Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | May 09, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Registrant Name | Nogin, Inc. | |
Entity Central Index Key | 0001841800 | |
Entity File Number | 001-40682 | |
Entity Tax Identification Number | 86-1370703 | |
Entity Interactive Data Current | Yes | |
Entity Current Reporting Status | Yes | |
Entity Incorporation, State Country Code | DE | |
Entity Address, Address Line One | 1775 Flight Way | |
Entity Address, Address Line Two | STE 400 | |
Entity Address, City Or Town | Tustin | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92782 | |
City Area Code | 949 | |
Local Phone Number | 222-0209 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 11,087,202 | |
Common Stock [Member] | ||
Document Information [Line Items] | ||
Security of 12b Security | Common stock, par value $0.0001 per share | |
Trading Symbol | NOGN | |
Security Exchange Name | NASDAQ | |
Warrant [Member] | ||
Document Information [Line Items] | ||
Security of 12b Security | Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50 per share | |
Trading Symbol | NOGNW | |
Security Exchange Name | NASDAQ |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 617 | $ 15,385 |
Accounts receivable, net | 1,924 | 1,578 |
Inventory | 14,444 | 15,726 |
Prepaid expenses and other current assets | 3,810 | 2,539 |
Total current assets | 20,795 | 35,228 |
Property and equipment, net | 1,476 | 1,595 |
Right-of-use asset, net (Note 19) | 17,350 | 17,391 |
Goodwill | 6,748 | 6,748 |
Intangible assets, net | 5,439 | 5,493 |
Investment in unconsolidated affiliates | 6,759 | 7,404 |
Other non-current asset | 1,065 | 1,074 |
Total assets | 59,632 | 74,933 |
Current Liabilities: | ||
Accounts payable | 18,457 | 19,605 |
Due to Clients | 6,633 | 10,891 |
Related party payables | 219 | 1,033 |
Loan (Note 7) | 2,922 | 0 |
Promissory notes (Note 7) | 4,807 | 0 |
Accrued expenses and other liabilities (Note 6) | 15,028 | 17,826 |
Lease liabilities, current portion (Note 19) | 4,565 | 4,367 |
Total current liabilities | 52,631 | 53,722 |
Convertible notes (Note 7) | 56,260 | 60,852 |
Deferred tax liabilities | 368 | 394 |
Lease liabilities, net of current portion (Note 19) | 14,775 | 15,223 |
Other long-term liabilities (Note 6) | 17,840 | 17,766 |
Total liabilities | 141,874 | 147,957 |
Commitments and contingencies (Note 19) | ||
STOCKHOLDERS' DEFICIT | ||
Common stock, $0.0001 par value, 500,000,000 shares authorized; 3,334,714 shares issued and outstanding as of March 31, 2023 and December 31, 2022 | 0 | 0 |
Additional paid-in capital | 9,953 | 9,270 |
Accumulated deficit | (92,195) | (82,294) |
Total stockholders' deficit | (82,242) | (73,024) |
Total liabilities and stockholders' deficit | $ 59,632 | $ 74,933 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Common stock par value | $ 0.0001 | $ 0.0001 |
Common stock shares authorized | 500,000,000 | 500,000,000 |
Common stock shares issued | 3,334,714 | 3,334,714 |
Common stock shares outstanding | 3,334,714 | 3,334,714 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Total net revenue | $ 16,675 | $ 25,199 | |
Operating costs and expenses: | |||
Sales and marketing | 702 | 566 | |
Research and development | 963 | 1,577 | |
General and administrative | 17,325 | 17,222 | |
Depreciation and amortization | 202 | 201 | |
Total operating costs and expenses | 28,664 | 35,252 | |
Operating loss | (11,989) | (10,053) | |
Interest expense | (2,014) | (652) | |
Change in fair value of promissory notes | (159) | 0 | |
Change in fair value of derivative instruments | 847 | 0 | |
Change in fair value of unconsolidated affiliates | (645) | (1,033) | |
Change in fair value of convertible notes | 4,591 | 0 | |
Other (loss) income, net | (558) | 1,954 | |
Loss before income taxes | (9,927) | (9,784) | |
(Benefit) Provision for income taxes | (26) | 158 | |
Net loss | $ (9,901) | $ (9,942) | |
Net loss per common share - basic | $ (2.11) | $ (5.02) | |
Net loss per common share - diluted | $ (2.11) | $ (5.02) | |
Weighted average shares outstanding - basic | 4,688,331 | 1,981,097 | |
Weighted average shares outstanding - diluted | 4,688,331 | 1,981,097 | |
Service [Member] | |||
Total net revenue | $ 8,917 | $ 8,533 | |
Operating costs and expenses: | |||
Cost of revenue | [1] | 5,530 | 5,435 |
Product [Member] | |||
Total net revenue | 6,544 | 12,922 | |
Operating costs and expenses: | |||
Cost of revenue | [1] | 3,942 | 10,251 |
Related Parties [Member] | |||
Total net revenue | $ 1,214 | $ 3,744 | |
[1] Exclusive of depreciation and amortization shown separately. |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Accumulated Deficit [Member] | Class A Redeemable Convertible Preferred Stock [Member] Convertible Redeemable Preferred Stock [Member] | Class B Redeemable Convertible Preferred Stock [Member] Convertible Redeemable Preferred Stock [Member] | |
Beginning Balance at Dec. 31, 2021 | $ (13,230) | $ 1 | $ 4,361 | $ (1,330) | $ (16,262) | $ 4,687 | $ 6,502 | |
Beginning Balance, Shares at Dec. 31, 2021 | 9,129,358 | 2,042,483 | 1,459,462 | |||||
Beginning Balance, as adjusted, shares at Dec. 31, 2021 | 1,981,097 | 443,224 | 316,707 | |||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 31, 2021 | (13,230) | 4,362 | (1,330) | (16,262) | ||||
Beginning Balance, as adjusted at Dec. 31, 2021 | $ 4,687 | $ 6,502 | ||||||
Retroactive application of reverse recapitalization, shares | [1] | 30,492,588 | 6,822,012 | 4,874,688 | ||||
Retroactive application of reverse recapitalization | [1] | $ 3 | (3) | |||||
Retroactive application of reverse stock split shares | [2] | (37,640,849) | (8,421,271) | (6,017,443) | ||||
Retroactive application of reverse stock split | [2] | $ (4) | 4 | |||||
Stock-based compensation | 58 | 58 | ||||||
Fair Value Adjustment of Warrants | 0 | |||||||
Fair value of equity classified warrants in common stock | 0 | |||||||
Net loss | (9,942) | (9,942) | ||||||
Ending Balance at Mar. 31, 2022 | (23,114) | 4,420 | (1,330) | (26,204) | $ 4,687 | $ 6,502 | ||
Ending Balance, shares at Mar. 31, 2022 | 1,981,097 | 443,224 | 316,707 | |||||
Beginning Balance at Dec. 31, 2022 | (73,024) | 9,270 | (82,294) | |||||
Beginning Balance, Shares at Dec. 31, 2022 | 3,334,714 | |||||||
Stock-based compensation | 253 | 253 | ||||||
Fair Value Adjustment of Warrants | 430 | 430 | ||||||
Fair value of equity classified warrants in common stock | 430 | 430 | ||||||
Net loss | (9,901) | (9,901) | ||||||
Ending Balance at Mar. 31, 2023 | $ (82,242) | $ 9,953 | $ 0 | $ (92,195) | ||||
Ending Balance, shares at Mar. 31, 2023 | 3,334,714 | |||||||
[1] As part of the Business Combination (as disclosed in Note 1), all share information has been retrospectively adjusted using the exchange ratio stipulated by the Merger Agreement As part of the Reverse Stock Split (as disclosed in Note 1), all share information has been retrospectively adjusted using the exchange ratio stipulated by the Reverse Stock Split. |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (9,901) | $ (9,942) |
Adjustments to reconcile net loss to net cash used by operating activities: | ||
Depreciation and amortization | 202 | 201 |
Amortization of debt issuance costs and discounts | 482 | 102 |
Stock-based compensation | 253 | 58 |
Deferred income taxes | (26) | 158 |
Change in fair value of unconsolidated affiliates | 645 | 1,033 |
Change in fair value of warrant liability | 430 | 0 |
Change in fair value of promissory notes | 159 | 0 |
Change in fair value of convertible notes | (4,591) | 0 |
Change in fair value of derivatives | (847) | 0 |
Settlement of deferred revenue | 0 | (1,611) |
Gain on disposal of asset | (1) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (347) | (363) |
Related party receivables | 0 | (525) |
Inventory | 1,282 | 4,052 |
Prepaid expenses and other current assets | (1,262) | (2,309) |
Accounts payable | (1,148) | 2,505 |
Due to clients | (4,258) | (277) |
Related party payables | (814) | 4,015 |
Lease assets and liabilities | (219) | 0 |
Accrued expenses and other liabilities | (2,285) | (2,374) |
Net cash used in operating activities | (22,246) | (5,277) |
Cash Flows from Investing Activities: | ||
Purchases of property and equipment | (21) | (101) |
Proceeds from sale of property and equipment | 3 | 0 |
Net cash used in investing activities | (18) | (101) |
Cash Flows from Financing Activities: | ||
Proceeds from short-term loan | 3,250 | 0 |
Payment of short-term loan | (328) | 0 |
Proceeds from promissory notes | 4,649 | 0 |
Payment of debt issuance costs | (75) | 0 |
Proceeds from line of credit | 0 | 47,455 |
Repayments of line of credit | 0 | (43,803) |
