Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 13, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-40477 | |
Entity Registrant Name | Better Choice Company Inc. | |
Entity Central Index Key | 0001471727 | |
Entity Tax Identification Number | 83-4284557 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 12400 Race Track Road | |
Entity Address, City or Town | Tampa | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33626 | |
City Area Code | (212) | |
Local Phone Number | 896-1254 | |
Title of 12(b) Security | Common Stock, $0.001 par value share | |
Trading Symbol | BTTR | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 32,081,148 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Net sales | $ 13,117 | $ 11,865 | $ 32,890 | $ 45,394 |
Cost of goods sold | 8,681 | 7,700 | 21,625 | 31,795 |
Gross profit | 4,436 | 4,165 | 11,265 | 13,599 |
Operating expenses: | ||||
Selling, general and administrative | 7,052 | 10,569 | 19,721 | 28,225 |
Total operating expenses | 7,052 | 10,569 | 19,721 | 28,225 |
Loss from operations | (2,616) | (6,404) | (8,456) | (14,626) |
Other expenses: | ||||
Interest expense, net | (344) | (142) | (952) | (324) |
Change in fair value of warrants liabilities | 1,339 | 1,339 | ||
Total other expense, net | 995 | (142) | 387 | (324) |
Net loss before income taxes | (1,621) | (6,546) | (8,069) | (14,950) |
Income tax expense | 1 | 4 | ||
Net loss available to common stockholders, basic | (1,621) | (6,547) | (8,069) | (14,954) |
Net loss available to common stockholders, diluted | $ (1,621) | $ (6,547) | $ (8,069) | $ (14,954) |
Weighted average number of shares outstanding, basic | 30,975,566 | 29,364,712 | 30,679,905 | 29,339,918 |
Weighted average number of shares outstanding, diluted | 30,975,566 | 29,364,712 | 30,679,905 | 29,339,918 |
Net loss per share available to common stockholders, basic | $ (0.05) | $ (0.22) | $ (0.26) | $ (0.51) |
Net loss per share available to common stockholders, diluted | $ (0.05) | $ (0.22) | $ (0.26) | $ (0.51) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 3,800 | $ 3,173 |
Restricted cash | 6,300 | |
Accounts receivable, net | 8,582 | 6,744 |
Inventories, net | 7,541 | 10,257 |
Prepaid expenses and other current assets | 992 | 1,051 |
Total Current Assets | 20,915 | 27,525 |
Fixed assets, net | 258 | 375 |
Right-of-use assets, operating leases | 134 | 173 |
Intangible assets, net | 8,914 | 10,059 |
Other assets | 828 | 544 |
Total Assets | 31,049 | 38,676 |
Current Liabilities | ||
Accounts payable | 7,807 | 2,932 |
Accrued and other liabilities | 2,525 | 2,596 |
Line of credit, net | 1,917 | |
Warrants liabilities | 869 | |
Operating lease liability | 56 | 52 |
Total Current Liabilities | 13,174 | 5,580 |
Non-current Liabilities | ||
Line of credit, net | 11,444 | |
Term loan, net | 2,714 | |
Operating lease liability | 82 | 124 |
Total Non-current Liabilities | 2,796 | 11,568 |
Total Liabilities | 15,970 | 17,148 |
Stockholders’ Equity | ||
Common Stock, $0.001 par value, 200,000,000 shares authorized, 32,077,148 & 29,430,267 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 32 | 29 |
Additional paid-in capital | 321,688 | 320,071 |
Accumulated deficit | (306,641) | (298,572) |
Total Stockholders’ Equity | 15,079 | 21,528 |
Total Liabilities and Stockholders’ Equity | $ 31,049 | $ 38,676 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 32,077,148 | 29,430,267 |
Common stock, shares outstanding | 32,077,148 | 29,430,267 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance at Dec. 31, 2021 | $ 29 | $ 317,102 | $ (259,256) | $ 57,875 |
Beginning balance, shares at Dec. 31, 2021 | 29,146,367 | |||
Share-based compensation | 1,091 | 1,091 | ||
Share-based compensation, shares | 218,345 | |||
Net loss available to common stockholders | (4,040) | (4,040) | ||
Ending balance at Mar. 31, 2022 | $ 29 | 318,193 | (263,296) | 54,926 |
Ending balance, shares at Mar. 31, 2022 | 29,364,712 | |||
Beginning balance at Dec. 31, 2021 | $ 29 | 317,102 | (259,256) | 57,875 |
Beginning balance, shares at Dec. 31, 2021 | 29,146,367 | |||
Net loss available to common stockholders | (14,954) | |||
Ending balance at Sep. 30, 2022 | $ 29 | 319,556 | (274,210) | 45,375 |
Ending balance, shares at Sep. 30, 2022 | 29,364,712 | |||
Beginning balance at Mar. 31, 2022 | $ 29 | 318,193 | (263,296) | 54,926 |
Beginning balance, shares at Mar. 31, 2022 | 29,364,712 | |||
Share-based compensation | 801 | 801 | ||
Net loss available to common stockholders | (4,367) | (4,367) | ||
Ending balance at Jun. 30, 2022 | $ 29 | 318,994 | (267,663) | 51,360 |
Ending balance, shares at Jun. 30, 2022 | 29,364,712 | |||
Share-based compensation | 562 | 562 | ||
Net loss available to common stockholders | (6,547) | (6,547) | ||
Ending balance at Sep. 30, 2022 | $ 29 | 319,556 | (274,210) | 45,375 |
Ending balance, shares at Sep. 30, 2022 | 29,364,712 | |||
Beginning balance at Dec. 31, 2022 | $ 29 | 320,071 | (298,572) | 21,528 |
Beginning balance, shares at Dec. 31, 2022 | 29,430,267 | |||
Share-based compensation | 861 | 861 | ||
Share-based compensation, shares | 1,066,881 | |||
Share issuance | $ 1 | (1) | ||
Net loss available to common stockholders | (3,484) | (3,484) | ||
Ending balance at Mar. 31, 2023 | $ 30 | 320,931 | (302,056) | 18,905 |
Ending balance, shares at Mar. 31, 2023 | 30,497,148 | |||
Beginning balance at Dec. 31, 2022 | $ 29 | 320,071 | (298,572) | 21,528 |
Beginning balance, shares at Dec. 31, 2022 | 29,430,267 | |||
Net loss available to common stockholders | (8,069) | |||
Ending balance at Sep. 30, 2023 | $ 32 | 321,688 | (306,641) | 15,079 |
Ending balance, shares at Sep. 30, 2023 | 32,077,148 | |||
Beginning balance at Mar. 31, 2023 | $ 30 | 320,931 | (302,056) | 18,905 |
Beginning balance, shares at Mar. 31, 2023 | 30,497,148 | |||
Share-based compensation | 284 | 284 | ||
Share-based compensation, shares | 80,000 | |||
Net loss available to common stockholders | (2,964) | (2,964) | ||
Ending balance at Jun. 30, 2023 | $ 30 | 321,215 | (305,020) | 16,225 |
Ending balance, shares at Jun. 30, 2023 | 30,577,148 | |||
Share-based compensation | $ 2 | 473 | 475 | |
Share-based compensation, shares | 1,500,000 | |||
Net loss available to common stockholders | (1,621) | (1,621) | ||
Ending balance at Sep. 30, 2023 | $ 32 | $ 321,688 | $ (306,641) | $ 15,079 |
Ending balance, shares at Sep. 30, 2023 | 32,077,148 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash Flow from Operating Activities: | ||
Net loss available to common stockholders | $ (8,069) | $ (14,954) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,262 | 1,265 |
Amortization of debt issuance costs | 165 | 39 |
Share-based compensation expense | 1,620 | 2,454 |
Amortization of prepaid assets | 2,095 | |
Change in fair value of warrants liabilities | (1,339) | |
Inventory reserve | (987) | 511 |
Loss on disposal of assets | 11 | |
Other | (6) | 127 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,831) | (2,901) |
Inventories | 3,703 | (6,877) |
Prepaid expenses and other assets | (225) | (257) |
Accounts payable | 4,875 | 466 |
Accrued and other liabilities | (73) | 60 |
Cash Used in Operating Activities | (894) | (17,972) |
Cash Flow from Investing Activities: | ||
Capital expenditures | (10) | (198) |
Cash Used in Investing Activities | (10) | (198) |
Cash Flow from Financing Activities: | ||
Proceeds from revolving lines of credit | 6,764 | 7,500 |
Payments on revolving line of credit | (16,291) | (5,000) |
Proceeds from Alphia Facility | 2,792 | |
Payment of loan issuance costs | (242) | (7) |
Proceeds from warrant liabilities | 2,208 | |
Payments on term loans | (650) | |
Cash (Used in) Provided by Financing Activities | (4,769) | 1,843 |
Net decrease in cash and cash equivalents and restricted cash | (5,673) | (16,327) |
Total cash and cash equivalents and restricted cash, beginning of period | 9,473 | 28,942 |
Total cash and cash equivalents and restricted cash, end of period | 3,800 | 12,615 |
Cash paid during the quarter for: | ||
Interest | $ 489 | $ 279 |
Nature of business and summary
