Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Jan. 31, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | Better Choice Co Inc. | |
Entity Central Index Key | 0001471727 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 47,977,390 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Address, State or Province | FL |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 2,776 | $ 3,946 |
Restricted cash | 6,225 | 0 |
Accounts receivable, net | 269 | 276 |
Inventories, net | 2,358 | 1,557 |
Prepaid expenses and other current assets | 1,931 | 269 |
Total Current Assets | 13,559 | 6,048 |
Noncurrent Assets | ||
Property and equipment, net | 115 | 71 |
Right-of-use asset, operating lease | 879 | 0 |
Intangible assets, net | 926 | 0 |
Other assets | 1,716 | 28 |
Total Assets | 17,195 | 6,147 |
Current Liabilities | ||
Line of credit | 6,191 | 4,600 |
Other liabilities | 0 | 1,914 |
Accounts payable | 1,972 | 765 |
Due to related parties | 34 | 1,600 |
Accrued liabilities | 3,874 | 244 |
Deferred revenue | 238 | 66 |
Operating lease liability, current portion | 293 | 0 |
Warrant derivative liability | 1,244 | 0 |
Total Current Liabilities | 13,846 | 9,189 |
Noncurrent Liabilities | ||
Operating lease liability | 619 | 0 |
Total Liabilities | 14,465 | 9,189 |
Stockholders' Deficit | ||
Common Stock, $0.001 par value, 88,000,000 shares and 580,000,000 shares authorized as of September 30, 2019 and December 31, 2018, respectively, 45,427,659 and 11,661,485 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively. | 45 | 12 |
Additional paid-in capital | 176,757 | 13,642 |
Accumulated deficit | (187,079) | (16,698) |
Total Stockholders' Deficit | (10,277) | (3,042) |
Total Liabilities, Redeemable Convertible Preferred Stock and Stockholders' Deficit | 17,195 | 6,147 |
Series E Preferred Stock [Member] | ||
Redeemable Series E Convertible Preferred Stock | ||
Redeemable Series E Convertible Preferred Stock, $0.001 par value, 2,900,000 and 0 shares authorized, 1,707,920 and 0 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively. | 13,007 | 0 |
Convertible Series A Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Convertible Series A Preferred Units, no par value, units equivalent to 0 and 2,391,403 Common Stock issued and outstanding at September 30, 2019 and December 31, 2018, respectively | $ 0 | $ 2 |
Unaudited Consolidated Balanc_2
Unaudited Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
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) | 45,427,659 | 11,661,485 |
Common stock, shares outstanding (in shares) | 45,427,659 | 11,661,485 |
Preferred stock, shares issued (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) | 1,707,920 | 0 |
Redeemable convertible preferred, shares outstanding (in shares) | 1,707,920 | 0 |
Preferred stock, par value (in dollars per share) | $ 0.99 | |
Convertible Series A Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares issued (in shares) | 0 | 2,391,403 |
Preferred stock, shares outstanding (in shares) | 0 | 2,391,403 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Unaudited Consolidated Statements of Operations and Comprehensive Loss [Abstract] | ||||
Net sales | $ 3,932 | $ 3,981 | $ 11,567 | $ 11,045 |
Cost of Goods Sold | 3,096 | 2,457 | 7,178 | 5,786 |
Gross Profit | 836 | 1,524 | 4,389 | 5,259 |
Operating Expenses: | ||||
General and administrative | 4,856 | 1,341 | 12,031 | 4,013 |
Share-based compensation | 2,496 | 0 | 6,708 | 0 |
Sales and marketing | 2,856 | 1,242 | 8,452 | 4,061 |
Customer service and warehousing | 303 | 350 | 854 | 927 |
Total operating expenses | 10,511 | 2,933 | 28,045 | 9,001 |
Loss from operations | (9,675) | (1,409) | (23,656) | (3,742) |
Other (expense) income: | ||||
Interest expense | (41) | (28) | (165) | (94) |
Loss on acquisitions | 2,612 | 0 | (147,376) | 0 |
Change in fair value of warrant derivative liability | 1,079 | 0 | 886 | 0 |
Total other (expense) income | 3,650 | (28) | (146,655) | (94) |
Net and comprehensive loss | (6,025) | (1,437) | (170,311) | (3,836) |
Preferred dividends | 43 | 0 | 70 | 0 |
Net and comprehensive loss available to common stockholders | $ (6,068) | $ (1,437) | $ (170,381) | $ (3,836) |
Weighted average number of shares outstanding (in shares) | 43,575,010 | 11,497,128 | 28,624,230 | 11,497,128 |
Loss per share, basic and diluted (in dollars per share) | $ (0.14) | $ (0.12) | $ (5.95) | $ (0.33) |
Unaudited Consolidated Statem_2
Unaudited Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Common Stock [Member]Better Choice Company [Member] | Common Stock [Member]Bona Vida, Inc. [Member] | Common Stock [Member]Previously Reported [Member] | Common Stock [Member]Restatement Adjustment [Member] | [1] | Common Stock [Member]Series A Preferred Stock [Member] | Common Stock [Member]Series E Preferred Stock [Member] | Preferred Stock [Member]Series A Preferred Stock [Member] | Preferred Stock [Member]Series A Preferred Stock [Member]Better Choice Company [Member] | Preferred Stock [Member]Series A Preferred Stock [Member]Bona Vida, Inc. [Member] | Preferred Stock [Member]Series E Preferred Stock [Member] | Preferred Stock [Member]Series E Preferred Stock [Member]Better Choice Company [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]Previously Reported [Member] | Additional Paid-in Capital [Member]Restatement Adjustment [Member] | [1] | Additional Paid-in Capital [Member]Series A Preferred Stock [Member] | Additional Paid-in Capital [Member]Series E Preferred Stock [Member] | Accumulated Deficit [Member] | Accumulated Deficit [Member]Better Choice Company [Member] | Accumulated Deficit [Member]Bona Vida, Inc. [Member] | Accumulated Deficit [Member]Previously Reported [Member] | Accumulated Deficit [Member]Restatement Adjustment [Member] | [1] | Accumulated Deficit [Member]Series A Preferred Stock [Member] | Accumulated Deficit [Member]Series E Preferred Stock [Member] | Total | Better Choice Company [Member] | Bona Vida, Inc. [Member] | Previously Reported [Member] | Restatement Adjustment [Member] | [1] | Series A Preferred Stock [Member] | Series E Preferred Stock [Member] |
Balance at Dec. 31, 2017 | $ 11 | $ 0 | $ 11 | $ 8,545 | $ 8,545 | $ 0 | $ (10,673) | $ (10,673) | $ 0 | $ (2,117) | $ (2,128) | $ 11 | |||||||||||||||||||||||||
Balance (in shares) at Dec. 31, 2017 | 11,497 | 0 | 11,497 | 0 | 10,397 | (10,397) | |||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||||||||
Net and comprehensive loss available to common stockholders | $ 0 | 0 | (3,836) | $ (3,836) | |||||||||||||||||||||||||||||||||
Balance at Sep. 30, 2018 | $ 11 | 8,545 | (14,509) | $ (5,953) | |||||||||||||||||||||||||||||||||
Balance (in shares) at Sep. 30, 2018 | 11,497 | 0 | |||||||||||||||||||||||||||||||||||
Balance at Jun. 30, 2018 | $ 11 | 8,545 | (13,072) | $ (4,516) | |||||||||||||||||||||||||||||||||
Balance (in shares) at Jun. 30, 2018 | 11,497 | ||||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||||||||
Net and comprehensive loss available to common stockholders | $ 0 | 0 | (1,437) | (1,437) | |||||||||||||||||||||||||||||||||
Balance at Sep. 30, 2018 | $ 11 | 8,545 | (14,509) | $ (5,953) | |||||||||||||||||||||||||||||||||
Balance (in shares) at Sep. 30, 2018 | 11,497 | 0 | |||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||||||||
Impact of adoption of ASC 842 | ASC 842 [Member] | $ 0 | $ 0 | 0 | (12) | $ (12) | ||||||||||||||||||||||||||||||||
Impact of adoption of ASC 842 | ASC 842 [Member] | Error Correction [Member] | 0 | 0 | 0 | 12 | 12 | ||||||||||||||||||||||||||||||||
Balance at Dec. 31, 2018 | $ 12 | $ 2 | 13,642 | (16,698) | (3,042) | ||||||||||||||||||||||||||||||||
Balance (in shares) at Dec. 31, 2018 | 11,662 | 2,391 | |||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||||||||
Share-based compensation | $ 1 | $ 0 | 6,708 | 0 | 6,709 | ||||||||||||||||||||||||||||||||
Share-based compensation (in shares) | 1,119 | ||||||||||||||||||||||||||||||||||||
Shares issued pursuant to private issuance of public equity- net proceeds | $ 6 | $ 0 | 15,820 | 0 | 15,826 | ||||||||||||||||||||||||||||||||
Shares issued pursuant to private issuance of public equity- net proceeds (in shares) | 5,745 | 70 | |||||||||||||||||||||||||||||||||||
Stock issued to third parties for services | $ 1 | $ 0 | 3,439 | 0 | 3,440 | ||||||||||||||||||||||||||||||||
Stock issued to third parties for services (in shares) | 1,000 | 0 | |||||||||||||||||||||||||||||||||||
Warrant exercise | $ 1 | $ 0 | $ 0 | 4,006 | 0 | 4,007 | |||||||||||||||||||||||||||||||
Warrant exercise (in shares) | 1,260 | 0 | |||||||||||||||||||||||||||||||||||
Net and comprehensive loss available to common stockholders | $ 0 | $ 0 | 0 | (170,381) | (170,381) | ||||||||||||||||||||||||||||||||
Conversion of Stock | $ 2 | $ 1 | $ (2) | $ (7,052) | $ 0 | $ 7,050 | $ 0 | $ 0 | $ 0 | $ 7,051 | |||||||||||||||||||||||||||
Conversion of Stock (in shares) | 2,461 | 1,175 | (2,461) | (926) | |||||||||||||||||||||||||||||||||
Acquisition | $ 4 | $ 18 | $ 0 | $ 0 | $ 20,059 | $ 23,560 | $ 108,602 | 0 | $ 0 | $ 0 | $ 23,564 | $ 108,620 | |||||||||||||||||||||||||
Acquisitions | $ (1) | $ 0 | (6,070) | (6,071) | |||||||||||||||||||||||||||||||||
Acquisition (in shares) | 3,915 | 18,103 | 0 | 0 | 2,634 | ||||||||||||||||||||||||||||||||
Acquisition (in shares) | (1,012) | 0 | |||||||||||||||||||||||||||||||||||
Balance at Sep. 30, 2019 | $ 45 | $ 0 | $ 13,007 | 176,757 | (187,079) | (10,277) | |||||||||||||||||||||||||||||||
Balance (in shares) at Sep. 30, 2019 | 45,428 | 0 | 1,708 | ||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||||||||
Impact of adoption of ASC 842 | ASC 842 [Member] | $ 0 | 0 | 12 | 12 | |||||||||||||||||||||||||||||||||
Balance at Jun. 30, 2019 | $ 43 | $ 13,007 | 170,017 | (181,023) | (10,963) | ||||||||||||||||||||||||||||||||
Balance (in shares) at Jun. 30, 2019 | 43,168 | 1,708 | |||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||||||||||||
Share-based compensation | $ 0 | 2,496 | 0 | 2,496 | |||||||||||||||||||||||||||||||||
Share-based compensation (in shares) | 0 | ||||||||||||||||||||||||||||||||||||
Stock issued to third parties for services | $ 1 | 3,439 | 0 | 3,440 | |||||||||||||||||||||||||||||||||
Stock issued to third parties for services (in shares) | 1,000 | ||||||||||||||||||||||||||||||||||||
Warrant exercise | $ 1 | 4,006 | 0 | 4,007 | |||||||||||||||||||||||||||||||||
Warrant exercise (in shares) | 1,260 | ||||||||||||||||||||||||||||||||||||
Net and comprehensive loss available to common stockholders | $ 0 | 0 | (6,068) | (6,068) | |||||||||||||||||||||||||||||||||
Acquisition | $ 0 | $ 0 | $ 69 | $ 600 | $ 0 | $ 0 | $ 69 | $ 600 | |||||||||||||||||||||||||||||
Acquisitions | $ 0 | (3,870) | 0 | (3,870) | |||||||||||||||||||||||||||||||||
Acquisition (in shares) | 0 | 0 | |||||||||||||||||||||||||||||||||||
Acquisition (in shares) | 0 | ||||||||||||||||||||||||||||||||||||
Balance at Sep. 30, 2019 | $ 45 | $ 0 | $ 13,007 | $ 176,757 | $ (187,079) | $ (10,277) | |||||||||||||||||||||||||||||||
Balance (in shares) at Sep. 30, 2019 | 45,428 | 0 | 1,708 | ||||||||||||||||||||||||||||||||||
[1] | Certain prior year amounts were adjusted to retroactively reflect the legal capital of the Company from LLC units to common stock due to the reverse acquisition described in Note 2. |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flow from Operating Activities | ||
Net and comprehensive loss | $ (170,311) | $ (3,836) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Non-cash expenses | 572 | 0 |
Depreciation and amortization | 76 | 11 |
Share-based compensation expenses | 6,708 | 0 |
Non-cash lease expenses | 39 | 0 |
Change in fair value of warrant derivative liability | (886) | 0 |
Non-cash loss on acquisitions | 146,980 | 0 |
(Increase) decrease in operating assets | ||
Accounts receivable, net | 76 | (161) |
Inventories, net | (705) | (476) |
Prepaid expenses and other current assets | (135) | 58 |
Other assets | 31 | 0 |
(Decrease) increase in current liabilities | ||
Accounts payable | 889 | 1,220 |
Accrued liabilities | 3,287 | 18 |
Deferred revenue | 172 | 119 |
Deferred rent | 0 | (9) |
Other | (17) | (1) |
Cash Used in Operating Activities | (13,224) | (3,057) |
Cash Flow from Investing Activities | ||
Acquisition of property and equipment, net | (52) | (31) |
Cash acquired in merger | 416 | 0 |
Cash Provided by (Used in) Investing Activities | 364 | (31) |
Cash Flow from Financing Activities | ||
Repayment of cash advance | (1,898) | 0 |
Proceeds from private issuance of public equity, net | 15,826 | 0 |
Payments on line of credit | (4,600) | 0 |
Payment of related party note payable | (1,600) | (53) |
Proceeds from related party note payable | 0 | 1,248 |
Capital contributions by owners | 0 | 356 |
Distribution to the owners | 0 | (356) |
Proceeds from the issuance of debt | 6,200 | 1,970 |
PIPE warrant exercise | 4,007 | 0 |
Debt issuance costs | (20) | 0 |
Cash Provided by Financing Activities | 17,915 | 3,165 |
Net Increase in Cash, Cash Equivalents and Restricted Cash | 5,055 | 77 |
Total Cash and Cash Equivalents, Beginning of Period | 3,946 | 157 |
Total Cash, Cash Equivalents and Restricted Cash, End of Period | 9,001 | $ 234 |
Supplemental Cash Flow Information | ||
Right-of-use asset recorded upon adoption of ASC 842 | 421 | |
Operating lease liability recorded upon adoption of ASC 842 | (429) | |
Noncash acquisition of right-of-use asset for leases entered into during period | 607 | |
Noncash acquisition of operating lease liability for leases entered into during the period | $ (594) |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Cash Flows (Parenthetical) shares in Thousands, $ in Thousands | May 06, 2019USD ($)Business | Sep. 30, 2019USD ($)shares | Sep. 30, 2018USD ($) |
Supplemental Cash Flow Information | |||
Number of businesses acquired | Business | 2 | ||
Purchase price | $ 146,569 | ||
Non-cash transaction costs | $ 4,800 | ||
Stock issued to third parties for services | $ 3,440 | ||
Prepaid advertising incurred | 5,800 | $ 3,000 | |
Income taxes paid | 0 | 0 | |
Cash interest paid | $ 200 | $ 100 | |
Common Stock [Member] | |||
Supplemental Cash Flow Information | |||
Stock issued to third parties for services (in shares) | shares | 1,000 | ||
Stock issued to third parties for services | $ 1 | ||
iHeartMedia [Member] | |||
Supplemental Cash Flow Information | |||
Prepaid advertising incurred | $ 600 |
Nature of Business and Summary
Nature of Business and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 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 Summary of Significant Accounting Policies 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. The Company operations include those of its two wholly-owned subsidiaries, 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 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 and Consolidation On May 6, 2019, Better Choice Company, Inc. completed the acquisition, for TruPet LLC (“TruPet”) and Bona Vida Inc. (“Bona Vida”) in a pair of all stock transactions (the “Acquisitions”) through the issuance of 32,332,314 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. The Company is the legal acquirer of TruPet and Bona Vida. However, the Acquisitions were treated as a reverse acquisition whereby TruPet acquired the Company and Bona Vida for accounting and financial reporting purposes. As a result, the financial statements for the nine months ending September 30, 2019 are comprised of 1) the results of TruPet for the period between January 1, 2019 and September 30, 2019 and 2) the results of the Company and Bona Vida, after giving effect to the Acquisitions on May 6, 2019 through September 30, 2019. All periods presented prior to the effective date of the Acquisitions are comprised solely of the operations and financial position of TruPet, and therefore, are not directly comparable. TruPet’s equity has been re-cast to reflect the equity structure of Better Choice Company and the shares of Common Stock received in the Acquisitions. References to the “Company”, “we”, “us” and “our” in this Report, refer to TruPet and its consolidated subsidiaries prior to May 6, 2019 and to Better Choice Company, TruPet and Bona Vida and their consolidated subsidiaries post May 6, 2019. The Company’s consolidated financial statements are prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission for quarterly reports and accounting principles generally accepted in the United States (GAAP). The financial statements are presented on a consolidated basis subsequent to the Acquisitions and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. 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 nine months ended September 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 in U.S. dollars (thousands), numbers in the text in dollars (millions), shares in thousands, and % as rounded up or down. Going Concern Considerations The Company is subject to risks common in the pet wellness consumer market including, but not limited to, dependence on key personnel, competitive forces, successful marketing and sale of its products, the successful protection of its proprietary technologies, ability to grow into new markets, compliance with government regulations, and the ability to obtain additional financing when needed. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and payments of liabilities in the ordinary course of business. Accordingly, the consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount of and classification of liabilities that may result should the Company be unable to continue as a going concern. See “Note 22- Going Concern” for more information. Cash and Cash Equivalents Cash and cash equivalents include demand deposits held with banks and highly liquid investments with original 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 line of credit agreement secured with a financial institution, the Company is required to maintain a restricted cash balance of $6.2 million in its account. Any withdrawals from the account require an equal reduction to the funds available under the line of credit agreement. See “Note 10 – Line of Credit and Due to Related Parties” for more details on the revolving credit agreement. The Company is also required to maintain a restricted cash balance of less than $0.1 million associated with a business credit card. Accounts receivable and allowance for doubtful accounts Accounts receivable primarily consist of credit card payments receivable from third-party credit card processing companies and unpaid buyer invoices from the Company’s wholesale customers. Accounts receivable is stated at the amount billed to customers, net of point of sale discounts. The Company assesses the collectability of all receivables on an ongoing basis by considering its historical credit loss experience, current economic conditions, and other relevant factors. Based on this analysis, an allowance for doubtful accounts is recorded. The provision for doubtful accounts is included in general and administrative expense in the consolidated statements of operations. As of September 30, 2019 and December 31, 2018, the Company considers accounts receivable to be fully collectible and, accordingly, no allowance for doubtful accounts was recorded. Inventories Inventories, primarily consisting of products available for sale and supplies, are valued using the first-in first-out (“FIFO”) method and are recorded at the lower of cost or net realizable value. Cost is determined on a standard cost basis and includes the purchase price, as well as inbound freight costs and packaging costs. The Company regularly reviews inventory quantities on hand. Excess or obsolete reserves are established when inventory is estimated to not be sellable before expiration dates based on forecasted usage, product demand and product life cycle. Additionally, Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Depreciable lives are 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 property and equipment accounts in the year of disposal with the resulting gain or loss reflected in general and administrative expenses. 