, 2019, the four holders of the Series E Convertible Preferred Stock, in exchange for $10 each (a total of $40), agreed to waive the right to receive any dividends which would accrue on the Series E for a one year period beginning on October 22, 2018. On February 2, 2019, the Company approved the Company’s entry into a six-month Employment Agreement, effective February 1, 2019, with its Chief Executive Officer Mr. David Lelong. Mr. Lelong shall accrue monthly at a rate of 18% per annum. On February 6, 2019, an investor converted 49,523 shares of the Company’s Series E Convertible Preferred Stock into 62,856 shares of common stock. On February 11, 2019, an investor converted 54,000 shares of the Company’s Series E Convertible Preferred Stock into 68,538 shares of common stock. On February 12, 2019 the Company filed a Certificate of Withdrawal of Certificate of Designation for the Company’s Series B Preferred Stock. On February 19, 2019, the Company filed a Certificate of Amendment to Articles of Incorporation permitting the Company’s Board of Directors to amend the certificate of designation for any class or series of the Company’s preferred stock without the vote of such class or series, unless such certificate of designation specifically prohibits the Board from amending such certificate of designation. On February 20, 2019, the Company filed a Certificate of Amendment to Certificate of Designation for the Company’s Series A Preferred Stock permitting the Board to convert all outstanding shares of Series A into shares of the Company’s common stock at the Board’s discretion. On February 22, 2019, the Company issued 115 shares of common stock in exchange for 1,000 shares of Series A. On March 4, 2019, Mr. David Lelong resigned from his position as the Company’s Chief Executive Officer effective immediately. Mr. Lelong remains as the President, Chief Financial Officer, Secretary and Treasurer of the Company. On March 4, 2019, the Board of Directors of the Company appointed Mr. Damian Dalla-Longa and Ms. Lori Taylor as the Company’s Co-Chief Executive Officers. On March 7, 2019, the Company filed a Certificate of Withdrawal of Certificate of Designation for the Company’s Series A Preferred Stock. The filing of the Amendment in Nevada was approved by the Company’s Board of Directors and there were no shares of Series A outstanding on the Effective Date. On March 8, 2019, the Company issued a Canadian investment banker 141,026 shares of the Company’s common stock for advisory services rendered. Effective March 11, 2019, Sport Endurance, Inc. merged into its wholly-owned subsidiary, Better Choice Company Inc., a Delaware corporation. As a result, the name of Sport Endurance, Inc. was changed to Better Choice Company Inc. Pursuant to the merger, each outstanding share of common stock of Sport Endurance, Inc. converted into one share of common stock of Better Choice Company Inc. and each outstanding share of Series E Convertible Preferred Stock of Sport Endurance, Inc. converted into one share of Series E of Better Choice Company Inc. On March 14, 2019, Mr. David Lelong notified the Company of his resignation as a member of the Company’s Board of Directors effective immediately. On March 15, 2019, the Board appointed the Company’s Co-Chief Executive Officers, Mr. Damian Dalla-Longa and Ms. Lori Taylor, to the Board, as well as Mr. Jeff Davis and Michael Galego. Mr. Galego will be the Chairman of the Board. On March 15, 2019, the Company effected a 1 for 26 reverse split of its common stock. An additional 682 shares of common stock were issued as a result of rounding up of any fractional shares as a result of the reverse split. On April 1, 2019, the Company issued 200,000 shares of common stock in connection with a licensing agreement. On April 22, 2019, the Company filed a certificate of amendment of certificate of incorporation with the State of Delaware which reduced the number of authorized shares of common stock to 88,000,000. On April 25, 2019, the Company entered into Subscription Agreements with accredited investors for the sale by the Company in a private placement (the “Private Placement”) of (i) 4,946,640 shares of the Company’s common stock at a purchase price of $3.00 per share and (ii) warrants to purchase up to 4,946,640 shares of Common Stock, exercisable at any time after issuance at an exercise price equal to $4.25 per share, subject to adjustments as provided under the terms of the warrants. The warrants are exercisable for 24 months from the initial issue date. On May 6, 2019, the Company closed the Private Placement. At the closing of the Private Placement, the Company issued 5,744,991 shares of its Common Stock at a purchase price of $3.00 per share and warrants to purchase up to 5,744,991 shares of its Common Stock at an exercise price of $4.25 per share (the “Warrants”). The Warrants are exercisable for 24 months from the Closing. The aggregate gross proceeds for the Private Placement were approximately $17.2 million. On April 29, 2019, the board of directors of the Company approved the Company’s New 2019 Incentive Award Plan (the “2019 Plan”) which became effective on such date (the “Effective Date”), subject to the approval by the Company’s stockholders. The 2019 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, other stock or cash-based awards or a dividend equivalent award (each an “Award”). Non-employee directors of the Company and employees and consultants of the Company or any of its subsidiaries are eligible to receive awards under the 2019 Plan. The 2019 Plan authorizes the issuance of (i) 6,000,000 shares of common stock plus (ii) an annual increase on the first day of each calendar year beginning on January 1, 2020 and ending on and including January 1, 2029, equal to the lesser of (A) 10% of the shares of common stock outstanding (on an as-converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of shares of common stock as determined by the Board. On May 2, 2019, the board of directors approved the grant to certain executives of the Company of non-qualified stock options to purchase shares of the Company’s common stock under the 2019 Plan at a per-share exercise price equal to the fair market value of a share of the Company’s common stock on the date of grant. In accordance with an agreement with the Company, the stock options vest and become exercisable monthly over 2 years in equal installments of 1/24 each month. The stock options will be accelerated upon a Change of Control, as defined in the 2019 Plan. Any exercise of stock options may, at the election of the executives, be exercised with a “cashless exercise” by using shares from any such exercise to pay the exercise price, which shares, for such purpose, being valued at the fair market value, as determined under the 2019 Plan, on the date of exercise. On May 2, 2019, an investor converted 60,000 shares of the Company’s Series E Convertible Preferred Stock into 76,154 shares of common stock. The following executive officers of the Company were granted the number of stock options under the 2019 Plan, in each case as listed after their names: Damian Dalla-Longa, 1,200,000 stock options; Lori Taylor, 1,150,000 stock options; and Anthony Santarsiero, 1,000,000 stock options. On May 6, 2019, the Company entered into a Loan Agreement (the “Loan Agreement”) by and between the Company and Franklin Synergy Bank, a Tennessee banking corporation (the “Lender”), pursuant to which, at the Company’s option and subject to the occurrence of the funding conditions described below and other customary funding conditions, the Lender is obligated to provide advances to the Company in an aggregate amount less than or equal to $6,200,000 (the “Loan”). Under the Revolving Line of Credit Promissory Note entered into by the Company (the “Note”), all advances bear interest from the date of such advance until such amount is due and payable (whether on any payment date, at maturity, by acceleration or otherwise), at a fixed rate of interest equal to 3.70% per annum, which may be adjusted from time to time subject to certain conditions. In addition, the Company paid a fee of $10,000 upon closing. The Company is also required to pay a late charge equal to 5% of the aggregate amount of any payments of principal and/or interest that are paid more than 10 days after the due date. The Note may be permanently prepaid at any time in whole or in part without penalty or premium in accordance with, and subject to any limitations on prepayments set forth in, the Loan Agreement. The Company is also required to make mandatory prepayments of the Loan and interest and expenses thereon, subject to specified exceptions, upon defaulting on any payments of principal or interest on the Loan, the occurrence of certain specified defaults of the covenants in the Loan Agreement, the occurrence of a material adverse change in the business, operations or conditions of the Company and specified other events. TruPet LLC and Bona Vida, Inc. became guarantors of the Company’s obligations under the Loan Agreement after the closing of the acquisitions described below. In addition, pursuant to a Security Agreement by and between the Company and Lender dated the date of the Loan Agreement (the “Security Agreement”), the Company has granted the Lender a security interest in all assets of the Company owned or later acquired. The Loan Agreement also contains certain events of default, representations, warranties and covenants of the Company and its subsidiaries. For example, the Loan Agreement contains representations and covenants that, subject to exceptions, restrict the Company’s ability to do the following, among other things: incur additional indebtedness, engage in certain asset sales or undergo a change in ownership. On May 6, 2019, the Company completed the acquisition of (i) Bona Vida, Inc. in accordance with the terms of the Agreement and Plan of Merger, dated as of February 28, 2019, by and among the Company, BCC Merger Sub, Inc. (“Merger Sub”), and Bona Vida, Inc. , as amended by Amendment No. 1 thereto made and entered into as of May 3, 2019, pursuant to which Merger Sub merged with and into Bona Vida, with Bona Vida surviving as a wholly owned subsidiary of the Company and (ii) TruPet LLC in accordance with the terms of the Securities Exchange Agreement, dated as of February 2, 2019, by and between the Company and TruPet LLC, as amended by Amendment No. 1 thereto made and entered into as of May 6, 2019, pursuant to which the Company agreed to acquire 93.3% of the outstanding TruPet membership interests with TruPet remaining as a wholly-owned subsidiary of the Company (the “Acquisitions”). Following the completion of the Acquisitions, the business conducted by the Company became primarily the businesses conducted by TruPet and Bona Vida, which is as an online seller of pet foods, pet nutritional products and related pet supplies and as an emerging hemp-based CBD platform focused on developing a portfolio of brand and product verticals within the animal health and wellness space, respectively. Under the terms of the Bona Vida Merger Agreement, the Company issued 18,003,273 shares of its common stock, par value $0.001 per share (“Common Stock”), to Bona Vida’s stockholders for all shares of Bona Vida’s common stock outstanding immediately prior to the Bona Vida Acquisition. The Company also offered to purchase each warrant held by Bona Vida warrant holders for CAD $0.75 per share, with any outstanding warrants at closing being cancelled. Under the terms of the TruPet Merger Agreement, the Company issued 15,027,533 shares of its Common Stock to TruPet’s members for 93.3% of the issued and outstanding membership interests of TruPet outstanding immediately prior to the TruPet Acquisition. Following the completion of the Acquisitions, the business conducted by the Company became primarily the businesses conducted by TruPet and Bona Vida, which is as an online seller of pet foods, pet nutritional products and related pet supplies and as an emerging hemp-based CBD platform focused on developing a portfolio of brand and product verticals within the animal health and wellness space, respectively. On May 6, 2019, the Company entered into executive employment agreements with each of Damian Dalla-Longa, Co-Chief Executive Officer, Lori Taylor, Co-Chief Executive Officer, and Anthony Santarsiero, President and Director of Operations, each of which is effective as of May 6, 2019. On May 10, 2019, an investor converted 689,394 shares of the Company’s Series E Convertible Preferred Stock into 682,500 shares of common stock. On May 13, 2019, the Company issued 100,000 shares of common stock to Damian Dalla-Longa, Co-Chief Executive Officer, pursuant to a change-of-control provision in the employment agreement between Mr. Dalla-Longa and Bona Vida. On May 17, 2019, the Company filed an Amended and Restated Certificate of Designations, Preferences and Rights of the Series E Convertible Preferred Stock of Better Choice Company Inc. with the Delaware Secretary of State to increase the limit on beneficial ownership of certain holders of Series E Convertible Preferred Stock. On May 21, 2019, the Board of Directors of the Company approved a change to the Company’s fiscal year end from August 31 to December 31 of each year. The fiscal year change for the Company is effective beginning with the Company’s 2019 fiscal year, which now began January 1, 2019 and ends December 31, 2019. On May 22, 2019, an investor converted 236,364 shares of the Company’s Series E Convertible Preferred Stock into 300,000 shares of common stock. On May 28, 2019, David Lelong resigned as Chief Financial Officer, President, Secretary and Treasurer of the Company, effective immediately. On May 28, 2019, Anthony Santarsiero, 35, has been appointed as President and Director of Operations of the Company. On June 10, 2019, the Company entered into a First Amendment to Registration Rights Agreement (the “Registration Rights Agreement Amendment”) with the stockholders signatory thereto, which amends the Registration Rights Agreement, dated as of May 6, 2019, by and among the Company and the stockholders named therein (the “Private Placement Investors”), entered into in connection with the previously announced private placement of shares of the Company’s commons stock and warrants to purchase common stock (the “Original Registration Rights Agreement”). Pursuant to the terms of the Original Registration Rights Agreement, the Company, among other things, granted certain registration rights to the Private Placement Investors. The Registration Rights Agreement Amendment extends the deadline by which the Company must file with the Securities and Exchange Commission (“SEC”) a Registration Statement covering the resale of the shares of the Company’s common stock purchased in the private placement, including the shares issuable upon exercise of the warrants to purchase common stock, by 42 days from July 5, 2019 to August 16, 2019, and extends the applicable deadline for seeking to have such Registration Statement declared effective by the SEC by the same amount. On June 29, 2019, the Company appointed Andreas Schulmeyer as Chief Financial Officer to serve as the Company’s principal financial officer and principal accounting officer, effective June 29, 2019, and to commence full-time employment on July 29, 2019. On July 12, 2019, the Company filed a Form 8-K disclosing the following: that as a result of the issuance of shares of our common stock pursuant to the Bona Vida Merger Agreement and TruPet Merger Agreement, a change in control from the legacy stockholders of the Company occurred on May 6, 2019; that the Bona Vida Merger and TruPet Merger are being accounted for as a reverse acquisition and recapitalization of the Company for financial accounting purposes, whereby TruPet is deemed to be the acquirer for accounting purposes, and the Company’s historical financial statements before the Acquisitions will be replaced with the historical financial statements of TruPet before the Acquisitions in future filings with the SEC; that the Company intends to appoint a new auditor for the combined entity; and that the Company also intends to file the historical financial statements of Bona Vida and TruPet, along with a pro forma presentation illustrating the effects of the Acquisitions, to comply with Rule 8-04 and Rule 8-05 of Regulation S-X and Item 9.01 of Form 8-K. On July 23, 2019, the Company filed a Form 8-K/A which included the audited financial statements of TruPet LLC as of and for the years ended December 31, 2018 and December 31, 2017 and the notes related thereto and the related independent auditor’s report of MNP LLC; the unaudited interim financial statements of TruPet LLC as of and for the three months ended March 31, 2019 and March 31, 2018 and the notes related thereto; the audited financial statements of Bona Vida, Inc. from the date of incorporation, March 29, 2018, to December 31, 2018 and the notes related thereto and the related independent auditor’s report of MNP LLC; the unaudited interim financial statements of Bona Vida, Inc. as of and for the three months ended March 31, 2019 and the notes related thereto; the audited financial statements of TruPet LLC; and the unaudited pro forma combined financial statements of Better Choice Company Inc. as of and for the three months ended March 31, 2019 and for the twelve months ended December 31, 2018 and the related notes thereto. We evaluated subsequent events after the balance sheet date through the date the financial statements were issued. We did not identify any additional material events or transactions occurring during this subsequent event reporting period that required further recognition or disclosure in these financial statements. | Note 18 - Subsequent Events Management has evaluated subsequent events through the date on which the unaudited condensed consolidated financial statements were issued. On June 28, 2019, the Company granted 500,000 options to Andreas Schulmeyer, the Company’s Chief Financial Officer, subject to commencement of employment on July 29, 2019. The options have an exercise price of $6.35 and vest over a two-year period beginning with commencement of employment. On July 23, 2019, the Audit Committee of the Board of Directors of the Company appointed Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal periods on or after January 1, 2019. On July 29, 2019, Mr. Schulmeyer received a grant of 6,042 common shares as a consulting fee pursuant to his employment agreement dated June 28, 2019. On August 14, 2019, the Company granted 30,000 options to an employee of the Company. The options have an exercise price of $4.00 and vest over a three-year period. On August 28, 2019, the Company entered into a radio advertising agreement with iHeartMedia + Entertainment, Inc. The Company issued 1,000,000 common shares which shall be entirely paid for by iHeartMedia in the form of a commitment from iHeartMedia to provide to Company advertising media inventory having an aggregate value of $5,000,000. Company has committed to using $2,500,000 of the media inventory by August 28, 2020 with the remainder of the inventory available through August 28, 2021 On August 30, 2019, the Company granted 100,000 stock options to Mr. Schulmeyer. These options have an exercise price of $3.90 and vest over a two-year period. On September 6, 2019, the Audit Committee notified RBSM LLP of the Audit Committee’s approval to dismiss RBSM as the Company’s independent registered public accounting firm upon filing of this Quarterly Report. On September 9, 2019, the Company granted 30,000 options to an employee of the Company. The options have an exercise price of $3.70 and vest over a three-year period. On September 13, 2019, Lori R. Taylor notified the Company of her decision to resign as Co-Chief Executive Officer of the Company effective as of September 13, 2019. The Company also entered into a separation agreement with Ms. Taylor, in connection with her resignation as an officer of the Company, effective as of the date thereof. Pursuant to the separation agreement all outstanding stock option awards will become fully vested on November 12, 2019, subject to Ms. Taylor’s continued cooperation with the Company through such date and subject to the effectiveness and irrevocability of the release of claims. Ms. Taylor will continue to serve as a member of the board of directors of the Company. On September 17, 2019, the Company entered into a 5-year consulting agreement with Bruce Linton. As compensation for the services rendered, the Company has issued 2,500,000 share purchase warrants to acquire one share each of Company Common Stock with an exercise price of $0.10. An additional 1,500,000 share purchase warrants to acquire one share each of Company Common Stock with an exercise price of $10.00. The Warrants will vest as follows: (i) 50% (or 1,250,000) of the Warrants (the “Tranche 1 Warrants”), will vest and be exercisable upon the earlier of (Y) September 17, 2020 or (Z) immediately prior to a Change in Control (as such term is defined under the Company’s 2019 Incentive Award Plan) (a “Change in Control”) and (ii) the remaining 50% (or 1,250,000) of the Warrants (the “Tranche 2 Warrants”) will vest and be exercisable upon the earlier of (Y) March 17, 2021 or (Z) immediately prior to a Change in Control, in each case, subject to Mr. Linton’s continued service to the Company through the applicable vesting date or Change in Control. The Warrants have a term expiring on September 17, 2029 (the “Expiry Date”) and will be subject to such other terms and conditions as may be determined by the Board. The Additional Warrants will be exercisable on the earlier of (Y) March 17, 2021 or (Z) immediately prior to a Change in Control, in each case, subject to Mr. Linton’s continued service to the Company through the applicable date. The Additional Warrants have a term expiring on the Expiry Date and will be subject to such other terms and conditions as may be determined by the Board. If Mr. Linton should cease to be engaged by the Company for any reason, other than as a result of a termination by reason of Just Cause (as such term is defined in the Independent Contractor Agreement) or as a result of Mr. Linton’s resignation as an independent contractor of the Company, the Incentive Warrants which have not then vested will immediately prior to the date Mr. Linton ceases to be engaged with the Company be deemed to become vested and such Incentive Warrants will remain exercisable until the Expiry Date. During the month of September 2019 several warrant holders converted 1,144,999 warrants to 1,259,498 Common Stock shares. The Company received $4.0 million in return for the common shares issued. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Nature of Business and Summary of Significant Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation The audited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles and applicable rules and regulations of the United States Securities and Exchange Commission (“SEC”). Effective March 15, 2019, the board of directors of the Company approved a change in our fiscal year end from August 31 to December 31. As a result of this change, we are filing this Transition Report on Form 10-KT for the four month transition period ended December 31, 2018. References to any of our previous fiscal years mean the fiscal years ending on August 31. All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10–Q and Article 10 of Regulation S–X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and operating results have been included. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for any subsequent quarters or for the year ending December 31, 2019. The significant accounting policies applied by the Company are described below. We present our tables, except for the Statements of Stockholders’ Deficit, in dollars (thousands), numbers in the text in dollars (millions) and % as rounded up or down. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management utilizes various other estimates, including but not limited to determining the collectability of accounts receivable, the fair value of warrants issued, the fair value of conversion features, the recognition of revenue, the valuation allowance for deferred tax assets and other legal claims and contingencies. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period that they are determined to be necessary. | Use of Estimates The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of expenses during the reporting periods. The Company evaluates its estimates on an ongoing basis. The Company bases its estimates on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and equivalents include investments with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Deposits with these banks may exceed the amount of insurance provided on such deposits; however, these deposits typically may be redeemed upon demand and, therefore, bear minimal risk. At December 31, 2018 and August 31, 2018, the uninsured balances amounted to $95,412 and $0, respectively. | Cash and Cash Equivalents Cash and cash equivalents include demand deposits held with banks and highly liquid investments with remaining maturities of ninety days or less at acquisition date. For purposes of reporting cash flows, the Company considers all cash accounts that are not subject to withdrawal restrictions or penalties to be cash and cash equivalents. |
Inventory | Inventory Inventory consists of finished goods and is stated at the lower of cost by the first-in, first-out method or net realizable value. The Company currently has approximately 2,432 containers of “Ultra Peak T” included in inventory at December 31, 2018 and August 31, 2018. | Inventories Inventories are recorded at the lower of cost and net realizable value. The net realizable value represents the estimated selling price for inventories in the ordinary course of business, less all estimated costs of completion and costs necessary to make the sale. Cost is determined on a standard cost basis and includes the purchase price and other costs, such as transportation costs. Inventory average cost is determined on a first‑in, first‑out (“FIFO”) basis and trade discounts are deducted from the purchase price. |
Revenue Recognition | Revenue Recognition Adoption of ASU 2014-09, Revenue from Contracts with Customers On September 1, 2018, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”) using the modified retrospective (cumulative effect) transition method. Under this transition method, results for reporting periods beginning September 1, 2018 or later are presented under ASC 606, while prior period results continue to be reported in accordance with previous guidance. The cumulative effect of the initial application of ASC 606 was immaterial, no adjustment was recorded to the opening balance of retained earnings. The timing of revenue recognition for our revenue stream was not materially impacted by the adoption of this standard. The Company believes its business processes, systems and controls are appropriate to support recognition and disclosure under ASC 606. Overall, the adoption of ASC 606 did not have a material impact on the Company’s balance sheet, statement of operations and statement of cash flows for the period ended December 31, 2018. ASC 606 also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. As described below, the analysis of contracts under ASC 606 supports the recognition of revenue at a point in time, resulting in revenue recognition timing that is materially consistent with the Company’s historical practice of recognizing product revenue when title and risk of loss pass to the customer. Policy The Company recognizes revenue upon product delivery. All of our products are shipped through a third party fulfillment center to the customer and the customer takes title to product and assumes risk and ownership of the product when it is delivered. Shipping charges to customers and sales taxes collectible from customers, if any, are included in revenues. For revenue from product sales, the Company recognizes revenue in accordance with ASC 606. A five-step analysis must be met as outlined in Topic 606: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. Contract Assets The Company does not have any contract assets such as work-in-process. All trade receivables on the Company’s balance sheet are from contracts with customers. Contract Costs Costs incurred to obtain a contract are capitalized unless short term in nature. As a practical expedient, costs to obtain a contract that are short term in nature are expensed as incurred. The Company does not have any contract costs capitalized as of December 31, 2018. Contract Liabilities - Deferred Revenue The Company’s contract liabilities may consist of advance customer payments and deferred revenue. Deferred revenue results from transactions in which the Company has been paid for products by customers, but for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the deferred revenues are recognized. | |
