Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 24, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 000-54677 | ||
Entity Registrant Name | CV Sciences, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 80-0944974 | ||
Entity Address, Address Line One | 9530 Padgett Street, Suite 107 | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92126 | ||
City Area Code | 866 | ||
Local Phone Number | 290-2157 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 6 | ||
Entity Common Stock, Shares Outstanding | 163,228,469 | ||
Documents Incorporated by Reference | Certain portions of the registrant’s definitive proxy statement to be delivered to its shareholders in connection with the registrant’s 2024 Annual Meeting of Shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K. Such definitive proxy statement will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K. | ||
Entity Central Index Key | 0001510964 | ||
Amendment Flag | false | ||
Document Financial Statement Error Correction | false | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
Auditor Firm ID | 200 | ||
Auditor Name | HASKELL & WHITE LLP | ||
Auditor Location | Irvine, California |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | HASKELL & WHITE LLP |
Auditor Location | Irvine, California |
Auditor Name | HASKELL & WHITE LLP |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 1,317 | $ 611 |
Accounts receivable, net | 431 | 766 |
Inventory | 5,655 | 6,563 |
Prepaid expenses and other | 535 | 3,190 |
Total current assets | 7,938 | 11,130 |
Property and equipment, net | 379 | 575 |
Right of use assets | 167 | 275 |
Intangibles, net | 78 | 251 |
Goodwill | 342 | 0 |
Other assets | 296 | 505 |
Total assets | 9,200 | 12,736 |
Current liabilities: | ||
Accounts payable | 2,309 | 2,284 |
Accrued expenses | 3,422 | 9,690 |
Operating lease liability - current | 130 | 117 |
Debt, net of debt discounts | 254 | 1,223 |
Total current liabilities | 6,115 | 13,314 |
Operating lease liability - net of current portion | 58 | 188 |
Deferred tax liability | 19 | 11 |
Other liabilities | 105 | 0 |
Total liabilities | 6,297 | 13,513 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity (deficit) | ||
Preferred stock, par value $0.0001; 10,000 shares authorized; 1 shares issued as of December 31, 2023 and 2022; no shares outstanding as of December 31, 2023 and 2022 | ||
Common stock, par value $0.0001; 790,000 shares authorized; 161,678 and 152,104 shares issued and outstanding as of December 31, 2023 and 2022, respectively | 16 | 15 |
Additional paid-in capital | 87,464 | 86,897 |
Accumulated deficit | (84,587) | (87,689) |
Accumulated other comprehensive income | 10 | 0 |
Total stockholders' equity (deficit) | 2,903 | (777) |
Total liabilities and stockholders' equity (deficit) | $ 9,200 | $ 12,736 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Preferred stock authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock issued (in shares) | 1,000 | 1,000 |
Preferred stock outstanding (in shares) | 0 | 0 |
Common stock par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (in shares) | 790,000,000 | 790,000,000 |
Common stock issued (in shares) | 161,678,000 | 152,104,000 |
Common stock outstanding (in shares) | 161,678,000 | 152,104,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
Product sales, net | $ 16,004,000 | $ 16,205,000 |
Cost of goods sold | 8,919,000 | 10,655,000 |
Gross profit | 7,085,000 | 5,550,000 |
Operating expenses: | ||
Research and development | 151,000 | 307,000 |
Selling, general and administrative | 9,745,000 | 12,090,000 |
Benefit from reversal of accrued payroll taxes (Note 13) | (6,171,000) | 0 |
Total operating expenses | 3,725,000 | 12,397,000 |
Operating income (loss) | 3,360,000 | (6,847,000) |
Gain on debt extinguishment | 0 | (127,000) |
Other expense, net | 264,000 | 1,541,000 |
Income (loss) before income taxes | 3,096,000 | (8,261,000) |
Income tax benefit | (6,000) | (47,000) |
Net income (loss) | 3,102,000 | (8,214,000) |
Deemed dividend for beneficial conversion of Series A Convertible Preferred Stock | 0 | 920,000 |
Net income (loss) attributable to common stockholders | 3,102,000 | (9,134,000) |
Net income (loss) attributable to common stockholders | $ 3,102,000 | $ (9,134,000) |
Weighted average common shares outstanding | ||
Basic | 153,954 | 138,034 |
Diluted | 153,955 | 138,034 |
Net income (loss) per share attributable to common stockholders | ||
Basic | $ 0.02 | $ (0.07) |
Diluted | $ 0.02 | $ (0.07) |
Revenue, Product and Service [Extensible List] | us-gaap:ProductMember | us-gaap:ProductMember |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 3,102,000 | $ (8,214,000) |
Other comprehensive income: | ||
Foreign currency translation adjustment | 10,000 | 0 |
Total comprehensive income (loss) | $ 3,112,000 | $ (8,214,000) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Total | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income |
Beginning balance (in shares) at Dec. 31, 2021 | 0 | 112,482,000 | ||||
Beginning balance at Dec. 31, 2021 | $ 3,543,000 | $ 0 | $ 11,000 | $ 83,007,000 | $ (79,475,000) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of preferred stock and common stock warrants, net of issuance costs (in shares) | 1,000 | |||||
Issuance of preferred stock and common stock warrants, net of issuance costs | 554,000 | $ 280,000 | 274,000 | |||
Conversion of preferred stock (in shares) | (1,000) | 10,000,000 | ||||
Conversion of preferred stock | $ (280,000) | $ 1,000 | 279,000 | |||
Beneficial conversion charge for preferred stock conversion | (920,000) | 920,000 | ||||
Deemed dividend | $ 920,000 | (920,000) | ||||
Issuance of common stock from note conversion (in shares) | 24,126,000 | |||||
Issuance of common stock from note conversion | 1,946,000 | $ 2,000 | 1,944,000 | |||
Issuance of common stock for services (in shares) | 5,496,000 | |||||
Issuance of common stock for services | 385,000 | $ 1,000 | 384,000 | |||
Stock-based compensation | 1,009,000 | 1,009,000 | ||||
Foreign currency translation adjustment | 0 | |||||
Net income (loss) | (8,214,000) | (8,214,000) | ||||
Ending balance (in shares) at Dec. 31, 2022 | 0 | 152,104,000 | ||||
Ending balance at Dec. 31, 2022 | (777,000) | $ 0 | $ 15,000 | 86,897,000 | (87,689,000) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock for services (in shares) | 2,500,000 | |||||
Issuance of common stock for services | 100,000 | 100,000 | ||||
Issuance of common stock for acquisition (in shares) | 7,074,000 | |||||
Issuance of common stock for acquisition | 250,000 | $ 1,000 | 249,000 | |||
Stock-based compensation | 218,000 | 218,000 | ||||
Foreign currency translation adjustment | 10,000 | 10,000 | ||||
Net income (loss) | 3,102,000 | 3,102,000 | ||||
Ending balance (in shares) at Dec. 31, 2023 | 0 | 161,678,000 | ||||
Ending balance at Dec. 31, 2023 | $ 2,903,000 | $ 0 | $ 16,000 | $ 87,464,000 | $ (84,587,000) | $ 10,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOW - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
OPERATING ACTIVITIES | ||
Net income (loss) | $ 3,102,000 | $ (8,214,000) |
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities: | ||
Depreciation and amortization | 235,000 | 992,000 |
Stock-based compensation | 218,000 | 1,009,000 |
Note discount and interest expense | 112,000 | 1,563,000 |
Non-cash lease expense, net | 108,000 | 70,000 |
Impairment of goodwill and intangible assets | 251,000 | 1,234,000 |
Benefit from reversal of accrued payroll tax (Note 13) | (6,171,000) | 0 |
Gain on debt extinguishment | 0 | (127,000) |
Employee retention credit benefit | 0 | (2,516,000) |
Loss on disposal of fixed assets | 0 | 150,000 |
Deferred taxes | (14,000) | (51,000) |
Other | 407,000 | 449,000 |
Change in operating assets and liabilities: | ||
Accounts receivable, net | 352,000 | 1,065,000 |
Inventory | 1,042,000 | 2,061,000 |
Prepaid expenses and other | 2,931,000 | 1,680,000 |
Accounts payable and accrued expenses | (320,000) | (1,250,000) |
Net cash flows provided by (used in) operating activities | 2,253,000 | (1,885,000) |
INVESTING ACTIVITIES | ||
Acquisition of business, net of cash acquired | (156,000) | 0 |
Net cash flows used in investing activities | (156,000) | 0 |
FINANCING ACTIVITIES | ||
Repayment of note payable | (1,117,000) | (953,000) |
Repayment of unsecured debt | (274,000) | (336,000) |
Proceeds from issuance of preferred stock and common stock warrants | 0 | 700,000 |
Issuance costs related to issuance of preferred stock and common stock warrants | 0 | (146,000) |
Proceeds from issuance of convertible notes | 0 | 1,000,000 |
Proceeds from note payable | 0 | 2,000,000 |
Repayment of convertible notes | 0 | (675,000) |
Net cash flows provided by (used in) financing activities | (1,391,000) | 1,121,000 |
Net increase (decrease) in cash | 706,000 | (764,000) |
Cash, beginning of year | 611,000 | 1,375,000 |
Cash, end of year | 1,317,000 | 611,000 |
Supplemental cash flow disclosures: | ||
Interest paid | 7,000 | 6,000 |
Income taxes paid | 0 | 2,000 |
Supplemental disclosure of non-cash transactions: | ||
Purchase of insurance through issuance of note payable (Note 8) | 259,000 | 245,000 |
Conversion of note into common shares | 0 | (1,284,000) |
Services paid with common stock | 100,000 | 385,000 |
Fair value of assets acquired, excluding cash | 275,000 | 0 |
Liabilities assumed | (77,000) | 0 |
Goodwill on acquisition | 336,000 | 0 |
Common stock consideration | (250,000) | 0 |
Holdback liability | (18,000) | 0 |
Contingent consideration | (88,000) | 0 |
Deferred tax liabilities | (22,000) | 0 |
Cash paid for acquisition | 156,000 | 0 |
Convertible Debt | ||
FINANCING ACTIVITIES | ||
Debt issuance costs | 0 | (46,000) |
Unsecured Notes Payable | ||
FINANCING ACTIVITIES | ||
Debt issuance costs | $ 0 | $ (423,000) |
Organization and Business
Organization and Business | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | ORGANIZATION AND BUSINESS CV Sciences, Inc. (the “Company”) was incorporated under the name Foreclosure Solutions, Inc. in the State of Texas on December 9, 2010. On July 25, 2013, CannaVest Corp., a Texas corporation (“CannaVest Texas”), merged with the Company, a wholly-owned Delaware subsidiary of CannaVest Texas, to effectuate a change in the Company’s state of incorporation from Texas to Delaware. On January 4, 2016, the Company filed a Certificate of Amendment of Certificate of Incorporation reflecting its corporate name change to “CV Sciences, Inc.”, effective on January 5, 2016. In addition, on January 4, 2016, the Company amended its Bylaws to reflect its corporate name change to “CV Sciences, Inc.” The Company develops, manufactures, markets and sells herbal supplements and hemp-based cannabidiol ("CBD"). The Company sells its products under tradenames, such as +PlusCBD and +PlusCBDPet. The Company's products are sold in a variety of market sectors including nutraceutical, beauty care and specialty foods. In addition, the Company is developing drug candidates which use CBD as a primary active ingredient. On December 7, 2023, the Company acquired Cultured Foods Sp. z.o.o., a limited liability company organized under the laws of Poland ("Cultured Foods"). Cultured Foods is a leading European manufacturer and distributor of plant-based protein products. The Company's plant-based food products are sold under the Cultured Foods brand. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). On December 7, 2023, the Company acquired Cultured Foods. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates – The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results may differ from these estimates. Significant estimates include the valuation of intangible assets, inputs for valuing equity awards, and assumptions related to revenue recognition. Concentrations of Credit Risk – As of December 31, 2023 , the Federal Deposit Insurance Corporation (“FDIC”) provided insurance coverage of up to $ 0.3 million per depositor per bank. The Company has not experienced any losses in such accounts and does not believe that the Company is exposed to significant risks from excess deposits. The Company’s cash balance in excess of FDIC limits totaled $ 1.0 million a s of December 31, 2023. The Company has not experienced any such losses in these accounts to date, and believes that the financial institutions at which such amounts are held are stable; however, no assurance can be provided. The Company sources its raw materials from suppliers in Europe and the U.S. One supplier of shipping and fulfillment services accounted for 18 % and 27 % of our outstanding accounts payable as of December 31, 2023 and 2022, respectively. In addition, one supplier for online marketing services accounted for 17 % and 13 % of our outstanding accounts payable as of December 31, 2023 and 2022, respectively. There was no other concentration of suppliers and no concentration of accounts receivable or revenue as of and for the years ended December 31, 2023 and 2022 . Fair Value Measurements – Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The carrying values of accounts receivable, other current assets, accounts payable, and certain accrued expenses as of December 31, 2023 and 2022, approximate their fair value due to the short-term nature of these items. The Company's notes payable balance also approximates fair value as of December 31, 2023, as the interest rates on the notes payable approximate the rates available to the Company as of this date. The accounting guidance establishes a three-level hierarchy for disclosure that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities. • Level 1 - uses unadjusted quoted prices that are available in active markets for identical assets or liabilities. The Company does no t have any cash equivalents or restricted cash as of December 31, 2023 and 2022 . The Company does no t have any liabilities that are valued using inputs identified under a Level 1 hierarchy as of December 31, 2023 and 2022. • Level 2 - uses inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data. Except as described below under the caption Goodwill and Intangible Assets, the Company did no t have any assets or liabilities that are valued using inputs identified under a Level 2 hierarchy as of December 31, 2023 and 2022. • Level 3 - uses one or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, and significant management judgment or estimation. The Company did no t have any assets or liabilities that are valued using inputs identified under a Level 3 hierarchy as of December 31, 2023 and 2022 . Liquidity Considerations – U.S. GAAP requires management to assess a company's ability to continue as a going concern within one year from the consolidated financial statement issuance and to provide related note disclosure in certain circumstances. The accompanying consolidated financial statements and notes have been prepared assuming the Company will continue as a going concern. For the year ended December 31, 2023, the Company generated cash flows from operations of $ 2.3 million, which included government receipts of $ 2.7 million. Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law on March 27, 2020 and the subsequent extension of the CARES Act, the Company was eligible for a refundable employee retention tax credit subject to certain criteria. The Company determined that it qualifies for the tax credit under the CARES Act. In 2022, the Company claimed employee retention tax credits, which were recognized as a reduction to general and administrative expenses of $ 2.5 million during the year ended December 31, 2022. The amount was included in prepaid expenses and other in the Company's consolidated balance sheet as of December 31, 2022. Excluding the funds from the employee retention tax credit, the Company generated negative cash flows from operations of $ 0.5 million for the year ended December 31, 2023 and had an accumulated deficit of $ 84.6 million. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operations, growth initiatives, and will continue to make and implement strategic cost reductions, including reductions in employee headcount, vendor spending, and delaying expenses related to its drug development activities. The Company intends to position itself so that it will be able to raise additional funds through the capital markets, issuance of debt, and/or securing lines of credit. The Company's financial operating results and accumulated deficit, besides other factors, raise substantial doubt about the Company's ability to continue as a going concern. The Company will continue to pursue the actions outlined above, as well as work towards increasing revenue and operating cash flows to meet its future liquidity requirements. However, there can be no assurance that the Company will be successful in any capital-raising efforts that it may undertake, and the failure of the Company to raise additional capital could adversely affect its future operations and viability. Debt Issuance Costs – The Company presents its debt issuance costs and debt discounts as a direct deduction from the carrying amount of the related indebtedness on its consolidated balance sheet and amortizes these costs over the term of the related debt liability using the effective interest method. Amortization is recorded in interest expense in the consolidated statements of operations. Accounts Receivable – Generally, the Company requires payment prior to shipment. However, in certain circumstances, the Company extends credit to companies located throughout the U.S. Accounts receivable consist of trade accounts arising in the normal course of business. Accounts for which no payments have been received after 30 days are considered delinquent and customary collection efforts are initiated. Accounts receivable are carried at original invoice amount less a reserve made for doubtful receivables based on a review of all outstanding amounts on a quarterly basis. Management has determined the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition and credit history, and current economic conditions. As of December 31, 2022, the Company maintained an allowance for doubtful accounts related to accounts receivable in the amount of $ 0.4 million. The allowance for doubtful accounts as of December 31, 2023 was no t material. Inventory – Inventory is stated at lower of cost or net realizable value, with cost being determined on an average cost basis. Cost includes costs directly related to manufacturing and distribution of the products. Primary costs include raw materials, packaging, manufacturing overhead, shipping and depreciation of manufacturing equipment and production facilities. Manufacturing overhead includes payroll, employee benefits, utilities, maintenance and property taxes. Total shipping and handling costs were $ 1.9 million and $ 2.2 million for the years ended December 31, 2023 and 2022, respectively, and are recorded in cost of goods sold. The Company performs an assessment of inventory obsolescence to measure inventory at the lower of cost or net realizable value. Factors considered in the determination of obsolescence include slow-moving or non-marketable items. The Company's inventory production process includes the processing and cultivation of botanical raw material. Because of the duration of the cultivation process, a portion of our inventory will not be sold within one year. Consistent with the practice in other industries that cultivate botanical raw materials, all inventory is classified as a current asset. Property & Equipment – Equipment is stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Depreciation is provided on a straight-line basis over the assets' estimated useful lives. Maintenance or repairs are charged to expense as incurred. Upon sale or disposition, the historically-recorded asset cost and accumulated depreciation are removed from the respective accounts and any related gain or loss is recognized. Impairment of Long-Lived Assets – In accordance with ASC Topic 360, Accounting for the Impairment or Disposal of Long-Lived Assets , the Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of property and equipment is measured by comparing its carrying value to the undiscounted projected future cash flows that the assets are expected to generate. If the carrying amount of an asset is not recoverable, the Company recognizes an impairment loss based on the excess of the carrying amount of the long-lived asset over its respective fair value, which is generally determined as the present value of estimated future cash flows or at the appraised value. The impairment analysis is based on significant assumptions of future results made by management, including revenue and cash flow projections. Circumstances that may lead to impairment of property and equipment include a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition and a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset including an adverse action or assessment by a regulator. As of December 31, 2023 and 2022 , the Company determined that long-lived assets were not impaired. Segments – Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker ("CODM") in deciding how to allocate resources and in assessing performance. As such, the Company has one operating segment, which is the business of hemp-based CBD wellness products. All long-lived assets are located in the United States and substantially all revenue is attributed to customers and consumers based in the United States. The Company previously reported two distinct