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. No impairment charges have been incurred for property and equipment for any period presented. License Intangibles Intangible assets acquired are carried at cost, less accumulated amortization. The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable and any not expected to be recovered through undiscounted future net cash flows and assets are written down to current fair value. The Company acquired a licensing agreement for Houndog brand. The estimated life was six years and was amortized on a straight line basis. On January 16, 2020, the Company terminated the licen Redeemable Convertible Preferred Stock In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 480, Distinguishing Liabilities from Equity (ASC 480), preferred stock issued with redemption provisions that are outside of the control of the Company or that contain certain redemption rights in a deemed liquidation event is required to be presented outside of stockholders’ deficit on the face of the consolidated balance sheet. The Company’s Redeemable Income Taxes Income taxes are recorded in accordance with FASB ASC Topic 740, Income Taxes (ASC 740), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement and tax bases of assets and liabilities and for loss and credit carryforwards using enacted tax rates anticipated to be in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if, based upon the weight of available evidence, it is more likely than not that some or all the deferred tax assets will not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that some or all the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of September 30, 2019, and 2018, the Company does not have any significant uncertain tax positions. If incurred, the Company would classify interest and penalties on uncertain tax positions as 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). TruPet adopted ASC 606, Revenue from Contracts with Customers Cost of Goods Sold Cost of goods sold consists primarily of the cost of product obtained from third-party contract manufacturing plants, packaging materials, CBD oils directly sourced by the Company, and inventory freight for shipping product from third-party contract manufacturing plants to the Company’s warehouse. General and Administrative Expenses General and administrative expenses include management and office personnel compensation and bonuses, corporate level information technology related costs, rent, travel, professional service fees, insurance, product development costs, general corporate expenses and outbound shipping. Shipping costs primarily consist of costs associated with moving finished products to customers through third-party carriers. Shipping costs were $0.6 million and $1.8 million for the three and nine month periods ended September 30, 2019 and $0.6 million and $1.9 million during the three and nine month periods ended September 30, 2018, respectively. For direct to consumer customers, the Company may recover shipping costs by charging the customer a shipping fee. In these instances, the Company includes the shipping charges billed to customers in net sales. The amount included in net sales related to such recoveries was $0.2 million and $0.5 million for the three and nine month periods ended September 30, 2019 and $0.2 million and $0.7 million for the three and nine month periods ended September 30, 2018, respectively. 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 online advertising, search costs, email advertising, and radio advertising were $1.8 million and $0.8 million for the three months ended September 30, 2019 and 2018, respectively and $5.8 million and $3.0 million for the nine-month periods ended September 30, 2019 and 2018, 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. Research and development costs incurred during both the three and nine month periods months ended September 30, 2019 were less than $0.1 million. No research and development costs were incurred during the three or nine month periods ended September 30, 2018. Customer Service and Warehousing Customer Service and Warehousing include costs associated with storing inventory, customer service and fulfilling customer orders. 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 on the balance sheets consist of cash and cash equivalents, restricted cash, accounts receivable, deposits, accounts payable, line of credit, due to related party, accrued and other liabilities, and warrant derivative liability. The warrant derivative liability is measured, due to their short term nature, 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. The Company uses applicable guidance for defining fair value, the initial recording and periodic remeasurement of certain assets and liabilities measured at fair value, and related disclosures for instruments measured at fair value. Fair value accounting guidance establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. An instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the instrument’s fair value measurement. The Company measures assets and liabilities using inputs from the following three levels of fair value hierarchy: Level 1 - Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 - Unobservable inputs for the asset or liability for which there is little, if any, market activity at the measurement date. Unobservable inputs reflect the Company’s own assumptions about what market participants would use to price the asset or liability. The inputs are developed based on the best information available in the circumstances, which may include the Company’s own financial data, such as internally developed pricing models, DCF methodologies, as well as instruments for which the fair value determination requires significant management judgment. The following table sets forth the Company’s financial liabilities that were accounted for at fair value on a recurring basis by level within the fair value hierarchy as of September 30, 2019 and December 31, 2018: September 30, 2019 Dollars in thousands Level 1 Level 2 Level 3 Total Liabilities Warrant derivative liability $ - $ - $ 1,244 $ 1,244 Basic and Diluted Loss Per Share Basic and diluted loss per share has been determined by dividing the net loss available to common 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. Share-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 follows the fair value method of accounting for stock awards granted to employees, directors, officers and consultants. Share-based awards to employees are measured at the fair value of the related share-based awards on grant date. The Company recognizes share-based payment expenses over the vesting period based on the number of awards expected to vest over that period on a straight-line basis. The Company’s share-based compensation awards are subject only to service based vesting conditions. 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 and the dividend yield on the underlying stock. Expected volatility is calculated based on the analysis of other public companies within the pet wellness, Internet commerce, and hemp derived CBD sectors. 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. Use of Estimates The preparation of the consolidated 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. The Company’s results can also be affected by economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings. Significant changes to the key assumptions used in the valuations could result in different fair values of equity instruments at each valuation date. Segment Information Operating segments are defined 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 reviews operating results on an aggregated basis. All the assets and operations of the Company are in the United States. 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. Legal costs such as outside counsel fees and expenses are charged to expense in the period incurred and are recorded in general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. 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 lease, royalty and line of credit agreements for which we are committed to pay certain amounts over a period of time. See Notes 8, 9, and 10. In connection with the preparation of the Company’s consolidated financial statements for the three and nine month periods ended September 30, 2019, the Company identified an error as of December 31, 2018 and June 30, 2019, related to an understatement of sales taxes due and payable of $0.7 million and $0.8 million, respectively. The error was corrected during the three and nine month periods ended September 30, 2019. The Company believes that the correction of this error is not material to the consolidated financial statements as of and for the three and nine month periods ended September 30, 2019. 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. Recently adopted: Adoption of FASB ASC Topic 842 “Leases” In February 2016, the Financial Accounting Standard Board (’ FASB’) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842) ” The adoption of ASC 842 resulted in recognition of right-of-use assets of $0.4 million and operating lease liabilities of $0.4 million as of January 1, 2019. The Company adopted the optional transition method that gives companies the option to use the adoption date as the initial application on transition. Accordingly, 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 January 1, 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 of January 1, 2019 as permitted under the ASU. As this standard only requires additional disclosures, there is no financial statement impact of its adoption. Issued but not Yet Adopted: ASU 2016-13 “Financial Instruments – Credit Losses (Topic 326)” In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses (Topic 326),” a new standard to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The standard is effective for the Company on January 1, 2021, and early adoption is permitted. The Company is currently evaluating the impact the new standard will have on its consolidated financial statements. ASU 2018-15 “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40)” In August 2018, the FASB issued ASU 2018-15 “ 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. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Acquisitions [Abstract] | |
Acquisitions | Note 2 - Acquisitions On May 6, 2019, the Company completed the Acquisitions through the issuance of 32,332,314 shares of Common Stock, par value $0.001 of the Company (the “Common Stock”). Following the completion of the Acquisitions, the operations of the Company are primarily comprised of the operations of TruPet and Bona Vida. The strategic objective for combining the two complementary businesses was to create a leading innovative holistic pet wellness company operating in a rapidly evolving and growing industry. The Company’s board of directors (“The Board”) consists of five directors: the current chairman of the Company who was the prior chairman of Bona Vida, two prior directors from TruPet, one prior director from Bona Vida, and one director who was a TruPet managing member as well as the prior chairman of the Company. TruPet was determined to be the accounting acquirer of the Company and Bona Vida. As such, the historical financial statements are those of TruPet, and TruPet’s equity has been re-cast to reflect the equity structure of the Company and the shares of Common Stock received. Better Choice exchanged 14,229,041 shares for the outstanding membership interest in TruPet. The Acquisitions were accounted for as asset acquisitions. The purchase price for Better Choice Company was $37.9 million which includes stock, minority interest, fully vested stock-based compensation and transaction expenses. The transaction price of Better Choice Company includes 100% of all outstanding stock valued at net $32.7 million, non-cash transaction costs of $4.8 million, cash transaction costs of $0.4 million and fully vested stock-based compensation with an estimated fair value of $0.1 million. The stock exchanged in the Acquisition of Better Choice Company is equal to the 3,915,856 shares of Better Choice Company outstanding prior to the issuance of additional shares in the Acquisitions, at the market price of $6.00 per share. The total purchase price has been allocated based on an estimate of the fair value of Better Choice Company’s assets acquired and liabilities assumed with the remainder recorded as an expense. The loss on acquisition of Better Choice Company’s net liabilities is $39.6 million. The purchase price for Bona Vida was $108.6 million for 100% of all outstanding stock . At the closing of the Bona Vida transaction, the Company issued 18,103,273 shares of Common Stock in exchange for 100% of the outstanding shares of Bona Vida. The fair value of Bona Vida’s net assets acquired is estimated to be $0.8 million. The estimated purchase price has been allocated based on an estimate of the fair value of assets acquired and liabilities assumed. The excess of the purchase price over the net assets acquired has been recorded as an expense. The loss on acquisition of Bona Vida’s net assets is $107.8 million. On May 6, 2019, the fair value of the following assets and liabilities were acquired resulting in the total loss of approximately $147.4 million: Better Choice Company Bona Vida Total Total Purchase Price $ 37,949 $ 108,620 $ 146,569 Net Assets (Liabilities) Acquired: Assets Cash and cash equivalents 7 384 391 Restricted cash - 25 25 Accounts receivable - 69 69 Inventories - 95 95 Prepaid expenses and other current assets 32 348 380 Intangible assets 986 - 986 Other assets - 74 74 Total Assets 1,025 995 2,020 Liabilities Warrant derivative liability (2,130 ) - (2,130 ) Accounts payable & accrued liabilities (544 ) (153 ) (697 ) Debt - - - Total Liabilities (2,674 ) (153 ) (2,827 ) Net Assets (Liabilities) Acquired (1,649 ) 842 (807 ) Loss on Acquisitions $ (39,598 ) $ (107,778 ) $ (147,376 ) The results of operations of the acquired entities are included in the accompanying consolidated financial statements subsequent to the date of Acquisitions. In connection with the preparation of the Company’s consolidated financial statements for the three and nine month periods ended September 30, 2019, the Company identified an error in the consolidated financial statements for the six month period ended June 30, 2019 related to the overstatement of Loss on Acquisitions of $2.6 million in the consolidated statement of operations and comprehensive loss. This was primarily due to a change in the estimated purchase price, which also resulted in errors in the statement of stockholders’ deficit. The errors were all corrected during the three month period ended September 30, 2019. The Company believes the correction of these errors is not material to the consolidated financial statements as of and for the three month period ended September 30, 2019. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2019 | |
Revenue [Abstract] | |
Revenue | Note 3 – 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 the goods. The Company has two revenue channels, direct to consumer (“DTC”) and wholesale. Nearly all of the Company’s revenue is derived from the DTC channel which represents 95% of consolidated revenue; the wholesale channel represents 5% of consolidated revenue. The majority of these sales transactions are single performance obligations that are recorded when control is transferred to the customer. The Company offers a loyalty program to its DTC customers which creates a separate performance obligation. The following is a description of principal activities from which the Company generates its revenue, by revenue channel. The Company’s DTC products are offered through the online stores where customers place orders directly for delivery across the United States. Revenue is recorded, net of discounts, at the time the order is shipped to the customer as this is when it has been determined that control has been transferred, and includes shipping paid by customers. Revenue is measured as the amount of consideration, net of discounts, the Company expects to receive in exchange for transferring the merchandise. The Company has elected to exclude from revenue all collected sales taxes paid by its customers. Revenue is deferred for orders that have been placed, and paid for, but have not yet been shipped. Customers have a 60-day guarantee on the product purchased. Based on the historical experience, the Company records an estimated liability for returns. Product returns have historically not been significant to the financial statements taken as a whole. For the Company’s DTC loyalty program, a portion of revenue is deferred at the time of the sale as points are earned based on the relative stand-alone selling price, and not recognized, until the redemption of the loyalty points. The Company has applied a redemption rate based on the historical age of the points. The customer has a material right in the form of future discounts with their accumulated points. For these transactions, the transaction price is allocated to the separate performance obligations based on the relative standalone selling price of loyalty points. The standalone selling price for the points earned for the Company’s loyalty program is estimated using the net retail value of the merchandise purchased, adjusted for the redemption percentage based on historical redemption patterns. The revenue associated with the initial merchandise purchased is recognized immediately and the value assigned to the points is deferred until the points are redeemed. Customer points do not expire. The Company’s wholesale channel includes the sale of goods to wholesale customers for resale. The wholesale sale of goods is considered a single performance obligation. The Company records revenue net of discounts. There is no shipping revenue on wholesale transactions and wholesale customers are not subject to sales tax. Revenue for wholesale sales are recognized when the product is shipped to the wholesale customer as this is when it has been determined that control has been transferred, with the exception of the Company’s largest customer due to specific FOB destination shipping terms as this is when it has been determined that control has transferred. The Company’s net revenue in the Consolidated Statements of Operations and Comprehensive Loss are net of sales taxes. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventories [Abstract] | |
Inventories | Note 4 - Inventories Inventories are summarized as follows: Dollars in thousands September 30, 2019 December 31, 2018 Food, treats and supplements $ 2,544 $ 1,301 Other products and accessories 110 191 Inventory packaging and supplies 142 133 2,796 1,625 Inventory reserve (438 ) (68 ) $ 2,358 $ 1,557 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended |
Sep. 30, 2019 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Prepaid Expenses and Other Current Assets | Note 5 – Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following: Dollars in thousands September 30, 2019 December 31, 2018 Prepaid insurance $ 50 $ 15 Prepaid advertising 1,291 - Other 590 254 Total prepaid expenses and other current assets $ 1,931 $ 269 On August 28, 2019, the Company entered into a radio advertising agreement with iHeartMedia + Entertainment, Inc. On August 28, 2019, the Company issued to iHeart Media 1,000,000 shares of common stock valued at $3.4 million for future advertising to be provided to the Company from August, 2019 to August, 2021. During each of the three and nine month periods ended September 30, 2019, $0.6 million of the $3.4 million of the prepaid advertising was incurred. In addition, the agreement requires the Company to spend a minimum amount for talent fees or other direct iHeart costs. As of September 30, 2019, the additional commitment is for less than $0.1 million. The company has committed to using $1.7 million of the media inventory by August 28, 2020, with the remainder of the inventory available through August 28, 2021. The Company expensed $0.6 million of the media inventory in the period ended September 30, 2019, reducing the Prepaid Advertising balance to $2.8 million, of which $1.3 million is recorded in Prepaid Expenses and Other Current Assets and $1.5 million in Other Noncurrent Assets. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property and Equipment [Abstract] | |