Nature of business and summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of business and summary of significant accounting policies | Note 1 – Nature of business and summary of significant accounting policies Nature of the business Better Choice Company Inc. (the “Company”) is a pet health and wellness company focused on providing pet products and services that help dogs and cats live healthier, happier and longer lives. The Company has a broad portfolio of pet health and wellness products for dogs and cats sold under its Halo brand across multiple forms, including foods, treats, toppers, dental products, chews and supplements. The products consist of kibble and canned dog and cat food, freeze-dried raw dog food and treats, vegan dog food and treats, oral care products and supplements. Basis of presentation The Company’s condensed consolidated financial statements are prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reports and accounting principles generally accepted in the U.S. (“GAAP”). Accordingly, the Condensed Consolidated Balance Sheet as of December 31, 2022 has been derived from the audited consolidated financial statements at that date but does not include all of the information required by GAAP for complete financial statements. Results of operations for interim periods may not be representative of results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes in the Company’s Annual Report for the year ended December 31, 2022, filed with the SEC. Consolidation The condensed financial statements are presented on a consolidated basis and include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Use of estimates The preparation of the condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On an ongoing basis, the Company evaluates these assumptions, judgments and estimates. Actual results may differ from these estimates. In the opinion of management, the condensed consolidated financial statements contain all adjustments necessary for a fair statement of the results of operations for the three and nine months ended September 30, 2023 and 2022, the financial position as of September 30, 2023 and December 31, 2022 and the cash flows for the nine months ended September 30, 2023 and 2022. 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. The Company has continually incurred losses and has an accumulated deficit. Our continued operating losses raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date these condensed consolidated financial statements are issued. The Company does not currently expect it will be able to generate sufficient cash flow from operations to maintain sufficient liquidity to meet the required financial covenant in certain periods prior to maturity giving the lender the right to call the debt. The Company will need to either raise additional capital or obtain additional financing, and/or secure future waivers or amendments from its lenders, or accomplish some combination of these items to maintain sufficient liquidity. There can be no assurance that the Company will be successful in raising additional capital, securing future waivers and/or amendments from its lenders, renewing or refinancing its existing debt or securing new financing. If the Company is unsuccessful in doing so, it may need to reduce the scope of its operations, repay amounts owed to its lenders or sell certain assets. The Company is continuing to implement plans to achieve operating profitability, as well as implementing other strategic objectives to address liquidity. 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. Summary of significant accounting policies For additional information, please refer to the most recently filed Annual Report regarding the Company’s summary of significant accounting policies. 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. Cash and cash equivalents are stated at cost, which approximates fair value because of the short-term nature of these instruments. The Company’s cash equivalents are held in government money market funds and at times may exceed federally insured limits. 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. At December 31, 2022, the Company had $ 8.0 Restricted cash The Company was required to maintain a restricted cash balance of $ 6.3 no Advertising The Company charges advertising costs to expense as incurred and such charges are included in SG&A expense. The Company’s advertising expenses consist primarily of online advertising, search costs, email advertising and radio advertising. In addition, the Company reimburses its customers and third parties for in store activities and record these costs as advertising expenses. Advertising costs were $ 2.4 4.8 6.1 10.0 Reclassification Certain prior period amounts within the condensed consolidated statements of operations related to share-based compensation, previously presented as a separate line item, have been reclassified into selling, general and administrative expense to conform with current period presentation. All share-based compensation in the current and prior periods is a selling, general and administrative expense. New Accounting Standards Recently adopted ASU 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” In June 2016, the FASB issued ASU 2016-13, 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 was effective for the Company on January 1, 2023. The new standard did not have a material impact on the condensed consolidated financial statements for the three and nine months ended September 30, 2023. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 2 – Revenue The Company records revenue net of discounts, which primarily consist of trade promotions, certain customer allowances and early pay discounts. The Company excludes sales taxes collected from revenues. Retail-partner based customers are not subject to sales tax. The Company’s direct-to-consumer (“DTC”) loyalty program enables customers to accumulate points based on their spending. A portion of revenue is deferred at the time of sale when points are earned and recognized when the loyalty points are redeemed. Revenue channels The Company groups its revenue channels into four Information about the Company’s net sales by revenue channel is as follows (in thousands): Schedule of Information about Revenue Channels Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 E-commerce (1) $ 3,180 24 % $ 3,530 30 % $ 10,330 32 % $ 11,035 24 % Brick & Mortar (2) 2,249 17 % 1,342 11 % 5,669 17 % 9,632 21 % DTC 1,298 10 % 1,371 12 % 4,316 13 % 5,066 11 % International (3) 6,390 49 % 5,622 47 % 12,575 38 % 19,661 44 % Net Sales $ 13,117 100 % $ 11,865 100 % $ 32,890 100 % $ 45,394 100 % (1) The Company’s E-commerce channel includes two customers that amounted to greater than 10% 3.1 10.0 3.3 10.6 (2) The Company’s Brick & Mortar channel includes $ 4.3 10% 10% (3) One of the Company’s International customers that distributes products in China amounted to greater than 10% 6.0 11.0 10% 5.3 16.6 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 3 - Inventories Inventories are summarized as follows (in thousands): Schedule of Inventories September 30, 2023 December 31, 2022 Food, treats and supplements $ 7,048 $ 10,212 Inventory packaging and supplies 1,160 1,699 Total Inventories 8,208 11,911 Inventory reserve (667 ) (1,654 ) Inventories, net $ 7,541 $ 10,257 |
Prepaid expenses and other curr
Prepaid expenses and other current assets | 9 Months Ended |
Sep. 30, 2023 | |
Prepaid Expenses And Other Current Assets | |
Prepaid expenses and other current assets | Note 4 – Prepaid expenses and other current assets Prepaid expenses and other current assets are summarized as follows (in thousands): Schedule of Prepaid Expenses and Other Current Assets September 30, 2023 December 31, 2022 Total Prepaid expenses and other current assets $ 992 $ 1,051 |
Fixed assets
Fixed assets | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Fixed assets | Note 5 - Fixed assets Fixed assets consist of the following (in thousands): Schedule of Fixed Assets Estimated Useful Life September 30, 2023 December 31, 2022 Equipment 2 5 $ 11 $ 7 Furniture and fixtures 2 5 221 221 Computer software, including website development 2 3 187 187 Computer equipment 1 2 109 129 Total fixed assets 528 544 Accumulated depreciation (270 ) (169 ) Fixed assets, net $ 258 $ 375 Depreciation expense was $ 0.04 0.12 |
Intangible assets
Intangible assets | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets | Note 6 – Intangible assets Intangible assets The Company’s intangible assets (in thousands) and related useful lives (in years) are as follows: Schedule of Intangible Assets September 30, 2023 December 31, 2022 Estimated useful life Gross carrying amount Accumulated amortization Net carrying amount Accumulated amortization Net carrying amount Customer relationships 7 $ 7,190 $ (3,885 ) $ 3,305 $ (3,115 ) $ 4,075 Trade name 15 7,500 (1,891 ) 5,609 (1,516 ) 5,984 Total intangible assets $ 14,690 $ (5,776 ) $ 8,914 $ (4,631 ) $ 10,059 Amortization expense was $ 0.38 1.15 The estimated future amortization of intangible assets over the remaining weighted average useful life of 8.3 Schedule of Future Amortization of Intangible Assets Remainder of 2023 $ 382 2024 1,527 2025 1,527 2026 1,494 2027 500 Thereafter 3,484 Total $ 8,914 The Company assesses intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable. If impairment indicators are present, the Company performs a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to these long-lived assets to their carrying value. There were no indicators of impairment of the intangible assets as of September 30, 2023. |
Accrued and other liabilities
