Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019 | |
Cover [Abstract] | |
Entity Registrant Name | Better Choice Co Inc. |
Entity Central Index Key | 0001471727 |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
Entity Small Business | true |
Document Type | S-1/A |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 2,361 | $ 3,946 |
Restricted cash | 173 | 0 |
Accounts receivable, net | 5,824 | 116 |
Inventories, net | 6,580 | 1,557 |
Prepaid expenses and other current assets | 2,641 | 269 |
Total current assets | 17,579 | 5,888 |
Property and equipment, net | 417 | 71 |
Right-of-use asset, operating lease | 951 | 0 |
Intangible assets, net | 14,641 | 0 |
Goodwill | 18,614 | 0 |
Other assets | 1,330 | 28 |
Total Assets | 53,532 | 5,987 |
Current liabilities | ||
Short term loan, net | 16,061 | 0 |
Line of credit, net | 4,819 | 4,600 |
Other liabilities | 500 | 1,914 |
Accounts payable | 4,049 | 765 |
Due to related party | 0 | 1,600 |
Accrued liabilities | 4,721 | 85 |
Deferred revenue | 311 | 65 |
Operating lease liability, current portion | 345 | 0 |
Warrant derivative liability | 2,220 | 0 |
Total current liabilities | 33,026 | 9,029 |
Noncurrent Liabilities | ||
Notes payable, net | 16,370 | 0 |
Operating lease liability | 641 | 0 |
Total Noncurrent Liabilities | 17,011 | 0 |
Total Liabilities | 50,037 | 9,029 |
Stockholders' Deficit | ||
Common stock, $0.001 par value, 88,000,000 and 16,303,928 shares authorized, 47,977,390 & 11,661,485 shares issued and outstanding at December 31, 2019 and 2018, respectively | 48 | 12 |
Additional paid-in capital | 194,150 | 13,642 |
Accumulated deficit | (201,269) | (16,698) |
Total Stockholders' Deficit | (7,071) | (3,042) |
Total Liabilities, Redeemable Preferred Stock and Stockholders' Deficit | 53,532 | 5,987 |
Series E Preferred Stock [Member] | ||
Redeemable Series E Convertible Preferred Stock | ||
Redeemable Series E preferred stock, $0.001 par value, 2,900,000 & 0 shares authorized, 1,387,378 & 0 shares issued and outstanding at December 31, 2019 and 2018, respectively | 10,566 | 0 |
Convertible Series A Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Convertible Series A Preferred Stock, $0.001 par value, 0 & 5,529,162 shares authorized, 0 & 2,391,403 shares issued and outstanding at December 31, 2019 and 2018, respectively | $ 0 | $ 2 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Stockholders' Deficit | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 88,000,000 | 16,303,928 |
Common stock, shares issued (in shares) | 47,977,390 | 11,661,485 |
Common stock, shares outstanding (in shares) | 47,977,390 | 11,661,485 |
Series E Preferred Stock [Member] | ||
Redeemable Series E Convertible Preferred Stock | ||
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) | 1,387,378 | 0 |
Redeemable convertible preferred, shares outstanding (in shares) | 1,387,378 | 0 |
Stockholders' Deficit | ||
Preferred stock, par value (in dollars per share) | $ 0.99 | |
Preferred stock, shares outstanding (in shares) | 1,387,378 | |
Convertible Series A Preferred Stock [Member] | ||
Stockholders' Deficit | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 0 | 5,529,162 |
Preferred stock, shares issued (in shares) | 0 | 2,391,403 |
Preferred stock, shares outstanding (in shares) | 0 | 2,391,403 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Operations and Comprehensive Loss [Abstract] | ||
Net sales | $ 15,577 | $ 14,785 |
Cost of goods sold | 9,717 | 7,489 |
Gross profit | 5,860 | 7,296 |
Operating expenses: | ||
General and administrative | 19,782 | 6,055 |
Share-based compensation | 10,280 | 431 |
Sales and marketing | 10,138 | 4,981 |
Customer service and warehousing | 1,097 | 987 |
Impairment of intangible asset | 889 | 0 |
Total operating expenses | 42,186 | 12,454 |
Loss from operations | (36,326) | (5,158) |
Other expense: | ||
Interest expense, net | (670) | (868) |
Loss on acquisitions | (147,376) | 0 |
Change in fair value of warrant derivative liability | (90) | 0 |
Total other expense | (148,136) | (868) |
Net and comprehensive loss | (184,462) | (6,026) |
Preferred dividends | 109 | 0 |
Net and comprehensive loss available to common stockholders | $ (184,571) | $ (6,026) |
Weighted average number of shares outstanding (in shares) | 33,238,600 | 11,516,421 |
Loss per share, basic and diluted (in dollars per share) | $ (5.55) | $ (0.52) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Common Stock [Member]Better Choice [Member] | Common Stock [Member]Bona Vida, Inc. [Member] | Common Stock [Member]Halo [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 [Member] | Preferred Stock [Member]Series A Preferred Stock [Member]Bona Vida, Inc. [Member] | Preferred Stock [Member]Series A Preferred Stock [Member]Halo [Member] | Preferred Stock [Member]Series E Preferred Stock [Member] | Preferred Stock [Member]Series E Preferred Stock [Member]Better Choice [Member] | Preferred Stock [Member]Series E Preferred Stock [Member]Bona Vida, Inc. [Member] | Preferred Stock [Member]Series E Preferred Stock [Member]Halo [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member]Better Choice [Member] | Additional Paid-in Capital [Member]Bona Vida, Inc. [Member] | Additional Paid-in Capital [Member]Halo [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 [Member] | Accumulated Deficit [Member]Bona Vida, Inc. [Member] | Accumulated Deficit [Member]Halo [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 [Member] | Bona Vida, Inc. [Member] | Halo [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 | $ (10,672) | $ (10,672) | $ 0 | $ (2,116) | $ (2,127) | $ 11 | ||||||||||||||||||||||||||||||||
Balance (in shares) at Dec. 31, 2017 | 11,497 | 0 | 11,497 | 10,397 | (10,397) | |||||||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||||||||||||||||||
Shares issued pursuant to a private placement - net proceeds | $ 2 | 4,666 | 0 | 4,668 | ||||||||||||||||||||||||||||||||||||||||
Shares issued pursuant to a private placement - net proceeds (in shares) | 2,391 | |||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | $ 1 | 431 | 432 | |||||||||||||||||||||||||||||||||||||||||
Share-based compensation (in shares) | 164 | |||||||||||||||||||||||||||||||||||||||||||
Net and comprehensive loss available to common stockholders | $ 0 | 0 | (6,026) | (6,026) | ||||||||||||||||||||||||||||||||||||||||
Balance at Dec. 31, 2018 | $ 12 | $ 2 | 13,642 | (16,698) | (3,042) | |||||||||||||||||||||||||||||||||||||||
Balance (in shares) at Dec. 31, 2018 | 11,661 | 2,391 | ||||||||||||||||||||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||||||||||||||||||||||
Shares issued pursuant to a private placement - net proceeds | $ 0 | $ 0 | 150 | 0 | 150 | |||||||||||||||||||||||||||||||||||||||
Shares issued pursuant to a private placement - net proceeds (in shares) | 0 | 70 | ||||||||||||||||||||||||||||||||||||||||||
Shares and warrants issued pursuant to private issuance of public equity (PIPE)- net proceeds | $ 6 | $ 0 | 15,670 | 0 | 15,676 | |||||||||||||||||||||||||||||||||||||||
Shares and warrants issued pursuant to private issuance of public equity (PIPE)- net proceeds (in shares) | 5,745 | 0 | ||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | $ 1 | $ 0 | 10,280 | 0 | 10,281 | |||||||||||||||||||||||||||||||||||||||
Share-based compensation (in shares) | 1,119 | 0 | ||||||||||||||||||||||||||||||||||||||||||
Stock issued to third parties for services | $ 1 | $ 0 | 3,476 | 0 | 3,477 | |||||||||||||||||||||||||||||||||||||||
Stock issued to third parties for services (in shares) | 1,009 | 0 | ||||||||||||||||||||||||||||||||||||||||||
Warrants issued to third parties for services | $ 0 | $ 0 | 2,968 | 0 | 2,968 | |||||||||||||||||||||||||||||||||||||||
Conversion of Stock | $ 2 | $ 2 | $ (2) | $ (9,492) | $ 0 | $ 9,490 | $ 0 | $ 0 | $ 0 | $ 9,492 | ||||||||||||||||||||||||||||||||||
Conversion of Stock (in shares) | 2,461 | 1,582 | (2,461) | (1,247) | ||||||||||||||||||||||||||||||||||||||||
Acquisitions of treasury shares | $ (1) | $ 0 | (6,070) | 0 | (6,071) | |||||||||||||||||||||||||||||||||||||||
Acquisition of treasury (in shares) | (1,012) | 0 | ||||||||||||||||||||||||||||||||||||||||||
Acquisition | $ 4 | $ 18 | $ 2 | $ 0 | $ 0 | $ 0 | $ 20,058 | $ 0 | $ 0 | $ 23,560 | $ 108,602 | $ 3,883 | $ 0 | $ 0 | $ 0 | $ 23,564 | $ 108,620 | $ 3,885 | ||||||||||||||||||||||||||
Acquisition of business (in shares) | 3,915 | 18,103 | 2,134 | 0 | 0 | 0 | 2,634 | 0 | 0 | |||||||||||||||||||||||||||||||||||
Guarantor warrants | $ 0 | $ 0 | 4,180 | 0 | 4,180 | |||||||||||||||||||||||||||||||||||||||
Warrants issued in connection with the Notes | 0 | 0 | 313 | 0 | 313 | |||||||||||||||||||||||||||||||||||||||
Warrant exercise | $ 1 | $ 0 | $ 0 | 4,006 | 0 | 4,007 | ||||||||||||||||||||||||||||||||||||||
Warrant exercise (in shares) | 1,260 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||
Net and comprehensive loss available to common stockholders | $ 0 | $ 0 | $ 0 | (184,571) | (184,571) | |||||||||||||||||||||||||||||||||||||||
Balance at Dec. 31, 2019 | $ 48 | $ 0 | $ 10,566 | $ 194,150 | $ (201,269) | $ (7,071) | ||||||||||||||||||||||||||||||||||||||
Balance (in shares) at Dec. 31, 2019 | 47,977 | 0 | 1,387 | |||||||||||||||||||||||||||||||||||||||||
[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 May Acquisitions described in "Note 2 - Acquisitions" |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flow from Operating Activities: | ||
Net and comprehensive loss | $ (184,462) | $ (6,026) |
Adjustments to reconcile net and comprehensive loss to net cash used in operating activities : | ||
Non-cash expenses | 0 | |
Stock and warrants issued to third parties for services | 3,548 | 0 |
Impairment of intangible asset | 889 | 0 |
Depreciation and amortization | 171 | 14 |
Amortization of debt issuance costs and discounts | 346 | 0 |
Share-based compensation | 10,280 | 431 |
Lease expenses | 41 | 0 |
Change in fair value of warrant derivative liability | 90 | 0 |
Loss on acquisitions | 146,980 | 0 |
Changes in operating assets and liabilities, net of effects of business acquisition: | ||
Accounts receivable, net | (99) | (196) |
Inventories, net | 232 | (400) |
Prepaid expenses and other current assets | (101) | (208) |
Other assets | (140) | 0 |
Accounts payable | (1,695) | 55 |
Accrued liabilities | 2,738 | (645) |
Deferred revenue | 245 | 66 |
Deferred rent | (15) | 6 |
Other | (17) | 0 |
Cash Used in Operating Activities | (20,969) | (6,903) |
Cash Flow from Investing Activities | ||
Acquisition of property and equipment | (110) | (31) |
Cash acquired in the May Acquisitions | 416 | 0 |
Acquisition of Halo | (20,513) | 0 |
Cash Used in Investing Activities | (20,207) | (31) |
Cash Flow from Financing Activities | ||
Cash advance, net | (1,899) | 1,840 |
Proceeds from shares issued pursuant to private placement, net | 15,826 | 4,668 |
Proceeds from investor prepayment | 500 | 0 |
Proceeds from revolving line of credit | 5,000 | 2,615 |
Proceeds from line of credit | 6,200 | 0 |
Payment of line of credit | (6,200) | 0 |
Proceeds from related party note | 0 | 1,600 |
Payments on related party note | (1,600) | 0 |
Proceeds from short term loan | 20,500 | 0 |
Proceeds from November 2019 Notes | 2,750 | 0 |
Proceeds from warrant exercise | 4,007 | 0 |
Debt issuance costs | (720) | 0 |
Cash Provided by Financing Activities | 39,764 | 10,723 |
Net Increase in Cash and cash equivalents and Restricted cash | (1,412) | 3,789 |
Total Cash and cash equivalents, Beginning of Period | 3,946 | 157 |
Total Cash and cash equivalents and Restricted cash, End of Period | 2,534 | 3,946 |
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) | |
TruPet, LLC [Member] | ||
Cash Flow from Financing Activities | ||
Payment of line of credit | $ (4,600) | $ 0 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) | Dec. 19, 2019USD ($)$ / sharesshares | May 06, 2019USD ($)Business$ / shares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / shares |
Supplemental Cash Flow Information | ||||
Number of businesses acquired | Business | 2 | |||
Purchase price | $ 146,569,000 | |||
Non-cash transaction costs | $ 4,800,000 | |||
Stock issued to third parties for services | $ 3,477,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |
Income taxes paid | $ 0 | $ 0 | ||
Cash interest paid | $ 300,000 | $ 900,000 | ||
Common Stock [Member] | ||||
Supplemental Cash Flow Information | ||||
Stock issued to third parties for services (in shares) | shares | 1,009,000 | |||
Stock issued to third parties for services | $ 1,000 | |||
Halo [Member] | ||||
Supplemental Cash Flow Information | ||||
Purchase price | $ 38,244,000 | |||
Non-cash component of purchase price | $ 17,700,000 | |||
Number of common shares issued for acquisition (in shares) | shares | 2,134,390 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||
Number of seller warrants issued (in shares) | shares | 937,500 | |||
Halo [Member] | Convertible Subordinated Seller Notes [Member] | ||||
Supplemental Cash Flow Information | ||||
Convertible subordinated seller notes issued | $ 15,000,000 | |||
iHeartMedia [Member] | ||||
Supplemental Cash Flow Information | ||||
Prepaid advertising incurred | $ 600,000 |
Nature of business and summary
Nature of business and summary of significant accounting policies | 12 Months Ended |
Dec. 31, 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. is a rapidly growing animal health and wellness company committed to leading the industry shift toward pet products and services that help dogs and cats live heathier, happier and longer lives. We take an alternative, nutrition-based approach to animal health relative to conventional dog and cat food offerings, and position our portfolio of brands to benefit from the mainstream trends of growing pet humanization and consumer focus on health and wellness. We have a demonstrated, multi-decade track record of success selling trusted animal health and wellness products, and leverage our established digital footprint to provide pet parents with the knowledge to make informed decision about their pet’s health. Basis of presentation and consolidation On May 6, 2019, Better Choice Company Inc. completed the acquisition of TruPet LLC (“TruPet”) and Bona Vida Inc. (“Bona Vida”) in a pair of all stock transactions (together referred to as the “May Acquisitions”) through the issuance of 33,130,806 shares of common stock, par value $0.001, of the Company. Following the completion of the May 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 May 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 year ending December 31, 2019 are comprised of (1) the results of TruPet for the period between January 1, 2019 and December 31, 2019, (2) the results of the Company and Bona Vida, after giving effect to the May Acquisitions on May 6, 2019 through December 31, 2019 and (3) the results of the Company and Halo, after giving effect to the Halo Acquisition (see “Note 2 – Acquisitions”) on December 19, 2019 through December 31, 2019. The financial statements for the year ended December 31, 2018 and all periods presented prior to the effective date of the May Acquisitions on May 6, 2019 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 May Acquisitions. On December 19, 2019, the Company acquired 100% of all the issued and outstanding capital stock of Halo, a Delaware corporation (the “Halo Acquisition”). Where the context allows, the May Acquisitions and Halo Acquisition are together referred to as the “Acquisitions.” References to the “Company”, “we”, “us” and “our” in this prospectus, refer to TruPet and its consolidated subsidiaries prior to May 6, 2019, to Better Choice Company, TruPet and Bona Vida and their consolidated subsidiaries after May 6, 2019 and to Better Choice Company, TruPet, Bona Vida and Halo and their consolidated subsidiaries after December 19, 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 annual financial 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. Historical operating results are not necessarily indicative of the results that may be expected in the future. The significant accounting policies applied by the Company are described below. We present our tables in U.S. dollars (thousands) and percentage as rounded up or down. In the notes, we represent US dollars (millions) and percentage 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, and compliance with government regulations. In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China. Uncertainties regarding the economic impact of COVID-19, the disease caused by the novel coronavirus, are likely to result in sustained market turmoil, which could also negatively impact our business, financial condition, and cash flows. The Company has incurred losses over the last three years and has an accumulated deficit. The Company continues to rely on current investors and the public markets to finance these losses through debt and/or equity issuance. These operating losses and the outstanding debt 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 Company is implementing plans to achieve cost savings and other strategic objectives to address these conditions. The Company expects cost savings from consolidation of third-party manufacturers, optimizing shipping and warehousing as well as overhead cost reductions. The business is focused on growing the most profitable channels while reducing investments in areas that are expected to have long-term benefits. 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. 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 At December 31, 2019, the Company had $0.2 million in restricted cash. The Company is required to maintain a restricted cash balance of less than $0.2 million associated with a business credit card and credit card clearance operations. The Company did not have any restricted cash at December 31, 2018. Accounts receivable and allowance for doubtful accounts Accounts receivable primarily consist of unpaid buyer invoices from the Company’s Retail customers and credit card payments receivable from third-party credit card processing companies. Accounts receivable is stated at the amount billed to customers, net of point of sale and cash 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. The Company recorded less than $0.1 million allowance for doubtful accounts for the year ended December 31, 2019. For the year ended December 31, 2018, the Company considered 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, inventory valuation reflects adjustments for anticipated physical inventory losses, such as shrink, that have occurred since the last physical inventory. 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 3 to 7 years Computer equipment 2 to 3 years Computer software 3 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. Goodwill Goodwill of $18.6 million was recognized as of December 31, 2019 in connection with the Halo Acquisition. In future years, the Company will complete an annual impairment test for goodwill that includes an assessment of qualitative factors including, but not limited to, macroeconomic conditions, industry and market conditions, and entity specific factors such as strategies and financial performance. The Company will perform annual impairment tests as of October 31st beginning in 2020 or earlier if indicators of impairment exist. There were no indicators of goodwill impairment as of December 31, 2019. Intangible assets 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 are written down to current fair value. The Company acquired an intangible asset related to the Houndog license with the acquisition of Bona Vida an May 6, 2019. The Company fully impaired the asset as of December 31, 2019 as we terminated the contract on January 13, 2020. The Company acquired intangible assets with the acquisition of Halo on December 19, 2019. We will review impairment of the assets acquired beginning in the fiscal year ending on December 31, 2020 given the proximity of the Halo Acquisition to year-end. Redeemable convertible preferred stock In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 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 Series E Convertible Preferred Stock (the “Series E”) contains redemption provisions that require it to be presented outside of stockholders’ deficit. Changes in the redemption value of the redeemable convertible preferred stock, if any, are recorded immediately in the period occurred as an adjustment to additional paid-in capital in the consolidated balance sheet. 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 December 31, 2019 and 2018, the Company does not have any significant uncertain income tax positions. If incurred, the Company would classify interest and penalties on uncertain tax positions as income tax expense. The Company was incorporated on May 6, 2019. Prior to this date, the Company operated as a flow through entity for state and United States federal tax purposes. The Company files a U.S. federal and state income tax return, including for its wholly owned subsidiaries. 