Property and Equipment | Note 6 - Property and Equipment Property and equipment consist of the following: Dollars in thousands September 30, 2019 December 31, 2018 Warehouse equipment $ 49 $ 49 Computer equipment 14 14 Furniture and fixtures 99 46 Total property and equipment 162 109 Accumulated depreciation (47 ) (38 ) Net property and equipment $ 115 $ 71 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | Note 7 – Accrued Liabilities Accrued expenses consist of the following: Dollars in thousands September 30, 2019 December 31, 2018 Accrued payroll and benefits $ 528 $ 85 Accrued professional fees 1,788 - Accrued sales tax 1,275 - Other 283 159 Total accrued liabilities $ 3,874 $ 244 |
Operating Leases
Operating Leases | 9 Months Ended |
Sep. 30, 2019 | |
Operating Leases [Abstract] | |
Operating Leases | Note 8 – Operating Leases Effective January 1, 2019, the Company adopted the FASB guidance on leases (“Topic 842”), which requires leases with durations greater than twelve months to be recognized on the balance sheet. The Company adopted Topic 842 using the modified retrospective transition approach. Prior year financial statements were not recast under Topic 842, and therefore those amounts are not disclosed. The Company has elected certain practical expedients, including the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs as well as an accounting policy to account for lease and non-lease components as a single component. The Company also elected the optional transition method that gives companies the option to use the effective date as the date of initial application on transition, and as a result, the Company will not adjust its comparative period financial information or make the new required lease disclosures for periods before the effective date. The Company has elected to make the accounting policy election for short-term leases. Consequently, short-term leases will be recorded as an expense on a straight-line basis over the lease term. The Company did not elect the hindsight practical expedient. The Company’s leases relate to our corporate offices and warehouse. For leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of lease payments over the term. Lease renewal options are not included in the measurement of the right-of-use assets and right-of-use liabilities unless the Company is reasonably certain to exercise the optional renewal periods. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Additionally, our leases contain rent escalations over the lease term and the Company recognizes expense for these leases on a straight-line basis over the lease term. Some of the Company’s leases include rent escalations based on inflation indexes, tenant allowances and fair market value adjustments. In connection with the preparation of the Company’s consolidated financial statements for the three and nine month periods ended September 30, 2019, the Company identified an error as of January 1, 2019 related to the adoption of ASC 842, Leases , which resulted in an overstatement of less than $0.1 million for right-of-use assets and operating lease liabilities, respectively. The Company also identified an overstatement of Accumulated Deficit of less than $0.1 million as of January 1, 2019. The errors related to impact upon adoption of ASC 842 were corrected during the three-and-nine-month periods ended September 30, 2019. The Company believes the correction of these errors is not material to the consolidated financial statements as of and for the three-and-nine-month periods ended September 30, 2019. For leases entered into or reassessed after the adoption of the new standard, the Company has elected the practical expedient allowed by the standard to account for all fixed consideration in a lease as a single lease component. Therefore, the lease payments used to measure the operating lease liability for these leases include fixed minimum rentals along with fixed operating costs such as common area maintenance and utilities. The Company’s leases do not provide a readily available implicit rate. Therefore, the Company estimates the incremental borrowing discount rate based on information available at lease commencement. The discount rates used are indicative of a synthetic credit rating based on quantitative and qualitative analysis. Lease position as of January 1, 2019 The table below presents the lease-related assets and liabilities recorded on the balance sheet. Dollars in thousands Classification on the Balance Sheet 2019 January 1, Assets Operating lease right-of-use assets Operating lease right-of-use assets 421 Liabilities Current - Operating Operating lease liability short term 87 Noncurrent - Operating Operating lease liability long term 342 Total operating lease liabilities $ 429 The table below presents certain information related to the lease costs for operating leases for the three and nine months ended September 30, 2019. Three months ended September 30, 2019 Nine months ended September 30, 2019 Dollars in thousands Operating lease costs 95 219 Variable lease costs 8 24 Total Operating Lease costs $ 103 243 As of September 30, 2019, the weighted-average remaining operating lease term was 2.75 years and the weighted average discount rate was 12.5% for operating leases recognized on our Consolidated Balance Sheet. Undiscounted cash flows The table below reconciles the undiscounted cash flows for each of the first four years and total of the remaining years to the operating lease liabilities recorded on the balance sheet. Dollars in thousands Operating Leases Remainder of 2019 $ 95 2020 381 2021 381 2022 182 Total Minimum Lease Payments 1,039 Less: amount of lease payments representing interest 127 Present value of future minimum lease payments $ 912 Less: current obligations under leases 293 Long-term lease obligations $ 619 |
Intangible Assets and Royalties
Intangible Assets and Royalties | 9 Months Ended |
Sep. 30, 2019 | |
Intangible Assets and Royalties [Abstract] | |
Intangible Assets and Royalties | Note 9 – Intangible Assets and Royalties In April 2019, Better Choice Company entered into a licensing agreement with Authentic Brands and Elvis Presley Enterprises whereby Better Choice will be able to sell newly developed hemp-derived CBD products that will be marketed under the Elvis Presley Houndog name. The license agreement required an upfront equity payment of $1 million worth of Common Stock. Upon the Acquisitions on May 6, 2019, the Company acquired the license agreement and recorded it at its fair value. Dollars in thousands September 30, 2019 December 31, 2018 License intangibles $ 986 $ - Less accumulated amortization 60 - Total Intangible Assets, net $ 926 $ - As of September 30, 2019, the Company paid $0.6 million of the 2019-2020 Guaranteed Minimum Royalty Payment. As there were no sales related to Houndog products during the three and nine month periods ended September 30, 2019, the Company determined that the minimum royalties paid through September 30, 2019 should be expensed. The Houndog license agreement was terminated in January 2020, refer to Note 23 - Subsequent Event. |
Line of Credit and Due to Relat
Line of Credit and Due to Related Parties | 9 Months Ended |
Sep. 30, 2019 | |
Line of Credit and Due to Related Parties [Abstract] | |
Line of Credit and Due to Related Parties | Note 10 - Line of Credit and Due to Related Parties 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 secured by the personal assets of the two majority owners. Through various amendments, the maximum borrowings under the credit facility increased to $4.6 million with a maturity of May 2019. Borrowings bear interest at LIBOR plus 3% and were repaid on May 6, 2019. At December 31, 2018, outstanding borrowings were $4.6 million. Accrued interest recorded at December 31, 2018 was less than $0.1 million. The credit facility was secured by personal assets of the co-borrowers, as noted above. Covenants under the credit facility required the Company to be within certain restrictions. As of December 31, 2018, the Company was in compliance with its covenants. At December 31, 2018, due to related parties consisted of a $1.6 million unsecured note payable to the director of the Company bearing 26.6% interest with principal and interest due within 30 days after change of control, as described below. On May 6, 2019, this loan was repaid. There was no accrued interest recorded at December 31, 2018. The unsecured note totaled $1.2 million during nine months ended September 30, 2018. On May 6, 2019, the Better Choice Company refinanced the $4.6 million credit facility and the $1.6 million note payable to the director with a $6.2 million revolving line of credit agreement with a financial institution (the “revolving line of credit”). The $6.2 million revolving line of credit agreement (“revolving credit agreement”) is secured by $6.2 million in restricted cash held in a Money Market Account. All advances relating to this revolving credit agreement bear a fixed rate of interest equal to 3.7% per annum, which may be adjusted from time to time in the event that the interest payable on the Money Market Account increases where the interest rate on the revolving line of credit is 185 basis points higher than the rate payable on the Money Market Account. The Company paid an issuance fee of $8,856 upon closing, which was recorded as a contra liability and will be amortized over the life of the debt. . 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. This revolving credit agreement matures on May 6, 2020 and requires that the Company maintain the $6.2 million restricted deposits on account at the bank. If withdrawals are made from the account, the amount available under the revolving credit agreement decreases by the amount of the withdrawal. Management has determined that the fair value of debt approximates the carrying value of the revolving line of credit given its short-term nature. The Company has granted the Lender a security interest in all assets of the Company owned or later acquired. The revolving credit agreement also contains certain events of default, representations, warranties and covenants of the Company and its subsidiaries. For example, the revolving credit 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. As of September 30, 2019, the Company was in compliance with its covenants. Interest expense of approximately $0.2 million was recorded in the consolidated statements of operations and comprehensive loss related to the lines of credit and the director note for the nine months ended September 30, 2019, and $0.1 million and less than $0.1 million for three and nine months ended September 30, 2018, respectively. Interest expense of approximately $0.1 million was recorded in the consolidated statements of operations and comprehensive loss related to the lines of credit for the three months ended September 30, 2019. |
Warrant Derivative Liability
Warrant Derivative Liability | 9 Months Ended |
Sep. 30, 2019 | |
Warrant Derivative Liability [Abstract] | |
Warrant Derivative Liability | Note 11 – 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. The December Offering generated $2.6 million of net proceeds that were received by the Company during the period ended December 31, 2018 for the sale of 1,400,000 Units, and $0.1 million of the net proceeds were received on January 8, 2019 for the sale of 25,641 Units. The warrants are exercisable over a two-year period at the initial exercise price of $3.90 per share. The warrants include an option to settle in cash in the event of a change of control of the Company and a reset feature if the Company issues shares of common stock with a strike price below $3.90 per share, which requires the Company to record the warrants as a derivative liability. The Company calculates the fair value of the derivative liability through a Monte Carlo Model that values the warrants 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 September 30, 2019. Dollars in thousands Warrant Liability Assumption of warrants pursuant to May 6, 2019 acquisition of Better Choice Company $ 2,130 Change in fair value of derivative liability (886 ) Balance as of September 30, 2019 $ 1,244 May 6, 2019 September 30, 2019 Warrant Liability Stock Price $ 6.00 $ 4.36 Exercise Price $ 3.90 $ 3.90 Expected remaining term (in years) 1.60 – 1.68 1.20 – 1.28 Volatility 64 % 64% – 69 % Risk-free interest rate 2.39 % 1.72 % The valuation of the warrants is subject to uncertainty as a result of the unobservable inputs. If the volatility rate or risk-free interest rate were to change, the value of the warrants would be impacted. At September 30, 2019, the Company would be required to pay $0.3 million if all warrants were settled in cash or issue 712,823 shares if all warrants were settled in shares. |
Other Liabilities
Other Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Other Liabilities [Abstract] | |
Other Liabilities | Note 12 – Other Liabilities Other liabilities consist of the following: Dollars in thousands September 30, 2019 December 31, 2018 Cash Advance $ - $ 1,898 Deferred Rent - 16 Total Other Liabilities $ - $ 1,914 During the fourth quarter of 2018, the Company received cash advances totaling $2.4 million from a third party lender, plus fees of $0.3 million, that were secured by customer payments on future sales and receivables. $0.8 million of the cash advance was paid back to the lender in the fourth quarter of 2018 and the remaining $1.9 million was paid during the nine month period ended September 30, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 13 – Commitments and Contingencies We have entered into lease, royalty and line of credit agreements for which we are committed to pay certain amounts over a period of time. See Notes 8, 9, and 10. In the normal course of business, the Company is subject to certain claims or lawsuits. Management is not aware of any claims or lawsuits that may have a material adverse effect on the consolidated financial position or results of operations of the Company. The Company has historically collected and remitted sales tax based on the locations of its significant physical operations. On June 21, 2018, the U.S. Supreme Court rendered a 5-4 majority decision in South Dakota v. Wayfair Inc., 17-494. Among other things, the Court held that a state may require an out-of-state seller with no physical presence in the state to collect and remit sales taxes on goods the seller ships to consumers in the state, overturning existing court precedent. Additionally, the Company discovered that TruPet had not collected and paid sales tax related to all sales in some states where it had a physical presence. The Company has estimated and recorded $1.2 million of sales tax liability as of September 30, 2019. While additional assessments are not anticipated, additional states may assert that the Company has nexus and must pay sales tax for prior sales. We do not believe that additional assessments, if any, will have a material impact on our financial position or results of operations. |
Redeemable Series E Convertible
Redeemable Series E Convertible Preferred Stock | 9 Months Ended |
Sep. 30, 2019 | |
Redeemable Series E Convertible Preferred Stock [Abstract] | |
Redeemable Series E Convertible Preferred Stock | Note 14 – Redeemable Series E Convertible Preferred Stock On October 22, 2018, the Board approved a resolution to designate a series of 2,900,000 shares of its Redeemable Series E Convertible Preferred Stock pursuant to its articles of incorporation of which 2,846,356 were issued. The Redeemable 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. On May 6, 2019, 2,633,678 outstanding shares of Redeemable Series E Convertible Preferred Stock, represented an element of the purchase price were acquired and recorded at fair value ( based on the $6.00 per share closing price of Better Choice Company’s shares of Common Stock 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 Redeemable 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. The below table summarizes changes in the balance of Redeemable Series E Convertible Preferred Stock since inception through September 30, 2019 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 September 30, 2019 1,707,920 $ 13,007 The rights preferences and privileges of Redeemable Series E Convertible Preferred stock are as follows: Voting The Redeemable Series E Convertible Preferred Stock has voting rights equal to those of the underlying Common Stock and ranks senior i . Dividends The holders of the Redeemable Series E Convertible Preferred stock are entitled to receive cumulative dividends at a rate of 10% per annum on the stated value. Each Holder of Redeemable Series E Convertible Preferred stock will be entitled to receive dividends or distributions on each share of Redeemable Series E Convertible Preferred stock on an as converted into common stock basis. Pursuant to waiver letters executed by each investor, the holders of the Company’s Redeemable Series E Convertible Preferred Stock agreed to waive their right to the distribution of dividends until October 22, 2019. Dividends accrued are $0.2 million as of September 30, 2019. Liquidation In the event of a Liquidation Event, the holders of Redeemable Series E Convertible Preferred stock will be entitled to receive in cash out of the assets of the Company, whether from capital or from earnings available for distribution to its stockholders, before any amount shall be paid to the holders of any of shares of Common Stock, an amount per share of Series E Preferred equal to the greater of (A) the sum of (1) the Stated Value thereof plus (2) the Additional Amount thereon and any accrued and unpaid Late Charges with respect to such Stated Value and Additional Amount as of such date of determination (the “Conversion Amount”) and (B) the amount per share such holder of Redeemable Series E Convertible Preferred would receive if such holder converted such Series E into Common Stock immediately prior to the date of such payment. Liquidation Event means, whether in a single transaction or series of transactions, the voluntary or involuntary liquidation, dissolution or winding up of the Corporation or such Subsidiaries the assets of which constitute all or substantially all of the assets of the business of the Corporation and its Subsidiaries, taken as a whole. Conversion Each holder of Redeemable Series E Convertible Preferred stock will be entitled to convert any portion of the outstanding Redeemable Series E Convertible Preferred held by such holder into validly issued, fully paid and non-assessable shares of common stock at the Conversion Rate. The number of shares of common stock issuable upon conversion of any share of Redeemable Series E Convertible Preferred would be determined by dividing (x) the Conversion Amount of such share of Series E Preferred by (y) the Conversion Price. The Redeemable 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. Redemption Under certain default conditions, the Redeemable 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. The Redeemable 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. |
Stockholders' Deficit
Stockholders' Deficit | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Deficit [Abstract] | |