Net cash provided by financing activities | 7,496 | 3,652 |
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH | (14,768) | (1,726) |
Beginning of period | 15,385 | 4,571 |
End of period | 617 | 2,845 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid for interest | 396 | 652 |
Cash paid for taxes | 6 | 1 |
Right-of-use assets exchanged for lease liabilities | 1,120 | 0 |
SCHEDULE OF CASH AND RESTRICTED CASH | ||
Cash | 617 | 1,345 |
Restricted cash | 0 | 1,500 |
Total cash and restricted cash | $ 617 | $ 2,845 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 1. DESCRI PTION OF BUSINESS Nogin, Inc. (together with its subsidiaries, the “Company” or “Nogin”) is an e-commerce, technology platform provider that delivers Commerce-as-a-Service (“CaaS”) solutions as a headless, flexible full stack enterprise commerce platform with cloud services and optimizations along with experts for brands and retailers that provide a unique combination of customizability and sales efficiency. The Company manages clients’ front-to-back-end operations so clients can focus on their business. The Company’s business model is based on providing a comprehensive e-commerce solution to its customers on a revenue sharing basis. Unless the context otherwise requires, references in this subsection to “we,” “our,” “Nogin” and the “Company” refer to the business and operations of Legacy Nogin (as defined below) and its consolidated subsidiaries prior to the Business Combination (as defined below) and to Nogin, Inc. (formerly known as Software Acquisition Group Inc. III) and its consolidated subsidiaries following the consummation of the Business Combination. The Company’s headquarters and principal place of business are in Tustin, California. Reverse Stock Split On March 18, 2023, the Company’s Board of Directors approved a one-for-twenty reverse stock split of its common stock. The reverse stock split became effective upon filing of a certificate of amendment to the Company’s second amended and restated certificate of incorporation on March 28, 2023. Upon the effectiveness of the reverse stock split, (i) every twenty shares of outstanding common stock were reclassified and combined into one share of common stock and (ii) the number of common stock for which each outstanding option and warrant to purchase common stock is exercisable was proportionately decreased and the exercise price per share of common stock of each outstanding option and warrant to purchase common stock was proportionately increased. No fractional shares were issued as a result of the reverse stock split. The total number of authorized shares of common stock and the par value per share of common stock did not change as a result of the reverse stock split. Accordingly, all share and per share amounts for all periods presented in these financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the reverse stock split and exercise price of each outstanding option and warrant as if the transaction had occurred as of the beginning of the earliest period presented. Business Combination On August 26, 2022 (the “Closing Date”), the Company completed its previously announced Business Combination pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of February 14, 2022 (as amended on April 19, 2022 and August 26, 2022), by and among the Company (formerly known as Software Acquisition Group Inc. III (“SWAG”)), Nuevo Merger Sub, Inc., a wholly owned subsidiary of SWAG (“Merger Sub”), and Branded Online, Inc. dba Nogin (“Legacy Nogin”). Pursuant to the Merger Agreement, Merger Sub was merged with and into Legacy Nogin, with Legacy Nogin surviving the Business Combination as a wholly owned subsidiary of the Company (the “Business Combination” and, together with the other transactions contemplated by the Merger Agreement, the “Transactions”). While Legacy Nogin became a wholly-owned subsidiary of the Company, Legacy Nogin was deemed to be the acquirer in the Business Combination for accounting purposes. Accordingly, the Business Combination was accounted for as a reverse recapitalization, in which case the condensed consolidated financial statements of the Company represent a continuation of Legacy Nogin and the issuance of common stock and cash consideration in exchange for the net assets of SWAG recognized at historical costs and no recognition of goodwill or other intangible assets. Operations prior to the Business Combination are those of Legacy Nogin and all share and per-share data included in these condensed consolidated financial statements have been retroactively adjusted to give effect to the Business Combination. As a result of the Business Combination, equity holders of Legacy Nogin received approximately 2.7 million shares of the Company’s common stock (“Common Stock”) and cash consideration of $ 15.0 million, of which $ 10.9 million was deferred on the Closing Date (Note 9). The treatment of the Business Combination as a reverse recapitalization was based on the stockholders of Legacy Nogin holding the majority of voting interests of the Company, Legacy Nogin’s existing management team serving primarily as the initial management team of the Company, Legacy Nogin’s appointment of the majority of the initial board of directors of the Company and Legacy Nogin’s operations comprising the ongoing operations of the Company. In connection with the Business Combination, the Company received proceeds of approximately $ 58.8 million from SWAG’s trust account, net of redemptions by SWAG’s public shareholders, as well as approximately $ 65.5 million in proceeds from the contemporaneous issuance of convertible notes (the “Convertible Notes”). The aggregate cash raised has been used for general business purposes, the paydown of Legacy Nogin’s outstanding debt, the payment of transaction costs and the payment of the cash consideration. The following table reconciles the elements of the Business Combination to the condensed consolidated statements of cash flows and the condensed consolidated statements of convertible redeemable preferred stock and stockholders’ deficit for the three months ended March 31, 2023: Recapitalization Cash - SWAG trust and cash, net of redemptions 58,841 Cash - PIPE equity financing 1,052 Less: Transaction and advisory fees paid in cash ( 54,409 ) Less: Cash election consideration paid in cash at the Closing Date ( 4,109 ) Net proceeds from Business Combination 1,375 Plus: Issuance of common stock to settle certain transaction costs 3,588 Less: non-cash items charged against additional paid-in capital ( 17,510 ) Less: Deferred cash election consideration (Note 9) ( 9,198 ) Net contributions from Business Combination and PIPE equity financing ( 21,745 ) The number of shares of Common Stock outstanding immediately following the consummation of the Business Combination was as follows: Number of Shares SWAG Common Stock, outstanding prior to the Business Combination 1,425,492 Less: Redemption of SWAG shares ( 851,080 ) SWAG Common Stock 574,412 Shares issued in PIPE equity financing 25,854 Shares issued to financial advisors to settle transaction and issuance costs 20,375 Business Combination and PIPE equity financing shares 620,641 Nogin shares 2,714,073 Total shares of common stock immediately after Business Combination 3,334,714 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying condensed financial statements should be read in conjunction with the Company’s Consolidated Financial Statements for the year ended December 31, 2022. The interim results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the period ending December 31, 2023, or for any future annual or interim periods. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. Liquidity and Capital Resources Our primary requirements for short-term liquidity and capital are working capital, inventory management, capital expenditures, public company costs and general corporate needs. We expect these needs to continue as we develop and grow our business. Our future capital requirements will depend on many factors, including our levels of revenue, the expansion of sales and marketing activities, successful customer acquisitions, the results of business initiatives, the timing of new product introductions and overall economic conditions. Prior to the Business Combination, the Company’s available liquidity and operations were financed through equity contributions, a line of credit, promissory notes and cash flow from operations. Moving forward, the Company expects to fund operations through equity contributions and cash flow from operations. Because we are in the growth stage of our business and operate in an emerging field of technology, we expect to continue to invest in research and development and expand our sales and marketing teams worldwide. We are likely to require additional capital to respond to technological advancements, competitive dynamics or technologies, customer demands, business opportunities, challenges, acquisitions or unforeseen circumstances and in either the short-term or long-term may determine to engage in equity or debt financings or enter into credit facilities for other reasons. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited. The accompanying consolidated financial statements as of and for the three months ended March 31, 2023 have been prepared assuming the Company will continue as a going concern. The Company has sustained recurring losses and negative cash flows from operations and had a cash balance of $ 0.6 million as of March 31, 2023. Our independent auditors, in their report on our audited financial statements for the year ended December 31, 2022, expressed substantial doubt about our ability to continue as a going concern for at least twelve months from the date that such consolidated financial statements were issued. In March 2023, the Company did not timely make the payment of the accrued interest on the Convertible Notes due on March 1, 2023 of $ 2.3 million, resulting in a default. On March 26, 2023, the Company, the Notes Guarantors and the holders of the Convertible Notes (collectively, the “Holders”) entered into limited waivers and consents (each, a “Waiver” and collectively, the “Waivers”) pursuant to which, among other things, each Holder agreed to (i) waive the Specified Default and any payment obligation of the Company under the Indenture with respect to the March Interest Payment (as defined below), (ii) in lieu of the Interest Payments (as defined below), (a) receive a Promissory Note or Convertible Promissory Note, as applicable, and (b) amend the Warrant Agreement to reduce the exercise price of the warrants governed thereby from $ 11.50 to $ 0.01 , and (iii) consent to the entry into the Supplemental Indenture (as defined below). The Supplemental Indenture, among other things, lowered the minimum amounts of liquidity the Company must maintain on a consolidated basis for each quarter in 2023 and the first quarter of 2024. In April 2023, the Company completed a registered public offering of common stock and common warrants for aggregate gross proceeds of $ 22 million, before deducting placement agent fees and other offering expenses. In addition, the Company is currently executing on various strategies to improve available cash balances, liquidity and cash generated from operations, including strategic growth plans, ongoing comprehensive cost reduction and performance improvement programs, reduced headcount and elimination of certain discretionary and general and administrative expenses, and taking steps to improve the operational efficiency of our fulfillment operations. With these strategies in place, the Company believes it will be able to continue as a going concern for at least the next twelve months. COVID-19 Pandemic The worldwide spread of COVID-19 and its variants have had, and continue to have a significant impact around the world. The COVID-19 pandemic has resulted in a global slowdown of economic activity which altered the demand for a broad variety of goods and services, including those provided by our clients, while also disrupting sales channels and advertising and marketing activities until economic activity normalized. Our revenue growth and results of operations have been resilient despite the headwinds created by the COVID-19 pandemic and its variants. The extent to which ongoing and future developments related to the global impact of the COVID-19 pandemic and related vaccination measures designed to curb its spread continue to impact our business, financial condition, and results of operations, all of which cannot be predicted with certainty. Many of these ongoing and future developments are beyond our control, including the speed of contagion, the development, distribution and implementation of effective preventative or treatment measures, including vaccines (and vaccination rates), the scope of governmental and other restrictions on travel, discretionary services and other activity, and the public reactions and receptiveness to these developments. The impacts of the COVID-19 pandemic and its variants will depend on future developments, including the duration and spread of the pandemic. These developments and the impacts of the COVID-19 pandemic on the financial markets and overall economy are highly uncertain and cannot be predicted. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. The Company prepared these estimates based on the most current and best available information, but actual results could differ materially from these estimates and assumptions. Significant estimates and assumptions reflected in the financial statements include, but are not limited to, the allowance for credit losses and revenue recognition, including variable consideration for estimated reserves for returns and other allowances, forecasts and other assumptions used in valuations. Management bases its estimates on historical experience and on assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying value of assets and liabilities that are not readily apparent from other sources. Accounts Receivable, Net The allowance for credit losses was $ 333 thousand as of March 31, 2023 and $ 425 thousand as of December 31, 2022. Inventory Inventory is comprised entirely of finished goods for resale. The reserve for returns was $ 159 thousand as of March 31, 2023 and $ 535 thousand as of December 31, 2022. Concentration of Risks Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, restricted cash and accounts receivables. The Company maintains cash balances at financial institutions. Amounts on deposit at these institutions are secured by the Federal Deposit Insurance Corporation (“FDIC”). At various times, the Company has had bank deposits in excess of the FDIC's insurance limit. The Company has not experienced any losses in its cash accounts to date. Management believes that the Company is not exposed to any significant credit risk with respect to its cash. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. As of March 31, 2023, receivables from two customers amounted to $ 619 thousand (or 36 % of accounts receivable) and $ 298 thousand (or 18 % of accounts receivable), respectively. As of December 31, 2022, receivables from two customers amounted to $ 771 thousand (or 44 % of accounts receivable) and $ 153 thousand (or 9 % of accounts receivable), respectively. Major Customers For the three months ended March 31, 2023, revenue from our top three customers amounted to $ 2.9 million (or 17 % of total revenue), $ 1.8 million (or 11 % of total revenue), and $ 1.7 million (or 10 % of total revenue), respectively. For the three months ended March 31, 2022, revenue from our top three customers amounted to $ 9.2 million (or 36 % of total revenue), $ 3.7 million (or 15 % of total revenue), and $ 2.0 million (or 8 % of total revenue), respectively. Major Suppliers For the three months ended March 31, 2023, our top three vendors accounted for operating expense of $ 2.1 million (or 12 % of total operating expense purchases), $ 2.0 million (or 12 % of total operating expense purchases) and $ 1.4 million (or 8 % of total operating expense purchases), respectively. For the three months ended March 31, 2022, our top three vendors accounted for operating expense of $ 4.8 million (or 20 % of total operating expense purchases), $ 2.3 million (or 10 % of total operating expense purchases) and $ 2.1 million (or 9 % of total operating expense purchases), respectively. Right-of-use Assets and Lease Liabilities On January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) 2016-02 and all subsequent amendments, collectively codified in ASC Topic 842, “Leases” (“ASC 842”), using the current period adjustment method. Accordingly, comparative period financial information was not restated for the effects of adopting ASC 842. The significant practical expedients we adopted include the following: • We elected the practical expedient to apply the transition approach as of the beginning of the period of adoption and not restate comparative periods; • We elected to utilize the “package of three” expedients, as defined in ASC 842, whereby we did not reassess whether contracts existing prior to the effective date contain leases, nor did we reassess lease classification