Accrued and other liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued and other liabilities | Note 7 – Accrued and other liabilities Accrued and other liabilities consist of the following (in thousands): Schedule of Accrued and Other Liabilities September 30, 2023 December 31, 2022 Accrued taxes $ 107 $ 110 Accrued payroll and benefits 375 688 Accrued trade promotions and advertising 524 567 Accrued interest 181 84 Accrued commissions 687 385 Deferred revenue (8 ) 336 Short-term financing 341 165 Licenses and permits 72 32 Other 246 229 Total accrued and other liabilities $ 2,525 $ 2,596 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Note 8 – Debt The components of the Company’s debt consist of the following (in thousands): Schedule of Components of Debt September 30, 2023 December 31, 2022 Amount Rate Maturity date Amount Rate Maturity date Term loan, net $ 2,714 (2) 6/21/2026 $ — Line of credit, net $ 1,917 (3) 6/21/2025 $ 11,444 (1) 10/31/2024 Less current portion 1,917 — Total long-term debt $ 2,714 $ 11,444 (1) Interest at a variable rate of the daily U.S. Federal Funds Rate plus 375 3.75% (2) Interest at a fixed rate of 10.00% (3) Interest at a variable rate of the daily U.S. Federal Funds Rate plus 250 5.50% Wintrust Term Loan and Line of Credit On January 6, 2021, Halo entered into a credit facility with Old Plank Trail Community Bank, N.A., an affiliate of Wintrust Bank, N.A. (“Wintrust”) consisting of a $ 6.0 6.0 250 2.50% 285 375 3.75% The Wintrust Credit Facility subjected the Company to certain financial covenants, including the maintenance of a fixed charge coverage ratio of no less than 1.25 13.0 12.0 8.5 The Wintrust Credit Facility is secured by a general guaranty and security interest on the assets, including the intellectual property, of the Company and its subsidiaries. The Company has also pledged all of the capital stock of Halo held by the Company as additional collateral. Furthermore, the Wintrust Credit Facility was supported by a collateral pledge by a member of the Company’s board of directors; as a result of the First Wintrust Amendment described below, this collateral pledge was terminated and released. On August 13, 2021, Halo entered into the first amendment to the Wintrust Credit Facility (the “First Wintrust Amendment”) to increase the revolving line of credit from $ 6.0 7.5 7.2 6.9 6.0 7.5 13.5 6.3 As part of the Third Wintrust Amendment described above, Halo used a portion of the increased revolving credit facility to repay and retire the outstanding term loan portion of the Wintrust Credit Facility. On June 21, 2023, the Company paid off the entire balance in the sum of $ 13.5 As of September 30, 2023, there was no 11.4 0.2 Wintrust Receivables Credit Facility On June 21, 2023, the Company entered into an account purchase agreement with Wintrust Receivables Finance (AP Agreement), a division of Wintrust Bank N.A. (“Wintrust”) pursuant to which Wintrust will purchase, at its discretion, eligible customer invoices and advance up to 75% 4.8 2.5% 5.5% two years 60 days The Wintrust Receivables Credit Facility limits or restrict the ability of the Company to incur additional indebtedness; incur additional liens; make dividends and other restricted payments; make investments; sell, assign, transfer or dispose of certain assets; make optional prepayments of other indebtedness; engage in transactions with affiliates; and enter into restrictive agreements. The Wintrust Receivables Credit Facility does not include any financial covenants and if an event of default occurs, Wintrust is entitled to accelerate the advances made thereunder and exercise rights against the collateral. Borrowing under the Wintrust Receivables Credit Facility are classified as current debt as a result of a required lockbox arrangement and a subjective acceleration clause. During the three and nine months ended September 30, 2023, the Company sold receivables having an aggregate face value of $ 3.5 6.5 2.6 4.9 1.9 Alphia Term Loan Facility On June 21, 2023, the Company entered into a term loan credit agreement (the “Term Loan Agreement”) with Alphia Inc. (“Alphia”), a custom manufacturer of super-premium pet food in the U.S. Pursuant to the Term Loan Agreement, Alphia made a term loan to the Company in the original principal amount of $ 5.0 The Term Loan bears an interest rate of 10% The Term Loan is secured by a general security interest on the assets, including the intellectual property, of the Company and Halo pursuant to (i) that certain Term Loan Security Agreement, dated June 21, 2023, made by the Company and Halo in favor of Alphia (the “Security Agreement”) and (ii) that certain Intellectual Property Security Agreement, dated as of June 21, 2023 of the Company and Halo in favor of Alphia (the “Intellectual Property Security Agreement”). The Company has also pledged all of the capital stock of Halo held by the Company as additional collateral for the Term Loan. The term Loan is guaranteed by Halo pursuant to that certain Term Loan Guaranty, dated as of June 21, 2023, by and between Halo and Alphia (the “Term Loan Guaranty”). As of September 30, 2023, our indebtedness on the Alphia Term Loan Facility is $ 5.0 2.5 2.7 0.2 Future Debt Maturities Future debt maturities as of September 30, 2023 and for succeeding years are as follows (in thousands): Schedule of Future Debt Maturities Year ending December 31: 2024 $ — 2025 — 2026 5,000 Total $ 5,000 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 9 - Fair Value Measurements The carrying amounts of cash and cash equivalents, trade accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value because of the short-term nature of these financial instruments. The carrying amounts of borrowings under credit facilities approximates fair value as variable interest rates on these instruments approximates current market rates. The Company estimates the fair value of the term loan based on a discounted cash flow method and the warrants liabilities (measured at fair value on a recurring basis) are based on a risk-neutral Monte Carlo simulation approach. The carrying value of the term loan was based on an accounting entry where proceeds from the loan were first allocated to the warrants liabilities. The following table presents the carrying amount and fair value of the Company’s term note, line of credit and warrants liabilities by hierarchy level: Schedule of Carrying Amount and Fair Value September 30, 2023 December 31, 2022 Fair Value Hierarchy Carrying Amount Fair Value Carrying Amount Fair Value Term loan Level 3 (2) $ 2,714 $ 3,024 $ — $ — Line of credit Level 2 (1) $ 1,917 $ 1,917 $ 11,444 $ 11,444 Warrants liabilities Level 3 (2) $ 2,208 $ 869 $ — $ — (1) the fair value estimates are based upon observable market data (2) the fair value estimates are based on unobservable inputs reflecting management’s assumptions about inputs used in pricing the asset or liability |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 10 – Commitments and contingencies The Company has manufacturing agreements with its vendors that provides for the company to make its commercial best efforts to purchase minimum quantities in the ordinary course of business. There are no The Company 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. The Company accrues 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 SG&A expenses. The Company does not accrue for contingent losses that are considered to be reasonably possible, but not probable; however, the Company discloses the range of such reasonably possible losses. Loss contingencies considered remote are generally not disclosed. 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 the Company’s 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. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2023 | |
Warrants | |
Warrants | Note 11 – Warrants The following summarizes the Company’s outstanding warrants to purchase shares of the Company’s common stock as of and for the years ended September 30, 2023 and December 31, 2022: Schedule of Outstanding Warrants Warrants Weighted Average Exercise Price Warrants outstanding as of December 31, 2022 9,433,584 $ 5.92 Issued — $ — Exercised — $ — Terminated/Expired — $ — Warrants outstanding as of March 31, 2023 9,433,584 $ 5.92 Issued 14,768,125 $ 0.26 Exercised — $ — Terminated/Expired — $ — Warrants outstanding as of June 30, 2023 24,201,709 $ 5.92 Issued — $ — Exercised — $ — Terminated/Expired — $ — Warrants outstanding as of September 30, 2023 24,201,709 $ 5.92 The warrants shown in the table above outstanding as of March 31, 2023 and December 31, 2022, are equity classified warrants issued between May 2019 and January 2021. There was no In conjunction with the Alphia Term Loan Facility mentioned in Note 8 - Debt, the Company issued to Alphia (i) a warrant (the “First Tranche Warrant”) to purchase 6,545,338.45 0.001 0.26 8,222,787 0.26 June 21, 2028 Additionally, in conjunction with the Term Loan, the Company entered into a Side Letter Agreement with Alphia (the “Side Letter”) pursuant to which Alphia was granted a right of first refusal on any of the following relating to the Company or any of its subsidiaries and to the extent such transactions constitute a change of control: (i) any transfer, sale, lease or encumbrance of all or any portion of the capital stock or assets (other than the sale of inventory in the ordinary course of business), (ii) any merger, consolidation or other business combination, (iii) any recapitalization, reorganization or any other extraordinary business transaction, (iv) or any equity issuance or debt incurrence. Alphia’s right of first refusal is effective so long as the Term Loan remains outstanding and for a period of 12 The Company evaluated the Alphia warrant liabilities under ASC 815-40, Derivatives and Hedging-Contracts in Entity’s Own Equity (“ASC 815-40”), and concluded they do not meet the criteria to be classified in shareholders’ equity. Specifically, there are contingent exercise provisions and settlement provisions that exist, including provisions where the number of shares available under the warrants may be adjusted based on a percentage of equity. Because the number of outstanding common shares is not a fair value input to a fixed-for-fixed model, this provision violates indexation guidance. Therefore, the warrants are not indexed to the Company’s stock. The Alphia warrant liabilities will be remeasured at fair value each reporting period until provisions precluding equity classification lapse and the Company reassess the warrants classification. The total value of the consideration received in connection with the Alphia Term Loan Agreement was first allocated to warrants liabilities at fair value, with the remainder allocated to the Alphia Term Loan Agreement. Accordingly, the Company recorded a discount of $ 2.2 The Alphia warrant liabilities are determined using a risk-neutral Monte Carlo simulation based approach, a Level 3 valuation. The significant inputs to the warrant liabilities are as follows: Schedule of Fair Value Measurement Inputs September 30, 2023 First Tranche Warrant Second Tranche Warrant Exercise price $ 0.26 $ 0.26 Stock price $ 0.21 $ 0.21 Volatility 66.0 % 66.0 % Time to maturity 5 5 Risk-free rate 5.55 % 4.63 % Dividend yield — % — % The following table summarizes the Alphia warrant liability activity for three and nine months ended September 30, 2023: Schedule of Warrant Liability Activity Fair value of warrant liabilities as of March 31, 2023 $ — Warrant liabilities incurred 2,208 Loss (gain) in change of fair value of warrant liabilities — Fair value of warrant liabilities as of June 30, 2023 $ 2,208 Warrant liabilities incurred — Loss (gain) in change of fair value of warrant liabilities (1,339 ) Fair value of warrant liabilities as of September 30, 2023 $ 869 The change in fair value related to the Alphia warrant liabilities was $ (1.3) |
