Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 29, 2022 | |
Document Information Line Items | ||
Entity Registrant Name | TATTOOED CHEF, INC. | |
Trading Symbol | TTCF | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 82,459,803 | |
Amendment Flag | false | |
Entity Central Index Key | 0001741231 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-38615 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-5457906 | |
Entity Address, Address Line One | 6305 Alondra Blvd | |
Entity Address, City or Town | Paramount | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90723 | |
City Area Code | (562) | |
Local Phone Number | 602-0822 | |
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS | ||
Cash | $ 57,417 | $ 92,351 |
Accounts receivable, net | 46,324 | 25,117 |
Inventory | 58,339 | 54,562 |
Prepaid expenses and other current assets | 3,695 | 7,027 |
TOTAL CURRENT ASSETS | 165,775 | 179,057 |
Property, plant and equipment, net | 54,217 | 46,476 |
Operating lease right-of-use assets, net | 7,573 | 8,039 |
Finance lease right-of-use assets, net | 5,597 | 5,639 |
Intangible assets, net | 124 | 151 |
Deferred income taxes, net | 555 | 266 |
Goodwill | 26,924 | 26,924 |
Other assets | 771 | 649 |
TOTAL ASSETS | 261,536 | 267,201 |
CURRENT LIABILITIES | ||
Accounts payable | 36,528 | 28,334 |
Accrued expenses | 6,222 | 3,767 |
Line of credit | 1,583 | 1,200 |
Notes payable, current portion | 4,962 | 5,019 |
Forward contract derivative liability | 1,960 | 1,804 |
Operating lease liabilities, current portion | 1,529 | 1,523 |
Other current liabilities | 736 | 122 |
TOTAL CURRENT LIABILITIES | 53,520 | 41,769 |
Warrant liability | 607 | 814 |
Operating lease liabilities, net of current portion | 6,171 | 6,599 |
Notes payable, net of current portion | 629 | 716 |
TOTAL LIABILITIES | 60,927 | 49,898 |
COMMITMENTS AND CONTINGENCIES (See Note 18) | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock- $0.0001 par value; 10,000,000 shares authorized, none issued and outstanding at March 31, 2022 and December 31, 2021 | ||
Common shares- $0.0001 par value; 1,000,000,000 shares authorized; 82,441,641 shares and 82,237,813 shares issued and outstanding at March 31, 2022, and December 31, 2021, respectively | 8 | 8 |
Additional paid in capital | 243,649 | 242,362 |
Accumulated other comprehensive loss | (1,383) | (953) |
Accumulated deficit | (41,665) | (24,114) |
TOTAL STOCKHOLDERS’ EQUITY | 200,609 | 217,303 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 261,536 | $ 267,201 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 82,441,641 | 82,237,813 |
Common stock, shares outstanding | 82,441,641 | 82,237,813 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
NET REVENUE | $ 72,064 | $ 52,469 |
COST OF GOODS SOLD | 63,914 | 45,289 |
GROSS PROFIT | 8,150 | 7,180 |
OPERATING EXPENSES | 24,793 | 14,196 |
LOSS FROM OPERATIONS | (16,643) | (7,016) |
Interest income (expense) | (41) | (20) |
Other income (expense) | (611) | (2,681) |
LOSS BEFORE INCOME TAX (EXPENSE) BENEFIT | (17,295) | (9,717) |
INCOME TAX (EXPENSE) BENEFIT | (256) | 1,475 |
NET LOSS | $ (17,551) | $ (8,242) |
NET LOSS PER SHARE | ||
Basic (in Dollars per share) | $ (0.21) | $ (0.1) |
Diluted (in Dollars per share) | $ (0.22) | $ (0.11) |
WEIGHTED AVERAGE COMMON SHARES | ||
Basic (in Shares) | 82,237,898 | 80,240,105 |
Diluted (in Shares) | 82,248,414 | 80,544,129 |
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX | ||
Foreign currency translation adjustments | $ (430) | $ 109 |
COMPREHENSIVE LOSS | $ (17,981) | $ (8,133) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Comprehensive Income | Retained Earnings | Treasury Shares | Total |
BALANCE at Dec. 31, 2020 | $ 7 | $ 168,448 | $ 1 | $ 63,598 | $ (81,087) | $ 232,054 |
BALANCE (in Shares) at Dec. 31, 2020 | 71,551,067 | |||||
FOREIGN CURRENCY TRANSLATION ADJUSTMENT | 109 | 109 | ||||
DIVIDENDS PAID | (308) | (308) | ||||
DIVIDENDS PAID (in Shares) | ||||||
STOCK-BASED COMPENSATION | 3,185 | 3,185 | ||||
STOCK-BASED COMPENSATION (in Shares) | ||||||
FORFEITURE OF STOCK-BASED AWARDS | ||||||
FORFEITURE OF STOCK-BASED AWARDS (in Shares) | (95,084) | |||||
CANCELLATION OF TREASURY SHARES | 81,087 | |||||
CANCELLATION OF TREASURY SHARES (in Shares) | (81,087) | |||||
EXERCISE OF WARRANTS | $ 1 | 63,361 | 63,362 | |||
EXERCISE OF WARRANTS (in Shares) | 10,025,303 | |||||
NET LOSS | (8,242) | (8,242) | ||||
BALANCE at Mar. 31, 2021 | $ 8 | 234,994 | 110 | 55,048 | 290,160 | |
BALANCE (in Shares) at Mar. 31, 2021 | 81,400,199 | |||||
BALANCE at Dec. 31, 2021 | $ 8 | 242,362 | (953) | (24,114) | 217,303 | |
BALANCE (in Shares) at Dec. 31, 2021 | 82,237,813 | |||||
FOREIGN CURRENCY TRANSLATION ADJUSTMENT | (430) | (430) | ||||
STOCK-BASED COMPENSATION | 1,287 | 1,287 | ||||
STOCK-BASED COMPENSATION (in Shares) | ||||||
ISSUANCE OF RESTRICTED STOCK AWARDS | ||||||
ISSUANCE OF RESTRICTED STOCK AWARDS (in Shares) | 203,828 | |||||
NET LOSS | (17,551) | (17,551) | ||||
BALANCE at Mar. 31, 2022 | $ 8 | $ 243,649 | $ (1,383) | $ (41,665) | $ 200,609 | |
BALANCE (in Shares) at Mar. 31, 2022 | 82,441,641 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (17,551) | $ (8,242) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Depreciation and amortization | 1,507 | 552 |
Bad debt expense | 226 | 122 |
Revaluation of warrant liability | (207) | (320) |
Unrealized forward contract loss | 1,023 | 2,181 |
Non-cash lease cost | 45 | 27 |
Stock compensation expense | 1,287 | 3,185 |
Deferred taxes, net | (300) | (1,749) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (21,438) | (13,012) |
Inventory | (3,997) | (979) |
Prepaid expenses and other assets | 3,154 | (7,332) |
Accounts payable | 7,607 | 5,308 |
Accrued expenses | 2,485 | 2,947 |
Other current liabilities | (234) | (262) |
Net cash used in operating activities | (26,393) | (17,574) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property, plant and equipment | (8,807) | (2,852) |
Net cash used in investing activities | (8,807) | (2,852) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net change in line of credit | 2 | 4 |
Repayments of notes payable to related parties | (24) | |
Borrowings of notes payable | 575 | |
Repayments of notes payable | (277) | (87) |
Proceeds from the exercise of warrants | 73,917 | |
Payment of distributions | (308) | |
Net cash provided by financing activities | 300 | 73,502 |
NET (DECREASE) INCREASE IN CASH | (34,900) | 53,076 |
EFFECT OF EXCHANGE RATE ON CASH | (34) | 506 |
CASH AT BEGINNING OF PERIOD | 92,351 | 131,579 |
CASH AT END OF PERIOD | 57,417 | 185,161 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Interest paid | 47 | 1 |
Income tax refund | (351) | |
Noncash investing and financing activities: | ||
Capital expenditures included in accounts payable | $ 1,299 | $ 1,328 |
The Company
The Company | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
THE COMPANY | 1 the company Tattooed Chef, Inc. was originally incorporated in Delaware on May 4, 2018 under the name of Forum Merger II Corporation (“Forum”), as a special purpose acquisition company (“SPAC”) for the purpose of effecting a merger, capital stock exchange, asset acquisitions, stock purchase, reorganization or similar business combination with one or more business. On October 15, 2020 (the “Closing Date”), Forum consummated the transactions contemplated within the Agreement and Plan of Merger dated June 11, 2020 as amended on August 10, 2020 (the “Merger Agreement”), by and among Forum, Myjojo, Inc., a Delaware corporation (“Myjojo”), Sprout Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Forum (“Merger Sub”), and Salvatore Galletti, in his capacity as the holder representative (the “Holder Representative”). The transactions contemplated by the Merger Agreement are referred to herein as the “Transaction”. Upon the consummation of the Transaction, Merger Sub merged with and into Myjojo (the “Merger”), with Myjojo surviving the merger in accordance with the Delaware General Corporation Law. Immediately upon the completion of the Transaction, Myjojo became a direct wholly owned subsidiary of Forum. In connection with the closing of the Transaction (the “Closing”), Forum changed its name to Tattooed Chef, Inc. (“Tattooed Chef”). Tattooed Chef’s common stock began trading on the Nasdaq under the symbol “TTCF” on October 16, 2020. Tattooed Chef and its subsidiaries (collectively, the “Company”) are principally engaged in the manufacturing of plant-based foods including, but not limited to, ready-to-cook bowls, zucchini spirals, riced cauliflower, acai and smoothie bowls, cauliflower crust pizza, handheld burritos, and quesadillas primarily in the United States and Italy. Ittella Properties LLC (“Properties”), the Company’s variable interest entity (“VIE”), owns a building located on Alondra Blvd., Paramount, California (“Alondra Building”), which is leased by Ittella International for 10 years from August 1, 2015 through August 1, 2025. Properties is wholly owned by Salvatore Galletti. The construction and acquisition of the Alondra building by Properties were funded by a loan agreement with unconditional guarantees by Ittella International and terms providing that 100% of the Alondra building must be leased to Ittella International throughout the term of the loan agreement. Accordingly, Properties is determined to be a consolidated VIE. On May 14, 2021, the Company acquired New Mexico Food Distributors, Inc. (“NMFD”) and Karsten Tortilla Factory, LLC (“Karsten”) in an all-cash transaction for approximately $34.1 million (collectively, the “NMFD Transaction”). NMFD and Karsten were privately held companies based in Albuquerque, New Mexico. NMFD produces and sells frozen and ready-to-eat Mexican food products to retail and food service customers through its network of distributors in the United States. NMFD processes its products in two leased facilities located in New Mexico. See Note 9 Business Combinations. On September 28, 2021, Tattooed Chef formed BCI Acquisition, Inc. (“BCI”). On December 21, 2021, BCI acquired substantially all of the assets, and assumed certain specified liabilities, from Belmont Confections, Inc. (“Belmont”) for an aggregate purchase price of approximately $17.0 million. Belmont was a privately held company based in Youngstown, Ohio, and specialized in the development and manufacturing of private label nutritional bars. See Note 9 Business Combinations. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 2. bASIS OF presentation and SIGNIFICANT ACCOUNTING POLICIES Basis of Consolidation. Basis of Presentation. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the SEC on March 16, 2022, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2021 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The interim results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future interim periods. The Transaction was accounted for as a reverse recapitalization in accordance with GAAP (the “Reverse Recapitalization”). Under this method, Forum was treated as the “acquired” company (“Accounting Acquiree”) and Myjojo, the accounting acquirer, was assumed to have issued stock for the net assets of Forum, accompanied by a recapitalization. The net assets of Forum are stated at historical cost, with no goodwill or other intangible assets recorded. The consolidated assets, liabilities and results of operations prior to the reverse recapitalization are those of Myjojo, The shares and corresponding capital amounts and earnings per share available for common stockholders, prior to the reverse recapitalization, have been retroactively restated. Use of Estimates. Significant Accounting Policies. Sales and Marketing Expenses. Concentrations of Credit Risk. Two customers accounted for 54% of the Company’s revenue during the three months ended March 31, 2022. Three customers accounted for more than 89% of the Company’s revenue during the three months ended March 31, 2021. Customer 2022 2021 Customer A 35 % 38 % Customer B * 10 % Customer C 19 % 41 % * Customer accounted for less than 10% of revenue in the period. Customers accounting for more than 10% of the Company’s accounts receivable as of March 31, 2022 and December 31, 2021 were: Customer March 31, 2022 December 31, 2021 Customer A 21 % 13 % Customer C 41 % 38 % Customer D * 12 % * Customer D accounted for less than 10% of accounts receivable as of March 31, 2022. However, customer D accounted for 12% as of December 31, 2021 and as such was included in the disclosure above for comparison purposes. COVID-19 Pandemic. However, the pandemic may adversely affect the Company’s suppliers and could impair its ability to obtain raw material inventory in the quantities or of a quality the Company desires. The Company currently sources a material amount of its raw materials from Italy. Though the Company is not dependent on any single Italian grower for its supply of a certain crop, events (including the pandemic) generally affecting these growers could adversely affect the Company’s business. If the Company is unable to manage its supply chain effectively and ensure that its products are available to meet consumer demand, operating costs could increase, and sales and profit margins could decrease. The rapid development and fluidity of this situation precludes any prediction as to the ultimate material adverse impact on the financial statements and presents material uncertainty and risk with respect to our business, operations, financial condition and liquidity. Russia-Ukraine Conflict. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | 3. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Recently issued and adopted accounting pronouncements In December 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Income Taxes In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses In March 2020, the FASB issued No. ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting In August 2020, the FASB issued ASU No. 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 Recently issued but not yet adopted accounting pronouncements In October 2021, the FASB issued No. ASU 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805) |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2022 | |
Revenue Recognition [Abstract] | |