determinations nor whether initial direct costs qualify for capitalization; • We elected the practical expedient to not capitalize any leases with initial terms of twelve months or less on our consolidated balance sheet; • For all underlying classes of leased assets, we elected the practical expedient to not separate lease and non-lease components; and • We elected not to use hindsight in determining the lease term for lease contracts that have historically been renewed or amended. As of the date of adoption on January 1, 2022, the impact of ASC 842 resulted in the recognition of a right-of-use asset (“ROU asset”) and lease liability for our operating leases on our consolidated balance sheets of approximately $ 13.0 million and $ 15.1 million, respectively. Lease liabilities were recognized based on the present value of remaining lease payments over the remaining lease term. ROU assets were recognized utilizing the lease liability as of January 1, 2022 adjusted for deferred rent recorded as under ASC 840 operating lease related balances. As the Company’s operating lease agreements do not provide a rate implicit in the lease, we discounted the remaining lease payments using an estimated incremental borrowing rate, which was based on the information available at the adoption date. Operating lease cost is recognized on a straight-line basis over the lease term. Variable lease costs such as common area costs and other operating costs are expensed as incurred. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The adoption of this new guidance did not have a material net impact on the Company’s consolidated statements of operations or consolidated statements of cash flows. Our operating leases primarily consist of office space, distribution centers and equipment used within our operations. Most of the leases have lease terms ranging from three to eight years, although the terms and conditions of our leases can vary significantly from lease to lease. Long-lived Assets There was no impairment of long-lived assets at March 31, 2023. Goodwill There was no impairment of goodwill at March 31, 2023. Intangibles Intangible assets include acquired technology, trade names and other intangibles. Intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the asset, which range from five to fifteen years . Indefinite lived assets such as trade names are expected to generate cash flows indefinitely. Consequently, these assets were classified as indefinite-lived intangibles and accordingly are not amortized but reviewed for impairment annually, or sooner under certain circumstances. There was no impairment of indefinite-lived assets at March 31, 2023. Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480 and ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own shares of common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter until settlement. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the condensed statements of operations. Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC Topic 740, “Income Taxes” (ASC 740). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since its inception. Revenue Recognition Revenue is accounted for using FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. In accordance with ASC Topic 606, the Company recognizes revenue when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. The Company determines revenue recognition through the following steps: • Identification of a contract with a customer, • Identification of the performance obligations in the contract, • Determination of the transaction price, • Allocation of the transaction price to the performance obligations in the contract, and • Recognition of revenue when or as the performance obligations are satisfied. A performance obligation is a promise in a contract to transfer a distinct product. Performance obligations promised in a contract are identified based on the goods that will be transferred that are both capable of being distinct and are distinct in the context of the contract, whereby the transfer of the goods is separately identifiable from other promises in the contract. Performance obligations include establishing and maintaining customer online stores, providing access to the Company’s e-commerce platform, customer service support, photography services, warehousing, and fulfillment. Most of the contracts of the Company with customers contain multiple promises, which may result in multiple performance obligations, while others are combined into one performance obligation. For contracts with customers, the Company accounts for individual promises separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines the standalone selling prices based on its overall pricing objectives, taking into consideration market conditions and other factors. The Company has concluded the sale of goods and related shipping and handling on behalf of our customers are accounted for as a single performance obligation, while the expenses incurred for actual shipping charges are included in cost of sales. The Company’s revenue is mainly commission fees derived from contractually committed gross revenue processed by customers on the Company's e-commerce platform. The Company is acting as an agent in these arrangements and customers do not have the contractual right to take possession of the Company's software. Revenue is recognized in an amount that reflects the consideration that the Company expects to ultimately receive in exchange for those promised goods, net of expected discounts for sales promotions and customary allowances. CaaS Revenue is recognized on a net basis from maintaining e-commerce platforms and online orders, as the Company is engaged primarily in an agency relationship with its customers and earns defined amounts based on the individual contractual terms for the customer and the Company does not take possession of the customers' inventory or any credit risks relating to the products sold. Variable consideration is included in revenue for potential product returns. The Company uses an estimate to constrain revenue for the expected variable consideration at each period end. The Company reviews and updates its estimates and related accruals of variable consideration each period based on the terms of the agreements, historical experience, and expected levels of returns. Any uncertainties in the ultimate resolution of variable consideration due to factors outside of the Company’s influence are typically resolved within a short timeframe therefore not requiring any additional constraint on the variable consideration. The estimated reserve for returns is included on the balance sheet in accrued expenses with changes to the reserve in revenue on the accompanying statement of operations. The reserve for returns as of March 31, 2023 was $ 0.6 million and as of December 31, 2022 was $ 1.4 million. In most cases the Company acts as the merchant of record, resulting in a due to client liability (discussed below). However, in some instances, the Company may perform services without being the merchant of record in which case there is a receivable from the customer. Payment terms and conditions are generally consistent for customers, including credit terms to customers ranging from seven days to 60 days, and the Company’s contracts do not include any significant financing component. The Company performs credit evaluations of customers and evaluates the need for allowances for potential credit losses based on historical experience, as well as current and expected general economic conditions. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and, therefore, are excluded from net revenue in the condensed consolidated statements of operations. Commerce as a Service As noted above, the Company’s main revenue stream is CaaS revenue in which it receives commission fees derived from contractually committed gross revenue processed by customers on the Company's e-commerce platform. Consideration for online sales is collected directly from the end customer by the Company and amounts not owed to the Company are remitted to the customer. Revenue is recognized on a net basis from maintaining e-commerce platforms and online orders, as the Company is engaged in an agency relationship with its customers and earns defined amounts based on the individual contractual terms for the customer and the Company does not take possession of the customers' inventory or any credit risks relating to the products sold. Product sales Under certain licensee agreements, the Company is the owner of inventory and reseller of record. As a result, the Company is the principal in sales to end customers and records these revenues on a gross basis at a point in time. Fulfillment services Revenue for business-to-business (“B2B”) fulfillment services is recognized on a gross basis either at a point in time or over a point in time. For example, inbound and outbound services are recognized when the service is complete, while monthly storage services are recognized over the service period. Marketing services Revenue for marketing services is recognized on a gross basis as marketing services are complete. Performance obligations include providing marketing and program management such as procurement and implementation. Shipping services Revenue for shipping services is recognized on a gross basis as shipments are completed and products are shipped to end customers. Set up and implementation services The Company provides set up and implementation services for new clients. The revenue is recognized on a gross basis at the completion of the service, with the unearned amounts received for incomplete services recorded as deferred revenue, if any. Other services Revenue for other services such as photography, business to customer (“B2C”) fulfillment, customer service, development and web design are reimbursable costs and recognized on the gross basis, and are services rendered as part of the performance obligations to clients for which an online platform and online orders are managed. All reimbursable costs are the responsibility of the Company as the Company uses such services to fulfill its performance obligations. Cost of services Cost of services reflects costs directly related to providing services under the master service agreements with customers, which primarily includes service provider costs directly related to processing revenue transactions, marketing expenses and shipping and handling expenses which correspond to marketing and shipping revenues, as well as credit card merchant fees. Cost of services is exclusive of depreciation and amortization and general salaries and related expenses. Cost of product revenue Cost of product revenue reflects costs directly related to selling inventory acquired from select clients, which primarily includes product cost, warehousing costs, fulfillment costs, credit card merchant fees and third-party royalty costs. Cost of product revenue is exclusive of depreciation and amortization and general salaries and related expenses. Due to Clients Due to clients consists of amounts payable to clients pertaining to the client’s last month pro rata share of revenue earned and collected by the Company, less any returns and any expenses incurred by the Company on behalf of the clients. In most cases, the Company acts as the merchant and seller of record and thus directly collects the funds from sales on the online store. As such, at the end of each month, there is an amount owed to the Company’s clients net of the Company’s fees, and expenses incurred on the client’s behalf. Fair Value Measurement The Company applies the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (“ASC 820”), which provides a single authoritative definition of fair value, sets out a framework for measuring fair value, and expands on required disclosures about fair value measurement. The Company applies the provisions of ASC 820 to all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 - Quoted prices in active markets for identical assets or liabilities. • Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 - Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. In determining fair value, the Company utilized valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counter party credit risk and nonperformance risk in its assessment of fair value. The carrying value of the Company’s short-term financial instruments, such as cash and cash equivalents, restricted cash, accounts receivable, notes payable, and accounts payable, approximate the fair value due to the immediate or short-term maturity of these instruments. The carrying value of the Company’s long-term debt approximates fair value as the interest rate on the Company’s secured credit facility and certain other debt has a variable component, which is reflective of the market. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses” (Topic 326). The FASB issued this update to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this update replace the existing guidance of incurred loss impairment methodology with an approach that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses,” which clarifies the scope of guidance in the ASU 2016-13. This update is effective for interim and annual periods beginning after December 15, 2022, with amendments generally applied prospectively. The Company adopted this update effective January 1, 2023, and it did not have a material impact on the Company's financial statements as a result of adoption. In August 2020, the FASB issued Accounting Standards Update ("ASU") 2020-06 Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which improves Convertible Instruments and Contracts in an Entity’s Own Equity and is expected to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted earnings per share (EPS) calcula |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | 3. PROPERTY AND EQUIPMENT Property and equipment, net as of March 31, 2023 and December 31, 2022, consisted of the following (in thousands): March 31, December 31, Furniture and equipment $ 2,402 $ 2,406 Leasehold improvements 572 572 Property and equipment, gross 2,974 2,978 Less accumulated depreciation ( 1,498 ) ( 1,383 ) Property and equipment, net $ 1,476 $ 1,595 Depreciation expense for property and equipment for the three months ended March 31, 2023 and 2022 was $ 138 thousand and $ 143 thousand, respectively. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 4. GOODWILL AND INTANGIBLE ASSETS In connection with the ModCloth acquisition (Note 13), the Company recorded $ 6.7 million of goodwill. In connection with the Betabrand acquisition, the Company’s amortization expense for capitalized software for the three months ended March 31, 2023 and 2022 was $ 55 thousand and $ 58 thousand, respectively. As of March 31, 2023 and December 31, 2022, intangible assets consist of the following (in thousands): March 31, December 31, Software $ 1,166 $ 1,166 Trade Name 4,617 4,617 5,783 5,783 Less: Accumulated amortization ( 344 ) ( 290 ) Intangible assets-net $ 5,439 $ 5,493 As of March 31, 2023, the Company’s amortization of intangibles for the next five years are as follows (in thousands): 2023 (remaining payments) $ 164 2024 219 2025 219 2026 219 2027 - Total remaining intangible amortization $ 821 |
INVESTMENT IN UNCONSOLIDATED AF
INVESTMENT IN UNCONSOLIDATED AFFILIATES | 3 Months Ended |
Mar. 31, 2023 | |
Investments in and Advances to Affiliates [Abstract] | |
Investments in and Advances to Affiliates, Schedule of Investments [Text Block] | 5. INVESTMENT IN UNCONSOLIDATED AFFILIATES On April 6, 2021, the Company and Tiger Capital Group, LLC (“Tiger Capital”) formed a joint venture, ModCloth Partners, LLC (“ModCloth”). The Company and Tiger Capital each contributed $ 1.5 million into ModCloth and the Company owned 50 % of the outstanding membership units. Tiger Capital provided the financing for the inventory, while the Company entered into a Master Services Agreement (“MSA”) with ModCloth to provide the e-commerce services (see Note 14). The Company accounted for its investment in ModCloth under the fair value option of accounting. On December 1, 2022, Tiger Capital assigned its interest in ModCloth to the Company for $ 1.5 million, at which point ModCloth became a wholly-owned subsidiary of the Company. In addition, the Company paid the remaining balance of approximately $ 1 million on the inventory financing arrangement between ModCloth and Tiger Capital (Note 13). On December 31, 2021, the Company and CFL Delaware, Inc. (“CFL”) formed a joint venture, IPCO, whereby Nogin contributed certain assets acquired from the BTB (ABC), LLC (“Betabrand”) acquisition and entered into a MSA with IPCO to provide certain e-commerce services, marketing, photography, customer service and merchant credit card monitor fraud services (Note 14). Also, CFL entered into a Master Supply Agreement with IPCO and agreed to procure the supply of inventory to IPCO, provide manufacturing, fulfillment, logistics and warehousing services for the inventory. The Company accounts for its investment in IPCO under the fair value option of accounting. As of March 31, 2023 and December 31, 2022, the investment balance related to IPCO was $ 6.8 million and $ 7.4 