Share-based compensation
Share-based compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based compensation | Note 12 – Share-based compensation During the three months ended September 30, 2023 and September 30, 2022, the Company recognized $ 0.5 0.6 1.6 2.5 On November 11, 2019, the Company received shareholder approval for the Amended and Restated 2019 Incentive Award Plan (the “Amended 2019 Plan”). The Amended 2019 Plan provides for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units, other stock or cash-based awards or a dividend equivalent award. The Amended 2019 Plan authorized the issuance of 1,083,334 1,500,000 10% 9,000,000 2,700,000 5,614,637 8,557,663 Stock options The following table provides detail of the options granted and outstanding (dollars in thousands): Schedule of Options Granted and Outstanding Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Options outstanding as of December 31, 2022 3,071,187 $ 5.39 7.2 $ — Granted — — Forfeited/Expired (178,656 ) 4.05 Options outstanding as of March 31, 2023 2,892,531 $ 5.47 6.3 $ — Granted — — Forfeited/Expired (280,689 ) 4.69 Options outstanding as of June 30, 2023 2,611,842 $ 5.51 6.2 $ — Granted — — Forfeited/Expired (180,948 ) $ 4.76 Options outstanding as of September 30, 2023 2,430,894 $ 5.56 5.4 $ — Options exercisable as of September 30, 2023 2,205,182 $ 5.71 5.1 $ — Options granted under the Amended 2019 Plan vest over a period of two three years ten Restricted Stock Awards In February 2022, the Company granted 218,345 0.5 During the fourth quarter of 2022, the Company granted 65,555 0.1 In January 2023, the Company granted 892,860 0.5 In January 2023, the Company granted 200,000 0.1 During the first quarter of 2023, the Company granted 18,021 0.1 During the third quarter of 2023, the Company granted 1,500,000 0.3 |
Employee benefit plans
Employee benefit plans | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
Employee benefit plans | Note 13 – Employee benefit plans The Company has a qualified defined contribution 401(k) plan, which covers substantially all of its employees. Participants are entitled to make pre-tax and/or Roth post-tax contributions up to the annual maximums established by the IRS. The Company matches 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 less than $ 0.1 0.1 |
Related party transactions
Related party transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related party transactions | Note 14 – Related party transactions Director Fees The Company pays quarterly board of director fees. As of December 31, 2022, $ 0.1 no Marketing Support Services On March 7, 2023, the Company entered into an agreement with Believeco to provide marketing support services for an interim period. A member of the Company’s board of directors is a partner at Believeco. As of September 30, 2023 marketing expense related to Believeco totaled $ 0.14 0.1 |
Income taxes
Income taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Note 15 – Income taxes For the three and nine months ended September 30, 2023 and September 30, 2022, the Company recorded income tax provision of less than $ 0.1 1% 21% |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Note 16 – Concentrations Major suppliers The Company sourced approximately 74% 70% Major customers Accounts receivable from three customers represented 88% 89% 63% 70% Credit risk As of September 30, 2023 and December 31, 2022, the Company’s cash and cash equivalents were deposited in accounts at several financial institutions and may maintain some balances in excess of federally insured limits. 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 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. |
Loss per share
Loss per share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Loss per share | Note 17 – Loss per share The Company presents loss per share on a basic and diluted basis. Basic loss per share is computed by dividing net loss by the weighted average number of common shares outstanding (“WASO”) during the period. For the three and nine months ended September 30, 2023 and 2022, the Company’s basic and diluted net loss per share attributable to common stockholders are the same as the Company generated a net loss and common stock equivalents are excluded from diluted net loss per share as they have an anti-dilutive impact. For the three and nine months ended September 30, 2023, potentially dilutive securities not included in the calculation of diluted net loss per share, because to do so would be anti-dilutive, are as follows: 9,433,584 14,768,125 6,545,338.45 8,222,787 2,611,842 6,412 9,433,584 14,768,125 3,200,271 6,412 . The following table sets forth basic and diluted net (loss) earnings per share attributable to common stockholders for the three and nine months ended September 30, 2023 and 2022 (in thousands, except share and per share amounts ) Schedule of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders 2023 2022 2023 2022 Three Months Ended Nine Months ended 2023 2022 2023 2022 Numerator: Net loss $ (1,621 ) $ (6,547 ) $ (8,069 ) $ (14,954 ) Adjusted net loss available to common stockholders $ (1,621 ) $ (6,547 ) $ (8,069 ) $ (14,954 ) Denominator: Basic WASO 30,975,566 29,364,712 30,679,905 29,339,918 Dilutive common stock equivalents — — — — Diluted WASO 30,975,566 29,364,712 30,679,905 29,339,918 Net loss per share attributable to common stockholders, basic $ (0.05 ) $ (0.22 ) $ (0.26 ) $ (0.51 ) Net loss per share attributable to common stockholders, diluted $ (0.05 ) $ (0.22 ) $ (0.26 ) $ (0.51 ) |
Subsequent events
Subsequent events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent events | Note 18 – Subsequent events In October 2023, the Company borrowed an additional $ 0.8 |
Nature of business and summar_2
Nature of business and summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Basis of presentation The Company’s condensed consolidated financial statements are prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reports and accounting principles generally accepted in the U.S. (“GAAP”). Accordingly, the Condensed Consolidated Balance Sheet as of December 31, 2022 has been derived from the audited consolidated financial statements at that date but does not include all of the information required by GAAP for complete financial statements. Results of operations for interim periods may not be representative of results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes in the Company’s Annual Report for the year ended December 31, 2022, filed with the SEC. |
Consolidation | Consolidation The condensed financial statements are presented on a consolidated basis and include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Use of estimates | Use of estimates The preparation of the condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On an ongoing basis, the Company evaluates these assumptions, judgments and estimates. Actual results may differ from these estimates. In the opinion of management, the condensed consolidated financial statements contain all adjustments necessary for a fair statement of the results of operations for the three and nine months ended September 30, 2023 and 2022, the financial position as of September 30, 2023 and December 31, 2022 and the cash flows for the nine months ended September 30, 2023 and 2022. |