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 accordance with the provisions of ASC 606, “Revenue from Contracts with Customers.” 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 on January 1, 2017. Accordingly all periods presented reflect the recognition of revenue and related disclosures required by ASC 606. 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, inventory freight for shipping product from third-party contract manufacturing plants to the Company’s warehouse and third party fulfillment and royalties. General and administrative expenses General and administrative expenses include management and office personnel compensation, share-based compensation, bonuses, information technology related costs, rent, travel, professional service fees, insurance, product development costs, outbound shipping and general corporate expenses. Advertising The Company charges advertising costs to expense as incurred and such charges are included in sales and marketing expenses in the consolidated statements of operations and comprehensive loss. Our advertising expenses consisting primarily of online advertising, search costs, email advertising, and radio advertising. In addition, with the acquisition of Halo, we reimburse our customers and third parties for in store activities and record these costs as sales and marketing expenses. Advertising costs were $6.7 million and $3.9 million for the years ended December 31, 2019 and 2018, respectively. Customer service and warehousing Customer service and warehousing include wages associated with customer service and fulfillment of DTC customer orders. Fair value of financial instruments The Company’s financial instruments recognized on the balance sheets consist of cash and cash equivalents, restricted cash, accounts receivable, prepaid deposits, accounts payable, short term loan, line of credit, subordinated convertible notes, accrued liabilities, other liabilities, and a warrant derivative liability. The warrant derivative liability is remeasured at fair value each reporting period. The carrying values for other financial instruments are deemed to be equivalent to their respective fair values due to their relative short term nature. 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 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, discounted cash flow methodologies, as well as instruments for which the fair value determination requires significant management judgment. The warrant derivative liability is remeasured at fair value each reporting period and represents a Level 3 financial instrument. Fair value measurements of nonfinancial assets and nonfinancial liabilities reflect Level 3 inputs and are primarily used to measure the estimated fair values of assets acquired and liabilities assumed in business combinations, for goodwill, other intangible assets and long-lived assets impairment analyses and the valuation of acquired intangibles. Basic and diluted loss per share Basic and diluted loss per share has been determined by dividing the net and comprehensive 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 compensation expense for all share–based payments in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. The Company follows the fair value method of accounting for awards granted to employees, directors, officers and consultants. Share-based awards are measured at their estimated fair value on each respective grant date. The Company recognizes share-based payment expenses over the vesting period. 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 expected dividend yield which is based on the historical dividends issued by the Company. The Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. Expected volatility is calculated based on the analysis of other public companies within the pet wellness, internet commerce (e-commerce), and hemp derived CBD sectors. Risk–free interest rates are calculated based on risk–free rates for the appropriate term. The expected life is calculated as (i) the mid-point between the average vested date and the contractual expiration of the option for executives and directors and (ii) three years from the average vesting date for all others due to limited exercise history 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 financial 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 leases, a royalty contract termination (see “Note 22 – Subsequent events”) and debt instruments, including a line of credit, subordinated convertible notes and a short term loan for which we are committed to pay certain amounts over a period of time. In connection with the preparation of the Company’s consolidated financial statements for the year ended December 31, 2019, the Company identified an error as of December 31, 2018 related to an understatement of sales taxes due and payable of $0.7 million. The error was corrected during the year ended December 31, 2019. The Company believes that the correction of this error is not material to the consolidated financial statements as of and for the years ended December 31, 2019 or 2018, respectively. Reclassification of prior period presentation Certain reclassifications have been made to conform the prior period data to the current presentation. These reclassifications had no material 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, Topic 842, “Leases (842)”, which amends leasing guidance by requiring companies to recognize a right-of-use asset and a lease liability for all operating and financing leases with lease terms greater than twelve months. The lease liability is equal to the present value of lease payments. The right-of-use lease asset is based on the lease liability, subject to adjustment for prepaid and deferred rent and tenant incentives. For income statement purposes, leases will continue to be classified as operating or financing with lease expense in both cases calculated substantially the same as under the prior leasing guidance. 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, results for reporting periods beginning prior to January 1, 2019 continue to be reported in accordance with our historical treatment. The adoption of ASC 842 did not have a material impact on the Company’s results of operations or cash flows. See “Note 8 – Operating leases.” Adoption of FASB ASU 2018-07 “Improvements to Nonemployee Share-Based Payment Accounting” On January 1, 2019, the Company adopted ASU. 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 nonemployees. 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 nonemployees as a change in accounting principle prospectively beginning in the period ending January 1, 2019. The Company did not restate prior periods for share-based compensation. 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, 2023, and early adoption is permitted. The Company is currently evaluating the impact the new standard will have on its consolidated financial statements. 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 is currently evaluating the impact the new standard will have on its consolidated financial statements. As this standard only requires additional disclosures, there is no anticipated financial statement impact of its adoption. ASU 2018-15 “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40)” In August 2018, the FASB issued ASU 2018-15 “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)” to amend ASU 2015-05 in an effort to provide additional guidance on the accounting for costs implementation activities performed in a cloud computing arrangement that is a service contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. The amendments in this update also require the entity to present the expense related to the capitalized implementation costs in the same line item in the statement of income as the fees associated with the hosting element (service) of the arrangement and classify payments for capitalizing implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. The entity is also required to present the capitalized implementation costs in the statement of financial position in the same line item that a prepayment for the fees of the associated hosting arrangement would be presented. The new standard is effective for the Company on January 1, 2020, and early adoption is permitted. The Company believes that current practices of capitalization versus expensing IT costs are in line with this guidance, however, the amendment will require the Company to change presentation within the statement of cash flows. The Company currently has no internal use software and expects this accounting standard will have no impact on its consolidated financial statements. 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 | 12 Months Ended |
Dec. 31, 2019 | |
Acquisitions [Abstract] | |
Acquisitions | Note 2 - Acquisitions Acquisition of Halo On October 15, 2019, the Company entered into a Stock Purchase Agreement (the “Halo Agreement”) to acquire Halo, a Delaware corporation. Halo is an ultra-premium, natural pet food brand. The strategic objective of the acquisition was to accelerate the growth of the Company’s animal health platform by acquiring an all-encompassing, global, animal health and wellness consumer product goods company. Under the terms of the Halo Agreement, the Company completed the Halo Acquisition on December 19, 2019 (the “Halo Acquisition Date”), for $38.2 million. 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 of $20.5 million, (ii) 2,134,390 shares of the Company’s common stock, par value $0.001 per share ($3.9 million), (iii) Seller Notes totaling $15,000,000, and (iv) 937,500 Seller Warrants ($0.3 million). The Company incurred $0.9 million in transaction costs, which are included in general and administrative expenses. The Halo Acquisition was accounted for under the purchase method of accounting, and accordingly, the purchase price was allocated to the identifiable assets and liabilities based on their estimated fair values at the Halo Acquisition Date. Halo’s revenue of $0.7 million and net and comprehensive loss of $0.2 million have been included in the consolidated results of the Company since the Halo Acquisition Date. The determination of the preliminary purchase price allocation to specific assets acquired and liabilities assumed is incomplete for Halo. The preliminary purchase price allocation may change in future periods as the fair value estimates of assets and liabilities and the valuation of the related tax assets and liabilities are completed. The preliminary purchase price allocation is summarized as follows: Dollars in thousands Total purchase price $ 38,244 Assets and liabilities acquired: Assets Property and equipment 260 Accounts receivable 5,540 Inventories 5,160 Intangible assets 14,690 Other assets 329 Total assets 25,979 Liabilities Accounts payable 4,628 Accrued liabilities 1,553 Long term liability 168 Total liabilities 6,349 Net assets acquired 19,630 Goodwill $ 18,614 The intangible assets acquired relate to customer relationships and trade name. The intangible asset related to customer relationships reflects the estimated net present value of the future cash flows associated with the stable and recurring customer base acquired in the Halo Acquisition. The fair value was determined using an income approach, which recognizes that the fair value of an asset is premised upon the expected receipt of future economic benefits such as earnings and cash inflows based on current sales projections and estimated direct costs for each product line. Acquired customer relationships are finite-lived intangible assets and are amortized over their estimated life of 7 years using the straight-line method, which approximates the customer attrition rate, reflecting the pattern of economic benefits associated with these assets. All of Halo’s products and services are sold under the “Halo” trade name, and each major product is identified by this trade name. The trade name of the Company was valued on an income approach using a 2% royalty rate which is supported by both market royalty rate data and profitability factors of Halo. The trade name is a finite-lived intangible asset and is being amortized over its estimated life of 15 years using the straight-line method, which reflects the pattern of economic benefits associated with this asset. The excess of purchase price over the fair value amounts assigned to the identifiable assets acquired and liabilities assumed represents goodwill from the acquisition. The Company believes the factors that contributed to goodwill include the acquisition of a talented workforce and administrative cost synergies. The Company does not expect any portion of this goodwill to be deductible for tax purposes. See “Note 9 – Intangible assets, royalties and goodwill.” Pro Forma Information (Unaudited) The following pro forma results reflect only pro forma adjustments for additional interest expense to fund the Halo Acquisition, amortization of deferred financing costs related to short term loan and line of credit, reduction in interest expense associated with the repayment of the Halo debt on the Halo Acquisition Date, amortization of identifiable intangible assets associated with the Halo Acquisition, share-based compensation expense related to stock options granted and effects of adjustments made to carrying values of acquired assets and liabilities. However, pro forma results do not include any anticipated synergies from the acquisition of Halo and accordingly, are not necessarily indicative of the results that would have occurred if the Halo Acquisition had occurred on the dates indicated or that may result in the future. Dollars in thousands Twelve Months ended December 31, 2019 2018 Net revenues $ 48,152 $ 51,388 Net loss per share attributable to common stockholders $ 192,592 $ 25,958 Reverse Acquisitions of Better Choice and Bona Vida by TruPet On May 6, 2019, the Company completed the May Acquisitions through the issuance of 33,130,806 shares of common stock, par value $0.001 of the Company. Following the completion of the May Acquisitions, the operations of the Company were 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. 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 15,027,533 shares for the outstanding membership interest in TruPet. The May Acquisitions were accounted for as asset acquisitions. The purchase price for Better Choice Company was $37.9 million which includes stock, minority interest, and fully vested share-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 share-based compensation with an estimated fair value of $0.1 million. The stock exchanged in the May Acquisitions 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 May 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: Dollars in thousands Better Choice Company Bona Vida Total Total Purchase Price $ 37,949 $ 108,620 $ 146,569 Net Assets (Liabilities) Acquired: Assets Cash and cash equivalents 7 384 391 Restricted cash - 25 25 Accounts receivable - 69 69 Inventories - 95 95 Prepaid expenses and other current assets 32 348 380 Intangible assets 986 - 986 Other assets - 74 74 Total Assets 1,025 995 2,020 Liabilities Warrant derivative liability (2,130 ) - (2,130 ) Accounts payable & accrued liabilities (544 ) (153 ) (697 ) Total Liabilities (2,674 ) (153 ) (2,827 ) Net Assets (Liabilities) Acquired (1,649 ) 842 (807 ) Loss on Acquisitions $ (39,598 ) $ (107,778 ) $ (147,376 ) |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 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 categories of revenue channels: retail-partner based (“Retail”), which includes the sale of product to e-commerce retailers, pet specialty chains, grocery, mass and distributors, and direct to consumer, (“DTC”), which is focused on driving consumers to directly purchase product through our online web platform. A significant portion of the Company’s revenue is derived from the DTC channel which represents 89% of consolidated revenue; the Retail channel represents 11% of consolidated revenue for the year ended December 31, 2019. The revenue channel percentage will change in 2020 with the acquisition of Halo, as the Halo business is predominantly driven by the Retail channel. 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 their DTC customer which creates a separate performance obligation upon customer participation. 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 point of sale 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 have been shipped. Based on the historical experience, the Company records an estimated liability for returns. Product returns were less than $0.4 million and $0.7 million in 2019 and 2018, respectively. 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 program enables customers to accumulate points based on their spending. For every $1 spent, customers receive twelve points, and for every five hundred points earned, customers will receive a $5 gift card which can be redeemed for goods purchased on-line. The points do not expire and the Company, based on historical redemption experience estimates a redemption rate of 37%. As of December 31, 2019 and 2018, customers earned, but not redeemed, loyalty program awards amounted to $0.2 million and less than $0.1 million, respectively. The Company recognized less than $0.2 million as revenue from the loyalty program for the year ended December 31, 2019. There was no revenue recognized for the year ended December 31, 2018 related to the loyalty program. The amount included in net sales related to recoveries of shipping costs by charging the customer a shipping fee for direct to consumer customers was $0.7 million and $0.9 million for the years ended December 31, 2019 and 2018, respectively. The Company’s Retail channel includes the sale of goods to Retail customers for resale. The Retail sale of goods is considered a single performance obligation. The Company records revenue net of point of sale discounts. Retail customers are not subject to sales tax. Revenue for Retail sales are recognized when the product is shipped to the Retail customer as this is when it has been determined that control has been transferred, the majority of Retail customers pick up their orders. There is an exception with one key customer with specific FOB destination shipping terms as this is when it has been determined that control has transferred. Shipping costs associated with moving finished products to customers through third party carriers were $2.3 million and $2.5 million for the years ended December 31, 2019 and 2018, respectively. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2019 | |
Inventories [Abstract] | |
Inventories | Note 4 - Inventories Inventories are summarized as follows: Dollars in thousands December 31, 2019 December 31, 2018 Food, treats and supplements $ 6,425 $ 1,301 Inventory packaging and supplies 504 133 Other products and accessories 73 191 7,002 1,625 Inventory reserve (422 ) (68 ) $ 6,580 $ 1,557 |
Prepaid expenses and other curr
Prepaid expenses and other current assets | 12 Months Ended |
Dec. 31, 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 December 31, 2019 December 31, 2018 Prepaid advertising & marketing $ 1,776 $ - Prepaid slotting fees 425 - Prepaid insurance 164 15 Deposits 115 - Prepaid state registration fees 81 - Other 80 254 Total prepaid expenses and other current assets $ 2,641 $ 269 On August 28, 2019, the Company entered into a radio advertising agreement with iHeartMedia + Entertainment, Inc. and issued 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 the year ended December 31, 2019, $0.6 million of the $3.4 million of the prepaid advertising was incurred. In addition, the agreement required the Company to spend a minimum amount for talent fees or other direct iHeart costs. 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 for the year ended December 31, 2019, reducing the prepaid advertising balance to $2.8 million, of which $1.7 million is recorded in prepaid expenses and other current assets and $1.1 million in other noncurrent assets. |
Property and equipment
Property and equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property and equipment [Abstract] | |
Property and equipment | Note 6 - Property and equipment Property and equipment consist of the following: Dollars in thousands December 31, 2019 December 31, 2018 Equipment $ 222 $ 49 Furniture and fixtures 138 46 Computer software 115 - Computer equipment 4 14 Total property and equipment 479 109 Accumulated depreciation (62 ) (38 ) Net property and equipment $ 417 $ 71 Depreciation expense was less than $0.1 million for the years ended December 31, 2019 and 2018. Depreciation expense is included as a component of general and administrative expenses. |
Accrued liabilities
