Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 05, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-38014 | |
Entity Registrant Name | NewAge, Inc. | |
Entity Central Index Key | 0001579823 | |
Entity Tax Identification Number | 27-2432263 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 2420 17th Street | |
Entity Address, Address Line Two | Suite 220 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80202 | |
City Area Code | (303) | |
Local Phone Number | 566-3030 | |
Title of 12(b) Security | Common stock, par value $0.001 per share | |
Trading Symbol | NBEV | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 146,812,746 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 46,829 | $ 43,711 |
Trade accounts receivable, net of allowance of $918 and $582, respectively | 8,873 | 12,341 |
Inventories | 48,876 | 48,051 |
Prepaid expenses and other | 15,123 | 13,032 |
Current portion of restricted cash | 12,000 | 10,000 |
Assets held for sale | 6,884 | |
Total current assets | 138,585 | 127,135 |
Long-term assets: | ||
Identifiable intangible assets, net of accumulated amortization | 144,539 | 169,611 |
Goodwill | 54,621 | 54,993 |
Right-of-use lease assets | 29,580 | 38,764 |
Property and equipment, net of accumulated depreciation | 22,786 | 28,076 |
Deferred income taxes | 7,404 | 7,782 |
Deposits and other | 4,621 | 5,297 |
Restricted cash, net of current portion | 3,514 | 11,524 |
Total assets | 405,650 | 443,182 |
Current liabilities: | ||
Accounts payable | 17,997 | 22,774 |
Accrued liabilities | 56,533 | 70,007 |
Current maturities of long-term debt | 17,636 | 18,016 |
Operating lease liability related to right-of-use assets held for sale | 4,503 | |
Current portion of business combination liabilities | 1,140 | 11,750 |
Total current liabilities | 97,809 | 122,547 |
Long-term liabilities: | ||
Business combination liabilities, net of current portion | 28,222 | 95,826 |
Long-term debt, net of current maturities | 16,181 | |
Operating lease liabilities, net of current portion: | ||
Lease liability | 27,054 | 34,788 |
Deferred lease financing obligation | 15,372 | 15,882 |
Deferred income taxes | 5,019 | 5,391 |
Warrant derivative liability | 1,782 | |
Other | 8,284 | 8,313 |
Total liabilities | 183,542 | 298,928 |
Commitments and contingencies (Note 10) | ||
Redeemable Common Stock, 800 shares as of December 31, 2020 | 2,101 | |
Stockholders’ equity: | ||
Preferred stock, $0.001 par value per share. Authorized 1,000 shares; no shares issued | ||
Common Stock, $0.001 par value per share. Authorized 400,000 and 200,000 shares as of September 30, 2021 and December 31, 2020, respectively; issued and outstanding 146,808 and 99,146 shares as of September 30, 2021 and December 31, 2020, respectively | 147 | 99 |
Additional paid-in capital | 363,205 | 236,732 |
Obligation to issue 4,551 and 19,704 shares of Common Stock as of September 30, 2021 and December 31, 2020, respectively | 9,464 | 54,186 |
Note receivable for stock subscription | (1,250) | |
Accumulated other comprehensive income | 4,204 | 4,201 |
Accumulated deficit | (154,912) | (151,815) |
Total stockholders’ equity | 222,108 | 142,153 |
Total liabilities, redeemable Common Stock, and stockholders’ equity | $ 405,650 | $ 443,182 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, net of allowance | $ 918 | $ 582 |
Redeemable common stock | 800 | |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 400,000,000 | 200,000,000 |
Common Stock, Shares, Issued | 146,808,000 | 99,146,000 |
Common Stock, Shares, Outstanding | 146,808,000 | 99,146,000 |
Obligation to issuance of common stock, shares issued | 4,551,000 | 19,704,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Net revenue | $ 99,553 | $ 62,719 | $ 349,111 | $ 189,049 |
Cost of goods sold | 33,567 | 25,224 | 111,925 | 71,952 |
Gross profit | 65,986 | 37,495 | 237,186 | 117,097 |
Operating expenses: | ||||
Commissions | 36,823 | 17,458 | 127,540 | 55,378 |
Selling, general and administrative | 39,027 | 27,983 | 118,928 | 84,868 |
Impairment of long-lived assets | 16,186 | 16,186 | 400 | |
Depreciation and amortization expense | 4,385 | 1,751 | 13,783 | 5,293 |
Loss on disposal of Divested Business | 3,446 | 4,339 | 3,446 | |
Total operating expenses | 96,421 | 50,638 | 280,776 | 149,385 |
Operating loss | (30,435) | (13,143) | (43,590) | (32,288) |
Non-operating income (expense): | ||||
Gain (loss) from change in fair value of derivatives | 19,498 | (86) | 40,714 | (392) |
Gain from forgiveness of PPP Loans and accrued interest | 9,751 | 9,751 | ||
Interest and other income, net | 1,397 | 229 | 992 | 954 |
Interest expense | (2,526) | (521) | (8,689) | (1,693) |
Loss before income taxes | (2,315) | (13,521) | (822) | (33,419) |
Income tax expense | (385) | (612) | (2,275) | (1,886) |
Net loss | (2,700) | (14,133) | (3,097) | (35,305) |
Other comprehensive income: | ||||
Foreign currency translation adjustments, net of tax | 726 | 1,275 | 3 | 332 |
Comprehensive loss | $ (1,974) | $ (12,858) | $ (3,094) | $ (34,973) |
Net loss per share of Common Stock: | ||||
Basic | $ (0.02) | $ (0.14) | $ (0.02) | $ (0.38) |
Diluted | $ (0.11) | $ (0.14) | $ (0.19) | $ (0.38) |
Weighted average number of shares of Common Stock outstanding: | ||||
Basic | 151,411 | 97,819 | 140,894 | 92,087 |
Diluted | 170,251 | 97,819 | 167,657 | 92,087 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Obligation To Issue Common Stock [Member] | Notes Receivable For Stock Subscription [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total | |
Balances at Dec. 31, 2019 | $ 82 | $ 203,862 | $ 802 | $ (112,471) | $ 92,275 | |||
Balance, shares at Dec. 31, 2019 | 81,873,000 | |||||||
Private placement of Common Stock, net of issuance costs, shares | 16,130,000 | |||||||
In ATM public offering, net of offering costs | $ 16 | 24,942 | 24,958 | |||||
In ATM public offering, net of offering costs, shares | 16,130,000 | |||||||
In exchange for note receivable | $ 1 | 1,249 | (1,250) | |||||
In exchange for note receivable, shares | 692,000 | |||||||
Upon vesting of restricted stock awards | ||||||||
Upon vesting of restricted stock awards, shares | 558,000 | |||||||
Purchase and retirement of Common Stock | $ (1) | (1,192) | (1,193) | |||||
Purchase and retirement of Common Stock, shares | (780,000) | |||||||
For exercise of stock options | 34 | 34 | ||||||
For exercise of stock options, shares | 17,000 | |||||||
Stock-based compensation expense | 3,280 | 3,280 | ||||||
Net change in accumulated other comprehensive income | 332 | 332 | ||||||
Net loss | (35,305) | (35,305) | ||||||
Balances at Sep. 30, 2020 | $ 98 | 232,175 | (1,250) | 1,134 | (147,776) | 84,381 | ||
Balance, shares at Sep. 30, 2020 | 98,490,000 | |||||||
Balances at Dec. 31, 2019 | $ 82 | 203,862 | 802 | (112,471) | 92,275 | |||
Balance, shares at Dec. 31, 2019 | 81,873,000 | |||||||
Balances at Dec. 31, 2020 | $ 99 | 236,732 | 54,186 | (1,250) | 4,201 | (151,815) | 142,153 | |
Balance, shares at Dec. 31, 2020 | 99,146,000 | |||||||
Balances at Jun. 30, 2020 | $ 98 | 231,201 | (141) | (133,643) | 97,515 | |||
Balance, shares at Jun. 30, 2020 | 98,442 | |||||||
In ATM public offering, net of offering costs | (70) | (70) | ||||||
In exchange for note receivable | $ 1 | 1,249 | (1,250) | |||||
In exchange for note receivable, shares | 692 | |||||||
Upon vesting of restricted stock awards | ||||||||
Upon vesting of restricted stock awards, shares | 121 | |||||||
For exercise of stock options | 30 | 30 | ||||||
For exercise of stock options, shares | 15 | |||||||
Stock-based compensation expense | 957 | 957 | ||||||
Net change in accumulated other comprehensive income | 1,275 | 1,275 | ||||||
Net loss | (14,133) | (14,133) | ||||||
Balances at Sep. 30, 2020 | $ 98 | 232,175 | (1,250) | 1,134 | (147,776) | 84,381 | ||
Balance, shares at Sep. 30, 2020 | 98,490,000 | |||||||
Balances at Dec. 31, 2020 | $ 99 | 236,732 | 54,186 | (1,250) | 4,201 | (151,815) | 142,153 | |
Balance, shares at Dec. 31, 2020 | 99,146,000 | |||||||
In Ariix business combination | $ 20 | 54,166 | (54,186) | |||||
In Ariix business combination, shares | 19,704,000 | |||||||
In Aliven business combination | $ 1 | 2,587 | 2,588 | |||||
In Aliven business combination, shares | 1,072,000 | |||||||
Private placement of Common Stock, net of issuance costs | $ 15 | 39,635 | 39,650 | |||||
Private placement of Common Stock, net of issuance costs, shares | 14,636,000 | |||||||
Upon vesting of restricted stock awards | $ 1 | (1) | ||||||
Upon vesting of restricted stock awards, shares | 761,000 | |||||||
For exercise of stock options | 530 | $ 530 | ||||||
For exercise of stock options, shares | 289,000 | 289,000 | [1] | |||||
Reclassification of Redeemable Common Stock | $ 1 | 3,160 | $ 3,161 | |||||
Reclassification of Redeemable Common Stock, shares | 1,200,000 | |||||||
Reclassification of Fixed Shares derivative liability | 30,263 | 30,263 | ||||||
Issuance of Common Stock to settle portion of settlement obligation | 10 | 20,789 | (20,799) | |||||
Issuance of Common Stock to settle portion of settlement, shares | 10,000,000 | |||||||
Stock-based compensation expense | 5,607 | $ 5,607 | ||||||
Allowance for Divested Business stock subscription receivable | 1,250 | 1,250 | ||||||
Net change in accumulated other comprehensive income | 3 | 3 | ||||||
Net loss | (3,097) | (3,097) | ||||||
Balances at Sep. 30, 2021 | $ 147 | 363,205 | 9,464 | 4,204 | (154,912) | 222,108 | ||
Balance, shares at Sep. 30, 2021 | 146,808,000 | |||||||
Balances at Jun. 30, 2021 | $ 137 | 340,937 | 30,263 | 3,478 | (152,212) | 222,603 | ||
Balance, shares at Jun. 30, 2021 | 136,606 | |||||||
Upon vesting of restricted stock awards | ||||||||
Upon vesting of restricted stock awards, shares | 201 | |||||||
For exercise of stock options | 2 | 2 | ||||||
For exercise of stock options, shares | 1 | |||||||
Stock-based compensation expense | 1,477 | 1,477 | ||||||
Net change in accumulated other comprehensive income | 726 | 726 | ||||||
Net loss | (2,700) | (2,700) | ||||||
Balances at Sep. 30, 2021 | $ 147 | $ 363,205 | $ 9,464 | $ 4,204 | $ (154,912) | $ 222,108 | ||
Balance, shares at Sep. 30, 2021 | 146,808,000 | |||||||
[1] | On the respective exercise dates, the weighted average intrinsic value per share of Common Stock issued upon exercise of stock options amounted to $ 1.72 0.5 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net loss | $ (2,700,000) | $ (14,133,000) | $ (3,097,000) | $ (35,305,000) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
Loss (gain) from change in fair value of derivatives, net | (40,714,000) | 392,000 | ||||
Gain from forgiveness of PPP Loans and accrued interest | (9,751,000) | (9,751,000) | ||||
Impairment of long-lived assets | 16,186,000 | 16,186,000 | 400,000 | |||
Depreciation and amortization | 4,481,000 | 1,855,000 | 14,077,000 | 5,607,000 | ||
Non-cash lease expense | 7,381,000 | 3,913,000 | ||||
Accretion of debt discount | 6,171,000 | 414,000 | ||||
Stock-based compensation expense | 5,624,000 | 3,415,000 | ||||
Allowance for uncollectible note receivable and accrued interest from Divested Business | 2,701,000 | |||||
Deferred income tax expense (benefit) | 490,000 | (442,000) | ||||
Loss from sale of property and equipment | 332,000 | 128,000 | ||||
Other | 118,000 | 73,000 | ||||
Loss on disposal of Divested Business | 3,446,000 | |||||
Changes in operating assets and liabilities, net of effects of business combination: | ||||||
Trade accounts receivable | 240,000 | (932,000) | ||||
Inventories | (87,000) | 2,741,000 | ||||
Prepaid expenses, deposits and other | 117,000 | 519,000 | ||||
Accounts payable | (4,915,000) | (484,000) | ||||
Other accrued liabilities | (20,486,000) | (13,738,000) | ||||
Net cash used in operating activities | (25,613,000) | (29,853,000) | $ 34,300,000 | |||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Cash payments for Ariix business combination | (10,000,000) | |||||
Capital expenditures for property and equipment | (1,267,000) | (2,108,000) | ||||
Cash advance under unsecured promissory note | (1,250,000) | |||||
Proceeds from sale of equipment | 4,000 | 231,000 | ||||
Proceeds received from buyer of Divested Businesses, net of cash conveyed of $209 | 381 | |||||
Net cash used in investing activities | (11,263,000) | (2,746,000) | ||||
Proceeds from private placement of Units, net of placement fee: | ||||||
Fair value of warrants to purchase 7,318 shares of Common Stock | 14,128 | |||||
Residual fair value of 14,636 shares of Common Stock | 39,673 | |||||
Proceeds from exercise of stock options | 530,000 | 34,000 | ||||
Proceeds from issuance of common stock | 25,122,000 | |||||
Proceeds from borrowings | 6,868,000 | |||||
Principal payments on borrowings | (12,000,000) | (10,825,000) | ||||
Principal payments on business combination obligations | (9,702,000) | (5,761,000) | ||||
Payments under deferred lease financing obligation | (495,000) | (480,000) | ||||
Debt issuance costs paid | (21,000) | (95,000) | ||||
Payments for deferred offering costs | (24,000) | (164,000) | ||||
Purchase and retirement of 780 shares of Common Stock | 1,193,000 | (1,193) | ||||
Net cash provided by financing activities | 32,089,000 | 13,506,000 | ||||
Effect of foreign currency translation changes | 1,895,000 | (247,000) | ||||
Net change in cash, cash equivalents and restricted cash | (2,892,000) | (19,340,000) | ||||
Cash, cash equivalents and restricted cash at beginning of period | $ 65,235,000 | 65,235,000 | 64,571,000 | 64,571,000 | ||
Cash, cash equivalents and restricted cash at end of period | 62,343,000 | 45,231,000 | 62,343,000 | 45,231,000 | 65,235,000 | |
SUMMARY OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD: | ||||||
Cash and cash equivalents | 46,829,000 | 26,885,000 | 46,829,000 | 26,885,000 | $ 43,711,000 | |
Current portion of restricted cash | 12,000,000 | 1,500,000 | 12,000,000 | 1,500,000 | ||
Long-term portion of restricted cash | 3,514,000 | 16,846,000 | 3,514,000 | 16,846,000 | ||
Total | $ 62,343,000 | $ 45,231,000 | 62,343,000 | 45,231,000 | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||
Cash paid for interest | 2,052,000 | 726,000 | ||||
Cash paid for income taxes | 2,130,000 | 15,788,000 | ||||
Cash paid for amounts included in the measurement of operating lease liabilities | 7,094,000 | 7,131,000 | ||||
Right-of-use assets acquired in exchange for operating lease liabilities | 2,535,000 | 3,034,000 | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||
Issuance of Common Stock in Ariix business combination | 54,186,000 | |||||
Reclassification of Fixed Shares derivative liability to equity | 30,263,000 | |||||
Reclassification of 1,200 shares of Redeemable Common Stock to equity | 3,161,000 | |||||
Clarification Letter obligation in exchange for reduction of shares issuable for derivative liability | 3,056,000 | |||||
Issuance of Common Stock in Aliven business combination | 2,588,000 | |||||
Issuance of 400 shares of Redeemable Common Stock for Senior Notes amendment fee | 1,060,000 | |||||
Issuance of Common Stock for unsecured promissory note receivable | $ 1,060,000 | 1,250,000 | ||||
Increase in payables for debt issuance costs | $ 150,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash conveyed for divested businesses | $ 209 | |
Purchase and retirement of shares of common stock | 780 | |
Warrant [Member] | ||
Private placement of Common Stock, net of issuance costs, shares | 7,318,000 | |
Common Stock [Member] | ||
Private placement of Common Stock, net of issuance costs, shares | 14,636,000 | 16,130,000 |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 — BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Overview NewAge, Inc. (the “Company”) was formed under the laws of the State of Washington on April 26, 2010. Effective May 24, 2021, the Company reincorporated to the State of Delaware (the “Reincorporation”) under a plan of conversion, dated May 14, 2021 (the “Plan of Conversion”). Pursuant to the Plan of Conversion, the Company also adopted new bylaws (the “Delaware Bylaws”). As a result of the Reincorporation, each outstanding share of Common Stock of the Company as a Washington corporation automatically converted into an outstanding share of Common Stock of the Company as a Delaware corporation. In addition, each outstanding stock option and warrant, or right to acquire shares of Common Stock of the Company as a Washington corporation converted into an equivalent stock option, warrant, or right to acquire, upon the same terms and conditions and for the same number of shares of Common Stock of the Company as a Delaware corporation (including the vesting schedule and exercise or conversion price per share applicable to each such option, warrant or other convertible right). Effective July 28, 2020, the Company amended its Articles of Incorporation to change its name from New Age Beverages Corporation to NewAge, Inc. Accordingly, all references herein have been changed to reflect the new name. The Company changed its name to NewAge, Inc. as it built out its distribution system and was in a position to drive a broader portfolio of products through that system that spans more than 50 markets worldwide with a large network of exclusive independent distributors (“Brand Partners”) and customers. The Company is a healthy and organic consumer products company engaged in the development and commercialization of a portfolio of brands in three core category platforms including health and wellness, healthy appearance, and nutritional performance primarily in a direct-to-consumer route to market. Segments The Company’s chief operating decision maker (the “CODM”), who is the Company’s Chief Executive Officer, allocates resources and assesses performance based on financial information of the Company. The CODM reviews financial information presented for each reportable segment for purposes of making operating decisions and assessing financial performance. The Company’s CODM assesses performance and allocates resources based on the financial information of two Basis of Presentation The unaudited condensed consolidated financial statements, which include the accounts of the Company and its wholly-owned subsidiaries, are prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated. The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial reporting. Accordingly, certain information and footnote disclosures required by U.S. GAAP for complete financial statements have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the unaudited condensed consolidated financial statements have been included. These unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2021 and 2020 should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2020, included in the Company’s 2020 Annual Report on Form 10-K filed with the SEC on March 18, 2021 (the “2020 Form 10-K”). The accompanying condensed consolidated balance sheet and related disclosures as of December 31, 2020 have been derived from the Company’s audited financial statements. The Company’s financial condition as of September 30, 2021 and its operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the financial condition and results of operations that may be expected for any future interim period or for the year ending December 31, 2021. Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires the Company to make judgments, assumptions, and estimates that affect the amounts reported in its consolidated financial statements and accompanying notes. The Company bases its estimates and assumptions on existing facts, historical experience, and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant accounting estimates include, but are not necessarily limited to, impairment of goodwill and long-lived assets; valuation assumptions for business combination obligations and the related assets acquired in business combinations; valuation assumptions for stock options, warrants and other equity instruments; the number of shares of restricted stock that will ultimately vest based on the future achievement of performance criteria; estimated useful lives for identifiable intangible assets and property and equipment; allowances for sales returns, chargebacks and inventory obsolescence; deferred income taxes and the related valuation allowances; and the evaluation and measurement of contingencies. Additionally, the full impact of COVID-19 is unknown and cannot be reasonably estimated. However, the Company has made appropriate accounting estimates based on the facts and circumstances available as of the reporting date. To the extent there are material differences between the Company’s estimates and the actual results, the Company’s future consolidated results of operation will be affected. NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements Recent Accounting Pronouncements The following accounting standard was adopted effective January 1, 2021: In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity). No recently issued accounting pronouncements are currently expected to have a material impact on the Company’s consolidated financial statements. |
LIQUIDITY AND GOING CONCERN
LIQUIDITY AND GOING CONCERN | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY AND GOING CONCERN | NOTE 2 — LIQUIDITY AND GOING CONCERN For the nine months ended September 30, 2021, the Company incurred an operating loss of $ 43.6 25.6 34.9 34.3 154.9 In February 2021, the Company entered into a securities purchase agreement in connection with a private placement of units that consisted of an aggregate of approximately 14.6 7.3 53.8 46.8 12.0 58.8 40.8 During the 12-month period ending on September 30, 2022, cash payments will be required to settle certain obligations, including operating lease payments of $ 8.3 million, deferred consideration related to business combinations of $ 1.1 million, and up to $ 21.1 million of principal and interest under the 8.00% Original Issue Discount Senior Secured Notes discussed in Note 6. Management believes the Company’s existing cash and cash equivalents of $ 46.8 million and the current portion of restricted cash of $ 12.0 million will be sufficient to fund contractual obligations and working capital requirements at least through November 2022. |
BUSINESS COMBINATIONS AND DISPO
BUSINESS COMBINATIONS AND DISPOSITIONS | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS AND DISPOSITIONS | NOTE 3 — BUSINESS COMBINATIONS AND DISPOSITIONS Ariix Merger Agreement On September 30, 2020, the Company entered into an Amended and Restated Agreement and Plan of Ariix Merger (the “Ariix Merger Agreement”), by and among Ariix, LLC (“Ariix”), Ariel Merger Sub, LLC (“Ariix Merger Sub”), Ariel Merger Sub 2, LLC (“Ariix Merger Sub 2”), certain Members of Ariix (the “Sellers”), and Dr. Frederick W. Cooper, 100 NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements On November 16, 2020, the Company entered into a letter agreement (the “Waiver Letter”) with Ariix and the Sellers’ Agent that resulted in closing of the Ariix Merger on November 16, 2020 (the “Ariix Closing Date”) and the Sellers’ Agent was appointed as a member of the Company’s Board of Directors. On the Ariix Closing Date, Ariix merged with Ariix Merger Sub, with Ariix as the surviving entity and a wholly owned subsidiary of the Company. Subsequently, Ariix Merger Sub was merged with and into Ariix Merger Sub 2 and remains a wholly owned subsidiary of the Company. Ariix Merger Sub 2 was subsequently renamed “Ariix, LLC”. The preliminary purchase consideration to acquire Ariix amounted to $ 155.1 19.7 54.2 10.0 90.9 On January 29, 2021, the Company and the Sellers’ Agent entered into a letter of clarification (the “Clarification Letter”) to the Ariix Merger Agreement. The Clarification Letter explained the intent of the parties as of the Ariix Closing Date whereby (i) a cash account of Ariix with a Chinese bank that had a balance of $ 3.1 0.5 25.5 25.0 0.6 3.1 3.1 3.1 3.1 87.8 Pursuant to the Ariix Merger Agreement as modified by the Waiver Letter and the Clarification Letter (the “Amended Ariix Merger Agreement”), the Company was obligated to issue 19.7 19.7 54.2 10.0 19.7 10.0 On or before May 16, 2021, under the Amended Ariix Merger Agreement, the Company was required to either pay up to an additional $ 10.0 10.0 11.0 18.0 29.0 5.0 In addition to the 19.7 million shares of Common Stock issued in the first quarter of 2021, the Company was required to seek approval from its shareholders to issue up to an additional 39.6 34.6 14.5 20.1 5.53 As of December 31, 2020, the obligation to issue shares of the Company’s Common Stock or pay $ 163.3 90.9 37.0 53.9 30.3 NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements In August 2021, the Company entered into letter agreements (the “August 2021 Amendment”) with Dr. Frederick W. Cooper in his capacity as Sellers’ Agent. The August 2021 Amendment revised certain terms of the Amended Ariix Merger Agreement, as follows: ● The Company paid the Sellers $ 5.0 2.7 ● The Amended Ariix Merger Agreement required that 7.0 11.7 19.1 7.0 16.2 ● In September 2021, the Company issued an aggregate of 10.0 million of the Fixed Shares, including 7.0 million shares originally designated as consideration for the Non-Compete Agreement. The remaining 4.6 million shares included in the Fixed Shares are issuable for 1.7 million shares as soon as the Sellers provide detailed issuance instructions, and 2.9 million shares are issuable by January 16, 2022. Aliven Business Combination On June 1, 2021 (the “Aliven Closing Date”), the Company entered into an asset purchase agreement (the “Aliven APA”) with Aliven, Inc. (“Aliven”) that was accounted for using the acquisition method of accounting under ASC 805, Business Combinations Fair Value Measurement 1,072,000 2,588,000 SCHEDULE OF PURCHASE PRICE ALLOCATION Identifiable assets acquired: Accounts receivable, net $ 525 Inventories 1,356 (1) Prepaid expenses and other assets 295 Property and equipment 86 Distributor sales force 1,590 (2) Trade name 400 (2) Total identifiable assets acquired 4,252 Liabilities assumed: Accounts payable and accrued liabilities (1,953 ) Net identifiable assets acquired 2,299 Goodwill 289 (3) Total purchase price allocation $ 2,588 (1) Based in part on the preliminary report of an independent valuation specialist, the fair value of work-in-process and finished goods inventories on the Aliven Closing Date exceeded the historical carrying