business segments: a consumer products segment in manufacturing, marketing and selling hemp-based CBD products to a range of market sectors; and a specialty pharmaceutical segment focused on developing and commercializing novel therapeutics utilizing CBD. Effective October 1, 2022, the Company no longer maintains separate financial information for which operating results are evaluated on a regular basis by the CODM in deciding how to allocate resources and in assessing performance. Goodwill and Intangible Assets – The Company evaluates the carrying value of goodwill and intangible assets annually during the fourth quarter in accordance with ASC Topic 350, Intangibles Goodwill and Other, and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Such circumstances could include, but are not limited to (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. Goodwill is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary. If it is determined, based on qualitative factors, that the fair value of the reporting unit may more likely than not be less than carrying amount, or if significant adverse changes in the Company's future financial performance occur that could materially impact fair value, a quantitative goodwill impairment test would be required. Additionally, management can elect to forgo the qualitative assessment and perform the quantitative test. If the qualitative assessment indicates that the quantitative analysis should be performed, or if management elects to bypass a qualitative assessment, the Company then evaluates goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount, including goodwill. The quantitative assessment for goodwill requires management to estimate the fair value of the Company's reporting units using either an income or market approach or a combination thereof. Management makes critical assumptions and estimates in completing impairment assessments of goodwill and other intangible assets. The Company's cash flow projections look several years into the future and include assumptions on variables such as future sales and operating margin growth rates, economic conditions, probability of success, market competition, inflation and discount rates. During the fourth quarter of 2023, the Company performed its annual goodwill impairment analysis following the steps laid out in ASC 350-20-35-3C. The Company's annual impairment analysis includes a qualitative assessment to determine if it is necessary to perform the quantitative impairment test. In performing a qualitative assessment, the Company reviewed events and circumstances that could affect the significant inputs used to determine if the fair value is less than the carrying value of goodwill. The Company determined that no triggering event had occurred to necessitate performing the quantitative impairment test. As a result, the Company did no t record any goodwill impairment charges for the year ended December 31, 2023 . The Company did no t have any goodwill as of December 31, 2022. The Company classifies intangible assets into three categories: (1) intangible assets with definite lives subject to amortization; (2) intangible assets with indefinite lives not subject to amortization; and (3) goodwill. As of December 31, 2023, the Company has in-process research & development (" IPR&D") with an indefinite life and trademarks and customer relationships acquired from Cultured Foods with a definite life. IPR&D is not amortized until completion and development of the project, at which time the IPR&D becomes an amortizable asset. Until such time as the projects are either completed or abandoned, the Company tests those assets for impairment at least annually at year end, or more frequently at interim periods, by evaluating qualitative factors which could be indicative of impairment. Qualitative factors being considered include, but are not limited to, macro-economic conditions, progress on drug development activities, and overall financial performance. If impairment indicators are present as a result of the Company's qualitative assessment, the Company will test those assets for impairment by comparing the fair value of the assets to their carrying value. Quantitative factors being considered include, but are not limited to, the current project status, forecasted changes in the timing or amounts required to complete the project, forecasted changes in timing or changes in the future cash flows to be generated by the completed products, a probability of success of the ultimate project and changes to other market-based assumptions, such as current Company market capitalization. Upon completion or abandonment, the value of the IPR&D assets will be amortized to expense over the anticipated useful life of the developed products, if completed, or charged to expense when abandoned if no alternative future use exists. The Company completed its annual impairment assessment during the fourth quarter of 2023 and 2022. The Company evaluated, on the basis of the weight of the evidence, the significance of all identified events and circumstances that could affect the significant inputs used to determine the fair value of the IPR&D for determining whether it is more likely than not that the IPR&D asset is impaired. After assessing the totality of events and circumstances and their potential effect on significant inputs to the fair value determination, the Company determined that it is more likely than not that the IPR&D asset is impaired. As such, the Company has estimated the fair value of the IPR&D and performed the quantitative impairment test. Based on the quantitative impairment test, the Company determined that its IPR&D is impaired by $ 0.3 million for the year ended December 31, 2023. An intangible asset impairment charge of $ 0.3 million was recorded during the year ended December 31, 2023. Revenue Recognition – The majority of the Company's revenue contracts represent a single performance obligation related to the fulfillment of customer orders for the purchase of its products. Net sales reflect the transaction prices for these contracts based on the Company's selling list price, which is then reduced by estimated costs for trade promotional programs, consumer incentives, and allowances and discounts used to incentivize sales growth and build brand awareness. The Company recognizes revenue at the point in time that control of the ordered product is transferred to the customer, which is typically upon shipment to the customer or other customer-designated delivery point. The Company accrues for estimated sales returns by customers based on historical sales return results. The computation of the sales return and other allowances require that management makes certain estimates and assumptions that effect the timing and amounts of revenue and liabilities recorded. Shipping and handling fees charged to customers are included in product sales and totaled $ 0.1 million for the year ended December 31, 2022 . Shipping and handling fees charged to customers was no t material for the year ended December 31, 2023. Taxes collected from customers that are remitted to governmental agencies are accounted for on a net basis and not included as revenue. The following represents product sales by retail (B2B) and e-commerce (B2C) channels for the years ended December 31, 2023 and 2022: For the years ended December 31, 2023 2022 Amount % of product Amount % of product (in thousands) (in thousands) Retail sales (B2B) $ 9,178 57.3 % $ 9,040 55.8 % E-Commerce sales (B2C) 6,826 42.7 % 7,165 44.2 % Product sales, net $ 16,004 100.0 % $ 16,205 100.0 % Compensation and Benefits – The Company records compensation and benefits expense for all cash and deferred compensation, benefits, and related taxes as earned by its employees. Compensation and benefits expense also includes compensation earned by temporary employees and contractors who perform similar services to those performed by the Company’s employees, primarily information technology and project management activities. The Company maintains a defined contribution 401(k) plan available to eligible employees. Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amount allowable under federal tax regulations. The Company does not make matching contributions. Research and Development Expense – Research and development costs are charged to expense as incurred and include, but are not limited to, employee salaries and benefits, cost of inventory used in product development and consulting service fees. Research and development expense was $ 0.2 million and $ 0.3 million for the years ended December 31, 2023 and 2022 , respectively. Advertising – The Company supports its products with advertising to build brand awareness of the Company’s various products in addition to other marketing programs executed by the Company’s marketing team. The Company believes the continual investment in advertising is critical to the development and sale of its products. Advertising costs of $ 1.1 million and $ 1.2 million were expensed as incurred during each of the years ended December 31, 2023 and 2022 , respectively. Common Stock Warrants - The Company classifies as equity any warrants that (i) require physical settlement or net-share settlement or (ii) provide the Company with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company assesses classification of its common stock warrants and other freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company’s freestanding derivatives consist of warrants to purchase common stock that were issued in connection with its convertible preferred stock. The Company evaluated these warrants to assess their proper classification, and determined that the common stock warrants meet the criteria for equity classification in the accompanying balance sheets. Stock-Based Compensation – Certain employees, officers, directors, and consultants of the Company participate in various long-term incentive plans that provide for granting stock options, restricted stock awards, restricted stock units, stock bonus awards and performance-based awards. Stock options generally vest in equal increments over a two - to four-year period and expire on the ten th anniversary following the date of grant. Performance-based stock options vest once the applicable performance condition is probable of being satisfied. The Company recognizes stock-based compensation for equity awards granted to employees, officers and directors as compensation and benefits expense in the statements of operations. The fair value of stock options is estimated using a Black-Scholes valuation model on the date of grant. The fair value of restricted stock awards is equal to the closing price of the Company’s stock on the date of grant. Stock-based compensation is recognized over the requisite service period of the individual awards, which generally equals the vesting period. For performance-based stock options, compensation is recognized once the applicable performance condition is satisfied. Income Taxes – Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the related temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized when the rate change is enacted. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. In accordance with ASC Topic 740, Income Taxes , the Company recognizes the effect of uncertain income tax positions only if the positions are more likely than not of being sustained in an audit, based on the technical merits of the position. Recognized uncertain income tax positions are measured at the largest amount that is greater than 50 % likely of being realized. Changes in recognition or measurement are reflected in the period in which those changes in judgment occur. The Company recognizes both interest and penalties related to uncertain tax positions as part of the income tax provision. As of December 31, 2023 and 2022 , the Company did no t have a liability for unrecognized tax uncertainties. The Company is subject to routine audits by taxing jurisdictions. Foreign Currency – The Company translates the assets and liabilities of its foreign subsidiary into U.S. Dollars at current rates of exchange in effect at the end of the reporting period. Income and expense items are translated at rates that approximate the rates in effect at the transaction date. Gains and losses from translation are included in accumulated other comprehensive income or loss. Gains or losses resulting from foreign currency transactions during the year ended December 31, 2023 (transactions denominated in a currency other than the entity’s functional currency) are included as other income i n the Company’s consolidated statements of operations. The Company did no t have any foreign currency translation gains (losses) during the year ended December 31, 2022 . Recent Accounting Pronouncements Not Yet Adopted In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Taxes Disclosures , which requires greater disaggregation of income tax disclosures. The new standard requires additional information to be disclosed with respect to the income tax rate reconciliation and income taxes paid disaggregated by jurisdiction. This ASU should be applied prospectively for fiscal years beginning after December 15, 2024, with retrospective application permitted. The Company is currently evaluating the impacts of this guidance on the Company’s Consolidated Financial Statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires companies to enhance the disclosures about segment expenses. The new standard requires the disclosure of the Company’s Chief Operating Decision Maker ("CODM"), expanded incremental line-item disclosures of significant segment expenses used by the CODM for decision-making, and the inclusion of previous annual only segment disclosure requirements on a quarterly basis. This ASU should be applied retrospectively for fiscal years beginning after December 15, 2023, and early adoption is permitted. The Company is currently evaluating the impacts of this guidance on the Company’s Consolidated Financial Statements. Recently Adopted Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance: ASU 2018-19, ASU 2019-04 and ASU 2019-05 (collectively, “Topic 326”). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. Topic 326 was to be effective for reporting periods beginning after December 15, 2019, with early adoption permitted. In November 2019, the FASB issued ASU 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates, which deferred the effective dates for the Company, as a smaller reporting company, until fiscal year 2023. The Company adopted the guidance as of January 1, 2023. Adoption of this guidance did not have a material impact on the Company's consolidated financial statements or its disclosures. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventory | INVENTORY Inventory as of December 31, 2023 and 2022 was comprised of the following (in thousands): December 31, 2023 2022 Raw materials $ 2,892 $ 3,563 Work in process 1,181 1,020 Finished goods 1,582 1,980 $ 5,655 $ 6,563 During the year ended December 31, 2022 , the Company recorded additions to the inventory provision of $ 0.3 million. Additions to the inventory provision for the year ended December 31, 2023 were not material. The Company had inventory outside the United States of $ 0.1 million as of December 31, 2023 . The Company did no t have any inventory outside the United States as of December 31, 2022 . |
Property And Equipment
Property And Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment, net, as of December 31, 2023 and 2022 were as follows (in thousands): December 31, Useful Lives 2023 2022 Office furniture and IT equipment 3 - 5 years $ 1,393 $ 1,392 Machinery and equipment 7 years 37 — 1,430 1,392 Less: accumulated depreciation ( 1,051 ) ( 817 ) $ 379 $ 575 Depreciation expense for the years ended December 31, 2023 and 2022 was $ 0.2 million and $ 1.0 million, respectively. During the year ended December 31, 2022, the Company sold or disposed of property and equipment with original cost of $ 3.9 million and recognized a loss on disposal of $ 0.2 million. During the year ended December 31, 2022 , the Company recorded accelerated depreciation for tenant improvements associated with the lease termination agreement for its main facility. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | 5. ACQUISITIONS On December 7, 2023, the Company acquired all the issued and outstanding shares of Cultured Foods. Cultured Foods manufactures and distributes plant-based food products. Cultured Foods is based in Poland. This acquisition provided the Company with growth opportunities in both plant-based food products and distribution of CBD products into Europe. The acquisition closed on December 7, 2023 and, accordingly, the consolidated statements of operations and comprehensive income (loss) included Cultured Foods' results of operations for the period from December 7, 2023 through December 31, 2023. If the acquisition had taken place as of January 1, 2023, net revenue and net income for the year ended December 31, 2023 would have been $ 16.2 million and $ 3.0 million, respectively. Net revenue and net loss of Cultured Foods since the date of the acquisition have been immaterial. As a result of the business combination, acquisition costs of $ 0.1 million was expensed as incurred during the year ended December 31, 2023. The following table outlines the total consideration transferred (in thousands): Cash $ 192 Common shares 250 Earn-out 88 Total consideration transferred $ 530 The following table summarizes the assets acquired and liabilities assumed as of the acquisition date (in thousands): Cash $ 18 Accounts receivable and other receivables 11 Inventories 133 Intangible assets 78 Other current assets 17 Fixed assets 38 Goodwill 334 Total assets 629 Accounts payable and accrued liabilities 27 Current note payable 50 Deferred tax liabilities 22 Total liabilities 99 Net assets acquired $ 530 The fair value of acquired intangible assets were determined using a forecasted cash flow and a cost approach. Acquired intangible assets consists of trade names and customer relationships. The Company assigned a 5-year useful life to the acquired intangible assets. The Company determined that Cultured Foods carrying costs approximates fair value for all other acquired assets and assumed liabilities. Included in the purchase agreement is an earn-out provision whereby the Company agreed to pay the Cultured Foods' selling shareholder additional consideration contingent on achievement of certain annual revenue results of Cultured Foods in 2024. The Company accrued the fair value of $ 88,000 for this earn-out provision and recorded this amount as additional goodwill and other non-current liabilities as of December 31, 2023. The valuation and purchase price allocation for the Cultured Foods acquisition remains preliminary and will be finalized no later than one year after the acquisition date. As of the date of this Annual Report, management is still in the process of evaluating the estimated fair value of the consideration transferred. In addition, management is still evaluating the allocation of the acquisition purchase price to the tangible and intangible assets acquired, liabilities assumed, and the resulting goodwill. Management's analysis of these items has not yet been completed because of the inherent complexities of estimating fair values. Therefore, the business combination amounts presented were determined by management based on its consideration of all currently available information; however, management has not fully completed its business combination analysis and such amounts must be considered provisional amounts. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | G OODWILL AND INTANGIBLE ASSETS Goodwill The following table summarizes the changes in the carrying amounts of goodwill (in thousands): Carrying Balance - December 31, 2022: $ — Acquisition of Cultured Foods 334 Translation adjustment 8 Balance - December 31, 2023: $ 342 As of December 31, 2023, the Company performed its annual goodwill impairment analysis following the steps laid out in ASC 350-20-35-3C. The Company's annual impairment analysis included a qualitative assessment to determine if it was necessary to perform the quantitative impairment test. After performing a qualitative test the Company concluded that it was more likely than not that the fair value of the Company exceeds its carrying value of goodwill. Accordingly, there was no indication of impairment and the qualitative impairment test was not performed. The Company did no t record any goodwill impairment charges for the year ended December 31, 2023 . The Company did no t have any goodwill as of December 31, 2022. Intangible Assets The following table summarizes the intangible assets and the related accumulated amortization (in thousands): December 31, December 31, Gross carrying amount $ 79 $ 251 Accumulated amortization ( 1 ) - Net carrying amount $ 78 $ 251 The Company evaluated, on the basis of the weight of the evidence, the significance of all identified events and circumstances that could affect the significant inputs used to determine the fair value of the IPR&D for determining whether it is more likely than not that the IPR&D asset is impaired. After assessing the totality of events and circumstances and their potential effect on significant inputs to the fair value determination, the Company determined that it is more likely than not that the IPR&D asset is impaired. As such, the Company has estimated the fair value of the IPR&D and performed the quantitative impairment test. Based on the quantitative impairment test, the Company determined that its IPR&D is impaired by $ 0.3 million. As a result, the Company recorded this impairment to reduce its intangible assets on its consolidated balance sheet as of December 31, 2023 and recorded the corresponding impairment expense, which is included in selling, general and administrative expense in the Company's consolidated statements of operations for the year ended December 31, 2023. The Company also recorded an impairment charge to reduce its intangible assets of $ 1.2 million during the year ended December 31, 2022. Changes in the carrying amounts of intangible assets are summarized below (in thousands): In-process research and development Trade names Customer relationships Total Balance - December 31, 2021: $ 1,485 $ — $ — $ 1,485 Impairment ( 1,234 ) — — ( 1,234 ) Balance - December 31, 2022: 251 — — 251 Impairment ( 251 ) — — ( 251 ) Acquisition of Cultured Foods — 52 26 78 Amortization — ( 1 ) — ( 1 ) Translation adjustments — 1 — 1 Balance - December 31, 2023: $ — $ 52 $ 26 $ 78 The Company did not incur costs to renew or extend the term of acquired intangible assets for the years ended December 31, 2023 and 2022 . The estimated amortization expense for the Company's intangible assets is not significant in any future individual fiscal year. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | ACCRUED EXPENSES Accrued expenses as of December 31, 2023 and 2022 were as follows (in thousands): December 31, 2023 2022 Accrued payroll tax - Mona (Note 13) $ 522 $ 6,694 Accrued payroll expenses 1,388 1,447 Other accrued liabilities 1,512 1,549 $ 3,422 $ 9,690 |