Accrued liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Accrued liabilities [Abstract] | |
Accrued liabilities | Note 7 – Accrued liabilities Accrued liabilities consist of the following: Dollars in thousands December 31, 2019 December 31, 2018 Accrued professional fees $ 1,695 $ - Accrued sales tax 1,233 - Accrued payroll and benefits 994 85 Accrued trade promotions 357 - Accrued dividends 256 - Accrued interest 109 - Other 77 - Total accrued liabilities $ 4,721 $ 85 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. 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 recognized $1.2 million and no sales tax liability as of December 31, 2019 and 2018, respectively. While additional assessments are not anticipated, additional states may assert that the Company has nexus and must pay sales tax for prior sales. The Company does not believe that additional assessments, if any, will have a material impact on our financial position or results of operations. In connection with the preparation of the Company’s consolidated financial statements for the year ended December 31, 2019, the Company identified an error as of December 31, 2018 related to an understatement of sales taxes due and payable of $0.7 million. The error was corrected during the year ended December 31, 2019. The Company believes that the correction of this error is not material to the consolidated financial statements as of and for the year ended December 31, 2019. |
Operating leases
Operating leases | 12 Months Ended |
Dec. 31, 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 did 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 are 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, the Company’s 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. 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 the impact upon adoption of ASC 842 were corrected during the twelve months ended December 31, 2019. The Company believes the correction of these errors is not material to the consolidated financial statements as of and for the twelve months ended December 31, 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. The table below presents the lease-related assets and liabilities recorded upon adoption: January 1, Dollars in thousands Classification on the balance sheet 2019 2019 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 lease liabilities $ 429 The table below presents certain information related to the lease costs for operating leases for the years ended December, 31 2019 and 2018. Year ended December 31, Dollars in thousands 2019 2018 Operating lease costs 369 189 Variable lease costs 31 42 Total operating lease costs $ 400 231 As of December 31, 2019, the weighted-average remaining operating lease term was 2.6 years and the incremental borrowing rate was 12.5% for operating leases recognized on our consolidated balance sheet. Short term lease costs, excluding expenses relating to leases with a lease term of one month or less, was $0.1 million for the year ended December 31, 2019. Rent expense for the year ended December 31, 2019 and 2018 was $0.5 million and $0.2 million, respectively. 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. Operating Leases 2020 444 2021 459 2022 240 2023 5 Total minimum lease payments 1,148 Less: amount of lease payments representing interest 162 Present value of future minimum lease payments $ 986 Less: current obligations under leases 345 Long-term lease obligations $ 641 Future minimum lease payments under contractually-obligated leases as of December 31, 2018 were as follows (in thousands): Year ending December 31, 2019 $ 257 2020 296 2021 296 2022 123 2023 - $ 972 |
Intangible assets, royalties an
Intangible assets, royalties and goodwill | 12 Months Ended |
Dec. 31, 2019 | |
Intangible assets, royalties and goodwill [Abstract] | |
Intangible assets, royalties and goodwill | Note 9 – Intangible assets, royalties and goodwill Intangible assets and royalties The Company’s intangible assets as of December 31, 2019 consist of customer relationships and trade name acquired in the Halo Acquisition. The customer relationships and trade name are amortized over their estimated useful lives of 7 and 15 years respectively, using the straight-line method. In April 2019, Better Choice Company entered into a licensing agreement with Authentic Brands and Elvis Presley Enterprises (“ABG”) whereby Better Choice was 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 $1.0 million worth of common stock. Upon the May Acquisitions on May 6, 2019, the Company acquired the license agreement and recorded it at its amortized cost which approximated fair value. As of December 31, 2019, the Company paid $0.6 million of the 2019-2020 agreed royalty payments. As there were no sales related to Houndog products during the year ended December 31, 2019, the Company determined that the minimum royalties paid during the year through December 31, 2019 should be expensed. The Houndog license agreement was terminated on January 13, 2020, see “Note 22 - Subsequent events.” The Company recognized amortization expense of $0.1 million and an impairment of the license intangible of $0.9 million as of and for the period ended December 31, 2019, respectively. The Company’s intangible assets as of December 31, 2019 are as follows: Dollars in thousands December 31, 2018 December 31, 2019 Weighted- Average Remaining Useful Lives (in years) Gross Carrying Amount Additions Adjustments Gross Carrying Amount Accumulated Amortization Net Carrying Amount License - $ - $ 986 $ (986 ) $ - $ - $ - Customer relationships 7 - 7,500 - 7,500 (35 ) 7,465 Trade name 15 - 7,190 - 7,190 (14 ) 7,176 Total intangible assets $ - $ 15,676 $ (986 ) $ 14,690 $ (49 ) $ 14,641 The Company did not have intangible assets or amortization expense during the year ended December 31, 2018. The estimated future amortization of intangible assets over the remaining weighted average useful life of 10 years is as follows: Dollars in thousands Years ended December 31, 2020 $ 1,551 2021 1,551 2022 1,551 2023 1,551 2024 1,551 Thereafter 6,886 $ 14,641 |
Line of credit, short term loan
Line of credit, short term loan and notes payable | 12 Months Ended |
Dec. 31, 2019 | |
Line of credit, short term loan and notes payable [Abstract] | |
Line of credit, short term loan and notes payable | Note 10 - Line of credit, short term loan and notes payable The components of the Company’s debt consist of the following: December 31, 2019 December 31, 2018 Amount Rate Maturity Date Amount Rate Maturity Date Note payable (due to related parties) $ - $ 1,600 26.6% May 6, 2019 Short term loan, net 16,061 (2) December 19, 2020 Lines of credit, net 4,819 (2) December 19, 2020 4,600 (1) May 6, 2019 November 2019 notes payable, net (November 2019 Notes) 2,769 10.0% November 4, 2021 December 2019 senior notes payable, net (Seller Notes) 9,191 10.0% June 30, 2023 - December 2019 junior notes payable, net (Seller Notes) 4,410 10.0% June 30, 2023 Total debt 37,250 6,200 (1) Interest at LIBOR plus 3% (2) Interest at Bank of Montreal Prime plus 8.05% TruPet line of credit, due to related parties and revolving line of credit In May 2017, TruPet along with the majority owners serving as co-borrowers entered into a line of credit providing for up to $2.0 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 as of December 31, 2018, with a maturity of May 2019. Borrowings bore interest at LIBOR plus 3% and were repaid on May 6, 2019. At December 31, 2018, outstanding borrowings were $4.6 million. The line of credit was secured by personal assets of the co-borrowers, as noted above. Covenants under the line of credit required TruPet to be within certain restrictions. As of December 31, 2018, TruPet was in compliance with its covenants. At December 31, 2018, due to related party consisted of a $1.6 million unsecured note payable to a director of TruPet 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 either December 31, 2018 or December 31, 2019. On May 6, 2019, Better Choice Company refinanced the $4.6 million credit facility and the $1.6 million note payable to a director with a $6.2 million revolving line of credit with a financial institution. The $6.2 million revolving line of credit was secured by restricted cash held in a money market account. In connection with the consummation of the Halo Acquisition, the Company terminated the $6.2 million revolving line of credit. Early termination of the revolving line of credit did not trigger any premiums or penalties, other than customary breakage costs. Short term loan and line of credit On the Halo Acquisition Date, 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”). The Facilities Agreement provides for (i) a term loan facility of $20.5 million and (ii) a revolving demand loan facility not to exceed $7.5 million. The Company borrowed $20.5 million on the short term loan and $5.0 million on the line of credit on December 19, 2019. The principal remains outstanding as of December 31, 2019. The short-term loan and line of credit were issued with customary affirmative and negative covenants relating to the incurrence of debt, liens, declaring or paying dividends, purchasing our redeeming our common stock, the making of restricted payments and asset sales and certain other fundamental changes and events of default such as maintaining timely payments, filing tax and regulatory documents in a timely manner, continuing the existing business with control over existing assets, default on senior debt, and voluntary or involuntary bankruptcy or insolvency proceedings. The Facilities Agreement is secured by substantially all assets of the Company and the subsidiary guarantors (who include Halo, TruPet and Bona Vida). As of December 31, 2019, the term loan outstanding was $20.5 million, net of debt issuance costs and discounts of $4.4 million, and the line of credit outstanding was $5.0 million, net of debt issuance costs of $0.2 million. The debt issuance costs and discounts are amortized using the effective interest method. The term loan and line of credit 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 Company used the proceeds of the short term loan to complete the Halo Acquisition and to pay transaction fees and expenses. The Company intends to use the proceeds of the line of credit for working capital and general corporate purposes. To induce the Agent to enter into the agreement, certain directors and shareholders of the Company (“Shareholder Guarantors”) agreed to enter into a Continuing Guaranty (the “Shareholder Guaranties”) in the amount of $20.0 million and guarantee the Company’s obligations under the agreement. As consideration for the Shareholder Guaranties, the Company agreed to issue common stock purchase warrants to the Shareholder Guarantors in an amount equal to 0.325 warrants for each dollar of debt under the agreement guaranteed by such Shareholder Guarantors (the “Guarantor Warrants”). The Guarantor Warrants are exercisable any time from the date of issuance for up to 24 months from the date of the consummation of an IPO (as defined therein) at an exercise price $1.82 per share. The Guarantor Warrants have a fair value of $4.2 million on the date of issuance. As of December 31, 2019, the Company was in compliance with its debt covenants. Notes Payable On November 4, 2019, the Company issued $2.8 million of subordinated convertible notes (the “November 2019 Notes”) which carry a 10% interest and mature on November 4, 2021. The interest is payable in arrears on March 31, June 30, September 30 and December 31 of each year. Interest is payable by increasing the aggregate principal amount of the November 2019 Notes. The November 2019 Notes are exercisable any time from the date of issuance and carry a conversion price of the lower of (a) $4.00 per share or (b) the IPO Price. The IPO Price is the price at which the Company’s stock will be sold at a future IPO. The Company issued incremental warrants associated with the November 2019 Notes with a fair value of less than $0.1 million. The November 2019 Note was amended on January 6 , On December 19, 2019, the Company issued $10.0 million and $5.0 million in senior subordinated convertible notes (the “Senior Seller Notes”) and junior subordinated convertible notes (the “Junior Seller Notes” and, together with the Senior Seller Notes, the “Seller Notes”) to the sellers of Halo. The Seller Notes are exercisable any time from the date of issuance and carry a 10% interest rate and mature on June 30, 2023. The interest is payable in arrears on March 31, June 30, September 30 and December 31 of each year. Interest is payable by increasing the aggregate principal amount of the Seller Notes. The Seller Notes carry a conversion price of the lower of (a) $4.00 per share or (b) the IPO Price. As of December 31, 2019, the Senior Seller Notes outstanding was $9.2 million, net of discounts of $0.9 million, and the Junior Seller Notes outstanding were $4.4 million, net of discounts of $0.5 million. The discounts are being amortized over the life of the Seller Notes using the effective interest method. The fair values of the November 2019, Senior and Junior Seller Notes are based on observable inputs, including quoted market prices (Level 2). The fair values of the November 2019, Senior and Junior Seller Notes were approximately $2.8 million, $9.2 million and $4.4 million, respectively, as of December 31, 2019. The remaining borrowings outstanding have a carrying value that approximates fair value due to their short term nature. The Company’s subordinated convertible notes were all issued with customary affirmative and negative covenants relating to the incurrence of debt, prohibitions on liens and restricted payments and events of default such as failure to pay, default on senior debt, and voluntary or involuntary bankruptcy or insolvency proceedings. It is also an event of default if the Company’s common stock is suspended from trading or the failure of the common stock to be listed on the OTC markets, the pink sheets, NASDAQ, NYSE or other national securities exchange in the United States or Canada for a period of five (5) consecutive days or for more than ten (10) days in any 365-day period. As of December 31, 2019, the Company was in compliance with all covenant requirements and there were no events of default. All notes payable are subordinated to the short term loan and line of credit. Interest expense of approximately $0.7 million and $0.9 million was recorded in the consolidated statements of operations and comprehensive loss related to the line of credit, November 2019 and Seller Notes, and other indebtedness for the years ended December 31, 2019 and 2018, respectively. |
Warrant derivative liability
Warrant derivative liability | 12 Months Ended |
Dec. 31, 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 year 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 anytime from the date of issuance 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. 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 issued an additional 1,003,232 warrants on March 17, 2020 to its warrant holders at a $1.62 exercise price and revise the existing warrants to an exercise price of $1.62. The warrants are valued based on future assumptions and, as the reset trigger was a known event on December 31, 2019, the Company included the trigger in the valuation performed during the period ended December 31, 2019. 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 as at December 31, 2019. Dollars in thousands Warrant liability Assumption of warrants in May Acquisitions $ 2,130 Change in fair value of warrant derivative liability 90 Balance as of December 31, 2019 $ 2,220 May 6, 2019 December 31, 2019 Warrant liability Stock price $ 6.00 $ 2.70 Exercise price $ 3.90 $ 1.62 Expected remaining term (in years) 1.60 – 1.68 0.95 – 1.02 Volatility 64 % 69 % Risk-free interest rate 2.39 % 1.60 % 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 December 31, 2019, the Company would be required to pay $1.1 million if all warrants were settled in cash or issue 712,823 shares if all warrants were settled in shares. |
Other liabilities
Other liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Other liabilities [Abstract] | |
Other liabilities | Note 12 – Other liabilities Other liabilities consist of the following: Dollars in thousands December 31, 2019 December 31, 2018 Cash advance $ - $ 1,899 Investor prepayment 500 - Deferred rent - 15 Total other liabilities $ 500 $ 1,914 During fiscal year 2018, the Company received net cash advances totaling $1.9 million from a third-party lender, that were secured by customer payments on future sales and receivables. At December 31, 2019, the Company held $0.5 million as a prepayment for the issuance of common stock in 2020. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and contingencies [Abstract] | |
Commitments and contingencies | Note 13 – Commitments and contingencies In the normal course of business, the Company may be subject to various legal claims and contingencies that arise, including claims related to commercial transactions, product liability, health and safety, taxes, environmental matters, employee matters and other matters. Litigation is subject to numerous uncertainties and the outcome of individual claims and contingencies is not predictable. It is possible that some legal matters for which reserves have or have not been established could result in an unfavorable outcome for the Company and any such unfavorable outcome could be of a material nature or have a material adverse effect on our consolidated financial condition, results of operations and cash flows. 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 no purchase obligations as of December 31, 2019. |
Redeemable series E convertible
Redeemable series E convertible preferred stock | 12 Months Ended |
Dec. 31, 2019 | |
Redeemable series E convertible preferred stock [Abstract] | |
Redeemable series E convertible preferred stock | Note 14 – Redeemable series E convertible preferred stock On May 6, 2019, the Company acquired 2,633,678 outstanding shares of Series E, which represented an element of the purchase price and were recorded at fair value (on an as converted into common stock basis) 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 - Acquisitions” above. The Series E has a stated value of $0.99 per share; is convertible to common stock at a price of $0.78 per share. On May 10, 2019 and May 13, 2019, holders of the Company’s Series E converted 689,394 and 236,364 preferred shares into 875,000 and 300,000 shares of the Company’s common stock, respectively. On November 21, 2019, holders of the Company’s Series E converted 320,542 preferred shares into 406,841 shares of the Company’s common stock. As of December 31, 2019, 1,387,378 shares of Series E remain outstanding. The rights, preferences and privileges of Series E are as follows: Voting The Series E has voting rights equal to those of the underlying common stock and ranks senior in respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company. Dividends The holders of the Series E are entitled to receive cumulative dividends at a rate of 10% per annum on the stated value. Each Holder of Series E will be entitled to receive dividends or distributions on each share of Series E on an as converted into common stock basis. Pursuant to waiver letters executed by each investor, the holders of the Company’s Series E agreed to waive their right to the distribution of dividends until October 22, 2020. Dividends accrued are $0.3 million as of December 31, 2019 and remain unpaid. There were no dividends accrued as at December 31, 2018. Liquidation In the event of a Liquidation Event, the holders of Series E 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 Series E 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 Series E will be entitled to convert any portion of the outstanding Series E 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 Series E would be determined by dividing (x) the Conversion Amount of such share of Series E by (y) the conversion price. The Series E 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 Series E 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 Series E has a stated value of $0.99 per share; is convertible to common stock at a price of $0.78 per share. Redemption of the Series E also occurs upon Triggering Events, which are not all entirely within the control of the Company. Due to this redemption option, the Series E is recorded in the mezzanine equity and subject to subsequent measurement under the guidance provided under FASB ASC 480-10-S99-3A, Accounting for Redeemable Equity Investments. |
Stockholders' deficit
Stockholders' deficit | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' deficit [Abstract] | |