Income Taxes | Income Taxes The Company utilizes ASC 740, Accounting for Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740, “Income Taxes”. Accounting guidance addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements, under which a company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Accordingly, the Company would report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company elects to recognize any interest and penalties, if any, related to unrecognized tax benefits in tax expense. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%. As of the completion of these consolidated financial statements and related disclosures, we have made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act, and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the fourth quarter of fiscal year 2019. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined. See Note 12 for additional information. Based on the new tax law that lowers corporate tax rates, the Company revalued its deferred tax assets. Future tax benefits are expected to be lower, with the corresponding one time charge being recorded as a component of income tax expense. | Income Taxes No provision has been made for federal and state income taxes prior to the date of the acquisitions since the proportionate share of TruPet’s income or loss was included in the personal tax returns of its members because TruPet was a limited liability company. Subsequent to the acquisitions, the Company, as a corporation, is required to provide for income taxes. The Company utilizes Accounting Standards Codification (“ASC 740”), “Accounting for Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The effective tax rate for each of the three months and the six months ended June 30, 2019 is 0%. The effective tax rate differs from the U.S. Federal statutory rate of 21% primarily because our previously reported losses have been offset by a valuation allowance due to uncertainty as to the realization of those losses. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. Accounting guidance addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements, under which a company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Accordingly, the Company would report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company elects to recognize any interest and penalties, if any, related to unrecognized tax benefits in tax expense. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%. As of the completion of these unaudited condensed financial statements, we have made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the end of the fourth quarter of fiscal year 2019. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined. Based on the new tax law that lowers corporate tax rates, the Company revalued its deferred tax assets. Future tax benefits are expected to be lower, with the corresponding one-time charge being recorded as a component of income tax expense. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash and accrued expenses reported on the balance sheet are estimated by management to approximate fair value primarily due to the short term nature of the instruments. | Fair Value of Financial Instruments A financial instrument is defined as cash, evidence of an ownership interest in an entity, or a contract that both: • Imposes on one entity a contractual obligation either: o To deliver cash or another financial instrument to a second entity; or o To exchange other financial instruments on potentially unfavorable terms with the second entity. • Conveys to that second entity a contractual right either: o To receive cash or another financial instrument from the first entity; or o To exchange other financial instruments on potentially favorable terms with the first entity. The Company’s financial instruments recognized in the balance sheet consist of cash and cash equivalents, restricted cash accounts, accounts receivable, deposits, accounts payable, line of credit, due to related party, accrued and other liabilities, warrant derivative liability and long-term debt. Warrant derivative liability is measured at fair value each reporting period. The fair values of the remaining financial instruments approximate their carrying values. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has applied the framework for measuring fair value which requires a fair value hierarchy to be applied to all fair value measurements. The fair value of the warrant derivative liability is considered a Level 3 financial instrument. All financial instruments recognized at fair value in the balance sheet are classified into one of three levels in the fair value hierarchy as follows: • Level 1 – valuation based on quoted prices (unadjusted) observed in active markets for identical assets or liabilities. Cash is measured based on Level 1 inputs. • Level 2 – valuation techniques based on inputs that are quoted prices of similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; inputs other than quoted prices used in a valuation model that are observable for that instrument; and inputs that are derived from or corroborated by observable market data by correlation or other means. • Level 3 – valuation techniques with significant unobservable market inputs. |
Fair Value Measurements | Fair Value Measurements The Company follows Accounting Standards Codification (“ASC”) 820–10 “Fair Value Measurement” of the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification to measure the fair value of its financial instruments and disclosures about fair value of its financial instruments. ASC 820–10 establishes a framework for measuring fair value and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820–10 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The three (3) levels of fair value hierarchy defined by ASC 820–10 are described below: Level 1- fair value measurements are those derived from quoted prices (unadjusted in active markets for identical assets or liabilities); Level 2- fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and Level 3- fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). Financial instruments classified as Level 1 - quoted prices in active markets include cash. These financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments. Changes in such judgments could have a material impact on fair value estimates. In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic conditions may also dramatically affect the estimated fair values. Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2018 and August 31, 2018. The respective carrying value of certain financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, accounts payable and accrued expenses. | |
Derivative Financial Instruments | Derivative Financial Instruments ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re- measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described. The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option and warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. The pricing model we use for determining fair value of our derivatives is the Lattice Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income (see note 11). Conversion options are recorded as debt discount and are amortized as interest expense over the life of the underlying debt instrument using effective interest method. | Derivative Financial Instruments Financial Accounting Standards Board (“FASB”) ASC Topic 815, “Derivatives and Hedging”, generally provides three criteria that, if met, require companies to bifurcate conversion options from its host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described. The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option and warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. The pricing model we use for determining fair value of our derivatives is the Lattice Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income (see Note 8). |
Basic and Diluted Loss Per Share | Basic and Diluted Loss Per Share The basic net loss per common share is computed by dividing the net loss by the weighted average number of common stock outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common stock outstanding plus potential dilutive securities. Following shares were not included in the calculation of diluted loss per share because the effect would be anti-dilutive. December 31, 2018 August 31, 2018 August 31, 2017 Conversion of notes payable - 82,974 44,245 Conversion of Series B Convertible Preferred Stock - 1,046,423 - Conversion of Series E Convertible Preferred Stock 3,681,273 - - Options 38,462 Warrants to purchase common stock 700,000 463,631 - 4,419,735 1,593,028 44,245 | Basic and Diluted Loss Per Share Basic and diluted loss per share has been determined by dividing the net loss available to stockholders for the applicable period by the basic and diluted weighted average number of shares outstanding, respectively. Common Stock equivalents and incentive shares are excluded from the computation of diluted loss per share when their effect is anti-dilutive. |
Related Parties | Related Parties Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. All transactions with related parties are recorded at fair value of the goods or services exchanged. | |
Discontinued Operations | Discontinued Operations ASC 360-10-45-9 requires that a long-lived asset (disposal group) to be sold shall be classified as held for sale in the period in which a set of criteria have been met, including criteria that the sale of the asset (disposal group) is probable and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. This criteria was achieved on August 21, 2018. Since the business was started and discontinued during the year ended August 31, 2018, there was no impact on the comparable consolidated financial statements. | |
Investments | Investments The Company records minority interest equity investments at cost. | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, FASB issued ASU No. 2016–02, “Leases (Topic 842)”, which creates new accounting and reporting guidelines for leasing arrangements. The new guidance requires organizations that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases, regardless of whether they are classified as finance or operating leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. The guidance also requires new disclosures to help financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early application permitted. The Company is currently evaluating the impact of the new pronouncement on its consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception”. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. ASU 2017-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company expects to implement ASU 2017-11 on January 1, 2019 and does not believe it will have a material impact on its consolidated financial statements. ASU 2018-02 - On December 22, 2017, the U.S. federal government enacted a tax bill, H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (the “Tax Cuts and Jobs Act”). Stakeholders raised a narrow-scope financial reporting issue that arose as a consequence of the Tax Cuts and Jobs Act of 2017. The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement-Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by the Generally Adopted Accounting Principles (“GAAP”). The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2018-210—Income Statement—Reporting Comprehensive Income (Topic 220), which has been deleted. We are currently evaluating the impact of adopting ASU 2017-13 on our consolidated financial statements. ASU 2018-05 Accounting Standards Update adds SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No. 118, which expresses the view of the staff regarding application of Topic 740, Income Taxes, in the reporting period that includes December 22, 2017 - the date on which the Tax Cuts and Jobs Act was signed into law. We are currently evaluating the impact of adopting ASU 2017-13 on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance is effective for public entities, certain not-for-profit entities, and certain employee benefit plans for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other entities, ASU 2018-07 is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company is evaluating the impact of adopting this pronouncement. In July 2018, the FASB issued ASU 2018-10 Leases (Topic 842), Codification Improvements and ASU 2018-11 Leases (Topic 842), Targeted Improvements, to provide additional guidance for the adoption of Topic 842. ASU 2018-10 clarifies certain provisions and correct unintended applications of the guidance such as the application of implicit rate, lessee reassessment of lease classification, and certain transition adjustments that should be recognized to earnings rather than to stockholders’ equity. ASU 2018-11 provides an alternative transition method and practical expedient for separating contract components for the adoption of Topic 842. In February 2016, the FASB issued ASU 2016-02 Leases (Topic 842) which requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases with terms greater than 12 months. ASU 2018-11, ASU 2018-10 and ASU 2016-02 (collectively, “the new lease standards”) are effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect the new lease standards will have on its Condensed Consolidated Financial Statements; however, the Company anticipates recognizing assets and liabilities arising from any leases that meet the requirements under the new lease standards on the adoption date and including qualitative and quantitative disclosures in the Company’s Notes to the Condensed Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. Removals The following disclosure requirements were removed from Topic 820: 1. The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy 2. The policy for timing of transfers between levels 3. The valuation processes for Level 3 fair value measurements 4. For nonpublic entities, the changes in unrealized gains and losses for the period included in earnings for recurring Level 3 fair value measurements held at the end of the reporting period. Modifications The following disclosure requirements were modified in Topic 820: 1. In lieu of a rollforward for Level 3 fair value measurements, a nonpublic entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities. 2. For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only 3. The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. Additions The following disclosure requirements were added to Topic 820; however, the disclosures are not required for nonpublic entities: 1. The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period 2. The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. In addition, the amendments eliminate at a minimum an entity shall disclose at a minimum The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. The impact of this ASU on the Company’s consolidated financial statements is not expected to be material. There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on our consolidated financial position, results of operations or cash flows. | Recently Issued Accounting Pronouncements The Company has reviewed the Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof issued by the FASB that have effective dates during the reporting period and in future periods. New Standards and Interpretations: Adoption of FASB ASC Topic 842 “Leases” The amendments in this update establish a comprehensive new lease accounting model. The new standard: (a) clarifies the definition of a lease; (b) requires a dual approach to lease classification similar to current lease classifications; and (c) causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease term of more than twelve months. The new standard is effective for fiscal years and interim periods beginning after December 15, 2018, with early adoption permitted. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, including a number of optional practical expedients that entities may elect to apply. In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements”, an update which provides another transition method, the prospective transition method, which allows entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted the new standard on January 1, 2019 using the prospective transition method. The Company has identified all leases to determine the impact of ASC 842 on its consolidated financial statements. The Company has elected to apply the practical expedient to certain classes of leases, whereby the separation of components of leases into lease and non-lease components is not required, and all of the practical expedients to all leases, (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any existing leases. The adoption of the new standard resulted in the recording on the consolidated balance sheet as of January 1, 2019 a right-of-use asset of $0.5 million, a lease liability of $0.5 million and a corresponding cumulative adjustment to accumulated deficit of an immaterial amount in accordance with ASC 842. Adoption of FASB ASU No. 2018-07 “Improvements to Nonemployee Share-Based Payment Accounting” On January 1, 2019, the Company adopted ASU No. 2018-07 “Improvements to Nonemployee Share-Based Payment Accounting”. The amendments in this update expanded the scope of ASC 718 to include share-based payment transactions for acquiring goods and services from non-employees. The requirements of ASC 718 are applied to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. The amendments specify that ASC 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that ASC 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606, “Revenue from Contracts with Customers.” The Company is treating the inclusion of share-based payments to non-employees as a change in accounting principle prospectively beginning in the period ending June 30, 2019. As the Company did not make any share-based payments to non-employees in prior periods, there was no impact on the results of operations in prior periods. Adoption of ASU 2018-13 “Fair Value Measurement” In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) Changes to the Disclosure Requirement for Fair Value Measurement” which amends ASC 820 to expand the disclosures required for items subject to Level 3, fair value remeasurement, including the underlying assumptions. ASU 2018-13 is effective for public companies for fiscal years beginning after December 15, 2019. The Company has early adopted the disclosures as permitted under the ASU. New and Revised Standards not Yet Adopted: In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326)”. ASU 2016-13 changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019. The Company does not anticipate any material impact from the implementation of this ASU. The Company has carefully considered other new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the Company’s reported balance sheet or operations in 2019. |
Nature of Business and Summar_2
Nature of Business and Summary of Significant Accounting Policies (Q2) (Policies) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Nature of Business and Summary of Significant Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation The audited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles and applicable rules and regulations of the United States Securities and Exchange Commission (“SEC”). Effective March 15, 2019, the board of directors of the Company approved a change in our fiscal year end from August 31 to December 31. As a result of this change, we are filing this Transition Report on Form 10-KT for the four month transition period ended December 31, 2018. References to any of our previous fiscal years mean the fiscal years ending on August 31. All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10–Q and Article 10 of Regulation S–X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America. However, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and operating results have been included. Operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for any subsequent quarters or for the year ending December 31, 2019. The significant accounting policies applied by the Company are described below. We present our tables, except for the Statements of Stockholders’ Deficit, in dollars (thousands), numbers in the text in dollars (millions) and % as rounded up or down. |
Basis of Measurement | Basis of Measurement The unaudited condensed consolidated financial statements of the Company are presented on a going concern basis, under the historical cost convention except for certain financial instruments that are measured at fair value, as explained in the accounting policies below. Historical cost is measured as the fair value of the consideration provided in exchange for goods and services. The Company’s functional and presentation currency is United States dollars (“USD”). | |
Consolidation | Consolidation The consolidated financial statements and related notes include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. | |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and equivalents include investments with initial maturities of three months or less. The Company maintains its cash balances at credit-worthy financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Deposits with these banks may exceed the amount of insurance provided on such deposits; however, these deposits typically may be redeemed upon demand and, therefore, bear minimal risk. At December 31, 2018 and August 31, 2018, the uninsured balances amounted to $95,412 and $0, respectively. | Cash and Cash Equivalents Cash and cash equivalents include demand deposits held with banks and highly liquid investments with remaining maturities of ninety days or less at acquisition date. For purposes of reporting cash flows, the Company considers all cash accounts that are not subject to withdrawal restrictions or penalties to be cash and cash equivalents. |
Restricted Cash | Restricted Cash As part of the revolving credit agreement with Franklin Synergy Bank, the Company is required to maintain a cash balance of $6.2 million in its account. Any withdrawals from the account require an equal reduction to the funds available under the revolving credit agreement. Dollars in thousands June 30, 2019 December 31, 2018 Cash and cash equivalents $ 5,019 $ 3,946 Restricted cash 6,243 0 Total cash, cash equivalents and restricted cash $ 11,262 $ 3,946 | |
Accounts Receivable | Accounts Receivable Accounts receivable represents amounts due from customers less an allowance for doubtful accounts. A provision is recorded for impairment when there is objective evidence (such as significant financial difficulties of the debtor) that the Company will not be able to collect all amounts due according to the original terms of the receivable. A provision is recorded as the difference between the carrying value of the receivable and the present value of future cash flows expected from the debtor, with an offsetting amount recorded as an allowance, reducing the carrying value of the receivable. The provision is included in general and administrative expense in the statements of operations. As of the period ended June 30, 2019 and December 31, 2018, the Company considers accounts receivable to be fully collectible and, accordingly, no allowance for doubtful accounts has been recorded. | |
Inventories | Inventory Inventory consists of finished goods and is stated at the lower of cost by the first-in, first-out method or net realizable value. The Company currently has approximately 2,432 containers of “Ultra Peak T” included in inventory at December 31, 2018 and August 31, 2018. | Inventories Inventories are recorded at the lower of cost and net realizable value. The net realizable value represents the estimated selling price for inventories in the ordinary course of business, less all estimated costs of completion and costs necessary to make the sale. Cost is determined on a standard cost basis and includes the purchase price and other costs, such as transportation costs. Inventory average cost is determined on a first‑in, first‑out (“FIFO”) basis and trade discounts are deducted from the purchase price. |
Property and Equipment | Property and Equipment Property and equipment are carried at cost and includes expenditures for new additions and other additions, which substantially increase the useful lives of existing assets. Depreciation is computed at various rates by use of the straight-line method. Depreciable lives are generally as follows: Furniture and Fixtures 5 to 7 years Equipment 7 years Expenditures for normal repairs and maintenance are charged to operations as incurred. The cost of property or equipment retired or otherwise disposed of and the related accumulated depreciation are removed from the accounts in the year of disposal with the resulting gain or loss reflected in earnings. The Company assesses potential impairments of its property and equipment whenever events or changes in circumstances indicate that the asset’s carrying value may not be recoverable. An impairment charge would be recognized when the carrying amount of property and equipment is not recoverable and exceeds its fair value. The carrying amount of property and equipment is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the property and equipment. | |