Stockholders' Deficit | Note 15 - Stockholders’ Deficit As noted above, 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 14,229,041 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 18,103,273 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 re-cast 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. Capital Contributions and Distributions of Capital During the nine months ended September 30, 2018, a Company Director contributed $0.4 million and received $0.4 million as distributions. There was no equity issued for the contribution. Series A Preferred Units In December 2018, the Company completed a private placement and issued 2,162,536 Series A Preferred Units to unrelated parties for $2.40 per unit. The proceeds were approximately $4.7 million, net of $0.5 million of 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. Common Stock The Company was authorized to issue 580,000,000 shares of Common Stock as of December 31, 2018. 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 and Preferred 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 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 45,427,659 and 11,661,485 shares of Common Stock issued and outstanding as of September 30, 2019 and December 31, 2018, respectively. 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. The December Offering generated $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 Units, and $0.1 million of the net proceeds were received on January 8, 2019 for the sale of 25,641 Units. 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 May 6, 2019, the Company acquired 1,011,748 shares of Common Stock (equivalent to 914,919 member units) valued at $6.1 million representing its initial 7% investment in TruPet. These shares are recorded as an acquisition of treasury shares. The Company issued 5,744,991 million units for gross proceeds of $3.00 per unit, also closing on May 6, 2019 with the PIPE transaction. Each unit included one share of Common Stock of Better Choice Company stock and a warrant to purchase an additional share. The shares issued in the PIPE are subject to the Securities and Exchange Commission’s Rule 144 restrictions which require the purchasers of the PIPE units to hold the shares for at least 6 months from the date of issuance. The funds raised from the PIPE 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 the employment agreement of an officer with Bona Vida dated October 29, 2018, the officer was entitled to a $500,000 Change of Control payment. The officer later agreed to receive 100,000 shares of Better Choice Company Common Stock. The 100,000 shares of Common Stock were valued at $6.00 per share, which was the market value as of the date of Acquisition. As of September 30, 2019, the Company has reserved approximately 18 million shares of Common Stock for future issuance as follows: September 30, 2019 Conversion of Redeemable Series E Convertible Preferred Stock 2,167,744 Exercise of options to purchase Common Stock 6,031,462 Warrants to purchase Common Stock 9,533,354 Total shares of Common Stock reserved for future issuance 17,732,560 The Company did not reserve any units for future issuances during the period ended September 30, 2018. Stock Awards During the period from November 1, 2018 through May 5, 2019, incentive equity awards for the equivalent of 1.1 million shares were awarded to employees and consultants. The incentive equity awards were valued at the date of award with a weighted average value per share of $2.26. The awards were to vest over a period of three or four years. On May 6, 2019, all outstanding 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 was recorded in the Consolidated Statements of Operations and Comprehensive Loss on May 6, 2019. There were no other incentive equity awards issued or outstanding during the nine months ended September 30, 2018. As of December 31, 2018, incentive equity awards for the equivalent of 164,356 shares were awarded to a consultant. Stock Options Options which had been granted in December 2018 to purchase an aggregate of 38,462 shares of Common Stock at an exercise price of $6.76 per share were outstanding prior to the merger. As a result of the merger, those options immediately vested. The estimated fair value associated with the vesting options with a value of $0.1 million is part of the purchase price of Better Choice Company. The options have not been exercised, remain outstanding at September 30, 2019, have a remaining life of 4.2 years and no intrinsic value. 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. Options to purchase an aggregate of 5,250,000 shares of the Company’s Common Stock at an exercise price of $5.00 per share were granted to management and non-employee directors of Better Choice Company on May 2, 2019. Subject to the holder’s continued service to the Company, 1/24 th After the Acquisitions, an additional 743,000 stock option awards were granted under the 2019 Incentive Award Plan. During the three and nine months ended September 30, 2019, 912,917 stock option awards vested due to severance agreements. All vested options are 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). The following table provides detail of the options granted and outstanding under the 2019 Incentive Award Plan. The table excludes any options awarded before the Plan was implemented. Vested Options Non-vested options Total Number of Options Weighted Average Exercise Price Number Number Weighted average grant date fair value Acquired on May 6, 2019 5,250,000 $ 5.00 - 5,250,000 $ 2.75 Granted 743,000 5.95 - 743,000 2.56 Vested during period 5.05 2,080,829 (2,080,829 ) 2.75 Options outstanding at September 30, 2019 5, 993,000 $ 5.12 2,080,829 3,912,171 $ 2.73 Options expected to vest 3,907,571 Weighted average exercise price 5.05 $ 5.15 Weighted average remaining contractual term (years) 9.6 9.6 Aggregate intrinsic value at September 30, 2019 (in thousands) $ 2 $ 74 Pursuant to ASC 718-10-35-8, the Company recognizes compensation cost for stock 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. • Term: Equal to the mid-point between the fully vested date and the contractual expiration of the option. • Dividend yield: 0% • Exercise Price: $3.70 to $7.50 • Risk-free rate: 1.41% to 2.39% • Volatility: 55-60% The number of options expected to vest are estimated based on expected attrition rates for non-executives. Aggregate intrinsic value represents the fair value of the Company’s Common Stock at the end of the period in excess of the exercise price multiplied by the number of options. Warrants On May 6, 2019, the Company acquired 712,823 warrants to purchase Common Stock with a weighted average exercise price of $3.90 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. Additionally, in connection with the PIPE transaction, the Company issued 220,539 warrants to brokers with an exercise price of $3.00. During the three months ended September 30, 2019, a company advisor was issued 2,500,000 warrants with a strike price of $0.10 and 1,500,000 warrants with a strike price of $10.00. Warrants Exercise Price Warrants Acquired on May 6, 2019 712,823 $ 3.90 Issued 9,965,530 4.05 Exercised (1,144,999 ) 3.50 Warrants outstanding at September 30, 2019 9,533,354 $ 4.01 The intrinsic value of outstanding warrants is $11.8 million as of September 30, 2019. No warrants were issued or outstanding at September 30, 2018. |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2019 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | Note 16 - Employee Benefit Plans The Company maintains a qualified defined contribution 401(k) plan, which covers substantially all of our employees. Under the plan, participants are entitled to make pre-tax and/or Roth post-tax contributions up to the annual maximums established by the Internal Revenue Service. The Company matches 4% of participant contributions pursuant to the terms of the plan, which contributions are limited to a percentage of the participant’s eligible compensation. The Company made contributions related to the plan of less than $0.1 million during both the three and nine months ended September 30, 2019, respectively and zero during the three and nine months ended September 30, 2018. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 17 - Related Party Transactions Management Services A related party provided management services during 2018. Payments related to this arrangement were less than $0.1 million for the three and nine months ended September 30, 2018. No payments were made to the related party during 2019. There were no outstanding balances at September 30, 2019 or December 31, 2018. Marketing Services A related party provides online traffic acquisition marketing services for the Company. The Company paid a total of $0.1 million for their services during the three and nine months ended September 30, 2019 and September 30, 2018. The service contract has a 30-day termination clause. Outstanding balances were less than $0.1 million at September 30, 2019 and December 31, 2018. Financial and Accounting Personnel The Company entered into an agreement with a related party 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. Payments related to this agreement were less than $0.1 million and $0.2 million for the three and nine-month periods ended September 30, 2019, respectively. As of September 30, 2019, the agreement was terminated and there is no outstanding balance due. 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 officers. Additionally, the Company paid approximately $0.4 million to this entity for other professional services rendered. No amounts have been paid in 2019. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | Note 18 - Income Taxes For the three and nine months ended September 30, 2019 we recorded income tax expense of zero. Our effective tax rate differs from the United States federal statutory rate of 21% primarily because our losses have been offset by a valuation allowance due to uncertainty as to the realization of the tax benefit of net operating losses (“NOLs”). The following is a reconciliation of the total amounts of unrecognized tax benefits (in thousands): Nine months ended September 30, 2019 Unrecognized tax benefit beginning of year $ -- Decreases-tax positions in prior year -- Increases-tax positions in current year -- Unrecognized tax benefit end of year $ -- As of September 30, 2019, we had no accrued interest and penalties related to uncertain income tax positions. We do not anticipate that the amount of unrecognized tax benefits will significantly increase or decrease within the next twelve months. As of September 30, 2019, and 2018, the Company does not have any significant uncertain tax positions. If incurred, the Company would classify interest and penalties on uncertain tax positions as income tax expense. On December 22, 2017, the United States government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act significantly revises the existing tax law by, among other things, lowering the United States corporate income tax rate from 35% to 21% beginning in 2018. Although the accounting related to the income tax effects of the TCJA is complete pursuant to available guidance, certain technical aspects of the TCJA remain subject to varying degrees of uncertainty as additional technical guidance and clarification from the U.S. government continues to be issued. Receipt of additional guidance and clarification from the U.S. government, as well as changes to the Company’s operations, may result in material changes to the provision for income taxes. To the extent applicable, the Company would recognize such adjustments in the provision for income taxes in the period that additional guidance and clarification is received. |
Major Suppliers
Major Suppliers | 9 Months Ended |
Sep. 30, 2019 | |
Major Suppliers [Abstract] | |
Major Suppliers | Note 19 - Major Suppliers The Company purchased approximately 85% and 60% of its inventories from one vendor for the nine months ended September 30, 2019 and 2018, respectively and approximately 90% and 51% for the three months ended September 30, 2019 and 2018, respectively. |
Concentration of Credit Risk an
Concentration of Credit Risk and Off-Balance Sheet Risk | 9 Months Ended |
Sep. 30, 2019 | |
Concentration of Credit Risk and Off-Balance Sheet Risk [Abstract] | |
Concentration of Credit Risk and Off-Balance Sheet Risk | Note 20 - Concentration of Credit Risk and Off-Balance Sheet Risk Cash and cash equivalents and accounts receivable potentially subject the Company to concentrations of credit risk. At September 30, 2019 and December 31, 2018, all the Company’s cash and cash equivalents were deposited in accounts at several financial institutions. The Company maintains its cash and cash equivalents with high-quality, accredited financial institutions and, accordingly, such funds are subject to minimal credit risk. The Company may maintain balances with financial institutions in excess of federally insured limits. The Company has not experienced any losses historically in these accounts and believes it is not exposed to significant credit risk in its cash and cash equivalents. The Company has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts, or other hedging arrangements. The largest customer of the Company had purchases that represented approximately 4% and 6% of total gross sales for the nine months ended September 30, 2019 and 2018, respectively and approximately 4% and 6% for the three months ending September 30, 2019 and 2018. Accounts receivable from the largest customer represented 38% and 54% of accounts receivable at September 30, 2019 and December 31, 2018, respectively. |
Net Loss per Share
Net Loss per Share | 9 Months Ended |
Sep. 30, 2019 | |
Net Loss per Share [Abstract] | |
Net Loss per Share | Note 21 - 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 three and nine month periods ended September 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 nine months ended September 30, 2019 and 2018: Dollars in thousands except per share amounts Nine Months Ended September 30, Three Months Ended September 30, 2019 2018 2019 2018 Common Stockholders Numerator: Net loss $ (170,311 ) $ (3,836 ) $ (6,025 ) $ (1,437 ) Less: Preferred Stock Dividends 70 - 43 - Net loss attributable to Common Stockholders $ (170,381 ) $ (3,836 ) $ (6,068 ) $ (1,437 ) Denominator: Weighted average shares used in computing net loss per share attributable to Common Stockholders, basic and diluted 28,624,230 11,497,128 43,575,010 11,497,128 Net loss per share attributable to Common Stockholders, basic and diluted $ (5.95 ) $ (0.33 ) $ (0.14 ) $ (0.12 ) |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2019 | |
Going Concern [Abstract] | |
Going Concern | Note 22 - Going Concern The Company has incurred losses over the last three years and has an accumulated deficit. These operating losses create substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date these consolidated financial statements are issued. The 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. We reviewed sales and profitability forecasts for the Company for the next fiscal year including the impact of the acquisition of Halo, Purely for Pets, Inc. (“Halo”) on December 20, 2019. The Company believes its available cash together with future capital raises and available borrowings, are sufficient to fund planned operations and operate its business for the next 12 months. The Company continues to have access to the public markets for additional funds for operations as well as refinancing of existing loans. If the Company is unable to raise the necessary funds when needed or achieve planned cost savings, or other strategic objectives are not achieved, the Company may not be able to continue its operations or the Company could be required to modify its operations that could slow future growth. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 23 - Subsequent Events Management has evaluated subsequent events through the date on which the consolidated financial statements were issued. Lease Operations In October 2019, the Company moved its distribution center to its new facility. The lease on its new distribution facility was signed in May 2019. In November 2019, the Company terminated its month-to-month office lease at its Milford, Ohio location and started a new month-to-month lease in Blue Ash, Ohio. Subordinated Convertible Notes On November 6, 2019, the Company issued 2,750 subordinated convertible notes (each, a “Convertible Note” and collectively, the “Convertible Notes”) for total proceeds of $2.75 million to existing shareholders. In connection with the Convertible Notes, the purchasers will be issued warrants (each, a “Warrant” and collectively, the “Warrants”) to purchase shares of common stock par value $0.001 of the Company (the “Common Stock”) equal to 62.5 Warrants for each Note. Each Warrant will entitle the holder thereof to purchase one share of Common Stock of the Company for a period of 24 months from the date of the consummation of a future initial public offering (“IPO”) at an exercise price equal to the greater of (i) $5.00 per share or (ii) the price at which the Common Stock of the Company was sold in the IPO. The issue price per Convertible Note is $1,000 and the maturity date is two years from the issue date. The Convertible Notes include interest at a rate of 10.0% per annum from the date of issue, payable quarterly. Fifty percent of the interest shall be payable in kind and the remainder shall be payable in cash. The Company intends to use the net proceeds from the offering for general working capital needs. Halo Acquisition On October 15, 2019, the Company entered into a Stock Purchase Agreement (“the Agreement”) with Halo, a Delaware corporation, Thriving Paws, LLC, a Delaware limited liability company (“Thriving Paws”), HH-Halo LP, a Delaware limited partnership (“HH-Halo” and, together with Thriving Paws, the “Sellers”) with HH-Halo, in the capacity of the representative of the Sellers. Pursuant to the terms and subject to the conditions of the Agreement, the Company agreed to purchase one hundred percent (100%) of the issued and outstanding capital stock of Halo. Halo is an ultra-premium, natural pet food brand. On December 18, 2019, Better Choice Company Inc. entered into an Amended and Restated Stock Purchase Agreement by and among the Company, Halo and the Sellers to acquire one hundred percent (100%) of the issued and outstanding capital stock of Halo, Purely For Pets, Inc (the “Acquisition”). Pursuant to the Amended Agreement, a portion of the consideration for the Acquisition as described below was paid to Werner von Pein, the chief executive officer of Halo. Under the terms of the Amended Agreement, the Company completed the Acquisition on December 19, 2019, for approximately $45 million pending final valuation of non-cash components issued to the sellers in the acquisition. The consideration was subject to customary adjustments for Halo’s net working capital, cash, and indebtedness, and consisted of a combination of (i) cash consideration, (ii) a total of 2,134,390 shares of the Company’s common stock, par value $0.001 per share, and (iii) transaction costs. The Company also (i) entered into a Subscription Agreement with the Sellers relating to the issuance of the Common Stock Consideration, (ii) issued convertible subordinated seller notes (“Seller Notes”), and (iii) issued Seller Warrants on December 19, 2019. Seller Notes The Seller Notes are scheduled to mature on June 30, 2023 and accrue interest at 10.00% per annum from December 19, 2019 until the Maturity Date, payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year. The interest shall be payable by increasing the aggregate principal amount of the Seller Notes. The Seller Notes may be converted into shares of Common Stock at any time prior to the last Business Day immediately preceding the Maturity Date and shall be automatically converted into Common Stock upon an IPO. The conversion price shall be equal to the lower of $4.00 per share or the price at which the Common Stock was sold in an IPO. In the event of a change of control, each holder of the Seller Notes shall have the option to (i) convert all of the Seller Notes held by such holder into a replacement note issued by the new issuer in an aggregate principal amount