Stockholders' deficit | Note 15 - Stockholders’ deficit As noted above, the May Acquisitions were completed on 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 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 May 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 and Bona Vida. As a result of the transactions, the historical TruPet members’ equity (units and incentive units) have 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 year ended December 31, 2018, a Company manager contributed $0.4 million and received $0.4 million as distributions. There was no equity issued for the contribution. There was no capital contribution or distribution in 2019 by Company directors. Series A preferred stock In December 2018, the Company completed a private placement and issued 2,391,403 Series A Preferred Stock to unrelated parties for $2.17 per share. 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 69,115 Series A Preferred Stock at $2.17 per share was completed. The proceeds were approximately $0.2 million, net of share issuance costs. On May 6, 2019, all Series A Preferred Shares were converted to 2,460,517 shares of common stock. Common stock On March 14, 2019, Better Choice Company Inc. 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 Better Choice Company Inc. filed a certificate of amendment of certificate of incorporation with the State of Delaware which resulted in authorized shares of common stock of 88,000,000. The Company has 47,977,390 On December 12, 2018, Better Choice Company Inc. closed a private placement offering (the “December Offering”) of 1,425,641 units (the “Units”), each unit consisting of (i) one share of the Company’s common stock and (ii) a warrant to purchase one half of a share of common stock. The Units were offered at a fixed price of $1.95 per Unit for gross proceeds of $2.8 million. Costs associated with the December Offering were $0.1 million, and net proceeds were $2.7 million. Net proceeds of $2.6 million were received by Better Choice Company Inc. 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 “Note 11 – Warrant derivative liability,” A portion of the proceeds from this private placement was used to acquire the initial 7% of TruPet. 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 December 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 December 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 valued at $6.1 million representing its initial 7% investment in TruPet. These shares are recorded as an acquisition of treasury shares. On May 6, 2019, the Company issued 5,744,991 million units for gross proceeds of $3.00 per unit in a 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 were 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 the May Acquisitions. On December 19, 2019, the Company completed the Halo Acquisition for $38.2 million. At the closing of the transaction, in addition to cash and other consideration, Better Choice Company issued 2,134,390 shares of the Company’s common stock, par value $0.001 per share in exchange for 100% of the outstanding ownership units of Halo. The 2,134,390 shares of common stock were valued at $1.82 per share, which was the market value as of the date of the Halo Acquisition. As of December 31, 2019, the Company has reserved approximately 31.0 million shares of common stock for future issuance as follows: December 31, 2019 Conversion of Series E 1,760,903 Exercise of options to purchase common stock 7,791,833 Warrants to purchase common stock 16,981,854 Notes payable 4,437,500 Total 30,972,090 The Company did not reserve any shares for future issuances during the year ended December 31, 2018. Share-based compensation During the period from November 1, 2018 through May 5, 2019, incentive units for the equivalent of 1.3 million shares were awarded to employees and consultants. The incentive units were measured at fair value on the date of each respective award with a weighted average value per equivalent share of $2.47. The awards were to vest over a period of two to three years. On May 6, 2019, all outstanding incentive unit awards issued prior to May 6, 2019 immediately vested. As a result of the immediate vesting of these incentive units, share-based compensation expense equal to $2.2 million was recorded in the consolidated statements of operations and comprehensive loss on May 6, 2019. Options in Better Choice Company Inc. 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 on May 6, 2019 (the “legacy options”). As a result of the May Acquisitions, those legacy options immediately vested. The accelerated vesting expense of $0.1 million was recognized as part of the purchase price of Better Choice Company. On May 6, 2019, the Company acquired the Better Choice Company Inc. 2019 Incentive Award Plan (the “2019 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”). Nonemployee 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 nonemployee directors of Better Choice Company on May 2, 2019. Subject to Holder’s continued status as an Employee, Director or Consultant through each vesting date, the Option shall vest and become exercisable with respect to 1/24th of the Shares subject thereto (rounded down to the next whole number of Shares) on the last day of each month, beginning with May 31, 2019, such that the Option shall be fully vested and exercisable on April 30, 2021. On November 11, 2019, the Company received shareholder approval for the Amended and Restated 2019 Incentive Award Plan (the “Amended 2019 Plan”). Under the Amended 2019 Plan, the number of option awards available for issuance increased from 6,000,000 to 9,000,000 on December 19, 2019. Effective as of December 19, 2019, the Board repriced all outstanding options under the Amended 2019 Plan As a result, the exercise price of all outstanding vested and unvested 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 option agreements were changed. The change in exercise price of the outstanding options caused an increase in fair value of all vested options at date of repricing of $0.6 million which was expensed by the Company. The change in exercise price also caused an increase in fair value of all unvested options at date of repricing of $0.8 million. As of December 31, 2019, 7,753,371 options were outstanding under the Amended 2019 Plan. As of December 31, 2018, incentive units for the equivalent of 164,356 shares were outstanding. These incentive units were awarded to a consultant. After the May Acquisitions an additional 2,503,371 stock option awards were granted under the 2019 Plan and Amended 2019 Plan. During the year ended December 31, 2019, 912,917 stock option awards vested due to severance agreements. The following table provides detail of the options granted and outstanding: Vested options Non-vested options Total number of options Weighted average exercise price Number Number Weighted average grant date fair value Legacy options 38,462 $ 6.76 38,462 - $ 8.06 Acquired on May 6, 2019 5,250,000 1.82 - 5,250,000 0.92 Granted 2,503,371 1.83 - 2,503,371 0.97 Vested during period - 1.89 2,678,329 (2,678,329 ) 1.02 Options outstanding at December 31, 2019 7,791, 833 $ 1.85 2,716,791 5,075,042 $ 0.97 Options expected to vest 5,075,042 Weighted average exercise price $ 1.89 $ 1.82 Weighted average remaining contractual term (years) 9.3 9.6 Aggregate intrinsic value at December 31, 2019 (in thousands) $ 2,357 $ 4,448 All vested options are exercisable and may be exercised through a five or ten-year anniversary of the grant date (or such earlier date described in the applicable award agreement). At December 31, 2019 and 2018, 7,791,833 and 164,356 stock options or stock option equivalents remain outstanding with a remaining life of 9.5 and 1.8 years respectively. 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. During the year ended December 31, 2019 and 2018, $10.3 million and $0.4 million, respectively, of share-based compensation expense was recognized related to options or stock option equivalents issued. During the year ended December 31, 2019, the Company recorded incremental share-based compensation of $0.6 million as a result of the option repricing. The options were valued using the Black-Scholes method assuming the following: • Term: For executives and directors, the estimated term is equal to the mid-point between the average vesting date and the contractual term. For all others, the estimated term is equal to the average vesting date plus three years. • Dividend yield: 0% • Exercise Price: $1.82 to $2.70 • Risk-free rate: 1.41% to 2.39% • Volatility: 55.0% to 62.1 Warrants On May 6, 2019, in connection with the May Acquisitions the Company acquired 712,823 warrants to purchase common stock with a weighted average exercise price of $3.90. 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. The warrants are exercisable on the date of issuance and expire 24 months from the date of the consummation of a future IPO. On September 17, 2019, a Company advisor was issued 2,500,000 warrants with an exercise price of $0.10 and 1,500,000 warrants with an exercise price of $10.00. The warrants are exercisable as follows: 1,250,000 of the warrants with the $0.10 exercise price are exercisable on the earlier of the twelve-month anniversary of the issuance date or immediately prior to a change in control subject to the advisor’s continued service to the Company; the remaining 1,250,000 of the warrants with the $0.10 exercise price and the 1,500,000 warrants with the $10.00 exercise price are exercisable on the earlier of the eighteen-month anniversary of the issuance date or immediately prior to a change in control subject to the advisor’s continued service to the Company. On November 4, 2019, the Company issued 11,000 warrants in connection with the November 2019 Notes. The warrants are exercisable on the date of issuance and expire 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. On December 19, 2019, the Company issued 937,500 Seller Warrants in connection with the Seller Notes. The warrants are exercisable on the date of issuance and expire 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. On December 19, 2019 the Company issued 6,500,000 warrants with an exercise price of $1.82 in conjunction with the short term loan (Guarantor Warrants). The warrants are exercisable on the date of issuance and expire 24 months from the date of the consummation of a future IPO. Warrants Exercise Price Warrants acquired on May 6, 2019 712,823 $ 3.90 Issued 17,414,030 3.27 Exercised (1,144,999 ) (1) 3.50 Warrants outstanding at December 31, 2019 16,981,854 $ 3.23 (1) Exercised warrants were converted at 1.1 shares per warrant for a total of 1,259,498 shares. The intrinsic value of outstanding warrants is $12.2 million as of December 31, 2019. No warrants were issued or outstanding at December 31, 2018. |
Employee benefit plans
Employee benefit plans | 12 Months Ended |
Dec. 31, 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 100% of up to 3% and 50% of up to 5% 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 and recognized expense of $0.1 million during the year ended December 31, 2019 and zero for the year ended December 31, 2018. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related party transactions [Abstract] | |
Related party transactions | Note 17 - Related party transactions Management services During the years ended December 31, 2019 and 2018, the company paid less than $0.2 million and $0.5 million, respectively, for management services provided by an entity owned by a member of the board of directors. Marketing services A company controlled by a member of the board of directors provides online traffic acquisition marketing services for the Company. The Company incurred a total of $0.2 million and $0.1 million for their services during the years ended December 31, 2019 and 2018, respectively. The service contract has a 30-day termination clause. Outstanding balances were less than $0.1 million at December 31, 2019 and December 31, 2018. The outstanding balance is included in Accounts Payable. Finder’s fee and other services The Company paid a finders’ fee of $0.3 million and $0.4 million for other professional services during the year ended December 31, 2018 to an entity owned by one of its officers during the year ended December 31, 2018. The Company paid less than $0.1 million during the year ended December 31, 2019. Notes payable The Company issued $1.4 million of subordinated convertible notes to a member of the board of directors during the year ended December 31, 2019. Interest related to the subordinated convertible notes was less than $0.1 million. Halo Transaction Bonus An executive received a transaction bonus as per his employment agreement upon the close of the Halo Acquisition. The executive received $0.1 million in subordinated convertible notes . Guarantor warrants The Company issued a total of 6,500,000 warrants to three members of the board of directors as consideration for the Shareholder Guaranties related to the short term loan during the year ended December 31, 2019. The 6,500,000 warrants have a fair market value of $4.2 million as of the date of issuance. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income taxes [Abstract] | |
Income taxes | Note 18 - Income taxes For the years ended December 31, 2019 and 2018, the Company recorded no current or deferred income tax expense. For the year ended December 31, 2018, the Company was a Limited Liability Company, taxed as a partnership. Thus, all of the Company’s income and losses flowed through to the owners. Furthermore, no deferred tax assets and liabilities were recorded. Beginning in 2019 the Company converted to a C-Corporation and is subject to tax at an entity level. The Company’s effective tax rate differs from the United States federal statutory rate of 21% primarily because the Company’s losses have been fully offset by a valuation allowance due to uncertainty as to the realization of the tax benefit of net operating losses (“NOLs”) for the year ended December 31, 2019. The following table is a reconciliation of the components that caused our provision for income taxes to differ from amounts computed by applying the United States federal statutory rate of 21% for the year ended December 31, 2019: Year Ended December 31, 2019 Statutory U.S. Federal income tax $ (38,760 ) 21.0 % State income taxes, net (818 ) 0.4 % LLC income not taxed 2,376 (1.3 %) Loss on acquisitions 29,051 (15.7 %) Change in valuation allowance 7,892 (4.3 %) Other 259 0.1 % Total provision $ - 0 % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands): Year Ended December 31, 2019 Deferred income tax assets: Net operating loss carryforwards 8,503 Stock options 2,493 Other assets 301 Gross deferred tax assets 11,297 Valuation allowance (7,913 ) Net deferred tax asset 3,384 Deferred income liabilities: Inventory (137 ) Intangibles (3,247 ) Deferred tax assets, net of valuation allowance - As of December 31, 2019, the Company had a deferred tax asset (before valuation allowance) recorded on gross federal and state net operating loss carryforwards of approximately $36.3 million and $32.7 million, respectively. These net operating losses will begin to expire in 2027. The Internal Revenue Code, as amended (“IRC”), imposes restrictions on the utilization of NOLs and other tax attributes in the event of an “ownership change” of a corporation. Accordingly, a company’s ability to use pre-change NOLs may be limited as prescribed under IRC Section 382. Events which may cause limitation in the amount of the NOLs and credits that can be utilized annually include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. Under ASC 805, “Business Combinations”, an acquirer should recognize, and measure deferred taxes arising from assets acquired and liabilities assumed in a business combination in accordance with ASC 740. The financial statement loss includes losses that will not result in future deferred tax assets and therefore these losses are excluded. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets in the future. A significant piece of objective negative evidence evaluated was the cumulative loss incurred through the year ended December 31, 2019 and 2018. Such objective evidence limits the ability to consider other subjective positive evidence such as current year taxable income and future income projections. On the basis of this evaluation, as of the year ended December 31, 2019, a valuation allowance of $7.9 million was recorded since it is more likely than not that the deferred tax assets will not be realized. Year Ended December 31, 2019 Valuation allowance, at beginning of year $ - Increase in valuation allowance 7,892 Halo Acquisition 21 Valuation allowance, at end of year $ 7,913 As of December 31, 2019 and 2018, the Company 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 December 31, 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. The Company is subject to taxation in the United States federal and various state jurisdictions. The Company is not currently under audit by any taxing authorities. The Company remains open to examination by tax jurisdictions for tax years beginning with the 2016 tax year for Federal and 2015 for states. Federal and state net operating losses are subject to review by taxing authorities in the year utilized. |
Major suppliers
Major suppliers | 12 Months Ended |
Dec. 31, 2019 | |
Major Suppliers [Abstract] | |
Major suppliers | Note 19 - Major suppliers The Company sourced approximately 74% and 70% of its inventory purchases from one vendor for the years ended December 31, 2019 and 2018, respectively. |
Concentration of credit risk an
Concentration of credit risk and off-balance sheet risk | 12 Months Ended |
Dec. 31, 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 December 31, 2019 and 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. None of the Company’s customers had purchases that represented over 10% of total gross sales for the years ended December 31, 2019 and 2018. Accounts receivable from the largest customer represented 44% and 68% of accounts receivable at December 31, 2019 and 2018, respectively. |
Net loss per share
Net loss per share | 12 Months Ended |
Dec. 31, 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 been recognized are collectively assumed to be used to repurchase shares. Basic and diluted net loss per share is calculated by dividing net and comprehensive The following table sets forth basic and diluted net loss per share attributable to common stockholders for the years ended December 31, 2019 and 2018: Dollars in thousands except per share amounts Years Ended December 31, 2019 2018 Common stockholders Numerator: Net and comprehensive loss $ (184,462 ) $ (6,026 ) Less: Preferred stock dividends 109 - Net and comprehensive loss available to common stockholders $ (184,571 ) $ (6,026 ) Denominator: Weighted average shares used in computing net loss per share attributable to common stockholders, basic and diluted 33,238,600 11,516,421 Net loss per share attributable to common stockholders, basic and diluted $ (5.55 ) $ (0.52 ) |
Subsequent events
Subsequent events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent events [Abstract] | |