REVENUE RECOGNITION | 4. REVENUE RECOGNITION Nature of Revenues Substantially all of the Company’s revenue from contracts with customers consists of the sale of plant-based foods including, but not limited to, ready-to-cook bowls, zucchini spirals, riced cauliflower, acai and smoothie bowls, cauliflower crust pizza, handheld burritos, and quesadillas in the United States and is recognized at a point in time in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. The Company disaggregates revenue based on the type of products sold to its customers – private label, Tattooed Chef and other. All sales are recorded within revenue on the accompanying condensed consolidated statements of operations and comprehensive loss. The Company does not have any contract assets or contract liabilities as of March 31, 2022 and December 31, 2021. Revenue streams for the three months ended March 31, 2022 and 2021 were as follows: 2022 2021 Revenue Streams (in thousands) Revenue % Total Revenue % Total Tattooed Chef $ 43,455 60 % $ 35,847 68 % Private Label 25,124 35 % 16,305 31 % Other revenues 3,485 5 % 317 1 % Total $ 72,064 $ 52,469 Significant Judgments Generally, the Company’s contracts with customers comprise a written quote and customer purchase order or statement of work and are governed by the Company’s trade terms and conditions. In certain instances, it may be further supplemented by separate pricing agreements. All products are sold on a standalone basis; therefore, when more than one product is included in a purchase order, the Company has observable evidence of stand-alone selling price. Contracts do not contain a significant financing component as payment terms on invoiced amounts are typically between 7 to 45 days, based on the Company’s credit assessment of individual customers, as well as industry expectations. Product returns are not significant. The contracts with customers do not include any additional performance obligations related to warranties and material rights. From time to time, the Company may offer incentives to its customers considered to be variable consideration including discounts and demonstration costs. Customer incentives considered to be variable consideration are recorded as a reduction to revenue as part of the transaction price based on the agreement at the time of the transaction. Customer incentives are allocated entirely to the single performance obligation of transferring product to the customer. |
Accounts Receivable, Net
Accounts Receivable, Net | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
ACCOUNTS RECEIVABLE, NET | 5. ACCOUNTS RECEIVABLE, NET The Company evaluates the creditworthiness of its customers regularly and based on its analysis, the Company has recognized an allowance for doubtful receivables is $0.2 million as of March 31, 2022 and $0.0 million as of December 31, 2021. The Company writes off accounts receivable whenever they become uncollectible, and any payments subsequently received on such receivables are recorded as bad debt recoveries in the period the payment is received. Credit losses from continuing operations have consistently been within management’s expectations. In 2021, the Company began offering new promotional programs on sales of Tattooed Chef branded products to some new and existing customers. These programs constitute variable consideration which is expected to reduce the transaction price on sales. The Company estimates variable consideration expected to reduce the related accounts receivables. In developing that estimate, the Company uses either the expected value or most likely amount method to determine the variable consideration. As a result, an allowance for promotional programs of $1.9 million and $4.1 million is recorded and presented as a reduction of accounts receivable as of March 31, 2022 and December 31, 2021, respectively. Additionally, the Company maintains product demonstration accruals with some of its customers. The product demonstration accruals represent variable consideration and are recorded as a reduction of revenue. The Company’s obligations to the customers are included within accrued expenses on the consolidated balance sheets. The outstanding balance for product demonstration accrual included in accrued expenses on the consolidated balance sheets was $1.3 million and $1.5 million as of March 31, 2022 and December 31, 2021, respectively (Note 12). |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | 6. INVENTORY Inventory consists of the following as of (in thousands): March 31, 2022 December 31, 2021 Raw materials $ 25,750 $ 22,724 Work-in-process 7,535 5,545 Finished goods 20,725 22,756 Packaging 4,329 3,537 Total $ 58,339 $ 54,562 |
Property, Plant, and Equipment
Property, Plant, and Equipment | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT, AND EQUIPMENT | 7. PROPERTY, PLANT, AND EQUIPMENT Property, plant and equipment consists of the following as of (in thousands): March 31, 2022 December 31, 2021 Land $ 719 $ 738 Buildings 4,776 4,766 Leasehold improvements 5,295 5,336 Machinery and equipment 34,406 33,975 Computer equipment 543 549 Furniture and fixtures 186 169 Construction in progress 16,564 7,986 62,489 53,519 Less: accumulated depreciation (8,272 ) (7,043 ) Net $ 54,217 $ 46,476 The Company recorded depreciation expense for the three months ended March 31, 2022 and 2021 of $1.5 million and $0.6 million, respectively. |
Intangible Assets, Net and Good
Intangible Assets, Net and Goodwill | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET AND GOODWILL | 8. INTANGIBLE ASSETS, NET and goodwill Intangible assets consist of the following as of (in thousands): March 31, 2022 December 31, 2021 Amortizable Tradenames $ 220 $ 220 Less: accumulated amortization (96 ) (69 ) Intangible assets, net $ 124 $ 151 The estimated useful lives of the identifiable definite-lived intangible assets, acquired in the NMFD Transaction (see Note 9) in May 2021, were determined to be two years. The Company recorded insignificant amortization expense for the three months ended March 31, 2022. Estimated future amortization expense for the definite-lived intangible assets is as follows (in thousands): Nine months ending December 31, 2022 $ 83 2023 41 Total $ 124 The following table sets forth the change in the carrying amount of goodwill for the three months ended March 31, 2022 (in thousands): Balance as of January 1, 2022 $ 26,924 Measurement period adjustment (change in consideration) - Balance as of March 31, 2022 $ 26,924 No goodwill impairment was recorded during the three months ended March 31, 2022. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATIONS | 9. BUSiness combinations New Mexico Food Distributors, Inc. (NMFD) and Karsten Acquisition On May 14, 2021, the Company entered into a stock purchase agreement to acquire all outstanding stock of NMFD, a distributor and manufacturer of frozen and ready-to-eat Mexican food products for a total purchase price of $28.9 million. In addition, the Company entered into a membership interests purchase agreement to acquire all of the membership interest of Karsten for a total purchase price of $5.2 million (together, the “NMFD Transaction”). The primary reason for the purchase of NMFD and Karsten was to expand the Company’s manufacturing capacity and developing more ambient and refrigerated products. The NMFD Transaction met the definition of an acquisition of a business in accordance with ASC 805, Business Combinations Though the purchase agreements for each of NMFD and Karsten were executed as legally separate transactions, each was entered into contemporaneously and in contemplation of the other, and involved the same group of sellers. As such, the transactions noted above were accounted for on a combined basis and were viewed to represent a single integrated event. Under the acquisition method of accounting, the assets acquired, and liabilities assumed, by the Company in connection with the NMFD Transaction were initially recorded at their respective fair values. The Company made an election under Section 338(h)(10) to treat the NMFD Transaction as an asset acquisition for income tax purposes, which allows for any goodwill recognized to be tax deductible and amortized over a 15-year statutory life. The Company considered the potential impact to the depreciation and amortization expense as a result of the fair values assigned to the acquired assets. The excess of the purchase price over the fair value of assets acquired and liabilities assumed of approximately $18.0 million was recorded as goodwill. Transaction costs of $0.5 million were incurred in relation to the acquisition and were recorded to operating expense within the consolidated statement of operations for the year ended December 31, 2021. The following table summarizes the preliminary fair value of assets acquired and liabilities assumed in the NMFD Transaction as of the date of acquisition (in thousands): Amount Purchase consideration, net of cash acquired $ 33,946 Assets acquired and liabilities assumed Accounts receivable 3,567 Inventory 2,270 Prepaid expenses and other current assets 122 Operating lease, ROU asset 207 Property, plant and equipment 9,819 Finance lease, ROU assets * 5,749 Other noncurrent assets 29 Intangible assets – tradenames 220 Accounts payable (2,834 ) Accrued expenses (78 ) Operating lease liability (207 ) Note payable * (2,917 ) Goodwill 17,999 Total assets acquired and liabilities assumed $ 33,946 * In December 2015 (prior to the NMFD Transaction), NMFD and Karsten entered into an agreement to purchase an industrial revenue bond (“IRB”) issued by Bernalillo County, New Mexico (“Bernalillo”) to be used to finance the costs of the constructing, renovating and equipping of the manufacturing plant and, concurrently, assigned ownership of the manufacturing plant including building and land (“Property”) to Bernalillo as consideration for the purchase of the IRB, as well as entered into a lease agreement to lease the Property from Bernalillo (“Lease”). The Lease provides NMFD the option to purchase the Property for $1 following the payoff of the Lease. The sale of the Property to Bernalillo and concurrent leaseback of the Property in December 2015 did not meet the sale-leaseback accounting requirements as a result of NMFD’s and Karsten’s continuous involvement with the Property and thus, the IRB was not recorded as a sale but as a financing obligation, with the Property remaining on NMFD’s financial statements. The Lease and the IRB have the same counterparty, therefore a right of offset exists so long as NMFD continues to make rent payments under the terms of the Lease. On May 14, 2021, the balance of the IRB asset and the lease obligation to Bernalillo were $2.9 million and $2.9 million, respectively. Upon the acquisition of NMFD and Karsten, the Company received all rights and assumed obligations related to the IRB, the Property and the Lease. Under business combination accounting literature and prior to the adoption of ASC 842, the transaction involving the IRB and the Lease should not be reassessed and, therefore, the failed sale-leaseback accounting should be reflected in the Company’s purchase accounting. There were no changes to the right of offset as a result of the acquisition and, thus, the lease obligation was offset against the IRB asset and is presented net on the Company’s consolidated balance sheet with no impact to the consolidated operations of income or consolidated cash flow statements. The leased assets are accounted for as a right of use (“ROU”) asset under ASC 842 and the fair value of the ROU asset was determined to be $5.7 million. As such, the lease for the land and the building will be presented on the consolidated balance sheet as an ROU asset of $5.7 million. The Note payable bears interest at 3.8% and has a maturity date of December 29, 2025. The note payable balance is reflected at the present value of future principal payments. The Company recognized the entire balance as a current liability due to noncompliance with certain financing covenants. See Note 14. The excess of purchase consideration over the fair value of the assets acquired and liabilities assumed was recorded as goodwill, which is primarily attributable to the assembled workforce and expanded market opportunities. Goodwill was assigned to the Company’s single reporting unit. The fair value assigned to the assets acquired and liabilities assumed are based on management’s estimates and assumptions, which are preliminary, are based on provisional amounts and may be subject to change as additional information is received. The Company expects to finalize the valuation of these assets not later than one year from the acquisition date. The estimated useful lives of the identifiable definite-lived intangible assets acquired in the NMFD Transaction were determined to be two years. Belmont Acquisition On September 28, 2021, Tattooed Chef formed BCI as a wholly-owned subsidiary. On December 21, 2021, BCI acquired substantially all of the assets, and assumed certain specified liabilities, from Belmont Confections, Inc. (“Belmont”) for an aggregate purchase price of $17.0 million. Belmont was a privately held company based in Youngstown, Ohio, and specialized in the development and manufacturing of private label nutritional bars. The primary reason for the purchase of Belmont’s assets and assumption of liabilities was to expand the Company’s manufacturing capacity into a nutritional bars and other ambient products. Approximately $4.0 million of the purchase price was paid by issuing 241,546 shares of Tattooed Chef’s common stock to Belmont’s sole shareholder. The number of shares payable at closing was determined based on the average closing price of the Company’s common stock over the three days preceding the closing date of the acquisition (December 21, 2021). The closing price of Tattooed Chef’s common stock was $16.9 per share at the acquisition date. During the three months ended March 31, 2022, BCI contributed $8.0 million of revenue and $0.6 million of net loss. Under the acquisition method of accounting, the assets acquired and liabilities assumed by the Company in connection with the Belmont Acquisition were initially recorded at their respective fair values. The Company considered the potential impact to the depreciation expense as a