Income Taxes | Income Taxes The Company utilizes ASC 740, Accounting for Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740, “Income Taxes”. Accounting guidance addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements, under which a company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Accordingly, the Company would report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company elects to recognize any interest and penalties, if any, related to unrecognized tax benefits in tax expense. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%. As of the completion of these consolidated financial statements and related disclosures, we have made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act, and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the fourth quarter of fiscal year 2019. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined. See Note 12 for additional information. Based on the new tax law that lowers corporate tax rates, the Company revalued its deferred tax assets. Future tax benefits are expected to be lower, with the corresponding one time charge being recorded as a component of income tax expense. | Income Taxes No provision has been made for federal and state income taxes prior to the date of the acquisitions since the proportionate share of TruPet’s income or loss was included in the personal tax returns of its members because TruPet was a limited liability company. Subsequent to the acquisitions, the Company, as a corporation, is required to provide for income taxes. The Company utilizes Accounting Standards Codification (“ASC 740”), “Accounting for Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The effective tax rate for each of the three months and the six months ended June 30, 2019 is 0%. The effective tax rate differs from the U.S. Federal statutory rate of 21% primarily because our previously reported losses have been offset by a valuation allowance due to uncertainty as to the realization of those losses. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. Accounting guidance addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements, under which a company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Accordingly, the Company would report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company elects to recognize any interest and penalties, if any, related to unrecognized tax benefits in tax expense. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act reduces the U.S. federal corporate tax rate from 35% to 21%. As of the completion of these unaudited condensed financial statements, we have made a reasonable estimate of the effects of the Tax Act. This estimate incorporates assumptions made based upon the Company’s current interpretation of the Tax Act and may change as the Company may receive additional clarification and implementation guidance and as the interpretation of the Tax Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Act no later than the end of the fourth quarter of fiscal year 2019. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined. Based on the new tax law that lowers corporate tax rates, the Company revalued its deferred tax assets. Future tax benefits are expected to be lower, with the corresponding one-time charge being recorded as a component of income tax expense. |
Revenue | Revenue The Company recognizes revenue to depict the transfer of promised goods to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. In order to recognize revenue, the Company applies the following five (5) steps: • Identify a customer along with a corresponding contract; • Identify the performance obligation(s) in the contract to transfer goods to a customer; • Determine the transaction price the Company expects to be entitled to in exchange for transferring promised goods to a customer; • Allocate the transaction price to the performance obligation(s) in the contract; and • Recognize revenue when or as the Company satisfies the performance obligation(s). A description of the Company’s revenue generating activities is listed below: Direct-to-consumer (“DTC”) – Our products are offered through our online stores where customers place orders online or through our customer service number. Revenue is recorded, net of discounts, at the time the order is received by the customer. Revenue is deferred for orders that have been placed, and paid for, but have not yet been received by the customer during the reporting period. As our customers have a 60-day guarantee on the product purchased, the Company records a liability for two months of estimated returns based on historical experience. Loyalty Program - The Company offers a loyalty program to all of its direct-to-consumer customers. There are two tiers to the program. Tier 1: the customer will earn 6 points for every $1 spent Tier 2: the customer can earn points at a much faster rate and will also have opportunities to earn bonus points for different events, such as a birthday. This tier is known as the TruDog Love Club, and the customer accumulates twelve points for every $1 spent. The redemption requirements are the same under both levels and, for every five hundred points earned, customers receive a $5 gift code which can be redeemed for goods purchased in the future. The Company records a reduction to sales revenue and deferred revenue when the customer accumulates loyalty points. Wholesale Sales – This channel includes the sale of our products to wholesale customers for resale. The Company’s policy is to recognize revenue at the time the product is shipped to the wholesale customer, net of estimated returns and allowances. Consignment – The Company partners with an Amazon channel partner to market and sell TruDog products. Revenue is recognized, net of returns, when our partner ships the product to the end customer. The commission, selling, marketing and storage fees are recognized at the time the services are rendered by the channel partner and are recorded by the Company, as follows: • Commission, selling and marketing fees as sales and marketing expenses • Storage fees as cost of goods sold. | |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold consists primarily of the cost of product obtained from the contract manufacturing plants, packaging materials and CBD oils directly sourced by the Company, and freight for shipping product from our contract manufacturing plants to our warehouse. We review inventory on hand periodically to identify damages, slow moving inventory, and/or aged inventory. Based on the analysis, we record inventories on the lower of cost and net realizable value, with any reduction in value expensed as cost of goods sold. | |
Advertising | Advertising The Company charges advertising costs to expense as incurred and such charges are included in sales and marketing expenses. Advertising costs, consisting primarily of Facebook advertising, search costs and email advertising, were $2.3 million and $1.2 million for the three-month periods ended June 30, 2019 and 2018, respectively. For the six-month periods ended June 30, 2019 and 2018, advertising costs were $3.5 million and $2.2 million, respectively. | |
Research and Development | Research and Development Research is a planned search or a critical investigation aimed at discovering new knowledge and information with the hope that such knowledge will be useful in developing a new product or service (referred to as a “product”) or a new process or technique (referred to as a “process”) or bringing about a significant improvement to an existing product or process. Development is the translation of research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or use. It includes the conceptual formulation, design and testing of product alternatives, construction of prototypes and operation of pilot plants. No research and development costs were incurred during the three or six month period ended June 30, 2019 and June 30, 2018. | |
Shipping and Handling / Freight Out | Shipping and Handling / Freight Out The Company recognizes shipping and handling costs as a fulfillment cost, included in other operating expenses as they are incurred prior to the customer obtaining control of the products. Shipping and handling costs primarily consist of costs associated with moving finished products to customers through third-party carriers. Shipping and handling costs were $0.6 million and $0.7 million for the three-month periods ended June 30, 2019 and 2018, respectively. For the six-month periods ended June 30, 2019 and 2018, shipping and handling costs were $1.2 million and $1.3 million, respectively. Additionally, for direct to consumer customers, the Company may recover such costs by passing them onto the customer. In these instances, the Company includes the freight charges billed to customers in total revenue. The amount included in revenue related to such recoveries was $0.2 million and $0.3 million for the three-month periods ended June 30, 2019 and 2018, respectively. For the six-month periods ended June 30, 2019 and 2018, the amounts included in revenue related to such recoveries was $0.4 million and $0.6 million, respectively. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash and accrued expenses reported on the balance sheet are estimated by management to approximate fair value primarily due to the short term nature of the instruments. | Fair Value of Financial Instruments A financial instrument is defined as cash, evidence of an ownership interest in an entity, or a contract that both: • Imposes on one entity a contractual obligation either: o To deliver cash or another financial instrument to a second entity; or o To exchange other financial instruments on potentially unfavorable terms with the second entity. • Conveys to that second entity a contractual right either: o To receive cash or another financial instrument from the first entity; or o To exchange other financial instruments on potentially favorable terms with the first entity. The Company’s financial instruments recognized in the balance sheet consist of cash and cash equivalents, restricted cash accounts, accounts receivable, deposits, accounts payable, line of credit, due to related party, accrued and other liabilities, warrant derivative liability and long-term debt. Warrant derivative liability is measured at fair value each reporting period. The fair values of the remaining financial instruments approximate their carrying values. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company has applied the framework for measuring fair value which requires a fair value hierarchy to be applied to all fair value measurements. The fair value of the warrant derivative liability is considered a Level 3 financial instrument. All financial instruments recognized at fair value in the balance sheet are classified into one of three levels in the fair value hierarchy as follows: • Level 1 – valuation based on quoted prices (unadjusted) observed in active markets for identical assets or liabilities. Cash is measured based on Level 1 inputs. • Level 2 – valuation techniques based on inputs that are quoted prices of similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; inputs other than quoted prices used in a valuation model that are observable for that instrument; and inputs that are derived from or corroborated by observable market data by correlation or other means. • Level 3 – valuation techniques with significant unobservable market inputs. |
Derivative Financial Instruments | Derivative Financial Instruments ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re- measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described. The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option and warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. The pricing model we use for determining fair value of our derivatives is the Lattice Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income (see note 11). Conversion options are recorded as debt discount and are amortized as interest expense over the life of the underlying debt instrument using effective interest method. | Derivative Financial Instruments Financial Accounting Standards Board (“FASB”) ASC Topic 815, “Derivatives and Hedging”, generally provides three criteria that, if met, require companies to bifurcate conversion options from its host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional, as described. The accounting treatment of derivative financial instruments requires that the Company record the embedded conversion option and warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification. The pricing model we use for determining fair value of our derivatives is the Lattice Model. Valuations derived from this model are subject to ongoing internal and external verification and review. The model uses market-sourced inputs such as interest rates and stock price volatilities. Selection of these inputs involves management’s judgment and may impact net income (see Note 8). |
Basic and Diluted Loss Per Share | Basic and Diluted Loss Per Share The basic net loss per common share is computed by dividing the net loss by the weighted average number of common stock outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common stock outstanding plus potential dilutive securities. Following shares were not included in the calculation of diluted loss per share because the effect would be anti-dilutive. December 31, 2018 August 31, 2018 August 31, 2017 Conversion of notes payable - 82,974 44,245 Conversion of Series B Convertible Preferred Stock - 1,046,423 - Conversion of Series E Convertible Preferred Stock 3,681,273 - - Options 38,462 Warrants to purchase common stock 700,000 463,631 - 4,419,735 1,593,028 44,245 | Basic and Diluted Loss Per Share Basic and diluted loss per share has been determined by dividing the net loss available to stockholders for the applicable period by the basic and diluted weighted average number of shares outstanding, respectively. Common Stock equivalents and incentive shares are excluded from the computation of diluted loss per share when their effect is anti-dilutive. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes a compensation expense for all equity–based payments in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”. The Company accounts for share–based payments granted to non–employees in accordance with FASB ASC Topic 505–50, “Equity Based Payments to Non–Employees.” The Company follows the fair value method of accounting for stock awards granted to employees, directors, officers and consultants. Stock-based awards to employees are measured at the fair value of the related stock-based awards. Stock-based payments to others are valued based on the related services rendered or goods received or if this cannot be reliably measured, on the fair value of the instruments issued. Issuances of such awards are valued using the fair value of the awards at the time of grant. The Company recognizes stock-based payment expenses over the vesting period based on the number of awards expected to vest over that period on a straight-line basis. Forfeitures are accounted for as they occur. The fair value of an option award is estimated on the date of grant using the Black–Scholes option valuation model. The Black–Scholes option valuation model requires the development of assumptions that are inputs into the model. These assumptions are the expected stock volatility, the risk–free interest rate, the expected life of the option, the dividend yield on the underlying stock and the expected forfeiture rate. Expected volatility is calculated based on the analysis of other public companies within the pet wellness sector. Risk–free interest rates are calculated based on continuously compounded risk–free rates for the appropriate term. Determining the appropriate fair value model and calculating the fair value of equity–based payment awards requires the input of the subjective assumptions described above. The assumptions used in calculating the fair value of equity–based payment awards represent management’s best estimates, which involve inherent uncertainties and the application of management’s judgment. The Company is required to estimate the expected forfeiture rate and recognize expense only for those shares expected to vest. | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management utilizes various other estimates, including but not limited to determining the collectability of accounts receivable, the fair value of warrants issued, the fair value of conversion features, the recognition of revenue, the valuation allowance for deferred tax assets and other legal claims and contingencies. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period that they are determined to be necessary. | Use of Estimates The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of expenses during the reporting periods. The Company evaluates its estimates on an ongoing basis. The Company bases its estimates on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. |
Segment Information | Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. To date, the Company has viewed its operations and manages its business as one segment operating in the United States of America. The Company’s chief operating decision-maker does not review operating results on a disaggregated basis; rather, the chief operating decision-maker reviews operating results on an aggregate basis. | |
License Intangibles | License Intangibles License intangibles are recorded at fair value at the date of acquisition and are amortized ratably over the life of the license agreement. | |
Commitments and Contingencies | Commitments and Contingencies We may be involved in legal proceedings, claims, and regulatory, tax, or government inquiries and investigations that arise in the ordinary course of business resulting in loss contingencies. We accrue for loss contingencies when losses become probable and are reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. We do not accrue for contingent losses that are considered to be reasonably possible, but not probable; however, we disclose the range of such reasonably possible losses. Loss contingencies considered remote are generally not disclosed. We have entered into debt, royalty and lease agreements for which we are committed to pay certain amounts over a period of time. See Notes 5, 6 and 7. | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, FASB issued ASU No. 2016–02, “Leases (Topic 842)”, which creates new accounting and reporting guidelines for leasing arrangements. The new guidance requires organizations that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases, regardless of whether they are classified as finance or operating leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. The guidance also requires new disclosures to help financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early application permitted. The Company is currently evaluating the impact of the new pronouncement on its consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, “Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception”. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. ASU 2017-11 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company expects to implement ASU 2017-11 on January 1, 2019 and does not believe it will have a material impact on its consolidated financial statements. ASU 2018-02 - On December 22, 2017, the U.S. federal government enacted a tax bill, H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (the “Tax Cuts and Jobs Act”). Stakeholders raised a narrow-scope financial reporting issue that arose as a consequence of the Tax Cuts and Jobs Act of 2017. The amendments in this Update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement-Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by the Generally Adopted Accounting Principles (“GAAP”). The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2018-210—Income Statement—Reporting Comprehensive Income (Topic 220), which has been deleted. We are currently evaluating the impact of adopting ASU 2017-13 on our consolidated financial statements. ASU 2018-05 Accounting Standards Update adds SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No. 118, which expresses the view of the staff regarding application of Topic 740, Income Taxes, in the reporting period that includes December 22, 2017 - the date on which the Tax Cuts and Jobs Act was signed into law. We are currently evaluating the impact of adopting ASU 2017-13 on our consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance is effective for public entities, certain not-for-profit entities, and certain employee benefit plans for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. For all other entities, ASU 2018-07 is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company is evaluating the impact of adopting this pronouncement. In July 2018, the FASB issued ASU 2018-10 Leases (Topic 842), Codification Improvements and ASU 2018-11 Leases (Topic 842), Targeted Improvements, to provide additional guidance for the adoption of Topic 842. ASU 2018-10 clarifies certain provisions and correct unintended applications of the guidance such as the application of implicit rate, lessee reassessment of lease classification, and certain transition adjustments that should be recognized to earnings rather than to stockholders’ equity. ASU 2018-11 provides an alternative transition method and practical expedient for separating contract components for the adoption of Topic 842. In February 2016, the FASB issued ASU 2016-02 Leases (Topic 842) which requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases with terms greater than 12 months. ASU 2018-11, ASU 2018-10 and ASU 2016-02 (collectively, “the new lease standards”) are effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the effect the new lease standards will have on its Condensed Consolidated Financial Statements; however, the Company anticipates recognizing assets and liabilities arising from any leases that meet the requirements under the new lease standards on the adoption date and including qualitative and quantitative disclosures in the Company’s Notes to the Condensed Consolidated Financial Statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. Removals The following disclosure requirements were removed from Topic 820: 1. The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy 2. The policy for timing of transfers between levels 3. The valuation processes for Level 3 fair value measurements 4. For nonpublic entities, the changes in unrealized gains and losses for the period included in earnings for recurring Level 3 fair value measurements held at the end of the reporting period. Modifications The following disclosure requirements were modified in Topic 820: 1. In lieu of a rollforward for Level 3 fair value measurements, a nonpublic entity is required to disclose transfers into and out of Level 3 of the fair value hierarchy and purchases and issues of Level 3 assets and liabilities. 2. For investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only 3. The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. Additions The following disclosure requirements were added to Topic 820; however, the disclosures are not required for nonpublic entities: 1. The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period 2. The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. In addition, the amendments eliminate at a minimum an entity shall disclose at a minimum The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity is permitted to early adopt any removed or modified disclosures upon issuance of this Update and delay adoption of the additional disclosures until their effective date. The impact of this ASU on the Company’s consolidated financial statements is not expected to be material. There are various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on our consolidated financial position, results of operations or cash flows. | Recently Issued Accounting Pronouncements The Company has reviewed the Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof issued by the FASB that have effective dates during the reporting period and in future periods. New Standards and Interpretations: Adoption of FASB ASC Topic 842 “Leases” The amendments in this update establish a comprehensive new lease accounting model. The new standard: (a) clarifies the definition of a lease; (b) requires a dual approach to lease classification similar to current lease classifications; and (c) causes lessees to recognize leases on the balance sheet as a lease liability with a corresponding right-of-use asset for leases with a lease term of more than twelve months. The new standard is effective for fiscal years and interim periods beginning after December 15, 2018, with early adoption permitted. A modified retrospective transition approach is required for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, including a number of optional practical expedients that entities may elect to apply. In July 2018, the FASB issued ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements”, an update which provides another transition method, the prospective transition method, which allows entities to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company adopted the new standard on January 1, 2019 using the prospective transition method. The Company has identified all leases to determine the impact of ASC 842 on its consolidated financial statements. The Company has elected to apply the practical expedient to certain classes of leases, whereby the separation of components of leases into lease and non-lease components is not required, and all of the practical expedients to all leases, (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any existing leases. The adoption of the new standard resulted in the recording on the consolidated balance sheet as of January 1, 2019 a right-of-use asset of $0.5 million, a lease liability of $0.5 million and a corresponding cumulative adjustment to accumulated deficit of an immaterial amount in accordance with ASC 842. Adoption of FASB ASU No. 2018-07 “Improvements to Nonemployee Share-Based Payment Accounting” On January 1, 2019, the Company adopted ASU No. 2018-07 “Improvements to Nonemployee Share-Based Payment Accounting”. The amendments in this update expanded the scope of ASC 718 to include share-based payment transactions for acquiring goods and services from non-employees. The requirements of ASC 718 are applied to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. The amendments specify that ASC 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that ASC 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606, “Revenue from Contracts with Customers.” The Company is treating the inclusion of share-based payments to non-employees as a change in accounting principle prospectively beginning in the period ending June 30, 2019. As the Company did not make any share-based payments to non-employees in prior periods, there was no impact on the results of operations in prior periods. Adoption of ASU 2018-13 “Fair Value Measurement” In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) Changes to the Disclosure Requirement for Fair Value Measurement” which amends ASC 820 to expand the disclosures required for items subject to Level 3, fair value remeasurement, including the underlying assumptions. ASU 2018-13 is effective for public companies for fiscal years beginning after December 15, 2019. The Company has early adopted the disclosures as permitted under the ASU. New and Revised Standards not Yet Adopted: In June 2016, the FASB issued ASU No. 2016-13 “Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326)”. ASU 2016-13 changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019. The Company does not anticipate any material impact from the implementation of this ASU. The Company has carefully considered other new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the Company’s reported balance sheet or operations in 2019. |
Nature of Business and Signif_2
Nature of Business and Significant Accounting Policies (FY) (Tables) | 4 Months Ended |
Dec. 31, 2018 | |
Nature of Business and Summary of Significant Accounting Policies [Abstract] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | Following shares were not included in the calculation of diluted loss per share because the effect would be anti-dilutive. December 31, 2018 August 31, 2018 August 31, 2017 Conversion of notes payable - 82,974 44,245 Conversion of Series B Convertible Preferred Stock - 1,046,423 - Conversion of Series E Convertible Preferred Stock 3,681,273 - - Options 38,462 Warrants to purchase common stock 700,000 463,631 - 4,419,735 1,593,028 44,245 |
Discontinued Operations (FY) (T
Discontinued Operations (FY) (Tables) - Yield Endurance [Member] | 4 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations in the Consolidated Statement of Operations [Member] | |
Discontinued Operations [Line Items] | |
Disposal Groups, Including Discontinued Operations | The following information presents the major classes of line items constituting the after-tax loss from discontinued operations in the consolidated statements of operations for the year ended August 31, 2018: Share income $ (48,593 ) Sales, general and administrative 368,032 Interest expense – accrued interest 117,534 Interest expense – excess value of warrants 2,988,090 Interest expense – amortization of discount on note payable 5,500,000 Mark to market BTC 509,730 Mark to market derivative liability (4,051,087 ) Reserve for uncollectible note receivable 4,490,270 Gain on disposal of discontinued operations (8,038,065 ) Loss from discontinued operations, net of tax $ 1,835,911 |