value by approximately $ 0.1 NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (2) Based in part on the preliminary report of an independent valuation specialist, the fair value of identifiable intangible assets was determined primarily using variations of the “income approach,” which is based on the present value of the future after-tax cash flows attributable to each identifiable intangible asset. These intangible assets are being amortized over estimated useful lives of seven years for the distributor sales force and three years for the trade name, with an aggregate weighted average life of 6.2 (3) Goodwill was recognized for the difference between the total purchase consideration transferred to consummate the business combination and the fair value of the net identifiable assets acquired. Goodwill primarily relates to expected synergies to be realized due to combining Aliven with the Company, and the value of the assembled workforce on the Aliven Closing Date. Goodwill is expected to be deductible for income tax purposes. Unaudited Pro Forma Disclosures The following table summarizes the results of operations for the Company after giving effect to the pre-acquisition results of Ariix and Aliven on an unaudited pro forma basis (in thousands, except per share amounts): SCHEDULE OF UNAUDITED PRO FORMA DISCLOSURE Three Months Ended Nine Months Ended September 30, September 30, 2020 2021 2020 Net revenue $ 147,868 $ 354,626 $ 397,200 Net loss $ (7,840 ) $ (3,682 ) $ (27,161 ) Net loss per share: Basic $ (0.07 ) $ (0.03 ) $ (0.24 ) Diluted $ (0.07 ) $ (0.19 ) (1) $ (0.24 ) Weighted average number of shares of common stock outstanding: Basic 118,595 141,490 112,863 Diluted 118,595 168,253 112,863 (1) For the nine months ended September 30, 2021, the calculation of pro forma diluted loss per share is based on pro forma net loss of $ 3.7 28.4 32.1 The pro forma financial results shown above reflect the historical operating results of the Company, including the unaudited pro forma results of Ariix and Aliven as if these business combinations and the related equity issuances had occurred at the beginning of the first full calendar year preceding the acquisition dates. For the three months ended September 30, 2021, the results of Ariix and Aliven are included in the Company’s historical results for the entirety of that period. Accordingly, pro forma results have been omitted since they are not applicable for the three months ended September 30, 2021. The calculations of pro forma net revenue and pro forma net loss give effect to the pre-acquisition operating results of Ariix and Aliven based on (i) the historical net revenue and net income of Ariix and Aliven, and (ii) incremental depreciation and amortization based on the fair value of property, equipment and identifiable intangible assets acquired and the related estimated useful lives. The pro forma information presented above does not purport to represent what the actual results of operations would have been for the periods indicated, nor does it purport to represent the Company’s future results of operations. NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements Business Combination Liabilities As of September 30, 2021 and December 31, 2020, business combination liabilities were as follows (in thousands): SCHEDULE OF BUSINESS COMBINATION LIABILITIES 2021 2020 Liabilities to former owners of Ariix: Fixed Shares derivative liability $ - (2) $ 37,028 (1) Variable Shares derivative liability 24,189 (3) 53,846 (1) Total derivative liabilities 24,189 90,874 (1) Short-term debt payable in cash - 10,000 Business combination liabilities assumed from Ariix: Fair value of deferred consideration payable: LIMU 3,435 (4) 3,656 Zennoa 1,738 (5) 2,196 Short-term debt for Zennoa - 850 Total 29,362 107,576 Less current portion 1,140 11,750 Long-term portion $ 28,222 $ 95,826 (1) As of December 31, 2020, the Company had an obligation under the Amended Ariix Merger Agreement to issue the Fixed Shares and the Variable Shares, or pay $ 163.3 90.9 Recurring Fair Value Measurements (2) The conditions that required accounting for the Fixed Shares as a derivative liability were eliminated upon receipt of shareholder approval on May 14, 2021. Therefore, the fair value of the Fixed Shares derivative liability as of May 14, 2021 was reclassified to equity. (3) The Variable Shares derivative liability provides for ongoing adjustments in the number of shares based on the outcome of any potential indemnification claims by either party to the Amended Ariix Merger Agreement. Accordingly, the Variable Shares derivative liability is being adjusted to fair value at the end of each reporting period until the underlying shares are issued in November 2021. Key valuation assumptions as of September 30, 2021 are set forth in Note 13 under the caption Recurring Fair Value Measurements (4) On May 31, 2019, Ariix completed a business combination with The LIMU Company, LLC (“LIMU”) that provided for a cash payment of $ 3.0 5.0 5.0 1.2 3.8 3.4 4.5 (5) On November 27, 2019, Ariix completed a business combination with Zennoa, LLC (“Zennoa”) that provided for fixed cash payments of $ 2.25 2.5 No amounts are payable if the Zennoa Sales Metric is less than $6.0 million, and payments ranging from 3% to 5% of monthly sales are payable if the Zennoa Sales Metric exceeds $6.0 million. 4.75 The amount of GI Payments due for each month is based on varying percentages starting at 2.0% if the Zennoa Sales Metric is at least $25.0 million, up to a maximum of 3.0% if the Zennoa Sales Metric is $45.0 million or higher. The Company determined that the probability of the Zennoa Sales Metric exceeding $25.0 million is remote. 1.7 3.9% NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements Changes in Business Combination Obligations For the nine months ended September 30, 2021, activity related to the Variable Shares and the Fixed Shares derivative liabilities, and other business combination obligations were as follows (in thousands): SCHEDULE OF CHANGES IN BUSINESS COMBINATION OBLIGATIONS Derivative Liabilities Variable Fixed Total Other Total Balances, December 31, 2020 $ 53,846 (1) $ 37,028 (1) $ 90,874 $ 16,702 $ 107,576 Reclassify Clarification Letter obligation (3,056 ) (2) - (3,056 ) 3,056 (2) - Cash payments for: August 2021 Amendment (5,000 ) (3) - (5,000 ) - (5,000 ) Short-term debt paid to Sellers of Ariix - - - (10,000 ) (10,000 ) Clarification Letter obligation - - - (3,056 ) (3,056 ) LIMU and Zennoa deferred consideration - - - (852 ) (852 ) Zennoa short-term debt - - - (850 ) (850 ) Net gain on change in fair value of derivatives (21,601 ) (4) (6,765 ) (5) (28,366 ) - (28,366 ) Accretion of discount on deferred consideration - - - 174 174 Fixed Shares derivative liability reclassified to equity - (30,263 ) (6) (30,263 ) - (30,263 ) Balances, September 30, 2021 $ 24,189 $ - $ 24,189 $ 5,174 $ 29,363 (1) Represents the allocable fair value associated with the Variable Shares and the Fixed Shares derivative liabilities as of December 31, 2020. (2) Represents the impact of the Clarification Letter entered into on January 29, 2021, whereby the number of shares subject to shareholder approval was reduced and a payable was recognized. (3) As discussed above under the caption Ariix Merger Agreement (4) Represents the gain from changes in fair value of the Variable Shares derivative liability for the nine months ended September 30, 2021. (5) Represents the gain recognized from changes in fair value of the Fixed Shares derivative liability for the period from January 1, 2021 through May 14, 2021 when this derivative liability was reclassified to equity. (6) The fair value of the Fixed Shares derivative liability as of May 14, 2021 was reclassified as a component of equity since shareholder approval to issue the shares eliminated the conditions that previously required liability treatment. Disposition of BWR and U.S. Retail Brands In September 2020, the Company sold Brands Within Reach, LLC (“BWR”) and substantially all of the Company’s legacy U.S. retail brands (collectively, the “Divested Business”). Zachert Private Equity GmbH (the “Buyer”) issued to the Company (i) an unsecured promissory note payable by BWR with a principal balance of $ 2.5 1.25 1.25 3.3 10 692,000 1.25 1.25 For the three months ended June 30, 2021, the Company determined that (i) collection of the $ 2.5 0.2 1.6 4.3 6.0 NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements For the three months ended September 30, 2020, the operating results related to the Divested Business were included in the Direct Store segment and accounted for net revenue of $ 2.4 2.1 9.6 7.4 |
OTHER FINANCIAL INFORMATION
OTHER FINANCIAL INFORMATION | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER FINANCIAL INFORMATION | NOTE 4 — OTHER FINANCIAL INFORMATION Inventories As of September 30, 2021 and December 31, 2020, inventories consisted of the following (in thousands): SCHEDULE OF INVENTORIES 2021 2020 Raw materials $ 9,550 $ 12,628 Work-in-process 2,368 1,225 Finished goods, net 36,958 34,198 Total inventories $ 48,876 $ 48,051 Other Accrued Liabilities As of September 30, 2021 and December 31, 2020, other accrued liabilities consisted of the following (in thousands): SCHEDULE OF OTHER ACCRUED LIABILITIES 2021 2020 Accrued commissions $ 15,486 $ 23,594 Accrued compensation and benefits 10,845 9,443 Accrued marketing events 6,891 8,212 Deferred revenue 2,351 6,278 Provision for sales returns 1,366 1,322 Income taxes payable 3,135 3,461 Current portion of operating lease liabilities 5,118 6,948 Current portion of deferred lease financing obligation 677 659 Other accrued liabilities 10,664 10,090 Total accrued liabilities $ 56,533 $ 70,007 Depreciation and Amortization For the three and nine months ended September 30, 2021 and 2020, depreciation expense related to property and equipment and amortization expense related to identifiable intangible assets, including amounts charged to cost of goods sold, were as follows (in thousands): SCHEDULE OF DEPRECIATION AND AMORTIZATION Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Depreciation $ 1,101 $ 967 $ 3,201 $ 2,926 Amortization 3,380 888 10,876 2,681 Total $ 4,481 $ 1,855 $ 14,077 $ 5,607 Accumulated depreciation of property and equipment amounted to $ 10.8 8.8 16.5 8.5 NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements Gain (loss) on change in fair value of derivatives For the three and nine months ended September 30, 2021 and 2020, gain (loss) from changes in fair value of derivatives is comprised of the following (in thousands): SCHEDULE OF LOSS FROM CHANGES IN FAIR VALUE OF DERIVATIVES Three Months Ended Nine Months Ended September 30, September 30, Description of Derivative 2021 2020 2021 2020 Ariix business combination consideration: Fixed Shares derivative $ - (1) $ - $ 6,765 (1) $ - Variable Shares derivative 15,584 (1) - 21,602 (1) - Warrants issued in private placement 3,914 (2) - 12,347 (2) - Interest rate swap - (86 ) - (392 ) Gain (loss) on change in fair value of derivatives $ 19,498 $ (86 ) $ 40,714 $ (392 ) (1) For further discussion of the Ariix Fixed Shares and Variable Shares derivative liabilities, please refer to Note 3. (2) For further discussion of the derivative liability for warrants, please refer to Note 7 under the caption Private Placement of Units. Severance and Restructuring Activities In September 2021, the Company initiated restructuring plans that were designed to take advantage of synergies achieved as a result of the merger with Ariix discussed in Note 3. These restructuring plans were primarily focused on reductions in marketing and other personnel and closure costs related to close several office locations. For the three months ended September 30, 2021, the Company implemented headcount reductions of approximately 60 employees that accounted for estimated annualized compensation costs of $3.2 million. For the three months ended September 30, 2021, the Company incurred severance costs of $1.4 million and office closure costs of approximately $1.1 million, substantially all of which related to the Direct/ Social Selling segment. On March 3, 2021, the Company and Gregory A. Gould, the former Chief Financial Officer of the Company, entered into a Modification and Transition Addendum to Employment Agreement and Indemnification Agreement (the “Gould Agreement”). The Gould Agreement amended an employment agreement with Mr. Gould, whereby he continued to serve as Chief Financial Officer of the Company until July 2, 2021 (the “Term”). As part of the transition, Mr. Gould was entitled to (i) a payment made in March 2021 for his 2020 performance bonus of $250,000, (ii) a target performance bonus of $650,000 for services through July 2, 2021, (iii) severance compensation of one year of base salary of $500,000 plus target bonus of $250,000 pursuant to his employment agreement, (iv) payment of health insurance premiums for one year, and (v) title to Company-owned automobiles and a laptop computer that have been transferred to Mr. Gould. In addition, the Company agreed to issue stock options for 125,000 three years July 2, 2021 1.6 0.4 In April and August 2020, the Company initiated restructuring plans that were designed to achieve selling, general and administrative cost reductions. These restructuring plans were primarily focused on reductions in marketing and other personnel. For the three and nine months ended September 30, 2020, the Company implemented headcount reductions of approximately 50 and 150 employees, respectively. These 150 employees whose employment was terminated accounted for estimated annualized compensation and benefit costs of $ 9.6 million. In connection with the termination of employees, the Company incurred severance costs of $ 1.7 million and $ 2.6 million for the three and nine months ended September 30, 2020, respectively. These expenses are included in selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations. For the three months ended September 30, 2020, approximately $ 1.0 million and $ 0.7 million of the severance costs related to the Direct/ Social Selling segment and the Direct Store segment, respectively. For the nine months ended September 30, 2020, approximately $ 1.8 million and $ 0.7 million of the severance costs related to the to the Direct/ Social Selling segment and the Direct Store segment, respectively. NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements For the three and nine months ended September 30, 2021 and 2020, activity affecting the accrued liability for severance benefits and office closure costs is summarized as follows (in thousands): SUMMARY OF ACTIVITY AFFECTING THE ACCRUED LIABILITY FOR SEVERANCE BENEFITS Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Accrued severance and restructuring, beginning of period $ 1,449 $ - $ 191 $ - Severance expense incurred 1,400 1,658 3,097 2,543 Office closure costs incurred 1,120 1,120 Cash payments (1,235 ) (527 ) (1,674 ) (1,412 ) Accrued severance and restructuring, end of period $ 2,734 $ 1,131 $ 2,734 $ 1,131 As of September 30, 2021, approximately $ 1.6 1.1 Assets Held for Sale On June 30, 2021, the Company entered into a memorandum of understanding (“MOU”) with TCI Co., Ltd. (“TCI”). On August 20, 2021, the Company and TCI entered into an asset purchase agreement (the “TCI APA”) that provides for a closing date after customary representation, warranties and other closing conditions are satisfied or waived. The TCI APA provides for (i) the sale of certain manufacturing equipment to TCI for $ 3.5 3.0 2.4 4.4 4.5 Long-lived assets are classified as held for sale when the Company commits to a plan to sell the assets. Accordingly, the Company determined that the MOU qualified as a commitment whereby accounting for the assets as held for sale is appropriate. Such assets are classified within current assets if there is reasonable certainty that the sale will take place within one year. Upon classification as held for sale, long-lived assets are no longer depreciated, and a measurement for impairment is performed to determine if there is any excess of carrying value over fair value less costs to sell. As of September 30, 2021, the Company determined that no impairment exists for the manufacturing equipment and the right-of-use asset whereby the aggregate net carrying value of $ 6.9 4.5 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
LEASES | NOTE 5 — LEASES Operating Leases The Company leases various facilities, vehicles and equipment under non-cancellable operating lease agreements that expire between October 2021 and March 2039. The Company has made accounting policy elections (i) to not apply the recognition requirements for short-term leases and (ii) for facility leases, when there are lease and non-lease components, such as common area maintenance charges, to account for the lease and non-lease components as a single lease component. 3.4 2.5 9.3 7.6 NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements As of September 30, 2021 and December 31, 2020, the weighted average remaining lease term under operating leases was 10.8 11.5 5.6 5.5 Right-Of-Use Asset Impairment and Sublease In June 2019, the Company began attempting to sublease a portion of its right-of-use assets previously used for warehouse space that are no longer needed for current operations. As a result, impairment evaluations were completed during 2019 that resulted in the recognition of an impairment charge of $ 2.3 0.4 In July 2021, the Company entered into a sublease agreement for this property that provides for aggregate cash payments of approximately $ 2.0 0.3 0.1 Future Lease and Sublease Payments As of September 30, 2021, future payments under operating lease agreements, including a lease for the Company’s facility in American Fork, Utah that is discussed in Note 4 under the caption Assets Held for Sale SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS Years Ending December 31, Remainder of 2021 $ 2,454 2022 7,716 2023 6,436 2024 5,575 2025 5,354 Thereafter 23,383 Total operating lease payments 50,918 Less imputed interest (14,243 ) (1) Present value $ 36,675 (1) Calculated based on the term of the respective leases using discount rates ranging from 2.0 10.0 NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 6 — DEBT Summary of Debt As of September 30, 2021 and December 31, 2020, the Company’s debt consisted of the following (dollars in thousands): SUMMARY OF DEBT 2021 2020 Senior Notes, net of discount of $ 2,810 and $ 7,900 $ 17,622 $ 24,532 PPP Loan payable, interest at 1.0 unsecured due April 2022 - (1) 6,868 Assumed PPP Loan payable, interest at 1.0 unsecured due May 2022 - (1) 2,781 Installment notes payable 14 16 Total 17,636 34,197 Less current maturities 17,636 (2) 18,016 Long-term debt, less current maturities $ - $ 16,181 (1) As discussed below, the PPP Loans were forgiven in July 2021 and the Company recognized an aggregate gain from forgiveness of $ 9.8 (2) Current maturities of long-term debt include the aggregate principal payments of $ 20.4 2.8 Private Placement of Senior Notes On November 30, 2020, the Company entered into a securities purchase agreement (the “November 2020 SPA”) for a private placement of (i) 8.00 32.4 800,000 750,000 3.75 750,000 5.75 Private Placement of Units Redeemable Common Stock The Senior Notes bear interest at an annual rate of 8.0% applied to the stated principal balance with accrued interest payable monthly in cash. As of the closing date, the aggregate discount related to the Senior Notes was approximately $ 8.5 23.9 42.3 For the months of February 2021 through April 2021, the holders of the Senior Notes were entitled to request that the Company make principal payments up to $1.0 million per month and these payments were made on a timely basis. Beginning in May 2021 and continuing for each subsequent month, the holders of the Senior Notes are entitled to request that the Company make principal payments up to $2.0 million per month. The holders of the Senior Notes requested principal payments of $1.0 million in May 2021 and $2.0 million for each of the months of June 2021 through September 2021, and these payments were made on a timely basis. The maturity date of the Senior Notes is on December 1, 2022. However, if the holders of the Senior Notes continue to exercise their rights to demand monthly principal payments of $2.0 million, the Senior Notes will be repaid in full by August 2022. The Company may prepay all or a portion of the outstanding principal amount of the Senior Notes at any time, subject to a prepayment fee of 3.0% of the outstanding stated principal balance through December 1, 2021. As a post-closing deliverable, the Company was required to provide certain historical financial statements of Ariix to the lenders by January 4, 2021. The required financial statements were not available by the deadline, which would have resulted in a default under the November 2020 SPA. The lenders agreed to amend the Senior Notes to extend the deadline in exchange for the issuance of 400,000 1.1 1.1 46.8 8.0 NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements The Company was required to maintain restricted cash balances of $ 18.0 8.0 12.0 12.0 The obligations of the Company under the Senior Notes are secured by substantially all of the assets of the Company and its subsidiaries, including all personal property and all proceeds and products thereof, goods, contract rights and other general intangibles, accounts receivable, intellectual property, equipment, and deposit accounts and a lien on certain real estate. The Senior Notes contain certain restrictions and covenants, which restrict the Company’s ability to incur additional debt or make guarantees, sell assets, make investments or loans, make distributions or create liens or other encumbrances. The Senior Notes also require that the Company comply with certain financial covenants, including maintaining minimum cash, minimum adjusted EBITDA, minimum revenue, and a maximum ratio of cash in foreign bank accounts to cash in U.S. deposit accounts subject to account control agreements. As of September 30, 2021, the Company was in compliance with all covenants related to the Senior Notes. The Senior Notes contain customary events of default, including failure to pay any principal or interest when due, failure to perform or observe covenants, breaches of representations and warranties, certain cross defaults, certain bankruptcy related events, monetary judgments defaults, material adverse effect defaults, change of management defaults, and a change in control. Upon the occurrence of an event of default, the outstanding obligations may be accelerated and become immediately due and payable and the contractual interest rate on the obligations increases from 8.0 12.0 PPP Loans Pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), the Company obtained a PPP loan (the “NewAge PPP Loan”) in April 2020 for approximately $ 6.9 2.8 1.0 9.8 The PPP Loans were accounted for under Accounting Standards Codification (“ASC”) 470, Debt 1.0 9.8 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 7 — STOCKHOLDERS’ EQUITY Authorized Shares of Capital Stock On May 14, 2021, the Company’s shareholders approved an increase in authorized shares of Common Stock and the Reincorporation discussed in Note 1. Accordingly, as a Delaware corporation, the Company has authority to issue up to 400.0 1.0 NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements Changes in Stockholders’ Equity Changes in stockholders’ equity for the three months ended September 30, 2021 and 2020 were as follows (in thousands): SCHEDULE OF CHANGES IN STOCKHOLDERS EQUITY Shares Amount Capital Stock Subscription Income (Loss) Deficit Total Obligation Note Accumulated Additional to Issue Receivable Other Common Stock Paid-in Common For Stock Comprehensive Accumulated Shares Amount Capital Stock Subscription Income (Loss) Deficit Total Three Months Ended September 30, 2021 Balances, June 30, 2021 136,606 $ 137 $ 340,937 $ 30,263 $ - $ 3,478 $ (152,212 ) $ 222,603 Issuance of Common Stock: Upon vesting of restricted stock awards 201 - - - - - - - For exercise of stock options 1 - 2 - - - - 2 Issuance of Common Stock to settle portion of settlement obligation 10,000 10 20,789 (20,799 ) - - - - Issuance of Common Stock to settle portion of settlement obligation 10,000 10 20,789 (20,799 ) - - - - In ATM public offering, net In exchange for note receivable In exchange for note receivable, shares Purchase and retirement of Common Stock Purchase and retirement of Common Stock, shares Stock-based compensation expense - - 1,477 - - - - 1,477 Net change in accumulated other comprehensive income (loss) - - - - - 726 - 726 Net income - - - - - - (2,700 ) (2,700 ) Balances, September 30, 2021 146,808 $ 147 $ 363,205 $ 9,464 $ - $ 4,204 $ (154,912 ) $ 222,108 Three Months Ended September 30, 2020 Balances, June 30, 2020 98,442 $ 98 $ 231,201 $ - $ - $ (141 ) $ (133,643 ) $ 97,515 Balances 98,442 $ 98 $ 231,201 $ - $ - $ (141 ) $ (133,643 ) $ 97,515 Issuance of Common Stock: In ATM public offering, net - - (70 ) - - - - (70 ) In exchange for note receivable 692 1 1,249 - (1,250 ) - - - For exercise of stock options 15 - 30 - - - - 30 Upon vesting of restricted stock awards 121 - - - - - - - Purchase and retirement of Common Stock (780 ) (1 ) (1,192 ) - - - - (1,193 ) Stock-based compensation expense - - 957 - - - - 957 Net change in accumulated other comprehensive income (loss) - - - - - 1,275 - 1,275 Net change in accumulated other comprehensive income (loss) - - - - - 1,275 - 1,275 Net loss - - - - - - (14,133 ) (14,133 ) Net income loss - - - - - - (14,133 ) (14,133 ) Balances, September 30, 2020 98,490 $ 98 $ 232,175 $ - $ (1,250 ) $ 1,134 $ (147,776 ) $ 84,381 Balances 98,490 $ 98 $ 232,175 $ - $ (1,250 ) $ 1,134 $ (147,776 ) $ 84,381 Private Placement of Units On February 16, 2021, the Company entered into a securities purchase agreement (the “February 2021 SPA”) in connection with a private placement of units (the “Units”). The Units consisted of an aggregate of approximately 14.6 7.3 58.0 7 53.8 The warrants have an initial exercise price of $ 5.00 February 19, 2024 4.99 9.99 53.8 SUMMARY OF RELATIVE FAIR VALUE ALLOCATION OF NET PROCEEDS Common Description Warrants Stock Total Fair value on issuance date $ 14,128 (1) $ 46,105 (2) $ 60,233 Adjustment to reduce Common Stock to residual fair value - (6,455 ) (3) (6,455 ) Total $ 14,128 (1) $ 39,650 (3) $ 53,778 (4) (1) Fair value was determined on the issuance date using the Black-Scholes-Merton (“BSM”) option-pricing model. Key valuation inputs as of the issuance date included the closing price of $ 3.15 5.00 117 3 1.93 NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (2) Represents fair value of 14.6 3.15 (3) Adjustment required to record shares of Common Stock at residual fair value since the total fair value of the warrants and shares of Common Stock exceeded the net proceeds received in the private placement. (4) Represents the net proceeds received in the private placement. As of September 30, 2021, the fair value of the warrants had decreased from $ 14.1 1.8 12.3 Recurring Fair Value Measurements Pursuant to a registration rights agreement entered into concurrently, the Company filed an initial registration statement on Form S-3 covering the resale of the shares of Common Stock and the Warrant Shares with the SEC on March 18, 2021, and the registration statement was declared effective by the SEC on March 29, 2021. The Company also agreed to maintain effectiveness of the registration statement within prescribed deadlines set forth in the registration rights agreement. If the Company does not comply with these requirements, the investors are entitled to liquidated damages equal to 2.0% of the aggregate subscription amount on each 30-day anniversary of such failure Redeemable Common Stock In connection with the November 2020 SPA and the January 2021 amendment discussed in Note 6, the Company issued Commitment Shares for an aggregate of 1.2 3.36 SCHEDULE OF ELIMINATION OF REDEMPTION CONTINGENCY Number of Carrying Description Shares Value Balance, December 31, 2020 800 $ 2,101 Amendment Fee 400 1,060 Total reclassified to permanent equity 1,200 $ 3,161 At the Market Offering Agreements On April 30, 2019, the Company entered into an At the Market Offering Agreement (“ATM Agreement”) with Roth Capital Partners, LLC (the “Agent”), pursuant to which the Company could offer and sell from time to time up to an aggregate of $ 100 SCHEDULE OF COMMON STOCK PURSUANT TO AGREEMENT Number Gross Proceeds Offering Costs Net Three Months Ended of Shares Per Share Amount Commissions Other Proceeds March 31, 2020 4,939 $ 1.73 $ 8,545 $ (257 ) $ (3 ) $ 8,285 June 30, 2020 11,191 $ 1.54 17,270 (436 ) (91 ) 16,743 September 30, 2020 - $ - - - (70 ) (70 ) Nine-month totals 16,130 $ 1.60 $ 25,815 $ (693 ) $ (164 ) $ 24,958 NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements On February 9, 2021, the Company notified the Agent of its election to terminate the ATM Agreement. On February 11, 2021, the Company entered into a sales agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners (the “Manager”), under which the Company may offer and sell from time-to-time up to an aggregate of approximately $ 53.5 |