result of the fair values assigned to the acquired assets. The excess of the purchase price over the fair value of assets acquired and liabilities assumed of approximately $8.9 million was recorded as goodwill. In relation to the acquisition, transaction costs of $0.2 million incurred by the Company were recorded to operating expense within the consolidated statement of operations for the year ended December 31, 2021. An immaterial amount of seller’s transaction costs were paid by the Company and included in the purchase price consideration. The following table summarizes the preliminary fair value of assets acquired and liabilities assumed in the Belmont Acquisition as of the date of acquisition (in thousands): Amount Cash consideration $ 13,000 Equity consideration – common stock 4,000 Total purchase consideration $ 17,000 Assets acquired and liabilities assumed Accounts receivable $ 1,630 Inventory 4,130 Prepaid expenses and other current assets 38 Operating lease ROU asset 870 Property, plant and equipment 6,477 Accounts payable (3,477 ) Accrued expenses (723 ) Operating lease liability (870 ) Goodwill 8,925 Total assets acquired and liabilities assumed $ 17,000 The excess of purchase consideration over the fair value of the assets acquired and liabilities assumed was recorded as goodwill, which is primarily attributable to the assembled workforce and expanded market opportunities. Goodwill was assigned to the Company’s single reporting unit. The fair value assigned to the assets acquired and liabilities assumed are based on management’s estimates and assumptions, which are preliminary, are based on provisional amounts and may be subject to change as additional information is received. The Company expects to finalize the valuation of these assets not later than one year from the acquisition date. The unaudited pro forma financial information in the table below summarizes the combined results of operations for the Company and all 2021 acquisitions as if both the NMFD Acquisition and the Belmont Acquisition had occurred as of January 1, 2021. There were no acquisitions during the three months ended March 31, 2022. The unaudited pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisitions had occurred on the dates indicated. Three-Months Ended March 31, (in thousands, except per share) 2022 2021 Net Revenue $ 72,064 $ 68,974 Net Loss (17,551 ) (8,498 ) Net Loss per Share Basic $ (0.21 ) $ (0.11 ) Diluted $ (0.22 ) $ (0.11 ) |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments [Abstract] | |
DERIVATIVE INSTRUMENTS | 10. Derivative instruments The Company enters into foreign currency exchange forward contracts to reduce the short-term effects of foreign currency fluctuations on assets and liabilities such as foreign currency inventory purchases, receivables and payables. The Company’s primary objective in holding derivatives is to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. The Company’s derivatives expose the Company to credit risk to the extent that the counterparties may be unable to meet the terms of the arrangement. The Company does, however, seek to mitigate such risks by limiting its counterparties to major financial institutions. Management does not expect material losses as a result of defaults by counterparties. Starting in February 2020, the Company entered into a trading facility for derivative forward contracts. Under this facility, the Company has access to open foreign exchange forward contract instruments to purchase a specific amount of funds in Euros and to settle, on an agreed-upon future date, in a corresponding amount of funds in US dollars. During the three months ended March 31, 2022, the Company did not enter into any new foreign currency exchange forward contracts. During the three months ended March 31, 2021, the Company entered into foreign currency exchange forward contracts to purchase 22.0 million Euros. The notional amounts of these derivatives were $26.9 million for the three-month period ended March 31, 2021. These derivatives are not designated as hedging instruments. Gains and losses on the contracts are included in other income net, and substantially offset foreign exchange gains and losses from the short-term effects of foreign currency fluctuations on assets and liabilities, such as purchases, receivables and payables, of which are denominated in currencies other than the functional currency of the reporting entity. These derivative instruments generally have maturities of up to nine months. The fair values of the Company’s derivative instruments classified as Level 2 financial instruments (see Note 11 Fair Value Measurements) and the line items within the accompanying condensed consolidated balance sheets to which they were recorded are summarized as follows (in thousands): Balance Sheet Line Item As of As of Derivatives not designated as hedging instruments: Foreign currency derivatives Forward contract derivative liability $ 1,960 $ 1,804 Total $ 1,960 $ 1,804 The effect on the accompanying condensed consolidated statements of operations and comprehensive loss of derivative instruments not designated as hedges is summarized as follows (in thousands): Three Months Ended March 31, Line Item in Statements of Operations 2022 2021 Derivatives not designated as hedging instruments: Foreign currency derivatives Other income (expense) $ (1,023 ) $ (3,001 ) Total $ (1,023 ) $ (3,001 ) Unrealized and realized losses on forward currency derivatives for the three months ended March 31, 2022 were $1.0 million and $0.9 million, respectively. The Company has notional amounts of $31.8 million and $43.5 million on outstanding derivatives as of March 31, 2022 and December 31, 2021, respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 11. FAIR VALUE MEASUREMENTS The carrying amounts of cash, accounts receivables, accounts payable and certain notes payable approximate fair value because of the short maturity and/or variable rates generally associated with these instruments. Long-term debt as of March 31, 2022 and December 31, 2021 approximates its fair value as the interest rates are indexed to market rates (Level 2 “inputs”). The Company categorizes the inputs to the fair value measurements into three levels based on the lowest level input that is significant to the fair value measurement in its entirety. Warrant Liabilities The Private Placement Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the condensed consolidated balance sheets. The warrant liabilities are measured at fair value at inception (“initial measurement”), which is at the Closing Date, and on a recurring basis (“subsequent remeasurement”), with changes in fair value presented within change in fair value of warrant liabilities in the condensed consolidated statements of operations and comprehensive loss. Initial Measurement The value of the Private Placement Warrants was initially measured at fair value on October 15, 2020, the Closing Date. Subsequent Measurement At each reporting period or upon exercise of the Warrants, the Company remeasures the Private Placement Warrants at their fair values with the change in fair value reported to current operations within the condensed consolidated statements of operations and comprehensive loss. During the three months ended March 31, 2022, no Private Placement Warrants were settled. For the three months ended March 31, 2022, change in the fair value of the warrant liabilities charged to current operations amounted to a gain of $0.2 million. Fair Value Measurement The fair value of the Private Placement Warrants was determined to be $5.27 per Warrant as of March 31, 2022 using Monte Carlo simulations and using Level 3 inputs. Inherent in a Monte Carlo simulation are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock warrants based on implied volatility from its traded warrants and historical volatility of select peers’ common stock with similar expected term of the Warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield on the grant date with a maturity similar to the expected remaining term of the warrants. The expected term of the Warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company estimated to remain at zero. The following table provides quantitative information regarding the inputs to the fair value measurement of the Private Placement Warrants as of each measurement date: March 31, December 31, Input 2022 2021 Risk-free interest rate 2.44 % 1.08 % Expected term (years) 3.55 3.79 Expected volatility 50.00 % 45.00 % Exercise price $ 11.50 $ 11.50 Fair value per Unit $ 5.27 $ 7.07 As of March 31, 2022, the fair value of the Private Placement Warrants was determined to be $5.27 per warrant, or an aggregate value of $0.6 million for 115,160 outstanding warrants. On December 31, 2021, the fair value of the Private Placement Warrants was determined to be $7.07 per warrant, or an aggregate value of $0.8 million for 115,160 outstanding warrants. The following table presents the changes in the fair value of warrant liabilities (in thousands): Private Fair value as of December 31, 2021 $ 814 Exercise of Private Placement Warrants - Change in fair value (1) (207 ) Fair value as of March 31, 2022 $ 607 Private Placement Fair value as of December 31, 2020 $ 5,184 Exercise of Private Placement Warrants (2,989 ) Change in fair value (1) (320 ) Fair value as of March 31, 2021 $ 1,875 (1) Changes in fair value are recognized in change in fair value of warrant liabilities in the consolidated statements of operations and comprehensive loss. Derivative Instruments Derivative contracts are valued using quoted market prices and significant other observable inputs. The Company uses derivative instruments to minimize our exposure to fluctuations in foreign currency exchange rates. The Company’s derivative instruments primarily include foreign currency forward contracts related to certain intercompany loans and intercompany trading balances. The fair values for the majority of the Company’s foreign currency derivative contracts are evaluated by comparing the contract rate to a published forward price of the underlying market rates, which is based on market rates of comparable transactions. The valuation approach is classified within Level 2 of the fair value hierarchy. See Note 10. Business Combination Business combinations are accounted for using the acquisition method of accounting. The Company recognizes the assets acquired and the liabilities assumed at the acquisition date measured at their fair values as of that date. Fair value determinations are based on a variety of valuation techniques based on the facts and circumstances surrounding the transaction and the nature of the assets. In determining the fair value of the assets acquired and liabilities assumed in a material acquisition, the Company may utilize from the assistance of third party valuation firms to determine fair values of some or all of the assets acquired, and liabilities assumed, or may complete some or all of the valuations internally. Fair value of property plant and equipment were determined by a cost approach to calculate the replacement or reproduction cost. Fair value of inventories was based on replacement cost to estimate the value of raw materials and the comparative sales method to estimate the value of work in process and finished goods. The value of goodwill reflects the excess of the fair value of the consideration conveyed to the seller over the fair value of the net assets received. See Note 9. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2022 | |
Accrued Expenses [Abstract] | |
ACCRUED EXPENSES | 12. ACCRUED EXPENSES The following table provides additional information related to the Company’s accrued expenses as of (in thousands): March 31, 2022 December 31, 2021 Accrued customer incentives $ 1,282 $ 1,471 Accrued payroll 3,573 1,600 Accrued commission 1,239 607 Other accrued expenses 128 89 Total $ 6,222 $ 3,767 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Taxes [Abstract] | |
INCOME TAXES | 13. INCOME TAXES The following table presents the provision for income taxes and the effective tax rate for the three months ended March 31, 2022 and March 31, 2021 (in thousands): March 31, March 31, Income tax (expense) benefit $ (256 ) $ 1,475 Effective tax rate -1 % 15 % The income tax (expense) benefit for the three months ended March 31, 2022 was primarily attributable to foreign income tax expenses for the Company’s foreign income in Italy. The income tax (expense) benefit for the three months ended March 31, 2022 was primarily attributable to federal, state and foreign income tax expenses attributable to federal and state tax benefits on the Company’s U.S. loss as a C-corporation, offset by foreign income tax expenses on the Company’s foreign income in Italy. The Company also believes that quarterly effective tax rates will vary from the fiscal 2022 effective tax rate as a result of recognizing the income tax effects of items that the Company cannot anticipate such as the changes in tax laws, tax amounts associated with foreign earnings at rates different from the United States federal statutory rate, and changes in valuation allowance. The Company’s foreign earnings on Italian operations are subject to foreign taxes applicable to its income derived in Italy. These taxes include income tax. As of March 31, 2022 and December 31, 2021, the Company had no open tax examinations by any taxing jurisdiction in which it operates. The taxing authorities of the most significant jurisdictions are the United States Internal Revenue Service and the California Franchise Tax Board and the Agenzia delle Entrate. The statute of limitations for which the Company’s tax returns are subject to examination are as follows: Federal 2018-2021, California 2017-2021, and Italy 2017-2021. |
Indebtedness
Indebtedness | 3 Months Ended |
Mar. 31, 2022 | |
Indebtedness [Abstract] | |