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. The Company has continually incurred losses and has an accumulated deficit. Our continued operating losses raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date these condensed consolidated financial statements are issued. The Company does not currently expect it will be able to generate sufficient cash flow from operations to maintain sufficient liquidity to meet the required financial covenant in certain periods prior to maturity giving the lender the right to call the debt. The Company will need to either raise additional capital or obtain additional financing, and/or secure future waivers or amendments from its lenders, or accomplish some combination of these items to maintain sufficient liquidity. There can be no assurance that the Company will be successful in raising additional capital, securing future waivers and/or amendments from its lenders, renewing or refinancing its existing debt or securing new financing. If the Company is unsuccessful in doing so, it may need to reduce the scope of its operations, repay amounts owed to its lenders or sell certain assets. The Company is continuing to implement plans to achieve operating profitability, as well as implementing other strategic objectives to address liquidity. 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. Summary of significant accounting policies For additional information, please refer to the most recently filed Annual Report regarding the Company’s summary of significant accounting policies. |
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. Cash and cash equivalents are stated at cost, which approximates fair value because of the short-term nature of these instruments. The Company’s cash equivalents are held in government money market funds and at times may exceed federally insured limits. 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. At December 31, 2022, the Company had $ 8.0 |
Restricted cash | Restricted cash The Company was required to maintain a restricted cash balance of $ 6.3 no |
Advertising | Advertising The Company charges advertising costs to expense as incurred and such charges are included in SG&A expense. The Company’s advertising expenses consist primarily of online advertising, search costs, email advertising and radio advertising. In addition, the Company reimburses its customers and third parties for in store activities and record these costs as advertising expenses. Advertising costs were $ 2.4 4.8 6.1 10.0 |
Reclassification | Reclassification Certain prior period amounts within the condensed consolidated statements of operations related to share-based compensation, previously presented as a separate line item, have been reclassified into selling, general and administrative expense to conform with current period presentation. All share-based compensation in the current and prior periods is a selling, general and administrative expense. |
New Accounting Standards | New Accounting Standards Recently adopted ASU 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” In June 2016, the FASB issued ASU 2016-13, 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 was effective for the Company on January 1, 2023. The new standard did not have a material impact on the condensed consolidated financial statements for the three and nine months ended September 30, 2023. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Information about Revenue Channels | Information about the Company’s net sales by revenue channel is as follows (in thousands): Schedule of Information about Revenue Channels Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 E-commerce (1) $ 3,180 24 % $ 3,530 30 % $ 10,330 32 % $ 11,035 24 % Brick & Mortar (2) 2,249 17 % 1,342 11 % 5,669 17 % 9,632 21 % DTC 1,298 10 % 1,371 12 % 4,316 13 % 5,066 11 % International (3) 6,390 49 % 5,622 47 % 12,575 38 % 19,661 44 % Net Sales $ 13,117 100 % $ 11,865 100 % $ 32,890 100 % $ 45,394 100 % (1) The Company’s E-commerce channel includes two customers that amounted to greater than 10% 3.1 10.0 3.3 10.6 (2) The Company’s Brick & Mortar channel includes $ 4.3 10% 10% (3) One of the Company’s International customers that distributes products in China amounted to greater than 10% 6.0 11.0 10% 5.3 16.6 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories are summarized as follows (in thousands): Schedule of Inventories September 30, 2023 December 31, 2022 Food, treats and supplements $ 7,048 $ 10,212 Inventory packaging and supplies 1,160 1,699 Total Inventories 8,208 11,911 Inventory reserve (667 ) (1,654 ) Inventories, net $ 7,541 $ 10,257 |
Prepaid expenses and other cu_2
Prepaid expenses and other current assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Prepaid Expenses And Other Current Assets | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets are summarized as follows (in thousands): Schedule of Prepaid Expenses and Other Current Assets September 30, 2023 December 31, 2022 Total Prepaid expenses and other current assets $ 992 $ 1,051 |
Fixed assets (Tables)
Fixed assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | Fixed assets consist of the following (in thousands): Schedule of Fixed Assets Estimated Useful Life September 30, 2023 December 31, 2022 Equipment 2 5 $ 11 $ 7 Furniture and fixtures 2 5 221 221 Computer software, including website development 2 3 187 187 Computer equipment 1 2 109 129 Total fixed assets 528 544 Accumulated depreciation (270 ) (169 ) Fixed assets, net $ 258 $ 375 |
Intangible assets (Tables)
Intangible assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The Company’s intangible assets (in thousands) and related useful lives (in years) are as follows: Schedule of Intangible Assets September 30, 2023 December 31, 2022 Estimated useful life Gross carrying amount Accumulated amortization Net carrying amount Accumulated amortization Net carrying amount Customer relationships 7 $ 7,190 $ (3,885 ) $ 3,305 $ (3,115 ) $ 4,075 Trade name 15 7,500 (1,891 ) 5,609 (1,516 ) 5,984 Total intangible assets $ 14,690 $ (5,776 ) $ 8,914 $ (4,631 ) $ 10,059 |
Schedule of Future Amortization of Intangible Assets | The estimated future amortization of intangible assets over the remaining weighted average useful life of 8.3 Schedule of Future Amortization of Intangible Assets Remainder of 2023 $ 382 2024 1,527 2025 1,527 2026 1,494 2027 500 Thereafter 3,484 Total $ 8,914 |
Accrued and other liabilities (
Accrued and other liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued and Other Liabilities | Accrued and other liabilities consist of the following (in thousands): Schedule of Accrued and Other Liabilities September 30, 2023 December 31, 2022 Accrued taxes $ 107 $ 110 Accrued payroll and benefits 375 688 Accrued trade promotions and advertising 524 567 Accrued interest 181 84 Accrued commissions 687 385 Deferred revenue (8 ) 336 Short-term financing 341 165 Licenses and permits 72 32 Other 246 229 Total accrued and other liabilities $ 2,525 $ 2,596 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Components of Debt | The components of the Company’s debt consist of the following (in thousands): Schedule of Components of Debt September 30, 2023 December 31, 2022 Amount Rate Maturity date Amount Rate Maturity date Term loan, net $ 2,714 (2) 6/21/2026 $ — Line of credit, net $ 1,917 (3) 6/21/2025 $ 11,444 (1) 10/31/2024 Less current portion 1,917 — Total long-term debt $ 2,714 $ 11,444 (1) Interest at a variable rate of the daily U.S. Federal Funds Rate plus 375 3.75% (2) Interest at a fixed rate of 10.00% (3) Interest at a variable rate of the daily U.S. Federal Funds Rate plus 250 5.50% |
Schedule of Future Debt Maturities | Future debt maturities as of September 30, 2023 and for succeeding years are as follows (in thousands): Schedule of Future Debt Maturities Year ending December 31: 2024 $ — 2025 — 2026 5,000 Total $ 5,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Amount and Fair Value | Schedule of Carrying Amount and Fair Value September 30, 2023 December 31, 2022 Fair Value Hierarchy Carrying Amount Fair Value Carrying Amount Fair Value Term loan Level 3 (2) $ 2,714 $ 3,024 $ — $ — Line of credit Level 2 (1) $ 1,917 $ 1,917 $ 11,444 $ 11,444 Warrants liabilities Level 3 (2) $ 2,208 $ 869 $ — $ — (1) the fair value estimates are based upon observable market data (2) the fair value estimates are based on unobservable inputs reflecting management’s assumptions about inputs used in pricing the asset or liability |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Warrants | |
Schedule of Outstanding Warrants | The following summarizes the Company’s outstanding warrants to purchase shares of the Company’s common stock as of and for the years ended September 30, 2023 and December 31, 2022: Schedule of Outstanding Warrants Warrants Weighted Average Exercise Price Warrants outstanding as of December 31, 2022 9,433,584 $ 5.92 Issued — $ — Exercised — $ — Terminated/Expired — $ — Warrants outstanding as of March 31, 2023 9,433,584 $ 5.92 Issued 14,768,125 $ 0.26 Exercised — $ — Terminated/Expired — $ — Warrants outstanding as of June 30, 2023 24,201,709 $ 5.92 Issued — $ — Exercised — $ — Terminated/Expired — $ — Warrants outstanding as of September 30, 2023 24,201,709 $ 5.92 |
Schedule of Fair Value Measurement Inputs | The Alphia warrant liabilities are determined using a risk-neutral Monte Carlo simulation based approach, a Level 3 valuation. The significant inputs to the warrant liabilities are as follows: Schedule of Fair Value Measurement Inputs September 30, 2023 First Tranche Warrant Second Tranche Warrant Exercise price $ 0.26 $ 0.26 Stock price $ 0.21 $ 0.21 Volatility 66.0 % 66.0 % Time to maturity 5 5 Risk-free rate 5.55 % 4.63 % Dividend yield — % — % |
Schedule of Warrant Liability Activity | The following table summarizes the Alphia warrant liability activity for three and nine months ended September 30, 2023: Schedule of Warrant Liability Activity Fair value of warrant liabilities as of March 31, 2023 $ — Warrant liabilities incurred 2,208 Loss (gain) in change of fair value of warrant liabilities — Fair value of warrant liabilities as of June 30, 2023 $ 2,208 Warrant liabilities incurred — Loss (gain) in change of fair value of warrant liabilities (1,339 ) Fair value of warrant liabilities as of September 30, 2023 $ 869 |