STOCK OPTIONS AND WARRANTS
STOCK OPTIONS AND WARRANTS | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS AND WARRANTS | NOTE 8 — STOCK OPTIONS AND WARRANTS Stock Option Activity The following table sets forth stock option activity under the Company’s stock option plans for the nine months ended September 30, 2021 (shares in thousands): SCHEDULE OF STOCK OPTION ACTIVITY Shares Price (1) Term (2) Outstanding, beginning of period 3,856 (3) $ 2.72 8.2 Grants 670 2.47 Forfeited (315 ) 3.07 Exercised (289 ) (4) 1.84 Outstanding, end of period 3,922 (5) 2.72 7.9 Vested, end of period 2,024 (5) 2.65 7.1 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term until the stock options expire. (3) Includes an aggregate of 100,000 3.06 vest upon achievement of cost savings of $25.0 million related to the successful integration of the Ariix business combination (4) On the respective exercise dates, the weighted average intrinsic value per share of Common Stock issued upon exercise of stock options amounted to $ 1.72 0.5 (5) As of September 30, 2021, based on the closing price of the Company’s Common Stock of $ 1.39 In connection with certain employee severance arrangements during the nine months ended September 30, 2021, the Company agreed to accelerate vesting and extend the exercise period for options for a total of 0.3 0.5 0.5 NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements For the nine months ended September 30, 2021, the valuation assumptions for newly-granted stock options and modifications under the Company’s stock option plans were estimated on the respective date of grant or modification using the BSM option-pricing model with the following weighted-average assumptions: SCHEDULE OF STOCK OPTIONS WEIGHTED AVERAGE ASSUMPTIONS Grants Modifications Closing price of Common Stock on measurement date $ 2.47 $ 2.69 Exercise price $ 2.47 $ 3.24 Expected life (in years) 5 6.8 Volatility 104 % 105 % Dividend yield 0 % 0 % Risk-free interest rate 0.7 % 0.1 % Using the BSM option-pricing model based on the valuation inputs set forth above, the weighted-average grant date fair value was $ 1.81 1.88 Restricted Stock Activity The following table sets forth share activity related to grants of restricted stock under the Company’s stock option plans for the nine months ended September 30, 2021 (in thousands): SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY Type of Awards Equity Liability (1) Unvested shares, December 31, 2020 2,039 18 Unvested awards granted to: Executive officer with performance conditions 2,275 (2) - Board members 187 (3) - Officers, employees and Brand Partners 566 (4) - Forfeitures (130 ) (1 ) Vested shares (1,023 ) - (4) Unvested shares, September 30, 2021 3,914 17 Intrinsic value, September 30, 2021 $ 5,441 (5) $ 23 (5) (1) Certain awards granted to employees in China are not permitted to be settled in shares, which requires classification as a liability in the Company’s condensed consolidated balance sheets. This liability is adjusted based on the closing price of the Company’s Common Stock at the end of each reporting period until the awards vest. (2) On March 10, 2021, the Board of Directors approved restricted stock grants to the Company’s Chief Executive Officer for (i) 175,000 shares that vest for one-third of the shares on each of the first, second and third anniversaries of the grant date, (ii) a grant of 350,000 shares up to 1,050,000 shares that vest to the extent that prescribed amounts of measurable merger synergies are realized by the Company over the three-year period ending December 31, 2023, and (iii) a grant of 350,000 shares up to 1,050,000 shares that vest if the Company achieves adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) margins ranging from 4.0% to 12.0% over the three-year period ending December 31, 2023. Adjusted EBITDA margin is a non-GAAP measure computed by dividing Adjusted EBITDA, as defined by the Board of Directors, by net revenue. The fair value of the Company’s Common Stock was $2.79 per share on the grant date, resulting in total compensation expense of $0.5 million that is being recognized over the 3-year service period for the award described in (i) above, and up to an aggregate of $5.9 million if the maximum performance targets are achieved for both awards described in (ii) and (iii) above whereby an aggregate of 2.1 million shares would vest. If the Company does not achieve the minimum targets set by the Board of Directors for merger synergies and Adjusted EBITDA margin, none of the 2.1 million shares will vest. NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements For the nine months ended September 30, 2021, an aggregate of approximately $0.4 million of compensation expense was recognized for the awards described in (ii) and (iii) above, which was calculated assuming that an aggregate of 0.7 million shares will ultimately vest and that the performance criteria will not be achieved for an aggregate of 1.4 million shares that are included in the table. This compensation calculation was based on management’s estimate of the most likely outcome for the performance conditions and considering the portion of the service period that had been rendered through September 30, 2021. Compensation expense will be recomputed at the end of each reporting period with the future impact of changes in management’s estimates reflected prospectively. (2) On March 10, 2021, the Board of Directors approved restricted stock grants to the Company’s Chief Executive Officer for (i) 175,000 shares that vest for one-third of the shares on each of the first, second and third anniversaries of the grant date, (ii) a grant of 350,000 shares up to 1,050,000 shares that vest to the extent that prescribed amounts of measurable merger synergies are realized by the Company over the three-year period ending December 31, 2023, and (iii) a grant of 350,000 shares up to 1,050,000 shares that vest if the Company achieves adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) margins ranging from 4.0% to 12.0% over the three-year period ending December 31, 2023. Adjusted EBITDA margin is a non-GAAP measure computed by dividing Adjusted EBITDA, as defined by the Board of Directors, by net revenue. The fair value of the Company’s Common Stock was $2.79 per share on the grant date, resulting in total compensation expense of $0.5 million that is being recognized over the 3-year service period for the award described in (i) above, and up to an aggregate of $5.9 million if the maximum performance targets are achieved for both awards described in (ii) and (iii) above whereby an aggregate of 2.1 million shares would vest. If the Company does not achieve the minimum targets set by the Board of Directors for merger synergies and Adjusted EBITDA margin, none of the 2.1 million shares will vest. 0.4 (iii) above, which was calculated assuming that an aggregate of 0.7 million shares will ultimately vest and that the performance criteria will not be achieved for an aggregate of 1.4 million shares that are included in the table. This compensation calculation was based on management’s estimate of the most likely outcome for the performance conditions and considering the portion of the service period that had been rendered through September 30, 2021. (3) Represents grants to members of the Board of Directors in January 2021, whereby the shares of Common Stock will vest one year after the grant date. The fair value of the Company’s Common Stock was $ 3.21 0.6 (4) Represents restricted stock awards that generally vest over three years with fair value determined based on the closing price of the Company’s Common Stock on the respective grant dates. (5) The intrinsic value is based on the closing price of the Company’s Common Stock of $ 1.39 In connection with employee severance arrangements during the nine months ended September 30, 2021, the Company modified certain restricted stock awards for 0.3 0.7 Stock-Based Compensation Expense Substantially all stock-based compensation expense is included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations. The table below summarizes stock-based compensation expense related to stock options and restricted stock awards for the three and nine months ended September 30, 2021 and 2020, and the unrecognized compensation expense as of September 30, 2021 and 2020 (in thousands): SCHEDULE OF STOCK BASED COMPENSATION EXPENSES Three Months Ended Nine Months Ended Unrecognized Expense September 30: September 30: as of September 30: 2021 2020 2021 2020 2021 2020 Plan-based stock option awards $ 629 $ 374 $ 2,350 $ 1,470 $ 2,744 $ 2,815 Plan-based restricted stock awards: Equity-classified 848 583 3,257 1,923 4,546 (1) 2,453 Liability-classified (2 ) 9 17 22 6 38 Total $ 1,475 $ 966 $ 5,624 $ 3,415 $ 7,296 $ 5,306 (1) Pursuant to the March 2021 grant of performance-based restricted stock to the Company’s Chief Executive Officer, the amount includes $ 1.6 0.7 Restricted Stock Activity Unrecognized compensation of $3.9 million related to an additional 1.4 million shares is excluded from the table based on management’s estimate that both performance conditions will be achieved at the target level. Accordingly, $3.9 million of additional stock-based compensation expense could be recognized if the maximum performance targets are achieved over the remaining performance period through December 2023. As of September 30, 2021, unrecognized stock-based compensation expense related to service-based awards is expected to be recognized on a straight-line basis over a weighted-average period of approximately 1.9 1.8 0.3 Restricted Stock Activity NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements Warrants The following table sets forth changes in outstanding warrants for the nine months ended September 30, 2021 (shares in thousands): SCHEDULE OF WARRANTS Shares Price (1) Term (2) Outstanding, beginning of period 1,803 $ 4.77 5.1 Issuance in private placement of Units 7,318 (3) 5.00 Outstanding, end of period 9,121 (4) 4.95 2.8 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term in years until the warrants expire. (3) As discussed in Note 7, the Company completed a private placement of equity securities in February 2021 that included warrants to purchase an aggregate of 7.3 5.00 (4) All warrants are vested and exercisable as of September 30, 2021. The November 2020 SPA discussed in Note 6 included the issuance of Class B Warrants to purchase 750,000 5.75 5.75 5.53 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9 — INCOME TAXES The Company recognized income tax expense of $ 0.4 0.6 21.0 The Company recognized income tax expense of $ 2.3 1.9 21.0 During the three months ended September 30, 2021, an entity classification election (or, check-the-box election) was made by our wholly owned Malta subsidiary to elect disregarded status for U.S. income tax reporting purposes effective retroactively to June 1, 2020. This election resulted in the recognition of deferred tax liabilities within the U.S. jurisdiction in the amount of $ 18.1 As of September 30, 2021, and December 31, 2020, $ 1.1 4.3 Interim income taxes are based on an estimated annualized effective tax rate applied to the respective quarterly periods, adjusted for discrete tax items in the period in which they occur. Although the Company believes its tax estimates are reasonable, the Company can make no assurance that the final tax outcome of these matters will not be different from that which it has reflected in its historical income tax provisions and accruals. Such differences could have a material impact on the Company’s income tax provision and operating results in the period in which the Company makes such determinations. NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 — COMMITMENTS AND CONTINGENCIES Litigation, Claims and Assessments From time to time, the Company may be a party to litigation and subject to claims incident to the ordinary course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on its business. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors. The Company’s operations are subject to numerous governmental rules and regulations in each of the countries it does business. These rules and regulations include a complex array of tax and customs regulations as well as restrictions on product ingredients and claims, the commissions paid to the Company’s Brand Partners, labeling and packaging of products, conducting business as a direct-selling business, and other facets of manufacturing and selling products. In some instances, the rules and regulations may not be fully defined under the law or are otherwise unclear in their application. Additionally, laws and regulations can change from time to time, as can their interpretation by the courts, administrative bodies, and the tax and customs authorities in each country. The Company actively seeks to be in compliance, in all material respects, with the laws of each of the countries in which it does business and expects its Brand Partners to do the same. The Company’s operations are often subject to review by local country tax and customs authorities and inquiries from other governmental agencies. No assurance can be given that the Company’s compliance with governmental rules and regulations will not be challenged by the authorities or that such challenges will not result in assessments or required changes in the Company’s business that could have a material impact on its business, consolidated financial statements and cash flow. The Company has various non-income tax contingencies in several countries. Such exposures could be material depending upon the ultimate resolution of each situation. As of September 30, 2021 and December 31, 2020, the Company has recorded current liabilities for non-income tax contingencies of approximately $ 1.2 On November 19, 2020, Ariix’s subsidiary in Japan (the “Japanese Subsidiary”) received an order from the Japan Consumer Affairs Agency notifying it of a nine-month suspension from recruiting new Brand Partners in Japan. In comparison to pre-acquisition levels of net revenue generated by the Japanese subsidiary, the suspension of recruiting is resulting in a reduction in net revenue for the nine-month suspension period. According to the order, the Japanese Subsidiary may continue to sell products to customers through existing Brand Partners and may continue to attract new customers. Accordingly, the Japanese Subsidiary has refocused its efforts to attract new customers by introducing new products and a new customer program. The Japanese Subsidiary has terminated non-compliant distributors whose actions led to the sanction, and many other distributors have elected to terminate their relationship with the Japanese Subsidiary. In December 2020, the Company engaged external counsel, accountants, and other advisors to conduct an independent investigation of Ariix’s international business practices, during which the investigation team identified conduct that potentially was in violation of the FCPA. In August 2021, the Company made a voluntary self-disclosure to the U.S. Department of Justice (“DOJ”) and the SEC about these items and our investigation. Although the reporting to the DOJ and SEC is ongoing, the Company believes its investigation is substantially complete. The Company has initiated procedures to remediate such practices. These findings provide opportunity for targeted, enhanced controls and additional training and other remediation. The Company intends to fully cooperate with the DOJ and SEC, with the assistance of legal counsel, to conclude this matter. The Company is unable at this time to predict when the government agencies’ review of these matters will be completed or what regulatory or other consequences may result. The ultimate outcome of this investigation, including potential claims that may arise from the matters under investigation, is uncertain and the Company cannot reasonably estimate the amount of any potential loss on its financial statements at this time. COVID-19 Pandemic In December 2019, a novel strain of coronavirus known as COVID-19 was reported to have surfaced in China, and by March 2020 the spread of the virus resulted in a world-wide pandemic. By March 2020, the U.S. economy had been largely shut down by mass quarantines and government mandated stay-in-place orders (the “Orders”) to halt the spread of the virus. Many of these Orders have been relaxed or lifted in jurisdictions where large portions of the population have been vaccinated, but there is considerable uncertainty about whether the Orders will need to be reinstated due to the ongoing spread of new variants of COVID-19. A significant portion of the worldwide population remains unvaccinated, and uncertainty also exists about whether existing vaccines will be effective as new variants of COVID-19 emerge. Accordingly, the overall impact of COVID-19 continues to have an adverse impact on global business activities. The Orders required some of the Company’s employees to work from home when possible, and other employees were entirely prevented from performing their job duties at times. The world-wide response to the pandemic has resulted in a significant downturn in economic activity and there is no assurance that government stimulus programs will successfully restore the economy to the levels that existed before the pandemic. If an economic recession or depression is sustained, it could have a material adverse effect on the Company’s business as consumer demand for its products could decrease. NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements Foreign jurisdictions accounted for approximately 77% 68% Employment Agreement In July 2021, the Company entered into an employment agreement with Kevin Manion to serve as the Company’s Chief Financial Officer through January 1, 2024. Under the terms of the employment agreement, Mr. Manion will be paid an annual base salary of $ 550,000 80% 160% 440,000 200,000 214,000 400,000 50% 50% three years If Mr. Manion’s employment is subsequently terminated by the Company without Cause (as defined in the employment agreement) or he resigns with Good Reason (as defined in the employment agreement), vesting for certain equity awards will be accelerated and he is entitled to severance payments consisting of annual base compensation, target performance bonus at 80% 2 360% |
NET LOSS PER SHARE
NET LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
Net loss per share of Common Stock: | |
NET LOSS PER SHARE | NOTE 11 — NET LOSS PER SHARE Basic and diluted net loss per share (“EPS”) is computed by dividing (i) net loss, as adjusted for certain gains and losses related to contingently issuable shares (the “Numerator”), by (ii) the weighted average number of common shares outstanding during the period, as adjusted to give effect to certain contingently issuable shares (the “Denominator”). The Company issued warrants in December 2020 and February 2021 for the purchase of an aggregate of 8.8 The calculation of diluted EPS is also required to include the dilutive effect, if any, of stock options, unvested restricted stock awards, and other Common Stock equivalents computed using the treasury stock method, in order to compute the weighted average number of shares outstanding. For the three and nine months ended September 30, 2021 and 2020, all Common Stock equivalents were antidilutive. NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements Presented below are the calculations of the Numerators and the Denominators for basic and diluted EPS (in thousands, except per share amounts): SCHEDULE OF LOSS PER SHARE 2021 2020 2021 2020 Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Calculation of Numerators: Net loss for basic EPS $ (2,700 ) $ (14,133 ) $ (3,097 ) $ (35,305 ) Eliminate derivative gains on Fixed Shares - (1) - (6,765 ) (1) - Eliminate derivative gains on Variable Shares (15,584 ) (1) - (21,602 ) (1) - Loss for diluted EPS $ (18,284 ) $ (14,133 ) $ (31,464 ) $ (35,305 ) Calculation of Denominators: Weighted average shares outstanding before adjustments 136,860 97,819 133,432 92,087 Give effect to elimination of contingency on May 14, 2021: Fixed Shares 14,551 (2) - 7,462 (2) - Variable Shares - (3) - - (3) - Weighted average shares for basic EPS 151,411 97,819 140,894 92,087 Give effect to elimination of contingency at beginning of period: Fixed Shares - (4) - 7,089 (4) - Variable Shares 18,840 (5) - 19,674 (5) - Weighted average shares for diluted EPS 170,251 97,819 167,657 92,087 Net loss per share of Common Stock: Basic $ (0.02 ) $ (0.14 ) $ (0.02 ) $ (0.38 ) Diluted $ (0.11 ) $ (0.14 ) $ (0.19 ) $ (0.38 ) (1) As discussed under footnote (4) below, the Fixed Shares and the Variable Shares are included in the Denominator for the calculation of diluted EPS beginning on the first day of each of the three- and nine-month periods ended September 30, 2021. Accordingly, it is necessary to adjust the Numerator to eliminate the related net gains attributable to changes in fair value of the derivative liabilities associated with these shares for the three and nine months ended September 30, 2021. (2) For purposes of the calculation of basic EPS, the Fixed Shares are treated as issued and outstanding beginning on May 14, 2021 when the shareholder approval contingency discussed in Note 3 was eliminated. This number represents the weighted average number of shares for the respective periods that the Fixed Shares were considered outstanding. (3) As discussed in Note 3 under the caption Business Combination Liabilities (4) For purposes of the calculation of diluted EPS, the Fixed Shares are treated as issued and outstanding beginning on the first day of each of the three- and nine-month periods ended September 30, 2021. The impact of this adjustment for the diluted EPS calculation increases the number of Fixed Shares included in the basic EPS calculation such that all Fixed Shares are treated as outstanding for the entirety of the three and nine months ended September 30, 2021. (5) For purposes of the calculation of diluted EPS, the Variable Shares are not treated as issued and outstanding for the calculation of basic EPS. However, for the calculation of diluted EPS all Variable Shares, as adjusted for the reduction in the number of Variable Shares pursuant to the August 2021 Amendment discussed in Note 3, are treated as outstanding for the entirety of the three and nine months ended September 30, 2021. NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements As of September 30, 2021 and 2020, the following potential Common Stock equivalents were excluded from the computation of diluted net loss per share since the impact of inclusion was antidilutive (in thousands): SCHEDULE OF ANTI DILUTED SECURITIES 2021 2020 Equity Incentive Plan awards: Stock options 3,922 3,337 Unvested restricted stock awards 3,914 1,810 Common stock purchase warrants 9,121 311 Total 16,957 5,458 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 12 — RELATED PARTY TRANSACTIONS Amended Ariix Merger Agreement Dr. Frederick W. Cooper is a member of the Company’s Board of Directors and serves as the Sellers’ Agent pursuant to the Amended Ariix Merger Agreement discussed in Note 3. In August 2021, the Company entered into the August 2021 Amendment to the Amended Ariix Merger Agreement with Dr. Cooper in his capacity as Sellers’ Agent. The August 2021 Amendment revised certain terms of the Amended Ariix Merger Agreement whereby the Company paid the Sellers $ 5.0 2.7 16.2 Assurance Financial Services International, LLC Assurance Financial Services International, LLC (“AFSI”) is an entity controlled by Dr. Cooper that extends personal loans to certain of the Company’s Brand Partners. One of the Company’s employees that is related to an officer of the Company also performs services for AFSI. Kwikclick Agreement On September 2, 2021, the Company and Kwikclick, Inc. (“Kwikclick”) entered into a licensing and exclusivity agreement (the “Kwikclick Agreement”). Kwikclick has more than 20 patents pending for its proprietary technology that is expected to provide a mechanism for the Company’s Brand Partners to share in the revenues and profits as contrasted with the traditional model of pay per click or post. Kwikclick is an entity controlled by Dr. Cooper and the owners of Kwikclick include an officer and certain employees of the Company. Under the Kwikclick Agreement, the Company is required to pay a license fee of $ 50,000 3.0% 4.0% Kwikclick is not permitted to sell or license the Software to any other business in the direct sales industry (the “Exclusivity Restriction”) so long as the Company meets certain minimum levels of net sales using the Software. If the Company achieves net sales of at least $20.0 million using the Software for the first six-month period under the Kwikclick Agreement, the Exclusivity Restriction will be extended for a second six-month period. Progressively higher levels of net sales are required to continue to extend the Exclusivity Restriction through the third year of the term. The Company also agreed to (i) assist Kwikclick in implementing certain merchant services to support the initial launch of the Software, (ii) transfer ownership of its subsidiary incorporated in China, subject to appropriate Chinese governmental approvals, (iii) promote the use of the Software to its Brand Partners through marketing and training activities, and (iv) designate an employee responsible for deployment of the Software in each of the Company’s markets. The Company may terminate the Kwikclick Agreement at any time if it is not satisfied with the function or performance of the Software. NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements |
FINANCIAL INSTRUMENTS AND SIGNI
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | 9 Months Ended |
Sep. 30, 2021 | |
Investments, All Other Investments [Abstract] | |
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS | NOTE 13 — FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS Fair Value Measurements Fair value is defined as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it transacts and considers assumptions that market participants would use when pricing the asset or liability. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1—Quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date Level 2—Other than quoted prices included in Level 1 that are observable for the asset and liability, either directly or indirectly through market collaboration, for substantially the full term of the asset or liability Level 3—Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date As of September 30, 2021 and December 31, 2020, the fair value of the Company’s cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued liabilities approximated their carrying values due to the short-term nature of these instruments. Cash equivalents consist of short-term certificates of deposit that are classified as Level 2. The estimated fair value of the Senior Notes discussed in Note 6 is classified as Level 2 and amounted to approximately $ 19.8 28.9 Recurring Fair Value Measurements Recurring measurements of the fair value of liabilities as of September 30, 2021 and December 31, 2020 were as follows (in thousands): SCHEDULE OF FAIR VALUE OF LIABILITIES 2021 2020 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative Liabilities: Ariix Fixed Shares $ - $ - $ - $ - $ - $ - $ 37,028 (1) $ 37,028 Ariix Variable Shares - - 24,189 (2) 24,189 - - 53,846 (1) 53,846 Warrants - - 1,782 (3) 1,782 - - - - Deferred consideration payable: LIMU - 3,435 (4) - 3,435 - 3,656 (4) - 3,656 Zennoa - 1,738 (4) - 1,738 - 2,196 (4) - 2,196 Total $ - $ 5,173 $ 25,971 $ 31,144 $ - $ 5,852 $ 90,874 $ 96,726 (1) Please refer to Note 3 under the caption Business Combination Liabilities 77 0.1% 16.5% NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (2) Key valuation assumptions to arrive at fair value of the Ariix Variable Shares derivative liability as of September 30, 2021 included (i) historical volatility of the Company’s shares of Common Stock of 84 0.1 (3) Please refer to Note 7 under the caption Private Placement of Units 1.39 5.00 82% 2.4 0.24 (4) The fair value of deferred consideration related to the LIMU and Zennoa business combination obligations set forth in Note 3 are classified as Level 2. The estimated fair value of these liabilities was determined in November 2020 such that the carrying values and fair values were similar as of September 30, 2021 and December 31, 2020. The Company’s policy is to recognize asset or liability transfers among Level 1, Level 2 and Level 3 as of the actual date of the events or change in circumstances that caused the transfer. During the nine months ended September 30, 2021, the Company did not have any transfers of its assets or liabilities between levels of the fair value hierarchy. Significant Concentrations A significant portion of the business of the Direct / Social Selling segment is conducted in foreign markets, exposing the Company to the risks of trade or foreign exchange restrictions, increased tariffs, foreign currency fluctuations and similar risks associated with foreign operations. As set forth in Note 14, for the three months ended September 30, 2021 and 2020, a significant portion of the Company’s consolidated net revenue was generated outside the United States. Most of the Direct / Social Selling segment’s products have a component of the Noni plant, Morinda Citrifolia (“Noni”) as a common element. Tahitian Noni® Juice, MAX and other noni-based beverage products comprised over 36% 82% 34% 85% 10% 10% Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash, and accounts receivable. The Company maintains its cash, cash equivalents and restricted cash at high-quality financial institutions. Cash deposits, including those held in foreign branches of global banks, may exceed the amount of insurance provided on such deposits. As of September 30, 2021, the Company had cash and cash equivalents with a financial institution in the United States with balances of $ 20.0 7.5 $7.1 8.2 23.7 6.3 7.3 Generally, credit risk with respect to accounts receivable is diversified due to the number of entities comprising the Company’s customer base and their dispersion across different geographies and industries. The Company performs ongoing credit evaluations on certain customers and generally does not require collateral on accounts receivable. The Company maintains reserves for potential bad debts. |
SEGMENTS AND GEOGRAPHIC CONCENT
SEGMENTS AND GEOGRAPHIC CONCENTRATIONS | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
SEGMENTS AND GEOGRAPHIC CONCENTRATIONS | NOTE 14 — SEGMENTS AND GEOGRAPHIC CONCENTRATIONS Reportable Segments The Company follows segment reporting in accordance with ASC Topic 280, Segment Reporting NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements The Direct / Social Selling segment is engaged in the development, manufacturing, and marketing of a portfolio of healthy products in three core category platforms including health and wellness, healthy appearance, and nutritional performance all sold primarily via e-commerce and through a direct route to market. The Direct / Social Selling segment has manufacturing operations in Tahiti, Germany, Japan, the United States, and China. The Direct / Social Selling segment’s products are sold and distributed in more than 50 countries using its Brand Partners and customers. Approximately 86% 84% of the net revenue of the Direct / Social Selling segment was generated internationally for the three months ended September 30, 2021 and 2020, respectively. Approximately 87% 86% Net revenue by reporting segment for the three and nine months ended September 30, 2021 and 2020, was as follows (in thousands): SCHEDULE OF SEGMENT REPORTING Segment 2021 2020 2021 2020 Three Months Ended Nine Months Ended September 30, September 30, Segment 2021 2020 2021 2020 Direct / Social Selling $ 84,066 $ 46,585 $ 308,280 $ 143,556 Direct Store 15,487 16,134 40,831 45,493 Net revenue $ 99,553 $ 62,719 $ 349,111 $ 189,049 Net revenue $ 99,553 $ 62,719 $ 349,111 $ 189,049 Gross profit by reporting segment for the three and nine months ended September 30, 2021 and 2020, was as follows (in thousands): Segment 2021 2020 2021 2020 Three Months Ended Nine Months Ended September 30, September 30, Segment 2021 2020 2021 2020 Direct / Social Selling $ 62,879 $ 35,465 $ 228,263 $ 110,974 Direct Store 3,107 2,030 8,923 6,123 Gross profit $ 65,986 $ 37,495 $ 237,186 $ 117,097 Gross profit $ 65,986 $ 37,495 $ 237,186 $ 117,097 Assets by reporting segment as of September 30, 2021 and December 31, 2020, were as follows (in thousands): Segment 2021 2020 Direct / Social Selling $ 345,341 $ 396,174 Direct Store 60,309 47,008 Total assets $ 405,650 $ 443,182 Total assets $ 405,650 $ 443,182 NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements Depreciation and amortization expense by reporting segment, including amounts charged to cost of goods sold for the three and nine months ended September 30, 2021 and 2020, was as follows (in thousands): Segment 2021 2020 2021 2020 Three Months Ended Nine Months Ended September 30, September 30, Segment 2021 2020 2021 2020 Direct / Social Selling $ 4,384 $ 1,713 $ 13,780 $ 5,157 Direct Store 97 142 297 450 Total depreciation and amortization $ 4,481 $ 1,855 $ 14,077 $ 5,607 Total depreciation and amortization $ 4,481 $ 1,855 $ 14,077 $ 5,607 Cash payments for capital expenditures for property and equipment and identifiable intangible assets by reporting segment for the three and nine months ended September 30, 2021 and 2020, were as follows (in thousands): Segment 2021 2020 2021 2020 Three Months Ended Nine Months Ended September 30, September 30, Segment 2021 2020 2021 2020 Direct / Social Selling $ 502 $ 128 $ 1,263 $ 1,881 Direct Store - - 4 227 Total capital expenditures $ 502 $ 128 $ 1,267 $ 2,108 Total capital expenditures $ 502 $ 128 $ 1,267 $ 2,108 Geographic Concentrations The Company attributes net revenue to geographic regions based on the location of its customers’ contracting entity. The following table presents net revenue for each country that exceeded 10% of consolidated net revenue for the three and nine months ended September 30, 2021 and 2020 (in thousands): SCHEDULE OF NET REVENUE BY GEOGRAPHIC REGION 2021 2020 2021 2020 Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 United States of America $ 27,514 $ 23,638 $ 81,290 $ 65,554 Japan 26,406 21,268 75,878 63,075 China 15,739 10,169 65,775 36,325 Italy 7,409 69 38,418 224 France 7,847 101 36,643 276 Rest of World 14,638 7,474 51,107 23,595 Net revenue $ 99,553 $ 62,719 $ 349,111 $ 189,049 Net revenue $ 99,553 $ 62,719 $ 349,111 $ 189,049 As of September 30, 2021 and December 31, 2020, the net carrying value of property and equipment located outside of the United States amounted to approximately $ 21.8 23.6 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | NOTE 15 — SUBSEQUENT EVENT On October 28, 2021, the Company entered into a settlement agreement (the “Settlement Agreement”) with the Buyer of the Divested Business discussed in Note 3. The parties to the Settlement Agreement also mutually agreed to establish a framework to settle all remaining unresolved issues as well as any issues that may arise through July 2022. Pursuant to the Settlement Agreement, the parties agreed (i) to rescind any remaining rights and obligations under a membership interest purchase agreement (“MIPA”) entered into on September 24, 2020, and (ii) to cancel the related supplier, distributor and transition services agreements that were entered into concurrently with the MIPA. For the three months ended September 30, 2021, no additional liabilities or expenses were required to be recognized as a result of the Settlement Agreement. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Segments | Segments The Company’s chief operating decision maker (the “CODM”), who is the Company’s Chief Executive Officer, allocates resources and assesses performance based on financial information of the Company. The CODM reviews financial information presented for each reportable segment for purposes of making operating decisions and assessing financial performance. The Company’s CODM assesses performance and allocates resources based on the financial information of two |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements, which include the accounts of the Company and its wholly-owned subsidiaries, are prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated. The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to interim financial reporting. Accordingly, certain information and footnote disclosures required by U.S. GAAP for complete financial statements have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the unaudited condensed consolidated financial statements have been included. These unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2021 and 2020 should be read in conjunction with the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2020, included in the Company’s 2020 Annual Report on Form 10-K filed with the SEC on March 18, 2021 (the “2020 Form 10-K”). The accompanying condensed consolidated balance sheet and related disclosures as of December 31, 2020 have been derived from the Company’s audited financial statements. The Company’s financial condition as of September 30, 2021 and its operating results for the three and nine months ended September 30, 2021 are not necessarily indicative of the financial condition and results of operations that may be expected for any future interim period or for the year ending December 31, 2021. |
Use of Estimates | Use of Estimates The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires the Company to make judgments, assumptions, and estimates that affect the amounts reported in its consolidated financial statements and accompanying notes. The Company bases its estimates and assumptions on existing facts, historical experience, and various other factors that it believes are reasonable under the circumstances, to determine the carrying values of assets and liabilities that are not readily apparent from other sources. The Company’s significant accounting estimates include, but are not necessarily limited to, impairment of goodwill and long-lived assets; valuation assumptions for business combination obligations and the related assets acquired in business combinations; valuation assumptions for stock options, warrants and other equity instruments; the number of shares of restricted stock that will ultimately vest based on the future achievement of performance criteria; estimated useful lives for identifiable intangible assets and property and equipment; allowances for sales returns, chargebacks and inventory obsolescence; deferred income taxes and the related valuation allowances; and the evaluation and measurement of contingencies. Additionally, the full impact of COVID-19 is unknown and cannot be reasonably estimated. However, the Company has made appropriate accounting estimates based on the facts and circumstances available as of the reporting date. To the extent there are material differences between the Company’s estimates and the actual results, the Company’s future consolidated results of operation will be affected. NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The following accounting standard was adopted effective January 1, 2021: In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity). No recently issued accounting pronouncements are currently expected to have a material impact on the Company’s consolidated financial statements. |
BUSINESS COMBINATIONS AND DIS_2
BUSINESS COMBINATIONS AND DISPOSITIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
SCHEDULE OF PURCHASE PRICE ALLOCATION | On June 1, 2021 (the “Aliven Closing Date”), the Company entered into an asset purchase agreement (the “Aliven APA”) with Aliven, Inc. (“Aliven”) that was accounted for using the acquisition method of accounting under ASC 805, Business Combinations Fair Value Measurement 1,072,000 2,588,000 SCHEDULE OF PURCHASE PRICE ALLOCATION Identifiable assets acquired: Accounts receivable, net $ 525 Inventories 1,356 (1) Prepaid expenses and other assets 295 Property and equipment 86 Distributor sales force 1,590 (2) Trade name 400 (2) Total identifiable assets acquired 4,252 Liabilities assumed: Accounts payable and accrued liabilities (1,953 ) Net identifiable assets acquired 2,299 Goodwill 289 (3) Total purchase price allocation $ 2,588 |
SCHEDULE OF UNAUDITED PRO FORMA DISCLOSURE | The following table summarizes the results of operations for the Company after giving effect to the pre-acquisition results of Ariix and Aliven on an unaudited pro forma basis (in thousands, except per share amounts): SCHEDULE OF UNAUDITED PRO FORMA DISCLOSURE Three Months Ended Nine Months Ended September 30, September 30, 2020 2021 2020 Net revenue $ 147,868 $ 354,626 $ 397,200 Net loss $ (7,840 ) $ (3,682 ) $ (27,161 ) Net loss per share: Basic $ (0.07 ) $ (0.03 ) $ (0.24 ) Diluted $ (0.07 ) $ (0.19 ) (1) $ (0.24 ) Weighted average number of shares of common stock outstanding: Basic 118,595 141,490 112,863 Diluted 118,595 168,253 112,863 |
SCHEDULE OF BUSINESS COMBINATION LIABILITIES | As of September 30, 2021 and December 31, 2020, business combination liabilities were as follows (in thousands): SCHEDULE OF BUSINESS COMBINATION LIABILITIES 2021 2020 Liabilities to former owners of Ariix: Fixed Shares derivative liability $ - (2) $ 37,028 (1) Variable Shares derivative liability 24,189 (3) 53,846 (1) Total derivative liabilities 24,189 90,874 (1) Short-term debt payable in cash - 10,000 Business combination liabilities assumed from Ariix: Fair value of deferred consideration payable: LIMU 3,435 (4) 3,656 Zennoa 1,738 (5) 2,196 Short-term debt for Zennoa - 850 Total 29,362 107,576 Less current portion 1,140 11,750 Long-term portion $ 28,222 $ 95,826 |
SCHEDULE OF CHANGES IN BUSINESS COMBINATION OBLIGATIONS | For the nine months ended September 30, 2021, activity related to the Variable Shares and the Fixed Shares derivative liabilities, and other business combination obligations were as follows (in thousands): SCHEDULE OF CHANGES IN BUSINESS COMBINATION OBLIGATIONS Derivative Liabilities Variable Fixed Total Other Total Balances, December 31, 2020 $ 53,846 (1) $ 37,028 (1) $ 90,874 $ 16,702 $ 107,576 Reclassify Clarification Letter obligation (3,056 ) (2) - (3,056 ) 3,056 (2) - Cash payments for: August 2021 Amendment (5,000 ) (3) - (5,000 ) - (5,000 ) Short-term debt paid to Sellers of Ariix - - - (10,000 ) (10,000 ) Clarification Letter obligation - - - (3,056 ) (3,056 ) LIMU and Zennoa deferred consideration - - - (852 ) (852 ) Zennoa short-term debt - - - (850 ) (850 ) Net gain on change in fair value of derivatives (21,601 ) (4) (6,765 ) (5) (28,366 ) - (28,366 ) Accretion of discount on deferred consideration - - - 174 174 Fixed Shares derivative liability reclassified to equity - (30,263 ) (6) (30,263 ) - (30,263 ) Balances, September 30, 2021 $ 24,189 $ - $ 24,189 $ 5,174 $ 29,363 |
OTHER FINANCIAL INFORMATION (Ta
OTHER FINANCIAL INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SCHEDULE OF INVENTORIES | As of September 30, 2021 and December 31, 2020, inventories consisted of the following (in thousands): SCHEDULE OF INVENTORIES 2021 2020 Raw materials $ 9,550 $ 12,628 Work-in-process 2,368 1,225 Finished goods, net 36,958 34,198 Total inventories $ 48,876 $ 48,051 |
SCHEDULE OF OTHER ACCRUED LIABILITIES | As of September 30, 2021 and December 31, 2020, other accrued liabilities consisted of the following (in thousands): SCHEDULE OF OTHER ACCRUED LIABILITIES 2021 2020 Accrued commissions $ 15,486 $ 23,594 Accrued compensation and benefits 10,845 9,443 Accrued marketing events 6,891 8,212 Deferred revenue 2,351 6,278 Provision for sales returns 1,366 1,322 Income taxes payable 3,135 3,461 Current portion of operating lease liabilities 5,118 6,948 Current portion of deferred lease financing obligation 677 659 Other accrued liabilities 10,664 10,090 Total accrued liabilities $ 56,533 $ 70,007 |
SCHEDULE OF DEPRECIATION AND AMORTIZATION | For the three and nine months ended September 30, 2021 and 2020, depreciation expense related to property and equipment and amortization expense related to identifiable intangible assets, including amounts charged to cost of goods sold, were as follows (in thousands): SCHEDULE OF DEPRECIATION AND AMORTIZATION Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Depreciation $ 1,101 $ 967 $ 3,201 $ 2,926 Amortization 3,380 888 10,876 2,681 Total $ 4,481 $ 1,855 $ 14,077 $ 5,607 |
SCHEDULE OF LOSS FROM CHANGES IN FAIR VALUE OF DERIVATIVES | For the three and nine months ended September 30, 2021 and 2020, gain (loss) from changes in fair value of derivatives is comprised of the following (in thousands): SCHEDULE OF LOSS FROM CHANGES IN FAIR VALUE OF DERIVATIVES Three Months Ended Nine Months Ended September 30, September 30, Description of Derivative 2021 2020 2021 2020 Ariix business combination consideration: Fixed Shares derivative $ - (1) $ - $ 6,765 (1) $ - Variable Shares derivative 15,584 (1) - 21,602 (1) - Warrants issued in private placement 3,914 (2) - 12,347 (2) - Interest rate swap - (86 ) - (392 ) Gain (loss) on change in fair value of derivatives $ 19,498 $ (86 ) $ 40,714 $ (392 ) |
SUMMARY OF ACTIVITY AFFECTING THE ACCRUED LIABILITY FOR SEVERANCE BENEFITS | For the three and nine months ended September 30, 2021 and 2020, activity affecting the accrued liability for severance benefits and office closure costs is summarized as follows (in thousands): SUMMARY OF ACTIVITY AFFECTING THE ACCRUED LIABILITY FOR SEVERANCE BENEFITS Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Accrued severance and restructuring, beginning of period $ 1,449 $ - $ 191 $ - Severance expense incurred 1,400 1,658 3,097 2,543 Office closure costs incurred 1,120 1,120 Cash payments (1,235 ) (527 ) (1,674 ) (1,412 ) Accrued severance and restructuring, end of period $ 2,734 $ 1,131 $ 2,734 $ 1,131 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS | As of September 30, 2021, future payments under operating lease agreements, including a lease for the Company’s facility in American Fork, Utah that is discussed in Note 4 under the caption Assets Held for Sale SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS Years Ending December 31, Remainder of 2021 $ 2,454 2022 7,716 2023 6,436 2024 5,575 2025 5,354 Thereafter 23,383 Total operating lease payments 50,918 Less imputed interest (14,243 ) (1) Present value $ 36,675 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
SUMMARY OF DEBT | As of September 30, 2021 and December 31, 2020, the Company’s debt consisted of the following (dollars in thousands): SUMMARY OF DEBT 2021 2020 Senior Notes, net of discount of $ 2,810 and $ 7,900 $ 17,622 $ 24,532 PPP Loan payable, interest at 1.0 unsecured due April 2022 - (1) 6,868 Assumed PPP Loan payable, interest at 1.0 unsecured due May 2022 - (1) 2,781 Installment notes payable 14 16 Total 17,636 34,197 Less current maturities 17,636 (2) 18,016 Long-term debt, less current maturities $ - $ 16,181 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
SCHEDULE OF CHANGES IN STOCKHOLDERS EQUITY | Changes in stockholders’ equity for the three months ended September 30, 2021 and 2020 were as follows (in thousands): SCHEDULE OF CHANGES IN STOCKHOLDERS EQUITY Shares Amount Capital Stock Subscription Income (Loss) Deficit Total Obligation Note Accumulated Additional to Issue Receivable Other Common Stock Paid-in Common For Stock Comprehensive Accumulated Shares Amount Capital Stock Subscription Income (Loss) Deficit Total Three Months Ended September 30, 2021 Balances, June 30, 2021 136,606 $ 137 $ 340,937 $ 30,263 $ - $ 3,478 $ (152,212 ) $ 222,603 Issuance of Common Stock: Upon vesting of restricted stock awards 201 - - - - - - - For exercise of stock options 1 - 2 - - - - 2 Issuance of Common Stock to settle portion of settlement obligation 10,000 10 20,789 (20,799 ) - - - - Issuance of Common Stock to settle portion of settlement obligation 10,000 10 20,789 (20,799 ) - - - - In ATM public offering, net In exchange for note receivable In exchange for note receivable, shares Purchase and retirement of Common Stock Purchase and retirement of Common Stock, shares Stock-based compensation expense - - 1,477 - - - - 1,477 Net change in accumulated other comprehensive income (loss) - - - - - 726 - 726 Net income - - - - - - (2,700 ) (2,700 ) Balances, September 30, 2021 146,808 $ 147 $ 363,205 $ 9,464 $ - $ 4,204 $ (154,912 ) $ 222,108 Three Months Ended September 30, 2020 Balances, June 30, 2020 98,442 $ 98 $ 231,201 $ - $ - $ (141 ) $ (133,643 ) $ 97,515 Balances 98,442 $ 98 $ 231,201 $ - $ - $ (141 ) $ (133,643 ) $ 97,515 Issuance of Common Stock: In ATM public offering, net - - (70 ) - - - - (70 ) In exchange for note receivable 692 1 1,249 - (1,250 ) - - - For exercise of stock options 15 - 30 - - - - 30 Upon vesting of restricted stock awards 121 - - - - - - - Purchase and retirement of Common Stock (780 ) (1 ) (1,192 ) - - - - (1,193 ) Stock-based compensation expense - - 957 - - - - 957 Net change in accumulated other comprehensive income (loss) - - - - - 1,275 - 1,275 Net change in accumulated other comprehensive income (loss) - - - - - 1,275 - 1,275 Net loss - - - - - - (14,133 ) (14,133 ) Net income loss - - - - - - (14,133 ) (14,133 ) Balances, September 30, 2020 98,490 $ 98 $ 232,175 $ - $ (1,250 ) $ 1,134 $ (147,776 ) $ 84,381 Balances 98,490 $ 98 $ 232,175 $ - $ (1,250 ) $ 1,134 $ (147,776 ) $ 84,381 |