Convertible Notes
Convertible Notes | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES | CONVERTIBLE NOTES Convertible notes as of December 31, 2022 were as follows (in thousands): December 31, Principal amount $ 2,120 Less: Original issuance discount ("OID") ( 120 ) Less: Debt issuance costs ( 275 ) Net proceeds 1,725 Default premium 179 Conversion of note into common shares ( 1,514 ) Accretion of OID and amortization of debt issuance costs 395 Repayment ( 675 ) Settlement ( 110 ) Carrying amount $ — The Company did no t have any convertible notes as of December 31, 2023. On November 14, 2021, the Company entered into a securities purchase agreement (the “SPA”), with an institutional investor (the “Investor”) providing for the sale and issuance in series of registered direct offerings of senior convertible notes (the “Notes”) in the aggregate original principal amount of up to $ 5.3 million (the “Offering”). On November 17, 2021, at the initial closing of this Offering, the Company sold and issued $ 1.06 million in aggregate principal amount of Notes to the Investor pursuant to a prospectus supplement to its effective shelf registration statement Form S-3 (Registration No. 333-237772) (the "Registration Statement"). The Notes had an OID of 6 % , resulting in net proceeds to the Company of $ 1.0 million before other debt issuance costs, and mature on May 17, 2022. The Notes did not bear interest except upon the occurrence of an event of default. After the occurrence of an event of default, the Notes accrued interest at the rate of 15 % per annum. The Notes were senior to other indebtedness of the Company. The Notes had an initial fixed conversion price of $ 0.2611 per share. The initial fixed conversion price was subject to proportional adjustment upon the occurrence of any stock split, stock dividend, stock combination and/or similar transactions and full-ratchet adjustment in connection with a subsequent offering at a per share price less than the fixed conversion price then in effect. Upon each additional closing, the fixed conversion price of all outstanding Notes was subject to downward adjustment if greater than the lower of (i) 120 % of the closing bid price of the Company's common stock on the trading day immediately preceding such additional closing date; and (ii) 120 % of the arithmetic average of the volume weighted average prices of the Company's common stock on the five trading days preceding the additional closing. The holder was able to convert any part of the Notes into shares of common stock at an “Alternate Conversion Price” equal to the lesser of (i) the fixed conversion price then in effect; (ii) the greater of the floor price of $ 0.01 and 90 % of the arithmetic average of the three lowest daily volume weighted average prices of the Company's common stock during the ten trading days immediately prior to such conversion; and (iii) the greater of the floor price and 97 % of the lowest sale price of the Company's common stock on the applicable conversion date. In the event of the occurrence of an event of default, each holder of a Note could require the Company to redeem all or any portion of the Notes (including all accrued and unpaid interest and late charges thereon), in cash, at the greater of the face value and a 15 % redemption premium or ( 10 % if such event of default is a price default) to the greater of the face value and the equity value of the common stock underlying the Notes. The equity value of the common stock underlying the Notes was calculated using the greatest closing sale price of the common stock on any trading day immediately preceding such event of default and the date the entire payment is made. Additionally, the Company had the option to redeem, at any time, any portion of the outstanding Notes in cash with a 15 % redemption premium to the greater of the face value of the Notes or the equity value of its common stock. On March 25, 2022, the Company sold and issued an additional $ 1.06 million in principal amount of the Notes under this Offering (the "Second Tranche"), which Notes were offered pursuant to a prospectus supplement to the Registration Statement. The Notes issued in the Second Tranche also had an OID of 6 % , resulting in net proceeds of the Company of $ 1.0 million, before other debt issuance costs. The Notes issued in the Second Tranche had the same material terms as those issued in the first tranche, but were scheduled to mature on September 25, 2022. The Notes issued in the second tranche had an initial conversion price of $ 0.1508 per share, and pursuant to the Notes, upon closing of second tranche, the initial conversion price of the Notes issued in the first tranche in November 2021 was adjusted down from $ 0.2611 per share to $ 0.1508 per share as well. The Company did not repay the Notes issued in November in full on May 17, 2022, the maturity date, resulting in an event of default under such Notes. As a result of such default, the Notes issued in November, in the principal amount of $ 130,000 as of such date, began accruing interest at a rate of 15 % per annum. Additionally, the default triggered the investor’s right under the Notes to require the Company to redeem all or any portion of the November Notes, in cash, at a price not less than the face value of such Notes plus a 15 % redemption premium (the “Redemption Premium”). On May 18, 2022, the Company entered into a Forbearance Agreement with the investor, pursuant to which the investor agreed to forebear exercising any rights or remedies that it may have under the November Notes that arise as a result of the default until the earlier of (i) the date immediately prior to the date of occurrence of a Bankruptcy Event of Default (as defined in the Notes), (ii) the date of occurrence of any other event of default under Section 4(a) of the Notes, (iii) the time of any breach by the Company pursuant to the Forbearance Agreement, and (v) June 1, 2022 (such period, the “Forbearance Period”). In accordance with the Forbearance Agreement, the Company agreed to pay the investor the aggregate outstanding principal on the November Note at the Redemption Premium, including all accrued and unpaid interest, upon expiration of the Forbearance Period. As of May 31, 2022, prior to expiration of the Forbearance Period, the investor had converted the outstanding balance (including the Redemption Premium and accrued interest) due under the Notes issued in November, amounting to $ 151,772 , into an aggregate of 3,751,971 shares of Company common stock at a conversion price of $ 0.04 per share. As a result, the Notes issued in November terminated. During the year ended December 31, 2022, the volume weighted average price ("VWAP") of the Company's common stock was below $ 0.10 for more than 5 days, which constituted a price default in accordance with the Notes. As a result, from the date of such default and for so long as such default remained uncured, the Notes that remained outstanding accrued interest at a rate of 15 % per annum. Following such default, the holder also added a 15 % per annum default premium to the outstanding balance in accordance with the Notes. During the years ended December 31, 2022, holders of certain Notes converted amounts payable under such Notes into an aggregate of 24,126,311 shares of Company common stock at a weighted average conversion price of $ 0.05 per share, resulting in a reduction of the Note balance of $ 1.3 million. In addition, the Company recognized additional interest expense associated with the conversion of $ 0.6 million during the years ended December 31, 2022. On August 18, 2022, the Company entered into the Cancellation Agreement with the investor, pursuant to which the Company paid the investor a total sum of $ 675,000 in full satisfaction and repayment of the Notes issued in the Second Tranche. Upon execution of the Cancellation Agreement, the Notes issued in the Second Tranche, including the Company's obligations thereunder, were cancelled and terminated. As a result of the Cancellation Agreement, the Company recognized a gain on debt extinguishment of $ 127,000 , including interest expense of $ 17,000 , and immediately expensed unamortized debt costs of $ 50,000 . DEBT Debt as of December 31, 2023 and 2022was as follows (in thousands): December 31, 2023 2022 Note payable, net of discount and costs $ — $ 1,005 Insurance financing 204 218 Cultured Foods note payable (Note 5) 50 — Total debt $ 254 $ 1,223 Note Payable In August 2022, the Company entered into a note purchase agreement with Streeterville, pursuant to which the Company issued and sold to Streeterville the secured Streeterville Note in the original principal amount of $ 2.0 million. The Streeterville Note carried an original issuance discount of $ 400,000 . The Company incurred additional debt issuance costs of $ 23,000 . As a result, the Company received aggregate net proceeds of approximately $ 1.6 million in connection with the sale and issuance of the Streeterville Note. The Streeterville Note was scheduled to mature on May 19, 2023 and the Company was required to make weekly repayments to Streeterville on the Note in the following amounts: (a) $ 40,000 for the first 8 weeks; and (b) $ 56,000 thereafter until the Streeterville Note was paid in full. No interest was to accrue on the Streeterville Note until an occurrence of an Event of Default, as defined in Section 4 of the Streeterville Note, if ever. The Streeterville Note provided for customary events of default, including, among other things, the event of nonpayment of principal, interest, fees or other amounts, a representation or warranty proving to have been incorrect when made, failure to perform or observe covenants within a specified period of time, a cross-default to certain other indebtedness of the Company, the bankruptcy or insolvency of the Company or any significant subsidiary, monetary judgment defaults of a specified amount and other defaults resulting in liability of a specified amount. In the event of an occurrence of an Event of Default by the Company, Streeterville could have declared all amounts owed under the Streeterville Note immediately due and payable. Also, a late fee and interest penalty of equal to either 22 % per annum or the maximum rate allowable under law, whichever is lesser, could have been applied to any outstanding amount not paid when due or that remains outstanding while an Event of Default exists. The unpaid amount of the Streeterville Note, any interest, fees, charges and late fees accrued was due and payable in full within three trading days of receipt by the Company of any employee retention credit funds owed to the Company under the CARES Act, provided, further, that if at least $ 1.0 million in CARES Act proceeds were not remitted to Streeterville within ninety days of August 19, 2022, the outstanding balance under the Streeterville Note was to be increased by 5 % . The Company did not receive the CARES Act proceeds within ninety days of August 19, 2022; as a result, the outstanding balance of the Streeterville Note was increased by 5 % . The Streeterville Note was secured by all of the Company’s assets as set forth in the Security Agreement dated August 19, 2022. The Company made principal payments to Streeterville of $ 1.1 million during the year ended December 31, 2023. As a result, the Streeterville Note has been fully repaid and satisfied, and the Company's obligation thereunder, were cancelled and terminated. Insurance Financing In October 2023, the Company entered into a finance agreement with First Insurance Funding ("First Insurance") in order to fund a portion of its insurance policies for the upcoming policy year. The amount financed was $ 0.3 million and incurs interest at a rate of 8.42 % per annum. The Company is required to make monthly payments of $ 29,781 from November 2023 through July 2024. The outstanding balance as of December 31, 2023 is $ 0.2 million. In November 2022, the Company entered into a finance agreement with First Insurance in order to fund a portion of its insurance policies for the most recent policy year. The amount financed was $ 0.2 million, which incurred interest at a rate of 6.32 % per annum. The Company was required to make monthly payments of $ 27,900 from November 2022 through July 2023. The was no outstanding balance as of December 31, 2023. Cultured Foods Note Payable The Company assumed the outstanding note payable of Cultured Foods. The note is payable to the prior owner of Cultured Foods is due within the next 12 months. The note carries an interest rate of 9 % per annum. Subsequent to December 31, 2023, the Company repaid the entire outstanding amount of the notes payable including interest. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | CONVERTIBLE NOTES Convertible notes as of December 31, 2022 were as follows (in thousands): December 31, Principal amount $ 2,120 Less: Original issuance discount ("OID") ( 120 ) Less: Debt issuance costs ( 275 ) Net proceeds 1,725 Default premium 179 Conversion of note into common shares ( 1,514 ) Accretion of OID and amortization of debt issuance costs 395 Repayment ( 675 ) Settlement ( 110 ) Carrying amount $ — The Company did no t have any convertible notes as of December 31, 2023. On November 14, 2021, the Company entered into a securities purchase agreement (the “SPA”), with an institutional investor (the “Investor”) providing for the sale and issuance in series of registered direct offerings of senior convertible notes (the “Notes”) in the aggregate original principal amount of up to $ 5.3 million (the “Offering”). On November 17, 2021, at the initial closing of this Offering, the Company sold and issued $ 1.06 million in aggregate principal amount of Notes to the Investor pursuant to a prospectus supplement to its effective shelf registration statement Form S-3 (Registration No. 333-237772) (the "Registration Statement"). The Notes had an OID of 6 % , resulting in net proceeds to the Company of $ 1.0 million before other debt issuance costs, and mature on May 17, 2022. The Notes did not bear interest except upon the occurrence of an event of default. After the occurrence of an event of default, the Notes accrued interest at the rate of 15 % per annum. The Notes were senior to other indebtedness of the Company. The Notes had an initial fixed conversion price of $ 0.2611 per share. The initial fixed conversion price was subject to proportional adjustment upon the occurrence of any stock split, stock dividend, stock combination and/or similar transactions and full-ratchet adjustment in connection with a subsequent offering at a per share price less than the fixed conversion price then in effect. Upon each additional closing, the fixed conversion price of all outstanding Notes was subject to downward adjustment if greater than the lower of (i) 120 % of the closing bid price of the Company's common stock on the trading day immediately preceding such additional closing date; and (ii) 120 % of the arithmetic average of the volume weighted average prices of the Company's common stock on the five trading days preceding the additional closing. The holder was able to convert any part of the Notes into shares of common stock at an “Alternate Conversion Price” equal to the lesser of (i) the fixed conversion price then in effect; (ii) the greater of the floor price of $ 0.01 and 90 % of the arithmetic average of the three lowest daily volume weighted average prices of the Company's common stock during the ten trading days immediately prior to such conversion; and (iii) the greater of the floor price and 97 % of the lowest sale price of the Company's common stock on the applicable conversion date. In the event of the occurrence of an event of default, each holder of a Note could require the Company to redeem all or any portion of the Notes (including all accrued and unpaid interest and late charges thereon), in cash, at the greater of the face value and a 15 % redemption premium or ( 10 % if such event of default is a price default) to the greater of the face value and the equity value of the common stock underlying the Notes. The equity value of the common stock underlying the Notes was calculated using the greatest closing sale price of the common stock on any trading day immediately preceding such event of default and the date the entire payment is made. Additionally, the Company had the option to redeem, at any time, any portion of the outstanding Notes in cash with a 15 % redemption premium to the greater of the face value of the Notes or the equity value of its common stock. On March 25, 2022, the Company sold and issued an additional $ 1.06 million in principal amount of the Notes under this Offering (the "Second Tranche"), which Notes were offered pursuant to a prospectus supplement to the Registration Statement. The Notes issued in the Second Tranche also had an OID of 6 % , resulting in net proceeds of the Company of $ 1.0 million, before other debt issuance costs. The Notes issued in the Second Tranche had the same material terms as those issued in the first tranche, but were scheduled to mature on September 25, 2022. The Notes issued in the second tranche had an initial conversion price of $ 0.1508 per share, and pursuant to the Notes, upon closing of second tranche, the initial conversion price of the Notes issued in the first tranche in November 2021 was adjusted down from $ 0.2611 per share to $ 0.1508 per share as well. The Company did not repay the Notes issued in November in full on May 17, 2022, the maturity date, resulting in an event of default under such Notes. As a result of such default, the Notes issued in November, in the principal amount of $ 130,000 as of such date, began accruing interest at a rate of 15 % per annum. Additionally, the default triggered the investor’s right under the Notes to require the Company to redeem all or any portion of the November Notes, in cash, at a price not less than the face value of such Notes plus a 15 % redemption premium (the “Redemption Premium”). On May 18, 2022, the Company entered into a Forbearance Agreement with the investor, pursuant to which the investor agreed to forebear exercising any rights or remedies that it may have under the November Notes that arise as a result of the default until the earlier of (i) the date immediately prior to the date of occurrence of a Bankruptcy Event of Default (as defined in the Notes), (ii) the date of occurrence of any other event of default under Section 4(a) of the Notes, (iii) the time of any breach by the Company pursuant to the Forbearance Agreement, and (v) June 1, 2022 (such period, the “Forbearance Period”). In accordance with the Forbearance Agreement, the Company agreed to pay the investor the aggregate outstanding principal on the November Note at the Redemption Premium, including all accrued and unpaid interest, upon expiration of the Forbearance Period. As of May 31, 2022, prior to expiration of the Forbearance Period, the investor had converted the outstanding balance (including the Redemption Premium and accrued interest) due under the Notes issued in November, amounting to $ 151,772 , into an aggregate of 3,751,971 shares of Company common stock at a conversion price of $ 0.04 per share. As a result, the Notes issued in November terminated. During the year ended December 31, 2022, the volume weighted average price ("VWAP") of the Company's common stock was below $ 0.10 for more than 5 days, which constituted a price default in accordance with the Notes. As a result, from the date of such default and for so long as such default remained uncured, the Notes that remained outstanding accrued interest at a rate of 15 % per annum. Following such default, the holder also added a 15 % per annum default premium