Share-based compensation (Table
Share-based compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Options Granted and Outstanding | The following table provides detail of the options granted and outstanding (dollars in thousands): Schedule of Options Granted and Outstanding Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Options outstanding as of December 31, 2022 3,071,187 $ 5.39 7.2 $ — Granted — — Forfeited/Expired (178,656 ) 4.05 Options outstanding as of March 31, 2023 2,892,531 $ 5.47 6.3 $ — Granted — — Forfeited/Expired (280,689 ) 4.69 Options outstanding as of June 30, 2023 2,611,842 $ 5.51 6.2 $ — Granted — — Forfeited/Expired (180,948 ) $ 4.76 Options outstanding as of September 30, 2023 2,430,894 $ 5.56 5.4 $ — Options exercisable as of September 30, 2023 2,205,182 $ 5.71 5.1 $ — |
Loss per share (Tables)
Loss per share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders | The following table sets forth basic and diluted net (loss) earnings per share attributable to common stockholders for the three and nine months ended September 30, 2023 and 2022 (in thousands, except share and per share amounts ) Schedule of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders 2023 2022 2023 2022 Three Months Ended Nine Months ended 2023 2022 2023 2022 Numerator: Net loss $ (1,621 ) $ (6,547 ) $ (8,069 ) $ (14,954 ) Adjusted net loss available to common stockholders $ (1,621 ) $ (6,547 ) $ (8,069 ) $ (14,954 ) Denominator: Basic WASO 30,975,566 29,364,712 30,679,905 29,339,918 Dilutive common stock equivalents — — — — Diluted WASO 30,975,566 29,364,712 30,679,905 29,339,918 Net loss per share attributable to common stockholders, basic $ (0.05 ) $ (0.22 ) $ (0.26 ) $ (0.51 ) Net loss per share attributable to common stockholders, diluted $ (0.05 ) $ (0.22 ) $ (0.26 ) $ (0.51 ) |
Nature of business and summar_3
Nature of business and summary of significant accounting policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Cash and Cash Equivalents [Line Items] | |||||
Restricted cash | $ 6,300,000 | ||||
Advertising expense | 2,400,000 | $ 4,800,000 | 6,100,000 | $ 10,000,000 | |
Revolving Credit Facility [Member] | |||||
Cash and Cash Equivalents [Line Items] | |||||
Restricted cash | $ 0 | $ 0 | 6,300,000 | ||
Money Market Funds [Member] | |||||
Cash and Cash Equivalents [Line Items] | |||||
Cash | $ 8,000,000 |
Schedule of Information about R
Schedule of Information about Revenue Channels (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 13,117 | $ 11,865 | $ 32,890 | $ 45,394 | |
Revenue from Contract with Customer Benchmark [Member] | Sales Channel Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | 100% | 100% | 100% | 100% | |
E Commerce [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [1] | $ 3,180 | $ 3,530 | $ 10,330 | $ 11,035 |
E Commerce [Member] | Revenue from Contract with Customer Benchmark [Member] | Sales Channel Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | [1] | 24% | 30% | 32% | 24% |
Brick And Mortar [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [2] | $ 2,249 | $ 1,342 | $ 5,669 | $ 9,632 |
Brick And Mortar [Member] | Revenue from Contract with Customer Benchmark [Member] | Sales Channel Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | [2] | 17% | 11% | 17% | 21% |
Direct To Consumer [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 1,298 | $ 1,371 | $ 4,316 | $ 5,066 | |
Direct To Consumer [Member] | Revenue from Contract with Customer Benchmark [Member] | Sales Channel Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | 10% | 12% | 13% | 11% | |
International [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [3] | $ 6,390 | $ 5,622 | $ 12,575 | $ 19,661 |
International [Member] | Revenue from Contract with Customer Benchmark [Member] | Sales Channel Concentration Risk [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | [3] | 49% | 47% | 38% | 44% |
[1]The Company’s E-commerce channel includes two customers that amounted to greater than 10% 3.1 10.0 3.3 10.6 4.3 10% 10% 10% 6.0 11.0 10% 5.3 16.6 |
Schedule of Information about_2
Schedule of Information about Revenue Channels (Details) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 13,117 | $ 11,865 | $ 32,890 | $ 45,394 | |
E Commerce [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [1] | 3,180 | 3,530 | 10,330 | 11,035 |
Brick And Mortar [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [2] | 2,249 | 1,342 | 5,669 | 9,632 |
International [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | [3] | 6,390 | 5,622 | 12,575 | 19,661 |
Customer Concentration Risk [Member] | Two Customers [Member] | E Commerce [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 3,100 | 3,300 | 10,000 | 10,600 | |
Customer Concentration Risk [Member] | One Customers [Member] | Brick And Mortar [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | 4,300 | ||||
Customer Concentration Risk [Member] | One Customers [Member] | International [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 11,000 | $ 16,600 | |||
Customer Concentration Risk [Member] | One Customer [Member] | International [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Net sales | $ 6,000 | $ 5,300 | |||
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | Two Customers [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | 10% | 10% | 10% | 10% | |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | One Customers [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | 10% | ||||
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | One Customers [Member] | Brick And Mortar [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | 10% | 10% | |||
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | One Customer [Member] | International [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk, percentage | 10% | 10% | |||
[1]The Company’s E-commerce channel includes two customers that amounted to greater than 10% 3.1 10.0 3.3 10.6 4.3 10% 10% 10% 6.0 11.0 10% 5.3 16.6 |
Revenue (Details Narrative)
Revenue (Details Narrative) | 9 Months Ended |
Sep. 30, 2023 Integer | |
Revenue from Contract with Customer [Abstract] | |
Number of revenue channels | 4 |
Schedule of Inventories (Detail
Schedule of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Food, treats and supplements | $ 7,048 | $ 10,212 |
Inventory packaging and supplies | 1,160 | 1,699 |
Total Inventories | 8,208 | 11,911 |
Inventory reserve | (667) | (1,654) |
Inventories, net | $ 7,541 | $ 10,257 |
Schedule of Prepaid Expenses an
Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Prepaid Expenses And Other Current Assets | ||
Prepaid expenses and other current assets | $ 992 | $ 1,051 |
Schedule of Fixed Assets (Detai
Schedule of Fixed Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | $ 528 | $ 544 |
Accumulated depreciation | (270) | (169) |
Fixed assets, net | 258 | 375 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | $ 11 | 7 |
Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 2 years | |
Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 5 years | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | $ 221 | 221 |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 2 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 5 years | |
Computer Software, Intangible Asset [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | $ 187 | 187 |
Computer Software, Intangible Asset [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 2 years | |
Computer Software, Intangible Asset [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 3 years | |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | $ 109 | $ 129 |
Computer Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 1 year | |
Computer Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | 2 years |
Fixed assets (Details Narrative
Fixed assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 40 | $ 40 | $ 120 | $ 120 |
Schedule of Intangible Assets (
Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 8 years 3 months 18 days | |
Gross carrying amount | $ 14,690 | |
Accumulated amortization | (5,776) | $ (4,631) |
Net carrying amount | $ 8,914 | 10,059 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 7 years | |
Gross carrying amount | $ 7,190 | |
Accumulated amortization | (3,885) | (3,115) |
Net carrying amount | $ 3,305 | 4,075 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life | 15 years | |
Gross carrying amount | $ 7,500 | |
Accumulated amortization | (1,891) | (1,516) |
Net carrying amount | $ 5,609 | $ 5,984 |
Schedule of Future Amortization
Schedule of Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2023 | $ 382 | |
2024 | 1,527 | |
2025 | 1,527 | |
2026 | 1,494 | |
2027 | 500 | |
Thereafter | 3,484 | |
Total | $ 8,914 | $ 10,059 |
Intangible assets (Details Narr
Intangible assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 380 | $ 1,150 | $ 380 | $ 1,150 |
Remaining weighted average useful life | 8 years 3 months 18 days | 8 years 3 months 18 days |
Schedule of Accrued and Other L
Schedule of Accrued and Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued taxes | $ 107 | $ 110 |
Accrued payroll and benefits | 375 | 688 |
Accrued trade promotions and advertising | 524 | 567 |
Accrued interest | 181 | 84 |
Accrued commissions | 687 | 385 |
Deferred revenue | (8) | 336 |