SUMMARY OF RELATIVE FAIR VALUE ALLOCATION OF NET PROCEEDS | SUMMARY OF RELATIVE FAIR VALUE ALLOCATION OF NET PROCEEDS Common Description Warrants Stock Total Fair value on issuance date $ 14,128 (1) $ 46,105 (2) $ 60,233 Adjustment to reduce Common Stock to residual fair value - (6,455 ) (3) (6,455 ) Total $ 14,128 (1) $ 39,650 (3) $ 53,778 (4) (1) Fair value was determined on the issuance date using the Black-Scholes-Merton (“BSM”) option-pricing model. Key valuation inputs as of the issuance date included the closing price of $ 3.15 5.00 117 3 1.93 NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements (2) Represents fair value of 14.6 3.15 (3) Adjustment required to record shares of Common Stock at residual fair value since the total fair value of the warrants and shares of Common Stock exceeded the net proceeds received in the private placement. (4) Represents the net proceeds received in the private placement. |
SCHEDULE OF ELIMINATION OF REDEMPTION CONTINGENCY | In connection with the November 2020 SPA and the January 2021 amendment discussed in Note 6, the Company issued Commitment Shares for an aggregate of 1.2 3.36 SCHEDULE OF ELIMINATION OF REDEMPTION CONTINGENCY Number of Carrying Description Shares Value Balance, December 31, 2020 800 $ 2,101 Amendment Fee 400 1,060 Total reclassified to permanent equity 1,200 $ 3,161 |
SCHEDULE OF COMMON STOCK PURSUANT TO AGREEMENT | On April 30, 2019, the Company entered into an At the Market Offering Agreement (“ATM Agreement”) with Roth Capital Partners, LLC (the “Agent”), pursuant to which the Company could offer and sell from time to time up to an aggregate of $ 100 SCHEDULE OF COMMON STOCK PURSUANT TO AGREEMENT Number Gross Proceeds Offering Costs Net Three Months Ended of Shares Per Share Amount Commissions Other Proceeds March 31, 2020 4,939 $ 1.73 $ 8,545 $ (257 ) $ (3 ) $ 8,285 June 30, 2020 11,191 $ 1.54 17,270 (436 ) (91 ) 16,743 September 30, 2020 - $ - - - (70 ) (70 ) Nine-month totals 16,130 $ 1.60 $ 25,815 $ (693 ) $ (164 ) $ 24,958 |
STOCK OPTIONS AND WARRANTS (Tab
STOCK OPTIONS AND WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SCHEDULE OF STOCK OPTION ACTIVITY | The following table sets forth stock option activity under the Company’s stock option plans for the nine months ended September 30, 2021 (shares in thousands): SCHEDULE OF STOCK OPTION ACTIVITY Shares Price (1) Term (2) Outstanding, beginning of period 3,856 (3) $ 2.72 8.2 Grants 670 2.47 Forfeited (315 ) 3.07 Exercised (289 ) (4) 1.84 Outstanding, end of period 3,922 (5) 2.72 7.9 Vested, end of period 2,024 (5) 2.65 7.1 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term until the stock options expire. (3) Includes an aggregate of 100,000 3.06 vest upon achievement of cost savings of $25.0 million related to the successful integration of the Ariix business combination (4) On the respective exercise dates, the weighted average intrinsic value per share of Common Stock issued upon exercise of stock options amounted to $ 1.72 0.5 (5) As of September 30, 2021, based on the closing price of the Company’s Common Stock of $ 1.39 |
SCHEDULE OF STOCK OPTIONS WEIGHTED AVERAGE ASSUMPTIONS | For the nine months ended September 30, 2021, the valuation assumptions for newly-granted stock options and modifications under the Company’s stock option plans were estimated on the respective date of grant or modification using the BSM option-pricing model with the following weighted-average assumptions: SCHEDULE OF STOCK OPTIONS WEIGHTED AVERAGE ASSUMPTIONS Grants Modifications Closing price of Common Stock on measurement date $ 2.47 $ 2.69 Exercise price $ 2.47 $ 3.24 Expected life (in years) 5 6.8 Volatility 104 % 105 % Dividend yield 0 % 0 % Risk-free interest rate 0.7 % 0.1 % |
SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY | The following table sets forth share activity related to grants of restricted stock under the Company’s stock option plans for the nine months ended September 30, 2021 (in thousands): SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY Type of Awards Equity Liability (1) Unvested shares, December 31, 2020 2,039 18 Unvested awards granted to: Executive officer with performance conditions 2,275 (2) - Board members 187 (3) - Officers, employees and Brand Partners 566 (4) - Forfeitures (130 ) (1 ) Vested shares (1,023 ) - (4) Unvested shares, September 30, 2021 3,914 17 Intrinsic value, September 30, 2021 $ 5,441 (5) $ 23 (5) (1) Certain awards granted to employees in China are not permitted to be settled in shares, which requires classification as a liability in the Company’s condensed consolidated balance sheets. This liability is adjusted based on the closing price of the Company’s Common Stock at the end of each reporting period until the awards vest. (2) On March 10, 2021, the Board of Directors approved restricted stock grants to the Company’s Chief Executive Officer for (i) 175,000 shares that vest for one-third of the shares on each of the first, second and third anniversaries of the grant date, (ii) a grant of 350,000 shares up to 1,050,000 shares that vest to the extent that prescribed amounts of measurable merger synergies are realized by the Company over the three-year period ending December 31, 2023, and (iii) a grant of 350,000 shares up to 1,050,000 shares that vest if the Company achieves adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) margins ranging from 4.0% to 12.0% over the three-year period ending December 31, 2023. Adjusted EBITDA margin is a non-GAAP measure computed by dividing Adjusted EBITDA, as defined by the Board of Directors, by net revenue. The fair value of the Company’s Common Stock was $2.79 per share on the grant date, resulting in total compensation expense of $0.5 million that is being recognized over the 3-year service period for the award described in (i) above, and up to an aggregate of $5.9 million if the maximum performance targets are achieved for both awards described in (ii) and (iii) above whereby an aggregate of 2.1 million shares would vest. If the Company does not achieve the minimum targets set by the Board of Directors for merger synergies and Adjusted EBITDA margin, none of the 2.1 million shares will vest. NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements For the nine months ended September 30, 2021, an aggregate of approximately $0.4 million of compensation expense was recognized for the awards described in (ii) and (iii) above, which was calculated assuming that an aggregate of 0.7 million shares will ultimately vest and that the performance criteria will not be achieved for an aggregate of 1.4 million shares that are included in the table. This compensation calculation was based on management’s estimate of the most likely outcome for the performance conditions and considering the portion of the service period that had been rendered through September 30, 2021. Compensation expense will be recomputed at the end of each reporting period with the future impact of changes in management’s estimates reflected prospectively. (2) On March 10, 2021, the Board of Directors approved restricted stock grants to the Company’s Chief Executive Officer for (i) 175,000 shares that vest for one-third of the shares on each of the first, second and third anniversaries of the grant date, (ii) a grant of 350,000 shares up to 1,050,000 shares that vest to the extent that prescribed amounts of measurable merger synergies are realized by the Company over the three-year period ending December 31, 2023, and (iii) a grant of 350,000 shares up to 1,050,000 shares that vest if the Company achieves adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) margins ranging from 4.0% to 12.0% over the three-year period ending December 31, 2023. Adjusted EBITDA margin is a non-GAAP measure computed by dividing Adjusted EBITDA, as defined by the Board of Directors, by net revenue. The fair value of the Company’s Common Stock was $2.79 per share on the grant date, resulting in total compensation expense of $0.5 million that is being recognized over the 3-year service period for the award described in (i) above, and up to an aggregate of $5.9 million if the maximum performance targets are achieved for both awards described in (ii) and (iii) above whereby an aggregate of 2.1 million shares would vest. If the Company does not achieve the minimum targets set by the Board of Directors for merger synergies and Adjusted EBITDA margin, none of the 2.1 million shares will vest. 0.4 (iii) above, which was calculated assuming that an aggregate of 0.7 million shares will ultimately vest and that the performance criteria will not be achieved for an aggregate of 1.4 million shares that are included in the table. This compensation calculation was based on management’s estimate of the most likely outcome for the performance conditions and considering the portion of the service period that had been rendered through September 30, 2021. (3) Represents grants to members of the Board of Directors in January 2021, whereby the shares of Common Stock will vest one year after the grant date. The fair value of the Company’s Common Stock was $ 3.21 0.6 (4) Represents restricted stock awards that generally vest over three years with fair value determined based on the closing price of the Company’s Common Stock on the respective grant dates. (5) The intrinsic value is based on the closing price of the Company’s Common Stock of $ 1.39 |
SCHEDULE OF STOCK BASED COMPENSATION EXPENSES | Substantially all stock-based compensation expense is included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations. The table below summarizes stock-based compensation expense related to stock options and restricted stock awards for the three and nine months ended September 30, 2021 and 2020, and the unrecognized compensation expense as of September 30, 2021 and 2020 (in thousands): SCHEDULE OF STOCK BASED COMPENSATION EXPENSES Three Months Ended Nine Months Ended Unrecognized Expense September 30: September 30: as of September 30: 2021 2020 2021 2020 2021 2020 Plan-based stock option awards $ 629 $ 374 $ 2,350 $ 1,470 $ 2,744 $ 2,815 Plan-based restricted stock awards: Equity-classified 848 583 3,257 1,923 4,546 (1) 2,453 Liability-classified (2 ) 9 17 22 6 38 Total $ 1,475 $ 966 $ 5,624 $ 3,415 $ 7,296 $ 5,306 (1) Pursuant to the March 2021 grant of performance-based restricted stock to the Company’s Chief Executive Officer, the amount includes $ 1.6 0.7 Restricted Stock Activity Unrecognized compensation of $3.9 million related to an additional 1.4 million shares is excluded from the table based on management’s estimate that both performance conditions will be achieved at the target level. Accordingly, $3.9 million of additional stock-based compensation expense could be recognized if the maximum performance targets are achieved over the remaining performance period through December 2023. |
SCHEDULE OF WARRANTS | The following table sets forth changes in outstanding warrants for the nine months ended September 30, 2021 (shares in thousands): SCHEDULE OF WARRANTS Shares Price (1) Term (2) Outstanding, beginning of period 1,803 $ 4.77 5.1 Issuance in private placement of Units 7,318 (3) 5.00 Outstanding, end of period 9,121 (4) 4.95 2.8 (1) Represents the weighted average exercise price. (2) Represents the weighted average remaining contractual term in years until the warrants expire. (3) As discussed in Note 7, the Company completed a private placement of equity securities in February 2021 that included warrants to purchase an aggregate of 7.3 5.00 (4) All warrants are vested and exercisable as of September 30, 2021. |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Net loss per share of Common Stock: | |
SCHEDULE OF LOSS PER SHARE | Presented below are the calculations of the Numerators and the Denominators for basic and diluted EPS (in thousands, except per share amounts): SCHEDULE OF LOSS PER SHARE 2021 2020 2021 2020 Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Calculation of Numerators: Net loss for basic EPS $ (2,700 ) $ (14,133 ) $ (3,097 ) $ (35,305 ) Eliminate derivative gains on Fixed Shares - (1) - (6,765 ) (1) - Eliminate derivative gains on Variable Shares (15,584 ) (1) - (21,602 ) (1) - Loss for diluted EPS $ (18,284 ) $ (14,133 ) $ (31,464 ) $ (35,305 ) Calculation of Denominators: Weighted average shares outstanding before adjustments 136,860 97,819 133,432 92,087 Give effect to elimination of contingency on May 14, 2021: Fixed Shares 14,551 (2) - 7,462 (2) - Variable Shares - (3) - - (3) - Weighted average shares for basic EPS 151,411 97,819 140,894 92,087 Give effect to elimination of contingency at beginning of period: Fixed Shares - (4) - 7,089 (4) - Variable Shares 18,840 (5) - 19,674 (5) - Weighted average shares for diluted EPS 170,251 97,819 167,657 92,087 Net loss per share of Common Stock: Basic $ (0.02 ) $ (0.14 ) $ (0.02 ) $ (0.38 ) Diluted $ (0.11 ) $ (0.14 ) $ (0.19 ) $ (0.38 ) |
SCHEDULE OF ANTI DILUTED SECURITIES | As of September 30, 2021 and 2020, the following potential Common Stock equivalents were excluded from the computation of diluted net loss per share since the impact of inclusion was antidilutive (in thousands): SCHEDULE OF ANTI DILUTED SECURITIES 2021 2020 Equity Incentive Plan awards: Stock options 3,922 3,337 Unvested restricted stock awards 3,914 1,810 Common stock purchase warrants 9,121 311 Total 16,957 5,458 |
FINANCIAL INSTRUMENTS AND SIG_2
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, All Other Investments [Abstract] | |
SCHEDULE OF FAIR VALUE OF LIABILITIES | Recurring measurements of the fair value of liabilities as of September 30, 2021 and December 31, 2020 were as follows (in thousands): SCHEDULE OF FAIR VALUE OF LIABILITIES 2021 2020 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative Liabilities: Ariix Fixed Shares $ - $ - $ - $ - $ - $ - $ 37,028 (1) $ 37,028 Ariix Variable Shares - - 24,189 (2) 24,189 - - 53,846 (1) 53,846 Warrants - - 1,782 (3) 1,782 - - - - Deferred consideration payable: LIMU - 3,435 (4) - 3,435 - 3,656 (4) - 3,656 Zennoa - 1,738 (4) - 1,738 - 2,196 (4) - 2,196 Total $ - $ 5,173 $ 25,971 $ 31,144 $ - $ 5,852 $ 90,874 $ 96,726 |
SEGMENTS AND GEOGRAPHIC CONCE_2
SEGMENTS AND GEOGRAPHIC CONCENTRATIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
SCHEDULE OF SEGMENT REPORTING | Net revenue by reporting segment for the three and nine months ended September 30, 2021 and 2020, was as follows (in thousands): SCHEDULE OF SEGMENT REPORTING Segment 2021 2020 2021 2020 Three Months Ended Nine Months Ended September 30, September 30, Segment 2021 2020 2021 2020 Direct / Social Selling $ 84,066 $ 46,585 $ 308,280 $ 143,556 Direct Store 15,487 16,134 40,831 45,493 Net revenue $ 99,553 $ 62,719 $ 349,111 $ 189,049 Net revenue $ 99,553 $ 62,719 $ 349,111 $ 189,049 Gross profit by reporting segment for the three and nine months ended September 30, 2021 and 2020, was as follows (in thousands): Segment 2021 2020 2021 2020 Three Months Ended Nine Months Ended September 30, September 30, Segment 2021 2020 2021 2020 Direct / Social Selling $ 62,879 $ 35,465 $ 228,263 $ 110,974 Direct Store 3,107 2,030 8,923 6,123 Gross profit $ 65,986 $ 37,495 $ 237,186 $ 117,097 Gross profit $ 65,986 $ 37,495 $ 237,186 $ 117,097 Assets by reporting segment as of September 30, 2021 and December 31, 2020, were as follows (in thousands): Segment 2021 2020 Direct / Social Selling $ 345,341 $ 396,174 Direct Store 60,309 47,008 Total assets $ 405,650 $ 443,182 Total assets $ 405,650 $ 443,182 NewAge, Inc. Notes to Unaudited Condensed Consolidated Financial Statements Depreciation and amortization expense by reporting segment, including amounts charged to cost of goods sold for the three and nine months ended September 30, 2021 and 2020, was as follows (in thousands): Segment 2021 2020 2021 2020 Three Months Ended Nine Months Ended September 30, September 30, Segment 2021 2020 2021 2020 Direct / Social Selling $ 4,384 $ 1,713 $ 13,780 $ 5,157 Direct Store 97 142 297 450 Total depreciation and amortization $ 4,481 $ 1,855 $ 14,077 $ 5,607 Total depreciation and amortization $ 4,481 $ 1,855 $ 14,077 $ 5,607 Cash payments for capital expenditures for property and equipment and identifiable intangible assets by reporting segment for the three and nine months ended September 30, 2021 and 2020, were as follows (in thousands): Segment 2021 2020 2021 2020 Three Months Ended Nine Months Ended September 30, September 30, Segment 2021 2020 2021 2020 Direct / Social Selling $ 502 $ 128 $ 1,263 $ 1,881 Direct Store - - 4 227 Total capital expenditures $ 502 $ 128 $ 1,267 $ 2,108 Total capital expenditures $ 502 $ 128 $ 1,267 $ 2,108 |
SCHEDULE OF NET REVENUE BY GEOGRAPHIC REGION | SCHEDULE OF NET REVENUE BY GEOGRAPHIC REGION 2021 2020 2021 2020 Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 United States of America $ 27,514 $ 23,638 $ 81,290 $ 65,554 Japan 26,406 21,268 75,878 63,075 China 15,739 10,169 65,775 36,325 Italy 7,409 69 38,418 224 France 7,847 101 36,643 276 Rest of World 14,638 7,474 51,107 23,595 Net revenue $ 99,553 $ 62,719 $ 349,111 $ 189,049 Net revenue $ 99,553 $ 62,719 $ 349,111 $ 189,049 |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 9 Months Ended |
Sep. 30, 2021Segments | |
Accounting Policies [Abstract] | |
Number of segments | 2 |
LIQUIDITY AND GOING CONCERN (De
LIQUIDITY AND GOING CONCERN (Details Narrative) - USD ($) shares in Thousands, $ in Thousands | Feb. 28, 2021 | Feb. 19, 2021 | Feb. 16, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2022 | Dec. 31, 2020 | Nov. 30, 2020 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Operating loss | $ 30,435 | $ 13,143 | $ 43,590 | $ 32,288 | $ (34,900) | |||||
Net cash used in operating activities | 25,613 | 29,853 | (34,300) | |||||||
Operating Income (Loss) | (30,435) | (13,143) | (43,590) | (32,288) | 34,900 | |||||
Net Cash Provided by (Used in) Operating Activities | (25,613) | (29,853) | 34,300 | |||||||
Accumulated deficit | 154,912 | 154,912 | 151,815 | |||||||
Cash and cash equivalents | 46,829 | 26,885 | 46,829 | 26,885 | 43,711 | |||||
Current portion of restricted cash | 12,000 | 12,000 | $ 10,000 | |||||||
Restricted cash and cash and cash equivalent total | 62,343 | $ 45,231 | 62,343 | $ 45,231 | ||||||
Working capital | 40,800 | $ 40,800 | ||||||||
Forecast [Member] | Subsequent Event [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Working capital | $ 1,100 | |||||||||
Forecast [Member] | Subsequent Event [Member] | Through August 2022 [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Cash and cash equivalents | 46,800 | |||||||||
Current portion of restricted cash | 12,000 | |||||||||
Forecast [Member] | Subsequent Event [Member] | Paycheck Protection Program Loan [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Repayments of Bank Debt | $ 21,100 | |||||||||
Forecast [Member] | Ariix LLC [Member] | Senior Secured Notes [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | |||||||||
Forecast [Member] | Ariix LLC [Member] | Subsequent Event [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Operating Lease, Payments | $ 8,300 | |||||||||
Common Stock [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Stock issued during the period | 14,636 | 16,130 | ||||||||
Securities Purchase Agreement [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Stock issued during the period | 14,600 | |||||||||
Warrants to purchase of shares of common stock | 7,300 | |||||||||
Net proceeds from private placement | $ 53,800 | |||||||||
Cash and cash equivalents | 46,800 | $ 46,800 | ||||||||
Current portion of restricted cash | 12,000 | 12,000 | ||||||||
Restricted cash and cash and cash equivalent total | $ 58,800 | $ 58,800 | ||||||||
Securities Purchase Agreement [Member] | Senior Secured Notes [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | |||||||||
Securities Purchase Agreement [Member] | Private Placement [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Warrants to purchase of shares of common stock | 7,300 | |||||||||
Securities Purchase Agreement [Member] | Common Stock [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Stock issued during the period | 14,600 | |||||||||
Securities Purchase Agreement [Member] | Common Stock [Member] | Private Placement [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Stock issued during the period | 14,600 | |||||||||
Net proceeds from private placement | $ 53,800 |
SCHEDULE OF PURCHASE PRICE ALLO
SCHEDULE OF PURCHASE PRICE ALLOCATION (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Aug. 31, 2021 | Jun. 02, 2021 | Dec. 31, 2020 | ||
Business Combination and Asset Acquisition [Abstract] | ||||||
Accounts receivable, net | $ 525 | |||||
Inventories | [1] | 1,356 | ||||
Prepaid expenses and other assets | 295 | |||||
Property and equipment | 86 | |||||
Distributor sales force | [2] | 1,590 | ||||
Trade name | $ 19,100 | 400 | [2] | |||
Total identifiable assets acquired | 4,252 | |||||
Accounts payable and accrued liabilities | (1,953) | |||||
Net identifiable assets acquired | 2,299 | |||||
Goodwill | $ 54,621 | 289 | [3] | $ 54,993 | ||
Total purchase price allocation | $ 2,588 | |||||
[1] | Based in part on the preliminary report of an independent valuation specialist, the fair value of work-in-process and finished goods inventories on the Aliven Closing Date exceeded the historical carrying value by approximately $ 0.1 | |||||
[2] | Based in part on the preliminary report of an independent valuation specialist, the fair value of identifiable intangible assets was determined primarily using variations of the “income approach,” which is based on the present value of the future after-tax cash flows attributable to each identifiable intangible asset. These intangible assets are being amortized over estimated useful lives of seven years for the distributor sales force and three years for the trade name, with an aggregate weighted average life of 6.2 | |||||
[3] | Goodwill was recognized for the difference between the total purchase consideration transferred to consummate the business combination and the fair value of the net identifiable assets acquired. Goodwill primarily relates to expected synergies to be realized due to combining Aliven with the Company, and the value of the assembled workforce on the Aliven Closing Date. Goodwill is expected to be deductible for income tax purposes. |
SCHEDULE OF UNAUDITED PRO FORMA
SCHEDULE OF UNAUDITED PRO FORMA DISCLOSURE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Business Combination and Asset Acquisition [Abstract] | ||||
Net revenue | $ 147,868 | $ 354,626 | $ 397,200 | |
Net loss | $ (7,840) | $ (3,682) | $ (27,161) | |
Net loss per share: | ||||
Basic | $ (0.07) | $ (0.03) | $ (0.24) | |
Diluted | $ (0.07) | $ (0.19) | [1] | $ (0.24) |
Weighted average number of shares of common stock outstanding: | ||||
Basic | 118,595 | 141,490 | 112,863 | |
Diluted | 118,595 | 168,253 | 112,863 | |
[1] | For the nine months ended September 30, 2021, the calculation of pro forma diluted loss per share is based on pro forma net loss of $ 3.7 28.4 32.1 |
SCHEDULE OF BUSINESS COMBINATIO
SCHEDULE OF BUSINESS COMBINATION LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Nov. 27, 2019 | May 31, 2019 | ||
Business Acquisition [Line Items] | ||||||
Derivative liability payable in cash or shares | $ 24,189 | $ 90,874 | [1] | |||
Short-term debt payable in cash | 10,000 | |||||
Fair value of deferred consideration payable | $ 3,400 | |||||
Short-term debt for Zennoa, due May 2021 | 850 | |||||
Total | 29,362 | 107,576 | ||||
Less current portion | 1,140 | 11,750 | ||||
Long-term portion | 28,222 | 95,826 | ||||
LIMU Company LLC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Fair value of deferred consideration payable | 3,435 | [2] | 3,656 | $ 3,800 | ||
Zennoa LLC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Fair value of deferred consideration payable | 1,738 | [3] | 2,196 | $ 1,700 | ||
Fixed Shares [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Derivative liability payable in cash or shares | [4] | 37,028 | [1] | |||
Variable Shares [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Derivative liability payable in cash or shares | $ 24,189 | [5] | $ 53,846 | [1] | ||
[1] | As of December 31, 2020, the Company had an obligation under the Amended Ariix Merger Agreement to issue the Fixed Shares and the Variable Shares, or pay $ 163.3 90.9 Recurring Fair Value Measurements | |||||
[2] | On May 31, 2019, Ariix completed a business combination with The LIMU Company, LLC (“LIMU”) that provided for a cash payment of $ 3.0 5.0 5.0 1.2 3.8 3.4 4.5 | |||||
[3] | On November 27, 2019, Ariix completed a business combination with Zennoa, LLC (“Zennoa”) that provided for fixed cash payments of $ 2.25 2.5 No amounts are payable if the Zennoa Sales Metric is less than $6.0 million, and payments ranging from 3% to 5% of monthly sales are payable if the Zennoa Sales Metric exceeds $6.0 million. 4.75 The amount of GI Payments due for each month is based on varying percentages starting at 2.0% if the Zennoa Sales Metric is at least $25.0 million, up to a maximum of 3.0% if the Zennoa Sales Metric is $45.0 million or higher. The Company determined that the probability of the Zennoa Sales Metric exceeding $25.0 million is remote. 1.7 3.9% | |||||
[4] | The conditions that required accounting for the Fixed Shares as a derivative liability were eliminated upon receipt of shareholder approval on May 14, 2021. Therefore, the fair value of the Fixed Shares derivative liability as of May 14, 2021 was reclassified to equity. | |||||
[5] | The Variable Shares derivative liability provides for ongoing adjustments in the number of shares based on the outcome of any potential indemnification claims by either party to the Amended Ariix Merger Agreement. Accordingly, the Variable Shares derivative liability is being adjusted to fair value at the end of each reporting period until the underlying shares are issued in November 2021. Key valuation assumptions as of September 30, 2021 are set forth in Note 13 under the caption Recurring Fair Value Measurements |
SCHEDULE OF CHANGES IN BUSINESS
SCHEDULE OF CHANGES IN BUSINESS COMBINATION OBLIGATIONS (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021USD ($) | ||
Business Acquisition [Line Items] | ||
Balances, December 31, 2020 | $ 107,576 | |
Reclassify Clarification Letter obligation | ||
August 2021 Amendment | (5,000) | |
Short-term debt paid to Sellers of Ariix | (10,000) | |
Clarification Letter obligation | (3,056) | |
LIMU and Zennoa deferred consideration | (852) | |
Zennoa short-term debt | (850) | |
Net gain on change in fair value of derivatives | (28,366) | |