equal to 104% of the outstanding principal amount of, and all accrued interest on, the Seller Notes held by such holder or (ii) require the Company to repay all of the outstanding principal amount of the Seller Notes held by such holder at a redemption price of 4% of the sum of all outstanding principal amount of the Seller Notes held by such holder plus all accrued interest thereon. If any such holder of Seller Notes fails to make an election above within thirty days of receipt of written notice of the change of control, all principal and accrued interest under the Seller Notes held by such holder shall automatically convert into Common Stock at the conversion price. Loan Agreement On December 19, 2019, the Company entered into a Loan Facilities Agreement (the “Facilities Agreement”) by and among the Company, as the borrower, the several lenders from time to time parties thereto (collectively, the “Lenders”) and a private debt lender, as agent (the “Agent”) that provides for a term loan facility not to exceed $20.5 million (the “Term Facility”) and a revolving demand loan facility not to exceed $7.5 million (the “Revolving Facility” and, together with the Term Facility, the “Facilities”). The Facilities are scheduled to mature on December 19, 2020 or such earlier date on which a demand is made by the Agent or any Lender. The obligations of the Company under the Facilities Agreement are guaranteed by each of the Company’s domestic subsidiaries and secured by a first-priority security interest in substantially all of the assets of the Company and the assets of its domestic subsidiaries. Borrowings under the Facilities bear interest at a rate per annum equal to the floating annual rate of interest established from time to time by the Bank of Montreal plus 8.05% calculated on the daily outstanding balance of the Facilities and compounded monthly. The revolving line of credit was satisfied in full on the same date. Three directors of the Company entered into a Continuing Personal Guaranty agreement as a condition to the Facilities Agreement. Amended Subordinated Convertible Notes The Subordinated Convertible Notes were amended on January 6th, 2020. Pursuant to Section 7(c) of the Subordinated Convertible Promissory Note (the “Notes”) issued on November 11, 2019, the Purchasers have the right to amend and restate the Note and related documents to incorporate the preferable terms of any convertible promissory notes issued after November 11, 2019, so long as the Note is outstanding. As disclosed in the Company’s 8-K issued on December 26, 2019, the Company issued convertible subordinated notes to the Sellers and Werner von Pein. The Amended Agreement was entered into in order to incorporate only the preferable terms of the convertible subordinated notes issued to the Sellers and all other terms and provisions of the Note shall remain in full force and effect. Pursuant to the Amended Notes, the interest shall be payable by increasing the aggregate principal amount of the Notes (such increase being referred to therein as “PIK Interest”). As amended, for so long as any Event of Default (as defined in the Note) exists, interest shall accrue on the Note principal at the default interest rate of 12.0% per annum, and such accrued interest shall be immediately due and payable. As amended, the provisions of the Note that provided for an additional number of shares of Common Stock to the Investor if the IPO (as defined in the Note) had not been completed by June 30, 2020, have been removed. 2019 Incentive Award Plan On November 11, 2019, the Company received shareholder approval for the Amended and Restated 2019 Incentive Award Plan. Under the Amended and Restated 2019 Incentive Award Plan, the number of awards available for issuance increased from 6,000,000 to 9,000,000 with the closing of the Halo Acquisition on December 20, 2019. Effective as of December 19, 2019, the Board repriced all outstanding options to purchase Common Stock issued pursuant to the 2019 Better Choice Amended and Restated Incentive Award Plan, including options held by executive officers. As a result, the exercise price of all Options was lowered to $1.82 per share, the closing price of the Company ’ s Common Stock on December 19, 2019. No other terms of the Options were changed. Damian Dalla-Longa, Chief Executive Officer of the Company, Andreas Schulmeyer, Chief Financial Officer of the Company, and Anthony Santarsiero, President of the Company, are the executive officers who hold Options subject to the repricing. The Board effectuated the repricing to realign the value of the Options with their intended purpose, which is to retain and motivate the holders of the Options to continue to work in the best interests of the Company. Prior to the repricing, many of the Options had exercise prices well above the recent market prices of the Common Stock. The Options were repriced unilaterally, and the consent of holders was neither necessary nor obtained. Stock and Warrant Issuance On December 31, 2019, the Company issued 20,371 stock options at a strike price of $2.70 to Mr. Schulmeyer as a sign on bonus as per the employment agreement On January 3, 2020, the Company issued 308,642 shares of Common Stock to an investor for net proceeds of $0.5 million, net of issuance costs of less than $0.1 million. During January 2020, the Company issued shares below the exercise price of warrants acquired on May 6, 2019. Pursuant to the warrant agreement, the Company is required to issue an additional 1,003,232 warrants to its warrant holders at $1.62 exercise price and revise the existing warrants to an exercise price of $1.62. The stock issued in conjunction with the Halo acquisition triggered an anti-dilution clause as part of an agreement with a third party. The Company will settle the required issuance of an additional 250,000 shares in the first quarter of 2020. ABG Termination On January 16, 2020, the Company terminated the Houndog licensing agreement (“Agreement”) with Associated Brands Group and Elvis Pressley Enterprises due to business judgment. As part of the termination, the Company agreed to the following: (1) to pay ABG One Hundred Thousand Dollars ($0.1 million) in cash upon the signing of this Agreement, (2) to issue to ABG Seventy Two Thousand Seven Hundred Twenty (72,720) shares of BTTR’s common stock, (3) to pay to ABG One Hundred Thousand Dollars ($0.1 million) in cash in four equal installments, (4) to issue to ABG Six Hundred Thousand Dollars ($0.6 million) in Subordinated Promissory Notes (the “Notes”), with the condition being that if the Company sells existing inventory in excess of One Hundred Thousand Dollars ($0.1 million), the Six Hundred Thousand Dollar ($0.6 million) Subordinated Promissory Note will be reduced on a dollar for dollar basis and (5) to issue to ABG a common stock purchase warrant (the “Warrants”) equating to a value of $150,000. The Notes are scheduled to mature on June 30, 2023 (the “Maturity Date”) and accrue interest at 10.00% per annum from January 13, 2020, until the Maturity Date, payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year. The interest shall be payable by increasing the aggregate principal amount of the Notes (such increase being referred to herein as “PIK Interest”). The Notes may be converted into shares of Common Stock at any time prior to the last Business Day immediately preceding the Maturity Date and shall be automatically converted into Common Stock upon an IPO (as defined in the Notes). The conversion price shall be equal to the lower of $4.00 per share or the price at which the Common Stock was sold in an IPO. In the event of a change of control, each holder of the Notes shall have the option to (i) convert all of the Notes held by such holder into a replacement note issued by the new issuer in an aggregate principal amount equal to 104% of the outstanding principal amount of, and all accrued interest on, of the Notes, held by such holder or (ii) require the Company to repay all of the outstanding principal amount of the Notes held by such holder at a redemption price of 4% of the sum of all outstanding principal amount of the Notes held by such holder plus all accrued interest thereon. If any such holder of Notes fails to make an election above within thirty days of receipt of written notice of the change of control, all principal and accrued interest under the Notes held by such holder shall automatically convert into Common Stock at the conversion price. The Warrants are exercisable for 24 months from the date of the consummation of an IPO (as defined in the Warrants) at an exercise price equal to the greater of (i) $5.00 per share or (ii) the price at which the Common Stock was sold in the IPO. No other recognized or non-recognized subsequent events were identified for recognition or disclosure in the financial statements. |
Nature of Business and Summar_2
Nature of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Nature of Business and Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation On May 6, 2019, Better Choice Company, Inc. completed the acquisition, for TruPet LLC (“TruPet”) and Bona Vida Inc. (“Bona Vida”) in a pair of all stock transactions (the “Acquisitions”) through the issuance of 32,332,314 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. The Company is the legal acquirer of TruPet and Bona Vida. However, the Acquisitions were treated as a reverse acquisition whereby TruPet acquired the Company and Bona Vida for accounting and financial reporting purposes. As a result, the financial statements for the nine months ending September 30, 2019 are comprised of 1) the results of TruPet for the period between January 1, 2019 and September 30, 2019 and 2) the results of the Company and Bona Vida, after giving effect to the Acquisitions on May 6, 2019 through September 30, 2019. All periods presented prior to the effective date of the Acquisitions are comprised solely of the operations and financial position of TruPet, and therefore, are not directly comparable. TruPet’s equity has been re-cast to reflect the equity structure of Better Choice Company and the shares of Common Stock received in the Acquisitions. References to the “Company”, “we”, “us” and “our” in this Report, refer to TruPet and its consolidated subsidiaries prior to May 6, 2019 and to Better Choice Company, TruPet and Bona Vida and their consolidated subsidiaries post May 6, 2019. The Company’s consolidated financial statements are prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission for quarterly reports and accounting principles generally accepted in the United States (GAAP). The financial statements are presented on a consolidated basis subsequent to the Acquisitions and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. 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 nine months ended September 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 in U.S. dollars (thousands), numbers in the text in dollars (millions), shares in thousands, and % as rounded up or down. |
Going Concern Considerations | Going Concern Considerations The Company is subject to risks common in the pet wellness consumer market including, but not limited to, dependence on key personnel, competitive forces, successful marketing and sale of its products, the successful protection of its proprietary technologies, ability to grow into new markets, compliance with government regulations, and the ability to obtain additional financing when needed. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and payments of liabilities in the ordinary course of business. Accordingly, the consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount of and classification of liabilities that may result should the Company be unable to continue as a going concern. See “Note 22- Going Concern” for more information. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include demand deposits held with banks and highly liquid investments with original 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 line of credit agreement secured with a financial institution, the Company is required to maintain a restricted cash balance of $6.2 million in its account. Any withdrawals from the account require an equal reduction to the funds available under the line of credit agreement. See “Note 10 – Line of Credit and Due to Related Parties” for more details on the revolving credit agreement. The Company is also required to maintain a restricted cash balance of less than $0.1 million associated with a business credit card. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable and allowance for doubtful accounts Accounts receivable primarily consist of credit card payments receivable from third-party credit card processing companies and unpaid buyer invoices from the Company’s wholesale customers. Accounts receivable is stated at the amount billed to customers, net of point of sale discounts. The Company assesses the collectability of all receivables on an ongoing basis by considering its historical credit loss experience, current economic conditions, and other relevant factors. Based on this analysis, an allowance for doubtful accounts is recorded. The provision for doubtful accounts is included in general and administrative expense in the consolidated statements of operations. As of September 30, 2019 and December 31, 2018, the Company considers accounts receivable to be fully collectible and, accordingly, no allowance for doubtful accounts was recorded. |
Inventories | Inventories Inventories, primarily consisting of products available for sale and supplies, are valued using the first-in first-out (“FIFO”) method and are recorded at the lower of cost or net realizable value. Cost is determined on a standard cost basis and includes the purchase price, as well as inbound freight costs and packaging costs. The Company regularly reviews inventory quantities on hand. Excess or obsolete reserves are established when inventory is estimated to not be sellable before expiration dates based on forecasted usage, product demand and product life cycle. Additionally, |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Depreciable lives are 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 property and equipment accounts in the year of disposal with the resulting gain or loss reflected in general and administrative expenses. 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. No impairment charges have been incurred for property and equipment for any period presented. |
License Intangibles | License Intangibles Intangible assets acquired are carried at cost, less accumulated amortization. The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable and any not expected to be recovered through undiscounted future net cash flows and assets are written down to current fair value. The Company acquired a licensing agreement for Houndog brand. The estimated life was six years and was amortized on a straight line basis. On January 16, 2020, the Company terminated the licen |
Redeemable Convertible Preferred Stock | Redeemable Convertible Preferred Stock In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 480, Distinguishing Liabilities from Equity (ASC 480), preferred stock issued with redemption provisions that are outside of the control of the Company or that contain certain redemption rights in a deemed liquidation event is required to be presented outside of stockholders’ deficit on the face of the consolidated balance sheet. The Company’s Redeemable |
Income Taxes | Income Taxes Income taxes are recorded in accordance with FASB ASC Topic 740, Income Taxes (ASC 740), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement and tax bases of assets and liabilities and for loss and credit carryforwards using enacted tax rates anticipated to be in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if, based upon the weight of available evidence, it is more likely than not that some or all the deferred tax assets will not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that some or all the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of September 30, 2019, and 2018, the Company does not have any significant uncertain tax positions. If incurred, the Company would classify interest and penalties on uncertain tax positions as 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). TruPet adopted ASC 606, Revenue from Contracts with Customers |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold consists primarily of the cost of product obtained from third-party contract manufacturing plants, packaging materials, CBD oils directly sourced by the Company, and inventory freight for shipping product from third-party contract manufacturing plants to the Company’s warehouse. |
General and Administrative Expenses | General and Administrative Expenses General and administrative expenses include management and office personnel compensation and bonuses, corporate level information technology related costs, rent, travel, professional service fees, insurance, product development costs, general corporate expenses and outbound shipping. Shipping costs primarily consist of costs associated with moving finished products to customers through third-party carriers. Shipping costs were $0.6 million and $1.8 million for the three and nine month periods ended September 30, 2019 and $0.6 million and $1.9 million during the three and nine month periods ended September 30, 2018, respectively. For direct to consumer customers, the Company may recover shipping costs by charging the customer a shipping fee. In these instances, the Company includes the shipping charges billed to customers in net sales. The amount included in net sales related to such recoveries was $0.2 million and $0.5 million for the three and nine month periods ended September 30, 2019 and $0.2 million and $0.7 million for the three and nine month periods ended September 30, 2018, respectively. |
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 online advertising, search costs, email advertising, and radio advertising were $1.8 million and $0.8 million for the three months ended September 30, 2019 and 2018, respectively and $5.8 million and $3.0 million for the nine-month periods ended September 30, 2019 and 2018, 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. Research and development costs incurred during both the three and nine month periods months ended September 30, 2019 were less than $0.1 million. No research and development costs were incurred during the three or nine month periods ended September 30, 2018. |
Customer Service and Warehousing | Customer Service and Warehousing Customer Service and Warehousing include costs associated with storing inventory, customer service and fulfilling customer orders. |
Fair Value of Financial 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 on the balance sheets consist of cash and cash equivalents, restricted cash, accounts receivable, deposits, accounts payable, line of credit, due to related party, accrued and other liabilities, and warrant derivative liability. The warrant derivative liability is measured, due to their short term nature, 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. The Company uses applicable guidance for defining fair value, the initial recording and periodic remeasurement of certain assets and liabilities measured at fair value, and related disclosures for instruments measured at fair value. Fair value accounting guidance establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. An instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the instrument’s fair value measurement. The Company measures assets and liabilities using inputs from the following three levels of fair value hierarchy: Level 1 - Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3 - Unobservable inputs for the asset or liability for which there is little, if any, market activity at the measurement date. Unobservable inputs reflect the Company’s own assumptions about what market participants would use to price the asset or liability. The inputs are developed based on the best information available in the circumstances, which may include the Company’s own financial data, such as internally developed pricing models, DCF methodologies, as well as instruments for which the fair value determination requires significant management judgment. The following table sets forth the Company’s financial liabilities that were accounted for at fair value on a recurring basis by level within the fair value hierarchy as of September 30, 2019 and December 31, 2018: September 30, 2019 Dollars in thousands Level 1 Level 2 Level 3 Total Liabilities Warrant derivative liability $ - $ - $ 1,244 $ 1,244 |