to the outstanding balance in accordance with the Notes. During the years ended December 31, 2022, holders of certain Notes converted amounts payable under such Notes into an aggregate of 24,126,311 shares of Company common stock at a weighted average conversion price of $ 0.05 per share, resulting in a reduction of the Note balance of $ 1.3 million. In addition, the Company recognized additional interest expense associated with the conversion of $ 0.6 million during the years ended December 31, 2022. On August 18, 2022, the Company entered into the Cancellation Agreement with the investor, pursuant to which the Company paid the investor a total sum of $ 675,000 in full satisfaction and repayment of the Notes issued in the Second Tranche. Upon execution of the Cancellation Agreement, the Notes issued in the Second Tranche, including the Company's obligations thereunder, were cancelled and terminated. As a result of the Cancellation Agreement, the Company recognized a gain on debt extinguishment of $ 127,000 , including interest expense of $ 17,000 , and immediately expensed unamortized debt costs of $ 50,000 . DEBT Debt as of December 31, 2023 and 2022was as follows (in thousands): December 31, 2023 2022 Note payable, net of discount and costs $ — $ 1,005 Insurance financing 204 218 Cultured Foods note payable (Note 5) 50 — Total debt $ 254 $ 1,223 Note Payable In August 2022, the Company entered into a note purchase agreement with Streeterville, pursuant to which the Company issued and sold to Streeterville the secured Streeterville Note in the original principal amount of $ 2.0 million. The Streeterville Note carried an original issuance discount of $ 400,000 . The Company incurred additional debt issuance costs of $ 23,000 . As a result, the Company received aggregate net proceeds of approximately $ 1.6 million in connection with the sale and issuance of the Streeterville Note. The Streeterville Note was scheduled to mature on May 19, 2023 and the Company was required to make weekly repayments to Streeterville on the Note in the following amounts: (a) $ 40,000 for the first 8 weeks; and (b) $ 56,000 thereafter until the Streeterville Note was paid in full. No interest was to accrue on the Streeterville Note until an occurrence of an Event of Default, as defined in Section 4 of the Streeterville Note, if ever. The Streeterville Note provided for customary events of default, including, among other things, the event of nonpayment of principal, interest, fees or other amounts, a representation or warranty proving to have been incorrect when made, failure to perform or observe covenants within a specified period of time, a cross-default to certain other indebtedness of the Company, the bankruptcy or insolvency of the Company or any significant subsidiary, monetary judgment defaults of a specified amount and other defaults resulting in liability of a specified amount. In the event of an occurrence of an Event of Default by the Company, Streeterville could have declared all amounts owed under the Streeterville Note immediately due and payable. Also, a late fee and interest penalty of equal to either 22 % per annum or the maximum rate allowable under law, whichever is lesser, could have been applied to any outstanding amount not paid when due or that remains outstanding while an Event of Default exists. The unpaid amount of the Streeterville Note, any interest, fees, charges and late fees accrued was due and payable in full within three trading days of receipt by the Company of any employee retention credit funds owed to the Company under the CARES Act, provided, further, that if at least $ 1.0 million in CARES Act proceeds were not remitted to Streeterville within ninety days of August 19, 2022, the outstanding balance under the Streeterville Note was to be increased by 5 % . The Company did not receive the CARES Act proceeds within ninety days of August 19, 2022; as a result, the outstanding balance of the Streeterville Note was increased by 5 % . The Streeterville Note was secured by all of the Company’s assets as set forth in the Security Agreement dated August 19, 2022. The Company made principal payments to Streeterville of $ 1.1 million during the year ended December 31, 2023. As a result, the Streeterville Note has been fully repaid and satisfied, and the Company's obligation thereunder, were cancelled and terminated. Insurance Financing In October 2023, the Company entered into a finance agreement with First Insurance Funding ("First Insurance") in order to fund a portion of its insurance policies for the upcoming policy year. The amount financed was $ 0.3 million and incurs interest at a rate of 8.42 % per annum. The Company is required to make monthly payments of $ 29,781 from November 2023 through July 2024. The outstanding balance as of December 31, 2023 is $ 0.2 million. In November 2022, the Company entered into a finance agreement with First Insurance in order to fund a portion of its insurance policies for the most recent policy year. The amount financed was $ 0.2 million, which incurred interest at a rate of 6.32 % per annum. The Company was required to make monthly payments of $ 27,900 from November 2022 through July 2023. The was no outstanding balance as of December 31, 2023. Cultured Foods Note Payable The Company assumed the outstanding note payable of Cultured Foods. The note is payable to the prior owner of Cultured Foods is due within the next 12 months. The note carries an interest rate of 9 % per annum. Subsequent to December 31, 2023, the Company repaid the entire outstanding amount of the notes payable including interest. |
Stockholders Equity
Stockholders Equity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS EQUITY | STOCKHOLDERS EQUITY Common Stock On June 6, 2022, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware, pursuant to which the number of shares of all classes of the Company’s capital stock authorized for issuance was increased from 200,000,000 shares to 800,000,000 shares, and the number of shares of common stock authorized for issuance was correspondingly increased from 190,000,000 shares to 790,000,000 shares. The number of shares of preferred stock authorized for issuance was not impacted by the amendment. As of December 31, 2023 and 2022, the Company had 161,678,000 and 152,104,000 shares of common stock issued and outstanding, respectively. During the year ended December 31, 2022, the Company issued 5,496,000 shares of common stock to a vendor as compensation for $ 0.4 million of services provided to the Company. In accordance with the agreement, the Company issued 2,500,000 additional shares of common stock to the vendor during the year ended December 31, 2023. Subsequent to December 31, 2023, the Company issued the vendor an additional 1,549,410 shares of common stock. Preferred Stock On March 30, 2022, the Company closed a registered direct offering with an institutional investor for the issuance and sale of an aggregate of 700 shares of the Company's Series A Convertible Preferred Stock ("Preferred Stock") and warrants to purchase up to an aggregate of 10,000,000 shares of common stock, par value $ 0.0001 per share, for gross proceeds of $ 0.7 million, or net cash proceeds of $ 0.6 million after deducting $ 0.1 million related to placement agent’s fees and other offering expenses. Shares of the Preferred Stock had a stated value of $ 1,000 per share and were convertible into an aggregate of 10,000,000 shares of common stock at a conversion price of $ 0.07 per share at any time. The warrants have an exercise price of $ 0.10 per share. In addition, the Company issued designees of the placement agent warrants to purchase up to 750,000 shares of common stock at an exercise price of $ 0.0875 per share, and their fair value of $ 0.1 million was recorded as an additional offering cost. In April 2022, the investor converted all of the 700 outstanding shares of Preferred Stock into an aggregate of 10,000,000 shares of common stock. The Preferred Stock did not have any mandatory redemption provisions, contingently redeemable redemption provisions, preferential dividend rights, or liquidation preferences. The Preferred Stock had no voting rights, other than the right to vote as a class on certain matters, except that each share of Preferred Stock had the right to cast 170,000 votes per share of Preferred Stock, voting together as a single class with holders of Company common stock, on the proposals to (i) amend the Company’s Certificate of Incorporation to increase the number of shares of capital stock authorized for issuance thereunder from 200,000,000 to 800,000,000 and the authorized number of shares of common stock from 190,000,000 to 790,000,000 shares (the “Increase in Authorized”), and (ii) authorize the Company’s board of directors, at any time or times before May 30, 2025, to amend the Company’s Certificate of Incorporation to effectuate a reverse stock split of the Company’s issued and outstanding shares of common stock in a range of not less than 1-for-10 and not greater than 1-for-400 , which were presented to the Company’s shareholders for approval, and were ultimately approved by the Company's shareholders, at the Company’s 2022 annual meeting of shareholders. The Company evaluated the classification of the Preferred Stock and determined equity classification was appropriate due to no mandatory or contingently redeemable redemption features. The warrants issued to the investors in the offering were considered freestanding equity classified instruments. The Company first allocated gross proceeds from the registered direct offering between the Preferred Stock and the warrants issued to investors using a relative fair value approach, resulting in an initial allocation to the instruments of $ 0.4 million and $ 0.3 million, respectively. The issuance costs, inclusive of the fair value of the warrants issued to placement agent designees, were allocated between the Preferred Stock and the warrants issued to investors in a systematic and rational manner, resulting in an allocation to the instruments of $ 0.1 million and $ 0.1 million, for a net allocation of $ 0.3 million and $ 0.2 million, respectively. On the issuance date, the Company estimated the fair value of the warrants issued to investors and to placement agent designees using a Black-Scholes pricing model using the following assumptions: (i) contractual term of 3 years, (ii) expected volatility rate of 104.0 % , (iii) risk-free interest rate of 2.5 % , (iv) expected dividend rate of 0 % %, and (v) closing price of the Company’s common stock as of the day immediately preceding the registered direct offering. The fair value of Preferred Stock was estimated based upon equivalent common shares that Preferred Stock could have been converted into at the closing price of the day immediately preceding the purchase date. The embedded conversion feature was evaluated and bifurcation from the Preferred Stock equity host was not considered necessary. Upon conversion of the Preferred Stock to common stock in April 2022, the Company recognized a deemed dividend of $ 0.9 million. Warrants The following represents a summary of the warrants outstanding as of December 31, 2023 and 2022: Number of Shares Underlying Issue Date Classification Exercise Price Expiration Date December 31, December 31, March 30, 2022 Equity $ 0.1000 June 6, 2025 10,000,000 10,000,000 March 30, 2022 Equity $ 0.0875 June 6, 2025 750,000 750,000 10,750,000 10,750,000 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION As of December 31, 2022, there were 30,976,000 shares authorized for issuance under the CV Sciences, Inc. Amended and Restated 2013 Equity Incentive Plan (the "2013 Plan"). On June 11, 2019, the Company’s stockholders approved an amendment to the 2013 Plan to add an automatic “evergreen” provision regarding the number of shares to be annually added to the 2013 Plan. As a result, for as long as the 2013 Plan remained in effect, the number of shares of common stock that would be automatically added to the 2013 Plan on January 1 of each year during the term of the plan, starting with January 1, 2020, was the lesser of: (a) 4 % of the total shares of the Company’s common stock outstanding on December 31st of the prior year, (b) 4,000,000 shares of the Company’s common stock, or (c) a lesser number of shares of the Company’s common stock as determined by the Company’s Board of Directors. On January 1, 2023, the Company added 4,000,000 shares of the Company's common stock to the 2013 Plan pursuant to the evergreen provision, resulting in a total of 34,976,000 shares authorized for issuance under the 2013 Plan. In March 2022, the Company cancelled 9,000,000 outstanding stock options. In addition, on March 30, 2022 the Company's Board of Directors reduced the shares available for issuance under the 2013 Plan by 8,000,000 shares. On June 1, 2023, the 2013 Plan terminated and was replaced by the 2023 Plan (defined below); future issuances of incentive instruments will be made under and governed by the 2023 Plan. Outstanding awards issued under the 2013 Plan will remain subject to the terms and conditions of the 2013 Plan, provided that to the extent that outstanding awards under the 2013 Plan are forfeited or lapse unexercised, the shares of common stock subject to such awards will no longer be available for future issuance under the 2013 Plan or any other equity incentive plan of the Company. On June 1, 2023, the Company's shareholders approved the adoption of the new 2023 Equity Incentive Plan (the "2023 Plan"), and the Company adopted the 2023 Plan. The 2023 Plan has a term of 10 years . The number of shares of the Company's common stock authorized for issuance under the 2023 Plan was initially 34,976,000 shares, which number shall automatically increase on January 1 of each fiscal year (for a period of ten years after adoption of the 2023 Plan) during the term of the 2023 Plan, commencing on January 1, 2024, by the lesser of (a) 4 % of the total shares of the Company's common stock outstanding on December 31st of the prior year, and (b) a lesser number of the Company's common stock as determined by the Company's Board of Directors. As of December 31, 2023, the Company had 34,726,000 authorized but unissued shares reserved for issuance under the 2023 Plan. On January 1, 2024, the Company did not add any shares to the 2023 Plan. The stock options are exercisable at no less than the fair market value of the underlying shares on the date of grant, and restricted stock and restricted stock units are issued at a value not less than the fair market value of the common stock on the date of the grant. Generally, stock options awarded are vested in equal increments ranging from two to four years on the annual anniversary date on which such equity grants were awarded. The stock options generally have a maximum term of 10 years . The Company recognized stock-based compensation expense of $ 0.2 million and $ 1.0 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, total unrecognized compensation cost related to non-vested stock-based compensation arrangements was $ 0.2 million, which is expected to be recognized over a weighted-average period of 2.1 years. The following summarizes activity related to the Company's stock options (in thousands, except per share data): Number of Weighted Weighted Aggregate Outstanding - December 31, 2022 19,831 $ 0.46 3.5 $ — Granted 7,950 0.04 — — Exercised — — — — Forfeited ( 3,346 ) 0.46 — — Outstanding - December 31, 2023 24,435 0.32 4.4 6 Exercisable - December 31, 2023 18,125 0.42 2.7 3 Vested or expected to vest - December 31, 2023 24,435 $ 0.32 4.4 $ 6 The Company has established performance milestones in connection with the drug development efforts for its lead drug candidate CVSI-007. The above table includes 4,250,000 vested performance-based options as of December 31, 2023, which were issued to Michael Mona Jr. ("Mona Jr.") outside of the 2013 Plan. As of December 31, 2023, there were 6,750,000 remaining unvested stock options granted to Mona Jr. outside of the 2013 Plan which are not included in the table above. These stock options vest upon the completion of future performance conditions, including those related to the Settlement Agreement with Mona Jr. (refer to Note 12). As of December 31, 2023, Mona Jr. has a total of 18,050,000 outstanding stock options with a weighted average exercise price of $ 0.40 . There were no stock option exercises during the year ended December 31, 2023 and 2022. The following table presents the weighted average grant date fair value of stock options granted and the weighted-average assumptions used to estimate the fair value on the date of grant using the Black-Scholes valuation model: For the years ended December 31, 2023 2022 Volatility 132.1 % 123.5 % Risk-Free Interest Rate 3.9 % 3.6 % Expected Term (in years) 5.75 5.52 Dividend Rate 0.0 % 0.0 % Fair Value Per Share on Grant Date $ 0.04 $ 0.03 The risk-free interest rates are based on the implied yield available on U.S. Treasury constant maturities with remaining terms equivalent to the respective expected terms of the options. Expected volatility is based on the historical volatility of the Company's common stock. The Company estimates the expected term for stock options awarded to employees, non-employees, officers and directors using the simplified method in accordance with ASC Topic 718, Stock Compensation , because the Company does not have sufficient relevant historical information to develop reasonable expectations about future exercise patterns. In the future, as the Company gains historical data for the actual term over which stock options are held, the expected term may change, which could substantially change the grant-date fair value of future stock option awards, and, consequently, compensation of future grants. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | NET INCOME (LOSS) PER SHARE Net income (loss) per common share is computed using the two-class method, which is required due to the participating nature of the Preferred Stock (as defined and discussed in Note 9). Except with respect to voting and conversion rights, the rights of the holders of the Company's common stock and the Preferred Stock are identical. Each class of shares has the same rights to dividends. All shares of the Company's issued Preferred Stock were converted into shares of Company common stock in April 2022. Although the Preferred Stock are participating securities, such securities do not participate in net losses, and therefore, do not impact the Company's net income (loss) per share calculation for the year ended December 31, 2022. The Company computes basic net income (loss) per share using the weighted-average number of common shares outstanding during the year. Diluted net income (loss) per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares plus potential common shares. The Company's stock options, including those with performance conditions, are included in the calculation of diluted net income (loss) per share using the treasury stock method when their effect is dilutive. Potential common shares are excluded from the calculation of diluted net income (loss) per share when their effect is anti-dilutive. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data): For the years ended December 31, 2023 2022 Numerator: Net income (loss) attributable to common stockholders $ 3,102 $ ( 9,134 ) Denominator for basic and diluted net income (loss) per share: Weighted average common shares outstanding for basic 153,954 138,034 Dilutive potential common stock outstanding: Stock options 1 — Weighted average common shares outstanding for diluted 153,955 138,034 Basic net income (loss) per share attributable to common stockholders $ 0.02 $ ( 0.07 ) Diluted net income (loss) per share attributable to common stockholders $ 0.02 $ ( 0.07 ) The following common stock equivalents were not included in the calculation of net income (loss) per diluted share because their effect were anti-dilutive (in thousands): For the years ended December 31, 2023 2022 Stock options 20,185 15,581 Performance stock options 11,000 11,000 Warrants 10,750 10,750 Total 41,935 37,331 |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | RELATED PARTIES During the year ended December 31, 2019, the Company's former President and Chief Executive Officer, Michael Mona Jr. ("Mona Jr."), and the Company entered into a Settlement Agreement (the “Settlement Agreement”), pursuant to which the Company agreed that Mona Jr.’s resignation from the Company on January 22, 2019 was for Good Reason (as defined in Mona Jr.’s Employment Agreement) and agreed to extend the deadline for Mona Jr.’s exercise of his stock options for a period of five years . As of December 31, 2023, Mona Jr. had 11,300,000 fully vested outstanding stock options with a weighted average exercise price of $ 0.42 per share. In exchange, Mona Jr. agreed that notwithstanding the terms of his Employment Agreement providing for acceleration of vesting of all stock options and RSU's upon a Good Reason resignation, certain of his unvested stock options would not immediately vest, but rather continue to vest if, and only if, certain Company milestones are achieved related to the Company’s drug development efforts. These stock options were issued in July 2016 ( 6,000,000 options) and March 2017 ( 5,000,000 options) and 6,750,000 of these stock options have not vested as of December 31, 2023. The Company and Mona Jr. also agreed to mutually release all claims arising out of and related to Mona Jr.’s resignation and separation from the Company. As a result of the Settlement Agreement, the Company recorded stock-based compensation expense related to the accelerated vesting of the RSU's of $ 5.1 million and the modification of certain stock options of $ 2.7 million during the year ended December 31, 2019. As part of the Settlement Agreement, 2,950,000 vested RSU's were issued to Mona Jr. The vesting of the RSU's and payment of shares is treated as taxable compensation to Mona Jr. and thus subject to income tax withholdings. No amounts were withheld (either in cash or the equivalent of shares of common stock from the vesting of the RSU's) or included in the original Company’s payroll tax filing. The compensation was subject to Federal and State income tax withholding and Federal Insurance Contributions Act (“FICA”) taxes withholding estimated to be $ 6.4 million for the employee portions. The employer portion of the FICA taxes was $ 0.2 million and was recorded as a component of selling, general and administrative expenses in the statement of operations for the year ended December 31, 2019. During the year ended December 31, 2020, the Company reported the taxable compensation associated with the RSU release to the taxing authorities and included the amount in Mona Jr.'s W-2 for 2019. In addition, the Company paid the employer and employee portion of the FICA taxes of $ 0.2 million, respectively. Although the primary tax liability is the responsibility of the employee, the Company is secondarily liable and thus has continued to reflect this liability on its balance sheet through December 31, 2022 in an amount of $ 6.7 million, which was recorded as a component of accrued expenses. The Company initially recorded an offsetting receivable of $ 6.2 million during the second quarter of 2019 for the total estimated Federal and State income taxes which should have been withheld in addition to the employee portion of the FICA payroll taxes as the primary liability is ultimately the responsibility of the employee. The receivable was recorded as a component of prepaid expenses and other on the balance sheet. The deadline to file and pay personal income taxes for 2019 was on October 15, 2020. To date, notwithstanding repeated requests from the Company, Mona Jr. has not provided to the Company the appropriate documentation substantiating that he properly filed and paid his taxes for 2019, and Mona Jr. has recently confirmed that he has not paid his personal income tax for 2019. As a result, the Company derecognized its previously recorded receivable of $ 6.2 million during the fourth quarter of 2020. The associated liability would have been relieved once the tax amount was paid by Mona Jr. and the Company had received the required taxing authority documentation from Mona Jr. If the tax amount was not paid by Mona Jr., the Company could have been liable for such withholding tax due. On April 15, 2023, the Company believes that the statute of limitations for federal payroll tax withholding expired. In addition, the statute of limitation for the state tax withholding expired during the three months ended March 31, 2023. As a result of the expiration of the relevant statutes of limitations, neither the IRS nor the State of California have the rights to assess and collect the $ 6.2 million of income taxes from the Company and the Company has made a change in accounting estimate and no longer expects to incur a loss with respect to this matter. As a result, the Company derecognized the contingent liability of $ 6.2 million during the year ended December 31, 2023. The remaining accrued amount of $ 0.5 million that the Company may still be liable for relates to employer and employee Medicare portion of FICA taxes for which the related statute of limitations has not yet expired. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES On March 17, 2015, Michael Ruth filed a shareholder derivative suit in Nevada District Court alleging breach of fiduciary duty and gross mismanagement (the “Ruth Complaint”). The claims were premised on the same events that were the subject of a purported class action filed in the Southern District of New York on April 23, 2014 (the “Sallustro Case”). On July 2, 2019, the court in the Sallustro Case entered a final order dismissing the complaint with prejudice. The Company did not make any settlement payment, and at no time was there a finding of wrongdoing by the Company or any of its directors. Regarding the Ruth Complaint, the parties previously agreed to stay the action pending the conclusion of discovery in the Sallustro Case. Once the Sallustro Case was dismissed, the stay was lifted. Plaintiff’s counsel later informed the Court that Mr. Ruth sold his shares of CVSI stock and thus he no longer had standing to pursue this claim. However, the Court allowed plaintiff’s counsel to substitute CVSI shareholder Otilda Lamont as the named plaintiff. On September 20, 2019, defendants filed a motion to dismiss the Ruth Complaint and the court issued a ruling denying the motion to dismiss on November 24, 2020. A Third Amended Complaint was filed on December 11, 2020 substituting Otilda Lamont as plaintiff. The Company filed an answer to the Ruth complaint on January 11, 2021. The parties agreed to a settlement in principle in January 2022 whereby the Company agreed to make certain corporate governance reforms in exchange for dismissal of the lawsuit. Plaintiff filed a motion for preliminary approval of proposed settlement on June 1, 2022. The court granted preliminary approval of the proposed settlement on February 7, 2023. A hearing seeking final approval of the proposed settlement was held on May 15, 2023, and the court indicated it would likely approve the proposed settlement and reschedule the hearing with regard to plaintiff's motion for attorney's fees. On June 23, 2023, the Company received notice of a court order dated May 23, 2023 without any hearing, granting plaintiff's motion for attorney's fees and expenses of approximately $ 250,000 , which the Company accrued as of December 31, 2023. On July 19, 2023, the Company requested to vacate the court order from May 23, 2023 and set a hearing date. If the court grants final approval, the Company will have 60 days to implement the corporate governance reforms. On December 3, 2019, Michelene Colette and Leticia Shaw filed a putative class action complaint in the Central District of California, alleging the labeling on the Company’s products violated the Food, Drug, and Cosmetic Act of 1938 (the “Colette Complaint”). On February 6, 2020, the Company filed a motion to dismiss the Colette Complaint. Instead of opposing the Company's motion, plaintiffs elected to file an amended complaint on February 25, 2020. On March 10, 2020, the Company filed a motion to dismiss the amended complaint. The court issued a ruling on May 22, 2020 that stayed this proceeding in its entirety and dismissed part of the amended complaint. The court's order stated that the portion of the proceeding that is stayed will remain stayed until the U.S. Food and Drug Administration (the "FDA") completes its rulemaking regarding the marketing, including labelling, of CBD ingestible products. However, on January 26, 2023, the FDA announced that it does not intend to pursue rulemaking allowing the use of cannabidiol products in dietary supplements or conventional foods. As a result, on February 13, 2023, Plaintiffs filed a status report with the court asking to have the stay lifted. The Company filed a written opposition. The court has taken no action since Plaintiffs filed that status report, and the case remains stayed pursuant to the court's original order. On November 5, 2021, Mona Jr. filed a complaint against the Company in Nevada state court seeking to recover federal and state taxes from the Company associated with the RSU release in 2019 - refer also to Note 13. Related Parties, for further information. On December 22, 2021, the Company filed a motion to dismiss the complaint. On September 12, 2022, the court denied the motion to dismiss the case. On November 3, 2022, the court ordered the case into arbitration. On December 6, 2022, Mona Jr. filed a demand for arbitration against the Company and its officers with the American Arbitration Association (the "AAA"). On January 31, 2023, the Company and management filed a case in the San Diego Superior Court for declaratory relief, seeking to enjoin the arbitration on the grounds that Mona Jr. is barred from proceeding with the arbitration under the doctrines of res judicata and judicial estoppel based on the position that Mona Jr. took against the Company in a prior arbitration. On February 2, 2023, the AAA stayed the arbitration for 60 days. On February 14, 2023, the Company filed a motion for preliminary injunction to enjoin Mona Jr. from proceeding with the arbitration. The preliminary injunction motion was scheduled for hearing on October 20, 2023. On March 20, 2023, the Company sought a temporary restraining order to enjoin Mona Jr. from proceeding with the arbitration, which the court denied. After the denial of the temporary restraining order, the Company withdrew its motion for preliminary injunction. On April 5, 2023, the AAA informed the parties that the stay issued on February 2, 2023 had been lifted. On April 28, 2023, the AAA appointed an arbitrator for the matter. On June 6, 2023, the Company's officers filed a motion to dismiss the claims in the arbitration against them, arguing that they are not party to an agreement with Mona Jr. to arbitrate. On July 6, 2023, the Arbitrator issued an order scheduling the hearing on the merits for April 8 through April 12, 2024. On September 12, 2023, the Arbitrator granted in part and denied in part the motion to dismiss the Company's officers, requiring the case to proceed to a hearing on the merits. Management intends to vigorously defend the allegations. In the normal course of business, the Company is a party to a variety of agreements pursuant to which they may be obligated to indemnify the other party. It is not possible to predict the maximum potential amount of future payments under these types of agreements due to the conditional nature of our obligations, and the unique facts and circumstances involved in each particular agreement. Historically, payments made by us under these types of agreements have not had a material effect on our business, results of operations or financial condition. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
LEASES | LEASES In April 2022, the Company entered into a new lease agreement for its main office facility. The lease is for the Company's operations, warehouse, sales, marketing and back office functions. The facility is approximately 6,000 square feet and located in San Diego, California. The lease term is three year s with a total lease obligation of approximately $ 0.4 million. The lease does not include an option to renew. The operating lease is included in "Right of use assets" on the Company's December 31, 2023 and 2022 Consolidated Balance Sheets, and represents the Company's right to use the underlying asset for the lease term. The Company's obligation to make lease payments is included in "Operating lease liability - current" and "Operating lease liability" on the Company's December 31, 2023 and 2022 Consolidated Balance Sheets. Based on the present value of the lease payments for the remaining lease term, the Company recognized an operating lease asset of $ 0.3 million and lease liabilities for operating leases of $ 0.4 million, respectively, on May 1, 2022. As of December 31, 2023, the Company had an operating lease obligation and operating lease asset of $ 0.2 million related to the new facility. Operating lease expense is recognized on a straight-line basis over the lease term. The Company recognized total lease costs of $ 0.1 million for each of the years ended December 31, 2023 and 2022. Total lease costs was mostly comprised of operating lease costs. Short-term lease costs related to short-term operating leases and variable lease costs were immaterial. Because the rate implicit in the lease is not readily determinable, the Company uses the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company has certain contracts for real estate which may contain lease and nonlease components which it has elected to treat as a single lease component. Information related to the Company's operating lease assets and related lease liabilities were as follows: December 31, 2023 Remaining lease term (in years) 1.42 Discount rate 7.0 % Maturities of lease liabilities as of December 31, 2023 were as follows (in thousands): Year ending December 31, 2024 $ 139 2025 59 Total 198 Less: imputed interest 10 Total lease liabilities $ 188 Operating lease liability - current $ 130 Operating lease liability - net of current portion 58 Total operating lease liability $ 188 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES For the years ended December 31, 2023 and 2022, pretax income (loss) was attributable to the following jurisdictions (in thousands): For the years ended December 31, 2023 2022 Domestic operations $ 3,114 $ ( 8,261 ) Foreign operations ( 18 ) — Total $ 3,096 $ ( 8,261 ) The income tax benefit for the years ended December 31, 2023 and 2022 was comprised of the following (in thousands): For the years ended December 31, 2023 2022 Current: Federal $ — $ — State 8 4 Foreign — — Total current tax expense 8 4 Deferred: Federal ( 11 ) ( 51 ) State — — Foreign ( 3 ) — Total deferred tax benefit ( 14 ) ( 51 ) Income tax benefit $ ( 6 ) $ ( 47 ) A reconciliation of the expected income tax benefit at the federal statutory rate of 21 % for the years ended December 31, 2023 and 2022, and the income tax benefit reported in the financial statements is as follows: For the years ended December 31, 2023 2022 Amount % of pretax Amount % of pretax (in thousands) (in thousands) Income tax expense (benefit) at federal statutory rate $ 651 21.0 % $ ( 1,735 ) 21.0 % State taxes, net of federal effect 182 5.9 ( 456 ) 5.5 Other permanent differences 33 1.1 21 ( 0.3 ) Stock-based compensation 420 13.5 1,795 ( 21.7 ) NOL adjustments and other true-ups ( 640 ) ( 20.6 ) 722 ( 8.7 ) R&D tax credits — — ( 1 ) — Other 8 0.2 14 ( 0.2 ) Decrease in valuation allowance ( 660 ) ( 21.3 ) ( 407 ) 4.9 Income tax benefit $ ( 6 ) ( 0.2 )% $ ( 47 ) 0.5 % The following table summarizes the significant components of the Company's deferred tax assets and liabilities as of December 31, 2023 and 2022 (in thousands): December 31, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 10,804 $ 9,280 Business credit carryforwards 939 948 Intangible assets 413 527 Stock-based compensation 4,075 4,416 Change to inventory 52 87 Operating lease liabilities 51 81 Accruals and reserves 565 2,351 Other 247 222 17,146 17,912 Deferred tax liabilities: Operating lease assets ( 45 ) ( 73 ) Property and equipment ( 97 ) ( 100 ) CanX intangible assets — ( 67 ) ( 142 ) ( 240 ) Valuation allowance ( 17,023 ) ( 17,683 ) Net deferred tax liabilities $ ( 19 ) $ ( 11 ) The valuation allowance decreased by $ 0.7 million for the year ended December 31, 2023 and increased by $ 0.4 million for the year ended December 31, 2022. Deferred tax assets and liabilities are provided for significant revenue and expense items recognized in different years for tax and financial reporting purposes. The Company periodically assesses the likelihood that it will be able to recover its deferred tax assets. The Company considers all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income, and ongoing prudent and feasible profits. As of December 31, 2023 and 2022, the Company established valuation allowances equal to the full amount of its deferred tax assets, net of certain tax liabilities, due to the uncertainties regarding the realization of the deferred tax assets in future years. As of December 31, 2023, the Company had federal, California, and other state net operating loss (“NOL”) carryforwards of $ 40.2 million, $ 27.5 million, and $ 8.0 million, respectively, which are available to offset future taxable income. Federal NOL carryforwards arising after 2017 of $ 33.0 million do not expire. Federal NOL carryforwards arising before 2018 of $ 7.2 million expire from 2036 to 2037. California NOL carryforwards of $ 27.5 million expire from 2036 to 2043. Other state NOL carryforwards of $ 8.0 million have various expirations from 2036 to 2043. As of December 31, 2023, the Company had federal and California R&D credit carryforwards of approximately $ 0.7 million and $ 0.4 million, respectively, which are available to offset future taxable income. Federal R&D credit carryforwards expire from 2036 to 2041. California R&D credit carryforwards do not expire. The NOL carryforward may be subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code of 1986 (the “Code”), and similar state provisions if the Company experienced one or more ownership changes, which would limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 and 383, results from the transactions increasing ownership of certain stockholders or public groups in the stock of the corporation of more than 50% over a three-year period. The Company completed a Section 382 and 383 analysis regarding the limitation of NOL and credit carryforwards from inception in December 2010 through November 4, 2019. The Company experienced multiple ownership changes for the purposes of Section 382 and 383 of the Code with the latest change in April 2017. The ownership changes did not result in the forfeiture of any NOLs or credits generated prior to this date. If a change in ownership occurs in the future, the NOL and tax credits carryforwards could be eliminated or restricted. The Company recognizes a tax benefit from an uncertain tax position when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits, and uncertain income tax positions must meet a more likely than not recognition threshold to be recognized. The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the statements of operations. The Company does not anticipate a significant change in its uncertain tax benefits over the next 12 months. The Company is subject to taxation in the U.S. and California state jurisdictions. Due to net operating losses all tax years since inception remain open to examination. A reconciliation of the Company's unrecognized tax benefits for the years ended December 31, 2023 and 2022 is provided in the following table (in thousands): 2023 2022 Balance as of January 1: $ 172 $ 172 Increase in current year positions — — Increase in prior year positions — — Decrease in prior year positions ( 2 ) — Balance as of December 31: $ 170 $ 172 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation - The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). On December 7, 2023, the Company acquired Cultured Foods. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates – The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results may differ from these estimates. Significant estimates include the valuation of intangible assets, inputs for valuing equity awards, and assumptions related to revenue recognition. |
Concentrations of Credit Risk | Concentrations of Credit Risk – As of December 31, 2023 , the Federal Deposit Insurance Corporation (“FDIC”) provided insurance coverage of up to $ 0.3 million per depositor per bank. The Company has not experienced any losses in such accounts and does not believe that the Company is exposed to significant risks from excess deposits. The Company’s cash balance in excess of FDIC limits totaled $ 1.0 million a s of December 31, 2023. The Company has not experienced any such losses in these accounts to date, and believes that the financial institutions at which such amounts are held are stable; however, no assurance can be provided. The Company sources its raw materials from suppliers in Europe and the U.S. One supplier of shipping and fulfillment services accounted for 18 % and 27 % of our outstanding accounts payable as of December 31, 2023 and 2022, respectively. In addition, one supplier for online marketing services accounted for 17 % and 13 % of our outstanding accounts payable as of December 31, 2023 and 2022, respectively. There was no other concentration of suppliers and no concentration of accounts receivable or revenue as of and for the years ended December 31, 2023 and 2022 . |
Fair Value Measurements | Fair Value Measurements – Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The carrying values of accounts receivable, other current assets, accounts payable, and certain accrued expenses as of December 31, 2023 and 2022, approximate their fair value due to the short-term nature of these items. The Company's notes payable balance also approximates fair value as of December 31, 2023, as the interest rates on the notes payable approximate the rates available to the Company as of this date. The accounting guidance establishes a three-level hierarchy for disclosure that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities. • Level 1 - uses unadjusted quoted prices that are available in active markets for identical assets or liabilities. The Company does no t have any cash equivalents or restricted cash as of December 31, 2023 and 2022 . The Company does no t have any liabilities that are valued using inputs identified under a Level 1 hierarchy as of December 31, 2023 and 2022. • Level 2 - uses inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data. Except as described below under the caption Goodwill and Intangible Assets, the Company did no t have any assets or liabilities that are valued using inputs identified under a Level 2 hierarchy as of December 31, 2023 and 2022. • Level 3 - uses one or more significant inputs that are unobservable and supported by little or no market activity, and that reflect the use of significant management judgment. Level 3 assets and liabilities include those whose fair value measurements are determined using pricing models, discounted cash flow methodologies or similar valuation techniques, and significant management judgment or estimation. The Company did no t have any assets or liabilities that are valued using inputs identified under a Level 3 hierarchy as of December 31, 2023 and 2022 . |