Subsequent events | Note 22 - Subsequent events Management has evaluated subsequent events through the date on which the consolidated financial statements were issued. Stock and Warrant Issuance 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 issued an additional 1,003,232 warrants on March 17, 2020 to its warrant holders at an exercise price of $1.62 and revised the existing warrants to an exercise price of $1.62. Amended November 2019 Notes The November 2019 Notes were amended on January 6, 2020. The amendment incorporates only the preferable terms of the Seller Notes and all other terms and provisions of the November 2019 Note remains in full force and effect. Pursuant to the amended November 2019 Notes, the interest shall be payable by increasing the aggregate principal amount of the November 2019 Notes. As amended, for so long as any event of default (as defined in the November 2019 Note) exists, interest shall accrue on the November 2019 Note principal at the default interest rate of 12.0% per annum, and such accrued interest shall be immediately due and payable. ABG Termination On January 13, 2020, the Company terminated the Houndog licensing agreement (“ABG Agreement”) with Associated Brands Group (ABG) and Elvis Presley Enterprises due to business judgment. As part of the termination, the Company agreed to the following: (1) paid ABG $0.1 million in cash upon the signing of this Agreement, (2) issue to ABG 72,720 shares of the Company’s common stock, (3) pay to ABG $0.1 million cash in four equal installments from July 31, 2020 through October 31, 2020, (4) issue to ABG $0.6 million in Subordinated Promissory Notes (the “ABG Notes”), (5) issue to ABG common stock purchase warrants (the “ABG Warrants”) equating to a value of $150,000. The terms of the ABG Notes, when issued, will match those of the Seller Notes. The Warrants are exercisable on the date of issuance and expire 24 months from the date of the consummation of an IPO (as defined in the ABG 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. COVID-19 In December 2019, a novel strain of coronavirus (“COVID-19”) was reported to have surfaced in Wuhan, China. In January 2020, the World Health Organization declared the novel coronavirus outbreak a “Public Health Emergency of International Concern.” This world-wide outbreak has resulted in the implementation of significant governmental measures, including lockdowns, closures, quarantines and travel bans intended to control the spread of the virus. Companies are also taking precautions, such as requiring employees to work remotely, imposing travel restrictions and temporarily closing businesses and facilities. These restrictions, and future prevention and mitigation measures, are likely to have an adverse impact on global economic conditions and consumer confidence and spending, which could materially adversely affect the supply of as well as the demand for our products. Uncertainties regarding the economic impact of COVID-19 is likely to result in sustained market turmoil, which could also negatively impact our business, financial condition and cash flows. We source our products from suppliers and manufacturers located in the United States and New Zealand. The impact of COVID-19 on these suppliers, or any of our other suppliers, co-manufacturers, distributors or transportation or logistics providers, may negatively affect the price and availability of our ingredients and/or packaging materials and impact our supply chain. If the disruptions caused by COVID-19 continue for an extended period of time, our ability to meet the demands of our customers may be materially impacted. To date, we have not experienced any reduction in the available supply of our products. As of March 2020, the United States Department of Homeland Security has classified businesses that manufacture, produce and supply pet food as “Essential Critical Infrastructure Workers.” We depend on a logistics partner and our warehouse facilities located in Tampa, Florida. If we are forced to scale back hours of operation or close these facilities in response to the pandemic, we expect our business, financial condition and results of operations would be materially adversely affected. Additionally, many of our employees, including members of our management team, have been reporting to work remotely due to the COVID-19 outbreak, which has resulted in the closure of our offices in Florida and New York. If our operations or productivity continue to be impacted throughout the duration of the COVID-19 outbreak and government-mandated closures, which may negatively impact our business, financial condition and cash flows. The extent to which COVID-19 pandemic will further impact our business will depend on future developments and, given the uncertainty around the extent and timing of the potential future spread or mitigation and around the imposition or relaxation of protective measures, we cannot reasonably estimate the impact to our business at this time. The extent of COVID-19’s effect on our operational and financial performance will depend on future developments, including the duration, spread and intensity of the outbreak, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. As a result, it is not currently possible to ascertain the overall impact of COVID-19 on our business. However, if the pandemic continues to evolve into a severe worldwide health crisis, the disease could have a material adverse effect on our business, results of operations, financial condition and cash flows and adversely impact the trading price of our common stock. On March 27, 2020, President Trump signed into law the CARES Act. The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. We continue to examine the impacts this CARES Act may have on our business On April 10, 2020, TruPet, LLC, a wholly owned subsidiary of Better Choice Company Inc., was granted a loan from JPMorgan Chase Bank, N.A. in the aggregate amount of $0.4 million, pursuant to the Paycheck Protection Program (PPP) under Division A, Title I of the CARES Act. The loan, which was in the form of a note dated April 6, 2020, issued by TruPet LLC, matures on April 6, 2022, and bears interest at a rate of 0.98% per annum, payable monthly commencing on November 6, 2020. The note may be prepaid by the TruPet LLC at any time prior to maturity with no prepayment penalties. Funds from the loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before February 15, 2020. The Company intends to use the entire loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. |
Nature of business and summar_2
Nature of business and summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 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 of TruPet LLC (“TruPet”) and Bona Vida Inc. (“Bona Vida”) in a pair of all stock transactions (together referred to as the “May Acquisitions”) through the issuance of 33,130,806 shares of common stock, par value $0.001, of the Company. Following the completion of the May 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 May 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 year ending December 31, 2019 are comprised of (1) the results of TruPet for the period between January 1, 2019 and December 31, 2019, (2) the results of the Company and Bona Vida, after giving effect to the May Acquisitions on May 6, 2019 through December 31, 2019 and (3) the results of the Company and Halo, after giving effect to the Halo Acquisition (see “Note 2 – Acquisitions”) on December 19, 2019 through December 31, 2019. The financial statements for the year ended December 31, 2018 and all periods presented prior to the effective date of the May Acquisitions on May 6, 2019 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 May Acquisitions. On December 19, 2019, the Company acquired 100% of all the issued and outstanding capital stock of Halo, a Delaware corporation (the “Halo Acquisition”). Where the context allows, the May Acquisitions and Halo Acquisition are together referred to as the “Acquisitions.” References to the “Company”, “we”, “us” and “our” in this prospectus, refer to TruPet and its consolidated subsidiaries prior to May 6, 2019, to Better Choice Company, TruPet and Bona Vida and their consolidated subsidiaries after May 6, 2019 and to Better Choice Company, TruPet, Bona Vida and Halo and their consolidated subsidiaries after December 19, 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 annual financial 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. Historical operating results are not necessarily indicative of the results that may be expected in the future. The significant accounting policies applied by the Company are described below. We present our tables in U.S. dollars (thousands) and percentage as rounded up or down. In the notes, we represent US dollars (millions) and percentage 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, and compliance with government regulations. In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China. Uncertainties regarding the economic impact of COVID-19, the disease caused by the novel coronavirus, are likely to result in sustained market turmoil, which could also negatively impact our business, financial condition, and cash flows. The Company has incurred losses over the last three years and has an accumulated deficit. The Company continues to rely on current investors and the public markets to finance these losses through debt and/or equity issuance. These operating losses and the outstanding debt 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 Company is implementing plans to achieve cost savings and other strategic objectives to address these conditions. The Company expects cost savings from consolidation of third-party manufacturers, optimizing shipping and warehousing as well as overhead cost reductions. The business is focused on growing the most profitable channels while reducing investments in areas that are expected to have long-term benefits. 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. |
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 At December 31, 2019, the Company had $0.2 million in restricted cash. The Company is required to maintain a restricted cash balance of less than $0.2 million associated with a business credit card and credit card clearance operations. The Company did not have any restricted cash at December 31, 2018. |
Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts Accounts receivable primarily consist of unpaid buyer invoices from the Company’s Retail customers and credit card payments receivable from third-party credit card processing companies. Accounts receivable is stated at the amount billed to customers, net of point of sale and cash 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. The Company recorded less than $0.1 million allowance for doubtful accounts for the year ended December 31, 2019. For the year ended December 31, 2018, the Company considered 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, inventory valuation reflects adjustments for anticipated physical inventory losses, such as shrink, that have occurred since the last physical inventory. |
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 3 to 7 years Computer equipment 2 to 3 years Computer software 3 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. |
Goodwill | Goodwill Goodwill of $18.6 million was recognized as of December 31, 2019 in connection with the Halo Acquisition. In future years, the Company will complete an annual impairment test for goodwill that includes an assessment of qualitative factors including, but not limited to, macroeconomic conditions, industry and market conditions, and entity specific factors such as strategies and financial performance. The Company will perform annual impairment tests as of October 31st beginning in 2020 or earlier if indicators of impairment exist. There were no indicators of goodwill impairment as of December 31, 2019. |
Intangible assets | Intangible assets 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 are written down to current fair value. The Company acquired an intangible asset related to the Houndog license with the acquisition of Bona Vida an May 6, 2019. The Company fully impaired the asset as of December 31, 2019 as we terminated the contract on January 13, 2020. The Company acquired intangible assets with the acquisition of Halo on December 19, 2019. We will review impairment of the assets acquired beginning in the fiscal year ending on December 31, 2020 given the proximity of the Halo Acquisition to year-end. |
Redeemable convertible preferred stock | Redeemable convertible preferred stock In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 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 Series E Convertible Preferred Stock (the “Series E”) contains redemption provisions that require it to be presented outside of stockholders’ deficit. Changes in the redemption value of the redeemable convertible preferred stock, if any, are recorded immediately in the period occurred as an adjustment to additional paid-in capital in the consolidated balance sheet. |
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 December 31, 2019 and 2018, the Company does not have any significant uncertain income tax positions. If incurred, the Company would classify interest and penalties on uncertain tax positions as income tax expense. The Company was incorporated on May 6, 2019. Prior to this date, the Company operated as a flow through entity for state and United States federal tax purposes. The Company files a U.S. federal and state income tax return, including for its wholly owned subsidiaries. |
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 accordance with the provisions of ASC 606, “Revenue from Contracts with Customers.” 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 on January 1, 2017. Accordingly all periods presented reflect the recognition of revenue and related disclosures required by ASC 606. |
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, inventory freight for shipping product from third-party contract manufacturing plants to the Company’s warehouse and third party fulfillment and royalties. |
General and administrative expenses | General and administrative expenses General and administrative expenses include management and office personnel compensation, share-based compensation, bonuses, information technology related costs, rent, travel, professional service fees, insurance, product development costs, outbound shipping and general corporate expenses. |
Advertising | Advertising The Company charges advertising costs to expense as incurred and such charges are included in sales and marketing expenses in the consolidated statements of operations and comprehensive loss. Our advertising expenses consisting primarily of online advertising, search costs, email advertising, and radio advertising. In addition, with the acquisition of Halo, we reimburse our customers and third parties for in store activities and record these costs as sales and marketing expenses. Advertising costs were $6.7 million and $3.9 million for the years ended December 31, 2019 and 2018, respectively. |
Customer service and warehousing | Customer service and warehousing Customer service and warehousing include wages associated with customer service and fulfillment of DTC customer orders. |
Fair value of financial instruments | Fair value of financial instruments The Company’s financial instruments recognized on the balance sheets consist of cash and cash equivalents, restricted cash, accounts receivable, prepaid deposits, accounts payable, short term loan, line of credit, subordinated convertible notes, accrued liabilities, other liabilities, and a warrant derivative liability. The warrant derivative liability is remeasured at fair value each reporting period. The carrying values for other financial instruments are deemed to be equivalent to their respective fair values due to their relative short term nature. 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 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, discounted cash flow methodologies, as well as instruments for which the fair value determination requires significant management judgment. The warrant derivative liability is remeasured at fair value each reporting period and represents a Level 3 financial instrument. Fair value measurements of nonfinancial assets and nonfinancial liabilities reflect Level 3 inputs and are primarily used to measure the estimated fair values of assets acquired and liabilities assumed in business combinations, for goodwill, other intangible assets and long-lived assets impairment analyses and the valuation of acquired intangibles. |
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 and comprehensive 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 compensation expense for all share–based payments in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. The Company follows the fair value method of accounting for awards granted to employees, directors, officers and consultants. Share-based awards are measured at their estimated fair value on each respective grant date. The Company recognizes share-based payment expenses over the vesting period. 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 expected dividend yield which is based on the historical dividends issued by the Company. The Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. Expected volatility is calculated based on the analysis of other public companies within the pet wellness, internet commerce (e-commerce), and hemp derived CBD sectors. Risk–free interest rates are calculated based on risk–free rates for the appropriate term. The expected life is calculated as (i) the mid-point between the average vested date and the contractual expiration of the option for executives and directors and (ii) three years from the average vesting date for all others due to limited exercise history |
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 financial 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 leases, a royalty contract termination (see “Note 22 – Subsequent events”) and debt instruments, including a line of credit, subordinated convertible notes and a short term loan for which we are committed to pay certain amounts over a period of time. In connection with the preparation of the Company’s consolidated financial statements for the year ended December 31, 2019, the Company identified an error as of December 31, 2018 related to an understatement of sales taxes due and payable of $0.7 million. The error was corrected during the year ended December 31, 2019. The Company believes that the correction of this error is not material to the consolidated financial statements as of and for the years ended December 31, 2019 or 2018, respectively. |
Reclassification of prior period presentation | Reclassification of prior period presentation Certain reclassifications have been made to conform the prior period data to the current presentation. These reclassifications had no material 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, Topic 842, “Leases (842)”, which amends leasing guidance by requiring companies to recognize a right-of-use asset and a lease liability for all operating and financing leases with lease terms greater than twelve months. The lease liability is equal to the present value of lease payments. The right-of-use lease asset is based on the lease liability, subject to adjustment for prepaid and deferred rent and tenant incentives. For income statement purposes, leases will continue to be classified as operating or financing with lease expense in both cases calculated substantially the same as under the prior leasing guidance. 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, results for reporting periods beginning prior to January 1, 2019 continue to be reported in accordance with our historical treatment. The adoption of ASC 842 did not have a material impact on the Company’s results of operations or cash flows. See “Note 8 – Operating leases.” Adoption of FASB ASU 2018-07 “Improvements to Nonemployee Share-Based Payment Accounting” On January 1, 2019, the Company adopted ASU. 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 nonemployees. 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 nonemployees as a change in accounting principle prospectively beginning in the period ending January 1, 2019. The Company did not restate prior periods for share-based compensation. 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, 2023, and early adoption is permitted. The Company is currently evaluating the impact the new standard will have on its consolidated financial statements. 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 is currently evaluating the impact the new standard will have on its consolidated financial statements. As this standard only requires additional disclosures, there is no anticipated financial statement impact of its adoption. ASU 2018-15 “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40)” In August 2018, the FASB issued ASU 2018-15 “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)” to amend ASU 2015-05 in an effort to provide additional guidance on the accounting for costs implementation activities performed in a cloud computing arrangement that is a service contract. The amendments in this update align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. The amendments in this update also require the entity to present the expense related to the capitalized implementation costs in the same line item in the statement of income as the fees associated with the hosting element (service) of the arrangement and classify payments for capitalizing implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. The entity is also required to present the capitalized implementation costs in the statement of financial position in the same line item that a prepayment for the fees of the associated hosting arrangement would be presented. The new standard is effective for the Company on January 1, 2020, and early adoption is permitted. The Company believes that current practices of capitalization versus expensing IT costs are in line with this guidance, however, the amendment will require the Company to change presentation within the statement of cash flows. The Company currently has no internal use software and expects this accounting standard will have no impact on its consolidated financial statements. 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) | 12 Months Ended |
Dec. 31, 2019 | |
Nature of business and summary of significant accounting policies [Abstract] | |