Discontinue Operations in the Consolidated Balance Sheets [Member] | |
Discontinued Operations [Line Items] | |
Disposal Groups, Including Discontinued Operations | The following table presents the calculation of the gain on the sale of discontinued operations: Assets of discontinued operations disposed in sale $ (9,415 ) Liabilities of discontinued operations disposed in sale 9,648,488 Fair value of warrants to purchase 384,615 shares of common stock to buyer (1,601,008 ) Gain on disposal of discontinued operations $ 8,038,065 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (FY) (Tables) | 4 Months Ended |
Dec. 31, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Accounts Payable and Accrued Liabilities | Accounts payable and accrued liabilities consist of the following: December 31, 2018 August 31, 2018 August 31, 2017 Trade accounts payable $ 120,774 $ 39,052 $ 106,726 Payroll and related 17,220 15,931 9,179 Accrued interest - 51,462 16,661 $ 137,994 $ 106,445 $ 132,566 |
Derivative Liability (FY) (Tabl
Derivative Liability (FY) (Tables) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Derivative Liability [Abstract] | ||
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | The following schedule shows the change in fair value of the derivative liabilities for the period ended December 31, 2018, August 31, 2018 and August 31, 2017: Derivative Liability Liabilities Measured at Fair Value Balance as of August 31, 2016 $ 254,952 Issuances 685,139 Redemptions / conversions (1,015,757 ) Revaluation loss 388,544 Balance as of August 31, 2017 $ 312,878 Issuances 1,565,487 Redemptions / conversions (1,207,308 ) Reclass from sale of discontinued operations 1,601,007 Revaluation loss 45,348 Balance as of August 31, 2018 $ 2,317,412 Issuances 6,244,548 Redemptions / conversions - Revaluation loss 1,135,345 Balance as of December 31, 2018 $ 7,379,893 | |
Fair Value Measurement Inputs and Valuation Techniques | Derivative liabilities incurred during the period ended August 31, 2018 were valued based upon the following assumptions and key inputs: August 31, August Assumption 2018 2017 Expected dividends: 0 % 0 % Expected volatility: 121.1-246.8 % 37.8-276.9 % Expected term (years): 0.21-1.00 years 0.04-0.50 years Risk free interest rate: 0.97-2.08. % 0.26-0.98 % Stock price $ 0.35-1.11 $ 0.51-1.97 | May 6, 2019 June 30, 2019 Warrant Liability Stock Price $ 6.00 $ 6.35 Exercise Price $ 3.90 $ 3.90 Remaining term (in years) 1.60 – 1.68 1.45 – 1.53 Volatility 64 % 65 % Risk-free interest rate 2.39 % 1.98 % |
Convertible Notes Payable (FY)
Convertible Notes Payable (FY) (Tables) | 4 Months Ended |
Dec. 31, 2018 | |
Convertible Notes Payable [Abstract] | |
Convertible Debt | December 31, 2018 August 31, 2018 August 31, 2017 May 2016 Convertible Notes On May 11, 2016 the Company entered into Securities Purchase Agreements with certain purchasers (“the May 2016 Convertible Noteholders”). The Company issued 3.5% original issue discount (“OID”) senior secured convertible promissory notes having an aggregate face amount of $440,000 (the “May 2016 Convertible Notes”). These notes bear interest at a rate of 10% per annum and mature in six months. The Company received cash proceeds of $424,600 net of the 3.5% original issue discount of $15,400. At the Holders option the principal and accrued interest under the Notes are convertible into common stock at a rate of $13 per share and have a full reset feature. The Notes are secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 125% during the first 90 days and 130% for the period from the 91st day through maturity. During November 2016, the Company entered into forbearance agreements with the May 2016 Convertible Noteholders extending its time to pay the Notes until December 16, 2016. In December 2016, the Company entered into agreements with the May 2016 Convertible Noteholders to substantially restructure the terms of the May 2016 Convertible Notes; see January and February 2017 Convertible Notes below. During the years ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $0 and $172,735, respectively, in connection with the amortization of the discount on these notes. $ - $ - $ - January and February 2017 Convertible Notes In December 2016, the Company entered into restructuring agreements with the May 2016 Convertible Noteholders in connection with the May 2016 Convertible Notes (see above) under the following terms: new notes (the “January and February 2017 Convertible Notes”) would be issued for the amounts due under the May 2016 Convertible Notes; penalties, fees, and accrued interest in the aggregate amount of $212,702 were added to the principal amount due under the January and February 2017 Convertible Notes; 1,346 shares of common stock were issued as a commitment fee; the January and February 2017 Convertible Notes were issued at a discount of 3.5%, bear interest at the rate of 10% per annum, are convertible at a rate of $13.00 per share, and contain a variable conversion rate whereby, should the Company subsequently sell common stock at a price less than the conversion price, the conversion price of the January and February 2017 Convertible Notes will be reduced to match the lower conversion price. In addition, the proceeds from one of the January and February 2017 Convertible Notes were used to fully redeem one of the May 2016 Convertible Notes. The aggregate original amount of principal due under the January and February 2017 Convertible Notes was $614,258. Two of the January and February 2017 Convertible Notes in the aggregate amount of $494,340 were due on March 31, 2017, and one of the January and February 2017 Convertible Notes in the amount of $119,918 was due on August 17, 2017. In April 2017, the Company received forbearance letters from the Note Purchasers of the January and February 2017 Convertible Notes that were due on March 31, 2017 to extend the due date to April 17, 2017 in exchange for principal payments in the aggregate amount of $75,000; on April 18, 2017, the Company received forbearance letters to further extend the due date to May 1, 2017 in exchange for principal payments in the aggregate amount of $45,000; and on May 1 and 2, 2017, the company entered into forbearance agreements with the holders of the January and February 2017 Convertible Notes to extend the due date to June 2, 2017. On June 5 and June 13, 2017, the Company entered into forbearance agreements with the holders of two of the three January and February 2017 Convertible Notes to extend the due dates to December 27, 2017 in exchange for increase in principal in the aggregate amount of $78,907. On August 17, 2017, the Company entered into a forbearance agreement with the holders of the third January and February Convertible Note to extend the due date to December 27, 2017 in exchange for $10. At August 31, 2017, three of the January and February 2017 Convertible Notes were outstanding in the aggregate amount of $553,976; these notes are due December 27, 2017. During the year ended December 31, 2017, the holders of the January and February 2017 Convertible Notes converted an aggregate of $33,865 in principal and $21,135 in accrued interest into 17,628 shares of common stock; the Company recorded an aggregate loss in the amount of $122,878 on these conversions. On January 17, 2018, the Note Purchasers of one of the January and February 2017 Convertible Notes in the principal amount of $241,802 purchased the remaining two January and February 2017 Convertible Notes in the aggregate principal amount of $278,309. The Company then entered into an agreement with the Note Purchasers to exchange the three January and February 2017 Convertible Notes (the “January 2018 Note Exchange”) in the aggregate principal amount of $520,111 for a new Convertible Note in the principal amount of $542,343 (the “January 2018 Convertible Note”). The Company revalued the derivative liability associated with the conversion feature associated with January and February 2017 notes and compared it with the derivative liability on the January 2018 convertible note, and recorded an expense in the amount of $396,611 related to the change in value. The Company recorded a loss in the amount of $6,409 on the January 2018 Note Exchange related to modification of notes. During the year ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $153,234 and $154,848, respectively in connection with the amortization of the discount on these notes. $ - $ - $ 553,977 December 31, 2018 August 31, 2018 August 31, 2017 November 2017 Convertible Note On November 17, 2017, the Company entered into a Securities Purchase Agreement with the Note Purchaser. The Company issued a 3.5% original issue discount (“OID”) senior secured convertible promissory note having an aggregate face amount of $250,000 (the “November 2017 Convertible Note”). This note bears interest at a rate of 10% per annum and matures in six months. The Company received cash proceeds of $241,250 net of the 3.5% original issue discount of $8,750. At the Note Purchaser’s option, the principal and accrued interest under the note are convertible into common stock at a rate of $13.00 per share and have a full reset feature. The note is secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. In addition, the Company granted the investor the Option to lend the Company $48,250 on or before January 15, 2018. If the Option is exercised, the Company would issue the investor a $50,000 3.5% original issue discount senior secured convertible promissory note. During the three months ended May 31, 2018, the Company accrued interest in the amount of $12,283 on this note. On May 31, 2018, the Company converted the outstanding balance of principal and interest in the amounts of $250,000 and $13,125, respectively, into a total of 265,782.83 shares of Series B Preferred Stock; the Company recorded a gain on settlement of notes payable in the amount of $130,252 in connection with this transaction. During the years ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $135,307 and $0 respectively, in connection with the amortization of the discount on these notes. $ - $ - $ - January 2018 Convertible Note On January 17, 2018, the Company entered into an agreement with the Note Purchaser to exchange the three January and February 2017 Convertible Notes for a new Convertible Note (the “January 2018 Convertible Note”). The Company exchanged outstanding principal in the amount of $520,111 and accrued interest of $15,823 for the January 2018 Convertible Note with a face amount of $542,343, and an original issue discount of $18,982; the Company revalued the derivative liability associated with the conversion feature associated with January and February 2017 notes and compared it with the derivative liability on the January 2018 convertible notes, and recorded an expense in the amount of $396,611 related to the change in value. A non-cash loss on restructuring of debt in the amount of $6,409 was recognized on this transaction during the year ended August 31, 2018. The January 2018 Convertible Note is a senior secured promissory note, bears interest at a rate of 10% per annum, and matures in 12 months. At the Note Purchaser’s option, the principal and accrued interest under the January 2018 Convertible Note are convertible into common stock at a rate of $0.78 per share and have a full reset feature. The note is secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. On January 29, 2018, the Note Purchaser converted $28,148 in principal and $1,808 in accrued interest into 38,405 shares of common stock. The Company recorded a loss of $351,769 on the conversion of note payable and accrued interest. During the three months ended May 31, 2018, the Company accrued interest in the amount of $13,125 on this note. On May 31, 2018, the Company converted the outstanding balance of principal and interest in the amounts of $514,195 and $18,610, respectively, into a total of 538,186.87 shares of Series B Preferred Stock; the Company recorded a gain in the amount of $933,263 on this transaction, and amortized the remaining discount in the amount of $68,855 to interest expense. During the years ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $0 and $0, respectively, in connection with the amortization of the discount on these notes. $ - $ - $ - December 31, 2018 August 31, 2018 August 31, 2017 February 2018 Convertible Note On February 15, 2018, the Company entered into a Securities Purchase Agreement with the Note Purchaser. The Company issued a 3.5% OID senior secured convertible promissory note with a face amount of $250,000 (the “February 2018 Convertible Note”). The February 2018 Convertible Note bears interest at a rate of 10% per annum and matures in nine months. The Company received cash proceeds of $241,250 net of the 3.5% original issue discount of $8,750. At the Note Purchaser’s option, the principal and accrued interest under the note are convertible into common stock at a rate of $13.00 per share and have a full reset feature. The February 2018 Convertible Note is secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. In addition, the Company granted the Note Purchaser 19,231 warrants to purchase 19,231 shares of the Company’s common stock with an exercise price of $0.26. The warrants have a five-year term. A derivative liability in the amount of $667,470 was created with regard to the conversion features and warrants associated with this note; $241,250 was charged to discount on notes payable, and the balance of $426,220 was charged to interest expense during the three months ended February 28, 2018. On March 26, 2018, the Company and the Note Purchaser agreed to eliminate the reset feature of this note. During the year ended August 31, 2018, the Company accrued interest in the amount of $13,681 on this note; as of August 31, 2018, principal in the amount of $250,000 was outstanding under the February 2018 Convertible Note. During the three months ended November 30, 2018, the Company accrued interest in the amount of $3,611 on this note. In October 2018, the February 2018 Convertible Note, accrued interest and warrants were converted to a new series of the Company’s preferred stock; see note 10. During the Transition Period ended December 31, 2018, the Company charged to interest expense the amounts of $16,298 in connection with the amortization of the discount on these notes. During the years ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $51,388 and $0, respectively, in connection with the amortization of the discount on these notes. $ - $ 250,000 $ - March 2018 Convertible Note On March 9, 2018, the Company issued a 3.5% OID senior secured convertible promissory note with a face amount of $777,202 (the “March 2018 Convertible Note”). The March 2018 Convertible Note bears interest at a rate of 10% per annum and matures in nine months. The Company received cash proceeds of $750,000 net of the 3.5% original issue discount of $27,202. At the Note Purchaser’s option, the principal and accrued interest under the note are convertible into common stock at a rate of $13.00 per share. The March 2018 Convertible Note is secured by all assets of the Company. The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. In addition, the Company granted the Note Purchaser 59,785 warrants to purchase 59,785 shares of the Company’s common stock with an exercise price of $0.26. The warrants have a five-year term. A derivative liability in the amount of $771,460 was created with regard to the conversion features and warrants associated with this note, which was charged to discount on notes payable. On May 9, 2018, the Note Purchaser transferred their ownership in $497,458 of principal and $18,042 of accrued interest in the March 2018 Convertible Note to a third party. The Company revalued the derivative liability associated with the conversion feature of the March 2018 note at the time of this restructure, and recorded a gain on revaluation in the amount of $40,072. During the year ended August 31, 2018, the Company accrued interest in the amount of $37,780 on the March 2018 Convertible. As of August 31, 2018, principal in the amount of $777,202 was outstanding under the March 2018 Convertible Note. During the three months ended November 30, 2018, the Company accrued interest in the amount of $11,226 on this note. In October 2018, the March 2018 convertible note, accrued interest and warrants were converted to a new series of the Company’s preferred stock; see note 10. During the Transition Period ended December 31, 2018, the Company charged to interest expense the amounts of $102,410, in connection with the amortization of the discount on these notes. During the years ended August 31, 2018 and 2017, the Company charged to interest expense the amounts of $192,978 and $0, respectively, in connection with the amortization of the discount on these notes. $ - $ 777,202 $ - December 31, 2018 August 31, 2018 August 31, 2017 Total $ - $ 1,027,202 $ 553,977 Less: Unamortized discount - (752,988 ) (153,234 ) Total, net of discount $ - $ 274,214 $ 400,743 Current portion $ - $ 1,027,202 $ 553,977 Long term - - - Total $ - $ 1,027,202 $ 553,977 |
Stockholders' Deficit (FY) (Tab
Stockholders' Deficit (FY) (Tables) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Stockholders' Deficit [Abstract] | ||
Warrants or Rights Shares Authorized, by Exercise Price Range | The following table summarizes the significant terms of warrants outstanding at December 31, 2018: Range of exercise Prices Number of warrants Outstanding Weighted average remaining contractual life (years) Weighted average exercise price of outstanding Warrants Number of warrants Exercisable Weighted average exercise price of exercisable Warrants $ 3.90 700,000 1.96 $ 3.90 700,000 $ 3.90 Total 700,000 1.96 $ 3.90 700,000 $ 3.90 | |
Stockholders' Equity Note, Warrants or Rights | Transactions involving warrants are summarized as follows: Number of Weighted Average Warrants Exercise Price Warrants outstanding at August 31, 2016 - $ - Issued - - Exercised - - Cancelled / Expired - - Warrants outstanding at August 31, 2017 - - Issued 1,040,554 $ 0.26 Exercised - Cancelled / Expired (576,923 ) 0.26 Warrants outstanding at August 31, 2018 463,631 $ 0.26 Issued 700,000 3.90 Exercised Cancelled / Expired (463,631 ) 0.26 Warrants outstanding at December 31, 2018 700,000 $ 3.90 | Number of Warrants Weighted Average Exercise Price Warrants Acquired on May 6, 2019 913,310 $ 3.70 Issued 5,744,991 $ 4.25 Exercised - - Canceled / expired - - Warrants outstanding at June 30, 2019 6,658,301 $ 4.39 |
Share-based Payment Arrangement, Option, Exercise Price Range | The following table summarizes the significant terms of options outstanding at December 31, 2018: Weighted Weighted Weighted average average average exercise exercise Range of Number of remaining price of Number of price of exercise options contractual outstanding options exercisable prices outstanding life (years) options exercisable options $ 6.76 38,462 4.98 $ 6.76 0 N/A | The following table summarizes the significant terms of options outstanding at June 30, 2019: Range of exercise prices Number of options outstanding Weighted average remaining contractual life (years) Weighted average exercise price of outstanding options number of options exercisable Weighted average exercise price of exercisable options $ 5.00 – 7.50 5,381,462 9.8 $ 5.06 260,545 5.04 |
Share-based Payment Arrangement, Option, Activity | Transactions involving options are summarized as follows: Number of Weighted Average Options Exercise Price Options outstanding at August 31, 2016 - $ - Granted - - Exercised - - Cancelled / Expired - - Options outstanding at August 31, 2017 - $ - Granted - - Exercised - - Cancelled / Expired - - Options outstanding at August 31, 2018 - $ - Granted 38,462 6.76 Exercised - - Cancelled / Expired - - Options outstanding at December 31, 2018 38,462 $ 6.76 | Transactions involving options are summarized below: Number of Options Weighted Average Exercise Price Acquired on May 6, 2019 5,288,462 $ 5.00 Granted 93,000 $ 7.50 Options outstanding at June 30, 2019 5,381,462 $ 5.04 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (FY) (Tables) | 4 Months Ended |
Dec. 31, 2018 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value, Assets and Liabilities Measured on Recurring Basis | The following summarized the Company’s financial liabilities that are recorded at fair value on a recurring basis at December 31, 2018, August 31, 2018 and August 31, 2017. December 31, 2018 Level 1 Level 2 Level 3 Total Liabilities Derivative liabilities $ - $ - $ 7,379,893 $ 7,379,893 August 31, 2018 Level 1 Level 2 Level 3 Total Liabilities Derivative liabilities $ - $ - $ 2,317,412 $ 2,317,412 August 31, 2017 Level 1 Level 2 Level 3 Total Liabilities Derivative liabilities $ - $ - $ 312,878 $ 312,878 |
Income Taxes (FY) (Tables)
Income Taxes (FY) (Tables) | 4 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Effective Income Tax Rate Reconciliation | The provision (benefit) for income taxes differs from the amount of income tax determined by applying the applicable Federal statutory income tax rates (21% for the period ended December 31, 2018 and year ended August 31, 2018 and 34% for the year ended August 31, 2017) to the loss before taxes as a result of the following differences: December 31, 2018 August 31, 2018 August 31, 2017 Federal income tax (benefit) at statutory rate $ (926,700 ) $ (619,672 ) $ (592,708 ) State income tax (benefit), net of Federal (441,286 ) (295,082 ) (191,758 ) Permanent differences – change in value of derivative liability and other 1,314,116 619,000 Effect of change in Federal statutory rate - 230,616 - Changes in valuation allowance 53,870 65,138 784,466 Total $ - $ - $ - |
Deferred Tax Assets and Liabilities | As of December 31, 2018, August 31, 2018 and August 31, 2017 significant components of the Company’s deferred tax assets are as follows: December 31, 2018 August 31, 2018 August 31, 2017 Deferred Tax Assets (Liabilities): Net operating loss carryforwards $ 920,390 $ 820,494 $ 741,267 Accrued compensation 39,680 44,800 54,000 Valuation allowance (960,070 ) (865,294 ) (795,267 ) Net deferred tax assets (liabilities) $ - $ - $ - |
Nature of Business and Summar_3
Nature of Business and Summary of Significant Accounting Policies (Q2) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Nature of Business and Summary of Significant Accounting Policies [Abstract] | |
Cash and Cash Equivalents and Restricted Cash | Dollars in thousands June 30, 2019 December 31, 2018 Cash and cash equivalents $ 5,019 $ 3,946 Restricted cash 6,243 0 Total cash, cash equivalents and restricted cash $ 11,262 $ 3,946 |
Depreciable Lives | Depreciable lives are generally as follows: Furniture and Fixtures 5 to 7 years Equipment 7 years |
Acquisition of TruPet LLC and_2
Acquisition of TruPet LLC and Bona Vida, Inc. (Q2) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Acquisition of TruPet LLC and Bona Vida, Inc. [Abstract] | |
Assets and Liabilities Acquired | On May 6, 2019, the fair value of the following assets and liabilities were acquired: Dollars in thousands Better Choice Company Bona Vida Total Assets Current Assets Cash and cash equivalents $ 1,546 $ 384 $ 1,930 Restricted cash 25 25 Accounts receivable 30 30 Intercompany receivables 6,161 38 6,199 Inventories 193 193 Prepaid expenses and other current assets 52 347 399 Total Current Assets 7,759 1,017 8,776 Intangible assets, net of amortization 986 986 Other assets 74 74 Total Assets $ 8,745 $ 1,091 $ 9,836 Liabilities and Redeemable Preferred Stock Current Liabilities Warrant derivative liability $ 2,111 $ - $ 2,111 Accounts payable & accrued liabilities 2,071 69 2,140 Long term debt, current portion 6,200 6,200 Total Current Liabilities $ 10,382 $ 69 $ 10,451 Total Liabilities $ 10,382 $ 69 $ 10,451 Redeemable Series E Preferred Stock $ 20,059 $ - $ 20,059 |
Inventories (Q2) (Tables)
Inventories (Q2) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Inventories [Abstract] | |
Inventories | Inventories reflected on the accompanying balance sheets are summarized as follows: Dollars in thousands June 30, 2019 December 31, 2018 Food, treats and supplements $ 1,682 $ 1,301 Other products and accessories 87 191 Inventory packaging and supplies 168 133 1,937 1,625 Inventory reserve (230 ) (68 ) $ 1,707 $ 1,557 |
Property and Equipment (Q2) (Ta
Property and Equipment (Q2) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property and Equipment [Abstract] | |
Property and Equipment | Property and equipment consist of the following: Dollars in thousands June 30, 2019 December 31, 2018 Warehouse equipment $ 49 $ 49 Computer equipment 14 14 Furniture and fixtures 76 46 Total property and equipment 139 109 Accumulated depreciation (80 ) (38 ) $ 59 $ 71 |
Operating Leases (Q2) (Tables)
Operating Leases (Q2) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Operating Leases [Abstract] | |
Operating Lease-related Assets and Liabilities | The table below presents the operating lease-related assets and liabilities recorded on the consolidated balance sheets: Dollars in thousands Leases Balance Sheet Classification June 30, 2019 Assets Non-current assets Operating lease right-of-use assets, net of accumulated amortization $ 840 Total operating lease assets $ 840 Liabilities Current Operating Operating lease liabilities (262 ) Non-current Operating Operating lease liabilities (590 ) Total operating lease liabilities $ (852 ) |
Maturity of Lease Liabilities | The table below presents the maturity of lease liabilities as of June 30, 2019: Dollars in thousands Lease payments Operating Leases Remainder of 2019 $ 147 2020 299 2021 303 2022 169 Total undiscounted minimum future lease payments 918 Less: imputed interest 66 Present value of lease liabilities $ 852 |
License Intangibles and Royal_2
License Intangibles and Royalties (Q2) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
License Intangibles and Royalties [Abstract] | |
Guaranteed Minimum Royalty Payments | The contract includes Guaranteed Minimum Royalty Payments for each of the contract years as per the table below: Dollars in thousands Guaranteed Minimum Royalty 2019-2020 $ 1,500 2021 $ 1,000 2022 $ 1,125 2023 $ 1,250 2024 $ 1,500 2025 $ 1,750 |
Warrant Derivative Liability _2
Warrant Derivative Liability (Q2) (Tables) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Warrant Derivative Liability [Abstract] | ||
Change in Fair Value of Derivative Liabilities | The following schedule shows the change in fair value of the derivative liabilities for the period from May 6, 2019 through June 30, 2019. Dollars in thousands Warrant Liability Assumption of warrants pursuant to May 6, 2019 acquisition of Better Choice Company $ 2,110 Change in fair value of derivative liability 193 Balance as of June 30, 2019 $ 2,304 | |
Warrant Liability Fair Value Measurement Inputs and Valuation Techniques | Derivative liabilities incurred during the period ended August 31, 2018 were valued based upon the following assumptions and key inputs: August 31, August Assumption 2018 2017 Expected dividends: 0 % 0 % Expected volatility: 121.1-246.8 % 37.8-276.9 % Expected term (years): 0.21-1.00 years 0.04-0.50 years Risk free interest rate: 0.97-2.08. % 0.26-0.98 % Stock price $ 0.35-1.11 $ 0.51-1.97 | May 6, 2019 June 30, 2019 Warrant Liability Stock Price $ 6.00 $ 6.35 Exercise Price $ 3.90 $ 3.90 Remaining term (in years) 1.60 – 1.68 1.45 – 1.53 Volatility 64 % 65 % Risk-free interest rate 2.39 % 1.98 % |
Other Liabilities (Q2) (Tables)
Other Liabilities (Q2) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Other Liabilities [Abstract] | |