INDEBTEDNESS | 14. INDEBTEDNESS Debt consisted of the following as of (in thousands): March 31, 2022 December 31, 2021 Notes payable $ 5,591 $ 5,735 Revolving credit facility 1,583 1,200 Total debt 7,174 6,935 Less current debt (6,545 ) (6,219 ) Total long-term debt $ 629 $ 716 Revolving credit facilities The Company is party to a revolving line of credit agreement, which has been amended from time to time, pursuant to which a credit facility has been extended to the Company until May 31, 2022 (the “Credit Facility”). The Credit Facility provides the Company with up to $25.0 million in revolving credit. Under the Credit Facility, the Company may borrow up to (a) 90% of the net amount of eligible accounts receivable; plus, (b) the lower of: (i) sum of: (1) 50% of the net amount of eligible inventory; plus (2) 45% of the net amount of eligible in-transit inventory; (ii) $10.0 million; or (iii) 50% of the aggregate amount of revolving loans outstanding, minus (c) the sum of all reserves. Under the Credit Facility: (i) the Company’s fixed charge coverage ratio may not be less than 1.10:1.00, and (ii) the Company may make dividends or distributions in shares of stock of the same class and also distributions for the payment of taxes. As of March 31, 2022, the Company was not in compliance with all terms and conditions of its Credit Facility. This noncompliance has no impact on the Company’s borrowing capacity and financial condition. On February 21, 2022, the lender issued a waiver of financial covenants letter to the Company waiving the requirement to comply with the debt covenant for the period ended December 31, 2021. The revolving line of credit bears interest at the sum of (i) the greater of (a) the daily Prime Rate, or (b) LIBOR plus 2%; and (ii) 1%. The actual interest rates on outstanding borrowings were at 4.25% at both of March 31, 2022 and December 31, 2021. The revolving line of credit has an arrangement associated with it wherein all collections from collateralized receivables are deposited into a collection account and applied to the outstanding balance of the line of credit on a daily basis. The funds in the collection account are earmarked for payment towards the outstanding line of credit and given the Company’s obligation to pay off the outstanding balance on a daily basis, the balance was classified as a current liability on the Company’s condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021. The balance on the credit facility was $0 million as of both March 31, 2022 and December 31, 2021. The Credit Facility includes a capital expenditure loan (“Capex Loan”) in the amount of up to $1.9 million that functions to reimburse the Company for certain qualified expenses related to the Company’s purchase of capital equipment. All borrowings against this loan are payable on a straight-line basis over 5 years and accrue interest at the greater of (a) the daily Prime Rate or (b) the daily LIBOR Rate plus 4%. The loan was paid off in full with the proceeds from the Transaction. The balance on the Capex Loan was $0 million as of both March 31, 2022 and December 31, 2021. In March 2021, Ittella Italy entered into a line of credit with a financial institution in the amount of up to 0.6 million Euros. The balance on the credit facility was 0.6 million Euros ($0.7 million) and 0.6 million Euros ($0.7 million) as of March 31, 2022, and December 31, 2021, respectively. The credit facility bears a one-time commission fee at 0.40% and interest at 1.50% per annum. Under this credit facility, Ittella Italy borrows the amount based on the sales invoices presented to the financial institution and pays back within 60 days. This line of credit does not have an expiration date and does not contain financial covenants. In September 2021, Ittella Italy entered into another credit line with a financial institution in the amount of up to 1.4 million Euros. The balance on the credit line was 0.8 million Euros ($0.9 million) and 0.5 million Euros ($0.5 million) as of March 31, 2022, and December 31, 2021, respectively. The credit facility bears a one-time commission fee at 0.40% and interest at 0.85% per annum. Under this credit facility, the financial institution advances suppliers based on purchase invoices presented and Ittella Italy pays back within 180 days. This line of credit does not have an expiration date and does not contain financial covenants. Notes payable In connection with the NMFD Transaction in May 2021 (see Note 9), the Company assumed a note payable in the amount of $2.9 million. The note payable bears interest at 3.8% per annum and has a maturity date of December 29, 2025. Under the note payable, NMFD must maintain a minimum fixed charge coverage ratio of 1.20:1.00, assessed semi-annually as of June 30th and December 31st of each calendar year beginning December 31, 2021, and the Company must, on a consolidated basis, maintain a funded debt to EBITDA ratio not to exceed four to one, tested semi-annually as of June 30 and December 31, with the first test to begin June 30, 2021. The outstanding balance of the note payable was $2.8 million and $2.8 million as of March 31, 2022, and December 31, 2021, respectively. The balance was classified as a current liability due to noncompliance with above financing covenants. In May 2021, Ittella Italy entered into a promissory note with a financial institution in the amount of 1.0 million Euros. The note accrues interest at 1.014% per annum and has a maturity date of May 28, 2025, when the full principal and interest are due. The promissory note does not contain any financial covenant. The balance on the promissory note was 0.8 million Euro ($0.9 million USD) and 0.9 million Euro ($1.0 million USD) as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022, the balance of the note in the amount of approximately 0.6 million Euro ($0.6 million USD) was classified as long term liability. On January 6, 2020, Properties, the VIE, refinanced all of its existing debt with a financial institution in the amount of $2.1 million (the “Note”). The Note accrues interest at 3.60% and has a maturity date of January 31, 2035. Financial covenants of the Note include a minimum fixed charge coverage ratio of 1.20 to 1.00. The outstanding balance on the Note was $1.9 million and $1.9 million as of March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022, the VIE was not in compliance with the fixed charge coverage ratio and the full balance of the Note was classified as a current liability. On March 15, 2022, the VIE executed an amendment to the Note that includes a waiver of the requirement to comply with the debt covenant through June 30, 2022. Commencing with the fiscal quarter ending September 30, 2022, the VIE should meet a minimum fixed charge coverage ratio of 1.20 to 1.00. Future minimum principal payments due on the notes payable, including notes payable to related parties, for periods subsequent to March 31, 2022 are as follows (in thousands): Nine months ending December 31, 2022 $ 6,477 2023 276 2024 280 2025 141 Total $ 7,174 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | 15. STOCKHOLDERS’ EQUITY The condensed consolidated statements of changes in equity reflect the Reverse Recapitalization as of October 15, 2020 as discussed in Note 1. Since Myjojo was determined to be the accounting acquirer in the Reverse Recapitalization, all periods prior to the consummation of the Transaction reflect the balances and activity of Myjojo (other than shares which were retroactively restated in connection with the Transaction). Further, the Company issued awards to certain officers and all of the directors pursuant to the Tattooed Chef, Inc. 2020 Incentive Award Plan (“Director Awards”) on December 17, 2020 (see Note 16). Preferred Stock The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. As of March 31, 2022 and December 31, 2021, there were no shares of preferred stock issued or outstanding. Common Stock The Company is authorized to issue 1,000,000,000 shares of common stock with a par value of $0.0001 per share. Holders of common stock are entitled to one vote for each share. As of March 31, 2022 and December 31, 2021, there were 82,441,641 shares issued and outstanding. Warrants In connection with Forum’s IPO and issuance of Private Placement Units in August 2018, Forum issued Units consisting of Common Stock with attached warrants as follows: 1. Public Warrants – Forum issued 20,000,000 Units at a price of $10.00 per Unit, each Unit consisting of one share of Common Stock of Forum and one redeemable warrant. 2. Private Placement Warrants – Forum issued 655,000 Private Placement Units, each consisting of one share of Common Stock and one warrant to the Sponsor, Jefferies LLC and EarlyBirdCapital, Inc. Each Public Warrant and Private Placement Warrant (together, the “Warrants”) entitles the holder to purchase one share of Common Stock at an exercise price of $11.50. The Public Warrants contain a redemption feature that provides the Company the option to call the Public Warrants for redemption 30 days after notice to the holder when any of conditions described in the following paragraph is met, and to require that any Public Warrant holder who desires to exercise his, her or its Public Warrant prior to the redemption date do so on a “cashless basis,” by converting each Public Warrant for an equivalent number of shares of Common Stock, determined by dividing (i) the product of the number of shares of Common Stock underlying the Warrants, multiplied by the difference between the Warrant Price and the “Fair Market Value”, and (ii) the Fair Market Value (defined as the average last sale price of the Common Stock for the ten trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of the Public Warrants). The Public Warrants became exercisable upon the occurrence of certain events (trigger events), including the completion of the Transaction. Once the Public Warrants become exercisable, the Company was able to redeem the Public Warrants in whole, at a price of $0.01 per warrant within 30 days after a written notice of redemption, and if, and only if, the reported last sale price of the Company’s common stock equaled or exceeded $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before the Company sent the notice of redemption to the holder. The Private Placement Warrants are identical to the Public Warrants, except that so long as they are held by the Sponsor, an Underwriter, or any of their Permitted Transferees, the Private Placement Warrants: (i) may be exercised for cash or on a cashless basis; (ii) may not be transferred, assigned, or sold 30 days after the completion of a defined Business Combination except to a Permitted Transferee who enters into a written agreement with the Company agreeing to be bound by the transfer restrictions, and (iii) are not redeemable by the Company. A Warrant may be exercised only during the “Exercise Period” commencing on the later of: (i) the date that is 30 days after the first date on which Forum completes its initial business combination; or (ii) 12 months from the date of the closing of the IPO, and terminating on the earlier to occur (x) five years after Forum completes its initial business combination; (y) the liquidation of the Company or, the Redemption Date (as that term is defined in the Warrant Agreement), subject to any applicable conditions as set forth in the Warrant Agreement. The Company in its sole discretion may extend the duration of the Warrants by delaying the expiration date, provided it give at least 20 days prior written notice of any such extension to the registered holders of the Warrants. Forum completed a business combination, which is one of the trigger events for exercisability of the Warrants. Warrant activity is as follows: Public Private Issued and outstanding as of October 15, 2020 20,000,000 655,000 Exercised (5,540,316 ) (247,423) Issued and outstanding as of December 31, 2020 14,459,684 407,577 Exercised (14,459,684 ) (292,417) Issued and outstanding as of December 31, 2021 - 115,160 Exercised - - Redeemed - - Issued and outstanding as of March 31, 2022 - 115,160 The Public Warrants were considered freestanding equity-classified instruments due to their detachable and separately exercisable features. Accordingly, the Public Warrants were presented as a component of Stockholders’ Equity in accordance with ASC 815-40-25. As discussed in Note 11, the Private Placement Warrants are considered freestanding liability-classified instruments under ASC 815-40-25. |
Equity Incentive Plan
Equity Incentive Plan | 3 Months Ended |
Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