Accretion of discount on deferred consideration | 174 | |
Fixed Shares derivative liability reclassified to equity | (30,263) | |
Balances, September 30, 2021 | 29,363 | |
Derivative Liabilities [Member] | ||
Business Acquisition [Line Items] | ||
Balances, December 31, 2020 | 90,874 | |
Reclassify Clarification Letter obligation | (3,056) | |
August 2021 Amendment | (5,000) | |
Short-term debt paid to Sellers of Ariix | ||
Clarification Letter obligation | ||
LIMU and Zennoa deferred consideration | ||
Zennoa short-term debt | ||
Net gain on change in fair value of derivatives | (28,366) | |
Accretion of discount on deferred consideration | ||
Fixed Shares derivative liability reclassified to equity | (30,263) | |
Balances, September 30, 2021 | 24,189 | |
Derivative Liabilities [Member] | Variable Shares [Member] | ||
Business Acquisition [Line Items] | ||
Balances, December 31, 2020 | 53,846 | [1] |
Reclassify Clarification Letter obligation | (3,056) | [2] |
August 2021 Amendment | (5,000) | [3] |
Short-term debt paid to Sellers of Ariix | ||
Clarification Letter obligation | ||
LIMU and Zennoa deferred consideration | ||
Zennoa short-term debt | ||
Net gain on change in fair value of derivatives | (21,601) | [4] |
Accretion of discount on deferred consideration | ||
Fixed Shares derivative liability reclassified to equity | ||
Balances, September 30, 2021 | 24,189 | |
Derivative Liabilities [Member] | Fixed Shares [Member] | ||
Business Acquisition [Line Items] | ||
Balances, December 31, 2020 | 37,028 | [1] |
Reclassify Clarification Letter obligation | ||
August 2021 Amendment | ||
Short-term debt paid to Sellers of Ariix | ||
Clarification Letter obligation | ||
LIMU and Zennoa deferred consideration | ||
Zennoa short-term debt | ||
Net gain on change in fair value of derivatives | (6,765) | [5] |
Accretion of discount on deferred consideration | ||
Fixed Shares derivative liability reclassified to equity | (30,263) | [6] |
Balances, September 30, 2021 | ||
Other [Member] | ||
Business Acquisition [Line Items] | ||
Balances, December 31, 2020 | 16,702 | |
Reclassify Clarification Letter obligation | 3,056 | [2] |
August 2021 Amendment | ||
Short-term debt paid to Sellers of Ariix | (10,000) | |
Clarification Letter obligation | (3,056) | |
LIMU and Zennoa deferred consideration | (852) | |
Zennoa short-term debt | (850) | |
Net gain on change in fair value of derivatives | ||
Accretion of discount on deferred consideration | 174 | |
Fixed Shares derivative liability reclassified to equity | ||
Balances, September 30, 2021 | $ 5,174 | |
[1] | Represents the allocable fair value associated with the Variable Shares and the Fixed Shares derivative liabilities as of December 31, 2020. | |
[2] | Represents the impact of the Clarification Letter entered into on January 29, 2021, whereby the number of shares subject to shareholder approval was reduced and a payable was recognized. | |
[3] | As discussed above under the caption Ariix Merger Agreement | |
[4] | Represents the gain from changes in fair value of the Variable Shares derivative liability for the nine months ended September 30, 2021. | |
[5] | Represents the gain recognized from changes in fair value of the Fixed Shares derivative liability for the period from January 1, 2021 through May 14, 2021 when this derivative liability was reclassified to equity. | |
[6] | The fair value of the Fixed Shares derivative liability as of May 14, 2021 was reclassified as a component of equity since shareholder approval to issue the shares eliminated the conditions that previously required liability treatment. |
BUSINESS COMBINATIONS AND DIS_3
BUSINESS COMBINATIONS AND DISPOSITIONS (Details Narrative) - USD ($) | Nov. 16, 2021 | May 16, 2021 | Jan. 29, 2021 | Jan. 29, 2021 | Jan. 29, 2021 | Nov. 16, 2020 | Nov. 16, 2020 | Nov. 27, 2019 | Nov. 27, 2019 | May 31, 2019 | Jan. 16, 2022 | Sep. 30, 2021 | Aug. 31, 2021 | Jul. 31, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Jun. 02, 2021 | [1] | May 14, 2021 | |||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Payments to Acquire Businesses, Gross | $ 2,000,000 | $ 10,000,000 | |||||||||||||||||||||||||||
Working capital | $ 40,800,000 | $ 40,800,000 | 40,800,000 | ||||||||||||||||||||||||||
Fail to approve the issuance of the aggregate | 4,600,000 | ||||||||||||||||||||||||||||
Conversion price of shares | $ 5.53 | ||||||||||||||||||||||||||||
Intangible asset | $ 19,100,000 | $ 400,000 | |||||||||||||||||||||||||||
Impairment charges | $ 2,300,000 | 16,186,000 | $ 16,186,000 | 400,000 | |||||||||||||||||||||||||
Shares originally designated as consideration for noncompete agreement | 7,000,000 | ||||||||||||||||||||||||||||
Historical carrying value | $ 100,000 | ||||||||||||||||||||||||||||
Weighted average life | 6 years 2 months 12 days | ||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Net Income (Loss) | $ 3,700,000 | ||||||||||||||||||||||||||||
Derivative gain | 28,400,000 | ||||||||||||||||||||||||||||
Diluted net loss | 32,100,000 | ||||||||||||||||||||||||||||
Stock Issued During Period, Value, New Issues | 39,650,000 | ||||||||||||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Contingent Liability | $ 3,400,000 | ||||||||||||||||||||||||||||
Discount rate | 4.50% | ||||||||||||||||||||||||||||
Deposits and other | $ 4,621,000 | 4,621,000 | 4,621,000 | $ 5,297,000 | |||||||||||||||||||||||||
Operating loss | (30,435,000) | (13,143,000) | $ (43,590,000) | (32,288,000) | 34,900,000 | ||||||||||||||||||||||||
BWR and U.S. Retail Brands [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Net Revenue | 2,400,000 | 9,600,000 | |||||||||||||||||||||||||||
Operating loss | 2,100,000 | 7,400,000 | |||||||||||||||||||||||||||
Fixed Shares [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Fail to approve the issuance of the aggregate | 1,700,000 | ||||||||||||||||||||||||||||
Stock Issued During Period, Shares, New Issues | 1,000,000 | ||||||||||||||||||||||||||||
Forecast [Member] | Fixed Shares [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Fail to approve the issuance of the aggregate | 2,900,000 | ||||||||||||||||||||||||||||
Ariix [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Business Combination, Consideration Transferred | $ 155,100,000 | ||||||||||||||||||||||||||||
In Ariix business combination, shares | 19,700,000 | ||||||||||||||||||||||||||||
Number of shares will be issued for acquisition, value | $ 54,200,000 | ||||||||||||||||||||||||||||
Payments to Acquire Businesses, Gross | 10,000,000 | ||||||||||||||||||||||||||||
Derivative Liability, Fair Value, Gross Liability | $ 90,900,000 | $ 90,900,000 | |||||||||||||||||||||||||||
Business acquisition, description | No amounts are payable if the Zennoa Sales Metric is less than $6.0 million, and payments ranging from 3% to 5% of monthly sales are payable if the Zennoa Sales Metric exceeds $6.0 million. | ||||||||||||||||||||||||||||
LIMU Company LLC [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Payments to Acquire Businesses, Gross | $ 3,000,000 | ||||||||||||||||||||||||||||
Business Combination Consideration Liability Deferred Consideration Payable | $ 5,000,000 | ||||||||||||||||||||||||||||
Business combination consideration liability deferred consideration, percentage | 500.00% | ||||||||||||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Contingent Liability | $ 3,800,000 | $ 3,435,000 | [2] | 3,435,000 | [2] | $ 3,435,000 | [2] | 3,656,000 | |||||||||||||||||||||
Ariix LLC [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Contingent Liability | $ 1,200,000 | ||||||||||||||||||||||||||||
Zennoa LLC [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Business Combination, Consideration Transferred | $ 4,750,000 | ||||||||||||||||||||||||||||
Payments to Acquire Businesses, Gross | 2,250,000 | ||||||||||||||||||||||||||||
Business Combination Consideration Liability Deferred Consideration Payable | $ 2,500,000 | 2,500,000 | |||||||||||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Contingent Liability | $ 1,700,000 | $ 1,700,000 | $ 1,738,000 | [3] | $ 1,738,000 | [3] | $ 1,738,000 | [3] | 2,196,000 | ||||||||||||||||||||
Discount rate | 3.90% | 3.90% | |||||||||||||||||||||||||||
Business acquisition, description | The amount of GI Payments due for each month is based on varying percentages starting at 2.0% if the Zennoa Sales Metric is at least $25.0 million, up to a maximum of 3.0% if the Zennoa Sales Metric is $45.0 million or higher. The Company determined that the probability of the Zennoa Sales Metric exceeding $25.0 million is remote. | ||||||||||||||||||||||||||||
Brands Within Reach, LLC [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
In Ariix business combination, shares | 692,000 | ||||||||||||||||||||||||||||
Number of shares will be issued for acquisition, value | $ 1,250,000 | ||||||||||||||||||||||||||||
Equity issued in business combination, fair value | 1,250,000 | 1,250,000 | 1,250,000 | ||||||||||||||||||||||||||
Principal balance of promissory notes | 2,500,000 | 2,500,000 | 2,500,000 | ||||||||||||||||||||||||||
Exchange as cash payment | 1,250,000 | ||||||||||||||||||||||||||||
Debt interest rate | 1000.00% | 1000.00% | 1000.00% | ||||||||||||||||||||||||||
Deposits and other | 1,250,000 | ||||||||||||||||||||||||||||
Notes receivables | $ 2,500,000 | ||||||||||||||||||||||||||||
Accrued interest | 200,000 | ||||||||||||||||||||||||||||
Liability | 1,600,000 | ||||||||||||||||||||||||||||
Loss of divested business | 4,300,000 | ||||||||||||||||||||||||||||
Cancellation of notes receivables | $ 6,000,000 | ||||||||||||||||||||||||||||
Brands Within Reach, LLC [Member] | Unsecured Nonrecourse Promissory Note [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Principal balance of promissory notes | $ 3,300,000 | $ 3,300,000 | $ 3,300,000 | ||||||||||||||||||||||||||
Ariix Merger Agreement [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Business Combination, Consideration Transferred | $ 3,100,000 | ||||||||||||||||||||||||||||
Restricted cash account balance | $ 3,100,000 | $ 3,100,000 | $ 3,100,000 | ||||||||||||||||||||||||||
Payments for business combination liabilities | $ 3,100,000 | ||||||||||||||||||||||||||||
Ariix Merger Agreement [Member] | Minimum [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Derivative Liability, Fair Value, Gross Liability | $ 3,100,000 | $ 3,100,000 | 3,100,000 | ||||||||||||||||||||||||||
Ariix Merger Agreement [Member] | Maximum [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Derivative Liability, Fair Value, Gross Liability | $ 87,800,000 | $ 87,800,000 | 87,800,000 | ||||||||||||||||||||||||||
Ariix Merger Agreement [Member] | First Anniversary [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Stock issued during period issuable to sellers decreasing shares | 500,000 | ||||||||||||||||||||||||||||
Ariix Merger Agreement [Member] | Ariix [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Business acquisition, percentage of voting interests acquired | 100.00% | 100.00% | 100.00% | ||||||||||||||||||||||||||
Payments to Acquire Businesses, Gross | $ 3,100,000 | ||||||||||||||||||||||||||||
Common stock issuable shares | 25,000,000 | 25,500,000 | |||||||||||||||||||||||||||
Decrease in number of shares issuable | 600,000 | ||||||||||||||||||||||||||||
Amended Ariix Merger Agreement [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Payments to Acquire Businesses, Gross | 163,300,000 | ||||||||||||||||||||||||||||
Derivative Liability, Fair Value, Gross Liability | 90,900,000 | ||||||||||||||||||||||||||||
Fail to approve the issuance of the aggregate | 34,600,000 | ||||||||||||||||||||||||||||
Business acquisition, number of shares issued | 14,500,000 | ||||||||||||||||||||||||||||
Amended Ariix Merger Agreement [Member] | Variable Shares [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Fail to approve the issuance of the aggregate | 20,100,000 | ||||||||||||||||||||||||||||
Amended Ariix Merger Agreement [Member] | Fixed Shares [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Equity issued in business combination, fair value | $ 30,300,000 | ||||||||||||||||||||||||||||
Amended Ariix Merger Agreement [Member] | Fixed And Variables Shares [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Derivative Liability, Fair Value, Gross Liability | 90,900,000 | ||||||||||||||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 163,300,000 | ||||||||||||||||||||||||||||
Amended Ariix Merger Agreement [Member] | Maximum [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Fail to approve the issuance of the aggregate | 39,600,000 | ||||||||||||||||||||||||||||
Amended Ariix Merger Agreement [Member] | Ariix [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
In Ariix business combination, shares | 19,700,000 | ||||||||||||||||||||||||||||
Payments to Acquire Businesses, Gross | $ 10,000,000 | ||||||||||||||||||||||||||||
Common stock issuable shares | 19,700,000 | 19,700,000 | |||||||||||||||||||||||||||
Equity issued in business combination, fair value | $ 54,200,000 | $ 54,200,000 | |||||||||||||||||||||||||||
Amended Ariix Merger Agreement [Member] | Ariix [Member] | Variable Shares [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Allocated shares | $ 53,900,000 | ||||||||||||||||||||||||||||
Amended Ariix Merger Agreement [Member] | Ariix [Member] | Fixed Shares [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Allocated shares | $ 37 | ||||||||||||||||||||||||||||
Amended Ariix Merger Agreement [Member] | Ariix [Member] | Sellers Agent [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Payments to Acquire Businesses, Gross | $ 10,000,000 | ||||||||||||||||||||||||||||
Interim Ariix Merger Consideration [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Payments to Acquire Businesses, Gross | $ 5,000,000 | ||||||||||||||||||||||||||||
Working capital | $ 18,000,000 | ||||||||||||||||||||||||||||
Short fall of targeted working capital | 29,000,000 | ||||||||||||||||||||||||||||
Long term accrued business combination liabilities | 5,000,000 | ||||||||||||||||||||||||||||
Fail to approve the issuance of the aggregate | 2,700,000 | ||||||||||||||||||||||||||||
Interim Ariix Merger Consideration [Member] | Minimum [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Fail to approve the issuance of the aggregate | 7,000,000 | ||||||||||||||||||||||||||||
Interim Ariix Merger Consideration [Member] | Maximum [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Payments to Acquire Businesses, Gross | 10,000,000 | ||||||||||||||||||||||||||||
Fail to approve the issuance of the aggregate | 11,700,000 | ||||||||||||||||||||||||||||
Interim Ariix Merger Consideration [Member] | Ariix [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Business Combination, Consideration Transferred | 11,000,000 | ||||||||||||||||||||||||||||
Interim Ariix Merger Consideration [Member] | Ariix [Member] | Maximum [Member] | |||||||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||||||
Number of shares will be issued for acquisition, value | $ 10,000,000 | ||||||||||||||||||||||||||||
[1] | Based in part on the preliminary report of an independent valuation specialist, the fair value of identifiable intangible assets was determined primarily using variations of the “income approach,” which is based on the present value of the future after-tax cash flows attributable to each identifiable intangible asset. These intangible assets are being amortized over estimated useful lives of seven years for the distributor sales force and three years for the trade name, with an aggregate weighted average life of 6.2 | ||||||||||||||||||||||||||||
[2] | On May 31, 2019, Ariix completed a business combination with The LIMU Company, LLC (“LIMU”) that provided for a cash payment of $ 3.0 5.0 5.0 1.2 3.8 3.4 4.5 | ||||||||||||||||||||||||||||
[3] | On November 27, 2019, Ariix completed a business combination with Zennoa, LLC (“Zennoa”) that provided for fixed cash payments of $ 2.25 2.5 No amounts are payable if the Zennoa Sales Metric is less than $6.0 million, and payments ranging from 3% to 5% of monthly sales are payable if the Zennoa Sales Metric exceeds $6.0 million. 4.75 The amount of GI Payments due for each month is based on varying percentages starting at 2.0% if the Zennoa Sales Metric is at least $25.0 million, up to a maximum of 3.0% if the Zennoa Sales Metric is $45.0 million or higher. The Company determined that the probability of the Zennoa Sales Metric exceeding $25.0 million is remote. 1.7 3.9% |
SCHEDULE OF INVENTORIES (Detail
SCHEDULE OF INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 9,550 | $ 12,628 |
Work-in-process | 2,368 | 1,225 |
Finished goods, net | 36,958 | 34,198 |
Total inventories | $ 48,876 | $ 48,051 |
SCHEDULE OF OTHER ACCRUED LIABI
SCHEDULE OF OTHER ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued commissions | $ 15,486 | $ 23,594 |
Accrued compensation and benefits | 10,845 | 9,443 |
Accrued marketing events | 6,891 | 8,212 |
Deferred revenue | 2,351 | 6,278 |
Provision for sales returns | 1,366 | 1,322 |
Income taxes payable | 3,135 | 3,461 |
Current portion of operating lease liabilities | 5,118 | 6,948 |
Current portion of deferred lease financing obligation | 677 | 659 |
Other accrued liabilities | 10,664 | 10,090 |
Total accrued liabilities | $ 56,533 | $ 70,007 |
SCHEDULE OF DEPRECIATION AND AM
SCHEDULE OF DEPRECIATION AND AMORTIZATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Depreciation | $ 1,101 | $ 967 | $ 3,201 | $ 2,926 |
Amortization | 3,380 | 888 | 10,876 | 2,681 |
Total | $ 4,481 | $ 1,855 | $ 14,077 | $ 5,607 |
SCHEDULE OF LOSS FROM CHANGES I
SCHEDULE OF LOSS FROM CHANGES IN FAIR VALUE OF DERIVATIVES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Fixed Shares derivative | [1] | $ 6,765 | [1] | |||
Variable Shares derivative | 15,584 | [1] | 21,602 | [1] | ||
Warrants issued in private placement | 3,914 | [2] | 12,347 | [2] | ||
Interest rate swap | (86) | (392) | ||||
Gain (loss) on change in fair value of derivatives | $ 19,498 | $ (86) | $ 40,714 | $ (392) | ||
[1] | For further discussion of the Ariix Fixed Shares and Variable Shares derivative liabilities, please refer to Note 3. | |||||
[2] | For further discussion of the derivative liability for warrants, please refer to Note 7 under the caption Private Placement of Units. |
SUMMARY OF ACTIVITY AFFECTING T
SUMMARY OF ACTIVITY AFFECTING THE ACCRUED LIABILITY FOR SEVERANCE BENEFITS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Accrued severance and restructuring, beginning of period | $ 1,449 | $ 191 | ||
Severance expense incurred | 1,400 | 1,658 | 3,097 | 2,543 |
Office closure costs incurred | 1,120 | 1,120 | ||
Cash payments | (1,235) | (527) | (1,674) | (1,412) |
Accrued severance and restructuring, end of period | $ 2,734 | $ 1,131 | $ 2,734 | $ 1,131 |
OTHER FINANCIAL INFORMATION (De
OTHER FINANCIAL INFORMATION (Details Narrative) $ in Thousands | Mar. 03, 2021shares | Sep. 30, 2020USD ($)Employee | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($)Employee | Dec. 31, 2020USD ($) |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Accumulated depreciation of property and equipment | $ 10,800 | $ 8,800 | |||
Accumulated amortization of identifiable intangible assets | $ 16,500 | 8,500 | |||
Compensation Costs | the Company implemented headcount reductions of approximately 60 employees that accounted for estimated annualized compensation costs of $3.2 million. For the three months ended September 30, 2021, the Company incurred severance costs of $1.4 million and office closure costs of approximately $1.1 million, substantially all of which related to the Direct/ Social Selling segment. | ||||
Shares vesting date | Unrecognized compensation of $3.9 million related to an additional 1.4 million shares is excluded from the table based on management’s estimate that both performance conditions will be achieved at the target level. Accordingly, $3.9 million of additional stock-based compensation expense could be recognized if the maximum performance targets are achieved over the remaining performance period through December 2023. | ||||
Restructuring and Related Cost, Number of Positions Eliminated | Employee | 50 | 150 | |||
Employee Benefits and Share-based Compensation | $ 9,600 | ||||
Restructuring liability | $ 1,600 | ||||
Office closure costs | 1,100 | ||||
Right of use asset | 29,580 | 38,764 | |||
Operating lease liability | 36,675 | ||||
Current asset carrying value | 138,585 | 127,135 | |||
Current liability | 97,809 | $ 122,547 | |||
TCI Co Ltd [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Sale of manufacturing equipment | 3,500 | ||||
Carrying value of equipments | 2,400 | ||||
Right of use asset | 4,400 | ||||
Operating lease liability | 4,500 | ||||
Current asset carrying value | 6,900 | ||||
Current liability | 4,500 | ||||
Gregory A. Gould [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Unpaid portion of severance costs | 400 | ||||
Gregory A. Gould [Member] | Selling, General and Administrative Expenses [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Severance costs | $ 1,700 | $ 1,600 | 2,600 | ||
Gregory A. Gould [Member] | Selling, General and Administrative Expenses [Member] | Direct Social Selling [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Severance costs | 1,000 | 1,800 | |||
Gregory A. Gould [Member] | Selling, General and Administrative Expenses [Member] | Direct Store [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Severance costs | $ 700 | $ 700 | |||
Third Party Customers [Member] | TCI Co Ltd [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Sale of stock, percentage | 3.00% | ||||
Gould Agreement [Member] | Gregory Gould [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Compensation description | As part of the transition, Mr. Gould was entitled to (i) a payment made in March 2021 for his 2020 performance bonus of $250,000, (ii) a target performance bonus of $650,000 for services through July 2, 2021, (iii) severance compensation of one year of base salary of $500,000 plus target bonus of $250,000 pursuant to his employment agreement, (iv) payment of health insurance premiums for one year, and (v) title to Company-owned automobiles and a laptop computer that have been transferred to Mr. Gould. | ||||
Stock options issued | shares | 125,000 | ||||
Expiration date | 3 years | ||||
Shares vesting date | July 2, 2021 |
SCHEDULE OF FUTURE MINIMUM LEAS
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS (Details) $ in Thousands | Sep. 30, 2021USD ($) | |
Leases | ||
Remainder of 2021 | $ 2,454 | |
2022 | 7,716 | |
2023 | 6,436 | |
2024 | 5,575 | |
2025 | 5,354 | |
Thereafter | 23,383 | |
Total operating lease payments | 50,918 | |
Less imputed interest | (14,243) | [1] |
Present value | $ 36,675 | |
[1] | Calculated based on the term of the respective leases using discount rates ranging from 2.0 10.0 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Jul. 31, 2021 | Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Operating lease expired | The Company leases various facilities, vehicles and equipment under non-cancellable operating lease agreements that expire between October 2021 and March 2039. The Company has made accounting policy elections (i) to not apply the recognition requirements for short-term leases and (ii) for facility leases, when there are lease and non-lease components, such as common area maintenance charges, to account for the lease and non-lease components as a single lease component. | ||||||
Operating Lease, Expense | $ 3,400 | $ 2,500 | $ 9,300 | $ 7,600 | |||
Operating lease, weighted average remaining lease term | 10 years 9 months 18 days | 10 years 9 months 18 days | 11 years 6 months | ||||
Operating lease, weighted average discount rate, percent | 5.60% | 5.60% | 5.50% | ||||
Impairment charges | $ 2,300 | $ 16,186 | $ 16,186 | 400 | |||
Impairment charges | 400 | ||||||
Payments to Acquire Businesses, Gross | $ 2,000 | 10,000 | |||||
Amount deposited in escrow account | $ 300 | ||||||
Rental Income | $ 100 | ||||||
Minimum [Member] | |||||||
Lease corporate borrowing rates | 2.00% | 2.00% | |||||
Maximum [Member] | |||||||
Lease corporate borrowing rates | 10.00% | 10.00% |
SUMMARY OF DEBT (Details)
SUMMARY OF DEBT (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | |
Short-term Debt [Line Items] | |||
Senior Notes, net of discount of $2,810 as of September 30, 2021 and $7,900 as of December 31, 2020 | $ 17,622 | $ 24,532 | |
Installment notes payable | 14 | 16 | |
Total | 17,636 | 34,197 | |
Less current maturities | 17,636 | [1] | 18,016 |
Long-term debt, less current maturities | 16,181 | ||
Paycheck Protection Program Loan Due April 2022 [Member] | |||
Short-term Debt [Line Items] | |||
Assumed PPP Loan payable, interest at 1.0%, unsecured, due May 2022 | [2] | 6,868 | |
Paycheck Protection Program Loan Due April 2022 [Member] | |||
Short-term Debt [Line Items] | |||
Assumed PPP Loan payable, interest at 1.0%, unsecured, due May 2022 | [2] | $ 2,781 | |
[1] | Current maturities of long-term debt include the aggregate principal payments of $ 20.4 2.8 | ||
[2] | As discussed below, the PPP Loans were forgiven in July 2021 and the Company recognized an aggregate gain from forgiveness of $ 9.8 |
SUMMARY OF DEBT (Details) (Pare
SUMMARY OF DEBT (Details) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Short-term Debt [Line Items] | ||||
Gain from forgiveness | $ 9,800 | $ 9,800 | ||
Debt Instrument, Annual Principal Payment | 20,400 | 20,400 | ||
Amortization of Debt Discount (Premium) | 6,171 | $ 414 | ||
Senior Notes [Member] | ||||
Short-term Debt [Line Items] | ||||
Amortization of Debt Discount (Premium) | 2,800 | |||
Senior Secured Notes [Member] | ||||
Short-term Debt [Line Items] | ||||
Debt Instrument, Unamortized Discount | $ 2,810 | $ 2,810 | $ 7,900 | |
Paycheck Protection Program Loan Due April 2022 [Member] | ||||
Short-term Debt [Line Items] | ||||
Interest rate percentage | 1.00% | 1.00% | 1.00% | |
Loan payable collateral | unsecured | unsecured | ||
Debt maturity date, description | due April 2022 | due April 2022 | ||
Paycheck Protection Program Loan Due April 2022 [Member] | ||||
Short-term Debt [Line Items] | ||||
Interest rate percentage | 1.00% | 1.00% | 1.00% | |
Loan payable collateral | unsecured | unsecured | ||
Debt maturity date, description | due May 2022 | due May 2022 |