Short-term financing | 341 | 165 |
Licenses and permits | 72 | 32 |
Other | 246 | 229 |
Total accrued and other liabilities | $ 2,525 | $ 2,596 |
Schedule of Components of Debt
Schedule of Components of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | ||
Line of Credit Facility [Line Items] | ||||
Line of credit, net | $ 5,000 | |||
Less current portion | 1,917 | |||
Total long-term debt | 2,714 | 11,444 | ||
Term Loan [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit, net | 2,714 | [1] | ||
Line of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit, net | $ 1,917 | $ 11,444 | [2] | |
[1]Interest at a fixed rate of 10.00% 375 3.75% |
Schedule of Components of Deb_2
Schedule of Components of Debt (Details) (Parenthetical) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Line of Credit [Member] | Fed Funds Effective Rate Overnight Index Swap Rate [Member] | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable interest rate | 25,000% | 37,500% |
Floor interest rate | 5.50% | 3.75% |
Term Loan [Member] | ||
Line of Credit Facility [Line Items] | ||
Interest at fixed rate | 10% |
Schedule of Future Debt Maturit
Schedule of Future Debt Maturities (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2024 | |
2025 | |
2026 | 5,000 |
Total | $ 5,000 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||
Jun. 21, 2023 | Oct. 01, 2022 | Mar. 25, 2022 | Jan. 06, 2021 | Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jan. 01, 2023 | Oct. 24, 2022 | Mar. 31, 2022 | Jan. 01, 2022 | Aug. 13, 2021 | Aug. 12, 2021 | ||||
Debt Instrument [Line Items] | ||||||||||||||||||
Payments on revolving line of credit | $ 16,291,000 | $ 5,000,000 | ||||||||||||||||
Debt | $ 5,000,000 | 5,000,000 | ||||||||||||||||
Line of credit | 1,917,000 | 1,917,000 | ||||||||||||||||
Wintrust Receivables Credit Facility [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Face amount advance (up to) | 75% | |||||||||||||||||
Interest rate per annum | 5.50% | |||||||||||||||||
Initial term of agreement | 2 years | |||||||||||||||||
Renewal term of agreement | 60 days | |||||||||||||||||
Accounts receivable, net | 3,500,000 | 6,500,000 | ||||||||||||||||
Line of credit | 2,600,000 | 4,900,000 | ||||||||||||||||
Line of credit | 1,900,000 | 1,900,000 | ||||||||||||||||
Wintrust Receivables Credit Facility [Member] | Maximum [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Eligible customer invoices purchased, maximum | $ 4,800,000 | |||||||||||||||||
Prime Rate [Member] | Wintrust Receivables Credit Facility [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Basis spread on variable interest rate | 2.50% | |||||||||||||||||
Term Loan [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt | $ 2,714,000 | [1] | $ 2,714,000 | [1] | ||||||||||||||
Interest rate per annum | 10% | 10% | ||||||||||||||||
Term Loan [Member] | Old Plank Trail Community Bank NA [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum borrowing capacity | $ 6,000,000 | |||||||||||||||||
Line of Credit [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt | $ 1,917,000 | $ 1,917,000 | 11,444,000 | [2] | ||||||||||||||
Line of Credit [Member] | Wintrust Credit Facility [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum borrowing capacity | $ 13,500,000 | $ 7,500,000 | $ 6,000,000 | |||||||||||||||
Floor interest rate | 3.75% | |||||||||||||||||
Covenant, minimum liquidity required | 8,500,000 | 8,500,000 | ||||||||||||||||
Restricted cash | $ 6,000,000 | $ 6,300,000 | $ 6,900,000 | $ 7,200,000 | ||||||||||||||
Payments on revolving line of credit | $ 13,500,000 | |||||||||||||||||
Debt | 0 | $ 0 | 11,400,000 | |||||||||||||||
Debt issuance costs | $ 200,000 | |||||||||||||||||
Line of Credit [Member] | Fed Funds Effective Rate Overnight Index Swap Rate [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Basis spread on variable interest rate | 25,000% | 37,500% | ||||||||||||||||
Floor interest rate | 5.50% | 3.75% | ||||||||||||||||
Line of Credit [Member] | Fed Funds Effective Rate Overnight Index Swap Rate [Member] | Wintrust Credit Facility [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Basis spread on variable interest rate | 375% | |||||||||||||||||
Line of Credit [Member] | Old Plank Trail Community Bank NA [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Maximum borrowing capacity | $ 6,000,000 | |||||||||||||||||
Floor interest rate | 2.50% | |||||||||||||||||
Line of Credit [Member] | Old Plank Trail Community Bank NA [Member] | Wintrust Credit Facility [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Fixed charge coverage ratio | 0.0125 | |||||||||||||||||
Liquidity required (no less than) | $ 12,000,000 | $ 13,000,000 | ||||||||||||||||
Line of Credit [Member] | Old Plank Trail Community Bank NA [Member] | London Interbank Offered Rate LIBOR1 [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Basis spread on variable interest rate | 25,000% | |||||||||||||||||
Line of Credit [Member] | Old Plank Trail Community Bank NA [Member] | Fed Funds Effective Rate Overnight Index Swap Rate [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Basis spread on variable interest rate | 28,500% | |||||||||||||||||
Secured Debt [Member] | Alphia Term Loan Facility [Member] | Line of Credit [Member] | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt | 2,700,000 | $ 2,700,000 | ||||||||||||||||
Debt issuance costs | 200,000 | 200,000 | ||||||||||||||||
Interest rate per annum | 10% | |||||||||||||||||
Original principal amount | $ 5,000,000 | |||||||||||||||||
Line of credit | 5,000,000 | 5,000,000 | ||||||||||||||||
Debt discounts | $ 2,500,000 | $ 2,500,000 | ||||||||||||||||
[1]Interest at a fixed rate of 10.00% 375 3.75% |
Schedule of Carrying Amount and
Schedule of Carrying Amount and Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Term Loan [Member] | Fair Value, Inputs, Level 3 [Member] | Reported Value Measurement [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt | [1] | $ 2,714 | |
Term Loan [Member] | Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt | [1] | 3,024 | |
Line of Credit [Member] | Fair Value, Inputs, Level 2 [Member] | Reported Value Measurement [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt | [2] | 1,917 | 11,444 |
Line of Credit [Member] | Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value Measurement [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt | [2] | 1,917 | 11,444 |
Warrants Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | Reported Value Measurement [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrants liabilities | [1] | 2,208 | |
Warrants Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value Measurement [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Warrants liabilities | [1] | $ 869 | |
[1]the fair value estimates are based on unobservable inputs reflecting management’s assumptions about inputs used in pricing the asset or liability[2]the fair value estimates are based upon observable market data |
Commitments and contingencies (
Commitments and contingencies (Details Narrative) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Purchase obligation | $ 0 | $ 0 |
Schedule of Outstanding Warrant
Schedule of Outstanding Warrants (Details) - $ / shares | 3 Months Ended | ||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | |
Warrants | |||
Warrants outstanding, beginning balance | 24,201,709 | 9,433,584 | 9,433,584 |
Weighted Average Exercise Price, Warrants outstanding Beginning Balance | $ 5.92 | $ 5.92 | $ 5.92 |
Warrants, issued | 14,768,125 | ||
Weighted Average Exercise Price, Warrants Issued | 0.26 | ||
Warrants, Exercised | |||
Weighted Average Exercise Price, Warrants Exercised | |||
Warrants, Terminated/Expired | |||
Weighted Average Exercise Price, Warrants Terminated/Expired | |||
Warrants outstanding, ending balance | 24,201,709 | 24,201,709 | 9,433,584 |
Weighted Average Exercise Price, Warrants outstanding Ending Balance | $ 5.92 | $ 5.92 | $ 5.92 |
Schedule of Fair Value Measurem
Schedule of Fair Value Measurement Inputs (Details) | Sep. 30, 2023 |
First Tranche Warrant [Member] | Measurement Input, Exercise Price [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant liabilities, measurement input | 0.26 |
First Tranche Warrant [Member] | Measurement Input, Share Price [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant liabilities, measurement input | 0.21 |
First Tranche Warrant [Member] | Measurement Input, Price Volatility [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant liabilities, measurement input | 66 |
First Tranche Warrant [Member] | Measurement Input, Expected Term [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant liabilities, measurement input | 5 |
First Tranche Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant liabilities, measurement input | 5.55 |
First Tranche Warrant [Member] | Measurement Input, Expected Dividend Rate [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant liabilities, measurement input | |
Second Tranche Warrant [Member] | Measurement Input, Exercise Price [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant liabilities, measurement input | 0.26 |
Second Tranche Warrant [Member] | Measurement Input, Share Price [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant liabilities, measurement input | 0.21 |
Second Tranche Warrant [Member] | Measurement Input, Price Volatility [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant liabilities, measurement input | 66 |