million, respectively, and was included in investment in unconsolidated affiliates on the consolidated balance sheets. For the three months ended March 31, 2022, the Company recorded a loss of $ 1.6 million to other expense related to the settlement of deferred revenue related to sale of finished inventory to IPCO. In addition, the Company recorded a fair value loss related to its IPCO investment of $ 645 thousand and $ 114 thousand, respectively, included in changes in fair value of unconsolidated affiliates on the consolidated statement of operations for the three months ended March 31, 2023 and March 31, 2022. The following table presents summarized financial information for the joint venture for the three months ended March 31, 2023 and 2022, and as of March 31, 2023 and December 31, 2022 (in thousands): IPCO For the Three Months For The Three Months 2023 2022 Net revenue $ 4,018 $ 6,507 Gross margin 2,674 1,356 Net loss ( 1,397 ) ( 561 ) IPCO As of March 31, As of December 31, Current assets $ 3,564 $ 4,254 Long term assets 5,366 5,509 Current liabilities 6,940 6,142 Long term liabilities 907 1,032 The Company’s IPCO investments are Level 3 fair value measurements. The Company utilized the following valuation methods to conclude on the fair value as of March 31, 2023: - Discounted Cash Flow – The key unobservable input utilized was a discount rate of 14.7 % for IPCO. - Guideline Public Company Method – The Company utilized a revenue multiple of 0.4 x for IPCO on current period forecasted revenues. The revenue multiple was derived from public peers of the Company. - Guideline Transaction Method – The Company utilized a revenue multiple of 0.45 x for IPCO on current period forecasted revenues. The revenue multiple was derived from public transactions in which the target companies were similar to the Company. The following table summarizes the changes in the IPCO investment Level 3 fair value measurement (in thousands): IPCO Balance as of January 1, 2022 $ 7,133 Change in fair value 271 Balance as of December 31, 2022 7,404 Change in fair value ( 645 ) Balance as of March 31, 2023 $ 6,759 |
CERTAIN LIABILITY ACCOUNTS
CERTAIN LIABILITY ACCOUNTS | 3 Months Ended |
Mar. 31, 2023 | |
Liabilities [Abstract] | |
Certain Liability Accounts | 6. CERTAIN LIABILITY ACCOUNTS Accrued expenses and other current liabilities as of March 31, 2023 and December 31, 2022 were as follows (in thousands): March 31, December 31, Business Combination consideration payable $ 5,000 $ 5,000 Contract liability 4,054 5,058 Payroll and other employee costs 2,215 1,300 Sales tax payable 557 1,191 Accrued interest 5 1,622 Accrued transaction costs — 840 Inventory accrual — 503 Other accrued expenses and current liabilities 3,197 2,312 Total $ 15,028 $ 17,826 Other long-term liabilities as of March 31, 2023 and December 31, 2022 were as follows (in thousands): March 31, December 31, Deferred transaction costs payable $ 10,979 $ 10,979 Business Combination consideration payable 3,555 3,355 Deferred PIPE issuance costs payable 1,160 1,160 PIPE principal accretion 1,104 617 Legal settlement 940 621 Standby agreement derivative liability — 847 Other long-term liabilities 102 187 Total $ 17,840 $ 17,766 |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | 7. LONG-TERM DEBT Convertible Notes and Indenture On April 19, 2022, the Company, certain guarantors named therein (the “Notes Guarantors”) and certain investors named therein (each, a “Subscriber” and collectively, the “Subscribers”), entered into subscription agreements (each, a “PIPE Subscription Agreement” and collectively, the “PIPE Subscription Agreements”) pursuant to which the Company agreed to issue and sell to the Subscribers immediately prior to the closing of the Business Combination (i) up to an aggregate principal amount of $ 75.0 million of 7.00 % Convertible Senior Notes due 2026 (the “Convertible Notes”) at par value of the notes and (ii) up to an aggregate of 1.5 million warrants (the “PIPE Warrants”) with each whole PIPE Warrant entitling the holder thereof to purchase one share of Common Stock On August 26, 2022, immediately prior to the closing of the Business Combination (the “Closing”), the Company issued $ 65.5 million aggregate principal amount of Convertible Notes and, as contemplated by the PIPE Subscription Agreements, the Company, the Note Guarantors and U.S. Bank Trust Company, National Association, as trustee, entered into an Indenture governing the Convertible Notes (the “Indenture”). The Convertible Notes were offered in a private placement under the Securities Act, pursuant to the PIPE Subscription Agreements. The Convertible Notes will mature on September 1, 2026 (the “Maturity Date”), unless earlier repurchased, redeemed or converted in accordance with their terms, and will accrue interest at a rate of 7.00 % per annum, payable in cash. The Convertible Notes may be converted at any time (in whole or in part) into shares of Common Stock, at the option of the holder of such Convertible Note, based on the applicable conversion rate at such time. The initial conversion price is approximately $ 11.50 per share of Common Stock, based on an initial conversion rate of 86.9565 shares of Common Stock per $ 1,000 principal amount of Convertible Notes. For conversions with a conversion date on or after the first anniversary of the closing of the Transactions and prior to the regular record date immediately preceding the Maturity Date, the conversion consideration will also include an interest make-whole payment equal to the remaining scheduled payments of interest on the Convertible Note being converted through the Maturity Date. The Company will be able to elect to make such interest make-whole payment in cash or in Common Stock, subject to certain conditions. The conversion rate is subject to adjustments set forth in the Indenture, including conversion rate resets (x) on August 27, 2023, September 26, 2023 and September 26, 2024 and (y) following the consummation of certain equity and equity-linked offerings by the Company and sales of certain equity and equity-linked securities by certain shareholders of the Company. On August 27, 2023, the conversion rate will reset to the greater of (i) the then - current conversion rate and (ii) if the Standby Capital VWAP Sale Price (as defined below) is less than or equal to $ 7.50 , the quotient of (x) $ 1,000 and (y) the volume weighted average sale price of shares of Common Stock sold under the Standby Agreement (as defined below) (the “Standby Capital VWAP Sale Price”). As of March 31, 2023, the Standby Capital VWAP Sale Price was $ 1.76 . Each holder of a Convertible Note will have the right to cause the Post-Combination Company to repurchase for cash all or a portion of the Convertible Notes held by such holder upon the occurrence of a “Fundamental Change” (as defined in the Indenture) at a price equal to (i) on or before September 26, 2023, 100% of the original principal amount of such Convertible Note, and (ii) from and after September 26, 2023, 100% of the accreted principal amount applicable at such time pursuant to the terms of the Indenture, in each case, plus accrued and unpaid interest. The Indenture includes restrictive covenants that, among other things, require the Company to maintain a minimum level of liquidity on a consolidated basis and limit the ability of the Company and its subsidiaries to incur indebtedness above certain thresholds or to issue preferred stock, to make certain restricted payments, to dispose of certain material assets and engage in other asset sales, subject to reinvestment rights, to pay certain advisory fees in connection to the Transactions and the transactions contemplated by the PIPE Subscription Agreements above a certain threshold, and other customary covenants with respect to the collateral securing the obligations created by the Convertible Notes and the Indenture, including the entry into security documents (in each case, subject to certain exceptions set forth in the Indenture); provided that the covenants with respect to (i) the making of restricted payments, (ii) the incurrence of indebtedness, (iii) the disposition of certain material assets and asset sales, (iv) liquidity, (v) the payment of advisory fees and (vi) the collateral securing the obligations created by the Convertible Notes and the Indenture shall terminate once less than 15% of the aggregate principal amount of the Convertible Notes are outstanding. The liquidity covenant would terminate if the Company achieves $ 175 million in consolidated revenue in the preceding four fiscal quarters. Certain of the Company’s