DEBT (Details Narrative)
DEBT (Details Narrative) $ / shares in Units, $ in Thousands | Feb. 16, 2021$ / sharesshares | Nov. 30, 2020USD ($)$ / sharesshares | Apr. 14, 2020USD ($) | May 31, 2020USD ($) | Sep. 30, 2021USD ($)$ / shares | Sep. 30, 2021USD ($)$ / sharesshares | Aug. 31, 2021USD ($) | Feb. 02, 2021USD ($) | Dec. 31, 2020USD ($) |
Short-term Debt [Line Items] | |||||||||
Warrants exercisable price per share | $ / shares | $ 5 | $ 5 | |||||||
Current portion of restricted cash | $ 12,000 | $ 12,000 | $ 10,000 | ||||||
Senior Secured Notes [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Debt instrument, unamortized discount | $ 2,810 | $ 2,810 | 7,900 | ||||||
Senior Secured Notes [Member] | Minimum [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Interest rate percentage | 8.00% | 8.00% | |||||||
Senior Notes [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Interest rate percentage | 8.00% | 8.00% | |||||||
Effective interest rate | 46.80% | 46.80% | |||||||
Debt Instrument, Payment Terms | For the months of February 2021 through April 2021, the holders of the Senior Notes were entitled to request that the Company make principal payments up to $1.0 million per month and these payments were made on a timely basis. Beginning in May 2021 and continuing for each subsequent month, the holders of the Senior Notes are entitled to request that the Company make principal payments up to $2.0 million per month. The holders of the Senior Notes requested principal payments of $1.0 million in May 2021 and $2.0 million for each of the months of June 2021 through September 2021, and these payments were made on a timely basis. The maturity date of the Senior Notes is on December 1, 2022. However, if the holders of the Senior Notes continue to exercise their rights to demand monthly principal payments of $2.0 million, the Senior Notes will be repaid in full by August 2022. The Company may prepay all or a portion of the outstanding principal amount of the Senior Notes at any time, subject to a prepayment fee of 3.0% of the outstanding stated principal balance through December 1, 2021. | ||||||||
Shares issued | shares | 400,000 | ||||||||
Fair value of stock issued | $ 1,100 | ||||||||
Amendment fee | $ 1,100 | ||||||||
Debt Instrument, Covenant Description | The Company was required to maintain restricted cash balances of $18.0 million as of December 31, 2020. Beginning in February 2021, the requirement to maintain restricted cash balances was reduced to $8.0 million until such time that the outstanding principal balance of the Senior Notes is reduced below $8.0 million without regard to the unaccreted discount, which is expected to occur during the second quarter of 2022. In August 2021, the Senior Notes were amended to (i) permit the Company to make a $5.0 million cash payment to the Sellers of Ariix pursuant to the August 2021 Amendment to the Amended Ariix Merger Agreement discussed in Notes 3 and 12, and (ii) to increase the restricted cash balance from $8.0 million to $12.0 million. As of September 30, 2021, the entire $12.0 million of restricted cash is classified as a current asset since those funds may be utilized to make principal payments that are classified within current maturities of long-term debt. | ||||||||
Restricted cash | $ 12,000 | $ 8,000 | $ 18,000 | ||||||
Securities Purchase Agreement [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Private placement of Common Stock, net of issuance costs, shares | shares | 14,600,000 | ||||||||
Number of Securities Called by Warrants | shares | 7,300,000 | ||||||||
Warrants exercisable price per share | $ / shares | $ 5 | ||||||||
Current portion of restricted cash | $ 12,000 | $ 12,000 | |||||||
Securities Purchase Agreement [Member] | Class A Warrants [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Number of Securities Called by Warrants | shares | 750,000 | ||||||||
Warrants exercisable price per share | $ / shares | $ 3.75 | ||||||||
Securities Purchase Agreement [Member] | Class B Warrants [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Number of Securities Called by Warrants | shares | 750,000 | ||||||||
Warrants exercisable price per share | $ / shares | $ 5.75 | ||||||||
Securities Purchase Agreement [Member] | Commitment Shares [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Private placement of Common Stock, net of issuance costs, shares | shares | 800,000 | ||||||||
Securities Purchase Agreement [Member] | Senior Secured Notes [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Interest rate percentage | 8.00% | ||||||||
Aggregate principal amount | $ 32,400 | ||||||||
Debt instrument, unamortized discount | 8,500 | ||||||||
Net carrying value | $ 23,900 | ||||||||
Effective interest rate | 42.30% | ||||||||
Securities Purchase Agreement [Member] | Senior Secured Notes [Member] | Maximum [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Accelerated interest rate percentage | 12.00% | 12.00% | |||||||
Paycheck Protection Program [Member] | |||||||||
Short-term Debt [Line Items] | |||||||||
Interest rate percentage | 1.00% | ||||||||
Aggregate principal amount | $ 6,900 | ||||||||
Proceeds from loan | $ 2,800 | ||||||||
Debt Instrument, Decrease, Forgiveness | $ 9,800 | ||||||||
Debt instrument contractual interest rate | 0.010 | ||||||||
Gain on forgiveness of debt | $ 9,800 | $ 9,800 |
SCHEDULE OF CHANGES IN STOCKHOL
SCHEDULE OF CHANGES IN STOCKHOLDERS EQUITY (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balances | $ 222,603,000 | $ 97,515,000 | $ 142,153,000 | $ 92,275,000 | |
Upon vesting of restricted stock awards | |||||
For exercise of stock options | 2,000 | 30,000 | $ 530,000 | 34,000 | |
For exercise of stock options, shares | [1] | 289,000 | |||
Issuance of Common Stock to settle portion of settlement obligation | |||||
In ATM public offering, net | (70,000) | 24,958,000 | |||
In exchange for note receivable | |||||
Purchase and retirement of Common Stock | (1,193,000) | 1,193 | |||
Stock-based compensation expense | 1,477,000 | 957,000 | 5,607,000 | 3,280,000 | |
Net change in accumulated other comprehensive income (loss) | 726,000 | 1,275,000 | 3,000 | 332,000 | |
Net income loss | (2,700,000) | (14,133,000) | (3,097,000) | (35,305,000) | |
Balances | 222,108,000 | 84,381,000 | 222,108,000 | 84,381,000 | |
Common Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balances | $ 137,000 | $ 98,000 | $ 99,000 | $ 82,000 | |
Balance, shares | 136,606 | 98,442 | 99,146,000 | 81,873,000 | |
Upon vesting of restricted stock awards | $ 1,000 | ||||
Upon vesting of restricted stock awards, shares | 201 | 121 | 761,000 | 558,000 | |
For exercise of stock options | |||||
For exercise of stock options, shares | 1 | 15 | 289,000 | 17,000 | |
Issuance of Common Stock to settle portion of settlement obligation | $ 10,000 | ||||
Issuance of Common Stock to settle portion of settlement obligation, shares | 10,000 | ||||
In ATM public offering, net | $ 16,000 | ||||
In exchange for note receivable | $ 1,000 | $ 1,000 | |||
In exchange for note receivable, shares | 692 | 692,000 | |||
Purchase and retirement of Common Stock | $ (1,000) | ||||
Purchase and retirement of Common Stock, shares | (780) | ||||
Stock-based compensation expense | |||||
Net change in accumulated other comprehensive income (loss) | |||||
Net income loss | |||||
Balances | $ 147,000 | $ 98,000 | $ 147,000 | $ 98,000 | |
Balance, shares | 146,808,000 | 98,490,000 | 146,808,000 | 98,490,000 | |
Additional Paid-in Capital [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balances | $ 340,937,000 | $ 231,201,000 | $ 236,732,000 | $ 203,862,000 | |
Upon vesting of restricted stock awards | (1,000) | ||||
For exercise of stock options | 2,000 | 30,000 | 530,000 | 34,000 | |
Issuance of Common Stock to settle portion of settlement obligation | 20,789,000 | ||||
In ATM public offering, net | (70,000) | 24,942,000 | |||
In exchange for note receivable | 1,249,000 | 1,249,000 | |||
Purchase and retirement of Common Stock | (1,192,000) | ||||
Stock-based compensation expense | 1,477,000 | 957,000 | 5,607,000 | 3,280,000 | |
Net change in accumulated other comprehensive income (loss) | |||||
Net income loss | |||||
Balances | 363,205,000 | 232,175,000 | 363,205,000 | 232,175,000 | |
Obligation To Issue Common Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balances | 30,263,000 | 54,186,000 | |||
Upon vesting of restricted stock awards | |||||
For exercise of stock options | |||||
Issuance of Common Stock to settle portion of settlement obligation | (20,799,000) | ||||
In ATM public offering, net | |||||
In exchange for note receivable | |||||
Purchase and retirement of Common Stock | |||||
Stock-based compensation expense | |||||
Net change in accumulated other comprehensive income (loss) | |||||
Net income loss | |||||
Balances | 9,464,000 | 9,464,000 | |||
Notes Receivable For Stock Subscription [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balances | (1,250,000) | ||||
Upon vesting of restricted stock awards | |||||
For exercise of stock options | |||||
Issuance of Common Stock to settle portion of settlement obligation | |||||
In ATM public offering, net | |||||
In exchange for note receivable | (1,250,000) | (1,250,000) | |||
Purchase and retirement of Common Stock | |||||
Stock-based compensation expense | |||||
Net change in accumulated other comprehensive income (loss) | |||||
Net income loss | |||||
Balances | (1,250,000) | (1,250,000) | |||
AOCI Attributable to Parent [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balances | 3,478,000 | (141,000) | 4,201,000 | 802,000 | |
Upon vesting of restricted stock awards | |||||
For exercise of stock options | |||||
Issuance of Common Stock to settle portion of settlement obligation | |||||
In ATM public offering, net | |||||
In exchange for note receivable | |||||
Purchase and retirement of Common Stock | |||||
Stock-based compensation expense | |||||
Net change in accumulated other comprehensive income (loss) | 726,000 | 1,275,000 | 3,000 | 332,000 | |
Net income loss | |||||
Balances | 4,204,000 | 1,134,000 | 4,204,000 | 1,134,000 | |
Retained Earnings [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balances | (152,212,000) | (133,643,000) | (151,815,000) | (112,471,000) | |
Upon vesting of restricted stock awards | |||||
For exercise of stock options | |||||
Issuance of Common Stock to settle portion of settlement obligation | |||||
In ATM public offering, net | |||||
In exchange for note receivable | |||||
Purchase and retirement of Common Stock | |||||
Stock-based compensation expense | |||||
Net change in accumulated other comprehensive income (loss) | |||||
Net income loss | (2,700,000) | (14,133,000) | (3,097,000) | (35,305,000) | |
Balances | $ (154,912,000) | $ (147,776,000) | $ (154,912,000) | $ (147,776,000) | |
[1] | On the respective exercise dates, the weighted average intrinsic value per share of Common Stock issued upon exercise of stock options amounted to $ 1.72 0.5 |
SUMMARY OF RELATIVE FAIR VALUE
SUMMARY OF RELATIVE FAIR VALUE ALLOCATION OF NET PROCEEDS (Details) - USD ($) $ in Thousands | Feb. 16, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Relative fair value allocation of net proceeds | $ 25,122 | |||
Private Placement [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Fair value on issuance date | $ 60,233 | |||
Adjustment to reduce Common Stock to residual fair value | (6,455) | |||
Relative fair value allocation of net proceeds | [1] | 53,778 | ||
Warrant [Member] | Private Placement [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Fair value on issuance date | [2] | 14,128 | ||
Adjustment to reduce Common Stock to residual fair value | ||||
Relative fair value allocation of net proceeds | [2] | 14,128 | ||
Common Stock [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Relative fair value allocation of net proceeds | $ 24,958 | |||
Common Stock [Member] | Private Placement [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Fair value on issuance date | [3] | 46,105 | ||
Adjustment to reduce Common Stock to residual fair value | [4] | (6,455) | ||
Relative fair value allocation of net proceeds | [4] | $ 39,650 | ||
[1] | Represents the net proceeds received in the private placement. | |||
[2] | Fair value was determined on the issuance date using the Black-Scholes-Merton (“BSM”) option-pricing model. Key valuation inputs as of the issuance date included the closing price of $ 3.15 5.00 117 3 1.93 | |||
[3] | Represents fair value of 14.6 3.15 | |||
[4] | Adjustment required to record shares of Common Stock at residual fair value since the total fair value of the warrants and shares of Common Stock exceeded the net proceeds received in the private placement. |
SUMMARY OF RELATIVE FAIR VALU_2
SUMMARY OF RELATIVE FAIR VALUE ALLOCATION OF NET PROCEEDS (Details) (Parenthetical) shares in Thousands | Feb. 19, 2021$ / sharesshares | Feb. 16, 2021$ / sharesshares | Sep. 30, 2021$ / sharesshares | Sep. 30, 2020shares |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Warrants exercisable price per share | $ 5 | |||
Warrants contractual term | 2 years 4 months 24 days | |||
Measurement Input, Price Volatility [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Warrants measurement input | 0.82 | |||
Common Stock [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Stock issued during the period | shares | 14,636 | 16,130 | ||
Securities Purchase Agreement [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Warrants exercisable price per share | $ 5 | |||
Weighted-average grant date fair value price | $ 1.93 | |||
Stock issued during the period | shares | 14,600 | |||
Securities Purchase Agreement [Member] | Measurement Input, Exercise Price [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Warrants exercisable price per share | $ 5 | |||
Securities Purchase Agreement [Member] | Measurement Input, Price Volatility [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Warrants measurement input | 1.17 | |||
Securities Purchase Agreement [Member] | Measurement Input, Expected Term [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Warrants contractual term | 3 years | |||
Securities Purchase Agreement [Member] | Common Stock [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Market price | $ 3.15 | $ 3.15 | ||
Stock issued during the period | shares | 14,600 |
SCHEDULE OF ELIMINATION OF REDE
SCHEDULE OF ELIMINATION OF REDEMPTION CONTINGENCY (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Class of Stock [Line Items] | ||||
Redeemable common stock | 800 | |||
Redeemable Common Stock, value | $ 2,101 | |||
Amendment fee | $ 1,060 | $ 1,250 | ||
Total reclassified to permanent equity | $ 3,161 | $ 3,161 | ||
Common Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Total reclassified to permanent equity, shares | 1,200 | 1,200,000 | ||
Total reclassified to permanent equity | $ 1 | |||
Redeemable Common Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Amendment fee, shares | 400 |
SCHEDULE OF COMMON STOCK PURSUA
SCHEDULE OF COMMON STOCK PURSUANT TO AGREEMENT (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Net proceeds from offering | $ 25,122 | |||||
Common Stock [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Private placement of Common Stock, net of issuance costs, shares | 14,636 | 16,130 | ||||
Gross proceeds, per shares | $ 1.60 | $ 1.60 | ||||
Gross proceeds | $ 25,815 | |||||
Offering costs, commissions | (693) | |||||
Offering costs, other | (164) | |||||
Net proceeds from offering | $ 24,958 | |||||
ATM Agreement [Member] | Common Stock [Member] | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Private placement of Common Stock, net of issuance costs, shares | 11,191 | 4,939 | ||||
Gross proceeds, per shares | $ 1.54 | $ 1.73 | ||||
Gross proceeds | $ 17,270 | $ 8,545 | ||||
Offering costs, commissions | (436) | (257) | ||||
Offering costs, other | (70) | (91) | (3) | |||
Net proceeds from offering | $ (70) | $ 16,743 | $ 8,285 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | May 14, 2021 | Feb. 19, 2021 | Feb. 16, 2021 | Feb. 11, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Class of Stock [Line Items] | ||||||
Warrants exercisable price per share | $ 5 | |||||
Fair value of warrants | $ (40,714) | $ 392 | ||||
Noncash gain from changes in fair value of the warrant derivative liability | 12,300 | |||||
Liquidated damages, description | If the Company does not comply with these requirements, the investors are entitled to liquidated damages equal to 2.0% of the aggregate subscription amount on each 30-day anniversary of such failure | |||||
Maximum [Member] | ||||||
Class of Stock [Line Items] | ||||||
Fair value of warrants | 14,100 | |||||
Minimum [Member] | ||||||
Class of Stock [Line Items] | ||||||
Fair value of warrants | $ 1,800 | |||||
Securities Purchase Agreement [Member] | ||||||
Class of Stock [Line Items] | ||||||
Private placement of Common Stock, net of issuance costs, shares | 14.6 | |||||
Warrants to purchase common stock | 7.3 | |||||
Proceeds from shares and warrants issued | $ 58,000 | |||||
Percentage of placement agent fee | 7.00% | |||||
Proceeds from shares and warrants issued after placement agent fee | $ 53,800 | |||||
Warrants exercisable price per share | $ 5 | |||||
Warrants expiration date | Feb. 19, 2024 | |||||
Shares beneficial ownership limitation percentage | 4.99% | |||||
Shares beneficial ownership limitation percentage of purchaser | 9.99% | |||||
Proceeds from private placement | $ 53,800 | |||||
ATM Sales Agreement [Member] | Manager [Member] | ||||||
Class of Stock [Line Items] | ||||||
Sale of common stock, value | $ 53,500 | |||||
Common Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Private placement of Common Stock, net of issuance costs, shares | 400 | |||||
Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Private placement of Common Stock, net of issuance costs, shares | 1 |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) shares in Thousands | 9 Months Ended | |||
Sep. 30, 2021$ / sharesshares | Dec. 31, 2020$ / shares | [2] | ||
Share-based Payment Arrangement [Abstract] | ||||
Options outstanding, shares | 3,856 | [1] | ||
Weighted average grant date fair value outstanding, per share | $ / shares | $ 2.72 | [2] | $ 2.72 | |
Weighted average remaining contractual term, beginning balance | 8 years 2 months 12 days | [3] | ||
Options outstanding, shares grants | 670 | |||
Weighted average grant date fair value outstanding, grants | $ / shares | $ 2.47 | [2] | ||
Options outstanding, shares forfeited | (315) | |||
Weighted average grant date fair value outstanding, forfeited | $ / shares | $ 3.07 | [2] | ||
Options outstanding, shares exercised | (289) | [4] | ||
Weighted average grant date fair value outstanding, exercised | $ / shares | $ 1.84 | [2] | ||
Options outstanding, shares | 3,922 | [5] | ||
Weighted average remaining contractual term, ending balance | 7 years 10 months 24 days | [3] | ||
Options vestes, shares | 2,024 | [5] | ||
Weighted average grant date fair value vested, per share | $ / shares | $ 2.65 | [2] | ||
Weighted average remaining contractual term, vested | 7 years 1 month 6 days | [3] | ||
[1] | Includes an aggregate of 100,000 3.06 vest upon achievement of cost savings of $25.0 million related to the successful integration of the Ariix business combination | |||
[2] | Represents the weighted average exercise price. | |||
[3] | Represents the weighted average remaining contractual term until the stock options expire. | |||
[4] | On the respective exercise dates, the weighted average intrinsic value per share of Common Stock issued upon exercise of stock options amounted to $ 1.72 0.5 | |||
[5] | As of September 30, 2021, based on the closing price of the Company’s Common Stock of $ 1.39 |
SCHEDULE OF STOCK OPTION ACTI_2
SCHEDULE OF STOCK OPTION ACTIVITY (Details) (Parenthetical) $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended | |
Sep. 30, 2021USD ($)$ / sharesshares | ||
Number of options exercisable | shares | 100,000 | |
Exercise price | $ 3.06 | |
Term of awards | vest upon achievement of cost savings of $25.0 million related to the successful integration of the Ariix business combination | |
Weighted average grant date fair value outstanding, exercised | $ 1.84 | [1] |
Aggregate intrinsic value of common stock issued upon exercise of stock options | $ | $ 0.5 | |
Closing price, common stock | $ 1.39 | |
Common Stock [Member] | ||
Weighted average grant date fair value outstanding, exercised | $ 1.72 | |
[1] | Represents the weighted average exercise price. |
SCHEDULE OF STOCK OPTIONS WEIGH
SCHEDULE OF STOCK OPTIONS WEIGHTED AVERAGE ASSUMPTIONS (Details) - Stock Option Plans [Member] | 9 Months Ended |
Sep. 30, 2021$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grant or modification date closing price of Common Stock | $ 2.47 |
Exercise price | $ 2.47 |
Expected life (in years) | 5 years |
Volatility | 104.00% |
Dividend yield | 0.00% |
Risk-free interest rate | 0.70% |
Modified [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grant or modification date closing price of Common Stock | $ 2.69 |
Exercise price | $ 3.24 |
Expected life (in years) | 6 years 9 months 18 days |
Volatility | 105.00% |
Dividend yield | 0.00% |
Risk-free interest rate | 0.10% |
SCHEDULE OF RESTRICTED STOCK AW
SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY (Details) - USD ($) shares in Thousands, $ in Thousands | Mar. 10, 2021 | Jan. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | Unrecognized compensation of $3.9 million related to an additional 1.4 million shares is excluded from the table based on management’s estimate that both performance conditions will be achieved at the target level. Accordingly, $3.9 million of additional stock-based compensation expense could be recognized if the maximum performance targets are achieved over the remaining performance period through December 2023. | ||||||
Share-based Payment Arrangement, Expense | $ 1,475 | $ 966 | $ 5,624 | $ 3,415 | |||
Share-based Payment Arrangement, Tranche Three [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | (ii) a grant of 350,000 shares up to 1,050,000 shares that vest to the extent that prescribed amounts of measurable merger synergies are realized by the Company over the three-year period ending December 31, 2023, and (iii) a grant of 350,000 shares up to 1,050,000 shares that vest if the Company achieves adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) margins ranging from 4.0% to 12.0% over the three-year period ending December 31, 2023. Adjusted EBITDA margin is a non-GAAP measure computed by dividing Adjusted EBITDA, as defined by the Board of Directors, by net revenue. The fair value of the Company’s Common Stock was $2.79 per share on the grant date, resulting in total compensation expense of $0.5 million that is being recognized over the 3-year service period for the award described in (i) above, and up to an aggregate of $5.9 million if the maximum performance targets are achieved for both awards described in (ii) and (iii) above whereby an aggregate of 2.1 million shares would vest. If the Company does not achieve the minimum targets set by the Board of Directors for merger synergies and Adjusted EBITDA margin, none of the 2.1 million shares will vest. | ||||||
Stock Option Plans Equity Awards [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unvested shares, outstanding, beginning of period | 2,039 | 2,039 | |||||
Unvested shares, Forfeitures and other | (130) | ||||||
Unvested shares, Vested shares | (1,023) | ||||||
Unvested shares, Vested shares | 1,023 | ||||||
Unvested shares, outstanding, beginning of period | 3,914 | 3,914 | |||||
Intrinsic value | [1] | $ 5,441 | $ 5,441 | ||||
Intrinsic value | [1] | $ 5,441 | $ 5,441 | ||||
Stock Option Plans Equity Awards [Member] | Executive Officer [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unvested shares, granted | [2] | 2,275 | |||||
Stock Option Plans Equity Awards [Member] | Board Members [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unvested shares, granted | [3] | 187 | |||||
Stock Option Plans Equity Awards [Member] | Officers, Employees and Brand Partners [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unvested shares, granted | [4] | 566 | |||||
Stock Option Plans Liability Awards [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unvested shares, outstanding, beginning of period | [5] | 18 | 18 | ||||
Unvested shares, Forfeitures and other | [5] | (1) | |||||
Unvested shares, Vested shares | [4],[5] | ||||||
Unvested shares, Vested shares | [4],[5] | ||||||
Unvested shares, outstanding, beginning of period | [5] | 17 | 17 | ||||
Intrinsic value | [1],[5] | $ 23 | $ 23 | ||||
Intrinsic value | [1],[5] | $ 23 | $ 23 | ||||
Stock Option Plans Liability Awards [Member] | Executive Officer [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unvested shares, granted | [5] | ||||||
Stock Option Plans Liability Awards [Member] | Board Members [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unvested shares, granted | [5] | ||||||
Stock Option Plans Liability Awards [Member] | Officers, Employees and Brand Partners [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unvested shares, granted | [5] | ||||||
Restricted Stock [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unvested shares, Vested shares | (700) | ||||||
Unvested shares, Vested shares | 700 | ||||||
Share-based Payment Arrangement, Expense | $ 600 | $ 400 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Description | (iii) above, which was calculated assuming that an aggregate of 0.7 million shares will ultimately vest and that the performance criteria will not be achieved for an aggregate of 1.4 million shares that are included in the table. This compensation calculation was based on management’s estimate of the most likely outcome for the performance conditions and considering the portion of the service period that had been rendered through September 30, 2021. | ||||||
[1] | The intrinsic value is based on the closing price of the Company’s Common Stock of $ 1.39 | ||||||