Liquidity Considerations | Liquidity Considerations – U.S. GAAP requires management to assess a company's ability to continue as a going concern within one year from the consolidated financial statement issuance and to provide related note disclosure in certain circumstances. The accompanying consolidated financial statements and notes have been prepared assuming the Company will continue as a going concern. For the year ended December 31, 2023, the Company generated cash flows from operations of $ 2.3 million, which included government receipts of $ 2.7 million. Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law on March 27, 2020 and the subsequent extension of the CARES Act, the Company was eligible for a refundable employee retention tax credit subject to certain criteria. The Company determined that it qualifies for the tax credit under the CARES Act. In 2022, the Company claimed employee retention tax credits, which were recognized as a reduction to general and administrative expenses of $ 2.5 million during the year ended December 31, 2022. The amount was included in prepaid expenses and other in the Company's consolidated balance sheet as of December 31, 2022. Excluding the funds from the employee retention tax credit, the Company generated negative cash flows from operations of $ 0.5 million for the year ended December 31, 2023 and had an accumulated deficit of $ 84.6 million. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operations, growth initiatives, and will continue to make and implement strategic cost reductions, including reductions in employee headcount, vendor spending, and delaying expenses related to its drug development activities. The Company intends to position itself so that it will be able to raise additional funds through the capital markets, issuance of debt, and/or securing lines of credit. The Company's financial operating results and accumulated deficit, besides other factors, raise substantial doubt about the Company's ability to continue as a going concern. The Company will continue to pursue the actions outlined above, as well as work towards increasing revenue and operating cash flows to meet its future liquidity requirements. However, there can be no assurance that the Company will be successful in any capital-raising efforts that it may undertake, and the failure of the Company to raise additional capital could adversely affect its future operations and viability. |
Debt Issuance Costs | Debt Issuance Costs – The Company presents its debt issuance costs and debt discounts as a direct deduction from the carrying amount of the related indebtedness on its consolidated balance sheet and amortizes these costs over the term of the related debt liability using the effective interest method. Amortization is recorded in interest expense in the consolidated statements of operations. |
Accounts Receivable | Accounts Receivable – Generally, the Company requires payment prior to shipment. However, in certain circumstances, the Company extends credit to companies located throughout the U.S. Accounts receivable consist of trade accounts arising in the normal course of business. Accounts for which no payments have been received after 30 days are considered delinquent and customary collection efforts are initiated. Accounts receivable are carried at original invoice amount less a reserve made for doubtful receivables based on a review of all outstanding amounts on a quarterly basis. Management has determined the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition and credit history, and current economic conditions. As of December 31, 2022, the Company maintained an allowance for doubtful accounts related to accounts receivable in the amount of $ 0.4 million. The allowance for doubtful accounts as of December 31, 2023 was no t material. |
Inventory | Inventory – Inventory is stated at lower of cost or net realizable value, with cost being determined on an average cost basis. Cost includes costs directly related to manufacturing and distribution of the products. Primary costs include raw materials, packaging, manufacturing overhead, shipping and depreciation of manufacturing equipment and production facilities. Manufacturing overhead includes payroll, employee benefits, utilities, maintenance and property taxes. Total shipping and handling costs were $ 1.9 million and $ 2.2 million for the years ended December 31, 2023 and 2022, respectively, and are recorded in cost of goods sold. The Company performs an assessment of inventory obsolescence to measure inventory at the lower of cost or net realizable value. Factors considered in the determination of obsolescence include slow-moving or non-marketable items. The Company's inventory production process includes the processing and cultivation of botanical raw material. Because of the duration of the cultivation process, a portion of our inventory will not be sold within one year. Consistent with the practice in other industries that cultivate botanical raw materials, all inventory is classified as a current asset. |
Property & Equipment | Property & Equipment – Equipment is stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Depreciation is provided on a straight-line basis over the assets' estimated useful lives. Maintenance or repairs are charged to expense as incurred. Upon sale or disposition, the historically-recorded asset cost and accumulated depreciation are removed from the respective accounts and any related gain or loss is recognized. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets – In accordance with ASC Topic 360, Accounting for the Impairment or Disposal of Long-Lived Assets , the Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of property and equipment is measured by comparing its carrying value to the undiscounted projected future cash flows that the assets are expected to generate. If the carrying amount of an asset is not recoverable, the Company recognizes an impairment loss based on the excess of the carrying amount of the long-lived asset over its respective fair value, which is generally determined as the present value of estimated future cash flows or at the appraised value. The impairment analysis is based on significant assumptions of future results made by management, including revenue and cash flow projections. Circumstances that may lead to impairment of property and equipment include a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long-lived asset is being used or in its physical condition and a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset including an adverse action or assessment by a regulator. As of December 31, 2023 and 2022 , the Company determined that long-lived assets were not impaired. |
Segments | Segments – Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker ("CODM") in deciding how to allocate resources and in assessing performance. As such, the Company has one operating segment, which is the business of hemp-based CBD wellness products. All long-lived assets are located in the United States and substantially all revenue is attributed to customers and consumers based in the United States. The Company previously reported two distinct business segments: a consumer products segment in manufacturing, marketing and selling hemp-based CBD products to a range of market sectors; and a specialty pharmaceutical segment focused on developing and commercializing novel therapeutics utilizing CBD. Effective October 1, 2022, the Company no longer maintains separate financial information for which operating results are evaluated on a regular basis by the CODM in deciding how to allocate resources and in assessing performance. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets – The Company evaluates the carrying value of goodwill and intangible assets annually during the fourth quarter in accordance with ASC Topic 350, Intangibles Goodwill and Other, and between annual evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Such circumstances could include, but are not limited to (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. Goodwill is evaluated for impairment by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary. If it is determined, based on qualitative factors, that the fair value of the reporting unit may more likely than not be less than carrying amount, or if significant adverse changes in the Company's future financial performance occur that could materially impact fair value, a quantitative goodwill impairment test would be required. Additionally, management can elect to forgo the qualitative assessment and perform the quantitative test. If the qualitative assessment indicates that the quantitative analysis should be performed, or if management elects to bypass a qualitative assessment, the Company then evaluates goodwill for impairment by comparing the fair value of the reporting unit to its carrying amount, including goodwill. The quantitative assessment for goodwill requires management to estimate the fair value of the Company's reporting units using either an income or market approach or a combination thereof. Management makes critical assumptions and estimates in completing impairment assessments of goodwill and other intangible assets. The Company's cash flow projections look several years into the future and include assumptions on variables such as future sales and operating margin growth rates, economic conditions, probability of success, market competition, inflation and discount rates. During the fourth quarter of 2023, the Company performed its annual goodwill impairment analysis following the steps laid out in ASC 350-20-35-3C. The Company's annual impairment analysis includes a qualitative assessment to determine if it is necessary to perform the quantitative impairment test. In performing a qualitative assessment, the Company reviewed events and circumstances that could affect the significant inputs used to determine if the fair value is less than the carrying value of goodwill. The Company determined that no triggering event had occurred to necessitate performing the quantitative impairment test. As a result, the Company did no t record any goodwill impairment charges for the year ended December 31, 2023 . The Company did no t have any goodwill as of December 31, 2022. The Company classifies intangible assets into three categories: (1) intangible assets with definite lives subject to amortization; (2) intangible assets with indefinite lives not subject to amortization; and (3) goodwill. As of December 31, 2023, the Company has in-process research & development (" IPR&D") with an indefinite life and trademarks and customer relationships acquired from Cultured Foods with a definite life. IPR&D is not amortized until completion and development of the project, at which time the IPR&D becomes an amortizable asset. Until such time as the projects are either completed or abandoned, the Company tests those assets for impairment at least annually at year end, or more frequently at interim periods, by evaluating qualitative factors which could be indicative of impairment. Qualitative factors being considered include, but are not limited to, macro-economic conditions, progress on drug development activities, and overall financial performance. If impairment indicators are present as a result of the Company's qualitative assessment, the Company will test those assets for impairment by comparing the fair value of the assets to their carrying value. Quantitative factors being considered include, but are not limited to, the current project status, forecasted changes in the timing or amounts required to complete the project, forecasted changes in timing or changes in the future cash flows to be generated by the completed products, a probability of success of the ultimate project and changes to other market-based assumptions, such as current Company market capitalization. Upon completion or abandonment, the value of the IPR&D assets will be amortized to expense over the anticipated useful life of the developed products, if completed, or charged to expense when abandoned if no alternative future use exists. The Company completed its annual impairment assessment during the fourth quarter of 2023 and 2022. The Company evaluated, on the basis of the weight of the evidence, the significance of all identified events and circumstances that could affect the significant inputs used to determine the fair value of the IPR&D for determining whether it is more likely than not that the IPR&D asset is impaired. After assessing the totality of events and circumstances and their potential effect on significant inputs to the fair value determination, the Company determined that it is more likely than not that the IPR&D asset is impaired. As such, the Company has estimated the fair value of the IPR&D and performed the quantitative impairment test. Based on the quantitative impairment test, the Company determined that its IPR&D is impaired by $ 0.3 million for the year ended December 31, 2023. An intangible asset impairment charge of $ 0.3 million was recorded during the year ended December 31, 2023. |
Revenue Recognition | Revenue Recognition – The majority of the Company's revenue contracts represent a single performance obligation related to the fulfillment of customer orders for the purchase of its products. Net sales reflect the transaction prices for these contracts based on the Company's selling list price, which is then reduced by estimated costs for trade promotional programs, consumer incentives, and allowances and discounts used to incentivize sales growth and build brand awareness. The Company recognizes revenue at the point in time that control of the ordered product is transferred to the customer, which is typically upon shipment to the customer or other customer-designated delivery point. The Company accrues for estimated sales returns by customers based on historical sales return results. The computation of the sales return and other allowances require that management makes certain estimates and assumptions that effect the timing and amounts of revenue and liabilities recorded. Shipping and handling fees charged to customers are included in product sales and totaled $ 0.1 million for the year ended December 31, 2022 . Shipping and handling fees charged to customers was no t material for the year ended December 31, 2023. Taxes collected from customers that are remitted to governmental agencies are accounted for on a net basis and not included as revenue. The following represents product sales by retail (B2B) and e-commerce (B2C) channels for the years ended December 31, 2023 and 2022: For the years ended December 31, 2023 2022 Amount % of product Amount % of product (in thousands) (in thousands) Retail sales (B2B) $ 9,178 57.3 % $ 9,040 55.8 % E-Commerce sales (B2C) 6,826 42.7 % 7,165 44.2 % Product sales, net $ 16,004 100.0 % $ 16,205 100.0 % |
Compensation and Benefits | Compensation and Benefits – The Company records compensation and benefits expense for all cash and deferred compensation, benefits, and related taxes as earned by its employees. Compensation and benefits expense also includes compensation earned by temporary employees and contractors who perform similar services to those performed by the Company’s employees, primarily information technology and project management activities. The Company maintains a defined contribution 401(k) plan available to eligible employees. Employee contributions are voluntary and are determined on an individual basis, limited to the maximum amount allowable under federal tax regulations. The Company does not make matching contributions. |
Research and Development Expense | Research and Development Expense – Research and development costs are charged to expense as incurred and include, but are not limited to, employee salaries and benefits, cost of inventory used in product development and consulting service fees. Research and development expense was $ 0.2 million and $ 0.3 million for the years ended December 31, 2023 and 2022 , respectively. |
Advertising | Advertising – The Company supports its products with advertising to build brand awareness of the Company’s various products in addition to other marketing programs executed by the Company’s marketing team. The Company believes the continual investment in advertising is critical to the development and sale of its products. Advertising costs of $ 1.1 million and $ 1.2 million were expensed as incurred during each of the years ended December 31, 2023 and 2022 , respectively. |
Common Stock Warrants | Common Stock Warrants - The Company classifies as equity any warrants that (i) require physical settlement or net-share settlement or (ii) provide the Company with a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company assesses classification of its common stock warrants and other freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company’s freestanding derivatives consist of warrants to purchase common stock that were issued in connection with its convertible preferred stock. The Company evaluated these warrants to assess their proper classification, and determined that the common stock warrants meet the criteria for equity classification in the accompanying balance sheets. |
Stock Based Compensation | Stock-Based Compensation – Certain employees, officers, directors, and consultants of the Company participate in various long-term incentive plans that provide for granting stock options, restricted stock awards, restricted stock units, stock bonus awards and performance-based awards. Stock options generally vest in equal increments over a two - to four-year period and expire on the ten th anniversary following the date of grant. Performance-based stock options vest once the applicable performance condition is probable of being satisfied. The Company recognizes stock-based compensation for equity awards granted to employees, officers and directors as compensation and benefits expense in the statements of operations. The fair value of stock options is estimated using a Black-Scholes valuation model on the date of grant. The fair value of restricted stock awards is equal to the closing price of the Company’s stock on the date of grant. Stock-based compensation is recognized over the requisite service period of the individual awards, which generally equals the vesting period. For performance-based stock options, compensation is recognized once the applicable performance condition is satisfied. |
Income Taxes | Income Taxes – Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the related temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized when the rate change is enacted. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. In accordance with ASC Topic 740, Income Taxes , the Company recognizes the effect of uncertain income tax positions only if the positions are more likely than not of being sustained in an audit, based on the technical merits of the position. Recognized uncertain income tax positions are measured at the largest amount that is greater than 50 % likely of being realized. Changes in recognition or measurement are reflected in the period in which those changes in judgment occur. The Company recognizes both interest and penalties related to uncertain tax positions as part of the income tax provision. As of December 31, 2023 and 2022 , the Company did no t have a liability for unrecognized tax uncertainties. The Company is subject to routine audits by taxing jurisdictions. |
Comprehensive Loss | Foreign Currency – The Company translates the assets and liabilities of its foreign subsidiary into U.S. Dollars at current rates of exchange in effect at the end of the reporting period. Income and expense items are translated at rates that approximate the rates in effect at the transaction date. Gains and losses from translation are included in accumulated other comprehensive income or loss. Gains or losses resulting from foreign currency transactions during the year ended December 31, 2023 (transactions denominated in a currency other than the entity’s functional currency) are included as other income i n the Company’s consolidated statements of operations. The Company did no t have any foreign currency translation gains (losses) during the year ended December 31, 2022 . |