EQUITY INCENTIVE PLAN | 16. Equity INCENTIVE PLAN On October 15, 2020, the Company’s Tattooed Chef, Inc. 2020 Incentive Plan (the “Plan”) became effective and permits the granting of equity awards of up to 5,200,000 common shares to executives, employees and non-employee directors, with the maximum number of common shares to be granted in a single fiscal year, when taken together with any cash fees paid to the non-employee director during that year in respect of his or her service as a non-employee director, not exceeding $0.1 million in total value to any non-employee director. Awards available for grant under the Plan include Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Other Share-based Awards, Other Cash-based Awards and Dividend Equivalents. Shares issued under the Plan may be newly issued shares or reissued treasury shares. Options maybe granted at a price per share not less than 100% of the fair market value at the date of grant. Options granted generally vest over a period of three to five years, subject to the grantee’s continued service with the Company through the scheduled vested date and expire no later than 10 years from the grant date. Stock Options Stock options under the Plan are generally granted with a strike price equal to 100% of the fair market value of the stock on the date of grant, with a three-year vesting period and a grant life of 10 years. The strike price may be higher than the fair value of the stock on the date of the grant but cannot be lower. The table below summarizes the share-based activity in the Plan: Number of Awards Outstanding Weighted- Average Exercise Price Weighted- Average Remaining Contractual Terms (Years) Intrinsic Value (in thousands) Balance at December 31, 2021 1,593,800 $ 21.30 9.26 $ - Granted 45,000 13.06 Cancelled and forfeited - - Exercised - - Balance at March 31, 2022 1,638,800 $ 21.08 9.04 $ - Exercisable at March 31, 2022 336,267 $ 22.73 8.89 $ - Number of Awards Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Terms (Years) Intrinsic Value (in thousands) Balance at December 31, 2020 756,300 $ 24.69 9.98 $ - Granted - - Cancelled and forfeited (1,500 ) 24.69 Exercised - - Balance at March 31, 2021 754,800 $ 24.69 9.73 $ - Exercisable at March 31, 2021 - $ - - $ - There were no options exercised during the three months ended March 31, 2022 and 2021. Compensation expense is recorded on a straight-line basis over the vesting period, which is the requisite service period, beginning on the grant date. The compensation expense is based on the fair value of each option grant using the Black-Scholes option pricing model. During the three months ended March 31, 2022 and 2021, respectively, the Company recorded in the aggregate $0.9 million and $0.5 million of share-based compensation expense related to stock options, which is included in operating expenses in the Company’s condensed consolidated statements of operations and comprehensive loss. As of March 31, 2022, the Company had stock-based compensation of $7.0 million related to stock options not yet recognized that are expected to be recognized over an estimated weighted average period of approximately three years. The fair value of each option grant was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions during the three months ended: March 31, March 31, Equity volatility 32.37 % 25.89 % Risk-free interest rate 2.50 % 0.67 % Expected term (in years) 6 6 Expected dividend 0.00 % 0.00 % Expected term—This represents the weighted-average period the stock options are expected to remain outstanding based upon expected exercise and expected post-vesting termination. Risk-free interest rate—The assumption is based upon the observed U.S. treasury rate appropriate for the expected life of the employee stock options. Expected volatility—The expected volatility assumption is based upon the weighted-average historical daily price changes of our common stock over the most recent period equal to the expected option life of the grant based on the contractual term of the awards, adjusted for activity which is not expected to occur in the future. Dividend yield—The dividend yield assumption is based on our history and expectation of dividend payouts. The fair value of granted stock options was $0.2 million and $0.0 million for the three months ended March 31, 2022 and 2021, respectively. Any option granted under the Plan may include tandem Stock Appreciation Rights (“SARs”). SARs may also be awarded to eligible persons independent of any option. The strike price for common share for each SAR shall not be less than 100% of the fair value of the shares determined as of the date of grant. There were no SARs outstanding as of March 31, 2022 and December 31, 2021. Restricted Stock and Restricted Stock Units Restricted Stock Units (“RSUs”) are convertible into shares of Company common stock upon vesting on a one-to-one basis. Restricted stock has the same rights as other issued and outstanding shares of Company common stock except they are not entitled to dividends until the awards vest. Restrictions also limit the sale or transfer of the same during the vesting period. Any unvested portion of the Restricted Stock and RSUs shall be terminated and forfeited upon termination of employment or service of the grantee. No director restricted stock activity under the Plan for the three months ended March 31, 2022. Director restricted stock activity under the Plan for the three months ended March 31, 2021 was as follows: Employee Director Awards Non-Employee Director Awards Weighted- Weighted- Number of Average Number of Average Shares Fair Value Shares Fair Value Balance at December 31, 2020 - $ - - $ - Granted - - 15,216 18.93 Vested - - (15,216 ) 18.93 Forfeited - - - - Non-vested restricted stock at March 31, 2021 - $ - - $ - Non-director employee and consultant restricted stock activity under the Plan for the three months ended March 31, 2022 is as follows: Employee Awards Consultant (Non-Employee) Award Number of Weighted- Average Fair Value Number of Weighted- Average Fair Value Balance at December 31, 2021 - $ - - $ - Granted 3,828 13.06 200,000 15.54 Vested (3,828 ) 13.06 (25,000 ) 15.54 Forfeited - - - - Non-vested restricted stock at March 31, 2022 - $ - 175,000 $ 15.54 Non-director employee and consultant restricted stock activity under the Plan for the three months ended March 31, 2021 is as follows: Employee Awards Consultant (Non-Employee) Awards Weighted- Weighted- Number of Average Number of Average Shares Fair Value Shares Fair Value Balance at December 31, 2020 400,000 $ 24.28 100,000 $ 24.69 Granted 30,416 23.65 100,000 18.96 Vested (4,916 ) 24.28 (100,000 ) 18.96 Forfeited (100,000 ) 24.69 (100,000 ) 24.69 Non-vested restricted stock at March 31, 2021 325,500 $ 24.10 - $ - During the three months ended March 31, 2022 and 2021, the Company recorded in aggregate $0.4 million and $2.7 million, respectively, of share-based compensation expense related to restricted stock awards, which is included in operating expenses in the Company’s condensed consolidated statements of operations and comprehensive loss. The fair value of granted restricted stock was $3.2 million and $2.9 million for the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, unrecognized compensation costs related to the employee restricted stock awards was $2.7 million and is expected to be recognized over the weighted average period of two years. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 17. RELATED PARTY TRANSACTIONS The Company leases office property in San Pedro, California from Deluna Properties, Inc., a company owned by Salvatore Galletti. Rent paid amount was $0.04 million for both of the three months ended March 31, 2022 and 2021. As of March 31, 2022, under the adoption of ASC 842, the Company recorded $2.0 million of operating lease right-of-use asset and $2.1 million of operating lease liabilities in relation to this lease. In Connection with Belmont acquisition in December 2021, the Company entered into a lease agreement with Penhurst Realty, LLC, owned by Belmont’s prior owner who is currently serving as the president of BCI. Rent expense was $0.1 million for the three months ended March 31, 2022. As of March 31, 2022, under the adoption of ASC 842, the Company recorded $0.6 million of operating lease right-of-use asset and $0.6 million of operating lease liabilities in relation to this lease. A company affiliated with a member of the Board has been contracted to provide marketing assistance to the Company. The Company paid $0.1 million for the services provided during the three months ended March 31, 2022. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 18. COMMITMENTS AND CONTINGENCIES In the ordinary course of business, the Company also enters into real property leases, which require the Company as lessee to indemnify the lessor from liabilities arising out of the Company’s occupancy of the properties. The Company’s indemnification obligations are generally covered under the Company’s general insurance policies. As of March 31, 2022, the Company has one additional operating lease that has not yet commenced. Approximately $9.5 million of operating lease ROU asset and operating lease liabilities are expected to be recognized in the Company’s consolidated balance sheet upon the possession date in April 2022. From time to time, the Company is involved in various litigation matters arising in the ordinary course of business. The Company does not believe the disposition of any current matter will have a material effect on its condensed consolidated financial position or results of operations and cash flows. A subsidiary of the Company, Ittella Italy, is involved in certain litigation related to the death of an independent contractor who fell off of the roof of Ittella Italy’s premises while performing pest control services. The case was brought by five relatives of the deceased worker. The five plaintiffs are seeking collectively 1.87 million Euros from the defendants. In addition to Ittella Italy, the pest control company for which the deceased was working at the time of the accident is co-defendant. Furthermore, under Italian law, the president of an Italian company is automatically criminally charged if a workplace death occurs on site. Ittella Italy has engaged local counsel, and while local counsel does not believe it is probable that Ittella Italy or its president will be found culpable, Ittella Italy cannot predict the ultimate outcome of the litigation. Procedurally, the case remains in a very early stage of the litigation. Ultimately, a trial will be required to determine if the defendants are liable, and if they are liable, a second separate proceeding will be required to establish the amount of damages owed by each of the co-defendants. Ittella Italy believes any required payment could be covered by its insurance policy; however, it is not possible to determine the amount at which the insurance company will reimburse Ittella Italy or whether any reimbursement will be received at all. Based on information received from its Italian lawyers, Ittella Italy believes that the litigation may continue for a number of years before it is finally resolved. Based on the assessment by management together with the independent assessment from its local legal counsel, the Company believes that a loss is currently not probable and an estimate cannot be made. Therefore, no accrual has been made as of March 31, 2022 nor December 31, 2021. |
Consolidated Variable Interest
Consolidated Variable Interest Entity | 3 Months Ended |
Mar. 31, 2022 | |
Consolidated Variable Interest Entity [Abstract] | |
CONSOLIDATED VARIABLE INTEREST ENTITY | 19. CONSOLIDATED VARIABLE INTEREST ENTITY Properties, the Company’s consolidated VIE, owns the Alondra Building, which is leased by Ittella International for 10 years from August 1, 2015 through August 1, 2025. Properties is wholly owned by Salvatore Galletti. The construction and acquisition of the Alondra building by Properties were funded by a loan agreement with unconditional guarantees by Ittella International and terms providing that 100% of the Alondra building must be leased to Ittella International throughout the term of the loan agreement. Ittella International guarantees the loan for Properties and substantially all of Properties’ transactions occur with the Ittella International. Thus, Properties’ equity at risk is considered to be insufficient to finance its activities without additional support from Ittella International. Therefore, Properties was designed in a way such that substantially all of the assets benefit the Company, and substantially all of the obligations are absorbed by the Company. Given the Company has control over the assets that most significantly affect the economic performance of Properties, the Company is determined to be the primary beneficiary of Properties. As a result, Properties is considered a VIE of the Company and is required to be consolidated. The results of operations and cash flows of Properties are included in the Company’s condensed consolidated financial statements. For the three-month periods ended March 31, 2022 and 2021, 100 % of the revenue of Properties is intercompany and thus was eliminated in consolidation. Properties contributed expenses of $0.1 million and $0.1 million for the three months ended March 31, 2022 and 2021, respectively. |
Loss Per Share
Loss Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | 20. LOSS per share The following is the summary of basic and diluted EPS for the three months ended March 31, 2022 and 2021 (in thousands): 2022 2021 Numerator Net loss $ (17,551 ) $ (8,242 ) Gain on fair value remeasurement related to Warrants (207 ) (472 ) Dilutive net loss (17,758 ) (8,714 ) Denominator Weighted average common shares outstanding 82,238 80,240 Effect of potentially dilutive securities related to Warrants 10 304 Weighted average diluted shares outstanding 82,248 80,544 Loss per share Basic $ (0.21 ) $ (0.10 ) Diluted $ (0.22 ) $ (0.11 ) The following have been excluded from the calculation of diluted earnings per share as the effect of including them would have been anti-dilutive for the three months ended March 31, 2022 and 2021 (in thousands): 2022 2021 Stock options 1,639 318 Restricted stock awards 175 318 Total 1,814 636 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 21. SUBSEQUENT EVENTS The Company evaluates subsequent events and transactions that occur after the balance sheet date up to the date that the condensed consolidated financial statements were issued. Other than as described in these financial statements, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation. |
Basis of Presentation | Basis of Presentation. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the SEC on March 16, 2022, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2021 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The interim results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or for any future interim periods. The Transaction was accounted for as a reverse recapitalization in accordance with GAAP (the “Reverse Recapitalization”). Under this method, Forum was treated as the “acquired” company (“Accounting Acquiree”) and Myjojo, the accounting acquirer, was assumed to have issued stock for the net assets of Forum, accompanied by a recapitalization. The net assets of Forum are stated at historical cost, with no goodwill or other intangible assets recorded. The consolidated assets, liabilities and results of operations prior to the reverse recapitalization are those of Myjojo, The shares and corresponding capital amounts and earnings per share available for common stockholders, prior to the reverse recapitalization, have been retroactively restated. |
Use of Estimates | Use of Estimates. |
Significant Accounting Policies | Significant Accounting Policies. Sales and Marketing Expenses. Concentrations of Credit Risk. Two customers accounted for 54% of the Company’s revenue during the three months ended March 31, 2022. Three customers accounted for more than 89% of the Company’s revenue during the three months ended March 31, 2021. Customer 2022 2021 Customer A 35 % 38 % Customer B * 10 % Customer C 19 % 41 % * Customer accounted for less than 10% of revenue in the period. Customers accounting for more than 10% of the Company’s accounts receivable as of March 31, 2022 and December 31, 2021 were: Customer March 31, 2022 December 31, 2021 Customer A 21 % 13 % Customer C 41 % 38 % Customer D * 12 % * Customer D accounted for less than 10% of accounts receivable as of March 31, 2022. However, customer D accounted for 12% as of December 31, 2021 and as such was included in the disclosure above for comparison purposes. |