Depreciable Lives | Depreciable lives are as follows: Furniture and Fixtures 5 to 7 years Equipment 3 to 7 years Computer equipment 2 to 3 years Computer software 3 years |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Halo Acquisition [Member] | |
Acquisitions [Abstract] | |
Assets and Liabilities Acquired | The preliminary purchase price allocation is summarized as follows: Dollars in thousands Total purchase price $ 38,244 Assets and liabilities acquired: Assets Property and equipment 260 Accounts receivable 5,540 Inventories 5,160 Intangible assets 14,690 Other assets 329 Total assets 25,979 Liabilities Accounts payable 4,628 Accrued liabilities 1,553 Long term liability 168 Total liabilities 6,349 Net assets acquired 19,630 Goodwill $ 18,614 |
Pro Forma Information (Unaudited) | The following pro forma results reflect only pro forma adjustments for additional interest expense to fund the Halo Acquisition, amortization of deferred financing costs related to short term loan and line of credit, reduction in interest expense associated with the repayment of the Halo debt on the Halo Acquisition Date, amortization of identifiable intangible assets associated with the Halo Acquisition, share-based compensation expense related to stock options granted and effects of adjustments made to carrying values of acquired assets and liabilities. However, pro forma results do not include any anticipated synergies from the acquisition of Halo and accordingly, are not necessarily indicative of the results that would have occurred if the Halo Acquisition had occurred on the dates indicated or that may result in the future. Dollars in thousands Twelve Months ended December 31, 2019 2018 Net revenues $ 48,152 $ 51,388 Net loss per share attributable to common stockholders $ 192,592 $ 25,958 |
TruPet, LLC [Member] | |
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: Dollars in thousands Better Choice Company Bona Vida Total Total Purchase Price $ 37,949 $ 108,620 $ 146,569 Net Assets (Liabilities) Acquired: Assets Cash and cash equivalents 7 384 391 Restricted cash - 25 25 Accounts receivable - 69 69 Inventories - 95 95 Prepaid expenses and other current assets 32 348 380 Intangible assets 986 - 986 Other assets - 74 74 Total Assets 1,025 995 2,020 Liabilities Warrant derivative liability (2,130 ) - (2,130 ) Accounts payable & accrued liabilities (544 ) (153 ) (697 ) Total Liabilities (2,674 ) (153 ) (2,827 ) Net Assets (Liabilities) Acquired (1,649 ) 842 (807 ) Loss on Acquisitions $ (39,598 ) $ (107,778 ) $ (147,376 ) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventories [Abstract] | |
Inventories | Inventories are summarized as follows: Dollars in thousands December 31, 2019 December 31, 2018 Food, treats and supplements $ 6,425 $ 1,301 Inventory packaging and supplies 504 133 Other products and accessories 73 191 7,002 1,625 Inventory reserve (422 ) (68 ) $ 6,580 $ 1,557 |
Prepaid expenses and other cu_2
Prepaid expenses and other current assets (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2019 December 31, 2018 Prepaid advertising & marketing $ 1,776 $ - Prepaid slotting fees 425 - Prepaid insurance 164 15 Deposits 115 - Prepaid state registration fees 81 - Other 80 254 Total prepaid expenses and other current assets $ 2,641 $ 269 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property and equipment [Abstract] | |
Property and Equipment | Property and equipment consist of the following: Dollars in thousands December 31, 2019 December 31, 2018 Equipment $ 222 $ 49 Furniture and fixtures 138 46 Computer software 115 - Computer equipment 4 14 Total property and equipment 479 109 Accumulated depreciation (62 ) (38 ) Net property and equipment $ 417 $ 71 |
Accrued liabilities (Tables)
Accrued liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accrued liabilities [Abstract] | |
Accrued Liabilities | Accrued liabilities consist of the following: Dollars in thousands December 31, 2019 December 31, 2018 Accrued professional fees $ 1,695 $ - Accrued sales tax 1,233 - Accrued payroll and benefits 994 85 Accrued trade promotions 357 - Accrued dividends 256 - Accrued interest 109 - Other 77 - Total accrued liabilities $ 4,721 $ 85 |
Operating leases (Tables)
Operating leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Operating leases [Abstract] | |
Operating Lease-related Assets and Liabilities | The table below presents the lease-related assets and liabilities recorded upon adoption: January 1, Dollars in thousands Classification on the balance sheet 2019 2019 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 lease liabilities $ 429 |
Lease Cost | The table below presents certain information related to the lease costs for operating leases for the years ended December, 31 2019 and 2018. Year ended December 31, Dollars in thousands 2019 2018 Operating lease costs 369 189 Variable lease costs 31 42 Total operating lease costs $ 400 231 |
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. Operating Leases 2020 444 2021 459 2022 240 2023 5 Total minimum lease payments 1,148 Less: amount of lease payments representing interest 162 Present value of future minimum lease payments $ 986 Less: current obligations under leases 345 Long-term lease obligations $ 641 |
Future Minimum Lease Payments under Contractually-Obligated Leases | Future minimum lease payments under contractually-obligated leases as of December 31, 2018 were as follows (in thousands): Year ending December 31, 2019 $ 257 2020 296 2021 296 2022 123 2023 - $ 972 |
Intangible assets, royalties _2
Intangible assets, royalties and goodwill (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Intangible assets, royalties and goodwill [Abstract] | |
Intangible Assets | The Company’s intangible assets as of December 31, 2019 are as follows: Dollars in thousands December 31, 2018 December 31, 2019 Weighted- Average Remaining Useful Lives (in years) Gross Carrying Amount Additions Adjustments Gross Carrying Amount Accumulated Amortization Net Carrying Amount License - $ - $ 986 $ (986 ) $ - $ - $ - Customer relationships 7 - 7,500 - 7,500 (35 ) 7,465 Trade name 15 - 7,190 - 7,190 (14 ) 7,176 Total intangible assets $ - $ 15,676 $ (986 ) $ 14,690 $ (49 ) $ 14,641 |
Estimated Future Amortization of Intangible Assets | The estimated future amortization of intangible assets over the remaining weighted average useful life of 10 years is as follows: Dollars in thousands Years ended December 31, 2020 $ 1,551 2021 1,551 2022 1,551 2023 1,551 2024 1,551 Thereafter 6,886 $ 14,641 |
Line of credit, short term lo_2
Line of credit, short term loan and notes payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Line of credit, short term loan and notes payable [Abstract] | |
Components of Debt | The components of the Company’s debt consist of the following: December 31, 2019 December 31, 2018 Amount Rate Maturity Date Amount Rate Maturity Date Note payable (due to related parties) $ - $ 1,600 26.6% May 6, 2019 Short term loan, net 16,061 (2) December 19, 2020 Lines of credit, net 4,819 (2) December 19, 2020 4,600 (1) May 6, 2019 November 2019 notes payable, net (November 2019 Notes) 2,769 10.0% November 4, 2021 December 2019 senior notes payable, net (Seller Notes) 9,191 10.0% June 30, 2023 - December 2019 junior notes payable, net (Seller Notes) 4,410 10.0% June 30, 2023 Total debt 37,250 6,200 (1) Interest at LIBOR plus 3% (2) Interest at Bank of Montreal Prime plus 8.05% |
Warrant derivative liability (T
Warrant derivative liability (Tables) | 12 Months Ended |
Dec. 31, 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 as at December 31, 2019. Dollars in thousands Warrant liability Assumption of warrants in May Acquisitions $ 2,130 Change in fair value of warrant derivative liability 90 Balance as of December 31, 2019 $ 2,220 |
Warrant Liability Fair Value Measurement Inputs and Valuation Techniques | May 6, 2019 December 31, 2019 Warrant liability Stock price $ 6.00 $ 2.70 Exercise price $ 3.90 $ 1.62 Expected remaining term (in years) 1.60 – 1.68 0.95 – 1.02 Volatility 64 % 69 % Risk-free interest rate 2.39 % 1.60 % |
Other liabilities (Tables)
Other liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other liabilities [Abstract] | |
Other Liabilities | Other liabilities consist of the following: Dollars in thousands December 31, 2019 December 31, 2018 Cash advance $ - $ 1,899 Investor prepayment 500 - Deferred rent - 15 Total other liabilities $ 500 $ 1,914 |
Stockholders' deficit (Tables)
Stockholders' deficit (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' deficit [Abstract] | |
Common Stock for Future Issuance | As of December 31, 2019, the Company has reserved approximately 31.0 million shares of common stock for future issuance as follows: December 31, 2019 Conversion of Series E 1,760,903 Exercise of options to purchase common stock 7,791,833 Warrants to purchase common stock 16,981,854 Notes payable 4,437,500 Total 30,972,090 |
Options Granted and Outstanding | The following table provides detail of the options granted and outstanding: Vested options Non-vested options Total number of options Weighted average exercise price Number Number Weighted average grant date fair value Legacy options 38,462 $ 6.76 38,462 - $ 8.06 Acquired on May 6, 2019 5,250,000 1.82 - 5,250,000 0.92 Granted 2,503,371 1.83 - 2,503,371 0.97 Vested during period - 1.89 2,678,329 (2,678,329 ) 1.02 Options outstanding at December 31, 2019 7,791, 833 $ 1.85 2,716,791 5,075,042 $ 0.97 Options expected to vest 5,075,042 Weighted average exercise price $ 1.89 $ 1.82 Weighted average remaining contractual term (years) 9.3 9.6 Aggregate intrinsic value at December 31, 2019 (in thousands) $ 2,357 $ 4,448 |
Activity of Warrants | The warrants are exercisable on the date of issuance and expire 24 months from the date of the consummation of a future IPO. Warrants Exercise Price Warrants acquired on May 6, 2019 712,823 $ 3.90 Issued 17,414,030 3.27 Exercised (1,144,999 ) (1) 3.50 Warrants outstanding at December 31, 2019 16,981,854 $ 3.23 (1) Exercised warrants were converted at 1.1 shares per warrant for a total of 1,259,498 shares. |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income taxes [Abstract] | |
Effective Income Tax Rate Reconciliation | The following table is a reconciliation of the components that caused our provision for income taxes to differ from amounts computed by applying the United States federal statutory rate of 21% for the year ended December 31, 2019: Year Ended December 31, 2019 Statutory U.S. Federal income tax $ (38,760 ) 21.0 % State income taxes, net (818 ) 0.4 % LLC income not taxed 2,376 (1.3 %) Loss on acquisitions 29,051 (15.7 %) Change in valuation allowance 7,892 (4.3 %) Other 259 0.1 % Total provision $ - 0 % |
Deferred Tax Assets and Liabilities | Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands): Year Ended December 31, 2019 Deferred income tax assets: Net operating loss carryforwards 8,503 Stock options 2,493 Other assets 301 Gross deferred tax assets 11,297 Valuation allowance (7,913 ) Net deferred tax asset 3,384 Deferred income liabilities: Inventory (137 ) Intangibles (3,247 ) Deferred tax assets, net of valuation allowance - |
Valuation Allowance | Year Ended December 31, 2019 Valuation allowance, at beginning of year $ - Increase in valuation allowance 7,892 Halo Acquisition 21 Valuation allowance, at end of year $ 7,913 |
Net loss per share (Tables)
Net loss per share (Tables) | 12 Months Ended |
Dec. 31, 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 years ended December 31, 2019 and 2018: Dollars in thousands except per share amounts Years Ended December 31, 2019 2018 Common stockholders Numerator: Net and comprehensive loss $ (184,462 ) $ (6,026 ) Less: Preferred stock dividends 109 - Net and comprehensive loss available to common stockholders $ (184,571 ) $ (6,026 ) Denominator: Weighted average shares used in computing net loss per share attributable to common stockholders, basic and diluted 33,238,600 11,516,421 Net loss per share attributable to common stockholders, basic and diluted $ (5.55 ) $ (0.52 ) |
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 | Dec. 31, 2019 | Dec. 19, 2019 | Dec. 31, 2018 |
Basis of Presentation and Consolidation [Abstract] | ||||
Number of common shares issued for acquisition (in shares) | 33,130,806 | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Halo Acquisition [Member] | ||||
Basis of Presentation and Consolidation [Abstract] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | |||
Acquisitions [Abstract] | ||||
Outstanding interests acquired | 100.00% |
Nature of business and summar_5
Nature of business and summary of significant accounting policies, Restricted cash (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Restricted Cash [Abstract] | ||
Restricted cash | $ 0.2 | $ 0 |
Business Credit Card [Member] | Maximum [Member] | ||
Restricted Cash [Abstract] | ||
Restricted cash | $ 0.2 |
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 | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts receivable and allowance for doubtful accounts [Abstract] | ||
Allowance for doubtful accounts | $ 0 | |
Maximum [Member] | ||
Accounts receivable and allowance for doubtful accounts [Abstract] | ||
Allowance for doubtful accounts | $ 0.1 |
Nature of business and Summar_7
Nature of business and Summary of Significant Accounting Policies, Property and equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property and Equipment [Abstract] | ||
Impairment charges for property and equipment | $ 0 | $ 0 |
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] | Minimum [Member] | ||
Property and Equipment [Abstract] | ||
Useful life | 3 years | |
Equipment [Member] | Maximum [Member] | ||
Property and Equipment [Abstract] | ||
Useful life | 7 years | |
Computer Equipment [Member] | Minimum [Member] | ||
Property and Equipment [Abstract] | ||
Useful life | 2 years | |
Computer Equipment [Member] | Maximum [Member] | ||
Property and Equipment [Abstract] | ||
Useful life | 3 years | |
Computer Software [Member] | ||
Property and Equipment [Abstract] | ||
Useful life | 3 years |
Nature of business and summar_8
Nature of business and summary of significant accounting policies, Goodwill (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 19, 2019 | Dec. 31, 2018 |
Acquisitions [Abstract] | |||
Goodwill | $ 18,614 | $ 0 | |
Halo Acquisition [Member] | |||
Acquisitions [Abstract] | |||
Goodwill | $ 18,600 | $ 18,614 |
Nature of business and summar_9
Nature of business and summary of significant accounting policies, Advertising & Share-based compensation (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based compensation [Abstract] | ||
Expected life | 3 years | |
Halo Acquisition [Member] | ||
Advertising [Abstract] | ||
Advertising costs | $ 6.7 | $ 3.9 |
Nature of business and summa_10
Nature of business and summary of significant accounting policies, Segment information (Details) | 12 Months Ended |
Dec. 31, 2019Segment | |
Segment Information [Abstract] | |
Number of segment | 1 |
Nature of business and summa_11
Nature of business and summary of significant accounting policies, Commitments and contingencies (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Taxes Payable [Abstract] | ||
Sales and Excise Tax Payable | $ 1.2 | $ 0 |
Previously Reported [Member] | ||
Taxes Payable [Abstract] | ||
Sales and Excise Tax Payable | $ 0.7 |
Nature of business and summa_12
Nature of business and summary of significant accounting policies, Recently issued accounting pronouncements (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | ||
Right-of-use asset | $ 951 | $ 0 |
Lease liability | $ 986 | |
ASU 842 [Member] | ||
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | ||
Right-of-use asset | 421 | |
Lease liability | $ 429 |
Acquisitions, Acquisition of Ha
Acquisitions, Acquisition of Halo (Details) - USD ($) | Dec. 19, 2019 | May 06, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Acquisitions [Abstract] | ||||
Businesses acquisition, cash consideration | $ 20,513,000 | $ 0 | ||
Number of shares of common stock issued (in shares) | 33,130,806 | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Revenue | $ 15,577,000 | $ 14,785,000 | ||
Net and comprehensive loss | (184,462,000) | (6,026,000) | ||
Total Purchase Price | $ 146,569,000 | |||
Assets [Abstract] | ||||
Accounts receivable | 69,000 | |||
Inventories | 95,000 | |||
Intangible assets | 986,000 | |||
Other assets | 74,000 | |||
Total Assets | 2,020,000 | |||
Liabilities [Abstract] | ||||
Total Liabilities | 2,827,000 | |||
Net Assets (Liabilities) Acquired | $ (807,000) | |||
Goodwill | 18,614,000 | $ 0 | ||
Halo Acquisition [Member] | ||||
Acquisitions [Abstract] | ||||
Businesses acquisition, cash consideration | $ 20,500,000 | |||
Number of shares of common stock issued (in shares) | 2,134,390 | |||
Common stock, par value (in dollars per share) | $ 0.001 | |||
Value of common stock issued | $ 3,900,000 | |||
Seller notes issued | $ 15,000,000 | |||
Number of seller warrants issued (in shares) | 937,500 | |||
Value of seller warrants issued | $ 300,000 | |||
Revenue | 700,000 | |||
Net and comprehensive loss | (200,000) | |||
Total Purchase Price | 38,244,000 | |||
Assets [Abstract] | ||||
Property and equipment | 260,000 | |||
Accounts receivable | 5,540,000 | |||
Inventories | 5,160,000 | |||
Intangible assets | 14,690,000 | |||
Other assets | 329,000 | |||
Total Assets | 25,979,000 | |||
Liabilities [Abstract] | ||||
Accounts payable | 4,628,000 | |||
Accrued liabilities | 1,553,000 | |||
Long term liability | 168,000 | |||
Total Liabilities | 6,349,000 | |||
Net Assets (Liabilities) Acquired | 19,630,000 | |||
Goodwill | 18,614,000 | $ 18,600,000 | ||
Halo Acquisition [Member] | Customer Relationships [Member] | ||||
Liabilities [Abstract] | ||||
Estimated life | 7 years | |||
Halo Acquisition [Member] | Trade Names [Member] | ||||
Liabilities [Abstract] | ||||
Estimated life | 15 years | |||
Royalty rate | 2.00% | |||
Halo Acquisition [Member] | General and Administrative Expense [Member] | ||||
Acquisitions [Abstract] | ||||
Transaction costs incurred | $ 900,000 |
Acquisitions, Pro Forma Informa
Acquisitions, Pro Forma Information (Unaudited) (Details) - Halo Acquisition [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Pro Forma Information (Unaudited) [Abstract] | ||
Net revenues | $ 48,152 | $ 51,388 |
Net loss per share attributable to common stockholders | $ 192,592 | $ 25,958 |
Acquisitions, Reverse Acquisiti
Acquisitions, Reverse Acquisitions of Better Choice and Bona Vida by TruPet (Details) - USD ($) $ / shares in Units, $ in Thousands | May 06, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 12, 2018 |
Acquisitions [Abstract] | ||||
Number of shares issued (in shares) | 33,130,806 | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |
Share price (in dollars per share) | $ 1.95 | |||
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) | |||
Total Liabilities | (2,827) | |||
Net Assets (Liabilities) Acquired | (807) | |||
Loss on acquisitions | $ (147,376) | $ (147,376) | $ 0 | |
TruPet, LLC [Member] | ||||
Acquisitions [Abstract] | ||||
Number of shares issued (in shares) | 15,027,533 | |||
Outstanding interests acquired | 93.00% | 7.00% | ||
Better Choice Company [Member] | ||||
Acquisitions [Abstract] | ||||
Number of shares issued (in shares) | 3,915,856 | |||
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) | $ 6 | |||
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) | |||
Total Liabilities | (2,674) | |||
Net Assets (Liabilities) Acquired | (1,649) | |||
Loss on acquisitions | $ (39,598) | |||
Bona Vida, Inc. [Member] | ||||
Acquisitions [Abstract] | ||||
Number of shares issued (in shares) | 18,103,273 | |||
Outstanding interests acquired | 100.00% | |||
Share price (in dollars per share) | $ 6 | |||
Fair value of net assets acquired | $ 800 | |||
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) | |||
Total Liabilities | (153) | |||
Net Assets (Liabilities) Acquired | 842 | |||
Loss on acquisitions | $ (107,778) |
Revenue (Details)
Revenue (Details) | 12 Months Ended | |
Dec. 31, 2019USD ($)ChannelPoint | Dec. 31, 2018USD ($) | |
Revenue Concentration [Abstract] | ||
Number of revenue channels | Channel | 2 | |
Revenue | $ 15,577,000 | $ 14,785,000 |
Maximum [Member] | ||
Revenue Concentration [Abstract] | ||
Product returns | $ 400,000 | $ 700,000 |
Revenues [Member] | ||
Revenue Concentration [Abstract] | ||
Concentration risk percentage | 10.00% | 10.00% |
Shipping Cost [Member] | ||
Revenue Concentration [Abstract] | ||
Revenue | $ 700,000 | $ 900,000 |
Cost of revenue | $ 2,300,000 | 2,500,000 |
Directly to Consumer [Member] | ||
Revenue Concentration [Abstract] | ||
Number of points received by customers for every $1 spent | Point | 12 | |
Dollar amount of gift card received for every 500 points earned | $ 5 | |
Estimated redemption rate of loyalty points earned | 37.00% | |