Second Tranche Warrant [Member] | Measurement Input, Expected Term [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant liabilities, measurement input | 5 |
Second Tranche Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant liabilities, measurement input | 4.63 |
Second Tranche Warrant [Member] | Measurement Input, Expected Dividend Rate [Member] | |
Class of Warrant or Right [Line Items] | |
Warrant liabilities, measurement input |
Schedule of Warrant Liability A
Schedule of Warrant Liability Activity (Details) - Warrant [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Fair value of warrant liabilities, beginning balance | $ 2,208 | ||
Warrant liabilities incurred | 2,208 | ||
Loss (gain) in change of fair value of warrant liabilities | (1,339) | $ (1,300) | |
Fair value of warrant liabilities, ending balance | $ 869 | $ 2,208 | $ 869 |
Warrants (Details Narrative)
Warrants (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Jun. 21, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | |
Class of Warrant or Right [Line Items] | |||||||
Warrants outstanding, intrinsic value | $ 0 | $ 0 | |||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Warrant [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Loss (gain) in change of fair value of warrant liabilities | $ (1,339,000) | $ (1,300,000) | |||||
Line of Credit [Member] | Fair Value, Inputs, Level 3 [Member] | Reported Value Measurement [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Warrants liabilities | $ 2,200,000 | $ 2,200,000 | |||||
Secured Debt [Member] | Line of Credit [Member] | Alphia Term Loan Facility [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Number of warrants converted | 14,768,125 | 14,768,125 | 14,768,125 | ||||
Term loan remains outstanding period | 12 months | ||||||
First Tranche Warrant [Member] | Secured Debt [Member] | Line of Credit [Member] | Alphia Term Loan Facility [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Number of warrants converted | 6,545,338.45 | 6,545,338.45 | 6,545,338.45 | ||||
Common stock, par value | $ 0.001 | ||||||
Price per share | $ 0.26 | ||||||
Second Tranche Warrant [Member] | Secured Debt [Member] | Line of Credit [Member] | Alphia Term Loan Facility [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Number of warrants converted | 8,222,787 | 8,222,787 | 8,222,787 | ||||
Price per share | $ 0.26 | ||||||
Warrants expiration | Jun. 21, 2028 |
Schedule of Options Granted and
Schedule of Options Granted and Outstanding (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||||
Options Outstanding, Beginning Balance | 2,611,842 | 2,892,531 | 3,071,187 | |
Weighted Average Exercise Price, Beginning Balance | $ 5.51 | $ 5.47 | $ 5.39 | |
Weighted Average Remaining Contractual Life (Years) | 5 years 4 months 24 days | 6 years 2 months 12 days | 6 years 3 months 18 days | 7 years 2 months 12 days |
Aggregate Intrinsic Value, Exercisable | ||||
Options, Granted | ||||
Weighted Average Exercise Price, Granted | ||||
Options, Forfeited/Expired | (180,948) | (280,689) | (178,656) | |
Weighted Average Exercise Price, Forfeited/Expired | $ 4.76 | $ 4.69 | $ 4.05 | |
Weighted Average Exercise Price, Beginning Balance | $ 5.56 | $ 5.51 | $ 5.47 | $ 5.39 |
Options Outstanding, Ending Balance | 2,430,894 | 2,611,842 | 2,892,531 | 3,071,187 |
Weighted Average Exercise Price, Ending Balance | $ 5.56 | $ 5.51 | $ 5.47 | $ 5.39 |
Options, Exercisable | 2,205,182 | |||
Weighted Average Exercise Price, Exercisable | $ 5.71 | |||
Weighted Average Remaining Contractual Life (Years) | 5 years 1 month 6 days |
Share-based compensation (Detai
Share-based compensation (Details Narrative) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||
Nov. 11, 2019 | Jan. 31, 2023 | Feb. 28, 2022 | Sep. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jan. 01, 2023 | Jan. 01, 2022 | Jan. 01, 2021 | Nov. 10, 2019 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Share-based compensation | $ 0.5 | $ 0.6 | $ 1.6 | $ 2.5 | |||||||||
Share-Based Payment Arrangement, Option [Member] | Minimum [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Award vesting period | 2 years | ||||||||||||
Share-Based Payment Arrangement, Option [Member] | Maximum [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Award vesting period | 3 years | ||||||||||||
TwoThousand Nineteen Incentive Award Plan [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Authorized issuance shares of common stock | 1,500,000 | 8,557,663 | 5,614,637 | 2,700,000 | 1,083,334 | ||||||||
Percent of common stock outstanding | 10% | ||||||||||||
Authorized common stock issuance | 9,000,000 | ||||||||||||
TwoThousand Nineteen Incentive Award Plan [Member] | Share-Based Payment Arrangement, Option [Member] | Maximum [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Expiration period | 10 years | ||||||||||||
TwoThousand Nineteen Incentive Award Plan [Member] | Restricted Stock [Member] | Board of Directors Chairman [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Share-based compensation | $ 0.5 | $ 0.5 | $ 0.1 | $ 0.1 | |||||||||
Awards granted | 892,860 | 218,345 | 18,021 | 65,555 | |||||||||
TwoThousand Nineteen Incentive Award Plan [Member] | Restricted Stock [Member] | Executives and Employees [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Share-based compensation | $ 0.1 | ||||||||||||
Awards granted | 200,000 | ||||||||||||
TwoThousand Nineteen Incentive Award Plan [Member] | Restricted Stock [Member] | Two Member of Board of Directors Chairman [Member] | |||||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||||||||||
Share-based compensation | $ 0.3 | ||||||||||||
Awards granted | 1,500,000 |
Employee benefit plans (Details
Employee benefit plans (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Retirement Benefits [Abstract] | ||||
Contribution expenses | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
Related party transactions (Det
Related party transactions (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | ||
Accounts payable | $ 7,807 | $ 2,932 |
Director [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable | $ 100 | |
Director [Member] | Believeco [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable | 100 | |
Marketing expense | $ 140 |
Income taxes (Details Narrative
Income taxes (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Income tax provision | $ 1 | $ 4 | ||
Effective tax rate | 1% | 1% | 1% | 1% |
Federal statutory rate | 21% | |||
Maximum [Member] | ||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||
Income tax provision | $ 100 | $ 100 | $ 100 | $ 100 |
Concentrations (Details Narrati
Concentrations (Details Narrative) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Inventories [Member] | Supplier Concentration Risk [Member] | Three Vendors [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 74% | 70% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 88% | 89% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 63% | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Four Customers [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 70% |
Schedule of Basic and Diluted N
Schedule of Basic and Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||||||
Net loss | $ (1,621) | $ (2,964) | $ (3,484) | $ (6,547) | $ (4,367) | $ (4,040) | $ (8,069) | $ (14,954) |
Adjusted net loss available to common stockholders | $ (1,621) | $ (6,547) | $ (8,069) | $ (14,954) | ||||
Basic WASO | 30,975,566 | 29,364,712 | 30,679,905 | 29,339,918 | ||||
Dilutive common stock equivalents | ||||||||
Diluted WASO | 30,975,566 | 29,364,712 | 30,679,905 | 29,339,918 | ||||
Net loss per share attributable to common stockholders, basic | $ (0.05) | $ (0.22) | $ (0.26) | $ (0.51) | ||||
Net loss per share attributable to common stockholders, diluted | $ (0.05) | $ (0.22) | $ (0.26) | $ (0.51) |
Loss per share (Details Narrati
Loss per share (Details Narrative) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Jun. 21, 2023 | |
Secured Debt [Member] | Line of Credit [Member] | Alphia Term Loan Facility [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of securities called by warrants or rights | 14,768,125 | 14,768,125 | 14,768,125 | |
Secured Debt [Member] | Line of Credit [Member] | Alphia Term Loan Facility [Member] | First Tranche Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of securities called by warrants or rights | 6,545,338.45 | 6,545,338.45 | 6,545,338.45 | |
Secured Debt [Member] | Line of Credit [Member] | Alphia Term Loan Facility [Member] | Second Tranche Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of securities called by warrants or rights | 8,222,787 | 8,222,787 | 8,222,787 | |
Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive common stock equivalents | 9,433,584 | 9,433,584 | 9,433,584 | |
ShareBased Payment Arrangement Employee Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive common stock equivalents | 2,611,842 | 3,200,271 | 2,611,842 | |
ShareBased Payment Arrangement Other Options [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive common stock equivalents | 6,412 | 6,412 | 6,412 |
Subsequent events (Details Narr
Subsequent events (Details Narrative) $ in Millions | 1 Months Ended |
Oct. 31, 2023 USD ($) | |
Wintrust Credit Facility [Member] | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Additional borrowing from lines of credit | $ 0.8 |