COVID-19 Pandemic | COVID-19 Pandemic. However, the pandemic may adversely affect the Company’s suppliers and could impair its ability to obtain raw material inventory in the quantities or of a quality the Company desires. The Company currently sources a material amount of its raw materials from Italy. Though the Company is not dependent on any single Italian grower for its supply of a certain crop, events (including the pandemic) generally affecting these growers could adversely affect the Company’s business. If the Company is unable to manage its supply chain effectively and ensure that its products are available to meet consumer demand, operating costs could increase, and sales and profit margins could decrease. The rapid development and fluidity of this situation precludes any prediction as to the ultimate material adverse impact on the financial statements and presents material uncertainty and risk with respect to our business, operations, financial condition and liquidity. |
Russia-Ukraine Conflict | Russia-Ukraine Conflict. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of customers accounting for more than 10% of the Company’s accounts receivable | Customer 2022 2021 Customer A 35 % 38 % Customer B * 10 % Customer C 19 % 41 % * Customer accounted for less than 10% of revenue in the period. Customer March 31, 2022 December 31, 2021 Customer A 21 % 13 % Customer C 41 % 38 % Customer D * 12 % * Customer D accounted for less than 10% of accounts receivable as of March 31, 2022. However, customer D accounted for 12% as of December 31, 2021 and as such was included in the disclosure above for comparison purposes. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue Recognition [Abstract] | |
Schedule of revenue streams | 2022 2021 Revenue Streams (in thousands) Revenue % Total Revenue % Total Tattooed Chef $ 43,455 60 % $ 35,847 68 % Private Label 25,124 35 % 16,305 31 % Other revenues 3,485 5 % 317 1 % Total $ 72,064 $ 52,469 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | March 31, 2022 December 31, 2021 Raw materials $ 25,750 $ 22,724 Work-in-process 7,535 5,545 Finished goods 20,725 22,756 Packaging 4,329 3,537 Total $ 58,339 $ 54,562 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | March 31, 2022 December 31, 2021 Land $ 719 $ 738 Buildings 4,776 4,766 Leasehold improvements 5,295 5,336 Machinery and equipment 34,406 33,975 Computer equipment 543 549 Furniture and fixtures 186 169 Construction in progress 16,564 7,986 62,489 53,519 Less: accumulated depreciation (8,272 ) (7,043 ) Net $ 54,217 $ 46,476 |
Intangible Assets, Net and Go_2
Intangible Assets, Net and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | March 31, 2022 December 31, 2021 Amortizable Tradenames $ 220 $ 220 Less: accumulated amortization (96 ) (69 ) Intangible assets, net $ 124 $ 151 |
Schedule of estimated future amortization expense | Nine months ending December 31, 2022 $ 83 2023 41 Total $ 124 |
Schedule of change in the carrying amount of goodwill | Balance as of January 1, 2022 $ 26,924 Measurement period adjustment (change in consideration) - Balance as of March 31, 2022 $ 26,924 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
Schedule of fair value of assets acquired and liabilities | Amount Purchase consideration, net of cash acquired $ 33,946 Assets acquired and liabilities assumed Accounts receivable 3,567 Inventory 2,270 Prepaid expenses and other current assets 122 Operating lease, ROU asset 207 Property, plant and equipment 9,819 Finance lease, ROU assets * 5,749 Other noncurrent assets 29 Intangible assets – tradenames 220 Accounts payable (2,834 ) Accrued expenses (78 ) Operating lease liability (207 ) Note payable * (2,917 ) Goodwill 17,999 Total assets acquired and liabilities assumed $ 33,946 * In December 2015 (prior to the NMFD Transaction), NMFD and Karsten entered into an agreement to purchase an industrial revenue bond (“IRB”) issued by Bernalillo County, New Mexico (“Bernalillo”) to be used to finance the costs of the constructing, renovating and equipping of the manufacturing plant and, concurrently, assigned ownership of the manufacturing plant including building and land (“Property”) to Bernalillo as consideration for the purchase of the IRB, as well as entered into a lease agreement to lease the Property from Bernalillo (“Lease”). The Lease provides NMFD the option to purchase the Property for $1 following the payoff of the Lease. The sale of the Property to Bernalillo and concurrent leaseback of the Property in December 2015 did not meet the sale-leaseback accounting requirements as a result of NMFD’s and Karsten’s continuous involvement with the Property and thus, the IRB was not recorded as a sale but as a financing obligation, with the Property remaining on NMFD’s financial statements. The Lease and the IRB have the same counterparty, therefore a right of offset exists so long as NMFD continues to make rent payments under the terms of the Lease. |
Schedule of preliminary fair value of assets acquired and liabilities | Amount Cash consideration $ 13,000 Equity consideration – common stock 4,000 Total purchase consideration $ 17,000 Assets acquired and liabilities assumed Accounts receivable $ 1,630 Inventory 4,130 Prepaid expenses and other current assets 38 Operating lease ROU asset 870 Property, plant and equipment 6,477 Accounts payable (3,477 ) Accrued expenses (723 ) Operating lease liability (870 ) Goodwill 8,925 Total assets acquired and liabilities assumed $ 17,000 |
Schedule of pro forma financial information | Three-Months Ended March 31, (in thousands, except per share) 2022 2021 Net Revenue $ 72,064 $ 68,974 Net Loss (17,551 ) (8,498 ) Net Loss per Share Basic $ (0.21 ) $ (0.11 ) Diluted $ (0.22 ) $ (0.11 ) |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments [Abstract] | |
Schedule of derivative instruments | Balance Sheet Line Item As of As of Derivatives not designated as hedging instruments: Foreign currency derivatives Forward contract derivative liability $ 1,960 $ 1,804 Total $ 1,960 $ 1,804 |
Schedule of operations and comprehensive loss | Three Months Ended March 31, Line Item in Statements of Operations 2022 2021 Derivatives not designated as hedging instruments: Foreign currency derivatives Other income (expense) $ (1,023 ) $ (3,001 ) Total $ (1,023 ) $ (3,001 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value measurement of the private placement warrants as of each measurement date | March 31, December 31, Input 2022 2021 Risk-free interest rate 2.44 % 1.08 % Expected term (years) 3.55 3.79 Expected volatility 50.00 % 45.00 % Exercise price $ 11.50 $ 11.50 Fair value per Unit $ 5.27 $ 7.07 |
Schedule of changes in the fair value of warrant liabilities | Private Fair value as of December 31, 2021 $ 814 Exercise of Private Placement Warrants - Change in fair value (1) (207 ) Fair value as of March 31, 2022 $ 607 Private Placement Fair value as of December 31, 2020 $ 5,184 Exercise of Private Placement Warrants (2,989 ) Change in fair value (1) (320 ) Fair value as of March 31, 2021 $ 1,875 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accrued Expenses [Abstract] | |
Schedule of accrued expenses | March 31, 2022 December 31, 2021 Accrued customer incentives $ 1,282 $ 1,471 Accrued payroll 3,573 1,600 Accrued commission 1,239 607 Other accrued expenses 128 89 Total $ 6,222 $ 3,767 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Income Taxes [Abstract] | |
Schedule of presents the provision for income taxes and the effective tax rate | March 31, March 31, Income tax (expense) benefit $ (256 ) $ 1,475 Effective tax rate -1 % 15 % |
Indebtedness (Tables)
Indebtedness (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Indebtedness [Abstract] | |
Schedule of debt | March 31, 2022 December 31, 2021 Notes payable $ 5,591 $ 5,735 Revolving credit facility 1,583 1,200 Total debt 7,174 6,935 Less current debt (6,545 ) (6,219 ) Total long-term debt $ 629 $ 716 |
Schedule of future minimum principal payments due on the notes payable | Nine months ending December 31, 2022 $ 6,477 2023 276 2024 280 2025 141 Total $ 7,174 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of warrant activity | Public Private Issued and outstanding as of October 15, 2020 20,000,000 655,000 Exercised (5,540,316 ) (247,423) Issued and outstanding as of December 31, 2020 14,459,684 407,577 Exercised (14,459,684 ) (292,417) Issued and outstanding as of December 31, 2021 - 115,160 Exercised - - Redeemed - - Issued and outstanding as of March 31, 2022 - 115,160 |
Equity Incentive Plan (Tables)
Equity Incentive Plan (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of summarizes the stock option activity | Number of Awards Outstanding Weighted- Average Exercise Price Weighted- Average Remaining Contractual Terms (Years) Intrinsic Value (in thousands) Balance at December 31, 2021 1,593,800 $ 21.30 9.26 $ - Granted 45,000 13.06 Cancelled and forfeited - - Exercised - - Balance at March 31, 2022 1,638,800 $ 21.08 9.04 $ - Exercisable at March 31, 2022 336,267 $ 22.73 8.89 $ - Number of Awards Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Terms (Years) Intrinsic Value (in thousands) Balance at December 31, 2020 756,300 $ 24.69 9.98 $ - Granted - - Cancelled and forfeited (1,500 ) 24.69 Exercised - - Balance at March 31, 2021 754,800 $ 24.69 9.73 $ - Exercisable at March 31, 2021 - $ - - $ - |
Schedule of fair value of each option grant was estimated on the grant date using the black-scholes option pricing model | March 31, March 31, Equity volatility 32.37 % 25.89 % Risk-free interest rate 2.50 % 0.67 % Expected term (in years) 6 6 Expected dividend 0.00 % 0.00 % |
Schedule of restricted stock activity under the plan | Employee Director Awards Non-Employee Director Awards Weighted- Weighted- Number of Average Number of Average Shares Fair Value Shares Fair Value Balance at December 31, 2020 - $ - - $ - Granted - - 15,216 18.93 Vested - - (15,216 ) 18.93 Forfeited - - - - Non-vested restricted stock at March 31, 2021 - $ - - $ - Employee Awards Consultant (Non-Employee) Award Number of Weighted- Average Fair Value Number of Weighted- Average Fair Value Balance at December 31, 2021 - $ - - $ - Granted 3,828 13.06 200,000 15.54 Vested (3,828 ) 13.06 (25,000 ) 15.54 Forfeited - - - - Non-vested restricted stock at March 31, 2022 - $ - 175,000 $ 15.54 Employee Awards Consultant (Non-Employee) Awards Weighted- Weighted- Number of Average Number of Average Shares Fair Value Shares Fair Value Balance at December 31, 2020 400,000 $ 24.28 100,000 $ 24.69 Granted 30,416 23.65 100,000 18.96 Vested (4,916 ) 24.28 (100,000 ) 18.96 Forfeited (100,000 ) 24.69 (100,000 ) 24.69 Non-vested restricted stock at March 31, 2021 325,500 $ 24.10 - $ - |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted EPS | 2022 2021 Numerator Net loss $ (17,551 ) $ (8,242 ) Gain on fair value remeasurement related to Warrants (207 ) (472 ) Dilutive net loss (17,758 ) (8,714 ) Denominator Weighted average common shares outstanding 82,238 80,240 Effect of potentially dilutive securities related to Warrants 10 304 Weighted average diluted shares outstanding 82,248 80,544 Loss per share Basic $ (0.21 ) $ (0.10 ) Diluted $ (0.22 ) $ (0.11 ) |
Schedule of anti-dilutive securities excluded from calculation of diluted earnings per share | 2022 2021 Stock options 1,639 318 Restricted stock awards 175 318 Total 1,814 636 |
The Company (Details)
The Company (Details) - USD ($) $ in Millions | Sep. 28, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | May 14, 2014 |
The Company (Details) [Line Items] | ||||
Ownership percentage | 100.00% | |||
Cash transaction | $ 0.5 | |||
Aggregate purchase price | $ 17 | |||
Mexico Food Distributors, Inc [Member] | ||||
The Company (Details) [Line Items] | ||||
Cash transaction | $ 34.1 | |||
Ittella Properties LLC [Member] | ||||
The Company (Details) [Line Items] | ||||
Term of lease | 10 years |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Basis of Presentation and Significant Accounting Policies (Details) [Line Items] | ||
Sales and marketing expenses (in Dollars) | $ 12.6 | $ 6.7 |
Percentage of benefit | 10.00% | 10.00% |
Percentage of revenue | 54.00% | 89.00% |
Customer [Member] | ||
Basis of Presentation and Significant Accounting Policies (Details) [Line Items] | ||
Concentration risk percentage | 10.00% | |
Customer B [Member] | ||
Basis of Presentation and Significant Accounting Policies (Details) [Line Items] | ||
Concentration risk percentage | 10.00% | 12.00% |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies (Details) - Schedule of customers accounting for more than 10% of the Company’s accounts receivable | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | ||
Revenue [Member] | Customer A [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 35.00% | 38.00% | |
Revenue [Member] | Customer B [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | [1] | 10.00% | |
Revenue [Member] | Customer C [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 19.00% | 41.00% | |
Accounts Receivable [Member] | Customer A [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 21.00% | 13.00% | |
Accounts Receivable [Member] | Customer B [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 41.00% | 38.00% | |
Accounts Receivable [Member] | Customer D [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | [2] | 12.00% | |
[1] | Customer accounted for less than 10% of revenue in the period. | ||
[2] | Customer D accounted for less than 10% of accounts receivable as of March 31, 2022. However, customer D accounted for 12% as of December 31, 2021 and as such was included in the disclosure above for comparison purposes. |
Recently Issued Accounting Pr_2
Recently Issued Accounting Pronouncements (Details) - ASU 2016-12 [Member] $ in Millions | Mar. 31, 2022USD ($) |
Recently Issued Accounting Pronouncements (Details) [Line Items] | |
Assets | $ 4.2 |