Other Liabilities | Dollars in thousands Advance #1 Advance #2 Advance #3 Total Opening balance – January 1, 2018 $ - $ - $ - $ - Advance of outstanding amounts 399 965 1,050 2,414 2018 Payments (429 ) (256 ) (102 ) (787 ) Rollover to Advance #3 (824 ) 824 Advance fixed fee 30 115 126 271 Closing Balance – December 31, 2018 - - 1,899 1,899 Payments (1,899 ) (1,899 ) Balance June 30, 2019 $ - $ - $ - $ - |
Redeemable Preferred Stock (Q_2
Redeemable Preferred Stock (Q2) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Redeemable Preferred Stock [Abstract] | |
Redeemable Preferred Stock | The below table summarizes changes in the balance of Series E Convertible Preferred Stock for the periods ended June 30, 2019 and December 31, 2018 including its value prior to acquisition by the Company. Number Amount Dollars in thousands Issued on October 18, 2018 2,846,356 $ 2,023 Converted to Common Stock (212,678 ) (152 ) Balance on May 6, 2019 2,633,678 1,871 Purchase price adjustment 18,188 Outstanding at May 6, 2019 2,633,678 20,059 Converted to Common Stock (925,758 ) (7,052 ) Balance at June 30, 2019 1,707,920 $ 13,007 |
Stockholders' Deficit (Q2) (Tab
Stockholders' Deficit (Q2) (Tables) | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Stockholders' Deficit [Abstract] | ||
Option Grants | Following the stockholder approval of the 2019 Incentive Award Plan, all vested options described herein will become exercisable and may be exercised through the ten-year anniversary of the grant date (or such earlier date described in the applicable award agreement following a holder’s termination of service). Dollars in thousands except per share amounts Date of grant(s) Vesting period (years) Number Exercise price ($) Share-based payment expense ($) Risk-free rate Volatility Dividend yield Expiry (yrs) Remaining Life (yrs) Option grant 5/21/2019 2 60,000 $ 7.50 9 2.28 % 55.00 % Nil 10 9.9 Option grant 5/21/2019 3 30,000 $ 7.50 5 2.28 % 55.00 % Nil 10 9.9 Option grant 6/29/2019 3 3,000 $ 7.50 0 1.84 % 56.00 % Nil 10 10.0 93,000 $ 14 | |
Significant Terms of Options Outstanding | The following table summarizes the significant terms of options outstanding at December 31, 2018: Weighted Weighted Weighted average average average exercise exercise Range of Number of remaining price of Number of price of exercise options contractual outstanding options exercisable prices outstanding life (years) options exercisable options $ 6.76 38,462 4.98 $ 6.76 0 N/A | The following table summarizes the significant terms of options outstanding at June 30, 2019: Range of exercise prices Number of options outstanding Weighted average remaining contractual life (years) Weighted average exercise price of outstanding options number of options exercisable Weighted average exercise price of exercisable options $ 5.00 – 7.50 5,381,462 9.8 $ 5.06 260,545 5.04 |
Transactions Involving Options | Transactions involving options are summarized as follows: Number of Weighted Average Options Exercise Price Options outstanding at August 31, 2016 - $ - Granted - - Exercised - - Cancelled / Expired - - Options outstanding at August 31, 2017 - $ - Granted - - Exercised - - Cancelled / Expired - - Options outstanding at August 31, 2018 - $ - Granted 38,462 6.76 Exercised - - Cancelled / Expired - - Options outstanding at December 31, 2018 38,462 $ 6.76 | Transactions involving options are summarized below: Number of Options Weighted Average Exercise Price Acquired on May 6, 2019 5,288,462 $ 5.00 Granted 93,000 $ 7.50 Options outstanding at June 30, 2019 5,381,462 $ 5.04 |
Activity of Warrants | Transactions involving warrants are summarized as follows: Number of Weighted Average Warrants Exercise Price Warrants outstanding at August 31, 2016 - $ - Issued - - Exercised - - Cancelled / Expired - - Warrants outstanding at August 31, 2017 - - Issued 1,040,554 $ 0.26 Exercised - Cancelled / Expired (576,923 ) 0.26 Warrants outstanding at August 31, 2018 463,631 $ 0.26 Issued 700,000 3.90 Exercised Cancelled / Expired (463,631 ) 0.26 Warrants outstanding at December 31, 2018 700,000 $ 3.90 | Number of Warrants Weighted Average Exercise Price Warrants Acquired on May 6, 2019 913,310 $ 3.70 Issued 5,744,991 $ 4.25 Exercised - - Canceled / expired - - Warrants outstanding at June 30, 2019 6,658,301 $ 4.39 |
Net Loss per Share (Q2) (Tables
Net Loss per Share (Q2) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Net Loss per Share [Abstract] | |
Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | The following table sets forth basic and diluted net loss per share attributable to Common Stockholders for the three and six months ended June 30, 2019 and 2018: Dollars in thousands except per share amounts Six Months Ended June 30 Three Months Ended June 30 2019 2018 2019 2018 Common Stockholders Numerator: Net loss $ (164,286 ) $ (2,400 ) $ (161,506 ) $ (745 ) Less: Preferred Stock Dividends (27 ) - (27 ) - Net loss attributable to Common Stockholders $ (164,313 ) $ (2,400 ) $ (161,533 ) $ (745 ) Denominator: Weighted average shares used in computing net loss per share attributable to Common Stockholders, basic and diluted 21,202,188 11,497,128 30,638,048 11,497,128 Net loss per share attributable to Common Stockholders, basic and diluted $ (7.75 ) $ (0.21 ) $ (5.27 ) $ (0.06 ) |
Nature of Business and Signif_3
Nature of Business and Significant Accounting Policies (FY) (Details) | Mar. 11, 2019 | Mar. 02, 2018USD ($) | Dec. 22, 2017 | Dec. 21, 2017 | Jun. 30, 2019USD ($)shares | Dec. 31, 2018USD ($)shares | Dec. 22, 2017 | Aug. 31, 2018USD ($)shares | Aug. 31, 2017shares | Apr. 22, 2019shares | Dec. 31, 2017shares |
Nature of Business and Significant Accounting Policies [Line Items] | |||||||||||
BTC Value | $ | $ 5,000,000 | ||||||||||
Common Stock, Conversion Basis | each outstanding share of common stock of Sport Endurance, Inc. converted into one share of common stock of Better Choice Company Inc. and each outstanding share of Series E Convertible Preferred Stock (the “Series E”) of Sport Endurance, Inc. converted into one share of Series E Convertible Preferred Stock of Better Choice Company Inc | ||||||||||
Common Stock, Shares Authorized | 88,000,000 | 580,000,000 | 580,000,000 | 580,000,000 | 88,000,000 | ||||||
Preferred Stock, Shares Authorized | 20,000,000 | 4,000,000 | 20,000,000 | ||||||||
Cash, FDIC Insured Amount | $ | $ 250,000 | ||||||||||
Cash, Uninsured Amount | $ | $ 10,300,000 | $ 3,400,000 | $ 0 | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | 21.00% | 35.00% | 21.00% | 34.00% | |||||
Previously Reported [Member] | |||||||||||
Nature of Business and Significant Accounting Policies [Line Items] | |||||||||||
Common Stock, Shares Authorized | 580,000,000 | ||||||||||
Preferred Stock, Shares Authorized | 20,000,000 | ||||||||||
Cash, Uninsured Amount | $ | $ 95,412 | ||||||||||
Ultra Peak T [Member] | |||||||||||
Nature of Business and Significant Accounting Policies [Line Items] | |||||||||||
Inventory, Number of Containers | 2,432 | 2,432 |
Nature of Business and Signif_4
Nature of Business and Significant Accounting Policies - Antidilutive Securities Excluded from Computation of Earnings Per Share (FY) (Details) - shares | 4 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4,419,735 | 1,593,028 | 44,245 |
Convertible Debt Securities [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 82,974 | 44,245 |
Conversion of Series B Convertible Preferred Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 1,046,423 | 0 |
Conversion of Series E Convertible Preferred Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,681,273 | 0 | 0 |
Share-based Payment Arrangement, Option [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 38,462 | ||
Warrant [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 700,000 | 463,631 | 0 |
Going Concern (FY) (Details)
Going Concern (FY) (Details) - USD ($) | May 06, 2019 | Apr. 25, 2019 | Dec. 12, 2018 | Jun. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | Jul. 02, 2019 | Dec. 17, 2018 | Jan. 04, 2017 | Aug. 31, 2016 |
Going Concern [Line Items] | |||||||||||||||||||
Net Income (Loss) Attributable to Parent | $ (161,533,182) | $ (161,506,000) | $ (2,780,082) | $ (745,000) | $ (1,655,302) | $ (4,412,858) | $ (403,212) | $ (164,286,000) | $ (3,626,157) | $ (2,400,000) | $ (2,950,819) | $ (1,743,258) | |||||||
Retained Earnings (Accumulated Deficit) | (181,023,000) | (181,023,000) | (16,698,000) | (181,023,000) | (16,698,000) | 6,059,291 | (3,108,472) | ||||||||||||
Working Capital (Deficit) | $ 600,000 | $ 600,000 | $ (7,330,882) | $ 600,000 | $ (7,330,882) | ||||||||||||||
Shares Issued, Price Per Share (in Dollars per share) | $ 46.80 | ||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 3.90 | $ 3.90 | $ 3.90 | ||||||||||||||||
Warrants and Rights Outstanding, Term | 2 years | ||||||||||||||||||
Proceeds from Issuance or Sale of Equity | $ 2,779,840 | $ 2,607,099 | 0 | $ 0 | $ 0 | ||||||||||||||
Stock Issued During Period, Shares, Acquisitions (in Shares) | 15,027,533 | ||||||||||||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||
Cash and Cash Equivalents, at Carrying Value | $ 5,019,000 | $ 5,019,000 | $ 3,946,000 | $ 73,642 | $ 5,019,000 | $ 3,946,000 | $ 199,674 | $ 1,442 | $ 10,197 | ||||||||||
Previously Reported [Member] | |||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||
Retained Earnings (Accumulated Deficit) | $ (10,472,149) | $ (10,472,149) | |||||||||||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | $ 0.001 | |||||||||||||||||
Cash and Cash Equivalents, at Carrying Value | $ 355,104 | $ 355,104 | |||||||||||||||||
Membership Interest [Member] | |||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||
Equity Method Investment, Ownership Percentage | 6.70% | ||||||||||||||||||
TruPet LLC [Member] | |||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||
Stock Issued During Period, Shares, Acquisitions (in Shares) | 15,027,533 | ||||||||||||||||||
Subsequent Event [Member] | |||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||
Private Placement, Shares (in Shares) | 5,744,991 | 4,946,640 | |||||||||||||||||
Shares Issued, Price Per Share (in Dollars per share) | $ 3 | $ 3 | |||||||||||||||||
Private Placement, Warrants (in Shares) | 5,744,991 | 4,946,640 | |||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 4.25 | $ 4.25 | |||||||||||||||||
Warrants and Rights Outstanding, Term | 24 months | 24 months | |||||||||||||||||
Proceeds from Issuance or Sale of Equity | $ 17,200,000 | ||||||||||||||||||
Debt Instrument, Face Amount | $ 6,200,000 | ||||||||||||||||||
Cash and Cash Equivalents, at Carrying Value | $ 10,739,705 | ||||||||||||||||||
Subsequent Event [Member] | TruPet LLC [Member] | |||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||
Equity Method Investment, Ownership Percentage | 93.30% | ||||||||||||||||||
Stock Issued During Period, Shares, Acquisitions (in Shares) | 15,027,533 | ||||||||||||||||||
Subsequent Event [Member] | Bona vida [Member] | |||||||||||||||||||
Going Concern [Line Items] | |||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 0.75 | ||||||||||||||||||
Stock Issued During Period, Shares, Acquisitions (in Shares) | 18,003,273 | ||||||||||||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 |
Discontinued Operations (FY) (D
Discontinued Operations (FY) (Details) - USD ($) $ in Millions | 1 Months Ended | 4 Months Ended | 12 Months Ended | ||
Aug. 20, 2018 | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 21, 2018 | |
Discontinued Operations [Line Items] | |||||
Warrants Cancelled | (463,631) | (576,923) | 0 | ||
Yield Endurance [Member] | |||||
Discontinued Operations [Line Items] | |||||
Guaranty Liabilities | $ 5.5 | ||||
Restructuring Agreement, Terms | Pursuant to the terms of the Restructuring Agreement, the parties agreed to modify the terms of the Former Agreements by (a) assigning to Madison all of the capital stock of Yield to provide for the continuation of the business of Yield as a subsidiary of Madison, (b) terminating the Guaranty Agreement by and between the Company and Prism, and (c) canceling 576,923 of the 961,538 warrants issued to Prism in connection with the NPA. On the Effective Date, the Company transferred its capital stock of Yield to Madison (the "Transfer") and terminated the Guaranty Agreement, thus, the Company's liability for the Senior Note, as defined below, issued pursuant to the NPA, was extinguished upon the Transfer. | ||||
Warrants Cancelled | 576,923 |
Discontinued Operations - After
Discontinued Operations - After-Tax Loss from Discontinued Operations (FY) (Details) - USD ($) | 4 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Loss from discontinued operations, net of tax | $ 0 | $ 0 | $ 1,835,911 | $ 0 |
Yield Endurance [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on disposal of discontinued operations | $ (8,038,065) | |||
Yield Endurance [Member] | Discontinued Operations [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Share income | (48,593) | |||
Sales, general and administrative | 368,032 | |||
Interest expense - accrued interest | 117,534 | |||
Interest expense - excess value of warrants | 2,988,090 | |||
Interest expense - amortization of discount on note payable | 5,500,000 | |||
Mark to market BTC | 509,730 | |||
Mark to market derivative liability | (4,051,087) | |||
Reserve for uncollectible note receivable | 4,490,270 | |||
Gain on disposal of discontinued operations | (8,038,065) | |||
Loss from discontinued operations, net of tax | $ 1,835,911 |
Discontinued Operations - Gain
Discontinued Operations - Gain on Sale of Discontinued Operations (FY) (Details) - Yield Endurance [Member] | 4 Months Ended |
Dec. 31, 2018USD ($)shares | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Assets of discontinued operations disposed in sale | $ (9,415) |
Liabilities of discontinued operations disposed in sale | 9,648,488 |
Fair value of warrants to purchase 384,615 shares of common stock to buyer | (1,601,008) |
Gain on disposal of discontinued operations | $ 8,038,065 |
Shares of common | shares | 384,615 |
Investment in TruPet (FY) (Deta
Investment in TruPet (FY) (Details) - USD ($) | May 06, 2019 | Dec. 17, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 |
Investment in TruPet [Abstract] | ||||||
Payments to Acquire Equity Method Investments (in Dollars) | $ 2,200,000 | $ 2,200,000 | $ 0 | $ 0 | $ 0 | |
Stock Issued During Period, Shares, Acquisitions (in Shares) | 15,027,533 | |||||
Membership Interest [Member] | ||||||
Investment in TruPet [Abstract] | ||||||
Equity Method Investment, Ownership Percentage | 6.70% | |||||
Business Acquisition, Percentage of Voting Interests Acquired | 93.30% |
Dividends Payable (FY) (Details
Dividends Payable (FY) (Details) - USD ($) | May 06, 2019 | Jan. 08, 2019 | Dec. 12, 2018 | Oct. 22, 2018 | Oct. 18, 2018 | May 30, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 |
Dividends Payable [Line Items] | |||||||||||
Issued (in shares) | 25,641 | 1,400,000 | 2,846,356 | 1,400,000 | |||||||
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Issued | $ 15,675,790 | $ 2,023,000 | $ 150,000 | $ 1,400 | $ 4,668,000 | ||||||
Dividends Payable, Current | $ 20,280 | ||||||||||
Series B Preferred Stock [Member] | |||||||||||
Dividends Payable [Line Items] | |||||||||||
Issued (in shares) | 803,969.73 | ||||||||||
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.99 | $ 0.001 | $ 0.001 | $ 0.001 | 0.001 | ||||||
Issued | $ 795,930 | ||||||||||
Preferred Stock, Dividend Rate, Percentage | 10.00% | ||||||||||
Dividends Payable, Current | $ 31,619 | $ 20,280 | |||||||||
Series E Preferred Stock [Member] | |||||||||||
Dividends Payable [Line Items] | |||||||||||
Issued (in shares) | 2,846,355.54 | ||||||||||
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.99 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Issued | $ 2,022,766 | ||||||||||
Preferred Stock, Dividend Rate, Percentage | 10.00% | ||||||||||
Dividends Payable, Current | $ 53,501 | $ 53,501 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities - Accounts Payable and Accrued Liabilities (FY) (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 |
Trade accounts payable | $ 2,413,000 | $ 765,000 | $ 39,052 | $ 106,726 |
Payroll and related | 17,220 | 15,931 | 9,179 | |
Accrued interest | 0 | 51,462 | 16,661 | |
Accounts payable and accrued liabilities | 137,994 | $ 106,445 | $ 132,566 | |
Previously Reported [Member] | ||||
Trade accounts payable | 120,774 | |||
Accounts payable and accrued liabilities | $ 137,994 |
Related Party Transactions (F_2
Related Party Transactions (FY) (Details) - USD ($) | Feb. 01, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Aug. 31, 2018 | Aug. 31, 2017 |
Related Party Transactions [Line Items] | |||||||
Proceeds from Related Party Debt | $ 0 | $ 35,500 | $ 6,200,000 | $ 2,013,000 | $ 35,500 | $ 0 | |
Due to Officers or Stockholders, Current | 140,000 | 120,000 | |||||
Interest Expense, Related Party | 0 | $ 1,516 | 2,291 | 2,011 | |||
Chief Executive Officer [Member] | |||||||
Related Party Transactions [Line Items] | |||||||
Employment Agreement, Annual Salary | $ 96,000 | ||||||
Proceeds from Related Party Debt | 35,500 | 231,000 | |||||
Imputed Interest | $ 2,011 | ||||||
Salary and Wage, Officer, Excluding Cost of Good and Service Sold | 16,000 | 76,000 | |||||
Increase (Decrease) in Accrued Salaries | 32,000 | 20,000 | |||||
Due to Officers or Stockholders, Current | $ 124,000 | 140,000 | |||||
Interest Expense, Related Party | 2,291 | ||||||
Due to Related Parties | 0 | ||||||
Principal [Member] | Chief Executive Officer [Member] | |||||||
Related Party Transactions [Line Items] | |||||||
Repayments of Related Party Debt | 266,500 | ||||||
Interest [Member] | Chief Executive Officer [Member] | |||||||
Related Party Transactions [Line Items] | |||||||
Repayments of Related Party Debt | $ 4,302 |
Derivative Liability (FY) (Deta
Derivative Liability (FY) (Details) | Jan. 08, 2019shares | Dec. 12, 2018USD ($)$ / sharesshares | Oct. 18, 2018shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($) | Aug. 31, 2018USD ($)$ / sharesshares | Aug. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2019 |
Derivative Liability [Line Items] | ||||||||
Issued (in shares) | shares | 25,641 | 1,400,000 | 2,846,356 | 1,400,000 | ||||
Class of Warrant or Rights, Granted (in Shares) | shares | 700,000 | 700,000 | 1,040,554 | 0 | ||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 3.90 | $ 3.90 | ||||||
Proceeds from Issuance or Sale of Equity (in Dollars) | $ | $ 2,779,840 | $ 2,607,099 | $ 0 | $ 0 | $ 0 | |||
Share Price (in Dollars per share) | $ 1.95 | $ 11.18 | ||||||
Minimum [Member] | ||||||||
Derivative Liability [Line Items] | ||||||||
Share Price (in Dollars per share) | 6.76 | $ 0.35 | $ 0.51 | |||||
Maximum [Member] | ||||||||
Derivative Liability [Line Items] | ||||||||
Share Price (in Dollars per share) | $ 11.18 | $ 1.11 | $ 1.97 | |||||
Measurement Input, Price Volatility [Member] | Minimum [Member] | ||||||||
Derivative Liability [Line Items] | ||||||||
Derivative Liability, Measurement Input | 198.1 | |||||||
Measurement Input, Price Volatility [Member] | Maximum [Member] | ||||||||
Derivative Liability [Line Items] | ||||||||
Derivative Liability, Measurement Input | 2.078 | |||||||
Event Probability [Member] | Minimum [Member] | ||||||||
Derivative Liability [Line Items] | ||||||||
Derivative Liability, Measurement Input | 0.85 | |||||||
Event Probability [Member] | Maximum [Member] | ||||||||
Derivative Liability [Line Items] | ||||||||
Derivative Liability, Measurement Input | 0.95 | |||||||
Event Probability [Member] | Forecast [Member] | ||||||||
Derivative Liability [Line Items] | ||||||||
Derivative Liability, Measurement Input | 0.50 | |||||||
Option to Force Early Exercise [Member] | ||||||||
Derivative Liability [Line Items] | ||||||||
Derivative Liability, Measurement Input | 0 |
Derivative Liability - Fair Val
Derivative Liability - Fair Value, Derivative Liability Measured on Recurring Basis, Unobservable Input Reconciliation (FY) (Details) - USD ($) | 4 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | |
Liabilities Measured at Fair Value | |||
Balance | $ 2,317,412 | $ 312,878 | $ 254,952 |
Issuances | 6,244,548 | 1,565,487 | 685,139 |
Conversions / redemptions | 0 | (1,207,308) | (1,015,757) |
Reclass from sale of discontinued operations | 1,601,007 | ||
Revaluation (gain) loss | 1,135,345 | 45,348 | 388,544 |
Balance | $ 7,379,893 | $ 2,317,412 | $ 312,878 |
Derivative Liability - Fair V_2
Derivative Liability - Fair Value Measurements, Recurring, Valuation Techniques (FY) (Details) - $ / shares | 12 Months Ended | |||
Aug. 31, 2018 | Aug. 31, 2017 | Dec. 31, 2018 | Dec. 12, 2018 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Expected dividends: | 0.00% | 0.00% | ||
Stock price (in dollars per share) | $ 11.18 | $ 1.95 | ||
Minimum [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Expected volatility: | 121.10% | 37.80% | ||
Expected term (years): | 76 days | 14 days | ||
Risk free interest rate: | 0.97% | 0.26% | ||
Stock price (in dollars per share) | $ 0.35 | $ 0.51 | 6.76 | |
Maximum [Member] | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Expected volatility: | 246.80% | 276.90% | ||
Expected term (years): | 1 year | 6 months | ||
Risk free interest rate: | 2.08% | 0.98% | ||
Stock price (in dollars per share) | $ 1.11 | $ 1.97 | $ 11.18 |
Convertible Notes Payable (FY_2
Convertible Notes Payable (FY) (Details) - Prism Note [Member] | 1 Months Ended |
Mar. 31, 2018USD ($) | |
Convertible Notes Payable [Line Items] | |
Debt Instrument, Original Issue Discount, Percentage | 10.00% |
Debt Instrument, Face Amount (in Dollars) | $ 5,500,000 |
Debt Instrument, Term | 30 years |
Debt Instrument, Interest Rate, Stated Percentage | 10.00% |
Convertible Notes Payable - Con
Convertible Notes Payable - Convertible Debt (FY) (Details) - USD ($) | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 |
Convertible Notes Payable - Convertible Debt [Line Items] | |||
Convertible debt | $ 0 | $ 1,027,202 | $ 553,977 |
Less: Unamortized discount | 0 | (752,988) | (153,234) |
Total, net of discount | 0 | 274,214 | 400,743 |
Current portion | 0 | 1,027,202 | 553,977 |
Long term | 0 | 0 | 0 |
Total | 0 | 1,027,202 | 553,977 |
May 2016 Convertible Notes [Member] | |||
Convertible Notes Payable - Convertible Debt [Line Items] | |||
Convertible debt | 0 | 0 | 0 |
Convertible Debt [Member] | January and February 2017 Convertible Notes [Member] | |||
Convertible Notes Payable - Convertible Debt [Line Items] | |||
Convertible debt | 0 | 0 | 553,977 |
Convertible Debt [Member] | November 2017 Convertible Note [Member] | |||
Convertible Notes Payable - Convertible Debt [Line Items] | |||
Convertible debt | 0 | 0 | 0 |
Convertible Debt [Member] | January 2018 Convertible Note [Member] | |||
Convertible Notes Payable - Convertible Debt [Line Items] | |||
Convertible debt | 0 | 0 | 0 |
Convertible Debt [Member] | February 2018 Convertible Note [Member] | |||
Convertible Notes Payable - Convertible Debt [Line Items] | |||
Convertible debt | 0 | 250,000 | 0 |
Convertible Debt [Member] | March 2018 Convertible Note [Member] | |||
Convertible Notes Payable - Convertible Debt [Line Items] | |||
Convertible debt | $ 0 | $ 777,202 | $ 0 |
Convertible Notes Payable - C_2
Convertible Notes Payable - Convertible Debt (Parentheticals) (FY) (Details) | Dec. 12, 2018$ / sharesshares | Jan. 29, 2018USD ($)shares | Nov. 16, 2017USD ($)shares | Sep. 28, 2017USD ($)shares | Jun. 02, 2017USD ($)shares | May 02, 2017USD ($)shares | Dec. 31, 2018USD ($)Note$ / sharesshares | Dec. 31, 2017USD ($) | Aug. 31, 2018USD ($)Note$ / sharesshares | Aug. 31, 2017USD ($)shares |
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Original issue discount | $ 752,990 | $ 153,234 | ||||||||
Amortization of discount | $ 118,708 | $ 177,573 | 532,907 | 780,293 | ||||||
Converted amount | $ 25,000 | |||||||||
Converted, shares (in Shares) | shares | 38,405 | 9,615 | 8,013 | 8,013 | 8,013 | |||||
Loss on conversion | 0 | 474,648 | 0 | |||||||
Change in value for derivative | (821,324) | 28,523 | (45,348) | (388,544) | ||||||
Loss on Debt | 472,267 | 0 | 1,033,669 | 0 | ||||||
Cash proceeds | $ 0 | 241,250 | $ 1,232,500 | $ 0 | ||||||
Warrants granted (in Shares) | shares | 700,000 | 700,000 | 1,040,554 | 0 | ||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 3.90 | $ 3.90 | ||||||||
Interest expense, other | $ 0 | $ 0 | $ 447,680 | $ 0 | ||||||
May 2016 Convertible Notes [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Discount | 3.50% | 3.50% | ||||||||
Original Amount | $ 440,000 | $ 440,000 | ||||||||
Original issue discount | $ 15,400 | $ 15,400 | ||||||||
Interest rate | 10.00% | 10.00% | ||||||||
Conversion terms | At the Holders option the principal and accrued interest under the Notes are convertible into common stock at a rate of $13 per share and have a full reset feature | At the Holders option the principal and accrued interest under the Notes are convertible into common stock at a rate of $13 per share and have a full reset feature | ||||||||
Repayments of debt | The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 125% during the first 90 days and 130% for the period from the 91st day through maturity. | The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 125% during the first 90 days and 130% for the period from the 91st day through maturity. | ||||||||
Amortization of discount | $ 0 | $ 172,735 | ||||||||
Convertible Debt [Member] | January and February 2017 Convertible Notes [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Discount | 3.50% | 3.50% | ||||||||
Original Amount | $ 614,258 | $ 614,258 | ||||||||
Interest rate | 10.00% | 10.00% | ||||||||
Conversion terms | contain a variable conversion rate whereby, should the Company subsequently sell common stock at a price less than the conversion price, the conversion price of the January and February 2017 Convertible Notes will be reduced to match the lower conversion price. In addition, the proceeds from one of the January and February 2017 Convertible Notes were used to fully redeem one of the May 2016 Convertible Notes | contain a variable conversion rate whereby, should the Company subsequently sell common stock at a price less than the conversion price, the conversion price of the January and February 2017 Convertible Notes will be reduced to match the lower conversion price. In addition, the proceeds from one of the January and February 2017 Convertible Notes were used to fully redeem one of the May 2016 Convertible Notes | ||||||||
Added to Principal Amount | $ 212,702 | $ 212,702 | ||||||||
Rate (in Dollars per share) | $ / shares | $ 13 | $ 13 | ||||||||
Convertible Notes | $ 553,976 | |||||||||
Payments | $ 45,000 | |||||||||
Converted, shares (in Shares) | shares | 17,628 | |||||||||
Loss on conversion | $ 122,878 | |||||||||
Debt Instument, Description | On January 17, 2018, the Note Purchasers of one of the January and February 2017 Convertible Notes in the principal amount of $241,802 purchased the remaining two January and February 2017 Convertible Notes in the aggregate principal amount of $278,309. The Company then entered into an agreement with the Note Purchasers to exchange the three January and February 2017 Convertible Notes (the "January 2018 Note Exchange") in the aggregate principal amount of $520,111 for a new Convertible Note in the principal amount of $542,343 (the "January 2018 Convertible Note"). | |||||||||
Change in value for derivative | $ 396,611 | |||||||||
Loss on Debt | $ 6,409 | |||||||||
Convertible Debt [Member] | November 2017 Convertible Note [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Discount | 3.50% | 3.50% | ||||||||
Original Amount | $ 250,000 | $ 250,000 | ||||||||
Original issue discount | $ 8,750 | $ 8,750 | ||||||||
Interest rate | 10.00% | 10.00% | ||||||||
Repayments of debt | The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. | The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. | ||||||||