Basic and Diluted Loss Per Share | Basic and Diluted Loss Per Share Basic and diluted loss per share has been determined by dividing the net loss available to common 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. |
Share-Based Compensation | Share-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 follows the fair value method of accounting for stock awards granted to employees, directors, officers and consultants. Share-based awards to employees are measured at the fair value of the related share-based awards on grant date. The Company recognizes share-based payment expenses over the vesting period based on the number of awards expected to vest over that period on a straight-line basis. The Company’s share-based compensation awards are subject only to service based vesting conditions. 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 and the dividend yield on the underlying stock. Expected volatility is calculated based on the analysis of other public companies within the pet wellness, Internet commerce, and hemp derived CBD sectors. 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. |
Use of Estimates | Use of Estimates The preparation of the consolidated 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. The Company’s results can also be affected by economic, political, legislative, regulatory and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings. Significant changes to the key assumptions used in the valuations could result in different fair values of equity instruments at each valuation date. |
Segment Information | Segment Information Operating segments are defined 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 reviews operating results on an aggregated basis. All the assets and operations of the Company are in the United States. |
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. Legal costs such as outside counsel fees and expenses are charged to expense in the period incurred and are recorded in general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. 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 lease, royalty and line of credit agreements for which we are committed to pay certain amounts over a period of time. See Notes 8, 9, and 10. In connection with the preparation of the Company’s consolidated financial statements for the three and nine month periods ended September 30, 2019, the Company identified an error as of December 31, 2018 and June 30, 2019, related to an understatement of sales taxes due and payable of $0.7 million and $0.8 million, respectively. The error was corrected during the three and nine month periods ended September 30, 2019. The Company believes that the correction of this error is not material to the consolidated financial statements as of and for the three and nine month periods ended September 30, 2019. |
Reclassification of Prior Period Presentation | 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 | 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. Recently adopted: Adoption of FASB ASC Topic 842 “Leases” In February 2016, the Financial Accounting Standard Board (’ FASB’) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842) ” The adoption of ASC 842 resulted in recognition of right-of-use assets of $0.4 million and operating lease liabilities of $0.4 million as of January 1, 2019. The Company adopted the optional transition method that gives companies the option to use the adoption date as the initial application on transition. Accordingly, 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 January 1, 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 of January 1, 2019 as permitted under the ASU. As this standard only requires additional disclosures, there is no financial statement impact of its adoption. Issued but not Yet Adopted: ASU 2016-13 “Financial Instruments – Credit Losses (Topic 326)” In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses (Topic 326),” a new standard to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The standard is effective for the Company on January 1, 2021, and early adoption is permitted. The Company is currently evaluating the impact the new standard will have on its consolidated financial statements. ASU 2018-15 “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40)” In August 2018, the FASB issued ASU 2018-15 “ 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_3
Nature of Business and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Nature of Business and Summary of Significant Accounting Policies [Abstract] | |
Depreciable Lives | Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Depreciable lives are as follows: Furniture and Fixtures 5 to 7 years Equipment 7 years |
Financial Liabilities Measured on Recurring Basis | The following table sets forth the Company’s financial liabilities that were accounted for at fair value on a recurring basis by level within the fair value hierarchy as of September 30, 2019 and December 31, 2018: September 30, 2019 Dollars in thousands Level 1 Level 2 Level 3 Total Liabilities Warrant derivative liability $ - $ - $ 1,244 $ 1,244 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Acquisitions [Abstract] | |
Assets and Liabilities Acquired | On May 6, 2019, the fair value of the following assets and liabilities were acquired resulting in the total loss of approximately $147.4 million: Better Choice Company Bona Vida Total Total Purchase Price $ 37,949 $ 108,620 $ 146,569 Net Assets (Liabilities) Acquired: Assets Cash and cash equivalents 7 384 391 Restricted cash - 25 25 Accounts receivable - 69 69 Inventories - 95 95 Prepaid expenses and other current assets 32 348 380 Intangible assets 986 - 986 Other assets - 74 74 Total Assets 1,025 995 2,020 Liabilities Warrant derivative liability (2,130 ) - (2,130 ) Accounts payable & accrued liabilities (544 ) (153 ) (697 ) Debt - - - Total Liabilities (2,674 ) (153 ) (2,827 ) Net Assets (Liabilities) Acquired (1,649 ) 842 (807 ) Loss on Acquisitions $ (39,598 ) $ (107,778 ) $ (147,376 ) |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventories [Abstract] | |
Inventories | Inventories are summarized as follows: Dollars in thousands September 30, 2019 December 31, 2018 Food, treats and supplements $ 2,544 $ 1,301 Other products and accessories 110 191 Inventory packaging and supplies 142 133 2,796 1,625 Inventory reserve (438 ) (68 ) $ 2,358 $ 1,557 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following: Dollars in thousands September 30, 2019 December 31, 2018 Prepaid insurance $ 50 $ 15 Prepaid advertising 1,291 - Other 590 254 Total prepaid expenses and other current assets $ 1,931 $ 269 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property and Equipment [Abstract] | |
Property and Equipment | Property and equipment consist of the following: Dollars in thousands September 30, 2019 December 31, 2018 Warehouse equipment $ 49 $ 49 Computer equipment 14 14 Furniture and fixtures 99 46 Total property and equipment 162 109 Accumulated depreciation (47 ) (38 ) Net property and equipment $ 115 $ 71 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | Accrued expenses consist of the following: Dollars in thousands September 30, 2019 December 31, 2018 Accrued payroll and benefits $ 528 $ 85 Accrued professional fees 1,788 - Accrued sales tax 1,275 - Other 283 159 Total accrued liabilities $ 3,874 $ 244 |
Operating Leases (Tables)
Operating Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Operating Leases [Abstract] | |
Operating Lease-related Assets and Liabilities | The table below presents the lease-related assets and liabilities recorded on the balance sheet. Dollars in thousands Classification on the Balance Sheet 2019 January 1, Assets Operating lease right-of-use assets Operating lease right-of-use assets 421 Liabilities Current - Operating Operating lease liability short term 87 Noncurrent - Operating Operating lease liability long term 342 Total operating lease liabilities $ 429 |
Lease Cost | The table below presents certain information related to the lease costs for operating leases for the three and nine months ended September 30, 2019. Three months ended September 30, 2019 Nine months ended September 30, 2019 Dollars in thousands Operating lease costs 95 219 Variable lease costs 8 24 Total Operating Lease costs $ 103 243 |
Maturity of Lease Liabilities | The table below reconciles the undiscounted cash flows for each of the first four years and total of the remaining years to the operating lease liabilities recorded on the balance sheet. Dollars in thousands Operating Leases Remainder of 2019 $ 95 2020 381 2021 381 2022 182 Total Minimum Lease Payments 1,039 Less: amount of lease payments representing interest 127 Present value of future minimum lease payments $ 912 Less: current obligations under leases 293 Long-term lease obligations $ 619 |
Intangible Assets and Royalti_2
Intangible Assets and Royalties (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Intangible Assets and Royalties [Abstract] | |
Acquired License agreement | Upon the Acquisitions on May 6, 2019, the Company acquired the license agreement and recorded it at its fair value. Dollars in thousands September 30, 2019 December 31, 2018 License intangibles $ 986 $ - Less accumulated amortization 60 - Total Intangible Assets, net $ 926 $ - |
Warrant Derivative Liability (T
Warrant Derivative Liability (Tables) | 9 Months Ended |
Sep. 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 September 30, 2019. Dollars in thousands Warrant Liability Assumption of warrants pursuant to May 6, 2019 acquisition of Better Choice Company $ 2,130 Change in fair value of derivative liability (886 ) Balance as of September 30, 2019 $ 1,244 |
Warrant Liability Fair Value Measurement Inputs and Valuation Techniques | May 6, 2019 September 30, 2019 Warrant Liability Stock Price $ 6.00 $ 4.36 Exercise Price $ 3.90 $ 3.90 Expected remaining term (in years) 1.60 – 1.68 1.20 – 1.28 Volatility 64 % 64% – 69 % Risk-free interest rate 2.39 % 1.72 % |
Other Liabilities (Tables)
Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Other Liabilities [Abstract] | |
Other Liabilities | Other liabilities consist of the following: Dollars in thousands September 30, 2019 December 31, 2018 Cash Advance $ - $ 1,898 Deferred Rent - 16 Total Other Liabilities $ - $ 1,914 |
Redeemable Series E Convertib_2
Redeemable Series E Convertible Preferred Stock (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Redeemable Series E Convertible Preferred Stock [Abstract] | |
Redeemable Preferred Stock | The below table summarizes changes in the balance of Redeemable Series E Convertible Preferred Stock since inception through September 30, 2019 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 September 30, 2019 1,707,920 $ 13,007 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Deficit [Abstract] | |
Common stock for future issuance | As of September 30, 2019, the Company has reserved approximately 18 million shares of Common Stock for future issuance as follows: September 30, 2019 Conversion of Redeemable Series E Convertible Preferred Stock 2,167,744 Exercise of options to purchase Common Stock 6,031,462 Warrants to purchase Common Stock 9,533,354 Total shares of Common Stock reserved for future issuance 17,732,560 |
Option Grants | The following table provides detail of the options granted and outstanding under the 2019 Incentive Award Plan. The table excludes any options awarded before the Plan was implemented. Vested Options Non-vested options Total Number of Options Weighted Average Exercise Price Number Number Weighted average grant date fair value Acquired on May 6, 2019 5,250,000 $ 5.00 - 5,250,000 $ 2.75 Granted 743,000 5.95 - 743,000 2.56 Vested during period 5.05 2,080,829 (2,080,829 ) 2.75 Options outstanding at September 30, 2019 5, 993,000 $ 5.12 2,080,829 3,912,171 $ 2.73 Options expected to vest 3,907,571 Weighted average exercise price 5.05 $ 5.15 Weighted average remaining contractual term (years) 9.6 9.6 Aggregate intrinsic value at September 30, 2019 (in thousands) $ 2 $ 74 |
Activity of Warrants | During the three months ended September 30, 2019, a company advisor was issued 2,500,000 warrants with a strike price of $0.10 and 1,500,000 warrants with a strike price of $10.00. Warrants Exercise Price Warrants Acquired on May 6, 2019 712,823 $ 3.90 Issued 9,965,530 4.05 Exercised (1,144,999 ) 3.50 Warrants outstanding at September 30, 2019 9,533,354 $ 4.01 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes [Abstract] | |
Reconciliation of Unrecognized Tax Benefits | The following is a reconciliation of the total amounts of unrecognized tax benefits (in thousands): Nine months ended September 30, 2019 Unrecognized tax benefit beginning of year $ -- Decreases-tax positions in prior year -- Increases-tax positions in current year -- Unrecognized tax benefit end of year $ -- |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 9 Months Ended |
Sep. 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 nine months ended September 30, 2019 and 2018: Dollars in thousands except per share amounts Nine Months Ended September 30, Three Months Ended September 30, 2019 2018 2019 2018 Common Stockholders Numerator: Net loss $ (170,311 ) $ (3,836 ) $ (6,025 ) $ (1,437 ) Less: Preferred Stock Dividends 70 - 43 - Net loss attributable to Common Stockholders $ (170,381 ) $ (3,836 ) $ (6,068 ) $ (1,437 ) Denominator: Weighted average shares used in computing net loss per share attributable to Common Stockholders, basic and diluted 28,624,230 11,497,128 43,575,010 11,497,128 Net loss per share attributable to Common Stockholders, basic and diluted $ (5.95 ) $ (0.33 ) $ (0.14 ) $ (0.12 ) |
Nature of Business and Summar_4
Nature of Business and Summary of Significant Accounting Policies, Basis of Presentation and Consolidation (Details) - $ / shares | May 06, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Basis of Presentation and Consolidation [Abstract] | |||
Number of common shares issued for acquisition (in shares) | 32,332,314 | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Nature of Business and Summar_5
Nature of Business and Summary of Significant Accounting Policies, Restricted Cash (Details) $ in Millions | Sep. 30, 2019USD ($) |
Restricted Cash [Abstract] | |
Restricted cash | $ 6.2 |
Business Credit Card [Member] | Maximum [Member] | |
Restricted Cash [Abstract] | |
Restricted cash | $ 0.1 |
Nature of Business and Summar_6
Nature of Business and Summary of Significant Accounting Policies, Accounts Receivable and Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts Receivable and Allowance for Doubtful Accounts [Abstract] | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
Nature of Business and Summar_7
Nature of Business and Summary of Significant Accounting Policies, Property and Equipment (Details) | 9 Months Ended |
Sep. 30, 2019 | |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property and Equipment [Abstract] | |
Useful life | 5 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property and Equipment [Abstract] | |
Useful life | 7 years |
Equipment [Member] | |
Property and Equipment [Abstract] | |
Useful life | 7 years |
Nature of Business and Summar_8
Nature of Business and Summary of Significant Accounting Policies, License Intangibles (Details) $ in Thousands | Jan. 16, 2020USD ($)Installmentshares | Oct. 31, 2020USD ($) | Sep. 30, 2019shares | Dec. 31, 2018shares |
License Intangibles [Abstract] | ||||
Common stock, shares issued (in shares) | shares | 45,427,659 | 11,661,485 | ||
Licensing Agreements [Member] | ||||
License Intangibles [Abstract] | ||||
Estimated life | 6 years | |||
Licensing Agreements [Member] | Forecast [Member] | ||||
License Intangibles [Abstract] | ||||
Termination fee installment payable | $ | $ 100 | |||
Number of equal installment payments | Installment | 4 | |||
Common stock, shares issued (in shares) | shares | 72,720 | |||
Subordinated promissory notes | $ | $ 600 |
Nature of Business and Summar_9
Nature of Business and Summary of Significant Accounting Policies, General and Administrative Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Shipping Cost [Abstract] | ||||
Shipping costs | $ 600 | $ 600 | $ 1,800 | $ 1,900 |
Net sales | 3,932 | 3,981 | 11,567 | 11,045 |
Shipping Cost [Member] | ||||
Shipping Cost [Abstract] | ||||
Net sales | $ 200 | $ 200 | $ 500 | $ 700 |
Nature of Business and Summa_10
Nature of Business and Summary of Significant Accounting Policies, Advertising, Research and Development (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Advertising [Abstract] | ||||
Advertising costs | $ 1,800 | $ 800 | $ 5,800 | $ 3,000 |
Research and Development [Abstract] | ||||
Research and development | $ 0 | $ 0 | ||
Maximum [Member] | ||||
Research and Development [Abstract] | ||||
Research and development | $ 100 | $ 100 |
Nature of Business and Summa_11
Nature of Business and Summary of Significant Accounting Policies, Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | May 06, 2019 | Dec. 31, 2018 |
Liabilities [Abstract] | |||
Warrant derivative liability | $ 1,244 | $ 2,130 | $ 0 |
Level 1 [Member] | |||
Liabilities [Abstract] | |||
Warrant derivative liability | 0 | ||
Level 2 [Member] | |||
Liabilities [Abstract] | |||
Warrant derivative liability | 0 | ||
Level 3 [Member] | |||
Liabilities [Abstract] | |||
Warrant derivative liability | $ 1,244 |
Nature of Business and Summa_12
Nature of Business and Summary of Significant Accounting Policies, Segment Information (Details) | 9 Months Ended |
Sep. 30, 2019Segment | |
Segment Information [Abstract] | |
Number of segment | 1 |
Nature of Business and Summa_13
Nature of Business and Summary of Significant Accounting Policies, Commitments and Contingencies (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Taxes Payable [Abstract] | |||
Sales and Excise Tax Payable | $ 1,200 | ||
Previously Reported [Member] | |||
Taxes Payable [Abstract] | |||
Sales and Excise Tax Payable | $ 800 | $ 700 |
Nature of Business and Summa_14
Nature of Business and Summary of Significant Accounting Policies, Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | ||
Right-of-use asset | $ 879 | $ 0 |
Lease liability | $ 912 | |
ASU 842 [Member] | ||
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | ||
Right-of-use asset | 421 | |
Lease liability | $ 429 |
Acquisitions, Purchase Consider
Acquisitions, Purchase Consideration (Details) $ / shares in Units, $ in Thousands | May 06, 2019USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / shares | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Director$ / shares | Sep. 30, 2018USD ($) | Dec. 31, 2018$ / shares | Dec. 12, 2018$ / shares |
Acquisition [Abstract] | |||||||
Number of shares issued (in shares) | shares | 32,332,314 | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||
Number of board of directors | Director | 5 | ||||||
Purchase price | $ 146,569 | ||||||
Share price (in dollars per share) | $ / shares | $ 1.95 | ||||||
Loss on acquisition | $ 147,376 | $ (2,612) | $ 0 | $ 147,376 | $ 0 | ||
Prior Chairman of Bona Vida [Member] | |||||||
Acquisition [Abstract] | |||||||
Number of board of directors | Director | 1 | ||||||
Prior Directors from TruPet [Member] | |||||||
Acquisition [Abstract] | |||||||
Number of board of directors | Director | 2 | ||||||
Prior Director from Bona Vida [Member] | |||||||