[2] | On March 10, 2021, the Board of Directors approved restricted stock grants to the Company’s Chief Executive Officer for (i) 175,000 shares that vest for one-third of the shares on each of the first, second and third anniversaries of the grant date, (ii) a grant of 350,000 shares up to 1,050,000 shares that vest to the extent that prescribed amounts of measurable merger synergies are realized by the Company over the three-year period ending December 31, 2023, and (iii) a grant of 350,000 shares up to 1,050,000 shares that vest if the Company achieves adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) margins ranging from 4.0% to 12.0% over the three-year period ending December 31, 2023. Adjusted EBITDA margin is a non-GAAP measure computed by dividing Adjusted EBITDA, as defined by the Board of Directors, by net revenue. The fair value of the Company’s Common Stock was $2.79 per share on the grant date, resulting in total compensation expense of $0.5 million that is being recognized over the 3-year service period for the award described in (i) above, and up to an aggregate of $5.9 million if the maximum performance targets are achieved for both awards described in (ii) and (iii) above whereby an aggregate of 2.1 million shares would vest. If the Company does not achieve the minimum targets set by the Board of Directors for merger synergies and Adjusted EBITDA margin, none of the 2.1 million shares will vest. 0.4 (iii) above, which was calculated assuming that an aggregate of 0.7 million shares will ultimately vest and that the performance criteria will not be achieved for an aggregate of 1.4 million shares that are included in the table. This compensation calculation was based on management’s estimate of the most likely outcome for the performance conditions and considering the portion of the service period that had been rendered through September 30, 2021. | ||||||
[3] | Represents grants to members of the Board of Directors in January 2021, whereby the shares of Common Stock will vest one year after the grant date. The fair value of the Company’s Common Stock was $ 3.21 0.6 | ||||||
[4] | Represents restricted stock awards that generally vest over three years with fair value determined based on the closing price of the Company’s Common Stock on the respective grant dates. | ||||||
[5] | Certain awards granted to employees in China are not permitted to be settled in shares, which requires classification as a liability in the Company’s condensed consolidated balance sheets. This liability is adjusted based on the closing price of the Company’s Common Stock at the end of each reporting period until the awards vest. |
SCHEDULE OF RESTRICTED STOCK _2
SCHEDULE OF RESTRICTED STOCK AWARD ACTIVITY (Details) (Parenthetical) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Payment Arrangement, Expense | $ 1,475 | $ 966 | $ 5,624 | $ 3,415 | |
Restricted Stock [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value for granted price shares | $ 3.21 | $ 1.39 | |||
Share-based Payment Arrangement, Expense | $ 600 | $ 400 |
SCHEDULE OF STOCK BASED COMPENS
SCHEDULE OF STOCK BASED COMPENSATION EXPENSES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expense Recognized | $ 1,475 | $ 966 | $ 5,624 | $ 3,415 | ||
Unrecognized Expense | 7,296 | 5,306 | 7,296 | 5,306 | ||
Stock Options Awards [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expense Recognized | 629 | 374 | 2,350 | 1,470 | ||
Unrecognized Expense | 2,744 | 2,815 | 2,744 | 2,815 | ||
Restricted Stock Awards [Member] | Equity Classified [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expense Recognized | 848 | 583 | 3,257 | 1,923 | ||
Unrecognized Expense | 4,546 | [1] | 2,453 | 4,546 | [1] | 2,453 |
Restricted Stock Awards [Member] | Liability Classified [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Expense Recognized | (2) | 9 | 17 | 22 | ||
Unrecognized Expense | $ 6 | $ 38 | $ 6 | $ 38 | ||
[1] | Pursuant to the March 2021 grant of performance-based restricted stock to the Company’s Chief Executive Officer, the amount includes $ 1.6 0.7 Restricted Stock Activity Unrecognized compensation of $3.9 million related to an additional 1.4 million shares is excluded from the table based on management’s estimate that both performance conditions will be achieved at the target level. Accordingly, $3.9 million of additional stock-based compensation expense could be recognized if the maximum performance targets are achieved over the remaining performance period through December 2023. |
SCHEDULE OF STOCK BASED COMPE_2
SCHEDULE OF STOCK BASED COMPENSATION EXPENSES (Details) (Parenthetical) - USD ($) $ in Thousands, shares in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized stock-based compensation | $ 7,296 | $ 5,306 |
Vested, description | Unrecognized compensation of $3.9 million related to an additional 1.4 million shares is excluded from the table based on management’s estimate that both performance conditions will be achieved at the target level. Accordingly, $3.9 million of additional stock-based compensation expense could be recognized if the maximum performance targets are achieved over the remaining performance period through December 2023. | |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized stock-based compensation | $ 1,600 | |
Number of shares, vested | 0.7 |
SCHEDULE OF WARRANTS (Details)
SCHEDULE OF WARRANTS (Details) shares in Thousands | 9 Months Ended | |
Sep. 30, 2021$ / sharesshares | ||
Share-based Payment Arrangement [Abstract] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number, Ending Balance | shares | 1,803 | |
Share based Compensation Arrangements By Share Based Payment Award Non-Options Outstanding Weighted Average Exercise Price. | $ / shares | $ 4.77 | [1] |
Term Outstanding, beginning of year | 5 years 1 month 6 days | [2] |
Issuance in private placement of Units, Grants | shares | 7,318 | [3] |
Issuance in private placement of Units, Price Grants | $ / shares | $ 5 | [1] |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number, Ending Balance | shares | 9,121 | [4] |
Share based Compensation Arrangements By Share Based Payment Award Non-Options Outstanding Weighted Average Exercise Price. | $ / shares | $ 4.95 | [1] |
Term Outstanding, end of year | 2 years 9 months 18 days | [2] |
[1] | Represents the weighted average exercise price. | |
[2] | Represents the weighted average remaining contractual term in years until the warrants expire. | |
[3] | As discussed in Note 7, the Company completed a private placement of equity securities in February 2021 that included warrants to purchase an aggregate of 7.3 5.00 | |
[4] | All warrants are vested and exercisable as of September 30, 2021. |
SCHEDULE OF WARRANTS (Details)
SCHEDULE OF WARRANTS (Details) (Parenthetical) - $ / shares shares in Millions | Sep. 30, 2021 | Feb. 16, 2021 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Warrants exercisable price per share | $ 5 | |
Securities Purchase Agreement [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Warrants to purchase common stock | 7.3 | |
Warrants exercisable price per share | $ 5 |
STOCK OPTIONS AND WARRANTS (Det
STOCK OPTIONS AND WARRANTS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Jan. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2021 | Feb. 16, 2021 | Nov. 30, 2020 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Options outstanding, shares exercised | [1] | 289,000 | |||||||
Stock-based compensation expense | $ 1,475 | $ 966 | $ 5,624 | $ 3,415 | |||||
Warrants exercisable price per share | $ 5 | $ 5 | |||||||
Restricted Stock [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock-based compensation expense | $ 600 | $ 400 | |||||||
Stock Options [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Unrecognized stock-based compensation, weighted-average period | 1 year 10 months 24 days | ||||||||
Equity-Classified Restricted Stock Awards [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Unrecognized stock-based compensation, weighted-average period | 1 year 9 months 18 days | ||||||||
Liability-Classified Restricted Stock Awards [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Unrecognized stock-based compensation, weighted-average period | 3 months 18 days | ||||||||
Certain Employee Severance Arrangements [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Options outstanding, shares exercised | 300,000 | ||||||||
Fair value of stock option | $ 500 | ||||||||
Stock-based compensation expense | 500 | ||||||||
Certain Employee Severance Arrangements [Member] | Restricted Stock [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Fair value of stock option | $ 700 | ||||||||
Number of shares temination of employment | 300,000 | ||||||||
Newly Granted Stock Options [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Weighted-average grant date fair value | $ 1.81 | ||||||||
Modified Stock Options [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Weighted-average grant date fair value | 1.88 | ||||||||
Securities Purchase Agreement [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Warrants to purchase common stock | 7,300,000 | ||||||||
Warrants exercisable price per share | $ 5 | ||||||||
Securities Purchase Agreement [Member] | Class B Warrants [Member] | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Warrants to purchase common stock | 750,000 | ||||||||
Warrants exercisable price per share | $ 5.75 | ||||||||
Warrants exercise price increase | 5.75 | ||||||||
Warrants exercise price decrease | $ 5.53 | ||||||||
[1] | On the respective exercise dates, the weighted average intrinsic value per share of Common Stock issued upon exercise of stock options amounted to $ 1.72 0.5 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense | $ 385 | $ 612 | $ 2,275 | $ 1,886 | |
Effective tax rate | 21.00% | 21.00% | 21.00% | 21.00% | |
Deferred tax liabilities | $ 18,100 | $ 18,100 | |||
Unrecognized tax benefit long term liabilities | 1,100 | 1,100 | $ 1,100 | ||
Other deferred tax assets, offset | $ 4,300 | $ 4,300 | $ 4,300 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jul. 31, 2023 | Jul. 31, 2022 | Jan. 31, 2022 | Jul. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Loss Contingencies [Line Items] | ||||||
Current liabilities for non-income tax contingencies | $ 1,200,000 | $ 1,200,000 | ||||
Base compensation bonus percentage | 80.00% | |||||
Mr Manion [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Base compensation bonus percentage | 360.00% | |||||
Annual base compensation | 2 years | |||||
Employment Agreement [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Annual base salary | $ 550,000 | |||||
Cash bonus | $ 440,000 | |||||
Restricted stock award, shares | 214,000 | |||||
Restricted stock award, value | $ 400,000 | |||||
Employment Agreement [Member] | Subsequent Event [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years | |||||
Employment Agreement [Member] | Forecast [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Restricted stock award vests percent | 50.00% | 50.00% | ||||
Employment Agreement [Member] | Mr Manion [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Cash bonus | $ 200,000 | |||||
Employment Agreement [Member] | Minimum [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Annual base salary, percent | 80.00% | |||||
Employment Agreement [Member] | Maximum [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Annual base salary, percent | 160.00% | |||||
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Customer [Member] | ||||||
Loss Contingencies [Line Items] | ||||||
Concentration Risk, Percentage | 77.00% | 68.00% |
SCHEDULE OF LOSS PER SHARE (Det
SCHEDULE OF LOSS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |||
Net loss per share of Common Stock: | ||||||
Net loss for basic EPS | $ (2,700) | $ (14,133) | $ (3,097) | $ (35,305) | ||
Eliminate derivative gains on Fixed Shares | [1] | (6,765) | [1] | |||
Eliminate derivative gains on Variable Shares | (15,584) | [1] | (21,602) | [1] | ||
Loss for diluted EPS | $ (18,284) | $ (14,133) | $ (31,464) | $ (35,305) | ||
Weighted average shares outstanding before adjustments | 136,860 | 97,819 | 133,432 | 92,087 | ||
Fixed Shares | 14,551 | [2] | 7,462 | [2] | ||
Variable Shares | [3] | [3] | ||||
Weighted average shares for basic EPS | 151,411 | 97,819 | 140,894 | 92,087 | ||
Fixed Shares | [4] | 7,089 | [4] | |||
Variable Shares | 18,840 | [5] | 19,674 | [5] | ||
Weighted average shares for diluted EPS | 170,251 | 97,819 | 167,657 | 92,087 | ||
Basic | $ (0.02) | $ (0.14) | $ (0.02) | $ (0.38) | ||
Diluted | $ (0.11) | $ (0.14) | $ (0.19) | $ (0.38) | ||
[1] | As discussed under footnote (4) below, the Fixed Shares and the Variable Shares are included in the Denominator for the calculation of diluted EPS beginning on the first day of each of the three- and nine-month periods ended September 30, 2021. Accordingly, it is necessary to adjust the Numerator to eliminate the related net gains attributable to changes in fair value of the derivative liabilities associated with these shares for the three and nine months ended September 30, 2021. | |||||
[2] | For purposes of the calculation of basic EPS, the Fixed Shares are treated as issued and outstanding beginning on May 14, 2021 when the shareholder approval contingency discussed in Note 3 was eliminated. This number represents the weighted average number of shares for the respective periods that the Fixed Shares were considered outstanding. | |||||
[3] | As discussed in Note 3 under the caption Business Combination Liabilities | |||||
[4] | For purposes of the calculation of diluted EPS, the Fixed Shares are treated as issued and outstanding beginning on the first day of each of the three- and nine-month periods ended September 30, 2021. The impact of this adjustment for the diluted EPS calculation increases the number of Fixed Shares included in the basic EPS calculation such that all Fixed Shares are treated as outstanding for the entirety of the three and nine months ended September 30, 2021. | |||||
[5] | For purposes of the calculation of diluted EPS, the Variable Shares are not treated as issued and outstanding for the calculation of basic EPS. However, for the calculation of diluted EPS all Variable Shares, as adjusted for the reduction in the number of Variable Shares pursuant to the August 2021 Amendment discussed in Note 3, are treated as outstanding for the entirety of the three and nine months ended September 30, 2021. |
SCHEDULE OF ANTI DILUTED SECURI
SCHEDULE OF ANTI DILUTED SECURITIES (Details) - shares shares in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 16,957 | 5,458 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 3,922 | 3,337 |
Unissued And Unvested Restricted Stock Awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 3,914 | 1,810 |
Common Stock Purchase Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share | 9,121 | 311 |
NET LOSS PER SHARE (Details Nar
NET LOSS PER SHARE (Details Narrative) - shares shares in Millions | 1 Months Ended | |
Feb. 28, 2021 | Dec. 31, 2020 | |
Participating Warrants [Member] | ||
Warrants issued for common stock | 8.8 | 8.8 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) shares in Millions | Sep. 02, 2021 | May 16, 2021 | Sep. 30, 2021 | Aug. 31, 2021 | Jul. 31, 2021 | Sep. 30, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Payments to Acquire Businesses, Gross | $ 2,000,000 | $ 10,000,000 | ||||||||
Fail to approve the issuance of the aggregate | 4.6 | |||||||||
Impairment charges | $ 2,300,000 | $ 16,186,000 | $ 16,186,000 | $ 400,000 | ||||||
Interim Ariix Merger Consideration [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Payments to Acquire Businesses, Gross | $ 5,000,000 | |||||||||
Fail to approve the issuance of the aggregate | 2.7 | |||||||||
Interim Ariix Merger Consideration [Member] | Minimum [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Fail to approve the issuance of the aggregate | 7 | |||||||||
Interim Ariix Merger Consideration [Member] | Maximum [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Payments to Acquire Businesses, Gross | $ 10,000,000 | |||||||||
Fail to approve the issuance of the aggregate | 11.7 | |||||||||
Kwikclick Agreement [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
License fees per month | $ 50,000 | |||||||||
Kwikclick Agreement [Member] | Minimum [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Percentage of commission on net sales | 3.00% | |||||||||
Agreement description | If the Company achieves net sales of at least $20.0 million using the Software for the first six-month period under the Kwikclick Agreement, the Exclusivity Restriction will be extended for a second six-month period. Progressively higher levels of net sales are required to continue to extend the Exclusivity Restriction through the third year of the term. | |||||||||
Kwikclick Agreement [Member] | Maximum [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Percentage of commission on net sales | 4.00% |
SCHEDULE OF FAIR VALUE OF LIABI
SCHEDULE OF FAIR VALUE OF LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | |||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deriviative Liabilities, Warrant | $ 1,782 | ||||
Fair Value, Recurring [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deriviative Liabilities, Warrant | 1,782 | ||||
Total | 31,144 | 96,726 | |||
Fair Value, Recurring [Member] | LIMU Company LLC [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deferred consideration payable | 3,435 | 3,656 | |||
Fair Value, Recurring [Member] | Zennoa LLC [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deferred consideration payable | 1,738 | 2,196 | |||
Fair Value, Recurring [Member] | Fixed Shares [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deriviative Liabilities, Ariix business combination | 37,028 | ||||
Fair Value, Recurring [Member] | Variable Shares [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deriviative Liabilities, Ariix business combination | 24,189 | 53,846 | |||
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deriviative Liabilities, Warrant | |||||
Total | |||||
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | LIMU Company LLC [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deferred consideration payable | |||||
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | Zennoa LLC [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deferred consideration payable | |||||
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | Fixed Shares [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deriviative Liabilities, Ariix business combination | |||||
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | Variable Shares [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deriviative Liabilities, Ariix business combination | |||||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deriviative Liabilities, Warrant | |||||
Total | 5,173 | 5,852 | |||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | LIMU Company LLC [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deferred consideration payable | [1] | 3,435 | 3,656 | ||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Zennoa LLC [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deferred consideration payable | [1] | 1,738 | 2,196 | ||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Fixed Shares [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deriviative Liabilities, Ariix business combination | |||||
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Variable Shares [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deriviative Liabilities, Ariix business combination | |||||
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deriviative Liabilities, Warrant | 1,782 | [2] | |||
Total | 25,971 | 90,874 | |||
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | LIMU Company LLC [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deferred consideration payable | |||||
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | Zennoa LLC [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deferred consideration payable | |||||
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | Fixed Shares [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deriviative Liabilities, Ariix business combination | 37,028 | [3] | |||
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | Variable Shares [Member] | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Deriviative Liabilities, Ariix business combination | $ 24,189 | [4] | $ 53,846 | [3] | |
[1] | The fair value of deferred consideration related to the LIMU and Zennoa business combination obligations set forth in Note 3 are classified as Level 2. The estimated fair value of these liabilities was determined in November 2020 such that the carrying values and fair values were similar as of September 30, 2021 and December 31, 2020. | ||||
[2] | Please refer to Note 7 under the caption Private Placement of Units 1.39 5.00 82% 2.4 0.24 | ||||
[3] | Please refer to Note 3 under the caption Business Combination Liabilities 77 0.1% 16.5% | ||||
[4] | Key valuation assumptions to arrive at fair value of the Ariix Variable Shares derivative liability as of September 30, 2021 included (i) historical volatility of the Company’s shares of Common Stock of 84 0.1 |
SCHEDULE OF FAIR VALUE OF LIA_2
SCHEDULE OF FAIR VALUE OF LIABILITIES (Details) (Parenthetical) | Sep. 30, 2021$ / shares | Dec. 31, 2020 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants exercisable price per share | $ 5 | |
Warrants and Rights Outstanding, Term | 2 years 4 months 24 days | |
Common Stock [Member] | Warrant [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Market price | $ 1.39 | |
Measurement Input, Risk Free Interest Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value of the derivative liability | 0.1 | 0.01 |
Measurement Input, Price Volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value of the derivative liability | 84 | 77 |
Fair value of warrants derivative liability | 0.82 | |
Measurement Input Weighted Average Cost Of Capital [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value of the derivative liability | 16.05 | |
Fair value of warrants derivative liability | 0.24 |
FINANCIAL INSTRUMENTS AND SIG_3
FINANCIAL INSTRUMENTS AND SIGNIFICANT CONCENTRATIONS (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Estimated fair value of senior notes | $ 19,800 | $ 19,800 | $ 28,900 | ||
Cash and cash equivalents, at carrying value | 46,829 | $ 26,885 | 46,829 | $ 26,885 | 43,711 |
UNITED STATES | |||||
Cash and cash equivalents, at carrying value | 20,000 | 20,000 | |||
UNITED STATES | Financial Institution One [Member] | |||||
Cash and cash equivalents, at carrying value | 8,200 | ||||
UNITED STATES | Financial Institution Two [Member] | |||||
Cash and cash equivalents, at carrying value | 23,700 | ||||
CHINA | Financial Institution One [Member] | |||||
Cash and cash equivalents, at carrying value | 7,500 | 7,500 | 6,300 | ||
CHINA | Financial Institution Two [Member] | |||||
Cash and cash equivalents, at carrying value | $ 7,100 | $ 7,100 | $ 7,300 | ||
Product Concentration Risk [Member] | Revenue Benchmark [Member] | Juice, MAX and Other Noni Based Beverage Products [Member] | |||||
Concentration risk, percentage | 36.00% | 82.00% | 34.00% | 85.00% | |
Product Concentration Risk [Member] | Revenue Benchmark [Member] | No Single Customer [Member] | |||||
Concentration risk, percentage | 10.00% | ||||
Product Concentration Risk [Member] | Revenue Benchmark [Member] | No Single Supplier [Member] | |||||
Concentration risk, percentage | 10.00% | 10.00% | 10.00% | ||
Measurement Input, Price Volatility [Member] | |||||
Fair value of the derivative liability | 84 | 84 | 77 | ||
Measurement Input, Risk Free Interest Rate [Member] | |||||
Fair value of the derivative liability | 0.1 | 0.1 | 0.01 | ||
Measurement Input Weighted Average Cost Of Capital [Member] | |||||
Fair value of the derivative liability | 16.05 |
SCHEDULE OF SEGMENT REPORTING (
SCHEDULE OF SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||||
Net revenue | $ 99,553 | $ 62,719 | $ 349,111 | $ 189,049 | |
Gross profit | 65,986 | 37,495 | 237,186 | 117,097 | |
Total assets | 405,650 | 405,650 | $ 443,182 | ||
Total depreciation and amortization | 4,481 | 1,855 | 14,077 | 5,607 | |
Total capital expenditures | 502 | 128 | 1,267 | 2,108 | |
Direct Social Selling [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 84,066 | 46,585 | 308,280 | 143,556 | |
Gross profit | 62,879 | 35,465 | 228,263 | 110,974 | |
Total assets | 345,341 | 345,341 | 396,174 | ||
Total depreciation and amortization | 4,384 | 1,713 | 13,780 | 5,157 | |
Total capital expenditures | 502 | 128 | 1,263 | 1,881 | |
Direct Store [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 15,487 | 16,134 | 40,831 | 45,493 | |
Gross profit | 3,107 | 2,030 | 8,923 | 6,123 | |
Total assets | 60,309 | 60,309 | $ 47,008 | ||
Total depreciation and amortization | 97 | 142 | 297 | 450 | |
Total capital expenditures | $ 4 | $ 227 |
SCHEDULE OF NET REVENUE BY GEOG
SCHEDULE OF NET REVENUE BY GEOGRAPHIC REGION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenue | $ 99,553 | $ 62,719 | $ 349,111 | $ 189,049 |
UNITED STATES | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenue | 27,514 | 23,638 | 81,290 | 65,554 |
JAPAN | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenue | 26,406 | 21,268 | 75,878 | 63,075 |
CHINA | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenue | 15,739 | 10,169 | 65,775 | 36,325 |
ITALY | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenue | 7,409 | 69 | 38,418 | 224 |
FRANCE | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenue | 7,847 | 101 | 36,643 | 276 |
Rest of World [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenue | $ 14,638 | $ 7,474 | $ 51,107 | $ 23,595 |
SEGMENTS AND GEOGRAPHIC CONCE_3
SEGMENTS AND GEOGRAPHIC CONCENTRATIONS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Revenue, Major Customer [Line Items] | |||||
Property and equipment, net carrying value | $ 22,786 | $ 22,786 | $ 28,076 | ||
Non-US [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Property and equipment, net carrying value | $ 21,800 | $ 21,800 | $ 23,600 | ||
Direct Selling Segment [Member] | Product Concentration Risk [Member] | Revenue Benchmark [Member] | Customer [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Concentration Risk, Percentage | 86.00% | 87.00% | |||
Social Selling Segment [Member] | Product Concentration Risk [Member] | Revenue Benchmark [Member] | Customer [Member] | |||||
Revenue, Major Customer [Line Items] | |||||
Concentration Risk, Percentage | 84.00% | 86.00% |