subsidiaries will serve as Notes Guarantors that jointly and severally, fully and unconditionally guarantee the obligations under the Convertible Notes and the Indenture. The Indenture also requires certain future subsidiaries of the Post-Combination Company, if any, to become Notes Guarantors. This covenant will terminate once less than 15% of the aggregate principal amount of the Convertible Notes are outstanding. The Indenture also includes customary events of default and related provisions for potential acceleration of the Convertible Notes. If the Company does not have an effective registration statement on file with the SEC within 90 days of the Closing Date, registering the underlying shares issuable upon conversion of the Convertible Notes, or fails to maintain the effectiveness of such registration statement, then additional interest would accrue on the outstanding principal of the Convertible Notes at a rate of (a) 0.25% per annum for the first 90 days commencing on the first business day following a ten business day grace period and (b) 0.50% per annum thereafter, in each case, until the Company cures the lapse of effectiveness. The Company accounts for such additional interest in accordance with ASC subtopic 825-20, Registration Payment Arrangements (“ASC 825-20”). ASC 825-20 specifies that the contingent obligation to make future payments under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a financial instrument, should be separately recognized and accounted for as a contingency in accordance with ASC 450-20, Loss Contingencies . The registration statement was declared effective on November 14, 2022. The Company elected to account for the Convertible Notes under the fair value option of accounting upon issuance of the Convertible Notes. At issuance the Company recognized the fair value of the Convertible Notes of $ 65.1 million with the remaining $ 0.4 million of proceeds received allocated to the PIPE Warrants. As of March 31, 2023 and December 31, 2022, the fair value of the Convertible Notes were $ 57.4 million and $ 62.5 million, respectively, of which $ 1.1 million and $ 1.6 million, respectively, representing accrued interest, is included in accrued expenses and other current liabilities on the consolidated balance sheets. The gain on fair value of the Convertible Notes during the three months ended March 31, 2023 was $ 4.6 million of which $ 1.1 million is included in interest expense, which is recognized based on the effective interest method. The primary reason for electing the fair value option is for simplification and cost-benefit considerations of accounting for the Convertible Notes (the hybrid financial instrument) at fair value in its entirety versus bifurcation of the embedded derivatives. The fair value was determined using a binomial lattice valuation model. The significant inputs to the valuation of the Convertible Notes at fair value are Level 3 inputs since they are not directly observable. The significant assumptions used in the model are the discount rate of 15.04 %, which is based on the company's credit rating, volatility of 96.85 % and 41 time-nodes. The Company did not timely make the payment of the accrued interest on the Convertible Notes due on March 1, 2023. On March 26, 2023, the Company, the Notes Guarantors and Holders entered into limited waivers and consents pursuant to which each holder agreed to (i) waive the Specified Default and any payment obligation of the Company under the Indenture with respect to the March Interest Payment, (ii) in lieu of the March Interest Payment and payment of the accrued interest on the Convertible Notes due on September 1, 2023 (collectively, the “Interest Payments”), (a) receive a Promissory Note (as defined below) and (b) amend the Warrant Agreement (as defined below) to reduce the exercise price of the warrants governed thereby from $ 11.50 to $ 0.01 , and (iii) consent to the entry into the Supplemental Indenture. The Supplemental Indenture, among other things, (i) lowered the minimum amounts of liquidity the Company must maintain on a consolidated basis for each quarter in 2023 and the first quarter of 2024, (ii) added restrictions on the Company's ability to make payments relating to certain restricted investments, (iii) decreased the maximum amount of equity interests that the Company may repurchase, redeem, acquire or retire, (iv) removed the Company's ability to issue preferred stock or incur certain unsecured indebtedness or junior lien indebtedness, (v) decreased other permitted debt baskets, (vi) decreased the threshold for a cross-default for purposes of determining an Event of Default and (vii) added a new Event of Default in the event the Company does not consummate an underwritten primary equity offering providing at least $ 10 million of proceeds to the Company by April 30, 2023. On March 26, 2023, the Company, the Notes Guarantors and each holder of the Convertible Notes executed unsecured promissory notes (each, a “ 2023 Promissory Note ” and collectively, the “ 2023 Promissory Notes ” ), with each 2023 Promissory Note having an aggregate principal amount equal to such holder's interest payments. The 2023 Promissory Notes mature on March 26, 2025 and accrue interest at seven percent (7.0%) per annum. In addition, the 2023 Promissory Notes provide that, in the event the Company consummates the April 2023 Offering (as defined below) by April 30, 2023, the holder of each 2023 Promissory Note has the option to require the Company to repay a portion of the principal balance of the 2023 Promissory Note in an amount equal to or less than the gross proceeds to the Company from any purchases by the holder of the Company's securities in the April 2023 Offering (the “ Put Option ” ). Each holder may exercise its Put Option within ten business days following the closing and funding of the April 2023 Offering. In addition, certain of the 2023 Promissory Notes provide such holders with the right to convert their respective promissory note (the “ Convertible Promissory Notes ” ) into unregistered securities of the Company (the “ Unregistered Securities ” ) on the same terms as the securities offered in the April 2023 Offering in the event such offering is consummated. The Company elected to account for the 2023 Promissory Notes and Convertible Promissory Notes under the fair value option of accounting upon issuance of such notes. At issuance the Company recognized the fair value of the 2023 Promissory Notes and Convertible Promissory Notes of $ 4.8 million. As of March 31, 2023, the fair value of the 2023 Promissory Notes and Convertible Promissory Notes remained consistent at $ 4.8 million. The loss on the increase in fair value of the notes during the three months ended March 31, 2023 was $ 159 thousand included in the change in fair value of promissory notes on the consolidated statements of operations. Loans In February 2023, the Company obtained a loan for $ 3 million with a third-party with an annual interest rate of 39 % and debt issuance cost of $ 75 thousand, which are to be paid from future cash receipts. The third-party has rights to future cash receipts until the loan is fully repaid. The weekly repayments began at the end of February 2023 for $ 130 thousand and will continue until the loan is fully repaid in October 2023. As of March 31, 2023, the outstanding balance of the loan was $ 2.7 million. In February 2023, the Company obtained a loan for $ 250 thousand with a merchant third-party with an annual percentage rate of 20.17 %, which are to be repaid from future cash receipts directly from the merchant. During the three months ended March 31, 2023, repayments of $ 72 thousand have been made and the loan is expected to be fully repaid in August 2023. As of March 31, 2023, the outstanding balance of the loan was $ 203 thousand. The Company calculates the interest and expenses of the debt issuance cost using the effective interest rate method. Promissory Notes During the second quarter of 2022, the Company entered into promissory notes with various individuals (the “Promissory Notes”), including current investors, members of management and other unrelated parties in exchange for cash in an amount equal to $ 7.0 million (the “Promissory Notes”). The Promissory Notes were due to mature on the earlier of (a) one year from issuance or (b) the closing of the Business Combination (Note 1) and bore per annum interest at the rate of 7.75 % plus the greater of 3.50 % or the prime rate as published by the Wall Street Journal. The Company was required to make nine interest-only payments, followed by three principal and interest payments. In connection with the Promissory Notes, the Company issued warrants (“Promissory Note Warrants”) to purchase up to 31,024 shares of common stock of the Company at an exercise price of $ 0.01 per share (Note 8). Upon payment in full of the Promissory Notes, the Company was required to make an additional final payment (“Final Payment”) of $ 3.5 million. The Company elected to account for the Promissory Notes under the fair value option of accounting upon issuance of each of the Promissory Notes. At issuance the Company recognized the fair value of the Promissory Notes of $ 6.3 million with the remaining $ 0.7 million of proceeds received allocated to the Promissory Note Warrants. The Promissory Notes were repaid at the closing of the Business Combination. |