Acquisition [Abstract] | |||||||
Number of board of directors | Director | 1 | ||||||
Prior Managing Member and Chairman of TruPet [Member] | |||||||
Acquisition [Abstract] | |||||||
Number of board of directors | Director | 1 | ||||||
TruPet, LLC [Member] | |||||||
Acquisition [Abstract] | |||||||
Number of shares issued (in shares) | shares | 14,229,041 | ||||||
Outstanding interests acquired | 93.00% | 7.00% | 7.00% | ||||
Better Choice Company [Member] | |||||||
Acquisition [Abstract] | |||||||
Number of shares issued (in shares) | shares | 3,915,856 | ||||||
Purchase price | $ 37,949 | ||||||
Outstanding interests acquired | 100.00% | ||||||
Outstanding stock value | $ 32,700 | ||||||
Non-cash transaction costs | 4,800 | ||||||
Cash transaction costs | 400 | ||||||
Estimated fair value of vested stock-based compensation | $ 100 | ||||||
Share price (in dollars per share) | $ / shares | $ 6 | ||||||
Loss on acquisition | $ 39,598 | ||||||
Bona Vida, Inc. [Member] | |||||||
Acquisition [Abstract] | |||||||
Number of shares issued (in shares) | shares | 18,103,273 | ||||||
Purchase price | $ 108,620 | ||||||
Outstanding interests acquired | 100.00% | ||||||
Share price (in dollars per share) | $ / shares | $ 6 | ||||||
Fair value of net assets acquired | $ 800 | ||||||
Loss on acquisition | $ 107,778 |
Acquisitions, Fair value of Ass
Acquisitions, Fair value of Assets and Liabilities (Details) - USD ($) $ in Thousands | May 06, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Acquisition [Abstract] | |||||
Total Purchase Price | $ 146,569 | ||||
Assets [Abstract] | |||||
Cash and cash equivalents | 391 | ||||
Restricted cash | 25 | ||||
Accounts receivable | 69 | ||||
Inventories | 95 | ||||
Prepaid expenses and other current assets | 380 | ||||
Intangible assets | 986 | ||||
Other assets | 74 | ||||
Total Assets | 2,020 | ||||
Liabilities [Abstract] | |||||
Warrant derivative liability | (2,130) | ||||
Accounts payable & accrued liabilities | (697) | ||||
Debt | 0 | ||||
Total Liabilities | (2,827) | ||||
Net Assets (Liabilities) Acquired | (807) | ||||
Loss on Acquisitions | (147,376) | $ 2,612 | $ 0 | $ (147,376) | $ 0 |
Quantifying Misstatement in Current Year Financial Statements [Line Items] | |||||
Quantifying misstatement corrected in current period | $ (2,612) | $ (2,612) | |||
Better Choice Company [Member] | |||||
Acquisition [Abstract] | |||||
Total Purchase Price | 37,949 | ||||
Assets [Abstract] | |||||
Cash and cash equivalents | 7 | ||||
Restricted cash | 0 | ||||
Accounts receivable | 0 | ||||
Inventories | 0 | ||||
Prepaid expenses and other current assets | 32 | ||||
Intangible assets | 986 | ||||
Other assets | 0 | ||||
Total Assets | 1,025 | ||||
Liabilities [Abstract] | |||||
Warrant derivative liability | (2,130) | ||||
Accounts payable & accrued liabilities | (544) | ||||
Debt | 0 | ||||
Total Liabilities | (2,674) | ||||
Net Assets (Liabilities) Acquired | (1,649) | ||||
Loss on Acquisitions | (39,598) | ||||
Bona Vida [Member] | |||||
Acquisition [Abstract] | |||||
Total Purchase Price | 108,620 | ||||
Assets [Abstract] | |||||
Cash and cash equivalents | 384 | ||||
Restricted cash | 25 | ||||
Accounts receivable | 69 | ||||
Inventories | 95 | ||||
Prepaid expenses and other current assets | 348 | ||||
Intangible assets | 0 | ||||
Other assets | 74 | ||||
Total Assets | 995 | ||||
Liabilities [Abstract] | |||||
Warrant derivative liability | 0 | ||||
Accounts payable & accrued liabilities | (153) | ||||
Debt | 0 | ||||
Total Liabilities | (153) | ||||
Net Assets (Liabilities) Acquired | 842 | ||||
Loss on Acquisitions | $ (107,778) |
Revenue (Details)
Revenue (Details) - Channel | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue Concentration [Abstract] | ||||
Number of revenue channels | 2 | |||
Guarantee period on product purchased | 60 days | |||
Revenues [Member] | ||||
Revenue Concentration [Abstract] | ||||
Concentration risk percentage | 4.00% | 6.00% | 4.00% | 6.00% |
Directly to Consumer [Member] | Revenues [Member] | ||||
Revenue Concentration [Abstract] | ||||
Concentration risk percentage | 95.00% | |||
Wholesale [Member] | Revenues [Member] | ||||
Revenue Concentration [Abstract] | ||||
Concentration risk percentage | 5.00% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventories [Abstract] | ||
Food, treats and supplements | $ 2,544 | $ 1,301 |
Other products and accessories | 110 | 191 |
Inventory packaging and supplies | 142 | 133 |
Inventories, gross | 2,796 | 1,625 |
Inventory reserve | (438) | (68) |
Inventories, net | $ 2,358 | $ 1,557 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) shares in Thousands, $ in Thousands | Aug. 28, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Prepaid Expenses and Other Current Assets [Abstract] | ||||||
Prepaid insurance | $ 50 | $ 50 | $ 15 | |||
Prepaid advertising | 1,291 | 1,291 | 0 | |||
Other | 590 | 590 | 254 | |||
Total prepaid expenses and other current assets | 1,931 | 1,931 | $ 269 | |||
Advertising Agreement [Abstract] | ||||||
Stock issued to third parties for services | $ 3,440 | 3,440 | 3,440 | |||
Advertising expenses incurred | 1,800 | $ 800 | 5,800 | $ 3,000 | ||
IHeartMedia [Member] | ||||||
Advertising Agreement [Abstract] | ||||||
Advertising expenses incurred | 600 | 600 | ||||
Committed usage amount of media inventory | 1,700 | |||||
Prepaid advertising balance | 2,800 | 2,800 | ||||
IHeartMedia [Member] | Maximum [Member] | ||||||
Advertising Agreement [Abstract] | ||||||
Committed talent fees | 100 | 100 | ||||
Prepaid Expenses and Other Current Assets [Member] | IHeartMedia [Member] | ||||||
Advertising Agreement [Abstract] | ||||||
Prepaid advertising balance | 1,300 | 1,300 | ||||
Other Noncurrent Assets [Member] | IHeartMedia [Member] | ||||||
Advertising Agreement [Abstract] | ||||||
Prepaid advertising balance | $ 1,500 | $ 1,500 | ||||
Common Stock [Member] | ||||||
Advertising Agreement [Abstract] | ||||||
Stock issued to third parties for services (in shares) | 1,000 | 1,000 | 1,000 | |||
Stock issued to third parties for services | $ 1 | $ 1 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment, Net [Abstract] | |||||
Property, and equipment, gross | $ 162 | $ 162 | $ 109 | ||
Accumulated depreciation | (47) | (47) | (38) | ||
Net property and equipment | 115 | 115 | 71 | ||
Warehouse Equipment [Member] | |||||
Property, Plant and Equipment, Net [Abstract] | |||||
Property, and equipment, gross | 49 | 49 | 49 | ||
Computer Equipment [Member] | |||||
Property, Plant and Equipment, Net [Abstract] | |||||
Property, and equipment, gross | 14 | 14 | 14 | ||
Furniture and Fixtures [Member] | |||||
Property, Plant and Equipment, Net [Abstract] | |||||
Property, and equipment, gross | 99 | 99 | $ 46 | ||
Maximum [Member] | |||||
Property, Plant and Equipment, Net [Abstract] | |||||
Depreciation expense | $ 100 | $ 100 | $ 100 | $ 100 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accrued Liabilities [Abstract] | ||
Accrued payroll and benefits | $ 528 | $ 85 |
Accrued professional fees | 1,788 | 0 |
Accrued sales tax | 1,275 | 0 |
Other | 283 | 159 |
Total accrued liabilities | $ 3,874 | $ 244 |
Operating Leases, Terms (Detail
Operating Leases, Terms (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | ||
Quantifying misstatement corrected in current period | $ (2,612) | $ (2,612) |
Overstatement of Right of Use Asset [Member] | ASU 842 [Member] | Maximum [Member] | ||
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | ||
Quantifying misstatement corrected in current period | 100 | 100 |
Overstatement of Operating Lease Liabilities [Member] | ASU 842 [Member] | Maximum [Member] | ||
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | ||
Quantifying misstatement corrected in current period | $ 100 | 100 |
Overstatement of Accumulated Deficit [Member] | ASU 842 [Member] | Maximum [Member] | ||
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | ||
Quantifying misstatement corrected in current period | $ 100 |
Operating Leases, Assets and Li
Operating Leases, Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets [Abstract] | ||
Operating lease right-of-use assets | $ 879 | $ 0 |
Current-Operating [Abstract] | ||
Operating lease liability short term | 293 | 0 |
Noncurrent-Operating [Abstract] | ||
Operating lease liability long term | 619 | 0 |
Total operating lease liabilities | $ 912 | |
ASU 842 [Member] | ||
Assets [Abstract] | ||
Operating lease right-of-use assets | 421 | |
Current-Operating [Abstract] | ||
Operating lease liability short term | 87 | |
Noncurrent-Operating [Abstract] | ||
Operating lease liability long term | 342 | |
Total operating lease liabilities | $ 429 |
Operating Leases, Lease Cost (D
Operating Leases, Lease Cost (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Operating Lease Cost [Abstract] | ||
Operating lease costs | $ 95 | $ 219 |
Variable lease costs | 8 | 24 |
Total Operating Lease costs | $ 103 | $ 243 |
Weighted-average remaining operating lease term | 2 years 9 months | 2 years 9 months |
Weighted average discount rate | 12.50% | 12.50% |
Operating Leases, Maturity of L
Operating Leases, Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Maturity of Lease Liabilities [Abstract] | ||
Remainder of 2019 | $ 95 | |
2020 | 381 | |
2021 | 381 | |
2022 | 182 | |
Total Minimum Lease Payments | 1,039 | |
Less: amount of lease payments representing interest | 127 | |
Total operating lease liabilities | 912 | |
Less: current obligations under leases | 293 | $ 0 |
Long-term lease obligations | $ 619 | $ 0 |
Intangible Assets and Royalti_3
Intangible Assets and Royalties (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
License Agreement [Abstract] | |||||
Total Intangible Assets, net | $ 926 | $ 926 | $ 0 | ||
Net sales | 3,932 | $ 3,981 | 11,567 | $ 11,045 | |
Licensing Agreements [Member] | |||||
License Agreement [Abstract] | |||||
License intangibles | 986 | 986 | 0 | ||
Less accumulated amortization | 60 | 60 | 0 | ||
Total Intangible Assets, net | 926 | 926 | $ 0 | ||
Payment of guaranteed minimum royalty | 600 | ||||
Licensing Agreements [Member] | Elvis Presley Hound Dog [Member] | |||||
License Agreement [Abstract] | |||||
Net sales | $ 0 | $ 0 |
Line of Credit and Due to Rel_2
Line of Credit and Due to Related Parties (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)owner | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | May 31, 2017USD ($) | |
Line of Credit and Debt [Abstract] | ||||||
Fee paid upon closing | $ 20 | $ 0 | ||||
Interest expenses | $ 100 | $ 100 | $ 200 | |||
Maximum [Member] | ||||||
Line of Credit and Debt [Abstract] | ||||||
Interest expenses | 100 | |||||
Line of Credit [Member] | ||||||
Line of Credit and Debt [Abstract] | ||||||
Maximum borrowing capacity | $ 4,600 | $ 2,000 | ||||
Number of owners whose personal assets pledged | owner | 2 | |||||
Line of credit | 4,600 | |||||
Maturity date | May 31, 2019 | |||||
Line of Credit [Member] | Maximum [Member] | ||||||
Line of Credit and Debt [Abstract] | ||||||
Accrued interest | $ 100 | |||||
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] | ||||||
Accrued interest | $ 0 | |||||
Long-term debt, current portion | $ 1,200 | $ 1,200 | $ 1,600 | |||
Long-term debt, interest rate | 26.60% | |||||
Term principal and interest due | 30 days | |||||
Revolving Credit Agreement [Member] | ||||||
Line of Credit and Debt [Abstract] | ||||||
Maximum borrowing capacity | $ 6,200 | $ 6,200 | ||||
Long-term debt, interest rate | 3.70% | 3.70% | ||||
Required amount of deposit at bank | $ 6,200 | $ 6,200 | ||||
Fee paid upon closing | $ 8,856 | |||||
Late charge percentage | 5.00% | |||||
Late charge period | 10 days | |||||
Maturity date | May 6, 2020 | |||||
Revolving Credit Agreement [Member] | Money Market Rate [Member] | ||||||
Line of Credit and Debt [Abstract] | ||||||
Variable interest rate | 1.85% |
Warrant Derivative Liability, P
Warrant Derivative Liability, Private Placement (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 08, 2019 | Dec. 12, 2018 | Dec. 31, 2018 | Sep. 30, 2019 | 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 | ||||
Gross proceeds from private placement offering | $ 2,800 | ||||
Share issuance costs | 100 | ||||
Net proceeds from private placement offering | $ 2,700 | ||||
Cash payable if warrants settled in cash | $ 300 | ||||
Warrant [Member] | |||||
Private Placement Offering [Abstract] | |||||
Number of shares issuable per unit (in shares) | 0.5 | 0.5 | |||
Warrants, exercisable period | 2 years | ||||
Warrants, exercise price (in dollars per share) | $ 3.90 | ||||
Common Stock [Member] | |||||
Private Placement Offering [Abstract] | |||||
Number of shares issuable per unit (in shares) | 1 | 1 | |||
Net proceeds from private placement offering | $ 100 | $ 2,600 | |||
Shares issued in private placement offering (in shares) | 25,641 | 1,400,000 | 5,745,000 | ||
Number of warrants issuable if settled in shares | 712,823 |
Warrant Derivative Liability, F
Warrant Derivative Liability, Fair Value of Derivative Liabilities (Details) - USD ($) $ in Thousands | 5 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Warrant Liability [Abstract] | |||
Assumption of warrants pursuant to May 6, 2019 acquisition of Better Choice Company | $ 2,130 | $ 0 | |
Change in fair value of derivative liability | (886) | (886) | $ 0 |
Balance as of September 30, 2019 | $ 1,244 | $ 1,244 |
Warrant Derivative Liability,_2
Warrant Derivative Liability, Fair Value Measurements and Valuation Techniques (Details) - Warrant [Member] | Sep. 30, 2019$ / shares | May 06, 2019$ / shares |
Stock Price [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Derivative liability | 4.36 | 6 |
Exercise Price [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Derivative liability | 3.90 | 3.90 |
Expected Remaining Term (in Years) [Member] | Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Derivative liability | 1.20 | 1.60 |
Expected Remaining Term (in Years) [Member] | Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Derivative liability | 1.28 | 1.68 |
Volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Derivative liability | 0.64 | |
Volatility [Member] | Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Derivative liability | 0.64 | |
Volatility [Member] | Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Derivative liability | 0.69 | |
Risk-free Interest Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Derivative liability | 0.0172 | 0.0239 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Dec. 31, 2018 | Sep. 30, 2019 | |
Other Liabilities [Abstract] | ||
Cash Advance | $ 1,898 | $ 0 |
Deferred Rent | 16 | 0 |
Total Other Liabilities | 1,914 | 0 |
Cash Advances from third party | 2,400 | |
Fees secured by customer payments on future sales and receivables | 300 | |
Cash advances repaid | $ 800 | $ 1,900 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Commitments and Contingencies [Abstract] | |
Sales tax liability | $ 1,200 |
Redeemable Series E Convertib_3
Redeemable Series E Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | May 13, 2019 | May 10, 2019 | May 06, 2019 | Sep. 30, 2019 | May 06, 2019 | Sep. 30, 2019 | Dec. 12, 2018 |
Redeemable Preferred Stock [Abstract] | |||||||
Share price (in dollars per share) | $ 1.95 | ||||||
Number [Abstract] | |||||||
Issued (in shares) | 2,633,678 | 2,846,356 | |||||
Converted to common stock (in shares) | (925,758) | (212,678) | |||||
Balance (in shares) | 2,633,678 | 1,707,920 | 2,633,678 | 1,707,920 | |||
Balance (in shares) | 2,633,678 | 2,633,678 | |||||
Amount [Abstract] | |||||||
Outstanding | $ 20,059 | ||||||
Issued | $ 2,023 | ||||||
Converted to Common Stock | (7,052) | (152) | |||||
Balance | $ 1,871 | 1,871 | |||||
Purchase price adjustment | 18,188 | ||||||
Balance | $ 20,059 | $ 13,007 | $ 20,059 | $ 13,007 | |||
Series E Convertible Preferred Stock [Member] | |||||||
Redeemable Preferred Stock [Abstract] | |||||||
Preferred stock, shares designated (in shares) | 2,900,000 | 2,900,000 | |||||
Preferred stock, stated value (in dollars per share) | $ 0.99 | $ 0.99 | |||||
Preferred stock, conversion price (in dollars per share) | $ 0.78 | $ 0.78 | |||||
Share price (in dollars per share) | $ 6 | $ 6 | |||||
Number of common stock, shares issued upon conversion of preferred stock (in shares) | 300,000 | 875,000 | |||||
Number [Abstract] | |||||||
Converted to common stock (in shares) | (236,364) | (689,394) | |||||
Dividends [Abstract] | |||||||
Preferred stock, dividend rate | 10.00% | ||||||
Accrued dividend | $ 200 | $ 200 | |||||
Redemption [Abstract] | |||||||
Preferred stock, mandatory redemption price in percentage of stated value | 125.00% | 125.00% | |||||
Preferred stock, mandatory redemption price (in dollars per share) | $ 1.23 | $ 1.23 | |||||
Series E Convertible Preferred Stock [Member] | Common Stock [Member] | |||||||
Redemption [Abstract] | |||||||
Preferred stock, mandatory redemption price in percentage of market price | 75.00% | 75.00% |
Stockholders' Deficit, Acquisit
Stockholders' Deficit, Acquisition, Contribution and Distributions of Capital (Details) - USD ($) $ in Millions | May 06, 2019 | Sep. 30, 2018 | Sep. 30, 2019 |
Acquisition, Contribution and Distributions of Capital [Abstract] | |||
Number of shares issued (in shares) | 32,332,314 | ||
Capital contribution | $ 0.4 | ||
Capital distribution | $ 0.4 | ||
Equity issued for contribution (in shares) | 0 | ||
TruPet, LLC [Member] | |||
Acquisition, Contribution and Distributions of Capital [Abstract] | |||
Number of shares issued (in shares) | 14,229,041 | ||
Outstanding interests acquired | 93.00% | 7.00% | |
Bona Vida, Inc. [Member] | |||
Acquisition, Contribution and Distributions of Capital [Abstract] | |||
Number of shares issued (in shares) | 18,103,273 | ||
Outstanding interests acquired | 100.00% |
Stockholders' Deficit, Preferre
Stockholders' Deficit, Preferred Units (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 12, 2019 | Dec. 12, 2018 | Dec. 31, 2018 | May 06, 2019 |
Class of Stock [Line Items] | ||||
Unit price (in dollars per share) | $ 1.95 | |||
Net proceeds from issuance of stock | $ 2,700 | |||
Share issuance costs | $ 100 | |||
Series A Preferred Units [Member] | ||||
Class of Stock [Line Items] | ||||
Shares issued in private placement (in shares) | 62,500 | 2,162,536 | ||
Unit price (in dollars per share) | $ 2.40 | $ 2.40 | ||
Net proceeds from issuance of stock | $ 200 | $ 4,700 | ||
Share issuance costs | $ 500 | |||
Shares issued in stock conversion (in shares) | 2,460,517 |
Stockholders' Deficit, Common S
Stockholders' Deficit, Common Stock (Details) $ / shares in Units, $ in Thousands | May 06, 2019USD ($)$ / sharesshares | Mar. 15, 2019 | Jan. 08, 2019USD ($)shares | Dec. 12, 2018USD ($)$ / sharesshares | Dec. 31, 2018USD ($)shares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Nov. 30, 2018shares | Oct. 29, 2018USD ($) | Sep. 30, 2018shares |
Common Stock [Abstract] | ||||||||||
Common stock, shares authorized (in shares) | 580,000,000 | 88,000,000 | 88,000,000 | |||||||
Reverse stock split ratio | 0.0385 | |||||||||
Common stock, shares issued (in shares) | 11,661,485 | 45,427,659 | 45,427,659 | |||||||
Common stock, shares outstanding (in shares) | 11,661,485 | 45,427,659 | 45,427,659 | |||||||
Units issued in private placement offering (in shares) | 1,425,641 | |||||||||
Unit price (in dollars per share) | $ / shares | $ 1.95 | |||||||||
Gross proceeds from private placement offering | $ | $ 2,800 | |||||||||
Share issuance costs | $ | 100 | |||||||||
Net proceeds from private placement offering | $ | $ 2,700 | |||||||||
Filing period of registration statement following closing date | 60 days | |||||||||
Acquisitions | $ | $ (3,870) | $ (6,071) | ||||||||
Reserved Shares of Common Stock for Future Issuance [Abstract] | ||||||||||
Conversion of Redeemable Series E Convertible Preferred Stock (in shares) | 2,167,744 | 2,167,744 | ||||||||
Exercise of options to purchase Common Stock (in shares) | 6,031,462 | 6,031,462 | ||||||||
Warrants to purchase Common Stock (in shares) | 712,823 | 9,533,354 | 9,533,354 | 0 | ||||||