Total liabilities | $ 4.2 |
Revenue Recognition (Details) -
Revenue Recognition (Details) - Schedule of revenue streams - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue Recognition (Details) - Schedule of revenue streams [Line Items] | ||
Revenue | $ 72,064 | $ 52,469 |
Tattooed Chef [Member] | ||
Revenue Recognition (Details) - Schedule of revenue streams [Line Items] | ||
Revenue | $ 43,455 | $ 35,847 |
Revenue percentage | 60.00% | 68.00% |
Private Label [Member] | ||
Revenue Recognition (Details) - Schedule of revenue streams [Line Items] | ||
Revenue | $ 25,124 | $ 16,305 |
Revenue percentage | 35.00% | 31.00% |
Other revenues [Member] | ||
Revenue Recognition (Details) - Schedule of revenue streams [Line Items] | ||
Revenue | $ 3,485 | $ 317 |
Revenue percentage | 5.00% | 1.00% |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Doubtful receivables | $ 0.2 | $ 0 |
Accounts receivable | 1.9 | 4.1 |
Outstanding balance for product demonstration accrual | $ 1.3 | $ 1.5 |
Inventory (Details) - Schedule
Inventory (Details) - Schedule of inventory - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule of inventory [Abstract] | ||
Raw materials | $ 25,750 | $ 22,724 |
Work-in-process | 7,535 | 5,545 |
Finished goods | 20,725 | 22,756 |
Packaging | 4,329 | 3,537 |
Total | $ 58,339 | $ 54,562 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 1.5 | $ 0.6 |
Property, Plant, and Equipmen_3
Property, Plant, and Equipment (Details) - Schedule of property, plant and equipment - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 62,489 | $ 53,519 |
Less: accumulated depreciation | (8,272) | (7,043) |
Net | 54,217 | 46,476 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 719 | 738 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 4,776 | 4,766 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 5,295 | 5,336 |
Machinery and equipment [member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 34,406 | 33,975 |
Computer equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 543 | 549 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 186 | 169 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 16,564 | $ 7,986 |
Intangible Assets, Net and Go_3
Intangible Assets, Net and Goodwill (Details) - Schedule of intangible assets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule of intangible assets [Abstract] | ||
Amortizable Tradenames | $ 220 | $ 220 |
Less: accumulated amortization | (96) | (69) |
Intangible assets, net | $ 124 | $ 151 |
Intangible Assets, Net and Go_4
Intangible Assets, Net and Goodwill (Details) - Schedule of estimated future amortization expense $ in Thousands | Mar. 31, 2022USD ($) |
Schedule of estimated future amortization expense [Abstract] | |
Nine months ending December 31, 2022 | $ 83 |
2023 | 41 |
Total | $ 124 |
Intangible Assets, Net and Go_5
Intangible Assets, Net and Goodwill (Details) - Schedule of change in the carrying amount of goodwill $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Schedule of change in the carrying amount of goodwill [Abstract] | |
Balance as of begining | $ 26,924 |
Measurement period adjustment (change in consideration) | |
Balance as of ending | $ 26,924 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ / shares in Units, $ in Thousands | May 31, 2021 | May 14, 2021 | Sep. 28, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Business Combinations (Details) [Line Items] | ||||||
Revenue | $ 72,064 | $ 68,974 | ||||
Net loss | (17,551) | (8,498) | ||||
Transaction costs | $ 500 | |||||
Maturity date | May 28, 2025 | |||||
Revenue | 72,064 | $ 52,469 | ||||
Business Combination [Member] | ||||||
Business Combinations (Details) [Line Items] | ||||||
Total purchase price | $ 5,200 | |||||
Net loss | $ 600 | |||||
Statutory life term | 15 years | |||||
Goodwill | $ 18,000 | |||||
Payoff of the lease | $ 1 | |||||
IRB asset | 2,900 | |||||
Lease obligation | 2,900 | |||||
Fair value of the ROU asset | 5,700 | |||||
ROU asset | $ 5,700 | |||||
Maturity date | Dec. 29, 2025 | |||||
Note payable bears interest rate | 3.80% | |||||
Estimated useful lives | 2 years | |||||
Purchase price amount | $ 17,000 | |||||
Shares issued (in Shares) | 241,546 | |||||
Revenue | $ 8,000 | |||||
Assets acquired and liabilities | 8,900 | |||||
Acquisition, transaction costs | 200 | |||||
Business Combination [Member] | New Mexico Food Distributors, Inc. [Member] | ||||||
Business Combinations (Details) [Line Items] | ||||||
Total purchase price | $ 28,900 | |||||
Business Combination [Member] | New Mexico Food Distributors, Inc. [Member] | Karsten Acquisition [Member] | ||||||
Business Combinations (Details) [Line Items] | ||||||
Revenue | 9,500 | |||||
Net loss | $ 500 | |||||
Business Combination [Member] | Tattooed Chef’s [Member] | ||||||
Business Combinations (Details) [Line Items] | ||||||
Purchase price amount | $ 4,000 | |||||
Common stock per share (in Dollars per share) | $ 16.9 |
Business Combinations (Detail_2
Business Combinations (Details) - Schedule of fair value of assets acquired and liabilities - NMFD Transaction [Member] $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($) | ||
Business Combinations (Details) - Schedule of fair value of assets acquired and liabilities [Line Items] | ||
Purchase consideration, net of cash acquired | $ 33,946 | |
Assets acquired and liabilities assumed | ||
Accounts receivable | 3,567 | |
Inventory | 2,270 | |
Prepaid expenses and other current assets | 122 | |
Operating lease, ROU asset | 207 | |
Property, plant and equipment | 9,819 | |
Finance lease, ROU assets | 5,749 | [1] |
Other noncurrent assets | 29 | |
Intangible assets – tradenames | 220 | |
Accounts payable | (2,834) | |
Accrued expenses | (78) | |
Operating lease liability | (207) | |
Note payable | (2,917) | [1] |
Goodwill | 17,999 | |
Total assets acquired and liabilities assumed | $ 33,946 | |
[1] | In December 2015 (prior to the NMFD Transaction), NMFD and Karsten entered into an agreement to purchase an industrial revenue bond (“IRB”) issued by Bernalillo County, New Mexico (“Bernalillo”) to be used to finance the costs of the constructing, renovating and equipping of the manufacturing plant and, concurrently, assigned ownership of the manufacturing plant including building and land (“Property”) to Bernalillo as consideration for the purchase of the IRB, as well as entered into a lease agreement to lease the Property from Bernalillo (“Lease”). The Lease provides NMFD the option to purchase the Property for $1 following the payoff of the Lease. The sale of the Property to Bernalillo and concurrent leaseback of the Property in December 2015 did not meet the sale-leaseback accounting requirements as a result of NMFD’s and Karsten’s continuous involvement with the Property and thus, the IRB was not recorded as a sale but as a financing obligation, with the Property remaining on NMFD’s financial statements. The Lease and the IRB have the same counterparty, therefore a right of offset exists so long as NMFD continues to make rent payments under the terms of the Lease. |
Business Combinations (Detail_3
Business Combinations (Details) - Schedule of preliminary fair value of assets acquired and liabilities - Belmont Acquisition [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Business Combinations (Details) - Schedule of preliminary fair value of assets acquired and liabilities [Line Items] | |
Cash consideration | $ 13,000 |
Equity consideration – common stock | 4,000 |
Total purchase consideration | 17,000 |
Assets acquired and liabilities assumed | |
Accounts receivable | 1,630 |
Inventory | 4,130 |
Prepaid expenses and other current assets | 38 |
Operating lease ROU asset | 870 |
Property, plant and equipment | 6,477 |
Accounts payable | (3,477) |
Accrued expenses | (723) |
Operating lease liability | (870) |
Goodwill | 8,925 |
Total assets acquired and liabilities assumed | $ 17,000 |
Business Combinations (Detail_4
Business Combinations (Details) - Schedule of pro forma financial information - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Schedule of pro forma financial information [Abstract] | ||
Net Revenue | $ 72,064 | $ 68,974 |
Net Loss | $ (17,551) | $ (8,498) |
Net Loss per Share | ||
Basic | $ (0.21) | $ (0.11) |
Diluted | $ (0.22) | $ (0.11) |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Derivative Instruments [Abstract] | |||
Foreign currency exchange forward | $ 22 | ||
Derivatives | $ 26.9 | ||
Foreign currency exchange unrealized | $ 1 | ||
Foreign currency exchange realized | 0.9 | ||
Outstanding derivatives | $ 31.8 | $ 43.5 |
Derivative Instruments (Detai_2
Derivative Instruments (Details) - Schedule of derivative instruments - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Derivatives, Fair Value [Line Items] | ||
Total | $ 1,960 | $ 1,804 |
Derivatives not designated as hedging instruments [Member] | Forward contract derivative liability [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency derivatives | $ 1,960 | $ 1,804 |
Derivative Instruments (Detai_3
Derivative Instruments (Details) - Schedule of operations and comprehensive loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Derivative Instruments (Details) - Schedule of operations and comprehensive loss [Line Items] | ||
Total | $ (1,023) | $ (3,001) |
Derivatives not designated as hedging instruments [Member] | Other income [Member] | ||
Derivative Instruments (Details) - Schedule of operations and comprehensive loss [Line Items] | ||
Foreign currency derivatives | $ (1,023) | $ (3,001) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Fair Value Measurements (Details) [Line Items] | ||
Fair value of the warrant liabilities | $ 0.2 | |
Warrant per share | $ 5.27 | |
Historical rate | 0.00% | |
Warrant per share | $ 5.27 | $ 7.07 |
Aggregate value | $ 0.6 | $ 0.8 |
Private Placement Warrants [Member] | ||
Fair Value Measurements (Details) [Line Items] | ||
Outstanding warrants | 115,160 | 115,160 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details) - Schedule of fair value measurement of the private placement warrants as of each measurement date - Warrant [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Risk-free interest rate | 2.44% | 1.08% |
Expected term (years) | 3 years 6 months 18 days | 3 years 9 months 14 days |
Expected volatility | 50.00% | 45.00% |
Exercise price | $ 11.5 | $ 11.5 |
Fair value per Unit | $ 5.27 | $ 7.07 |
Fair Value Measurements (Deta_3
Fair Value Measurements (Details) - Schedule of changes in the fair value of warrant liabilities - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Schedule of changes in the fair value of warrant liabilities [Abstract] | |||
Fair value. beginning | $ 814 | $ 5,184 | |
Fair value, ending | 607 | 1,875 | |
Exercise of Private Placement Warrants | (2,989) | ||
Change in fair value | [1] | $ (207) | $ (320) |
[1] | Changes in fair value are recognized in change in fair value of warrant liabilities in the consolidated statements of operations and comprehensive loss. |
Accrued Expenses (Details) - Sc
Accrued Expenses (Details) - Schedule of accrued expenses - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Schedule of accrued expenses [Abstract] | ||
Accrued customer incentives | $ 1,282 | $ 1,471 |
Accrued payroll | 3,573 | 1,600 |
Accrued commission | 1,239 | 607 |
Other accrued expenses | 128 | 89 |
Total | $ 6,222 | $ 3,767 |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of presents the provision for income taxes and the effective tax rate - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Schedule of presents the provision for income taxes and the effective tax rate [Abstract] | ||
Income tax expense (benefit) | $ (256) | $ 1,475 |
Effective tax rate | (1.00%) | 15.00% |
Indebtedness (Details)
Indebtedness (Details) € in Millions, $ in Millions | Mar. 15, 2022 | May 31, 2021USD ($) | Jan. 06, 2020USD ($) | Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) | Mar. 31, 2022EUR (€) | Dec. 31, 2021EUR (€) | Sep. 30, 2021EUR (€) | May 31, 2021EUR (€) | Mar. 31, 2021EUR (€) |
Indebtedness (Details) [Line Items] | ||||||||||
Loan amount | $ 0.6 | € 0.6 | ||||||||
Revolving credit facility, description | (a) 90% of the net amount of eligible accounts receivable; plus, (b) the lower of: (i) sum of: (1) 50% of the net amount of eligible inventory; plus (2) 45% of the net amount of eligible in-transit inventory; (ii) $10.0 million; or (iii) 50% of the aggregate amount of revolving loans outstanding, minus (c) the sum of all reserves. Under the Credit Facility: (i) the Company’s fixed charge coverage ratio may not be less than 1.10:1.00, and (ii) the Company may make dividends or distributions in shares of stock of the same class and also distributions for the payment of taxes. As of March 31, 2022, the Company was not in compliance with all terms and conditions of its Credit Facility. This noncompliance has no impact on the Company’s borrowing capacity and financial condition. On February 21, 2022, the lender issued a waiver of financial covenants letter to the Company waiving the requirement to comply with the debt covenant for the period ended December 31, 2021. | |||||||||
Line of credit, description | The revolving line of credit bears interest at the sum of (i) the greater of (a) the daily Prime Rate, or (b) LIBOR plus 2%; and (ii) 1%. The actual interest rates on outstanding borrowings were at 4.25% at both of March 31, 2022 and December 31, 2021. | |||||||||
Balance on the credit facility | $ 0 | $ 0.5 | € 0.5 | |||||||
Variable interest, description | All borrowings against this loan are payable on a straight-line basis over 5 years and accrue interest at the greater of (a) the daily Prime Rate or (b) the daily LIBOR Rate plus 4%. | |||||||||
Balance amount | 0 | |||||||||
Balance on the credit facility description | The balance on the credit facility was 0.6 million Euros ($0.7 million) and 0.6 million Euros ($0.7 million) as of March 31, 2022, and December 31, 2021, respectively. | |||||||||
Maturity date | May 28, 2025 | |||||||||
Balance on promissory note | 1 | € 0.9 | ||||||||
Fixed charge coverage ratio, description | On March 15, 2022, the VIE executed an amendment to the Note that includes a waiver of the requirement to comply with the debt covenant through June 30, 2022. Commencing with the fiscal quarter ending September 30, 2022, the VIE should meet a minimum fixed charge coverage ratio of 1.20 to 1.00. | |||||||||