Dollar amount of loyalty program awards earned but not redeemed | $ 200,000 | |
Revenue | 0 | |
Directly to Consumer [Member] | Maximum [Member] | ||
Revenue Concentration [Abstract] | ||
Dollar amount of loyalty program awards earned but not redeemed | $ 100,000 | |
Revenue | $ 200,000 | |
Directly to Consumer [Member] | Revenues [Member] | ||
Revenue Concentration [Abstract] | ||
Concentration risk percentage | 89.00% | |
Wholesale [Member] | Revenues [Member] | ||
Revenue Concentration [Abstract] | ||
Concentration risk percentage | 11.00% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Inventories [Abstract] | ||
Food, treats and supplements | $ 6,425 | $ 1,301 |
Inventory packaging and supplies | 504 | 133 |
Other products and accessories | 73 | 191 |
Inventories, gross | 7,002 | 1,625 |
Inventory reserve | (422) | (68) |
Inventories, net | $ 6,580 | $ 1,557 |
Prepaid expenses and other cu_3
Prepaid expenses and other current assets (Details) - USD ($) shares in Thousands, $ in Thousands | Aug. 28, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Prepaid expenses and other current assets [Abstract] | |||
Prepaid advertising & marketing | $ 1,776 | $ 0 | |
Prepaid slotting fees | 425 | 0 | |
Prepaid insurance | 164 | 15 | |
Deposits | 115 | 0 | |
Prepaid state registration fee | 81 | 0 | |
Other | 80 | 254 | |
Total prepaid expenses and other current assets | 2,641 | $ 269 | |
Advertising Agreement [Abstract] | |||
Stock issued to third parties for services | 3,477 | ||
IHeartMedia [Member] | |||
Advertising Agreement [Abstract] | |||
Advertising expenses incurred | 600 | ||
Committed usage amount of media inventory | 1,700 | ||
Prepaid advertising balance | 2,800 | ||
Prepaid Expenses and Other Current Assets [Member] | IHeartMedia [Member] | |||
Advertising Agreement [Abstract] | |||
Prepaid advertising balance | 1,700 | ||
Other Noncurrent Assets [Member] | IHeartMedia [Member] | |||
Advertising Agreement [Abstract] | |||
Prepaid advertising balance | $ 1,100 | ||
Common Stock [Member] | |||
Advertising Agreement [Abstract] | |||
Stock issued to third parties for services (in shares) | 1,009 | ||
Stock issued to third parties for services | $ 1 | ||
Common Stock [Member] | IHeartMedia [Member] | |||
Advertising Agreement [Abstract] | |||
Stock issued to third parties for services (in shares) | 1,000 | ||
Stock issued to third parties for services | $ 3,400 |
Property and equipment (Details
Property and equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property and Equipment [Abstract] | ||
Total property and equipment | $ 479 | $ 109 |
Accumulated depreciation | (62) | (38) |
Net property and equipment | 417 | 71 |
Equipment [Member] | ||
Property and Equipment [Abstract] | ||
Total property and equipment | 222 | 49 |
Furniture and Fixtures [Member] | ||
Property and Equipment [Abstract] | ||
Total property and equipment | 138 | 46 |
Computer Software [Member] | ||
Property and Equipment [Abstract] | ||
Total property and equipment | 115 | 0 |
Computer Equipment [Member] | ||
Property and Equipment [Abstract] | ||
Total property and equipment | 4 | 14 |
Maximum [Member] | ||
Property and Equipment [Abstract] | ||
Depreciation expense | $ 100 | $ 100 |
Accrued liabilities (Details)
Accrued liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accrued liabilities [Abstract] | ||
Accrued professional fees | $ 1,695 | $ 0 |
Accrued sales tax | 1,233 | 0 |
Accrued payroll and benefits | 994 | 85 |
Accrued trade promotions | 357 | 0 |
Accrued dividends | 256 | 0 |
Accrued interest | 109 | 0 |
Other | 77 | 0 |
Total accrued liabilities | 4,721 | 85 |
Taxes Payable [Abstract] | ||
Sales and Excise Tax Payable | $ 1,200 | 0 |
Previously Reported [Member] | ||
Taxes Payable [Abstract] | ||
Sales and Excise Tax Payable | $ 700 |
Operating leases, Terms (Detail
Operating leases, Terms (Details) - ASU 842 [Member] - Maximum [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Overstatement of Right of Use Asset [Member] | |
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | |
Quantifying misstatement corrected in current period | $ 0.1 |
Overstatement of Operating Lease Liabilities [Member] | |
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | |
Quantifying misstatement corrected in current period | 0.1 |
Overstatement of Accumulated Deficit [Member] | |
Adoption of FASB ASC Topic 842 "Leases" [Abstract] | |
Quantifying misstatement corrected in current period | $ 0.1 |
Operating leases, Assets and li
Operating leases, Assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets [Abstract] | ||
OperatingLeaseRightOfUseAsset | $ 951 | $ 0 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:OperatingLeaseRightOfUseAsset | |
Current-Operating [Abstract] | ||
Operating lease liability short term | $ 345 | 0 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OperatingLeaseLiabilityCurrent | |
Noncurrent-Operating [Abstract] | ||
OperatingLeaseLiabilityNoncurrent | $ 641 | 0 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OperatingLeaseLiabilityNoncurrent | |
Total operating lease costs | $ 986 | |
ASU 842 [Member] | ||
Assets [Abstract] | ||
OperatingLeaseRightOfUseAsset | 421 | |
Current-Operating [Abstract] | ||
Operating lease liability short term | 87 | |
Noncurrent-Operating [Abstract] | ||
OperatingLeaseLiabilityNoncurrent | 342 | |
Total operating lease costs | $ 429 |
Operating leases, Lease cost (D
Operating leases, Lease cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Lease Cost [Abstract] | ||
Operating lease costs | $ 369 | $ 189 |
Variable lease costs | 31 | 42 |
Total operating lease costs | $ 400 | 231 |
Weighted-average remaining operating lease term | 2 years 7 months 6 days | |
Short term lease costs | $ 100 | |
Rent expense | $ 500 | $ 200 |
Weighted average discount rate | 12.50% |
Operating leases, Maturity of l
Operating leases, Maturity of lease liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Maturity of Lease Liabilities [Abstract] | ||
2020 | $ 444 | |
2021 | 459 | |
2022 | 240 | |
2023 | 5 | |
Total minimum lease payments | 1,148 | |
Less: amount of lease payments representing interest | 162 | |
Total operating lease costs | 986 | |
OperatingLeaseLiabilityCurrent | 345 | $ 0 |
Long-term lease obligations | $ 641 | $ 0 |
Operating leases, Future Minimu
Operating leases, Future Minimum Lease Payments under Contractually-Obligated Leases (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Future Minimum Lease Payments under Contractually-Obligated Leases [Abstract] | |
2019 | $ 257 |
2020 | 296 |
2021 | 296 |
2022 | 123 |
2023 | 0 |
Total future minimum lease payments | $ 972 |
Intangible assets, royalties _3
Intangible assets, royalties and goodwill (Details) - USD ($) | Dec. 19, 2019 | Apr. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Intangible Asset, Royalties and Goodwill [Abstract] | ||||
Net sales | $ 15,577,000 | $ 14,785,000 | ||
Amortization expense of intangible assets | $ 100,000 | 0 | ||
Intangible Assets [Abstract] | ||||
Weighted Average Remaining Useful Lives | 10 years | |||
Gross Carrying Amount | $ 0 | |||
Additions | 15,676,000 | |||
Adjustments | (986,000) | |||
Gross Carrying Amount | 14,690,000 | 0 | ||
Accumulated Amortization | (49,000) | |||
Net Carrying Amount | 14,641,000 | 0 | ||
Halo Acquisition [Member] | ||||
Intangible Asset, Royalties and Goodwill [Abstract] | ||||
Net sales | $ 700,000 | |||
Licensing Agreements [Member] | ||||
Intangible Asset, Royalties and Goodwill [Abstract] | ||||
Payment of upfront fees in equity | $ 1,000,000 | |||
Payment of agreed minimum royalty | 600,000 | |||
Impairment of intangible assets | $ 900,000 | |||
Intangible Assets [Abstract] | ||||
Weighted Average Remaining Useful Lives | 0 years | |||
Gross Carrying Amount | $ 0 | |||
Additions | 986,000 | |||
Adjustments | (986,000) | |||
Gross Carrying Amount | 0 | 0 | ||
Accumulated Amortization | 0 | |||
Net Carrying Amount | 0 | |||
Licensing Agreements [Member] | Elvis Presley Hound Dog [Member] | ||||
Intangible Asset, Royalties and Goodwill [Abstract] | ||||
Net sales | $ 0 | |||
Customer Relationships [Member] | ||||
Intangible Assets [Abstract] | ||||
Weighted Average Remaining Useful Lives | 7 years | |||
Gross Carrying Amount | $ 0 | |||
Additions | 7,500,000 | |||
Adjustments | 0 | |||
Gross Carrying Amount | 7,500,000 | 0 | ||
Accumulated Amortization | (35,000) | |||
Net Carrying Amount | $ 7,465,000 | |||
Customer Relationships [Member] | Halo Acquisition [Member] | ||||
Intangible Asset, Royalties and Goodwill [Abstract] | ||||
Estimated useful lives of intangible assets | 7 years | |||
Trade Names [Member] | ||||
Intangible Assets [Abstract] | ||||
Weighted Average Remaining Useful Lives | 15 years | |||
Gross Carrying Amount | $ 0 | |||
Additions | 7,190,000 | |||
Adjustments | 0 | |||
Gross Carrying Amount | 7,190,000 | $ 0 | ||
Accumulated Amortization | (14,000) | |||
Net Carrying Amount | $ 7,176,000 | |||
Trade Names [Member] | Halo Acquisition [Member] | ||||
Intangible Asset, Royalties and Goodwill [Abstract] | ||||
Estimated useful lives of intangible assets | 15 years |
Intangible assets, royalties _4
Intangible assets, royalties and goodwill, Estimated Future Amortization of Amortizable Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Intangible assets, royalties and goodwill [Abstract] | ||
Remaining weighted average useful life | 10 years | |
Estimated Future Amortization of Amortizable Intangible Assets [Abstract] | ||
2020 | $ 1,551 | |
2021 | 1,551 | |
2022 | 1,551 | |
2023 | 1,551 | |
2024 | 1,551 | |
Thereafter | 6,886 | |
Total intangible assets, net | $ 14,641 | $ 0 |
Line of credit, short term lo_3
Line of credit, short term loan and notes payable, Components of Debt (Details) - USD ($) $ in Thousands | Dec. 19, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 04, 2019 | |||
Debt Instruments [Abstract] | |||||||
Total debt | $ 37,250 | $ 6,200 | |||||
Note Payable (Due to Related Parties) [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Total debt | 0 | $ 1,600 | |||||
Rate | 26.60% | ||||||
Maturity date | May 6, 2019 | ||||||
November 2019 Notes Payable, Net (November 2019 Notes) [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Total debt | $ 2,769 | ||||||
Rate | 10.00% | 10.00% | |||||
Maturity date | Nov. 4, 2021 | ||||||
Seller Notes [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Rate | 10.00% | ||||||
Maturity date | Jun. 30, 2023 | ||||||
December 2019 Senior Notes Payable, Seller Notes [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Total debt | $ 9,191 | $ 0 | |||||
Rate | 10.00% | ||||||
Maturity date | Jun. 30, 2023 | ||||||
December 2019 Junior Notes Payable, Seller Notes [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Total debt | $ 4,410 | ||||||
Rate | 10.00% | ||||||
Maturity date | Jun. 30, 2023 | ||||||
Short Term Loan, Net [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Total debt | $ 16,061 | ||||||
Rate | [1] | ||||||
Maturity date | Dec. 19, 2020 | ||||||
Lines of Credit, Net [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Total debt | $ 4,819 | $ 4,600 | |||||
Rate | [1] | [2] | |||||
Maturity date | Dec. 19, 2020 | May 6, 2019 | |||||
Lines of Credit, Net [Member] | LIBOR [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Basis spread on variable interest rate | 3.00% | ||||||
Lines of Credit, Net [Member] | Bank of Montreal Prime [Member] | |||||||
Debt Instruments [Abstract] | |||||||
Basis spread on variable interest rate | 8.05% | ||||||
[1] | Interest at Bank of Montreal Prime plus 8.05% | ||||||
[2] | Interest at LIBOR plus 3% |
Line of credit, short term lo_4
Line of credit, short term loan and notes payable, TruPet Line of Credit, Due to Related Parties and Revolving Line of Credit (Details) $ in Millions | Dec. 19, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($)owner | May 31, 2017USD ($) | ||
Line of Credit [Member] | ||||||
Debt Instruments [Abstract] | ||||||
Maximum borrowing capacity | $ 4.6 | $ 4.6 | $ 2 | |||
Number of majority owners whose personal assets are pledged | owner | 2 | |||||
Line of credit | $ 4.6 | |||||
Maturity date | Dec. 19, 2020 | May 6, 2019 | ||||
Long-term debt, interest rate | [1] | [2] | ||||
Line of Credit [Member] | LIBOR [Member] | ||||||
Debt Instruments [Abstract] | ||||||
Basis spread on variable interest rate | 3.00% | |||||
Note Payable [Member] | ||||||
Debt Instruments [Abstract] | ||||||
Accrued interest | $ 0 | $ 0 | ||||
Long-term debt, current portion | $ 1.6 | |||||
Long-term debt, interest rate | 26.60% | |||||
Term principal and interest due | 30 days | |||||
Revolving Credit Agreement [Member] | ||||||
Debt Instruments [Abstract] | ||||||
Maximum borrowing capacity | 6.2 | |||||
Required amount of deposit at bank | $ 6.2 | |||||
Revolving Credit Agreement [Member] | Halo Acquisition [Member] | ||||||
Debt Instruments [Abstract] | ||||||
Early termination of line of credit | $ 6.2 | |||||
[1] | Interest at Bank of Montreal Prime plus 8.05% | |||||
[2] | Interest at LIBOR plus 3% |
Line of credit, short term lo_5
Line of credit, short term loan and notes payable, Short Term Loan and Line of Credit (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 19, 2019 | |
Debt Instruments [Abstract] | |||
Debt amount, net of debt discounts | $ 37,250 | $ 6,200 | |
Short Term Loan and Line of Credit [Member] | |||
Debt Instruments [Abstract] | |||
Maturity date | Dec. 19, 2020 | ||
Short Term Loan [Member] | |||
Debt Instruments [Abstract] | |||
Face amount | $ 20,500 | $ 20,500 | |
Amount borrowed | 20,500 | ||
Debt amount, net of debt discounts | 16,061 | ||
Debt discounts | $ 4,400 | ||
Maturity date | Dec. 19, 2020 | ||
Line of Credit [Member] | |||
Debt Instruments [Abstract] | |||
Face amount | $ 5,000 | ||
Amount borrowed | 5,000 | ||
Debt amount, net of debt discounts | 4,819 | $ 4,600 | |
Debt discounts | $ 200 | ||
Maturity date | Dec. 19, 2020 | May 6, 2019 | |
Shareholder Guaranties [Member] | |||
Debt Instruments [Abstract] | |||
Guaranty obligations | $ 20,000 | ||
Warrants per share (in dollars per share) | $ 0.325 | ||
Warrants, exercise price (in dollars per share) | $ 1.82 | ||
Warrants, fair value | $ 4,200 | ||
Shareholder Guaranties [Member] | Maximum [Member] | |||
Debt Instruments [Abstract] | |||
Warrants, exercisable period | 24 months | ||
Revolving Credit Facility [Member] | |||
Debt Instruments [Abstract] | |||
Face amount | $ 7,500 |
Line of credit, short term lo_6
Line of credit, short term loan and notes payable, Notes Payable (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 19, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Nov. 04, 2019 |
Debt Instruments [Abstract] | ||||
Debt amount, net of debt discounts | $ 37,250 | $ 6,200 | ||
Interest expense | $ 670 | 868 | ||
November 2019 Notes Payable, Net (November 2019 Notes) [Member] | ||||
Debt Instruments [Abstract] | ||||
Long-term debt, interest rate | 10.00% | 10.00% | ||
Maturity date | Nov. 4, 2021 | |||
Conversion price (in dollars per share) | $ 4 | |||
Debt amount, net of debt discounts | $ 2,769 | |||
Fair value of debt | 2,800 | |||
November 2019 Notes Payable, Net (November 2019 Notes) [Member] | Maximum [Member] | ||||
Debt Instruments [Abstract] | ||||
Fair value of incremental warrants issued | $ 100 | |||
Debt amount, net of debt discounts | 2,800 | |||
Debt discounts | $ 100 | |||
Seller Notes [Member] | ||||
Debt Instruments [Abstract] | ||||
Long-term debt, interest rate | 10.00% | |||
Maturity date | Jun. 30, 2023 | |||
Conversion price (in dollars per share) | $ 4 | |||
Senior Seller Notes [Member] | ||||
Debt Instruments [Abstract] | ||||
Face amount | $ 10,000 | |||
Long-term debt, interest rate | 10.00% | |||
Maturity date | Jun. 30, 2023 | |||
Debt amount, net of debt discounts | $ 9,191 | $ 0 | ||
Debt discounts | 900 | |||
Fair value of debt | $ 9,200 | |||
Junior Seller Notes [Member] | ||||
Debt Instruments [Abstract] | ||||
Face amount | $ 5,000 | |||
Long-term debt, interest rate | 10.00% | |||
Maturity date | Jun. 30, 2023 | |||
Debt amount, net of debt discounts | $ 4,410 | |||
Debt discounts | 500 | |||
Fair value of debt | $ 4,400 |
Warrant derivative liability, P
Warrant derivative liability, Private placement (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 03, 2020 | Jan. 08, 2019 | Dec. 12, 2018 | Dec. 31, 2018 | Dec. 31, 2019 | Mar. 17, 2020 | Nov. 30, 2018 |
Private Placement Offering [Abstract] | |||||||
Units issued in private placement offering (in shares) | 1,425,641 | ||||||
Number of shares issuable per unit (in shares) | 1.1 | ||||||
Unit price (in dollars per share) | $ 1.95 | ||||||
Gross proceeds from private placement offering | $ 2.8 | ||||||
Share issuance costs | 0.1 | ||||||
Net proceeds from private placement offering | $ 2.7 | ||||||
Cash payable if warrants settled in cash | $ 1.1 | ||||||
Number of warrants issuable if settled (in shares) | 1,259,498 | ||||||
Subsequent Event [Member] | |||||||
Private Placement Offering [Abstract] | |||||||
Shares issued in private placement offering (in shares) | 308,642 | ||||||
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 | ||||||
Warrant [Member] | Subsequent Event [Member] | |||||||
Private Placement Offering [Abstract] | |||||||
Number of shares issuable per unit (in shares) | 1,003,232 | ||||||
Warrants, exercise price (in dollars per share) | $ 1.62 | ||||||
Common Stock [Member] | |||||||
Private Placement Offering [Abstract] | |||||||
Number of shares issuable per unit (in shares) | 1 | 1 | |||||
Net proceeds from private placement offering | $ 0.1 | $ 2.6 | |||||
Shares issued in private placement offering (in shares) | 25,641 | 1,400,000 | 0 | ||||
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 | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Warrant Liability [Abstract] | ||
Assumption of warrants in May Acquisitions | $ 2,130 | |
Change in fair value of warrant derivative liability | 90 | $ 0 |
Balance as of December 31, 2019 | $ 2,220 | $ 0 |
Warrant derivative liability,_2
Warrant derivative liability, Fair value measurements and valuation techniques (Details) - Warrant [Member] | Dec. 31, 2019$ / shares | May 06, 2019$ / shares |
Stock Price [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Derivative liability | 2.70 | 6 |
Exercise Price [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Derivative liability | 1.62 | 3.90 |
Expected Remaining Term (in Years) [Member] | Minimum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Derivative liability | 0.95 | 1.60 |
Expected Remaining Term (in Years) [Member] | Maximum [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Derivative liability | 1.02 | 1.68 |
Volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Derivative liability | 0.69 | 0.64 |
Risk-free Interest Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Derivative liability | 0.0160 | 0.0239 |
Other liabilities (Details)
Other liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2019 | |
Other liabilities [Abstract] | ||
Cash advance | $ 1,899 | $ 0 |
Investor prepayment | 0 | 500 |
Deferred rent | 15 | 0 |
Total other liabilities | 1,914 | $ 500 |
Net cash advances | $ 1,900 |
Commitments and contingencies (
Commitments and contingencies (Details) $ in Millions | Dec. 31, 2019USD ($) |
Commitments and contingencies [Abstract] | |
Purchase obligations | $ 0 |
Redeemable series E convertib_2
Redeemable series E convertible preferred stock (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 21, 2019 | May 13, 2019 | May 10, 2019 | Dec. 31, 2019 | May 06, 2019 | Dec. 31, 2018 | Dec. 12, 2018 |
Redeemable Preferred Stock [Abstract] | |||||||
Share price (in dollars per share) | $ 1.95 | ||||||
Dividends [Abstract] | |||||||
Accrued dividends | $ 256 | $ 0 | |||||
Series E Convertible Preferred Stock [Member] | |||||||
Redeemable Preferred Stock [Abstract] | |||||||
Preferred stock, shares outstanding (in shares) | 1,387,378 | 2,633,678 | |||||
Share price (in dollars per share) | $ 6 | ||||||
Preferred stock, stated value (in dollars per share) | $ 0.99 | ||||||
Preferred stock, conversion price (in dollars per share) | $ 0.78 | ||||||
Converted to common stock (in shares) | (320,542) | (236,364) | (689,394) | ||||
Number of common stock, shares issued upon conversion of preferred stock (in shares) | 406,841 | 300,000 | 875,000 | ||||
Dividends [Abstract] | |||||||
Preferred stock, dividend rate | 10.00% | ||||||
Accrued dividends | $ 300 | $ 0 | |||||
Redemption [Abstract] | |||||||
Preferred stock, mandatory redemption price in percentage of stated value | 125.00% | ||||||
Preferred stock, mandatory redemption price (in dollars per share) | $ 1.23 | ||||||
Preferred stock, mandatory redemption price in percentage of market price | 75.00% |
Stockholders' deficit, Acquisit
Stockholders' deficit, Acquisition, Contribution and Distributions of Capital (Details) - USD ($) $ in Millions | May 06, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Acquisition, Contribution and Distributions of Capital [Abstract] | |||