Recent Accounting Pronouncements Not Yet Adopted and Recently Adopted Accounting Standards | Recent Accounting Pronouncements Not Yet Adopted In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Taxes Disclosures , which requires greater disaggregation of income tax disclosures. The new standard requires additional information to be disclosed with respect to the income tax rate reconciliation and income taxes paid disaggregated by jurisdiction. This ASU should be applied prospectively for fiscal years beginning after December 15, 2024, with retrospective application permitted. The Company is currently evaluating the impacts of this guidance on the Company’s Consolidated Financial Statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , which requires companies to enhance the disclosures about segment expenses. The new standard requires the disclosure of the Company’s Chief Operating Decision Maker ("CODM"), expanded incremental line-item disclosures of significant segment expenses used by the CODM for decision-making, and the inclusion of previous annual only segment disclosure requirements on a quarterly basis. This ASU should be applied retrospectively for fiscal years beginning after December 15, 2023, and early adoption is permitted. The Company is currently evaluating the impacts of this guidance on the Company’s Consolidated Financial Statements. Recently Adopted Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance: ASU 2018-19, ASU 2019-04 and ASU 2019-05 (collectively, “Topic 326”). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. Topic 326 was to be effective for reporting periods beginning after December 15, 2019, with early adoption permitted. In November 2019, the FASB issued ASU 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates, which deferred the effective dates for the Company, as a smaller reporting company, until fiscal year 2023. The Company adopted the guidance as of January 1, 2023. Adoption of this guidance did not have a material impact on the Company's consolidated financial statements or its disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Revenue Product Sales by Channel | The following represents product sales by retail (B2B) and e-commerce (B2C) channels for the years ended December 31, 2023 and 2022: For the years ended December 31, 2023 2022 Amount % of product Amount % of product (in thousands) (in thousands) Retail sales (B2B) $ 9,178 57.3 % $ 9,040 55.8 % E-Commerce sales (B2C) 6,826 42.7 % 7,165 44.2 % Product sales, net $ 16,004 100.0 % $ 16,205 100.0 % |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory as of December 31, 2023 and 2022 was comprised of the following (in thousands): December 31, 2023 2022 Raw materials $ 2,892 $ 3,563 Work in process 1,181 1,020 Finished goods 1,582 1,980 $ 5,655 $ 6,563 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property and equipment, net, as of December 31, 2023 and 2022 were as follows (in thousands): December 31, Useful Lives 2023 2022 Office furniture and IT equipment 3 - 5 years $ 1,393 $ 1,392 Machinery and equipment 7 years 37 — 1,430 1,392 Less: accumulated depreciation ( 1,051 ) ( 817 ) $ 379 $ 575 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary Of Total Consideration Transferred | The following table outlines the total consideration transferred (in thousands): Cash $ 192 Common shares 250 Earn-out 88 Total consideration transferred $ 530 |
Summary Of Assets Acquired And Liabilities Assumed Of Acquisition Date | The following table summarizes the assets acquired and liabilities assumed as of the acquisition date (in thousands): Cash $ 18 Accounts receivable and other receivables 11 Inventories 133 Intangible assets 78 Other current assets 17 Fixed assets 38 Goodwill 334 Total assets 629 Accounts payable and accrued liabilities 27 Current note payable 50 Deferred tax liabilities 22 Total liabilities 99 Net assets acquired $ 530 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amounts of Goodwill | The following table summarizes the changes in the carrying amounts of goodwill (in thousands): Carrying Balance - December 31, 2022: $ — Acquisition of Cultured Foods 334 Translation adjustment 8 Balance - December 31, 2023: $ 342 As of |
Summary of Intangible Assets Related Accumulated Amortization | The following table summarizes the intangible assets and the related accumulated amortization (in thousands): December 31, December 31, Gross carrying amount $ 79 $ 251 Accumulated amortization ( 1 ) - Net carrying amount $ 78 $ 251 |
Summary of Changes in Carrying Amounts of Intangible Assets | Changes in the carrying amounts of intangible assets are summarized below (in thousands): In-process research and development Trade names Customer relationships Total Balance - December 31, 2021: $ 1,485 $ — $ — $ 1,485 Impairment ( 1,234 ) — — ( 1,234 ) Balance - December 31, 2022: 251 — — 251 Impairment ( 251 ) — — ( 251 ) Acquisition of Cultured Foods — 52 26 78 Amortization — ( 1 ) — ( 1 ) Translation adjustments — 1 — 1 Balance - December 31, 2023: $ — $ 52 $ 26 $ 78 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses as of December 31, 2023 and 2022 were as follows (in thousands): December 31, 2023 2022 Accrued payroll tax - Mona (Note 13) $ 522 $ 6,694 Accrued payroll expenses 1,388 1,447 Other accrued liabilities 1,512 1,549 $ 3,422 $ 9,690 |
Convertible Notes (Tables)
Convertible Notes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Convertible Notes | Convertible notes as of December 31, 2022 were as follows (in thousands): December 31, Principal amount $ 2,120 Less: Original issuance discount ("OID") ( 120 ) Less: Debt issuance costs ( 275 ) Net proceeds 1,725 Default premium 179 Conversion of note into common shares ( 1,514 ) Accretion of OID and amortization of debt issuance costs 395 Repayment ( 675 ) Settlement ( 110 ) Carrying amount $ — |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt as of December 31, 2023 and 2022was as follows (in thousands): December 31, 2023 2022 Note payable, net of discount and costs $ — $ 1,005 Insurance financing 204 218 Cultured Foods note payable (Note 5) 50 — Total debt $ 254 $ 1,223 |
Stockholders Equity (Tables)
Stockholders Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Warrants Outstanding | The following represents a summary of the warrants outstanding as of December 31, 2023 and 2022: Number of Shares Underlying Issue Date Classification Exercise Price Expiration Date December 31, December 31, March 30, 2022 Equity $ 0.1000 June 6, 2025 10,000,000 10,000,000 March 30, 2022 Equity $ 0.0875 June 6, 2025 750,000 750,000 10,750,000 10,750,000 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Options Activity | The following summarizes activity related to the Company's stock options (in thousands, except per share data): Number of Weighted Weighted Aggregate Outstanding - December 31, 2022 19,831 $ 0.46 3.5 $ — Granted 7,950 0.04 — — Exercised — — — — Forfeited ( 3,346 ) 0.46 — — Outstanding - December 31, 2023 24,435 0.32 4.4 6 Exercisable - December 31, 2023 18,125 0.42 2.7 3 Vested or expected to vest - December 31, 2023 24,435 $ 0.32 4.4 $ 6 |
Summary of Weighted-Average Assumptions Used to Estimate Fair Value | The following table presents the weighted average grant date fair value of stock options granted and the weighted-average assumptions used to estimate the fair value on the date of grant using the Black-Scholes valuation model: For the years ended December 31, 2023 2022 Volatility 132.1 % 123.5 % Risk-Free Interest Rate 3.9 % 3.6 % Expected Term (in years) 5.75 5.52 Dividend Rate 0.0 % 0.0 % Fair Value Per Share on Grant Date $ 0.04 $ 0.03 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings per Share | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data): For the years ended December 31, 2023 2022 Numerator: Net income (loss) attributable to common stockholders $ 3,102 $ ( 9,134 ) Denominator for basic and diluted net income (loss) per share: Weighted average common shares outstanding for basic 153,954 138,034 Dilutive potential common stock outstanding: Stock options 1 — Weighted average common shares outstanding for diluted 153,955 138,034 Basic net income (loss) per share attributable to common stockholders $ 0.02 $ ( 0.07 ) Diluted net income (loss) per share attributable to common stockholders $ 0.02 $ ( 0.07 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following common stock equivalents were not included in the calculation of net income (loss) per diluted share because their effect were anti-dilutive (in thousands): For the years ended December 31, 2023 2022 Stock options 20,185 15,581 Performance stock options 11,000 11,000 Warrants 10,750 10,750 Total 41,935 37,331 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Lease Information | Information related to the Company's operating lease assets and related lease liabilities were as follows: December 31, 2023 Remaining lease term (in years) 1.42 Discount rate 7.0 % |
Maturities of Lease Liabilities | Maturities of lease liabilities as of December 31, 2023 were as follows (in thousands): Year ending December 31, 2024 $ 139 2025 59 Total 198 Less: imputed interest 10 Total lease liabilities $ 188 Operating lease liability - current $ 130 Operating lease liability - net of current portion 58 Total operating lease liability $ 188 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Pretax Income (loss) | For the years ended December 31, 2023 and 2022, pretax income (loss) was attributable to the following jurisdictions (in thousands): For the years ended December 31, 2023 2022 Domestic operations $ 3,114 $ ( 8,261 ) Foreign operations ( 18 ) — Total $ 3,096 $ ( 8,261 ) |
Components of Income Tax Benefit | The income tax benefit for the years ended December 31, 2023 and 2022 was comprised of the following (in thousands): For the years ended December 31, 2023 2022 Current: Federal $ — $ — State 8 4 Foreign — — Total current tax expense 8 4 Deferred: Federal ( 11 ) ( 51 ) State — — Foreign ( 3 ) — Total deferred tax benefit ( 14 ) ( 51 ) Income tax benefit $ ( 6 ) $ ( 47 ) |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the expected income tax benefit at the federal statutory rate of 21 % for the years ended December 31, 2023 and 2022, and the income tax benefit reported in the financial statements is as follows: For the years ended December 31, 2023 2022 Amount % of pretax Amount % of pretax (in thousands) (in thousands) Income tax expense (benefit) at federal statutory rate $ 651 21.0 % $ ( 1,735 ) 21.0 % State taxes, net of federal effect 182 5.9 ( 456 ) 5.5 Other permanent differences 33 1.1 21 ( 0.3 ) Stock-based compensation 420 13.5 1,795 ( 21.7 ) NOL adjustments and other true-ups ( 640 ) ( 20.6 ) 722 ( 8.7 ) R&D tax credits — — ( 1 ) — Other 8 0.2 14 ( 0.2 ) Decrease in valuation allowance ( 660 ) ( 21.3 ) ( 407 ) 4.9 Income tax benefit $ ( 6 ) ( 0.2 )% $ ( 47 ) 0.5 % |
Schedule of Deferred Tax Assets And Liabilities | The following table summarizes the significant components of the Company's deferred tax assets and liabilities as of December 31, 2023 and 2022 (in thousands): December 31, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 10,804 $ 9,280 Business credit carryforwards 939 948 Intangible assets 413 527 Stock-based compensation 4,075 4,416 Change to inventory 52 87 Operating lease liabilities 51 81 Accruals and reserves 565 2,351 Other 247 222 17,146 17,912 Deferred tax liabilities: Operating lease assets ( 45 ) ( 73 ) Property and equipment ( 97 ) ( 100 ) CanX intangible assets — ( 67 ) ( 142 ) ( 240 ) Valuation allowance ( 17,023 ) ( 17,683 ) Net deferred tax liabilities $ ( 19 ) $ ( 11 ) |
Schedule of Unrecognized Tax Benefits | A reconciliation of the Company's unrecognized tax benefits for the years ended December 31, 2023 and 2022 is provided in the following table (in thousands): 2023 2022 Balance as of January 1: $ 172 $ 172 Increase in current year positions — — Increase in prior year positions — — Decrease in prior year positions ( 2 ) — Balance as of December 31: $ 170 $ 172 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||
Mar. 30, 2022 USD ($) | Aug. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) Segment | Dec. 31, 2022 USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash in excess of FDIC limits | $ 1,000,000 | |||
Cash equivalents | 0 | $ 0 | ||
Restricted cash | 0 | 0 | ||
Negative operating cash flow | 2,253,000 | (1,885,000) | ||
Employee retention tax credit negative operating cash flow | (500,000) | |||
Accumulated deficit | 84,587,000 | 87,689,000 | ||
CARES act, tax credit received under relief provision | 2,500,000 | |||
CARES Act, proceeds received under relief provision | 2,700,000 | |||
Proceeds from note payable | 0 | 2,000,000 | ||
Proceeds from issuance of preferred stock | $ 700,000 | |||
Repayment of note payable | $ (1,117,000) | (953,000) | ||
CARES act, tax credit received under relief provision | (2,500,000) | |||
Threshold for determining delinquent accounts receivable | 30 days | |||
Allowance for doubtful accounts | $ 0 | 400,000 | ||
Number of operating segments | Segment | 1 | |||
Number of business segments | Segment | 2 | |||
Goodwill, impairment | $ 0 | 0 | ||
Impairment of intangible assets, finite-lived | 251,000 | 1,234,000 | ||
Product sales, net | 16,004,000 | 16,205,000 | ||
Research and development | 151,000 | 307,000 | ||
Advertising costs | $ 1,100,000 | 1,200,000 | ||
Percentage of likely being realized of recognized uncertain income tax positions | 50% | |||
Liability for unrecognized tax uncertainties | $ 0 | 0 | ||
Foreign currency translation gains (losses) | $ 10,000 | $ 0 | ||
Accounts Payable | One Supplier Of Shipping And Fulfillment Services | Customer Concentration Risk | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Concentration risk percentage for accounts payable | 18% | 27% | ||
Accounts Payable | One Supplier For Online Marketing Services | Customer Concentration Risk | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Concentration risk percentage for accounts payable | 17% | 13% | ||
In-process research and development | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Impairment of intangible assets, finite-lived | $ 251,000 | $ 1,234,000 | ||
Maximum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cash, FDIC insured amount | $ 300,000 | |||
Equity Option | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Stock option, maximum term | 10 years | |||
Equity Option | Minimum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Award vesting period | 2 years | |||
Equity Option | Maximum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Award vesting period | 4 years | |||
Shipping and Handling | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Shipping and handling costs | $ 1,900,000 | 2,200,000 | ||
Product sales, net | 0 | 100,000 | ||
Secured Promissory Note | Streeterville Capital, LLC | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Proceeds from secured notes payable | $ 1,600,000 | |||
Level 1 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Liabilities | 0 | 0 | ||
Level 2 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Liabilities | 0 | 0 | ||
Assets | 0 | 0 | ||
Level 3 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Liabilities | 0 | 0 | ||
Assets | $ 0 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Revenue Product Sales by Channel (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Amount | $ 16,004 | $ 16,205 |
Concentration Risk, Product | Revenue Benchmark | ||
Disaggregation of Revenue [Line Items] | ||
% of product sales, net | 100% | 100% |
Retail sales (B2B) | ||
Disaggregation of Revenue [Line Items] | ||
Amount | $ 9,178 | $ 9,040 |
Retail sales (B2B) | Concentration Risk, Product | Revenue Benchmark | ||
Disaggregation of Revenue [Line Items] | ||
% of product sales, net | 57.30% | 55.80% |
E-Commerce sales (B2C) | ||
Disaggregation of Revenue [Line Items] | ||
Amount | $ 6,826 | $ 7,165 |
E-Commerce sales (B2C) | Concentration Risk, Product | Revenue Benchmark | ||
Disaggregation of Revenue [Line Items] | ||
% of product sales, net | 42.70% | 44.20% |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,892 | $ 3,563 |
Work in process | 1,181 | 1,020 |
Finished goods | 1,582 | 1,980 |
Total gross inventory | $ 5,655 | $ 6,563 |
Inventory - Additional Informat
Inventory - Additional Information (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory [Line Items] | ||
Inventory write-down | $ 300,000 | |
Inventory | $ 5,655,000 | 6,563,000 |
Outside the United States | ||
Inventory [Line Items] | ||
Inventory | $ 100,000 | $ 0 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,430 | $ 1,392 |
Less: accumulated depreciation | (1,051) | (817) |
Property and equipment, net | 379 | 575 |
Office furniture and IT equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,393 | $ 1,392 |
Office furniture and IT equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment useful life | 3 years | |
Office furniture and IT equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment useful life | 5 years | |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment useful life | 7 years | |
Property and equipment, gross | $ 37 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation | $ 200 | $ 1,000 |
Property and equipment, sold or disposed | 3,900 | |
Loss on disposal of fixed assets | $ 0 | $ 150 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - Cultured Foods $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Business Acquisition [Line Items] | |
Net revenue | $ 16,200 |
Net income | 3,000 |
Acquisition costs | $ 100 |
Useful life to acquired intangible assets | 5 years |
Fair value of earn-out provision | $ 88,000 |
Acquisitions - Summary Of Total
Acquisitions - Summary Of Total Consideration Transferred (Details) - Cultured Foods $ in Thousands | Dec. 07, 2023 USD ($) |
Business Acquisition [Line Items] | |
Cash | $ 192 |
Common shares | 250 |
Earn-out | 88 |
Total consideration transferred | $ 530 |
Acquisitions - Summary Of Asset
Acquisitions - Summary Of Assets Acquired And Liabilities Assumed Of Acquisition Date (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 07, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | |||
Goodwill | $ 342 | $ 0 | |
Cultured Foods | |||
Business Acquisition [Line Items] | |||
Cash | $ 18 | ||
Accounts receivable and other receivables | 11 | ||
Inventories | 133 | ||
Intangible assets | 78 | ||
Other current assets | 17 | ||
Fixed assets | 38 | ||
Goodwill | 334 | ||
Total assets | 629 | ||
Accounts payable and accrued liabilities | 27 | ||
Current note payable | 50 | ||
Deferred tax liabilities | 22 | ||
Total liabilities | 99 | ||
Net assets acquired | $ 530 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Summary Of Changes In Carrying Amounts Of Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Balance, beginning | $ 0 |
Acquisition of Cultured Foods | 334 |
Translation adjustment | 8 |
Balance, ending | $ 342 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill, impairment | $ 0 | $ 0 |
Goodwill | 342,000 | 0 |
Impairment of intangible assets, finite-lived | $ 251,000 | $ 1,234,000 |
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Selling, general and administrative | Selling, general and administrative |
In-process research and development | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets, finite-lived | $ 251,000 | $ 1,234,000 |
Goodwill And Intangible Asset_4
Goodwill And Intangible Assets - Summary of Intangible Assets Related Accumulated Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Gross carrying amount | $ 79 | $ 251 | |
Accumulated amortization | (1) | 0 | |
Net carrying amount | $ 78 | $ 251 | $ 1,485 |
Goodwill And Intangible Asset_5
Goodwill And Intangible Assets - Summary of Changes in Carrying Amounts of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Beginning balance | $ 251 | $ 1,485 |
Impairment | (251) | (1,234) |
Acquisition of Cultured Foods | 78 | |
Amortization | (1) | |
Translation adjustments | 1 | |
Ending balance | 78 | 251 |
In-process research and development | ||
Finite-Lived Intangible Assets [Line Items] | ||
Beginning balance | 251 | 1,485 |
Impairment | (251) | (1,234) |
Acquisition of Cultured Foods | 0 | |
Amortization | 0 | |
Translation adjustments | 0 | |
Ending balance | 0 | 251 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Beginning balance | 0 | 0 |
Impairment | 0 | 0 |
Acquisition of Cultured Foods | 52 | |
Amortization | (1) | |
Translation adjustments | 1 | |
Ending balance | 52 | 0 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Beginning balance | 0 | 0 |
Impairment | 0 | 0 |
Acquisition of Cultured Foods | 26 | |
Amortization | 0 | |
Translation adjustments | 0 | |
Ending balance | $ 26 | $ 0 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued payroll tax - Mona (Note 13) | $ 522 | $ 6,694 |
Accrued payroll expenses | 1,388 | 1,447 |
Other accrued liabilities | 1,512 | 1,549 |
Total accrued expenses | $ 3,422 | $ 9,690 |
Convertible Notes - Schedule of
Convertible Notes - Schedule of Convertible Notes (Details) - Convertible Debt - USD ($) | 12 Months Ended | |
Aug. 18, 2022 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||
Principal amount | $ 2,120,000 | |
Less: Original issuance discount ("OID") | (120,000) | |
Less: Debt issuance costs | (275,000) | |
Net proceeds | 1,725,000 | |
Default premium | 179,000 | |
Conversion of note into common shares | (1,514,000) | |
Accretion of OID and amortization of debt issuance costs | 395,000 | |
Repayment | $ (675,000) | (675,000) |
Settlement | (110,000) | |
Carrying amount | $ 0 |
Convertible Notes - Additional
Convertible Notes - Additional Information (Details) | 12 Months Ended | ||||||
Aug. 18, 2022 USD ($) | May 31, 2022 USD ($) $ / shares shares | Mar. 25, 2022 USD ($) $ / shares | Nov. 14, 2021 USD ($) Days $ / shares | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) Days $ / shares shares | May 17, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||||