Notes payable [Member] | ||||||||||
Indebtedness (Details) [Line Items] | ||||||||||
Loan amount | € | € 1 | |||||||||
Balance amount | $ 1.9 | 1.9 | ||||||||
Notes payable | $ 2.9 | $ 2.8 | 2.8 | |||||||
Note payable bears interest | 3.80% | 3.80% | ||||||||
Accrued interest, percentage | 3.60% | |||||||||
Maturity date | Jan. 31, 2035 | |||||||||
Ittella Italy [Member] | ||||||||||
Indebtedness (Details) [Line Items] | ||||||||||
Loan amount | € | € 1.4 | |||||||||
Balance on the credit facility | $ 0.9 | € 0.8 | ||||||||
Credit facility bears one time commission fee | 0.40% | |||||||||
Credit facility bears one time interest | 0.85% | 0.85% | ||||||||
Balance on promissory note | $ 0.9 | € 0.8 | ||||||||
Revolving Credit Facility [Member] | ||||||||||
Indebtedness (Details) [Line Items] | ||||||||||
Loan amount | 25 | |||||||||
Revolving Credit Facility [Member] | Ittella Italy [Member] | ||||||||||
Indebtedness (Details) [Line Items] | ||||||||||
Loan amount | € | € 0.6 | |||||||||
Credit facility bears one time commission fee | 0.40% | |||||||||
Credit facility bears one time interest | 1.50% | 1.50% | ||||||||
Capex Loan [Member] | ||||||||||
Indebtedness (Details) [Line Items] | ||||||||||
Loan amount | 1.9 | |||||||||
Balance amount | $ 0 | |||||||||
CDC Loan [Member] | ||||||||||
Indebtedness (Details) [Line Items] | ||||||||||
Accrued interest, percentage | 1.014% | 1.014% | ||||||||
CB Loan [Member] | ||||||||||
Indebtedness (Details) [Line Items] | ||||||||||
Promissory note payable | $ 2.1 |
Indebtedness (Details) - Schedu
Indebtedness (Details) - Schedule of debt - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total debt | $ 7,174 | $ 6,935 |
Less current debt | (6,545) | (6,219) |
Total long-term debt | 629 | 716 |
Notes payable [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | 5,591 | 5,735 |
Revolving credit facilities [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 1,583 | $ 1,200 |
Indebtedness (Details) - Sche_2
Indebtedness (Details) - Schedule of future minimum principal payments due on the notes payable - Notes payable to related parties [Member] $ in Thousands | Mar. 31, 2022USD ($) |
Indebtedness (Details) - Schedule of future minimum principal payments due on the notes payable [Line Items] | |
Nine months ending December 31, 2022 | $ 6,477 |
2023 | 276 |
2024 | 280 |
2025 | 141 |
Total | $ 7,174 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Stockholders' Equity (Details) [Line Items] | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Voting rights | Holders of common stock are entitled to one vote for each share. | |
Common stock, shares issued | 82,441,641 | 82,441,641 |
Common stock, shares outstanding | 82,441,641 | 82,441,641 |
Redemption of warrants, description | Once the Public Warrants become exercisable, the Company was able to redeem the Public Warrants in whole, at a price of $0.01 per warrant within 30 days after a written notice of redemption, and if, and only if, the reported last sale price of the Company’s common stock equaled or exceeded $18.00 per share for any 20 trading days within a 30-trading day period ending three business days before the Company sent the notice of redemption to the holder. | |
Warrant [Member] | ||
Stockholders' Equity (Details) [Line Items] | ||
Description of warrants exercised period | (i) the date that is 30 days after the first date on which Forum completes its initial business combination; or (ii) 12 months from the date of the closing of the IPO, and terminating on the earlier to occur (x) five years after Forum completes its initial business combination; (y) the liquidation of the Company or, the Redemption Date (as that term is defined in the Warrant Agreement), subject to any applicable conditions as set forth in the Warrant Agreement. The Company in its sole discretion may extend the duration of the Warrants by delaying the expiration date, provided it give at least 20 days prior written notice of any such extension to the registered holders of the Warrants. | |
Public Warrants [Member] | ||
Stockholders' Equity (Details) [Line Items] | ||
Public warrants issued | 20,000,000 | |
Share issued price per share (in Dollars per share) | $ 10 | |
Private Placement Warrants [Member] | ||
Stockholders' Equity (Details) [Line Items] | ||
Private warrants issued | 655,000 | |
Warrants price per share (in Dollars per share) | $ 11.5 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of warrant activity - shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2020 | Dec. 31, 2021 | |
Schedule of warrant activity [Abstract] | |||
Public Warrants, Issued and outstanding, Beginning | 20,000,000 | 14,459,684 | |
Private Placement Warrants, Issued and outstanding, Beginning | 115,160 | 655,000 | 407,577 |
Public Warrants, Exercised | (5,540,316) | (14,459,684) | |
Private Placement Warrants, Exercised | (247,423) | (292,417) | |
Public Warrants, Redeemed | |||
Private Placement Warrants, Redeemed | |||
Public Warrants, Issued and outstanding, Ending | 14,459,684 | ||
Private Placement Warrants, Issued and outstanding, Ending | 115,160 | 407,577 | 115,160 |
Equity Incentive Plan (Details)
Equity Incentive Plan (Details) - USD ($) $ in Millions | Oct. 15, 2020 | Mar. 31, 2022 | Mar. 31, 2021 |
Equity Incentive Plan (Details) [Line Items] | |||
Fair market value percentage | 100.00% | ||
Grant date | 10 years | ||
Compensation costs | $ 0.9 | $ 0.5 | |
Fair value granted stock options | 0.2 | 0 | |
Fair value of restricted shares vested | 0.4 | 2.7 | |
Fair value of granted restricted stock | $ 3.2 | $ 2.9 | |
Minimum [Member] | |||
Equity Incentive Plan (Details) [Line Items] | |||
Options granted generally vest over period | 3 years | ||
Maximum [Member] | |||
Equity Incentive Plan (Details) [Line Items] | |||
Options granted generally vest over period | 5 years | ||
Nonemployee Director [Member] | |||
Equity Incentive Plan (Details) [Line Items] | |||
Exceeding total value | $ 0.1 | ||
Stock Appreciation Rights (SARs) [Member] | |||
Equity Incentive Plan (Details) [Line Items] | |||
Fair market value percentage | 100.00% | ||
Executive [Member] | |||
Equity Incentive Plan (Details) [Line Items] | |||
Common shares (in Shares) | 5,200,000 | ||
Stock Options [Member] | |||
Equity Incentive Plan (Details) [Line Items] | |||
Fair market value percentage | 100.00% | ||
Options granted generally vest over period | |||
Grant date | 10 years | ||
Stock-based compensation expenses to be recognized | $ 7 | ||
Weighted average period term | 3 years | ||
Restricted Stock [Member] | |||
Equity Incentive Plan (Details) [Line Items] | |||
Compensation costs | $ 2.7 |
Equity Incentive Plan (Detail_2
Equity Incentive Plan (Details) - Schedule of summarizes the stock option activity - Stock Options [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Equity Incentive Plan (Details) - Schedule of summarizes the stock option activity [Line Items] | ||
Number of Awards Outstanding, Beginning Balance | 1,593,800 | 756,300 |
Weighted Average Exercise Price, Beginning Balance | $ 21.3 | $ 24.69 |
Weighted Average Remaining Contractual Terms (Years), Beginning Balance | 9 years 3 months 3 days | 9 years 11 months 23 days |
Intrinsic Value, Beginning Balance | ||
Number of Awards Outstanding, Granted | 45,000 | |
Weighted Average Exercise Price, Granted | $ 13.06 | |
Weighted Average Remaining Contractual Terms (Years) Granted | ||
Intrinsic Value, Granted | ||
Number of Awards Outstanding, Cancelled and forfeited | (1,500) | |
Weighted Average Exercise Price, Cancelled and forfeited | $ 24.69 | |
Weighted Average Remaining Contractual Terms (Years), Cancelled and forfeited | ||
Intrinsic Value, Cancelled and forfeited | ||
Number of Awards Outstanding, Exercised | ||
Weighted Average Exercise Price, Exercised | ||
Weighted Average Remaining Contractual Terms (Years), Exercised | ||
Intrinsic Value, Exercised | ||
Number of Awards Outstanding, Ending Balance | 1,638,800 | 754,800 |
Weighted Average Exercise Price, Ending Balance | $ 21.08 | $ 24.69 |
Weighted Average Remaining Contractual Terms (Years), Ending Balance | 9 years 14 days | 9 years 8 months 23 days |
Intrinsic Value, Ending Balance | ||
Number of Awards Outstanding, Exercisable | 336,267 | |
Weighted Average Exercise Price, Exercisable | $ 22.73 | |
Weighted Average Remaining Contractual Terms (Years), Exercisable | 8 years 10 months 20 days | |
Intrinsic Value, Exercisable |
Equity Incentive Plan (Detail_3
Equity Incentive Plan (Details) - Schedule of fair value of each option grant was estimated on the grant date using the black-scholes option pricing model | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Schedule of fair value of each option grant was estimated on the grant date using the black-scholes option pricing model [Abstract] | ||
Equity volatility | 32.37% | 25.89% |
Risk-free interest rate | 2.50% | 0.67% |
Expected term (in years) | 6 years | 6 years |
Expected dividend | 0.00% | 0.00% |
Equity Incentive Plan (Detail_4
Equity Incentive Plan (Details) - Schedule of restricted stock activity under the plan - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Employee Director Awards [Member] | ||
Equity Incentive Plan (Details) - Schedule of restricted stock activity under the plan [Line Items] | ||
Balance, Number of Shares | ||
Balance, Weighted- Average Fair Value | ||
Granted, Number of Shares | ||
Granted, Weighted- Average Fair Value | ||
Vested, Number of Shares | ||
Vested, Weighted- Average Fair Value | ||
Forfeited, Number of Shares | ||
Forfeited, Weighted- Average Fair Value | ||
Non-vested restricted stock, Number of Shares | ||
Non-vested restricted, Weighted- Average Fair Value | ||
Non-Employee Director Awards [Member] | ||
Equity Incentive Plan (Details) - Schedule of restricted stock activity under the plan [Line Items] | ||
Balance, Number of Shares | ||
Balance, Weighted- Average Fair Value | ||
Granted, Number of Shares | 15,216 | |
Granted, Weighted- Average Fair Value | $ 18.93 | |
Vested, Number of Shares | (15,216) | |
Vested, Weighted- Average Fair Value | $ 18.93 | |
Forfeited, Number of Shares | ||
Forfeited, Weighted- Average Fair Value | ||
Non-vested restricted stock, Number of Shares | ||
Non-vested restricted, Weighted- Average Fair Value | ||
Employee Awards [Member] | ||
Equity Incentive Plan (Details) - Schedule of restricted stock activity under the plan [Line Items] | ||
Balance, Number of Shares | 400,000 | |
Balance, Weighted- Average Fair Value | $ 24.28 | |
Granted, Number of Shares | 3,828 | 30,416 |
Granted, Weighted- Average Fair Value | $ 13.06 | $ 23.65 |
Vested, Number of Shares | (3,828) | (4,916) |
Vested, Weighted- Average Fair Value | $ 13.06 | $ 24.28 |
Forfeited, Number of Shares | (100,000) | |
Forfeited, Weighted- Average Fair Value | $ 24.69 | |
Non-vested restricted stock, Number of Shares | 325,500 | |
Non-vested restricted, Weighted- Average Fair Value | $ 24.1 | |
Consultant (Non-Employee) Awards [Member] | ||
Equity Incentive Plan (Details) - Schedule of restricted stock activity under the plan [Line Items] | ||
Balance, Number of Shares | 100,000 | |
Balance, Weighted- Average Fair Value | $ 24.69 | |
Granted, Number of Shares | 200,000 | 100,000 |
Granted, Weighted- Average Fair Value | $ 15.54 | $ 18.96 |
Vested, Number of Shares | (25,000) | (100,000) |
Vested, Weighted- Average Fair Value | $ 15.54 | $ 18.96 |
Forfeited, Number of Shares | (100,000) | |
Forfeited, Weighted- Average Fair Value | $ 24.69 | |
Non-vested restricted stock, Number of Shares | 175,000 | |
Non-vested restricted, Weighted- Average Fair Value | $ 15.54 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Related Party Transactions (Details) [Line Items] | |
Rent paid | $ 40 |
Amount paid | 100 |
Deluna Properties Inc [Member] | |
Related Party Transactions (Details) [Line Items] | |
Operating lease right of use asset | 2,000 |
Operating lease liabilities | 2,100 |
Penhurst Realty LLC[Member] | |
Related Party Transactions (Details) [Line Items] | |
Operating lease right of use asset | 600 |
Operating lease liabilities | 600 |
Rent expense | $ 100 |
Commitments and Contingencies (
Commitments and Contingencies (Details) € in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022EUR (€) | Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) | |
Commitments and Contingencies (Details) [Line Items] | |||
Operating lease | $ 7,573 | $ 8,039 | |
Purchase of materials | € | € 1,870 | ||
One additional operating lease [Member] | |||
Commitments and Contingencies (Details) [Line Items] | |||
Operating lease | $ 9,500 |
Consolidated Variable Interes_2
Consolidated Variable Interest Entity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Consolidated Variable Interest Entity (Details) [Line Items] | ||
Leased term description | the Alondra Building, which is leased by Ittella International for 10 years from August 1, 2015 through August 1, 2025. | |
Percentage of revenue | 100.00% | 100.00% |
Properties contributed expenses (in Dollars) | $ 0.1 | $ 0.1 |
Alondra Building [Member] | ||
Consolidated Variable Interest Entity (Details) [Line Items] | ||
Loan agreement, percentage | 100.00% |
Loss Per Share (Details) - Sche
Loss Per Share (Details) - Schedule of basic and diluted EPS - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator | ||
Net loss (in Dollars) | $ (17,551) | $ (8,242) |
Gain on fair value remeasurement related to Warrants | (207) | (472) |
Dilutive net loss | (17,758) | (8,714) |
Denominator | ||
Weighted average common shares outstanding | 82,238 | 80,240 |
Effect of potentially dilutive securities related to Warrants | 10 | 304 |
Weighted average diluted shares outstanding | 82,248 | 80,544 |
Loss per share | ||
Basic (in Dollars per share) | $ (0.21) | $ (0.1) |
Diluted (in Dollars per share) | $ (0.22) | $ (0.11) |
Loss Per Share (Details) - Sc_2
Loss Per Share (Details) - Schedule of anti-dilutive securities excluded from calculation of diluted earnings per share - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 1,814,000 | 636,000 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 1,639,000 | 318,000 |
Restricted Stock Awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 175,000 | 318,000 |