Rate (in Dollars per share) | $ / shares | $ 13 | $ 13 | ||||||||
Converted, shares (in Shares) | shares | 265,782.83 | |||||||||
Loss on Debt | $ 130,252 | $ 0 | ||||||||
Issuance Date | Nov. 17, 2017 | Nov. 17, 2017 | ||||||||
Mature | 6 months | 6 months | ||||||||
Cash proceeds | $ 241,250 | $ 241,250 | ||||||||
Convertible Debt [Member] | January 2018 Convertible Note [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Original Amount | 542,343 | |||||||||
Original issue discount | $ 18,982 | |||||||||
Interest rate | 10.00% | 10.00% | ||||||||
Repayments of debt | The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. | The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. | ||||||||
Rate (in Dollars per share) | $ / shares | $ 0.78 | $ 0.78 | ||||||||
Converted, shares (in Shares) | shares | 538,186.87 | |||||||||
Loss on conversion | $ (933,263) | |||||||||
Loss on Debt | $ 6,409 | |||||||||
Issuance Date | Jan. 17, 2018 | Jan. 17, 2018 | ||||||||
Mature | 12 months | 12 months | ||||||||
Interest Expense | $ 68,855 | |||||||||
Convertible Debt [Member] | February 2018 Convertible Note [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Discount | 3.50% | 3.50% | ||||||||
Original Amount | $ 250,000 | $ 250,000 | ||||||||
Original issue discount | $ 8,750 | |||||||||
Interest rate | 10.00% | 10.00% | ||||||||
Repayments of debt | The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity | The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity | ||||||||
Amortization of discount | $ 16,298 | $ 0 | ||||||||
Rate (in Dollars per share) | $ / shares | $ 13 | $ 13 | ||||||||
Issuance Date | Feb. 15, 2018 | Feb. 15, 2018 | ||||||||
Mature | 9 months | 9 months | ||||||||
Cash proceeds | $ 241,250 | |||||||||
Interest Expense | $ 13,681 | |||||||||
Warrants granted (in Shares) | shares | 19,231 | |||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.26 | |||||||||
Warrant term | 5 months | |||||||||
Derivative Liability | $ 667,470 | |||||||||
Interest expense, other | $ 426,220 | |||||||||
Convertible Debt [Member] | March 2018 Convertible Note [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Discount | 3.50% | |||||||||
Original Amount | $ 777,202 | |||||||||
Original issue discount | $ 27,202 | |||||||||
Interest rate | 10.00% | |||||||||
Repayments of debt | The Company at any time may prepay in whole or in part the outstanding principal and accrued interest at 120% during the first 90 days and 130% for the period from the 91st day through maturity. | |||||||||
Amortization of discount | $ 102,410 | $ 0 | ||||||||
Rate (in Dollars per share) | $ / shares | $ 13 | |||||||||
Issuance Date | Mar. 9, 2018 | |||||||||
Mature | 9 months | |||||||||
Cash proceeds | $ 750,000 | |||||||||
Interest Expense | $ 37,780 | |||||||||
Warrants granted (in Shares) | shares | 59,785 | |||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.26 | |||||||||
Warrant term | 5 months | |||||||||
Derivative Liability | $ 771,460 | |||||||||
Three Months Ended May 31, 2018 [Member] | Convertible Debt [Member] | January 2018 Convertible Note [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Interest Expense | 13,125 | |||||||||
Principal [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Converted amount | $ 28,148 | $ 17,518 | $ 16,347 | $ 15,000 | ||||||
Principal [Member] | Convertible Debt [Member] | January and February 2017 Convertible Notes [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Converted amount | 33,865 | |||||||||
Principal [Member] | Convertible Debt [Member] | November 2017 Convertible Note [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Converted amount | 250,000 | |||||||||
Principal [Member] | Convertible Debt [Member] | January 2018 Convertible Note [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Converted amount | 514,195 | |||||||||
Interest [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Converted amount | $ 1,808 | $ 12,482 | $ 8,653 | $ 10,000 | ||||||
Interest [Member] | Convertible Debt [Member] | January and February 2017 Convertible Notes [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Converted amount | 21,135 | |||||||||
Interest [Member] | Convertible Debt [Member] | November 2017 Convertible Note [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Converted amount | 13,125 | |||||||||
Interest [Member] | Convertible Debt [Member] | January 2018 Convertible Note [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Converted amount | $ 18,610 | |||||||||
Conversion January 29, 2018 [Member] | Convertible Debt [Member] | January 2018 Convertible Note [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Converted, shares (in Shares) | shares | 38,405 | |||||||||
Loss on conversion | $ 351,769 | |||||||||
Conversion January 29, 2018 [Member] | Convertible Debt [Member] | January 2018 Convertible Note [Member] | Principal [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Converted amount | 28,148 | |||||||||
Conversion January 29, 2018 [Member] | Convertible Debt [Member] | January 2018 Convertible Note [Member] | Interest [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Converted amount | 1,808 | |||||||||
Gain on Revaluation [Member] | Convertible Debt [Member] | March 2018 Convertible Note [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Loss on Debt | $ (40,072) | |||||||||
Extension to April 17, 2017 [Member] | Convertible Debt [Member] | January and February 2017 Convertible Notes [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Payments | 75,000 | |||||||||
Extended Maturity [Member] | Convertible Debt [Member] | January and February 2017 Convertible Notes [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Added to Principal Amount | $ 78,907 | |||||||||
Convertible Debt, Option [Member] | Convertible Debt [Member] | November 2017 Convertible Note [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Discount | 3.50% | |||||||||
Original Amount | $ 50,000 | |||||||||
Cash proceeds | 48,250 | |||||||||
Principal [Member] | Convertible Debt [Member] | January 2018 Convertible Note [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Converted amount | 520,111 | |||||||||
Interest [Member] | Convertible Debt [Member] | January 2018 Convertible Note [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Converted amount | 15,823 | |||||||||
Discount from Derivative [Member] | Convertible Debt [Member] | February 2018 Convertible Note [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Original issue discount | $ 241,250 | |||||||||
Two Notes [Member] | Convertible Debt [Member] | January and February 2017 Convertible Notes [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Notes | Note | 2 | 2 | ||||||||
Convertible Notes | $ 494,340 | $ 494,340 | ||||||||
Due | Mar. 31, 2017 | Mar. 31, 2017 | ||||||||
One Note [Member] | Convertible Debt [Member] | January and February 2017 Convertible Notes [Member] | ||||||||||
Convertible Notes Payable - Convertible Debt [Line Items] | ||||||||||
Notes | Note | 1 | 1 | ||||||||
Convertible Notes | $ 119,918 | $ 119,918 | ||||||||
Due | Aug. 17, 2017 | Aug. 17, 2017 |
Stockholders' Deficit (FY) (Det
Stockholders' Deficit (FY) (Details) - USD ($) | May 13, 2019 | May 10, 2019 | May 06, 2019 | Jan. 08, 2019 | Dec. 21, 2018 | Dec. 12, 2018 | Nov. 28, 2018 | Oct. 22, 2018 | Oct. 18, 2018 | May 31, 2018 | May 30, 2018 | Jan. 29, 2018 | Nov. 16, 2017 | Sep. 28, 2017 | Jun. 02, 2017 | May 02, 2017 | Jan. 04, 2017 | Dec. 31, 2018 | Jun. 30, 2019 | Oct. 22, 2018 | Jun. 30, 2019 | Mar. 31, 2019 | Aug. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 22, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | Apr. 22, 2019 | Feb. 12, 2019 |
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 4,000,000 | |||||||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||||||||||
Preferred stock, shares issued (in shares) | 2,633,678 | |||||||||||||||||||||||||||||||||
Preferred stock, shares outstanding | 2,633,678 | 1,707,920 | 1,707,920 | 1,707,920 | ||||||||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 38,405 | 9,615 | 8,013 | 8,013 | 8,013 | |||||||||||||||||||||||||||||
Dividends, Preferred Stock (in Dollars) | $ 27,000 | $ 0 | $ 64,840 | $ 0 | $ 27,000 | $ 0 | $ 20,280 | $ 0 | ||||||||||||||||||||||||||
Issued (in shares) | 25,641 | 1,400,000 | 2,846,356 | 1,400,000 | ||||||||||||||||||||||||||||||
Debt Conversion, Original Debt, Amount (in Dollars) | $ 25,000 | |||||||||||||||||||||||||||||||||
Class of Warrant or Rights Cancelled or Expired | (463,631) | (576,923) | 0 | |||||||||||||||||||||||||||||||
Embedded Derivative, No Longer Bifurcated, Amount Reclassified to Stockholders' Equity (in Dollars) | $ 2,003,390 | $ 2,003,390 | 23,447 | $ 0 | $ 1,015,757 | |||||||||||||||||||||||||||||
Issued | $ 15,675,790 | $ 2,023,000 | $ 150,000 | 1,400 | $ 4,668,000 | |||||||||||||||||||||||||||||
Gains (Losses) on Restructuring of Debt (in Dollars) | $ 472,267 | 0 | $ 1,033,669 | $ 0 | ||||||||||||||||||||||||||||||
Common Stock, Shares Authorized | 580,000,000 | 88,000,000 | 88,000,000 | 580,000,000 | 580,000,000 | 88,000,000 | 580,000,000 | 580,000,000 | 580,000,000 | 88,000,000 | ||||||||||||||||||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||
Common Stock, Shares, Issued | 11,661,485 | 43,168,161 | 43,168,161 | 3,064,763 | 11,661,485 | 43,168,161 | 11,661,485 | 3,064,763 | 3,008,730 | |||||||||||||||||||||||||
Common Stock, Shares, Outstanding | 11,661,485 | 43,168,161 | 43,168,161 | 3,064,763 | 11,661,485 | 43,168,161 | 11,661,485 | 3,064,763 | 3,008,730 | |||||||||||||||||||||||||
Stock Repurchased During Period, Shares | 1,048,904 | |||||||||||||||||||||||||||||||||
Number of Shareholders | 2 | |||||||||||||||||||||||||||||||||
Stock Repurchased During Period, Value (in Dollars) | $ 27,271 | |||||||||||||||||||||||||||||||||
Number of Units Sold | 1,425,641 | |||||||||||||||||||||||||||||||||
Unit, Description | each unit consisting of (i) one share of the Company’s common stock, par value $0.001 per share and (ii) a warrant to purchase one half of a share of Common Stock | |||||||||||||||||||||||||||||||||
Unit Price per Unit (in Dollars per share) | $ 1.95 | |||||||||||||||||||||||||||||||||
Proceeds from Issuance or Sale of Equity (in Dollars) | $ 2,779,840 | $ 2,607,099 | $ 0 | $ 0 | $ 0 | |||||||||||||||||||||||||||||
Payments of Stock Issuance Costs (in Dollars) | 122,741 | |||||||||||||||||||||||||||||||||
Proceeds from Sale of Stock, Net (in Dollars) | $ 50,000 | $ 2,657,099 | ||||||||||||||||||||||||||||||||
Warrants and Rights Outstanding, Term | 2 years | |||||||||||||||||||||||||||||||||
Warrant exercise price (in dollars per share) | $ 3.90 | $ 3.90 | $ 3.90 | $ 3.90 | ||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Other | 1,346 | |||||||||||||||||||||||||||||||||
Stock Issued During Period, Value, Other (in Dollars) | $ 68,950 | $ 2,021,962 | ||||||||||||||||||||||||||||||||
Shares Issued, Price Per Share (in Dollars per share) | $ 46.80 | |||||||||||||||||||||||||||||||||
Class of Warrant or Rights, Granted | 700,000 | 700,000 | 1,040,554 | 0 | ||||||||||||||||||||||||||||||
Class of Warrant or Rights, Outstanding Intrinsic Value (in Dollars) | $ 5,095,996 | |||||||||||||||||||||||||||||||||
Share Price (in Dollars per share) | $ 1.95 | $ 11.18 | $ 11.18 | $ 11.18 | ||||||||||||||||||||||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | $ 7.50 | $ 6.76 | $ 0 | $ 0 | ||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||||||||||||||||||||||||||||||||
APIC, Share-based Payment Arrangement, Option, Increase for Cost Recognition (in Dollars) | $ 1,178,997 | |||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value (in Dollars) | $ 170,002 | $ 34,200,000 | $ 34,200,000 | $ 170,002 | $ 34,200,000 | $ 170,002 | ||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value (in Dollars) | $ 170,002 | $ 170,002 | $ 170,002 | |||||||||||||||||||||||||||||||
Previously Reported [Member] | ||||||||||||||||||||||||||||||||||
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 | 20,000,000 | |||||||||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||||||
Common Stock, Shares Authorized | 580,000,000 | 580,000,000 | 580,000,000 | |||||||||||||||||||||||||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||||||
Common Stock, Shares, Issued | 3,415,859 | 3,415,859 | 3,415,859 | |||||||||||||||||||||||||||||||
Common Stock, Shares, Outstanding | 3,415,859 | 3,415,859 | 3,415,859 | |||||||||||||||||||||||||||||||
Warrants Issued with Debt [Member] | ||||||||||||||||||||||||||||||||||
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Warrant exercise price (in dollars per share) | $ 0.26 | $ 0.26 | ||||||||||||||||||||||||||||||||
Class of Warrant or Rights, Granted | 79,016 | |||||||||||||||||||||||||||||||||
Principal [Member] | ||||||||||||||||||||||||||||||||||
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Debt Conversion, Original Debt, Amount (in Dollars) | $ 28,148 | $ 17,518 | $ 16,347 | $ 15,000 | ||||||||||||||||||||||||||||||
Interest [Member] | ||||||||||||||||||||||||||||||||||
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Debt Conversion, Original Debt, Amount (in Dollars) | $ 1,808 | $ 12,482 | $ 8,653 | $ 10,000 | ||||||||||||||||||||||||||||||
Discontinued Operations [Member] | ||||||||||||||||||||||||||||||||||
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Class of Warrant or Rights Cancelled or Expired | 576,923 | |||||||||||||||||||||||||||||||||
Warrant exercise price (in dollars per share) | $ 0.26 | $ 0.26 | ||||||||||||||||||||||||||||||||
Class of Warrant or Rights, Granted | 961,538 | |||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Option [Member] | ||||||||||||||||||||||||||||||||||
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 38,462 | |||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 5 years | |||||||||||||||||||||||||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) | $ 6.76 | |||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | |||||||||||||||||||||||||||||||||
APIC, Share-based Payment Arrangement, Option, Increase for Cost Recognition (in Dollars) | $ 154,983 | |||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Option [Member] | Board of Directors Chairman [Member] | ||||||||||||||||||||||||||||||||||
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 19,231 | |||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Option [Member] | Chief Financial Officer [Member] | ||||||||||||||||||||||||||||||||||
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures | 19,231 | |||||||||||||||||||||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||||||||||||||||||||||
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Preferred Stock, Shares Authorized | 1,000 | 1,000 | 1,000 | |||||||||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||
Preferred stock, shares issued (in shares) | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | ||||||||||||||||||||||||||||
Preferred stock, shares outstanding | 1,000 | 1,000 | 1,000 | |||||||||||||||||||||||||||||||
Issued (in shares) | 69,115 | 2,391,403 | ||||||||||||||||||||||||||||||||
Issued | $ 69 | $ 2,391 | ||||||||||||||||||||||||||||||||
Payments of Stock Issuance Costs (in Dollars) | $ 500,000 | |||||||||||||||||||||||||||||||||
Share Price (in Dollars per share) | $ 2.40 | $ 2.40 | $ 2.40 | $ 2.40 | ||||||||||||||||||||||||||||||
Series A Preferred Stock [Member] | Previously Reported [Member] | ||||||||||||||||||||||||||||||||||
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Preferred Stock, Shares Authorized | 1,000 | 1,000 | 1,000 | |||||||||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||||||
Preferred stock, shares issued (in shares) | 1,000 | 1,000 | 1,000 | |||||||||||||||||||||||||||||||
Preferred stock, shares outstanding | 1,000 | 1,000 | 1,000 | |||||||||||||||||||||||||||||||
Series B Preferred Stock [Member] | ||||||||||||||||||||||||||||||||||
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Preferred Stock, Shares Authorized | 805,000 | 805,000 | 805,000 | 805,000 | 805,000 | 805,000 | 805,000 | |||||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.99 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||
Preferred stock, shares issued (in shares) | 803,969.73 | 803,969.73 | 0 | |||||||||||||||||||||||||||||||
Preferred stock, shares outstanding | 803,969.73 | 0 | 803,969.73 | 803,969.73 | 0 | 803,969.73 | 0 | 803,969.73 | 0 | |||||||||||||||||||||||||
Convertible Preferred Stock, Conversion Rate (in Dollars per share) | $ 0.78 | |||||||||||||||||||||||||||||||||
Preferred Stock, Dividend Rate, Percentage | 10.00% | |||||||||||||||||||||||||||||||||
Convertible Preferred Stock, Terms of Conversion | Under certain default condition, the Series B Convertible Preferred Stock is subject to mandatory redemption at 125%, and the conversion price resets to 75% of the market price of the Company’s common stock | |||||||||||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 803,969.73 | |||||||||||||||||||||||||||||||||
Dividends, Preferred Stock (in Dollars) | $ 11,339 | $ 20,280 | ||||||||||||||||||||||||||||||||
Preferred Stock, Amount of Preferred Dividends in Arrears (in Dollars) | $ 31,619 | |||||||||||||||||||||||||||||||||
Issued (in shares) | 803,969.73 | |||||||||||||||||||||||||||||||||
Conversion of stock, shares converted (in shares) | 803,969.73 | |||||||||||||||||||||||||||||||||
Issued | $ 795,930 | |||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Other | 803,969.73 | |||||||||||||||||||||||||||||||||
Stock Issued During Period, Value, Other (in Dollars) | $ (804) | |||||||||||||||||||||||||||||||||
Series B Preferred Stock [Member] | Previously Reported [Member] | ||||||||||||||||||||||||||||||||||
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Preferred Stock, Shares Authorized | 805,000 | 805,000 | 805,000 | |||||||||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||||||
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | |||||||||||||||||||||||||||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | |||||||||||||||||||||||||||||||
Series E Preferred Stock [Member] | ||||||||||||||||||||||||||||||||||
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Preferred Stock, Shares Authorized | 2,900,000 | 2,900,000 | 2,900,000 | 2,900,000 | 2,900,000 | 2,900,000 | 2,900,000 | 2,900,000 | 2,900,000 | |||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.99 | $ 0.001 | $ 0.99 | $ 0.001 | $ 0.001 | $ 0.99 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | |||||||||||||||||||||||||||||||
Preferred stock, shares outstanding | 2,846,355.54 | 1,707,920 | 1,707,920 | 0 | 2,846,355.54 | 1,707,920 | 2,846,355.54 | 0 | 0 | |||||||||||||||||||||||||
Convertible Preferred Stock, Conversion Rate (in Dollars per share) | $ 0.78 | |||||||||||||||||||||||||||||||||
Preferred Stock, Dividend Rate, Percentage | 10.00% | |||||||||||||||||||||||||||||||||
Convertible Preferred Stock, Terms of Conversion | Under certain default condition, the Series E Convertible Preferred Stock is subject to mandatory redemption at 125%, and the conversion price resets to 75% of the market price of the Company’s common stock | |||||||||||||||||||||||||||||||||
Dividends, Preferred Stock (in Dollars) | $ 53,501 | |||||||||||||||||||||||||||||||||
Issued (in shares) | 2,846,355.54 | |||||||||||||||||||||||||||||||||
Conversion of stock, shares converted (in shares) | 236,364 | 689,394 | 925,758 | 925,758 | ||||||||||||||||||||||||||||||
Class of Warrant or Rights Cancelled or Expired | 463,631 | |||||||||||||||||||||||||||||||||
Issued | $ 2,022,766 | |||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Other | 2,846,355.54 | |||||||||||||||||||||||||||||||||
Stock Issued During Period, Value, Other (in Dollars) | $ 2,846 | |||||||||||||||||||||||||||||||||
Series E Preferred Stock [Member] | Previously Reported [Member] | ||||||||||||||||||||||||||||||||||
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Preferred Stock, Shares Authorized | 2,900,000 | 2,900,000 | 2,900,000 | |||||||||||||||||||||||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||||||||||||||||
Preferred stock, shares issued (in shares) | 2,846,355.54 | 2,846,355.54 | 2,846,355.54 | |||||||||||||||||||||||||||||||
Preferred stock, shares outstanding | 2,846,355.54 | 2,846,355.54 | 2,846,355.54 | |||||||||||||||||||||||||||||||
Series E Preferred Stock [Member] | Principal [Member] | ||||||||||||||||||||||||||||||||||
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Debt Conversion, Original Debt, Amount (in Dollars) | 1,027,202 | |||||||||||||||||||||||||||||||||
Series E Preferred Stock [Member] | Interest [Member] | ||||||||||||||||||||||||||||||||||
Stockholders' Deficit [Line Items] | ||||||||||||||||||||||||||||||||||
Debt Conversion, Original Debt, Amount (in Dollars) | $ 66,299 |
Stockholders' Deficit - Warrant
Stockholders' Deficit - Warrants or Rights Shares Authorized, by Exercise Price Range (FY) (Details) - $ / shares | 4 Months Ended | |||||
Dec. 31, 2018 | Jun. 30, 2019 | Dec. 12, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Stockholders' Deficit - Schedule of Warrants or Rights Shares Authorized, by Exercise Price Range [Line Items] | ||||||
Range of exercise Prices | $ 3.90 | $ 3.90 | ||||
Number of warrants Outstanding (in Shares) | 700,000 | 6,658,301 | 463,631 | 0 | 0 | |
Weighted average remaining contractual life | 1 year 350 days | |||||
Weighted average exercise price of outstanding Warrants | $ 3.90 | $ 4.39 | ||||
Number of warrants Exercisable (in Shares) | 700,000 | |||||
Weighted average exercise price of exercisable Warrants | $ 3.90 | |||||
Warrants at $0.01 [Member] | ||||||
Stockholders' Deficit - Schedule of Warrants or Rights Shares Authorized, by Exercise Price Range [Line Items] | ||||||
Range of exercise Prices | $ 3.90 | |||||
Number of warrants Outstanding (in Shares) | 700,000 | |||||
Weighted average remaining contractual life | 1 year 350 days | |||||
Weighted average exercise price of outstanding Warrants | $ 3.90 | |||||
Number of warrants Exercisable (in Shares) | 700,000 | |||||
Weighted average exercise price of exercisable Warrants | $ 3.90 |
Stockholders' Deficit - Stockho
Stockholders' Deficit - Stockholders' Equity Note, Warrants or Rights (FY) (Details) - $ / shares | Dec. 12, 2018 | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 |
Schedule of Stockholders' Equity Note, Warrants or Rights [Abstract] | ||||
Warrants outstanding, Number of Warrants | 463,631 | 0 | 0 | |
Warrants outstanding, Weighted Average Exercise Price | $ 0.26 | $ 0 | $ 0 | |
Granted, Number of Warrants | 700,000 | 700,000 | 1,040,554 | 0 |
Granted, Weighted Average Exercise Price | $ 3.90 | $ 0.26 | $ 0 | |
Exercised, Number of Warrants | 0 | 0 | ||
Exercised, Weighted Average Exercise Price | $ 0 | $ 0 | ||
Cancelled / Expired, Number of Warrants | (463,631) | (576,923) | 0 | |
Cancelled / Expired, Weighted Average Exercise Price | $ 0.26 | $ 0.26 | $ 0 | |
Warrants outstanding, Number of Warrants | 700,000 | 463,631 | 0 | |
Warrants outstanding, Weighted Average Exercise Price | $ 3.90 | $ 0.26 | $ 0 |
Stockholders' Deficit - Share-b
Stockholders' Deficit - Share-based Compensation, Shares Authorized under Stock Option Plans (FY) (Details) | 4 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans [Abstract] | |
Range of exercise prices | $ 6.76 |
Number of options outstanding (in Shares) (in Shares) | shares | 38,462 |
Weighted average remaining contractual life | 4 years 357 days |
Weighted average exercise price of outstanding options | $ 6.76 |
number of options exercisable (in Shares) | shares | 0 |
Weighted average exercise price of exercisable options | $ 0 |
Stockholders' Deficit - Share_2
Stockholders' Deficit - Share-based Compensation, Stock Options, Activity (FY) (Details) - $ / shares | 2 Months Ended | 4 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | Aug. 31, 2018 | Aug. 31, 2017 | |
Share-based Compensation, Stock Options, Activity [Abstract] | |||||
Options outstanding, Number of Options | 0 | 38,462 | 0 | 0 | |
Options outstanding, Weighted Average Exercise Price | $ 0 | $ 6.76 | $ 0 | $ 0 | |
Granted, Number of Options | 93,000 | 38,462 | 0 | 0 | |
Granted (in dollars per share) | $ 7.50 | $ 6.76 | $ 0 | $ 0 | |
Exercised, Number of Options | 0 | 0 | 0 | ||
Exercised, Weighted Average Exercise Price | $ 0 | $ 0 | $ 0 | ||
Cancelled / Expired, Number of Options | 0 | 0 | 0 | ||
Cancelled / Expired, Weighted Average Exercise Price | $ 0 | $ 0 | $ 0 | ||
Options outstanding, Number of Options | 5,381,462 | 38,462 | 5,381,462 | 0 | 0 |
Options outstanding, Weighted Average Exercise Price | $ 5.04 | $ 6.76 | $ 5.04 | $ 0 | $ 0 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Fair Value, Liabilities Measured on Recurring Basis (FY) (Details) - USD ($) | Jun. 30, 2019 | May 06, 2019 | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 |
Fair Value of Financial Instruments - Schedule of Fair Value, Liabilities Measured on Recurring Basis [Line Items] | |||||
Derivative liabilities | $ 2,304,000 | $ 2,110,000 | $ 0 | $ 2,317,412 | $ 312,878 |
Previously Reported [Member] | |||||
Fair Value of Financial Instruments - Schedule of Fair Value, Liabilities Measured on Recurring Basis [Line Items] | |||||
Derivative liabilities | 7,379,893 | ||||
Fair Value, Inputs, Level 1 [Member] | |||||
Fair Value of Financial Instruments - Schedule of Fair Value, Liabilities Measured on Recurring Basis [Line Items] | |||||
Derivative liabilities | 0 | 0 | 0 | ||
Fair Value, Inputs, Level 2 [Member] | |||||
Fair Value of Financial Instruments - Schedule of Fair Value, Liabilities Measured on Recurring Basis [Line Items] | |||||
Derivative liabilities | 0 | 0 | 0 | ||
Fair Value, Inputs, Level 3 [Member] | |||||
Fair Value of Financial Instruments - Schedule of Fair Value, Liabilities Measured on Recurring Basis [Line Items] | |||||
Derivative liabilities | $ 7,379,893 | $ 2,317,412 | $ 312,878 |
Income Taxes (FY) (Details)
Income Taxes (FY) (Details) - USD ($) | Dec. 22, 2017 | Dec. 21, 2017 | Jun. 30, 2019 | Dec. 22, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | Dec. 31, 2018 |
Income Taxes [Abstract] | |||||||
Operating Loss Carryforwards (in Dollars) | $ 2,970,000 | ||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% | 21.00% | 35.00% | 21.00% | 34.00% |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (FY) (Details) - USD ($) | 4 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Aug. 31, 2018 | Aug. 31, 2017 | |
Schedule of Effective Income Tax Rate Reconciliation [Abstract] | ||||
Federal income tax (benefit) at statutory rate | $ (926,700) | $ (619,672) | $ (592,708) | |
State income tax (benefit), net of Federal | (441,286) | (295,082) | (191,758) | |
Permanent differences - change in value of derivative liability and other | 1,314,116 | 619,000 | ||
Effect of change in Federal statutory rate | 0 | 230,616 | 0 | |
Changes in valuation allowance | 53,870 | 65,138 | 784,466 | |
Total | $ 0 | $ 0 | $ 0 | $ 0 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (FY) (Details) - USD ($) | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 |
Deferred Tax Assets (Liabilities): | |||
Net operating loss carryforwards | $ 920,390 | $ 820,494 | $ 741,267 |
Accrued compensation | 39,680 | 44,800 | 54,000 |
Valuation allowance | (960,070) | (865,294) | (795,267) |
Net deferred tax assets (liabilities) | $ 0 | $ 0 | $ 0 |
Subsequent Events (FY) (Details
Subsequent Events (FY) (Details) - USD ($) | May 31, 2019 | May 13, 2019 | May 10, 2019 | May 06, 2019 | May 02, 2019 | Apr. 29, 2019 | Apr. 25, 2019 | Apr. 01, 2019 | Mar. 15, 2019 | Mar. 08, 2019 | Feb. 22, 2019 | Feb. 11, 2019 | Feb. 06, 2019 | Feb. 01, 2019 | Jan. 18, 2019 | Jan. 17, 2019 | Jan. 08, 2019 | Dec. 12, 2018 | Nov. 28, 2018 | Oct. 22, 2018 | Oct. 18, 2018 | Jan. 04, 2017 | Jan. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | Apr. 22, 2019 |
Subsequent Events [Line Items] | |||||||||||||||||||||||||||||||||