Number of shares issued (in shares) | 33,130,806 | ||
Capital contribution | $ 0 | $ 0.4 | |
Capital distribution | $ 0 | $ 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 Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 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 | |||
Shares issued pursuant to a private placement - net proceeds | $ 2.7 | |||
Share issuance costs | $ 0.1 | |||
Series A Preferred Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Shares issued pursuant to a private placement - net proceeds (in shares) | 69,115 | 2,391,403 | ||
Unit price (in dollars per share) | $ 2.17 | $ 2.17 | ||
Shares issued pursuant to a private placement - net proceeds | $ 0.2 | $ 4.7 | ||
Share issuance costs | $ 0.5 | |||
Shares issued in stock conversion (in shares) | 2,460,517 |
Stockholders' deficit, Common S
Stockholders' deficit, Common Stock (Details) $ / shares in Units, $ in Thousands | Dec. 19, 2019USD ($)$ / sharesshares | May 06, 2019USD ($)$ / sharesshares | Mar. 15, 2019 | Jan. 08, 2019USD ($)shares | Dec. 12, 2018USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Nov. 30, 2018shares | Oct. 29, 2018USD ($) |
Common Stock [Abstract] | |||||||||
Common stock, shares authorized (in shares) | 16,303,928 | 88,000,000 | |||||||
Reverse stock split ratio | 0.0385 | ||||||||
Common stock, shares issued (in shares) | 11,661,485 | 47,977,390 | |||||||
Common stock, shares outstanding (in shares) | 11,661,485 | 47,977,390 | |||||||
Units issued in private placement offering (in shares) | 1,425,641 | ||||||||
Number of shares issuable per unit (in shares) | 1.1 | ||||||||
Share 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 | $ | $ (6,071) | ||||||||
Purchase price | $ | $ 146,569 | ||||||||
Common stock shares issued (in shares) | 33,130,806 | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Reserved Shares of Common Stock for Future Issuance [Abstract] | |||||||||
Conversion of Series E (in shares) | 1,760,903 | ||||||||
Exercise of options to purchase common stock (in shares) | 7,791,833 | ||||||||
Warrants to purchase common stock (in shares) | 16,981,854 | ||||||||
Notes payable (in shares) | 4,437,500 | ||||||||
Total (in shares) | 0 | 30,972,090 | |||||||
Halo Acquisition [Member] | |||||||||
Common Stock [Abstract] | |||||||||
Ownership percentage | 100.00% | ||||||||
TruPet, LLC [Member] | |||||||||
Common Stock [Abstract] | |||||||||
Initial ownership interest acquired | 93.00% | 7.00% | |||||||
Acquisition (in shares) | (1,011,748) | ||||||||
Acquisitions | $ | $ (6,012) | ||||||||
Common stock shares issued (in shares) | 15,027,533 | ||||||||
Bona Vida, Inc. [Member] | |||||||||
Common Stock [Abstract] | |||||||||
Share 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) | 100,000 | ||||||||
Purchase price | $ | $ 108,620 | ||||||||
Common stock shares issued (in shares) | 18,103,273 | ||||||||
PIPE Transaction [Member] | |||||||||
Common Stock [Abstract] | |||||||||
Units issued in private placement offering (in shares) | 5,744,991 | ||||||||
Share price (in dollars per share) | $ / shares | $ 3 | ||||||||
Net proceeds from private placement offering | $ | $ 15,700 | ||||||||
Halo Acquisition [Member] | |||||||||
Common Stock [Abstract] | |||||||||
Share price (in dollars per share) | $ / shares | $ 1.82 | ||||||||
Initial ownership interest acquired | 100.00% | ||||||||
Purchase price | $ | $ 38,244 | ||||||||
Common stock shares issued (in shares) | 2,134,390 | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | ||||||||
Warrant [Member] | |||||||||
Common Stock [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) | $ / shares | $ 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 | 0 | ||||||
Acquisition (in shares) | (1,012,000) | ||||||||
Acquisitions | $ | $ (1) | ||||||||
Common Stock [Member] | PIPE Transaction [Member] | |||||||||
Common Stock [Abstract] | |||||||||
Number of shares issuable per unit (in shares) | 1 |
Stockholders' deficit, Share-ba
Stockholders' deficit, Share-based compensation (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | May 06, 2019 | May 05, 2019 | Dec. 31, 2019 |
Stock Awards [Abstract] | |||
Equity awards issued (in shares) | 1.3 | ||
Equity awards issued, weighted average value per share (in dollars per share) | $ 2.47 | ||
Share-based compensation expense as a result of immediate vesting | $ 2,200 | ||
Minimum [Member] | |||
Stock Awards [Abstract] | |||
Equity awards vesting period | 2 years | ||
Maximum [Member] | |||
Stock Awards [Abstract] | |||
Equity awards vesting period | 3 years |
Stockholders' deficit, Incentiv
Stockholders' deficit, Incentive Award Plan (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 19, 2019 | May 06, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 20, 2019 | Nov. 11, 2019 |
Stock Options [Abstract] | ||||||
Shares granted (in shares) | 2,503,371 | |||||
Shares granted, exercise price (in dollars per share) | $ 1.83 | |||||
Accelerated vesting expense | $ 2,200 | |||||
Shares acquired (in shares) | 5,250,000 | |||||
Shares acquired, exercise price (in dollars per share) | $ 1.82 | |||||
Option outstanding (in shares) | 7,791,833 | 38,462 | ||||
Shares vested (in shares) | 2,716,791 | 38,462 | ||||
Stock Options [Member] | ||||||
Stock Options [Abstract] | ||||||
Shares granted (in shares) | 38,462 | |||||
Shares granted, exercise price (in dollars per share) | $ 6.76 | |||||
Accelerated vesting expense | $ 100 | |||||
2019 Incentive Award Plan [Member] | ||||||
Stock Options [Abstract] | ||||||
Authorized issuance shares of common stock (in shares) | 6,000,000 | |||||
Percent of common stock outstanding | 10.00% | |||||
Option outstanding (in shares) | 7,753,371 | 164,356 | ||||
2019 Incentive Award Plan [Member] | Stock Options [Member] | ||||||
Stock Options [Abstract] | ||||||
Shares granted (in shares) | 2,503,371 | |||||
Option outstanding (in shares) | 164,356 | |||||
Shares vested (in shares) | 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% | |||||
Amended and Restated Incentive Award Plan 2019 [Member] | ||||||
Stock Options [Abstract] | ||||||
Number of awards available for issuance (in shares) | 9,000,000 | 6,000,000 | ||||
Exercise price of options, lower (in dollars per share) | $ 1.82 | |||||
Increase in fair value of vested options | $ 600 | |||||
Increase in fair value of unvested options | $ 800 |
Stockholders' deficit, Options
Stockholders' deficit, Options Granted and Outstanding (Details) - USD ($) $ / shares in Units, $ in Thousands | May 06, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Total number of options [Roll Forward] | |||
Legacy options (in shares) | 38,462 | ||
Acquired (in shares) | 5,250,000 | ||
Granted (in shares) | 2,503,371 | ||
Options outstanding (in shares) | 7,791,833 | 38,462 | |
Weighted average exercise price [Abstract] | |||
Legacy options (in dollars per share) | $ 6.76 | ||
Acquired (in dollars per share) | 1.82 | ||
Granted (in dollars per share) | 1.83 | ||
Vested during period (in dollars per share) | 1.89 | ||
Options outstanding (in dollars per share) | $ 1.85 | $ 6.76 | |
Vested options, number [Abstract] | |||
Legacy options (in shares) | 38,462 | ||
Acquired (in shares) | 0 | ||
Granted (in shares) | 0 | ||
Vested during period (in shares) | 2,678,329 | ||
Options outstanding (in shares) | 2,716,791 | 38,462 | |
Vested options, weighted average exercise price (in dollars per share) | $ 1.89 | ||
Vested options, weighted average remaining contractual term | 9 years 3 months 18 days | ||
Vested options, aggregate intrinsic value | $ 2,357 | ||
Nonvested options, number [Roll Forward] | |||
Legacy options (in shares) | 0 | ||
Acquired (in shares) | 5,250,000 | ||
Granted (in shares) | 2,503,371 | ||
Vested during period (in shares) | (2,678,329) | ||
Options outstanding (in shares) | 5,075,042 | 0 | |
Options expected to vest (in shares) | 5,075,042 | ||
Non-vested options, weighted average exercise price (in dollars per share) | $ 1.82 | ||
Non-vested options, weighted average remaining contractual term | 9 years 7 months 6 days | ||
Non-vested options, aggregate intrinsic value | $ 4,448 | ||
Weighted average grant date fair value [Abstract] | |||
Legacy options (in dollars per share) | $ 8.06 | ||
Acquired (in dollars per share) | 0.92 | ||
Granted (in dollars per share) | 0.97 | ||
Vested during period (in dollars per share) | 1.02 | ||
Outstanding options (in dollars per share) | $ 0.97 | $ 8.06 | |
Estimated term | 3 years | ||
Stock Options [Member] | |||
Total number of options [Roll Forward] | |||
Granted (in shares) | 38,462 | ||
Weighted average exercise price [Abstract] | |||
Granted (in dollars per share) | $ 6.76 | ||
Nonvested options, number [Roll Forward] | |||
Granted (in shares) | 38,462 | ||
2019 Incentive Award Plan [Member] | |||
Total number of options [Roll Forward] | |||
Legacy options (in shares) | 164,356 | ||
Options outstanding (in shares) | 7,753,371 | 164,356 | |
2019 Incentive Award Plan [Member] | Stock Options [Member] | |||
Total number of options [Roll Forward] | |||
Legacy options (in shares) | 164,356 | ||
Granted (in shares) | 2,503,371 | ||
Options outstanding (in shares) | 164,356 | ||
Vested options, number [Abstract] | |||
Options outstanding (in shares) | 912,917 | ||
Vested options, weighted average remaining contractual term | 1 year 9 months 18 days | ||
Nonvested options, number [Roll Forward] | |||
Granted (in shares) | 2,503,371 | ||
Weighted average grant date fair value [Abstract] | |||
Share-based compensation expense | $ 10,300 | $ 400 | |
Incremental share-based compensation related to option re-pricing | $ 600 | ||
Estimated term | 3 years | ||
Dividend yield | 0.00% | ||
Risk-free rate, minimum | 1.41% | ||
Risk-free rate, maximum | 2.39% | ||
Volatility, minimum | 55.00% | ||
Volatility, maximum | 62.10% | ||
2019 Incentive Award Plan [Member] | Stock Options [Member] | Minimum [Member] | |||
Weighted average grant date fair value [Abstract] | |||
Award exercise period | 5 years | ||
Exercise price (in dollars per share) | $ 1.82 | ||
2019 Incentive Award Plan [Member] | Stock Options [Member] | Maximum [Member] | |||
Weighted average grant date fair value [Abstract] | |||
Award exercise period | 10 years | ||
Exercise price (in dollars per share) | $ 2.70 |
Stockholders' deficit, Warrants
Stockholders' deficit, Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 19, 2019 | Nov. 04, 2019 | Sep. 17, 2019 | May 06, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Warrants [Abstract] | |||||||
Warrants acquired (in shares) | 712,823 | ||||||
Issued (in shares) | 17,414,030 | 0 | |||||
Exercised (in shares) | [1] | (1,144,999) | |||||
Warrants outstanding (in shares) | 9,533,354 | 0 | |||||
Weighted Average Exercise Price [Abstract] | |||||||
Warrants acquired (in dollars per share) | $ 3.90 | ||||||
Issued (in dollars per share) | $ 3.27 | ||||||
Exercised (in dollars per share) | 3.50 | ||||||
Warrants outstanding (in dollars per share) | $ 3.23 | ||||||
Warrants conversion rate (in shares) | 1.1 | ||||||
Number of warrants converted (in shares) | 1,259,498 | ||||||
Warrants outstanding, intrinsic value | $ 12,200 | ||||||
Exercise Price $5.00 [Member] | |||||||
Number of Warrants [Abstract] | |||||||
Issued (in shares) | 937,500 | 11,000 | |||||
Weighted Average Exercise Price [Abstract] | |||||||
Warrants, exercisable period | 24 months | ||||||
Warrants, exercise price (in dollars per share) | $ 5 | $ 5 | |||||
Exercise price $1.82 [Member] | |||||||
Number of Warrants [Abstract] | |||||||
Issued (in shares) | 6,500,000 | ||||||
Weighted Average Exercise Price [Abstract] | |||||||
Warrants, exercisable period | 24 months | ||||||
Warrants, exercise price (in dollars per share) | $ 1.82 | ||||||
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 | ||||||
Warrants, exercisable period | 24 months | ||||||
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 $0.10 [Member] | Tranche One [Member] | |||||||
Weighted Average Exercise Price [Abstract] | |||||||
Warrants, exercisable period | 12 months | ||||||
Warrants exercisable (in shares) | 1,250,000 | ||||||
Advisor [Member] | Exercise Price $0.10 [Member] | Tranche Two [Member] | |||||||
Weighted Average Exercise Price [Abstract] | |||||||
Warrants, exercisable period | 18 months | ||||||
Warrants exercisable (in shares) | 1,250,000 | ||||||
Advisor [Member] | Exercise Price $10.00 [Member] | |||||||
Number of Warrants [Abstract] | |||||||
Issued (in shares) | 1,500,000 | ||||||
Weighted Average Exercise Price [Abstract] | |||||||
Exercised (in dollars per share) | $ 10 | ||||||
Warrants, exercisable period | 18 months | ||||||
Warrants exercisable (in shares) | 1,500,000 | ||||||
[1] | Exercised warrants were converted at 1.1 shares per warrant for a total of 1,259,498 shares. |
Employee benefit plans (Details
Employee benefit plans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Benefit Plans [Abstract] | ||
Contributions related to plan and recognized expense | $ 100 | $ 0 |
Maximum [Member] | ||
Employee Benefit Plans [Abstract] | ||
Percentage of 100% participant contributions matched | 3.00% | |
Percentage of 50% participant contributions matched | 5.00% |
Related party transactions (Det
Related party transactions (Details) $ in Thousands | 8 Months Ended | 12 Months Ended | |
Dec. 31, 2019USD ($)shares | Dec. 31, 2019USD ($)Directorshares | Dec. 31, 2018USD ($)Membershares | |
Related Party Transactions [Abstract] | |||
Payment of finder's fee | $ 300 | ||
Number of members who own entity | Member | 1 | ||
Subordinated convertible notes issued | $ 16,370 | $ 16,370 | $ 0 |
Warrants issued (in shares) | shares | 17,414,030 | 0 | |
Shareholder Guaranty [Member] | |||
Related Party Transactions [Abstract] | |||
Warrants issued (in shares) | shares | 6,500,000 | ||
Number of members of board of directors to whom warrants were issued | Director | 3 | ||
Fair value of warrants issued | $ 4,200 | $ 4,200 | |
Subordinated Convertible Notes [Member] | Member of Board of Directors [Member] | |||
Related Party Transactions [Abstract] | |||
Subordinated convertible notes issued | 1,400 | 1,400 | |
Subordinated Convertible Notes [Member] | Maximum [Member] | Member of Board of Directors [Member] | |||
Related Party Transactions [Abstract] | |||
Interest amount | 100 | 100 | |
Subordinated Convertible Notes [Member] | Halo Acquisition [Member] | Executive Officer [Member] | |||
Related Party Transactions [Abstract] | |||
Subordinated convertible notes | 100 | 100 | |
Management Services [Member] | Maximum [Member] | Member of Board of Directors [Member] | |||
Related Party Transactions [Abstract] | |||
Payments to related parties | 200 | $ 500 | |
Marketing Services [Member] | Member of Board of Directors [Member] | |||
Related Party Transactions [Abstract] | |||
Payments to related parties | $ 200 | 100 | |
Service contract termination clause | 30 days | ||
Marketing Services [Member] | Maximum [Member] | Member of Board of Directors [Member] | |||
Related Party Transactions [Abstract] | |||
Outstanding balances due to related party | $ 100 | $ 100 | 100 |
Other Professional Services [Member] | |||
Related Party Transactions [Abstract] | |||
Payments to related parties | 400 | ||
Other Professional Services [Member] | Maximum [Member] | |||
Related Party Transactions [Abstract] | |||
Payments to related parties | $ 100 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income taxes [Abstract] | ||
Current income tax expense | $ 0 | $ 0 |
Deferred income tax expense | 0 | 0 |
Deferred tax assets | $ 3,384 | 0 |
Deferred tax liabilities | $ 0 | |
Federal statutory rate | 21.00% |
Income taxes, Effective Income
Income taxes, Effective Income Tax Rate Reconciliation (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |
Statutory U.S. Federal income tax | $ (38,760) |
State income taxes, net | (818) |
LLC income not taxed | 2,376 |
Loss on acquisitions | 29,051 |
Changes in valuation allowance | 7,892 |
Other | 259 |
Total provision | $ 0 |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |
Statutory U.S. Federal income tax | 21.00% |
State income taxes, net | 0.40% |
LLC income not taxed | (1.30%) |
Loss on acquisitions | (15.70%) |
Change in valuation allowance | (4.30%) |
Other | 0.10% |
Total provision | 0.00% |
Income taxes, Deferred Tax Asse
Income taxes, Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred income tax assets: | ||
Net operating loss carryforwards | $ 8,503 | |
Stock options | 2,493 | |
Other assets | 301 | |
Gross deferred tax assets | 11,297 | |
Valuation allowance | (7,913) | $ 0 |
Net deferred tax asset | 3,384 | $ 0 |
Deferred income liabilities: | ||
Inventory | (137) | |
Intangibles | (3,247) | |
Deferred tax assets, net of valuation allowance | 0 | |
Federal [Member] | ||
Operating Loss Carryforwards [Abstract] | ||
Net operating loss carryforwards | 36,300 | |
State [Member] | ||
Operating Loss Carryforwards [Abstract] | ||
Net operating loss carryforwards | $ 32,700 |
Income taxes, Valuation Allowan
Income taxes, Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Valuation Allowance [Abstract] | ||
Valuation allowance, at beginning of year | $ 0 | |
Increase in valuation allowance | 7,892 | |
Halo Acquisition | 21 | |
Valuation allowance, at end of year | 7,913 | |
Accrued interest and penalties related to uncertain tax positions | $ 0 | $ 0 |
Major suppliers (Details)
Major suppliers (Details) - Vendor | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Concentration Risk [Abstract] | ||
Number of vendors utilized to purchase inventory | 1 | 1 |
Inventory Purchases [Member] | Supplier Concentration Risk [Member] | ||
Concentration Risk [Abstract] | ||
Concentration risk percentage | 74.00% | 70.00% |
Concentration of credit risk _2
Concentration of credit risk and off-balance sheet risk (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Gross Sales [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 10.00% | 10.00% |
Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 44.00% | 68.00% |
Net loss per share (Details)
Net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator [Abstract] | ||
Net and comprehensive loss | $ (184,462) | $ (6,026) |
Less: Preferred Stock Dividends | 109 | 0 |
Net and comprehensive loss available to common stockholders | $ (184,571) | $ (6,026) |
Denominator [Abstract] | ||
Weighted average shares used in computing net loss per share attributable to common stockholders, basic and diluted (in shares) | 33,238,600 | 11,516,421 |
Net loss per share attributable to common stockholders, basic and diluted (in dollars per share) | $ (5.55) | $ (0.52) |
Subsequent events, Stock and Wa
Subsequent events, Stock and Warrant Issuance (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 17, 2020 | Jan. 03, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Stock and Warrant Issuance [Abstract] | ||||
Net proceeds from shares issued | $ 15,826 | $ 4,668 | ||
Granted (in dollars per share) | $ 0.97 | |||
Subsequent Event [Member] | ||||
Stock and Warrant Issuance [Abstract] | ||||
Units issued in private placement offering (in shares) | 308,642 | |||
Net proceeds from shares issued | $ 500 | |||
Net of issuance cost | $ 100 | |||
Stock issued to third parties for services (in shares) | 1,003,232 | |||
Granted (in dollars per share) | $ 1.62 |
Subsequent events, Amended Nove
Subsequent events, Amended November 2019 Notes (Details) - Subsequent Event [Member] | Apr. 06, 2020 | Jan. 06, 2020 |
Amended November 2019 Notes [Abstract] | ||
Long-term debt, interest rate | 0.98% | |
November 2019 Notes [Member] | ||
Amended November 2019 Notes [Abstract] | ||
Long-term debt, interest rate | 12.00% |
Subsequent events, ABG Terminat
Subsequent events, ABG Termination (Details) | Oct. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Aug. 31, 2020USD ($) | Jul. 31, 2020USD ($) | Jan. 13, 2020USD ($)Installment$ / sharesshares | Dec. 31, 2019shares | Dec. 31, 2018shares |
ABG Termination [Abstract] | |||||||
Common stock, shares issued (in shares) | shares | 47,977,390 | 11,661,485 | |||||
Forecast [Member] | |||||||
ABG Termination [Abstract] | |||||||
Termination fee installment payable | $ 25,000 | $ 25,000 | $ 25,000 | $ 25,000 | |||
Subsequent Event [Member] | Licensing Agreements [Member] | |||||||
ABG Termination [Abstract] | |||||||
Common stock, shares issued (in shares) | shares | 72,720 | ||||||
Termination fee paid | $ 100,000 | ||||||
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 | ||||||
Warrants, exercisable period | 24 months | ||||||
Warrants, exercise price (in dollars per share) | $ / shares | $ 5 |
Subsequent events, COVID-19 (De
Subsequent events, COVID-19 (Details) - Subsequent Event [Member] - USD ($) $ in Thousands | Apr. 06, 2020 | Apr. 10, 2020 |
COVID-19 [Abstract] | ||
Debt issuance amount | $ 400 | |
Interest rate | 0.98% | |
Maturity date | Apr. 6, 2022 |