Convertible notes | $ 0 | ||||||
Conversion price (in dollars per share) | $ / shares | $ 0.04 | ||||||
Conversion of convertible debt | $ 151,772 | 0 | $ 1,284,000 | ||||
Converted instrument, shares issued (in shares) | shares | 3,751,971 | 24,126,311 | |||||
Interest expense | $ 600,000 | ||||||
Gain on debt extinguishment | $ 127,000 | $ 0 | $ 127,000 | ||||
Expensed unamortized debt costs | 50,000 | ||||||
Quarter-to-Date | |||||||
Debt Instrument [Line Items] | |||||||
Conversion price (in dollars per share) | $ / shares | $ 0.05 | ||||||
Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt face value | $ 5,300,000 | ||||||
Principal amount | $ 1,060,000 | $ 1,060,000 | $ 130,000 | ||||
Discount percentage | 6% | 6% | |||||
Net proceeds | $ 1,000,000 | $ 1,000,000 | |||||
Debt interest rate percentage | 15% | ||||||
Conversion price (in dollars per share) | $ / shares | $ 0.1508 | $ 0.2611 | |||||
Threshold percentage of stock price trigger | 120% | ||||||
Threshold trading days | Days | 5 | 5 | |||||
Redemption price premium, percentage | 15% | ||||||
Decrease in convertible notes | $ 1,300,000 | ||||||
Interest expense | 17,000 | ||||||
Repayments of debt | $ 675,000 | $ 675,000 | |||||
Convertible Debt | Alternative Conversion Price, Option One | |||||||
Debt Instrument [Line Items] | |||||||
Threshold percentage of stock price trigger | 90% | ||||||
Threshold trading days | Days | 10 | ||||||
Floor price (in dollars per share) | $ / shares | $ 0.01 | ||||||
Convertible Debt | Alternative Conversion Price, Option Two | |||||||
Debt Instrument [Line Items] | |||||||
Threshold percentage of stock price trigger | 97% | ||||||
Convertible Debt | Default | |||||||
Debt Instrument [Line Items] | |||||||
Redemption price premium, percentage | 10% | ||||||
Volume weighted average price (VWAP) (in dollars per share) | $ / shares | $ 0.1 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total debt | $ 254 | $ 1,223 |
Insurance financing | ||
Debt Instrument [Line Items] | ||
Total debt | 204 | 218 |
Cultured Foods Note Payable | ||
Debt Instrument [Line Items] | ||
Total debt | $ 50 | |
Note payable, net of discount and costs | ||
Debt Instrument [Line Items] | ||
Total debt | $ 1,005 |
Debt - Additional Information (
Debt - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2023 USD ($) | Nov. 30, 2022 USD ($) | Aug. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) Tradingday | |
Streeterville Capital, LLC | ||||
Debt Instrument [Line Items] | ||||
CARES Act, term for repayment of debt instrument after receipt of employee retention credit funds | Tradingday | 3 | |||
CARES ACT, minimum proceeds to be remitted to lender | $ 1,000,000 | |||
CARES Act, term for repayment of debt instrument to avoid penalty | 90 days | |||
CARES Act, percentage increase in principal balance following delayed payment | 5% | |||
Cultured Foods Note Payable | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, term | 12 months | |||
Debt interest rate percentage | 9% | |||
Note payable, net of discount and costs | Streeterville Capital, LLC | ||||
Debt Instrument [Line Items] | ||||
Amount financed | $ 2,000,000 | |||
Original issue discount | 400,000 | |||
Additional debt issuance costs | $ 23,000 | |||
Scheduled maturity date | May 19, 2023 | |||
Repayments of debt | $ 56,000 | |||
Late fee percentage (as a percent) | 22% | |||
Secured Promissory Note | Streeterville Capital, LLC | ||||
Debt Instrument [Line Items] | ||||
Proceeds from secured notes payable | $ 1,600,000 | |||
Repayments of debt | $ 40,000 | |||
Debt instrument, term | 56 days | |||
Unsecured Note Payable | 2023 Premium Finance Agreement | ||||
Debt Instrument [Line Items] | ||||
Amount financed | $ 300,000 | |||
Debt interest rate percentage | 8.42% | |||
Monthly payment | $ 29,781 | |||
Outstanding balance | $ 200,000 | |||
Unsecured Note Payable | Insurance financing | ||||
Debt Instrument [Line Items] | ||||
Amount financed | $ 200,000 | |||
Debt interest rate percentage | 6.32% | |||
Monthly payment | $ 27,900 | |||
Outstanding balance | 0 | |||
Convertible Promissory Notes | Streeterville Capital, LLC | ||||
Debt Instrument [Line Items] | ||||
Principal payments | $ 1,100,000 |
Stockholders Equity - Additiona
Stockholders Equity - Additional Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Mar. 28, 2024 shares | Mar. 30, 2022 USD ($) Vote $ / shares shares | Apr. 30, 2022 USD ($) | Dec. 31, 2023 USD ($) yr $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Jun. 06, 2022 shares | Jun. 05, 2022 shares | Mar. 29, 2022 shares | |
Subsidiary, Sale of Stock [Line Items] | ||||||||
Capital stock authorized (in shares) | shares | 800,000,000 | 200,000,000 | ||||||
Common stock authorized (in shares) | shares | 790,000,000 | 790,000,000 | 790,000,000 | 790,000,000 | 190,000,000 | 190,000,000 | ||
Common stock issued (in shares) | shares | 161,678,000 | 152,104,000 | ||||||
Common stock shares outstanding | shares | 161,678,000 | 152,104,000 | ||||||
Issuance of common stock for services | $ | $ 100 | $ 385 | ||||||
Securities called by preferred stock and warrants (in shares) | shares | 10,000,000 | |||||||
Preferred stock par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Proceeds from issuance of preferred stock | $ | $ 700 | |||||||
Payments of stock issuance costs | $ | 600 | |||||||
Deduction from proceeds, related to agent’s fees and other offering expenses | $ | $ 100 | |||||||
Preferred stock, stated value, subjected to conversion (in dollars per share) | $ / shares | $ 1,000 | |||||||
Preferred stock, convertible into common stock (in shares) | shares | 10,000,000 | |||||||
Conversion price (in dollars per share) | $ / shares | $ 0.07 | |||||||
Number of shares underlying warrants (in shares) | shares | 10,750,000 | 10,750,000 | ||||||
Fair value recorded as additional offering cost | $ | $ 100 | |||||||
Number of votes per share of common stock underlying the preferred stock | Vote | 170,000 | |||||||
Preferred stock authorized (in shares) | shares | 800,000,000 | 10,000,000 | 10,000,000 | 200,000,000 | ||||
Deemed dividend for beneficial conversion of Series A Convertible Preferred Stock | $ | $ 900 | $ 0 | $ 920 | |||||
Maximum | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Stock split, conversion ratio | 0.1 | |||||||
Minimum | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Stock split, conversion ratio | 0.0025 | |||||||
Warrants with $0.1000 Exercise Price | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.1 | $ 0.1 | ||||||
Number of shares underlying warrants (in shares) | shares | 750,000 | 750,000 | ||||||
Warrants with $0.0875 Exercise Price | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.0875 | $ 0.0875 | ||||||
Number of shares underlying warrants (in shares) | shares | 750,000 | 10,000,000 | 10,000,000 | |||||
Contractual term | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Fair value of the warrants issued, assumptions | yr | 3 | |||||||
Expected volatility rate | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Fair value of the warrants issued, assumptions | 1.04 | |||||||
Risk-free interest rate | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Fair value of the warrants issued, assumptions | 0.025 | |||||||
Expected dividend rate | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Fair value of the warrants issued, assumptions | 0 | |||||||
Series A Preferred Stock | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Stock issued during period (in shares) | shares | 700 | |||||||
Common Stock | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Issuance of common stock for services (in shares) | shares | 2,500,000 | 5,496,000 | ||||||
Issuance of common stock for services | $ | $ 1 | |||||||
Common Stock | Subsequent Event | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Issuance of common stock for services (in shares) | shares | 1,549,410 | |||||||
Preferred Stock | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Proceeds from issuance of preferred stock | $ | $ 400 | |||||||
Payments of stock issuance costs | $ | 100 | |||||||
Preferred stock, net of stock issuance costs | $ | 300 | |||||||
Warrants | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Payments of stock issuance costs | $ | 100 | |||||||
Proceeds from warrants issued | $ | 300 | |||||||
Warrants, net of stock issuance costs | $ | $ 200 |
Stockholders Equity - Warrants
Stockholders Equity - Warrants Outstanding (Details) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 | Mar. 30, 2022 |
Subsidiary, Sale of Stock [Line Items] | |||
Number of Shares Underlying Warrants (in shares) | 10,750,000 | 10,750,000 | |
Warrants with $0.1000 Exercise Price | |||
Subsidiary, Sale of Stock [Line Items] | |||
Exercise Price (in dollars per share) | $ 0.1 | $ 0.1 | |
Number of Shares Underlying Warrants (in shares) | 750,000 | 750,000 | |
Warrants with $0.0875 Exercise Price | |||
Subsidiary, Sale of Stock [Line Items] | |||
Exercise Price (in dollars per share) | $ 0.0875 | $ 0.0875 | |
Number of Shares Underlying Warrants (in shares) | 10,000,000 | 10,000,000 | 750,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | |||||
Jun. 01, 2023 | Jan. 01, 2023 | Mar. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 11, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock option cancelled (in shares) | 3,346,000 | ||||||
Granted (in dollars per share) | $ 0.04 | ||||||
Unvested options granted (in shares) | 7,950,000 | ||||||
Unrecognized compensation cost | $ 0.2 | ||||||
Unrecognized weighted average period | 2 years 1 month 6 days | ||||||
Options outstanding (in shares) | 24,435,000 | 19,831,000 | |||||
Weighted average exercise price (in dollars per share) | $ 0.32 | $ 0.46 | |||||
Exercised (in shares) | 0 | ||||||
Equity Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock option, maximum term | 10 years | ||||||
Exercised (in shares) | 0 | 0 | |||||
Options Outside the Amended 2013 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options vested (in shares) | 4,250,000 | ||||||
Unvested stock options (in shares) | 6,750,000 | ||||||
Options outstanding (in shares) | 18,050,000 | ||||||
Weighted average exercise price (in dollars per share) | $ 0.4 | ||||||
Operating Income (Loss) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock based compensation expense | $ 0.2 | $ 1 | |||||
Minimum | Equity Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 2 years | ||||||
Maximum | Equity Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 4 years | ||||||
Amended 2013 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares authorized under plan (in shares) | 34,976,000 | 30,976,000 | |||||
Annual increase in shares available for issuance as percent of total shares outstanding percentage | 4% | ||||||
Annual increase to shares authorized for issuance under the Plan (in shares) | 4,000,000 | ||||||
Additional shares authorized (in shares) | 4,000,000 | ||||||
Stock option cancelled (in shares) | 9,000,000 | ||||||
Increase (decrease) in number of shares authorized, | 8,000,000 | ||||||
Amended 2013 Plan | Equity Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock option, maximum term | 10 years | ||||||
Amended 2013 Plan | Minimum | Equity Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 2 years | ||||||
Amended 2013 Plan | Maximum | Equity Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 4 years | ||||||
2023 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares authorized under plan (in shares) | 34,976,000 | 34,726,000 | |||||
Equity incentive plan, term | 10 years | ||||||
Annual increase in shares available for issuance as percent of total shares outstanding percentage | 4% | ||||||
Equity incentive plan, automatic annual plan increase after adoption, term | 10 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Number of Shares | ||
Outstanding beginning balance (in shares) | 19,831,000 | |
Granted (in shares) | 7,950,000 | |
Exercised (in shares) | 0 | |
Forfeited (in shares) | (3,346,000) | |
Outstanding ending balance (in shares) | 24,435,000 | 19,831,000 |
Number of shares, Exercisable (in shares) | 18,125,000 | |
Number of shares, Vested or expected to vest (in shares) | 24,435,000 | |
Weighted Average Exercise Price | ||
Outstanding beginning balance (in dollars per share) | $ 0.46 | |
Granted (in dollars per share) | 0.04 | |
Exercised (in dollars per share) | 0 | |
Forfeited (in dollars per share) | 0.46 | |
Outstanding ending balance (in dollars per share) | 0.32 | $ 0.46 |
Weighted average exercise price, Exercisable (in dollars per share) | 0.42 | |
Weighted average exercise price, Vested or expected to vest (in dollars per share) | $ 0.32 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Outstanding balance, weighted average remaining contract term (in years) | 4 years 4 months 24 days | 3 years 6 months |
Options exercisable, weighted average remaining contract term (in years) | 2 years 8 months 12 days | |
Options Vested or expected to vest, weighted average remaining contract term (in years) | 4 years 4 months 24 days | |
Outstanding, aggregate intrinsic value | $ 6 | $ 0 |
Options exercisable, aggregate intrinsic value | 3 | |
Options Vested or expected to vest, aggregate intrinsic value | $ 6 | |
Equity Option | ||
Number of Shares | ||
Exercised (in shares) | 0 | 0 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Weighted-Average Assumptions Used to Estimate Fair Value (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Volatility | 132.10% | 123.50% |
Risk-Free Interest Rate | 3.90% | 3.60% |
Expected Term (in years) | 5 years 9 months | 5 years 6 months 7 days |
Dividend Rate | 0% | 0% |
Fair Value Per Share on Grant Date | $ 0.04 | $ 0.03 |
Net Income (Loss) Per Share - C
Net Income (Loss) Per Share - Computation Of Basic And Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator: | ||
Net income (loss) attributable to common stockholders | $ 3,102 | $ (9,134) |
Denominator for basic and diluted net income (loss) per share: | ||
Weighted average common shares outstanding for basic | 153,954 | 138,034 |
Dilutive potential common stock outstanding: | ||
Stock options | 1 | 0 |
Weighted average common shares outstanding for diluted | 153,955 | 138,034 |
Basic net income (loss) per share attributable to common stockholders | $ 0.02 | $ (0.07) |
Diluted net income (loss) per share attributable to common stockholders | $ 0.02 | $ (0.07) |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total (in shares) | 41,935 | 37,331 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total (in shares) | 20,185 | 15,581 |
Performance stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total (in shares) | 11,000 | 11,000 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total (in shares) | 10,750 | 10,750 |
Related Parties - Narrative (De
Related Parties - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Mar. 31, 2017 | Jul. 31, 2016 | Dec. 31, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | |
Related Party Transaction [Line Items] | ||||||||
Weighted average exercise price of outstanding vested options (in dollars per share) | $ 0.32 | |||||||
Employee portion of payroll taxes | $ 200 | |||||||
Accrued payroll taxes | $ 522 | $ 6,694 | ||||||
Reversal of accrued payroll tax | 6,171 | 0 | ||||||
Stock options | ||||||||
Related Party Transaction [Line Items] | ||||||||
Stock based compensation expense | $ 2,700 | |||||||
Restricted Stock Units (RSUs) | ||||||||
Related Party Transaction [Line Items] | ||||||||
Stock based compensation expense | 5,100 | |||||||
Former President and CEO | ||||||||
Related Party Transaction [Line Items] | ||||||||
Due from former president and CEO | 6,400 | |||||||
Reversal of accrued payroll tax | 6,200 | |||||||
Former President and CEO | Accrued Liabilities | ||||||||
Related Party Transaction [Line Items] | ||||||||
Accrued payroll taxes | $ 500 | $ 6,700 | ||||||
Former President and CEO | Prepaid Expenses and Other Current Assets | ||||||||
Related Party Transaction [Line Items] | ||||||||
Due from former president and CEO | $ 6,200 | |||||||
Impairment charge related to previously recorded receivable | $ 6,200 | |||||||
Former President and CEO | Selling, General and Administrative Expenses | ||||||||
Related Party Transaction [Line Items] | ||||||||
Payroll tax expense | $ 200 | |||||||
Former President and CEO | Stock options | ||||||||
Related Party Transaction [Line Items] | ||||||||
Stock option exercise period extension | 5 years | |||||||
Options vested (in shares) | 11,300,000 | |||||||
Weighted average exercise price of outstanding vested options (in dollars per share) | $ 0.42 | |||||||
Stock options issued (in shares) | 5,000,000 | 6,000,000 | ||||||
Unvested stock options (in shares) | 6,750,000 | |||||||
Former President and CEO | Restricted Stock Units (RSUs) | ||||||||
Related Party Transaction [Line Items] | ||||||||
Vested RSU's (in shares) | 2,950,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | Sep. 30, 2023 USD ($) |
Otilda Lamont Litigation | Pending Litigation | |
Loss Contingencies [Line Items] | |
Estimated litigation liability | $ 250,000 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | May 01, 2022 USD ($) | Apr. 30, 2022 USD ($) ft² | |
Lessee, Lease, Description [Line Items] | ||||
Operating lease, liability | $ 188 | $ 400 | ||
Right of use assets | 167 | $ 275 | $ 300 | |
Lease cost | $ 100 | $ 100 | ||
Terminated San Diego Facility | ||||
Lessee, Lease, Description [Line Items] | ||||
Area of property | ft² | 6,000 | |||
Lease term | 3 years | |||
Operating lease, liability | $ 400 |
Leases - Information Related to
Leases - Information Related to Operating Lease (Details) | Dec. 31, 2023 |
Leases [Abstract] | |
Remaining lease term (in years) | 1 year 5 months 1 day |
Discount rate | 7% |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | May 01, 2022 |
Leases [Abstract] | |||
2024 | $ 139 | ||
2025 | 59 | ||
Total | 198 | ||
Less: imputed interest | 10 | ||
Total lease liabilities | 188 | $ 400 | |
Operating lease liability - current | 130 | $ 117 | |
Operating lease liability - net of current portion | 58 | $ 188 | |
Total operating lease liability | $ 188 | $ 400 |
INCOME TAXES - Schedule of Pret
INCOME TAXES - Schedule of Pretax income (loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Domestic operations | $ 3,114 | $ (8,261) |
Foreign operations | (18) | 0 |
Total | $ 3,096 | $ (8,261) |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current: | ||
Federal | $ 0 | $ 0 |
State | 8 | 4 |
Foreign | 0 | 0 |
Total current tax expense | 8 | 4 |
Deferred: | ||
Federal | (11) | (51) |
State | 0 | 0 |
Foreign | (3) | 0 |
Total deferred tax benefit | (14) | (51) |
Income tax benefit | $ (6) | $ (47) |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Amount | ||
Income tax expense (benefit) at federal statutory rate | $ 651 | $ (1,735) |
State taxes, net of federal effect | 182 | (456) |
Other permanent differences | 33 | 21 |
Stock-based compensation | 420 | 1,795 |
NOL adjustments and other true-ups | (640) | 722 |
R&D tax credits | 0 | (1) |
Other | 8 | 14 |
Decrease in valuation allowance | (660) | (407) |
Income tax benefit | $ (6) | $ (47) |
% of pretax income (loss) | ||
Income tax expense (benefit) at federal statutory rate | 21% | 21% |
State taxes, net of federal effect | 5.90% | 5.50% |
Other permanent differences | 1.10% | (0.30%) |
Stock-based compensation | 13.50% | (21.70%) |
NOL adjustments and other true-ups | (20.60%) | (8.70%) |
R&D tax credits | 0% | 0% |
Other | 0.20% | (0.20%) |
Decrease in valuation allowance | (21.30%) | 4.90% |
Income tax benefit | (0.20%) | 0.50% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets And Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 10,804 | $ 9,280 |
Business credit carryforwards | 939 | 948 |
Intangible assets | 413 | 527 |
Stock-based compensation | 4,075 | 4,416 |
Change to inventory | 52 | 87 |
Operating lease liabilities | 51 | 81 |
Accruals and reserves | 565 | 2,351 |
Other | 247 | 222 |
Total deferred tax assets | 17,146 | 17,912 |
Deferred tax liabilities: | ||
Operating lease assets | (45) | (73) |
Property and equipment | (97) | (100) |
CanX intangible assets | 0 | (67) |
Total deferred tax liabilities | (142) | (240) |
Valuation allowance | (17,023) | (17,683) |
Net deferred tax liabilities | $ (19) | $ (11) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance increase (decrease) | $ (0.7) | $ 0.4 |
Income tax expense (benefit) at federal statutory rate | 21% | 21% |
Domestic Tax Authority | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | $ 40.2 | |
R&D credit carryforwards | 0.7 | |
Domestic Tax Authority | After 2017 | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | 33 | |
Domestic Tax Authority | Before 2018 | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | 7.2 | |
State and Local Jurisdiction | California Franchise Tax Board | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | 27.5 | |
R&D credit carryforwards | 0.4 | |
State and Local Jurisdiction | States Other than California | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | $ 8 |
Income Taxes - Schedule of Unre
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance as of January 1: | $ 172 | $ 172 |
Increase in current year positions | 0 | 0 |
Increase in prior year positions | 0 | 0 |
Decrease in prior year positions | 2 | 0 |
Balance as of December 31: | $ 170 | $ 172 |