Stock Repurchased During Period, Shares | 1,048,904 | ||||||||||||||||||||||||||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||||||||||||||
Stock Repurchased During Period, Value (in Dollars) | $ 27,271 | ||||||||||||||||||||||||||||||||
Issued (in shares) | 25,641 | 1,400,000 | 2,846,356 | 1,400,000 | |||||||||||||||||||||||||||||
Issued | $ 15,675,790 | $ 2,023,000 | $ 150,000 | $ 1,400 | $ 4,668,000 | ||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Other | 1,346 | ||||||||||||||||||||||||||||||||
Common Stock, Shares Authorized | 88,000,000 | 88,000,000 | 580,000,000 | 88,000,000 | 580,000,000 | 580,000,000 | 580,000,000 | 88,000,000 | |||||||||||||||||||||||||
Shares Issued, Price Per Share (in Dollars per share) | $ 46.80 | ||||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 3.90 | $ 3.90 | $ 3.90 | ||||||||||||||||||||||||||||||
Warrants and Rights Outstanding, Term | 2 years | ||||||||||||||||||||||||||||||||
Proceeds from Issuance or Sale of Equity (in Dollars) | $ 2,779,840 | $ 2,607,099 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 93,000 | 38,462 | 0 | 0 | |||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Acquisitions (in Shares) | 15,027,533 | ||||||||||||||||||||||||||||||||
TruPet LLC [Member] | |||||||||||||||||||||||||||||||||
Subsequent Events [Line Items] | |||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Acquisitions (in Shares) | 15,027,533 | ||||||||||||||||||||||||||||||||
Subsequent Event [Member] | |||||||||||||||||||||||||||||||||
Subsequent Events [Line Items] | |||||||||||||||||||||||||||||||||
Issued (in shares) | 100,000 | 25,641 | |||||||||||||||||||||||||||||||
Issued | $ 50,000 | ||||||||||||||||||||||||||||||||
Conversion of Stock, Shares Issued | 682,500 | 76,154 | |||||||||||||||||||||||||||||||
Subsequent Event, Description | four holders of the Series E Convertible Preferred Stock, in exchange for $10 each (a total of $40), agreed to waive the right to receive any dividends which would accrue on the Series E for a one year period beginning on October 22, 2018 | ||||||||||||||||||||||||||||||||
Stockholders' Equity, Reverse Stock Split | 1 for 26 reverse split | ||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Rounding up, Reverse Stock Splits | 682 | ||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Other | 200,000 | ||||||||||||||||||||||||||||||||
Common Stock, Shares Authorized | 88,000,000 | ||||||||||||||||||||||||||||||||
Private Placement, Shares | 5,744,991 | 4,946,640 | |||||||||||||||||||||||||||||||
Shares Issued, Price Per Share (in Dollars per share) | $ 3 | $ 3 | |||||||||||||||||||||||||||||||
Private Placement, Warrants | 5,744,991 | 4,946,640 | |||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 4.25 | $ 4.25 | |||||||||||||||||||||||||||||||
Warrants and Rights Outstanding, Term | 24 months | 24 months | |||||||||||||||||||||||||||||||
Proceeds from Issuance or Sale of Equity (in Dollars) | $ 17,200,000 | ||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Description | The 2019 Plan authorizes the issuance of (i) 6,000,000 shares of common stock plus (ii) an annual increase on the first day of each calendar year beginning on January 1, 2020 and ending on and including January 1, 2029, equal to the lesser of (A) 10% of the shares of common stock outstanding (on an as-converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of shares of common stock as determined by the Board. | ||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 6,000,000 | ||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | vest and become exercisable monthly over 2 years in equal installments of 1/24 each month. | ||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 2 years | ||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount (in Dollars) | $ 6,200,000 | ||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.70% | ||||||||||||||||||||||||||||||||
Debt Instrument, Fee Amount (in Dollars) | $ 10,000 | ||||||||||||||||||||||||||||||||
Debt Instrument, Fee | The Company is also required to pay a late charge equal to 5% of the aggregate amount of any payments of principal and/or interest that are paid more than 10 days after the due date. | ||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Canadian Investment Banker [Member] | |||||||||||||||||||||||||||||||||
Subsequent Events [Line Items] | |||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 141,026 | ||||||||||||||||||||||||||||||||
Subsequent Event [Member] | The 2019 Equity Incentive Plan [Member] | |||||||||||||||||||||||||||||||||
Subsequent Events [Line Items] | |||||||||||||||||||||||||||||||||
Common Stock, Number of Shares with Potential Issuance | 180,769 | ||||||||||||||||||||||||||||||||
Subsequent Event [Member] | TruPet LLC [Member] | |||||||||||||||||||||||||||||||||
Subsequent Events [Line Items] | |||||||||||||||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 93.30% | ||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Acquisitions (in Shares) | 15,027,533 | ||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Bona vida [Member] | |||||||||||||||||||||||||||||||||
Subsequent Events [Line Items] | |||||||||||||||||||||||||||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | ||||||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ 0.75 | ||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Acquisitions (in Shares) | 18,003,273 | ||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Chief Executive Officer [Member] | |||||||||||||||||||||||||||||||||
Subsequent Events [Line Items] | |||||||||||||||||||||||||||||||||
Stock Repurchased During Period, Shares | 935,897 | ||||||||||||||||||||||||||||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.001 | ||||||||||||||||||||||||||||||||
Stock Repurchased During Period, Value (in Dollars) | $ 24,333 | ||||||||||||||||||||||||||||||||
Equity Method Investment, Ownership Percentage | 38.00% | ||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,200,000 | ||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Chief Financial Officer [Member] | |||||||||||||||||||||||||||||||||
Subsequent Events [Line Items] | |||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,150,000 | ||||||||||||||||||||||||||||||||
Subsequent Event [Member] | Director [Member] | |||||||||||||||||||||||||||||||||
Subsequent Events [Line Items] | |||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,000,000 | ||||||||||||||||||||||||||||||||
Series E Preferred Stock [Member] | |||||||||||||||||||||||||||||||||
Subsequent Events [Line Items] | |||||||||||||||||||||||||||||||||
Issued (in shares) | 2,846,355.54 | ||||||||||||||||||||||||||||||||
Issued | $ 2,022,766 | ||||||||||||||||||||||||||||||||
Conversion of stock, shares converted (in shares) | 236,364 | 689,394 | 925,758 | 925,758 | |||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Other | 2,846,355.54 | ||||||||||||||||||||||||||||||||
Series E Preferred Stock [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||||
Subsequent Events [Line Items] | |||||||||||||||||||||||||||||||||
Conversion of stock, shares converted (in shares) | 236,364 | 689,394 | 60,000 | 54,000 | 49,523 | 49,155 | |||||||||||||||||||||||||||
Conversion of Stock, Shares Issued | 300,000 | ||||||||||||||||||||||||||||||||
Common Stock [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||||
Subsequent Events [Line Items] | |||||||||||||||||||||||||||||||||
Conversion of Stock, Shares Issued | 115 | 68,538 | 62,856 | 62,389 | |||||||||||||||||||||||||||||
Common Class A [Member] | Subsequent Event [Member] | |||||||||||||||||||||||||||||||||
Subsequent Events [Line Items] | |||||||||||||||||||||||||||||||||
Conversion of stock, shares converted (in shares) | 1,000 |
Nature of Business and Summar_4
Nature of Business and Summary of Significant Accounting Policies, Restricted Cash (Q2) (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Aug. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Aug. 31, 2017 | Aug. 31, 2016 |
Cash and Cash Equivalents and Restricted Cash [Abstract] | |||||||
Cash and cash equivalents | $ 5,019,000 | $ 3,946,000 | $ 199,674 | $ 73,642 | $ 1,442 | $ 10,197 | |
Restricted cash | 6,243,000 | 0 | |||||
Total cash and cash equivalents and restricted cash | $ 11,262,000 | $ 3,946,000 | $ 113,000 | $ 157,000 |
Nature of Business and Summar_5
Nature of Business and Summary of Significant Accounting Policies, Property and Equipment (Q2) (Details) | 6 Months Ended |
Jun. 30, 2019 | |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 7 years |
Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 7 years |
Nature of Business and Summar_6
Nature of Business and Summary of Significant Accounting Policies, Income Taxes (Q2) (Details) | Dec. 22, 2017 | Dec. 21, 2017 | Jun. 30, 2019 | Dec. 22, 2017 | Jun. 30, 2019 | Aug. 31, 2018 | Aug. 31, 2017 |
Income Taxes [Abstract] | |||||||
Effective tax rate | 0.00% | 0.00% | |||||
Federal statutory rate | 21.00% | 35.00% | 21.00% | 35.00% | 21.00% | 34.00% |
Nature of Business and Summar_7
Nature of Business and Summary of Significant Accounting Policies, Revenue (Q2) (Details) | 6 Months Ended |
Jun. 30, 2019USD ($)Points | |
Direct-to-Consumer [Abstract] | |
Product warranty period | 60 days |
Returns period used for estimating liability | 2 months |
Loyalty Program [Abstract] | |
Points earned for every $1 spent - Tier 1 | 6 |
Points earned for every $1 spent - Tier 2 | 12 |
Number of points redeemable for customers to receive gift code | 500 |
Value of gift code receivable by customers on redemption of five hundred points earned | $ | $ 5 |
Nature of Business and Summar_8
Nature of Business and Summary of Significant Accounting Policies, Advertising, Research and Development (Q2) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Advertising [Abstract] | ||||
Advertising costs | $ 2.3 | $ 1.2 | $ 3.5 | $ 2.2 |
Research and Development [Abstract] | ||||
Research and development | $ 0 | $ 0 |
Nature of Business and Summar_9
Nature of Business and Summary of Significant Accounting Policies, Shipping and Handling/Freight Out (Q2) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Shipping and Handling [Abstract] | ||||
Shipping and handling costs | $ 6,000 | $ 7,000 | $ 1,200 | $ 1,300 |
Net sales | 4,084 | 3,817 | 7,635 | 7,064 |
Shipping and Handling [Member] | ||||
Shipping and Handling [Abstract] | ||||
Net sales | $ 200 | $ 300 | $ 400 | $ 600 |
Nature of Business and Summa_10
Nature of Business and Summary of Significant Accounting Policies, Segment Information (Q2) (Details) | 6 Months Ended |
Jun. 30, 2019Segment | |
Segment Information [Abstract] | |
Number of segment | 1 |
Nature of Business and Summa_11
Nature of Business and Summary of Significant Accounting Policies, Recently Issued Accounting Pronouncements (Q2) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | ||
Right-of-use asset | $ 840 | $ 0 |
Lease liability | $ 852 | |
ASU 842 [Member] | ||
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | ||
Right-of-use asset | 500 | |
Lease liability | $ 500 |
Acquisition of TruPet LLC and_3
Acquisition of TruPet LLC and Bona Vida, Inc. (Q2) (Details) - USD ($) | May 06, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 |
Acquisition [Abstract] | ||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||
Number of member units retired (in shares) | (914,919) | |||||||
Purchase and retirement of common stock (in shares) | (1,011,748) | |||||||
Loss on acquisition | $ 149,988,000 | $ 0 | $ 149,988,000 | $ 0 | ||||
Current Assets | ||||||||
Cash and cash equivalents | $ 1,930,000 | |||||||
Restricted cash | 25,000 | |||||||
Accounts receivable | 30,000 | |||||||
Intercompany receivables | 6,199,000 | |||||||
Inventories | 193,000 | |||||||
Prepaid expenses and other current assets | 399,000 | |||||||
Total Current Assets | 8,776,000 | |||||||
Intangible assets, net of amortization | 986,000 | |||||||
Other assets | 74,000 | |||||||
Total Assets | 9,836,000 | |||||||
Current Liabilities | ||||||||
Warrant derivative liability | 2,111,000 | |||||||
Accounts payable & accrued liabilities | 2,140,000 | |||||||
Long term debt, current portion | 6,200,000 | |||||||
Total Current Liabilities | 10,451,000 | |||||||
Total Liabilities | 10,451,000 | |||||||
Redeemable Series E Preferred Stock | 20,059,000 | |||||||
TruPet, LLC [Member] | ||||||||
Acquisition [Abstract] | ||||||||
Number of shares issued (in shares) | $ 15,027,533 | |||||||
Outstanding interests acquired | 93.00% | 7.00% | 7.00% | 7.00% | ||||
Number of member units retired (in shares) | (914,919) | |||||||
Purchase and retirement of common stock (in shares) | (1,011,748) | |||||||
Fair value of net assets acquired | $ 19,500,000 | |||||||
Loss on acquisition | $ 38,200,000 | |||||||
TruPet, LLC [Member] | Better Choice Company [Member] | ||||||||
Acquisition [Abstract] | ||||||||
Percentage ownership after acquisition | 38.00% | |||||||
Better Choice Company [Member] | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ 1,546,000 | |||||||
Intercompany receivables | 6,161,000 | |||||||
Prepaid expenses and other current assets | 52,000 | |||||||
Total Current Assets | 7,759,000 | |||||||
Intangible assets, net of amortization | 986,000 | |||||||
Total Assets | 8,745,000 | |||||||
Current Liabilities | ||||||||
Warrant derivative liability | 2,111,000 | |||||||
Accounts payable & accrued liabilities | 2,071,000 | |||||||
Long term debt, current portion | 6,200,000 | |||||||
Total Current Liabilities | 10,382,000 | |||||||
Total Liabilities | 10,382,000 | |||||||
Redeemable Series E Preferred Stock | 20,059,000 | |||||||
Bona Vida, Inc. [Member] | ||||||||
Acquisition [Abstract] | ||||||||
Number of shares issued (in shares) | $ 18,003,274 | |||||||
Outstanding interests acquired | 100.00% | |||||||
Fair value of net assets acquired | $ 1,000,000 | |||||||
Loss on acquisition | 107,000,000 | |||||||
Current Assets | ||||||||
Cash and cash equivalents | 384,000 | |||||||
Restricted cash | 25,000 | |||||||
Accounts receivable | 30,000 | |||||||
Intercompany receivables | 38,000 | |||||||
Inventories | 193,000 | |||||||
Prepaid expenses and other current assets | 347,000 | |||||||
Total Current Assets | 1,017,000 | |||||||
Other assets | 74,000 | |||||||
Total Assets | 1,091,000 | |||||||
Current Liabilities | ||||||||
Warrant derivative liability | 0 | |||||||
Accounts payable & accrued liabilities | 69,000 | |||||||
Total Current Liabilities | 69,000 | |||||||
Total Liabilities | 69,000 | |||||||
Redeemable Series E Preferred Stock | $ 0 | |||||||
Bona Vida, Inc. [Member] | Better Choice Company [Member] | ||||||||
Acquisition [Abstract] | ||||||||
Percentage ownership after acquisition | 46.00% |
Inventories (Q2) (Details)
Inventories (Q2) (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 |
Inventories [Abstract] | ||||
Food, treats and supplements | $ 1,682,000 | $ 1,301,000 | ||
Other products and accessories | 87,000 | 191,000 | ||
Inventory packaging and supplies | 168,000 | 133,000 | ||
Inventories, gross | 1,937,000 | 1,625,000 | ||
Inventory reserve | (230,000) | (68,000) | ||
Inventories, net | $ 1,707,000 | $ 1,557,000 | $ 9,402 | $ 14,882 |
Property and Equipment (Q2) (De
Property and Equipment (Q2) (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, and equipment, gross | $ 138 | $ 109 |
Accumulated depreciation | (80) | (38) |
Property, and equipment, net | 59 | 71 |
Warehouse Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, and equipment, gross | 49 | 49 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, and equipment, gross | 14 | 14 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, and equipment, gross | $ 75 | $ 46 |
Operating Leases (Q2) (Details)
Operating Leases (Q2) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)$ / ft² | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | |||||
Right-of-use asset | $ 840 | $ 840 | $ 0 | ||
Lease liability | 852 | 852 | |||
Rent expense for operating leases | 100 | $ 100 | 100 | $ 100 | |
Assets [Abstract] | |||||
Non-current assets | 840 | 840 | |||
Total operating lease assets | 840 | 840 | 0 | ||
Current [Abstract] | |||||
Operating lease liability, Current | (262) | (262) | 0 | ||
Non-current [Abstract] | |||||
Operating lease liability, Non-current | (590) | (590) | 0 | ||
Total operating lease liabilities | (852) | (852) | |||
Maturity of Lease Liabilities [Abstract] | |||||
Remainder of 2019 | 147 | 147 | |||
2020 | 299 | 299 | |||
2021 | 303 | 303 | |||
2022 | 169 | 169 | |||
Total undiscounted minimum future lease payments | 918 | 918 | |||
Less: imputed interest | 66 | 66 | |||
Present value of lease liabilities | $ 852 | $ 852 | |||
Office and Warehouse Facilities [Member] | |||||
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | |||||
Annual escalation clause | 3.50% | ||||
Lease renewal term | 5 years | 5 years | |||
Original Office and Warehouse Facilities [Member] | |||||
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | |||||
Base rent (per square foot) | $ / ft² | 13.02 | ||||
Additional Office and Warehouse Facilities in 2017 [Member] | |||||
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | |||||
Base rent (per square foot) | $ / ft² | 15.50 | ||||
Additional Office and Warehouse Facilities in 2019 [Member] | Minimum [Member] | |||||
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | |||||
Annual escalation clause | 2.00% | ||||
Additional Office and Warehouse Facilities in 2019 [Member] | Maximum [Member] | |||||
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | |||||
Annual escalation clause | 5.00% | ||||
Additional Office Facilities [Member] | |||||
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | |||||
Lease term | 3 years | 3 years | |||
Base monthly rental rates | $ 8,856 | ||||
Additional Warehouse Facilities [Member] | |||||
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | |||||
Lease term | 3 years | 3 years | |||
Base monthly rental rates | $ 4,492 | ||||
ASU 842 [Member] | |||||
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | |||||
Right-of-use asset | 500 | ||||
Lease liability | 500 | ||||
Assets [Abstract] | |||||
Total operating lease assets | 500 | ||||
Non-current [Abstract] | |||||
Total operating lease liabilities | (500) | ||||
Maturity of Lease Liabilities [Abstract] | |||||
Present value of lease liabilities | $ 500 |
License Intangibles and Royal_3
License Intangibles and Royalties, Elvis Presley Enterprises, LLC (Q2) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | May 06, 2019 | |
License Agreement [Abstract] | |||||
Sales related to products | $ 4,084 | $ 3,817 | $ 7,635 | $ 7,064 | |
Guaranteed Minimum Royalty Payments [Abstract] | |||||
2019-2020 | 1,500 | 1,500 | |||
2021 | 1,000 | 1,000 | |||
2022 | 1,125 | 1,125 | |||
2023 | 1,250 | 1,250 | |||
2024 | 1,500 | 1,500 | |||
2025 | 1,750 | $ 1,750 | |||
Elvis Presley Enterprises, LLC [Member] | |||||
License Agreement [Abstract] | |||||
License agreement, fair value | $ 1,000 | ||||
License expiration date | Dec. 31, 2025 | ||||
Royalty quarterly rate, net retail sales | 5.00% | ||||
Royalty quarterly rate, net wholesale sales | 10.00% | ||||
Prepaid expenses | 600 | $ 600 | |||
Elvis Presley Enterprises, LLC [Member] | Elvis Presley Hound Dog [Member] | |||||
License Agreement [Abstract] | |||||
Sales related to products | $ 0 | $ 0 |
License Intangibles and Royal_4
License Intangibles and Royalties, Orapup (Q2) (Details) - Orapup [Member] - USD ($) $ in Millions | Nov. 30, 2018 | Jun. 30, 2019 | Nov. 30, 2015 |
License Agreement [Abstract] | |||
Royalty rate | 10.00% | ||
Royalty, amount of sales threshold | $ 2.5 | ||
Term of royalty agreement | 3 years | ||
Royalty rate after sales threshold amount reached | 2.00% | ||
Royalty obligation settlement | $ 0.1 | ||
Royalty obligation | $ 0 |
Line of Credit and Debt (Q2) (D
Line of Credit and Debt (Q2) (Details) - USD ($) | May 06, 2019 | May 31, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 |
Line of Credit and Debt [Abstract] | |||||||||
Long-term debt, current portion | $ 6,200,000 | $ 6,200,000 | $ 1,600,000 | $ 0 | $ 233,011 | ||||
Interest expenses | 100,000 | $ 100,000 | 100,000 | $ 100,000 | |||||
Line of Credit [Member] | |||||||||
Line of Credit and Debt [Abstract] | |||||||||
Maximum borrowing capacity | $ 2,000,000 | 4,600,000 | |||||||
Line of credit | 0 | 0 | $ 4,600,000 | ||||||
Line of Credit [Member] | LIBOR [Member] | |||||||||
Line of Credit and Debt [Abstract] | |||||||||
Variable interest rate | 3.00% | ||||||||
Note Payable [Member] | |||||||||
Line of Credit and Debt [Abstract] | |||||||||
Long-term debt, interest rate | 26.60% | ||||||||
Term principal and interest due | 30 days | ||||||||
Interest paid | 0 | ||||||||
Long-term debt, current portion | $ 0 | $ 0 | $ 1,600,000 | ||||||
Revolving Credit Agreement [Member] | |||||||||
Line of Credit and Debt [Abstract] | |||||||||
Maximum borrowing capacity | $ 6,200,000 | ||||||||
Fee paid upon closing | $ 10,000 | ||||||||
Late charge percentage | 5.00% | ||||||||
Late charge period | 10 days | ||||||||
Required amount of deposit at bank | $ 6,200,000 | ||||||||
Revolving Credit Agreement [Member] | LIBOR [Member] | |||||||||
Line of Credit and Debt [Abstract] | |||||||||
Variable interest rate | 3.70% |
Warrant Derivative Liability, P
Warrant Derivative Liability, Private Placement (Q2) (Details) - USD ($) | May 06, 2019 | Jan. 08, 2019 | Dec. 12, 2018 | Oct. 18, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Nov. 30, 2018 |
Private Placement Offering [Abstract] | |||||||||
Units issued in private placement offering (in shares) | 1,425,641 | ||||||||
Unit price (in dollars per share) | $ 1.95 | $ 11.18 | $ 11.18 | ||||||
Gross proceeds from private placement offering | $ 2,800,000 | $ 150,000 | $ 0 | ||||||
Share issuance costs | 122,741 | ||||||||
Net proceeds from private placement offering | $ 2,700,000 | ||||||||
Shares issued in private placement offering (in shares) | 25,641 | 1,400,000 | 2,846,356 | 1,400,000 | |||||
Warrants, exercisable period | 2 years | ||||||||
Warrant exercise price (in dollars per share) | $ 3.90 | $ 3.90 | $ 3.90 | ||||||
Common Stock [Member] | |||||||||
Private Placement Offering [Abstract] | |||||||||
Number of shares in contained in one unit (in shares) | 1 | 1 | |||||||
Net proceeds from private placement offering | $ 100,000 | $ 2,600,000 | |||||||
Shares issued in private placement offering (in shares) | 5,744,991 | 25,641 | 1,400,000 | 1,400,000 | |||||
Warrants settleable in shares, number of shares (in shares) | 712,823 | ||||||||
Warrant [Member] | |||||||||
Private Placement Offering [Abstract] | |||||||||
Number of shares in contained in one unit (in shares) | 0.5 | 0.5 | |||||||
Warrants, exercisable period | 2 years | ||||||||
Warrant exercise price (in dollars per share) | $ 3.90 |
Warrant Derivative Liability, F
Warrant Derivative Liability, Fair Value of Derivative Liabilities (Q2) (Details) - USD ($) $ in Thousands | 2 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | |
Warrant Liability [Abstract] | |||
Assumption of warrants pursuant to May 6, 2019 acquisition of Better Choice Company | $ 2,110 | $ 0 | |
Change in fair value of derivative liability | 193 | 193 | $ 0 |
Balance as of June 30, 2019 | $ 2,304 | $ 2,304 |
Warrant Derivative Liability,_2
Warrant Derivative Liability, Fair Value Measurements and Valuation Techniques (Q2) (Details) | Jun. 30, 2019$ / shares | May 06, 2019$ / shares | Dec. 31, 2018 |
Volatility [Member] | Minimum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |||
Derivative liability | 198.1 | ||
Volatility [Member] | Maximum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |||
Derivative liability | 2.078 | ||
Warrant [Member] | Stock Price [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |||
Derivative liability | 6.35 | 6 | |
Warrant [Member] | Exercise Price [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |||
Derivative liability | 3.90 | 3.90 | |
Warrant [Member] | Remaining Term (in Years) [Member] | Minimum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |||
Derivative liability | 1.45 | 1.60 | |
Warrant [Member] | Remaining Term (in Years) [Member] | Maximum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |||
Derivative liability | 1.53 | 1.68 | |
Warrant [Member] | Volatility [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |||
Derivative liability | 0.65 | 0.64 | |
Warrant [Member] | Risk-free Interest Rate [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |||
Derivative liability | 0.0198 | 0.0239 |
Loyalty Program Provision (Q2)
Loyalty Program Provision (Q2) (Details) | 6 Months Ended | |
Jun. 30, 2019USD ($)Points | Dec. 31, 2018USD ($) | |
Loyalty Program Provision [Abstract] | ||
Points earned for every $1 spent - Tier 1 | 6 | |
Points earned for every $1 spent - Tier 2 | 12 | |
Number of points redeemable for customers to receive gift code | 500 | |
Value of gift code receivable by customers on redemption of five hundred points earned | $ | $ 5 | |
Percentage of liability provision for accrued and unredeemed points | 45.00% | |
Estimated loyalty program awards, earned but not redeemed | $ | $ 200,000 | $ 100,000 |
Other Liabilities (Q2) (Details
Other Liabilities (Q2) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Other Liabilities [Abstract] | |||||
Interest rate on issued credit cards, for purchases | 22.00% | 22.00% | 22.00% | 22.00% | |
Interest rate on issued credit cards, for cash advances | 24.24% | 24.24% | 24.24% | 24.24% | |
Future receivables sold | $ 2,000 | ||||
Proceeds from sale of future receivables | 1,900 | ||||
Other Liabilities [Abstract] | |||||
Opening balance | $ 1,899 | $ 0 | 0 | ||
Advance of outstanding amounts | 2,414 | ||||
Payments | (1,899) | (787) | |||
Advance fixed fee | 271 | ||||
Closing balance | $ 0 | 0 | 1,899 | ||
Advance #1 [Member] | |||||
Other Liabilities [Abstract] | |||||
Opening balance | 0 | 0 | 0 | ||
Advance of outstanding amounts | 399 | ||||
Payments | (429) | ||||
Advance fixed fee | 30 | ||||
Closing balance | 0 | 0 | 0 | ||
Advance #2 [Member] | |||||
Other Liabilities [Abstract] | |||||
Opening balance | 0 | 0 | 0 | ||
Advance of outstanding amounts | 965 | ||||
Payments | (256) | ||||
Rollover to Advance #3 | (824) | ||||
Advance fixed fee | 115 | ||||
Closing balance | 0 | 0 | 0 | ||
Advance #3 [Member] | |||||
Other Liabilities [Abstract] | |||||
Opening balance | 1,899 | $ 0 | 0 | ||
Advance of outstanding amounts | 1,050 | ||||
Payments | (1,899) | (102) | |||
Rollover to Advance #3 | 824 | ||||
Advance fixed fee | 126 | ||||
Closing balance | $ 0 | $ 0 | $ 1,899 |
Redeemable Preferred Stock (Q_3
Redeemable Preferred Stock (Q2) (Details) - USD ($) | May 13, 2019 | May 10, 2019 | May 06, 2019 | Jan. 08, 2019 | Dec. 12, 2018 | Oct. 22, 2018 | Oct. 18, 2018 | Dec. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | May 06, 2019 | Apr. 22, 2019 | Aug. 31, 2018 | Dec. 31, 2017 | Aug. 31, 2017 |
Redeemable Preferred Stock [Abstract] | |||||||||||||||||||
Preferred stock, shares designated (in shares) | 20,000,000 | 20,000,000 | 20,000,000 | 4,000,000 | 20,000,000 | ||||||||||||||
Preferred stock, stated value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||
Number [Abstract] | |||||||||||||||||||
Issued (in shares) | 25,641 | 1,400,000 | 2,846,356 | 1,400,000 | |||||||||||||||
Converted to common stock (in shares) | (925,758) | (212,678) | |||||||||||||||||
Balance (in shares) | 2,633,678 | 2,633,678 | |||||||||||||||||
Balance (in shares) | 2,633,678 | 1,707,920 | 1,707,920 | 1,707,920 | 2,633,678 | ||||||||||||||
Amount [Abstract] | |||||||||||||||||||
Issued | $ 15,675,790 | $ 2,023,000 | $ 150,000 | $ 1,400 | $ 4,668,000 | ||||||||||||||
Converted to Common Stock | $ (7,052,000) | $ (152,000) | |||||||||||||||||
Balance | 1,871,000 | 20,059,000 | |||||||||||||||||
Purchase price adjustment | 18,188,000 | ||||||||||||||||||
Balance | $ 20,059,000 | $ 13,007,000 | $ 13,007,000 | $ 13,007,000 | $ 20,059,000 | ||||||||||||||