Total shares of Common Stock reserved for future issuance (in shares) | 17,732,560 | 17,732,560 | 0 | |||||||
TruPet, LLC [Member] | ||||||||||
Common Stock [Abstract] | ||||||||||
Initial ownership interest acquired | 93.00% | 7.00% | 7.00% | |||||||
Acquisition (in shares) | (1,011,748) | |||||||||
Number of member units acquired (in shares) | (914,919) | |||||||||
Acquisitions | $ | $ (6,012) | |||||||||
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 | |||||||||
Number of shares of common stock to be issued in consideration for Change of Control payment (in shares) | 100 | |||||||||
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 | |||||||||
Warrant [Member] | ||||||||||
Common Stock [Abstract] | ||||||||||
Number of shares issuable per unit (in shares) | 0.5 | 0.5 | ||||||||
Warrants, exercisable period | 2 years | 2 years | ||||||||
Warrants, exercise price (in dollars per share) | $ / shares | $ 3.90 | $ 3.90 | ||||||||
Common Stock [Member] | ||||||||||
Common Stock [Abstract] | ||||||||||
Number of shares issuable per unit (in shares) | 1 | 1 | ||||||||
Net proceeds from private placement offering | $ | $ 100 | $ 2,600 | ||||||||
Units issued in private placement offering (in shares) | 25,641 | 1,400,000 | 5,745,000 | |||||||
Acquisition (in shares) | 0 | (1,012,000) | ||||||||
Acquisitions | $ | $ 0 | $ (1) | ||||||||
Common Stock [Member] | PIPE Transaction [Member] | ||||||||||
Common Stock [Abstract] | ||||||||||
Number of shares issuable per unit (in shares) | 1 |
Stockholders' Deficit, Stock Aw
Stockholders' Deficit, Stock Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | May 06, 2019 | May 05, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Stock Awards [Abstract] | |||||
Equity awards issued (in shares) | 1,100,000 | 0 | |||
Equity awards issued, weighted average value per share (in dollars per share) | $ 2.26 | ||||
Share-based compensation expense as a result of immediate vesting | $ 2,200 | ||||
Equity awards outstanding (in shares) | 0 | ||||
Minimum [Member] | |||||
Stock Awards [Abstract] | |||||
Equity awards vesting period | 3 years | ||||
Maximum [Member] | |||||
Stock Awards [Abstract] | |||||
Equity awards vesting period | 4 years | ||||
Consultant [Member] | |||||
Stock Awards [Abstract] | |||||
Equity awards issued (in shares) | 164,356 |
Stockholders' Deficit, Stock Op
Stockholders' Deficit, Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | May 06, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Stock Options [Member] | ||||
Stock Options [Abstract] | ||||
Shares granted (in shares) | 38,462 | |||
Shares granted, exercise price (in dollars per share) | $ 6.76 | |||
Estimated fair value amount | $ 100 | |||
Weighted average remaining contractual term (years) | 4 years 2 months 12 days | |||
Intrinsic value | $ 0 | $ 0 | ||
2019 Incentive Award Plan [Member] | ||||
Stock Options [Abstract] | ||||
Shares granted (in shares) | 743,000 | |||
Shares granted, exercise price (in dollars per share) | $ 5.95 | |||
Shares vested (in shares) | 2,080,829 | 2,080,829 | ||
2019 Incentive Award Plan [Member] | Stock Options [Member] | ||||
Stock Options [Abstract] | ||||
Shares granted (in shares) | 743,000 | |||
Award exercise period | 10 years | |||
Shares vested (in shares) | 912,917 | 912,917 | ||
2019 Incentive Award Plan [Member] | Stock Options [Member] | Management [Member] | ||||
Stock Options [Abstract] | ||||
Shares acquired (in shares) | 5,250,000 | |||
Shares acquired, exercise price (in dollars per share) | $ 5 | |||
Award monthly vesting percentage | 4.167% |
Stockholders' Deficit, Options
Stockholders' Deficit, Options Granted and Outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands | May 06, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Stock Options [Member] | |||||
Outstanding [Roll Forward] | |||||
Number of options, vested during period (in shares) | 38,462 | ||||
Weighted average exercise price [Abstract] | |||||
Weighted average exercise price, granted (in dollars per shares) | $ 6.76 | ||||
Nonvested, number of shares [Roll Forward] | |||||
Non-vested options, granted (in shares) | 38,462 | ||||
2019 Incentive Award Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Authorized issuance shares of common stock (in shares) | 6,000,000 | 6,000,000 | 6,000,000 | ||
Percent of common stock outstanding | 10.00% | ||||
Outstanding [Roll Forward] | |||||
Number of options, outstanding (in shares) | 5,250,000 | ||||
Number of options, vested during period (in shares) | 743,000 | ||||
Number of options, outstanding (in shares) | 5,250,000 | 5,993,000 | 5,993,000 | 5,993,000 | |
Weighted average exercise price [Abstract] | |||||
Weighted average exercise price, outstanding (in dollars per shares) | $ 5 | ||||
Weighted average exercise price, granted (in dollars per shares) | 5.95 | ||||
Weighted average exercise price, vested during period (in dollars per share) | 5.05 | ||||
Weighted average exercise price, outstanding (in dollars per shares) | $ 5 | $ 5.12 | $ 5.12 | $ 5.12 | |
Vested options [Abstract] | |||||
Vested options, vested during period (in shares) | 2,080,829 | ||||
Vested options, outstanding (in shares) | 2,080,829 | 2,080,829 | 2,080,829 | ||
Vested options, weighted average exercise price (in dollars per share) | $ 5.05 | $ 5.05 | $ 5.05 | ||
Vested options, weighted average remaining contractual term | 9 years 7 months 6 days | ||||
Vested options, aggregate intrinsic value | $ 2 | $ 2 | $ 2 | ||
Nonvested, number of shares [Roll Forward] | |||||
Non-vested options, outstanding (in shares) | 5,250,000 | ||||
Non-vested options, granted (in shares) | 743,000 | ||||
Non-vested options, vested during period (in shares) | (2,080,829) | ||||
Non-vested options, outstanding (in shares) | 5,250,000 | 3,912,171 | 3,912,171 | 3,912,171 | |
Non-vested options, options expected to vest (in shares) | 3,907,571 | ||||
Non-vested options, weighted average exercise price (in dollars per share) | $ 5.15 | ||||
Non-vested options, weighted average remaining contractual term | 9 years 7 months 6 days | ||||
Non-vested options, aggregate intrinsic value | $ 74 | $ 74 | $ 74 | ||
Nonvested, weighted average grant date fair value [Abstract] | |||||
Non-vested options, weighted average grant date fair value, outstanding (in dollars per share) | $ 2.75 | ||||
Non-vested options, weighted average grant date fair value, granted (in dollars per share) | 2.56 | ||||
Non-vested options, weighted average grant date fair value, vested during period (in dollars per shares) | 2.75 | ||||
Non-vested options, weighted average grant date fair value, outstanding (in dollars per share) | $ 2.75 | $ 2.73 | $ 2.73 | $ 2.73 | |
2019 Incentive Award Plan [Member] | Stock Options [Member] | |||||
Outstanding [Roll Forward] | |||||
Number of options, vested during period (in shares) | 743,000 | ||||
Vested options [Abstract] | |||||
Vested options, outstanding (in shares) | 912,917 | 912,917 | 912,917 | ||
Nonvested, number of shares [Roll Forward] | |||||
Non-vested options, granted (in shares) | 743,000 | ||||
Nonvested, weighted average grant date fair value [Abstract] | |||||
Share-based compensation expense | $ 2,500 | $ 6,700 | |||
Dividend yield | 0.00% | ||||
Risk-free rate, minimum | 1.41% | ||||
Risk-free rate, maximum | 2.39% | ||||
Volatility, minimum | 55.00% | ||||
Volatility, maximum | 60.00% | ||||
2019 Incentive Award Plan [Member] | Stock Options [Member] | Minimum [Member] | |||||
Nonvested, weighted average grant date fair value [Abstract] | |||||
Exercise price (in dollars per share) | $ 3.7 | $ 3.7 | $ 3.7 | ||
2019 Incentive Award Plan [Member] | Stock Options [Member] | Maximum [Member] | |||||
Nonvested, weighted average grant date fair value [Abstract] | |||||
Exercise price (in dollars per share) | $ 7.5 | $ 7.5 | $ 7.5 |
Stockholders' Deficit, Warrants
Stockholders' Deficit, Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | May 06, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 |
Number of Warrants [Abstract] | ||||
Warrants acquired (in shares) | 712,823 | |||
Issued (in shares) | 9,965,530 | 0 | ||
Exercised (in shares) | (1,144,999) | |||
Warrants outstanding (in shares) | 712,823 | 9,533,354 | 9,533,354 | 0 |
Weighted Average Exercise Price [Abstract] | ||||
Warrants acquired (in dollars per share) | $ 3.90 | |||
Issued (in dollars per share) | 4.05 | |||
Exercised (in dollars per share) | 3.50 | |||
Warrants outstanding (in dollars per share) | $ 4.01 | $ 4.01 | ||
Warrants outstanding, intrinsic value | $ 11,800 | $ 11,800 | ||
PIPE Transaction [Member] | ||||
Number of Warrants [Abstract] | ||||
Issued (in shares) | 5,744,991 | |||
Weighted Average Exercise Price [Abstract] | ||||
Exercised (in dollars per share) | $ 4.25 | |||
Broker [Member] | ||||
Number of Warrants [Abstract] | ||||
Issued (in shares) | 220,539 | |||
Weighted Average Exercise Price [Abstract] | ||||
Exercised (in dollars per share) | $ 3 | |||
Advisor [Member] | Exercise Price $0.10 [Member] | ||||
Number of Warrants [Abstract] | ||||
Issued (in shares) | 2,500,000 | |||
Weighted Average Exercise Price [Abstract] | ||||
Exercised (in dollars per share) | $ 0.10 | |||
Advisor [Member] | Exercise Price $10.0 [Member] | ||||
Number of Warrants [Abstract] | ||||
Issued (in shares) | 1,500,000 | |||
Weighted Average Exercise Price [Abstract] | ||||
Exercised (in dollars per share) | $ 10 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Employee Benefit Plans [Abstract] | ||||
Percentage of participant contributions matched | 4.00% | |||
Contributions related to plan | $ 0 | $ 0 | ||
Maximum [Member] | ||||
Employee Benefit Plans [Abstract] | ||||
Contributions related to plan | $ 100 | $ 100 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($)Member | |
Related Party Transactions [Abstract] | |||||
Payment of finder's fee | $ 300 | ||||
Number of members who own entity | Member | 1 | ||||
Management Services [Member] | |||||
Related Party Transactions [Abstract] | |||||
Payments to related parties | $ 0 | ||||
Outstanding balances due to related party | $ 0 | 0 | $ 0 | ||
Management Services [Member] | Maximum [Member] | |||||
Related Party Transactions [Abstract] | |||||
Payments to related parties | $ 100 | $ 100 | |||
Marketing Services [Member] | |||||
Related Party Transactions [Abstract] | |||||
Payments to related parties | 100 | $ 100 | $ 100 | $ 100 | |
Service contract termination clause | 30 days | ||||
Marketing Services [Member] | Maximum [Member] | |||||
Related Party Transactions [Abstract] | |||||
Outstanding balances due to related party | 100 | $ 100 | 100 | ||
Financial Services [Member] | |||||
Related Party Transactions [Abstract] | |||||
Outstanding balances due to related party | 0 | $ 0 | |||
Notice period to terminate agreement | 60 days | ||||
Period of payment | 1 month | ||||
Financial Services [Member] | Maximum [Member] | |||||
Related Party Transactions [Abstract] | |||||
Payments to related parties | $ 100 | $ 200 | |||
Other Professional Services [Member] | |||||
Related Party Transactions [Abstract] | |||||
Payments to related parties | $ 0 | $ 400 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2017 | |
Income Taxes [Abstract] | |||
Income tax expense | $ 0 | $ 0 | |
Federal statutory rate | 21.00% | 35.00% | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Unrecognized tax benefit beginning of year | $ 0 | ||
Decreases-tax positions in prior year | 0 | ||
Increases-tax positions in current year | 0 | ||
Unrecognized tax benefit end of year | 0 | 0 | |
Accrued interest and penalties related to uncertain tax positions | $ 0 | $ 0 |
Major Suppliers (Details)
Major Suppliers (Details) - Vendor | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Concentration Risk [Abstract] | ||||
Number of vendors utilized to purchase inventory | 1 | 1 | 1 | 1 |
Cost of Goods [Member] | Supplier Concentration Risk [Member] | ||||
Concentration Risk [Abstract] | ||||
Concentration risk percentage | 90.00% | 51.00% | 85.00% | 60.00% |
Concentration of Credit Risk _2
Concentration of Credit Risk and Off-Balance Sheet Risk (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Gross Sales [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 4.00% | 6.00% | 4.00% | 6.00% | |
Accounts Receivable [Member] | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 38.00% | 54.00% |
Net Loss per Share (Details)
Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: [Abstract] | ||||
Net loss | $ (6,025) | $ (1,437) | $ (170,311) | $ (3,836) |
Less: Preferred Stock Dividends | 43 | 0 | 70 | 0 |
Net and comprehensive loss available to common stockholders | $ (6,068) | $ (1,437) | $ (170,381) | $ (3,836) |
Denominator: [Abstract] | ||||
Weighted average shares used in computing net loss per share attributable to Common Stockholders, basic and diluted (in shares) | 43,575,010 | 11,497,128 | 28,624,230 | 11,497,128 |
Net loss per share attributable to Common Stockholders, basic and diluted (in dollars per share) | $ (0.14) | $ (0.12) | $ (5.95) | $ (0.33) |
Subsequent Events, Subordinated
Subsequent Events, Subordinated Convertible Notes (Details) | Nov. 06, 2019USD ($)Note$ / sharesshares | Jan. 06, 2020 | Sep. 30, 2019$ / shares | May 06, 2019$ / shares | Dec. 31, 2018$ / shares |
Subsequent Events (Additional Information) [Abstract] | |||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Subsequent Event [Member] | Subordinated Convertible Notes [Member] | |||||
Subsequent Events (Additional Information) [Abstract] | |||||
Number of subordinated convertible notes issued | Note | 2,750 | ||||
Proceeds from subordinated convertible notes issued | $ | $ 2,750,000 | ||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||
Number of warrants for each note (in shares) | shares | 62.5 | ||||
Number of shares issuable per unit (in shares) | shares | 1 | ||||
Warrant entitlement period to purchase shares | 24 months | ||||
Warrants, exercise price (in dollars per share) | $ 5 | ||||
Issue price per convertible note | $ | $ 1,000 | ||||
Maturity period of convertible note | 2 years | ||||
Long-term debt, interest rate | 10.00% | 12.00% | |||
Percentage of interest payable in kind | 50.00% |
Subsequent Events, Halo Acquisi
Subsequent Events, Halo Acquisition (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 18, 2019 | May 06, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Subsequent Events (Additional Information) [Abstract] | ||||
Purchase price | $ 146,569 | |||
Business acquisition, total number of common shares (in shares) | 32,332,314 | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Subsequent Event [Member] | Halo Acquisition [Member] | Amended and Restated Stock Purchase Agreement [Member] | ||||
Subsequent Events (Additional Information) [Abstract] | ||||
Purchase price | $ 45,000 | |||
Business acquisition, total number of common shares (in shares) | 2,134,390 | |||
Common stock, par value (in dollars per share) | $ 0.001 | |||
Long-term debt, interest rate | 10.00% | |||
Outstanding interests acquired | 100.00% | |||
Maturity date | Jun. 30, 2023 | |||
Conversion price (in dollars per share) | $ 4 | |||
Redemption percentage to outstanding principal | 104.00% | |||
Percentage of redemption price of outstanding principal amount | 4.00% | |||
Written notice to convert seller notes to common stock | 30 days |
Subsequent Events, Loan Agreeme
Subsequent Events, Loan Agreement (Details) | Dec. 19, 2019USD ($)Director | Sep. 30, 2019USD ($) |
Revolving Credit Facility [Member] | ||
Subsequent Events (Additional Information) [Abstract] | ||
Maturity date | May 6, 2020 | |
Maximum borrowing capacity | $ 6,200,000 | |
Subsequent Event [Member] | ||
Subsequent Events (Additional Information) [Abstract] | ||
Number of directors in Continuing Personal Guaranty agreement | Director | 3 | |
Subsequent Event [Member] | Term Loan [Member] | ||
Subsequent Events (Additional Information) [Abstract] | ||
Maturity date | Dec. 19, 2020 | |
Maximum borrowing capacity | $ 20,500,000 | |
Subsequent Event [Member] | Term Loan [Member] | Bank of Montreal [Member] | ||
Subsequent Events (Additional Information) [Abstract] | ||
Basis spread | 8.05% | |
Subsequent Event [Member] | Revolving Credit Facility [Member] | ||
Subsequent Events (Additional Information) [Abstract] | ||
Maturity date | Dec. 19, 2020 | |
Maximum borrowing capacity | $ 7,500,000 | |
Subsequent Event [Member] | Revolving Credit Facility [Member] | Bank of Montreal [Member] | ||
Subsequent Events (Additional Information) [Abstract] | ||
Basis spread | 8.05% |
Subsequent Events, Amended Subo
Subsequent Events, Amended Subordinated Convertible Notes (Details) | Jan. 06, 2020 | Nov. 06, 2019 |
Subsequent Event [Member] | Subordinated Convertible Notes [Member] | ||
Subsequent Events (Additional Information) [Abstract] | ||
Long-term debt, interest rate | 12.00% | 10.00% |
Subsequent Events, 2019 Incenti
Subsequent Events, 2019 Incentive Award Plan (Details) - Subsequent Event [Member] - Amended and Restated 2019 Incentive Award Plan [Member] - $ / shares | Dec. 19, 2019 | Dec. 20, 2019 | Nov. 11, 2019 |
Subsequent Events (Additional Information) [Abstract] | |||
Exercise price of options, lower (in dollars per share) | $ 1.82 | ||
Halo Acquisition [Member] | |||
Subsequent Events (Additional Information) [Abstract] | |||
Number of awards available for issuance (in shares) | 9,000,000 | 6,000,000 |
Subsequent Events, Stock and Wa
Subsequent Events, Stock and Warrant Issuance (Details) - USD ($) | Jan. 31, 2020 | Jan. 03, 2020 | Dec. 31, 2019 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2018 |
Subsequent Events (Additional Information) [Abstract] | ||||||
Net proceeds from shares issued | $ 15,826,000 | $ 0 | ||||
Forecast [Member] | Halo Acquisition [Member] | ||||||
Subsequent Events (Additional Information) [Abstract] | ||||||
Shares issued pursuant to private issuance of public equity- net proceeds (in shares) | 250,000 | |||||
Subsequent Event [Member] | ||||||
Subsequent Events (Additional Information) [Abstract] | ||||||
Stock issued to third parties for services (in shares) | 1,003,232 | |||||
Non-vested options, weighted average grant date fair value, granted (in dollars per share) | $ 1.62 | |||||
Shares issued pursuant to private issuance of public equity- net proceeds (in shares) | 308,642 | |||||
Net proceeds from shares issued | $ 450,000 | |||||
Net of issuance cost | $ 100,000 | |||||
Subsequent Event [Member] | Mr. Schulmeyer [Member] | ||||||
Subsequent Events (Additional Information) [Abstract] | ||||||
Stock issued to third parties for services (in shares) | 20,371 | |||||
Non-vested options, weighted average grant date fair value, granted (in dollars per share) | $ 2.70 |
Subsequent Events, ABG Terminat
Subsequent Events, ABG Termination (Details) | Jan. 16, 2020USD ($)Installment$ / sharesshares | Oct. 31, 2020USD ($) | Sep. 30, 2019shares | Dec. 31, 2018shares |
Subsequent Events (Additional Information) [Abstract] | ||||
Common stock, shares issued (in shares) | shares | 45,427,659 | 11,661,485 | ||
Licensing Agreements [Member] | Forecast [Member] | ||||
Subsequent Events (Additional Information) [Abstract] | ||||
Termination fee installment payable | $ 100,000 | |||
Common stock, shares issued (in shares) | shares | 72,720 | |||
Number of equal installment payments | Installment | 4 | |||
Threshold excess value of inventory sold for reducing Subordinated Promissory Note value on dollar to dollar basis | $ 100,000 | |||
Subordinated promissory notes | 600,000 | |||
Common stock purchase warrant issuable | $ 150,000 | |||
Conversion price (in dollars per share) | $ / shares | $ 4 | |||
Redemption percentage to outstanding principal | 104.00% | |||
Percentage of redemption price of outstanding principal amount | 4.00% | |||
Written notice to convert seller notes to common stock | 30 days | |||
Maturity date | Jun. 30, 2023 | |||
Long-term debt, interest rate | 10.00% | |||
Warrant entitlement period to purchase shares | 24 months | |||
Warrants, exercise price (in dollars per share) | $ / shares | $ 5 |