Common Stock [Member] | |||||||||||||||||||
Number [Abstract] | |||||||||||||||||||
Issued (in shares) | 5,744,991 | 25,641 | 1,400,000 | 1,400,000 | |||||||||||||||
Amount [Abstract] | |||||||||||||||||||
Issued | $ 5,745 | $ 1,400 | |||||||||||||||||
Series E Convertible Preferred Stock [Member] | |||||||||||||||||||
Redeemable Preferred Stock [Abstract] | |||||||||||||||||||
Preferred stock, shares designated (in shares) | 2,900,000 | 2,900,000 | 2,900,000 | 2,900,000 | 2,900,000 | 2,900,000 | |||||||||||||
Preferred stock, stated value (in dollars per share) | $ 0.99 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||
Preferred stock, conversion price (in dollars per share) | $ 0.78 | ||||||||||||||||||
Preferred stock, dividend rate | 10.00% | ||||||||||||||||||
Preferred stock, mandatory redemption price in percentage of stated value | 125.00% | ||||||||||||||||||
Preferred stock, mandatory redemption price (in dollars per share) | $ 1.23 | ||||||||||||||||||
Preferred stock, fair value (in dollar per share) | $ 6 | $ 6 | |||||||||||||||||
Preferred stock, shares converted (in shares) | 236,364 | 689,394 | 925,758 | 925,758 | |||||||||||||||
Number of common stock, shares issued upon conversion of preferred stock (in shares) | 300,000 | 875,000 | |||||||||||||||||
Number [Abstract] | |||||||||||||||||||
Issued (in shares) | 2,846,355.54 | ||||||||||||||||||
Balance (in shares) | 2,846,355.54 | 1,707,920 | 1,707,920 | 2,846,355.54 | 1,707,920 | 2,846,355.54 | |||||||||||||
Amount [Abstract] | |||||||||||||||||||
Issued | $ 2,022,766 | ||||||||||||||||||
Series E Convertible Preferred Stock [Member] | Common Stock [Member] | |||||||||||||||||||
Redeemable Preferred Stock [Abstract] | |||||||||||||||||||
Preferred stock, mandatory redemption price in percentage of market price | 75.00% |
Stockholders' Deficit (Q2) (Det
Stockholders' Deficit (Q2) (Details) - shares | May 06, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
Number of shares issued (in shares) | 15,027,533 | ||
Tru Pet LLC [Member] | |||
Business Acquisition [Line Items] | |||
Number of shares issued (in shares) | 15,027,533 | ||
Outstanding interests acquired | 93.00% | 7.00% | 7.00% |
Bona Vida, Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Number of shares issued (in shares) | 18,003,273 | ||
Outstanding interests acquired | 100.00% |
Stockholders' Deficit, Preferre
Stockholders' Deficit, Preferred Units/Stock (Q2) (Details) - USD ($) | May 13, 2019 | May 10, 2019 | May 06, 2019 | Feb. 12, 2019 | Dec. 12, 2018 | Dec. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2019 | Oct. 22, 2018 | Aug. 31, 2018 | Aug. 31, 2017 |
Class of Stock [Line Items] | |||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||||
Unit price (in dollars per share) | $ 1.95 | $ 11.18 | |||||||||
Net proceeds from issuance of stock | $ 2,700,000 | ||||||||||
Share issuance costs | $ 122,741 | ||||||||||
Shares outstanding (in shares) | 2,633,678 | 1,707,920 | 1,707,920 | ||||||||
Series A Preferred Units [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Shares issued in private placement (in shares) | 62,500 | 2,162,536 | |||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Unit price (in dollars per share) | $ 2.40 | $ 2.40 | |||||||||
Net proceeds from issuance of stock | $ 200,000 | $ 4,700,000 | |||||||||
Share issuance costs | $ 500,000 | ||||||||||
Shares issued in stock conversion (in shares) | 2,460,517 | ||||||||||
Shares outstanding (in shares) | 1,000 | 1,000 | |||||||||
Series E Preferred Stock [Member] | |||||||||||
Class of Stock [Line Items] | |||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.99 | $ 0.001 | $ 0.001 | |||||||
Shares issued in stock conversion (in shares) | 300,000 | 875,000 | |||||||||
Shares acquired (in shares) | 2,633,678 | ||||||||||
Shares converted (in shares) | 236,364 | 689,394 | 925,758 | 925,758 | |||||||
Shares outstanding (in shares) | 2,846,355.54 | 1,707,920 | 1,707,920 | 0 | 0 | ||||||
Preferred stock, shares issuable upon conversion (in shares) | 2,167,745 | 2,167,745 |
Stockholders' Deficit, Common S
Stockholders' Deficit, Common Stock (Q2) (Details) | May 06, 2019USD ($)$ / sharesshares | May 05, 2019$ / sharesshares | Mar. 15, 2019 | Jan. 08, 2019USD ($)shares | Dec. 12, 2018USD ($)$ / sharesshares | Nov. 18, 2018shares | Oct. 18, 2018shares | May 05, 2019USD ($)shares | Dec. 31, 2018USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018shares | Dec. 31, 2018USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018USD ($)shares | Apr. 22, 2019shares | Nov. 30, 2018shares | Oct. 29, 2018USD ($) | Aug. 31, 2018shares | Aug. 31, 2017shares |
Common Stock [Abstract] | |||||||||||||||||||
Common stock, shares authorized (in shares) | 580,000,000 | 88,000,000 | 580,000,000 | 88,000,000 | 88,000,000 | 580,000,000 | 580,000,000 | ||||||||||||
Common stock, shares issued (in shares) | 11,661,485 | 43,168,161 | 11,661,485 | 43,168,161 | 3,064,763 | 3,008,730 | |||||||||||||
Common stock, shares outstanding (in shares) | 11,661,485 | 43,168,161 | 11,661,485 | 43,168,161 | 3,064,763 | 3,008,730 | |||||||||||||
Reverse stock split ratio | 0.0385 | ||||||||||||||||||
Units issued in private placement offering (in shares) | 1,425,641 | ||||||||||||||||||
Unit price (in dollars per share) | $ / shares | $ 1.95 | $ 11.18 | $ 11.18 | ||||||||||||||||
Gross proceeds from private placement offering | $ | $ 2,800,000 | $ 150,000 | $ 0 | ||||||||||||||||
Share issuance costs | $ | 122,741 | ||||||||||||||||||
Net proceeds from private placement offering | $ | $ 2,700,000 | ||||||||||||||||||
Shares issued in private placement offering (in shares) | 25,641 | 1,400,000 | 2,846,356 | 1,400,000 | |||||||||||||||
Warrants, exercisable period | 2 years | ||||||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 3.90 | 3.90 | $ 3.90 | ||||||||||||||||
Filing period of registration statement following closing date | 60 days | ||||||||||||||||||
Equity awards issued (in shares) | 979,716 | 0 | 0 | ||||||||||||||||
Equity awards issued, weighted average value per share (in dollars per share) | $ / shares | $ 2.26 | ||||||||||||||||||
Equity awards vesting period | 3 years | ||||||||||||||||||
Share-based compensation expense as a result of immediate vesting | $ | $ 2,200,000 | $ 2,400,000 | |||||||||||||||||
Equity awards outstanding (in shares) | 0 | 0 | |||||||||||||||||
Number of member units retired (in shares) | (914,919) | ||||||||||||||||||
Purchase and retirement of common stock (in shares) | (1,011,748) | ||||||||||||||||||
Value of shares retired | $ | $ 2,200,000 | $ 27,271 | $ 2,200,000 | ||||||||||||||||
Stock price (in dollars per share) | $ / shares | $ 1.95 | $ 11.18 | $ 11.18 | ||||||||||||||||
Tru Pet LLC [Member] | |||||||||||||||||||
Common Stock [Abstract] | |||||||||||||||||||
Initial ownership interest acquired | 93.00% | 7.00% | 7.00% | 7.00% | 7.00% | ||||||||||||||
Number of member units retired (in shares) | (914,919) | ||||||||||||||||||
Purchase and retirement of common stock (in shares) | (1,011,748) | ||||||||||||||||||
Bona Vida, Inc. [Member] | |||||||||||||||||||
Common Stock [Abstract] | |||||||||||||||||||
Unit price (in dollars per share) | $ / shares | $ 6 | ||||||||||||||||||
Initial ownership interest acquired | 100.00% | ||||||||||||||||||
Amount of Change of Control payment | $ | $ 500,000 | ||||||||||||||||||
Number of shares of common stock to be issued in consideration for Change of Control payment (in shares) | 100,000 | ||||||||||||||||||
Stock price (in dollars per share) | $ / shares | $ 6 | ||||||||||||||||||
PIPE Transaction [Member] | |||||||||||||||||||
Common Stock [Abstract] | |||||||||||||||||||
Units issued in private placement offering (in shares) | 5,744,991 | ||||||||||||||||||
Unit price (in dollars per share) | $ / shares | $ 3 | ||||||||||||||||||
Net proceeds from private placement offering | $ | $ 15,700,000 | ||||||||||||||||||
Stock price (in dollars per share) | $ / shares | $ 3 | ||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||
Common Stock [Abstract] | |||||||||||||||||||
Number of shares contained in one unit (in shares) | 1 | 1 | |||||||||||||||||
Net proceeds from private placement offering | $ | $ 100,000 | $ 2,600,000 | |||||||||||||||||
Shares issued in private placement offering (in shares) | 5,744,991 | 25,641 | 1,400,000 | 1,400,000 | |||||||||||||||
Purchase and retirement of common stock (in shares) | (1,011,748) | (1,048,904) | |||||||||||||||||
Value of shares retired | $ | $ 1,012 | $ 1,049 | |||||||||||||||||
Common Stock [Member] | Consultant [Member] | |||||||||||||||||||
Common Stock [Abstract] | |||||||||||||||||||
Equity awards issued (in shares) | 303,427 | ||||||||||||||||||
Common Stock [Member] | Consultant [Member] | First Half [Member] | |||||||||||||||||||
Common Stock [Abstract] | |||||||||||||||||||
Percentage of equity awards vested on grant date | 50.00% | ||||||||||||||||||
Common Stock [Member] | Consultant [Member] | Second Half [Member] | |||||||||||||||||||
Common Stock [Abstract] | |||||||||||||||||||
Equity awards vesting period | 2 years | ||||||||||||||||||
Common Stock [Member] | PIPE Transaction [Member] | |||||||||||||||||||
Common Stock [Abstract] | |||||||||||||||||||
Number of shares contained in one unit (in shares) | 1 | ||||||||||||||||||
Warrant [Member] | |||||||||||||||||||
Common Stock [Abstract] | |||||||||||||||||||
Number of shares contained in one unit (in shares) | 0.5 | 0.5 | |||||||||||||||||
Warrants, exercisable period | 2 years | 2 years | |||||||||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 3.90 | $ 3.90 |
Stockholders' Deficit, Stock Op
Stockholders' Deficit, Stock Options (Q2) (Details) $ / shares in Units, $ in Millions | Jun. 29, 2019Installment$ / sharesshares | May 21, 2019Installment$ / sharesshares | May 06, 2019$ / sharesshares | Dec. 21, 2018$ / shares | Jun. 30, 2019$ / sharesshares | Jun. 30, 2019USD ($) | Dec. 31, 2018$ / sharesshares | Jun. 30, 2019USD ($)shares | Aug. 31, 2018$ / sharesshares | Aug. 31, 2017$ / sharesshares |
Stock Options [Abstract] | ||||||||||
Shares acquired (in shares) | shares | 5,288,462 | |||||||||
Shares acquired, exercise price (in dollars per share) | $ / shares | $ 5 | |||||||||
Granted (in shares) | shares | 93,000 | 38,462 | 0 | 0 | ||||||
Granted (in dollars per share) | $ / shares | $ 7.50 | $ 6.76 | $ 0 | $ 0 | ||||||
Share-based compensation expense as a result of immediate vesting | $ | $ 2.2 | $ 2.4 | ||||||||
Stock Options [Member] | ||||||||||
Stock Options [Abstract] | ||||||||||
Granted (in dollars per share) | $ / shares | $ 6.76 | |||||||||
Award exercise period | 5 years | |||||||||
2019 Incentive Award Plan [Member] | ||||||||||
Stock Options [Abstract] | ||||||||||
Granted (in shares) | shares | 93,000 | |||||||||
2019 Incentive Award Plan [Member] | Stock Options [Member] | ||||||||||
Stock Options [Abstract] | ||||||||||
Award exercise period | 10 years | |||||||||
2019 Incentive Award Plan [Member] | Stock Options [Member] | Management [Member] | ||||||||||
Stock Options [Abstract] | ||||||||||
Shares acquired (in shares) | shares | 3,750,000 | |||||||||
Shares acquired, exercise price (in dollars per share) | $ / shares | $ 5 | |||||||||
Award monthly vesting percentage | 4.167% | |||||||||
2019 Incentive Award Plan [Member] | Stock Options [Member] | Employee [Member] | ||||||||||
Stock Options [Abstract] | ||||||||||
Granted (in shares) | shares | 3,000 | 30,000 | ||||||||
Granted (in dollars per share) | $ / shares | $ 7.50 | $ 7.50 | ||||||||
Award monthly vesting percentage | 2.778% | 2.778% | ||||||||
Award vesting percentage on first anniversary of grant date | 25.00% | 25.00% | ||||||||
Number of equal installments of vesting after first anniversary of grant date | Installment | 24 | 24 | ||||||||
2019 Incentive Award Plan [Member] | Stock Options [Member] | Non-Employee Director [Member] | ||||||||||
Stock Options [Abstract] | ||||||||||
Shares acquired (in shares) | shares | 1,500,000 | |||||||||
Shares acquired, exercise price (in dollars per share) | $ / shares | $ 5 | |||||||||
Award monthly vesting percentage | 4.167% | |||||||||
2019 Incentive Award Plan [Member] | Stock Options [Member] | Third-party Consultant [Member] | ||||||||||
Stock Options [Abstract] | ||||||||||
Granted (in shares) | shares | 60,000 | |||||||||
Granted (in dollars per share) | $ / shares | $ 7.50 | |||||||||
Award monthly vesting percentage | 2.778% |
Stockholders' Deficit, Option G
Stockholders' Deficit, Option Grants (Q2) (Details) - USD ($) $ / shares in Units, $ in Thousands | May 06, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | Aug. 31, 2018 | Aug. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Granted (in shares) | 93,000 | 38,462 | 0 | 0 | ||
Exercise price (in dollars per share) | $ 7.50 | $ 6.76 | $ 0 | $ 0 | ||
Dividend yield | 0.00% | 0.00% | ||||
2019 Incentive Award Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | 93,000 | |||||
Share-based payment expense | $ 14 | |||||
Authorized issuance shares of common stock (in shares) | 6,000,000 | |||||
Percent of common stock outstanding | 10.00% | |||||
2019 Incentive Award Plan [Member] | 5/21/2019 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Date of grant(s) | May 21, 2019 | |||||
Vesting period | 2 years | |||||
Granted (in shares) | 60,000 | |||||
Exercise price (in dollars per share) | $ 7.50 | |||||
Share-based payment expense | $ 9 | |||||
Risk-free rate | 2.28% | |||||
Volatility | 55.00% | |||||
Dividend yield | 0.00% | |||||
Expiry | 10 years | |||||
Remaining life | 9 years 10 months 24 days | |||||
2019 Incentive Award Plan [Member] | 5/21/2019 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Date of grant(s) | May 21, 2019 | |||||
Vesting period | 3 years | |||||
Granted (in shares) | 30,000 | |||||
Exercise price (in dollars per share) | $ 7.50 | |||||
Share-based payment expense | $ 5 | |||||
Risk-free rate | 2.28% | |||||
Volatility | 55.00% | |||||
Dividend yield | 0.00% | |||||
Expiry | 10 years | |||||
Remaining life | 9 years 10 months 24 days | |||||
2019 Incentive Award Plan [Member] | 6/29/2019 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Date of grant(s) | Jun. 29, 2019 | |||||
Vesting period | 3 years | |||||
Granted (in shares) | 3,000 | |||||
Exercise price (in dollars per share) | $ 7.50 | |||||
Share-based payment expense | $ 0 | |||||
Risk-free rate | 1.84% | |||||
Volatility | 56.00% | |||||
Dividend yield | 0.00% | |||||
Expiry | 10 years | |||||
Remaining life | 10 years |
Stockholders' Deficit, Signific
Stockholders' Deficit, Significant Terms of Options Outstanding (Q2) (Details) - $ / shares | 4 Months Ended | 6 Months Ended |
Dec. 31, 2018 | Jun. 30, 2019 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Range of exercise prices, lower range limit (in dollars per share) | $ 6.76 | |
Number of options outstanding (in shares) | 38,462 | |
Weighted average remaining contractual life | 4 years 357 days | |
Weighted average exercise price of outstanding options (in dollars per share) | $ 6.76 | |
Number of options, exercisable (in shares) | 0 | |
Weighted average exercise price of exercisable options (in dollars per share) | $ 0 | |
$5.00 - 7.50 [Member] | ||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||
Range of exercise prices, lower range limit (in dollars per share) | $ 5 | |
Range of exercise prices, upper range limit (in dollars per share) | $ 7.50 | |
Number of options outstanding (in shares) | 5,381,462 | |
Weighted average remaining contractual life | 9 years 9 months 18 days | |
Weighted average exercise price of outstanding options (in dollars per share) | $ 5.06 | |
Number of options, exercisable (in shares) | 260,545 | |
Weighted average exercise price of exercisable options (in dollars per share) | $ 5.04 |
Stockholders' Deficit, Transact
Stockholders' Deficit, Transactions Involving Options (Q2) (Details) - USD ($) | May 06, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 |
Number of Options [Abstract] | ||||||
Acquired (in shares) | 5,288,462 | |||||
Granted (in shares) | 93,000 | 38,462 | 0 | 0 | ||
Option outstanding (in shares) | 5,381,462 | 38,462 | 0 | 0 | 0 | |
Weighted Average Exercise Price [Abstract] | ||||||
Acquired (in dollars per share) | $ 5 | |||||
Granted (in dollars per share) | $ 7.50 | $ 6.76 | $ 0 | $ 0 | ||
Options outstanding (in dollars per share) | $ 5.04 | $ 6.76 | $ 0 | $ 0 | $ 0 | |
Options outstanding, intrinsic value | $ 34,200,000 | $ 170,002 |
Stockholders' Deficit, Warrants
Stockholders' Deficit, Warrants (Q2) (Details) - USD ($) $ / shares in Units, $ in Millions | 2 Months Ended | |||||
Jun. 30, 2019 | May 06, 2019 | Dec. 31, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | Aug. 31, 2016 | |
Number of Warrants [Abstract] | ||||||
Warrants Acquired (in shares) | 913,310 | |||||
Issued (in shares) | 5,744,991 | |||||
Exercised (in shares) | 0 | |||||
Canceled/ expired (in shares) | 0 | |||||
Warrants outstanding (in shares) | 6,658,301 | 700,000 | 463,631 | 0 | 0 | |
Weighted Average Exercise Price [Abstract] | ||||||
Warrants Acquired (in dollars per share) | $ 3.70 | |||||
Issued (in dollars per share) | $ 4.25 | |||||
Exercised (in dollars per share) | 0 | |||||
Canceled/ expired (in dollars per share) | 0 | |||||
Warrants outstanding (in dollars per share) | $ 4.39 | $ 3.90 | ||||
Warrants outstanding, intrinsic value | $ 13 |
Related Party Transactions an_2
Related Party Transactions and Material Service Agreements, Related Party Transactions (Q2) (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($)Member | |
Related Party Transactions [Abstract] | |||
Payment of finder's fee | $ 300,000 | ||
Number of members who own entity | Member | 1 | ||
Management Services [Member] | |||
Related Party Transactions [Abstract] | |||
Payments to related parties | $ 0 | $ 0 | |
Marketing Services [Member] | |||
Related Party Transactions [Abstract] | |||
Outstanding balances due to related party | 100,000 | $ 100,000 | |
Service contract termination clause | 30 days | ||
Financial Services [Member] | |||
Related Party Transactions [Abstract] | |||
Payments to related parties | 100,000 | $ 200,000 | |
Notice period to terminate agreement | 60 days | ||
Payments for agreement regarding financial operation | $ 21,160 | ||
Period of payment | 1 month | ||
Employment Agreement [Member] | |||
Related Party Transactions [Abstract] | |||
Payments to related parties | $ 100,000 | $ 200,000 | |
Term of agreement | 6 months | ||
Other Professional Services [Member] | |||
Related Party Transactions [Abstract] | |||
Payments to related parties | $ 0 | $ 400,000 |
Related Party Transactions an_3
Related Party Transactions and Material Service Agreements, Material Service Agreements (Q2) (Details) | May 06, 2019USD ($)shares | May 05, 2019shares | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($)shares | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($)shares | Dec. 31, 2018USD ($)Extension |
Other Commitments [Abstract] | |||||||
Common stock issued (in shares) | shares | 979,716 | 0 | 0 | ||||
Loss on acquisition | $ 149,988,000 | $ 0 | $ 149,988,000 | $ 0 | |||
Accounting Management Services [Member] | |||||||
Other Commitments [Abstract] | |||||||
Payments for accounting management services agreement | $ 8,370 | $ 2,600 | |||||
Period of payment | 14 days | 14 days | |||||
Payments related to agreement | 100,000 | $ 200,000 | |||||
Marketing Services [Member] | |||||||
Other Commitments [Abstract] | |||||||
Payments related to agreement | $ 200,000 | 400,000 | $ 200,000 | ||||
Placement and Selling Agent [Member] | |||||||
Other Commitments [Abstract] | |||||||
Payments related to agreement | $ 0 | $ 100,000 | |||||
Term of agreement | 6 months | ||||||
Agreement base fee | $ 0 | ||||||
Percentage of commission on cash proceeds | 5.00% | ||||||
Number of term extensions | Extension | 1 | ||||||
Term of extended agreement | 12 months | ||||||
Notice period to extend term before initial term expires | 60 days | ||||||
Stock issuance costs expensed | $ 100,000 | ||||||
Loss on acquisition | $ 4,800,000 | ||||||
Placement and Selling Agent [Member] | Common Stock [Member] | |||||||
Other Commitments [Abstract] | |||||||
Common stock issued (in shares) | shares | 798,492 |
Major Suppliers (Q2) (Details)
Major Suppliers (Q2) (Details) - Vendor | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Concentration Risk [Abstract] | ||
Number of vendors utilized to purchase inventory | 1 | 1 |
Number of vendors utilized for outsourced manufactured meals | 1 | 1 |
Cost of Goods [Member] | Supplier Concentration Risk [Member] | ||
Concentration Risk [Abstract] | ||
Percentage of purchased inventories | 83.00% | 72.00% |
Concentration of Credit Risk _2
Concentration of Credit Risk (Q2) (Details) | Jun. 30, 2019USD ($)Institution | Dec. 31, 2018USD ($) | Aug. 31, 2018USD ($) |
Concentration of Credit Risk [Abstract] | |||
Number of financial institutions | Institution | 1 | ||
Deposits in excess of FDIC insured limits | $ | $ 10,300,000 | $ 3,400,000 | $ 0 |
Net Loss per Share (Q2) (Detail
Net Loss per Share (Q2) (Details) - USD ($) | 2 Months Ended | 3 Months Ended | 4 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Jun. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | |
Numerator: [Abstract] | ||||||||||||
Net loss | $ (161,533,182) | $ (161,506,000) | $ (2,780,082) | $ (745,000) | $ (1,655,302) | $ (4,412,858) | $ (403,212) | $ (164,286,000) | $ (3,626,157) | $ (2,400,000) | $ (2,950,819) | $ (1,743,258) |
Less: Preferred Stock Dividends | (27,000) | 0 | (27,000) | 0 | ||||||||
Net loss attributable to Common Stockholders | $ (161,533,000) | $ (745,000) | $ (4,477,698) | $ (403,212) | $ (164,313,000) | $ (2,400,000) | $ (2,971,099) | $ (1,743,258) | ||||
Denominator: [Abstract] | ||||||||||||
Weighted average shares used in computing net loss per share attributable to Common Stockholders, basic and diluted (in shares) | 30,638,048 | 11,497,128 | 21,202,188 | 11,497,128 | ||||||||
Net loss per share attributable to Common Stockholders, basic and diluted (in dollars per share) | $ (5.27) | $ (0.06) | $ (1.49) | $ (0.13) | $ (7.75) | $ (0.21) | $ (0.98) | $ (0.58) |
Going Concern (Q2) (Details)
Going Concern (Q2) (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | |
Going Concern [Abstract] | ||||||||
Working capital | $ 600,000 | $ (7,330,882) | $ 600,000 | |||||
Non-cash stock compensation | $ 4,006,000 | $ 0 | 4,212,000 | $ 0 | ||||
Proceeds from the issuance of debt | $ 0 | $ 35,500 | $ 6,200,000 | $ 2,013,000 | $ 35,500 | $ 0 |
Subsequent Events (Q2) (Details
Subsequent Events (Q2) (Details) - USD ($) | Sep. 17, 2019 | Sep. 09, 2019 | Aug. 30, 2019 | Aug. 28, 2019 | Aug. 14, 2019 | Jul. 29, 2019 | Jun. 28, 2019 | May 10, 2019 | May 02, 2019 | Dec. 21, 2018 | Sep. 30, 2019 | May 05, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Aug. 31, 2018 | Aug. 31, 2017 | May 06, 2019 | Apr. 25, 2019 | Dec. 12, 2018 |
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Granted (in shares) | 93,000 | 38,462 | 0 | 0 | |||||||||||||||||||
Exercise price (in dollars per share) | $ 7.50 | $ 6.76 | $ 0 | $ 0 | |||||||||||||||||||
Number of common shares issued for services | $ 2,227,006 | $ 600,000 | $ 206,166 | $ 430,811 | |||||||||||||||||||
Vesting period | 3 years | ||||||||||||||||||||||
Warrant exercise price (in dollars per share) | $ 3.90 | $ 3.90 | $ 3.90 | ||||||||||||||||||||
Proceeds from private issuance of public equity | $ 15,676,000 | $ 0 | |||||||||||||||||||||
Warrant [Member] | |||||||||||||||||||||||
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Warrant exercise price (in dollars per share) | $ 3.90 | $ 3.90 | |||||||||||||||||||||
Common Stock [Member] | |||||||||||||||||||||||
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Number of common shares issued for services (in shares) | 1,099,822 | 100,000 | 18,964 | 164,357 | |||||||||||||||||||
Number of common shares issued for services | $ 1,100 | $ 100 | $ 19 | $ 164 | |||||||||||||||||||
Stock Options [Member] | |||||||||||||||||||||||
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Exercise price (in dollars per share) | $ 6.76 | ||||||||||||||||||||||
Vesting period | 1 year | ||||||||||||||||||||||
Chief Financial Officer [Member] | Stock Options [Member] | |||||||||||||||||||||||
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Granted (in shares) | 500,000 | ||||||||||||||||||||||
Exercise price (in dollars per share) | $ 6.35 | ||||||||||||||||||||||
Vesting period | 2 years | ||||||||||||||||||||||
Subsequent Event [Member] | |||||||||||||||||||||||
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Vesting period | 2 years | ||||||||||||||||||||||
Warrant exercise price (in dollars per share) | $ 4.25 | $ 4.25 | |||||||||||||||||||||
Conversion of Stock, Shares Issued (in shares) | 682,500 | 76,154 | |||||||||||||||||||||
Proceeds from private issuance of public equity | $ 4,000,000 | ||||||||||||||||||||||
Subsequent Event [Member] | Tranche One [Member] | |||||||||||||||||||||||
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Vesting percentage of warrants | 50.00% | ||||||||||||||||||||||
Number of warrants vested (in shares) | 1,250,000 | ||||||||||||||||||||||
Subsequent Event [Member] | Tranche Two [Member] | |||||||||||||||||||||||
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Vesting percentage of warrants | 50.00% | ||||||||||||||||||||||
Number of warrants vested (in shares) | 1,250,000 | ||||||||||||||||||||||
Subsequent Event [Member] | Warrant [Member] | |||||||||||||||||||||||
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Conversion of stock, shares converted (in shares) | 1,144,999 | ||||||||||||||||||||||
Subsequent Event [Member] | Common Stock [Member] | |||||||||||||||||||||||
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Conversion of Stock, Shares Issued (in shares) | 1,259,498 | ||||||||||||||||||||||
Subsequent Event [Member] | iHeartMedia [Member] | |||||||||||||||||||||||
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Number of common shares issued for services (in shares) | 1,000,000 | ||||||||||||||||||||||
Number of common shares issued for services | $ 5,000,000 | ||||||||||||||||||||||
Advertising media inventory committed for use in 2020 | $ 2,500,000 | ||||||||||||||||||||||
Subsequent Event [Member] | Chief Financial Officer [Member] | |||||||||||||||||||||||
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Number of common shares issued for services (in shares) | 6,042 | ||||||||||||||||||||||
Subsequent Event [Member] | Chief Financial Officer [Member] | Stock Options [Member] | |||||||||||||||||||||||
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Granted (in shares) | 100,000 | ||||||||||||||||||||||
Exercise price (in dollars per share) | $ 3.90 | ||||||||||||||||||||||
Vesting period | 2 years | ||||||||||||||||||||||
Subsequent Event [Member] | Employee [Member] | Stock Options [Member] | |||||||||||||||||||||||
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Granted (in shares) | 30,000 | 30,000 | |||||||||||||||||||||
Exercise price (in dollars per share) | $ 3.70 | $ 4 | |||||||||||||||||||||
Vesting period | 3 years | 3 years | |||||||||||||||||||||
Subsequent Event [Member] | Special Adviser [Member] | |||||||||||||||||||||||
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Consulting agreement period | 5 years | ||||||||||||||||||||||
Subsequent Event [Member] | Special Adviser [Member] | Tranche One [Member] | |||||||||||||||||||||||
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Number of warrants issued (in shares) | 2,500,000 | ||||||||||||||||||||||
Warrant exercise price (in dollars per share) | $ 0.10 | ||||||||||||||||||||||
Subsequent Event [Member] | Special Adviser [Member] | Tranche Two [Member] | |||||||||||||||||||||||
Subsequent Events (Additional Information) [Abstract] | |||||||||||||||||||||||
Number of warrants issued (in shares) | 1,500,000 | ||||||||||||||||||||||
Warrant exercise price (in dollars per share) | $ 10 |