WARRANTS AND DERIVATIVES
WARRANTS AND DERIVATIVES | 3 Months Ended |
Mar. 31, 2023 | |
Warrants and Rights Note Disclosure [Abstract] | |
WARRANTS AND DERIVATIVES | 8. WARRANTS AND DERIVATIVES Convertible Note Warrants The Company issued the PIPE Warrants in connection with the Convertible Notes issuance. There were 1,396,419 PIPE Warrants issued to purchase common stock of the Company at $ 11.50 per share. The PIPE Warrants are redeemable for $ 0.01 once the Company’s stock price reaches $ 18.00 per share. The PIPE Warrants are equity classified. Approximately $ 377 thousand of the proceeds upon issuance of the Convertible Notes was allocated to the PIPE Warrants along with an immaterial amount of issuance costs. On March 26, 2023, the Company and Continental Stock Transfer & Trust Company (the “Warrant Agent”) entered into an Amendment to that certain Warrant Agreement, dated as of August 26, 2022, by and between the Company and the Warrant Agent (the “Warrant Agreement” ). Pursuant to the Warrant Agreement Amendment, the exercise price of each warrant was reduced from $ 11.50 to $ 0.01 . The Company recorded a loss related to the warrant amendment of $ 430 thousand in other expense in the consolidated statement of operations. On March 28, 2023, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to its Second Amended and Restated Certificate of Incorporation (the “Charter Amendment” ) to effect a 1-for-20 reverse stock split of the Company's common stock (the “Reverse Stock Split”). Proportionate adjustments have been made to the per share exercise price and the number of shares of the Company's common stock that may be purchased upon exercise of warrants issued by the Company. Standby Agreement Derivative Liability In connection with the Business Combination, Legacy Nogin acquired from SWAG a derivative liability associated with agreements entered into by SWAG prior to the Closing Date. SWAG entered into an agreement with a financial institution (the “Financial Institution”), whereby the Financial Institution purchased SWAG Class A common stock from third parties prior to the Closing Date (the “Standby Agreement”). At the Closing Date, the Company paid the Financial Institution 80 % of the Financial Institution’s aggregate purchase price of such shares of SWAG Class A common stock. After the Closing Date, the Financial Institution may sell the shares purchased pursuant to the Standby Agreement and keep all the proceeds of such sales until they have recouped the remaining 20 % of the aggregate purchase price of the shares purchased prior to the Closing Date. After such time, proceeds from the sale of such shares would be paid to the Company less a liquidity fee equal to 3.5 % of the proceeds from such sales. If the Financial Institution has not fully recouped the aggregate purchase price of the shares purchased prior to the Closing Date by August 26, 2026, the Company would be obligated to pay the remaining amount due to the Financial Institution on such date. Any remaining unsold shares as of August 26, 2026 would be returned to the Company. In addition, SWAG entered into a subscription agreement (the “Subscription Agreement”) with the same Financial Institution whereby the Financial Institution purchased 517,079 shares of Common Stock at a purchase price of $ 10.17 per share at the closing of the Business Combination and paid the Company an amount equal to 20 % of the purchase price. The Subscription Agreement was structured similarly to the Standby Agreement between the Company and the Financial Institution regarding the timing and amount of future payments, as well as the return of any unsold shares at maturity. The Company concluded the Standby Agreement would be accounted for as a derivative in its entirety in accordance with ASC 815-10, and the structured payments within the Subscription Agreement was considered an embedded feature in the Subscription Agreement that met the definition of a derivative and required bifurcation from the Subscription Agreement, as it is not clearly and closely related to the Subscription Agreement and would be accounted for in accordance with ASC 815-10 (together the “Standby Agreement Derivative). The Standby Agreement Derivative was not entered into for hedging purposes. The Company accounted for the Standby Agreement Derivative acquired at fair value upon the closing of the Business Combination. The Company will continue to account for the Standby Agreement Derivative at fair value each reporting period in accordance with ASC 815-10. The Company engaged a third-party valuation specialist to assist with the fair value assessment. The fair value as of December 31, 2022 of the Standby Agreement Derivative liability was $ 847 thousand and was recorded in other long-term liabilities on the condensed consolidated balance sheets. In March 2023, all shares were resold by the Financial Institution and the Company recognized a gain to fair value of derivative instruments of $ 847 thousand for the three months ended March 31, 2023 on the condensed consolidated statements of operations. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 9. FAIR VALUE MEASUREMENTS The Company applies the provisions of FASB Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (“ASC 820”), which provides a single authoritative definition of fair value, sets out a framework for measuring fair value, and expands on required disclosures about fair value measurement. The Company applies the provisions of ASC 820 to all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. In determining fair value, the Company utilized valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counter party credit risk and nonperformance risk in its assessment of fair value. The carrying value of the Company’s short-term financial instruments, such as cash, restricted cash, accounts receivable, notes payable, and accounts payable, approximate the fair value due to the immediate or short-term maturity of these instruments. As of March 31, 2023, the Company no longer has recurring measurements for warrant liability. Further, the Company has elected to apply the fair value option of accounting for its Convertible Notes and equity investments in unconsolidated affiliates. The Company is required to present the fair value of the Standby Agreement derivative liability each reporting period. The following details the Company’s recurring measurements for assets and liabilities at fair value (in thousands): March 31, December 31, Investment in unconsolidated affiliates (Level 3) - Note 5 6,759 7,404 Convertible Note (Level 3) - Note 7 56,260 60,852 Standby Agreement derivative liability (Level 3)- Note 8 — 847 Non-current Business Combination Cash Consideration (Level 3) 3,555 3,355 Deferred Business Combination cash consideration In connection with the Business Combination, Legacy Nogin equity holders elected to receive $ 15.0 million of the merger consideration in cash. In order to meet conditions to close the Transactions, the Company paid $ 4.1 million of the $ 15.0 million cash consideration at the Closing Date. Of the $ 10.9 million in deferred cash consideration, $ 5.0 million is payable, subject to certain conditions, on February 21, 2023, and is included in accrued expenses and other current liabilities as of March 31, 2023 on the condensed consolidated balance sheets (the “Current Cash Consideration”). The remaining $ 5.9 million (the “Non-current Cash Consideration”) is payable, subject to certain conditions, on the earlier of (a) the date on which the Company completes a primary offering of equity securities that generates gross proceeds to the Company equal to or in excess of $ 15.0 million and (b) November 25, 2026. In the event the conditions to paying cash consideration are not met and cash consideration remains unpaid as of November 25, 2026, the unpaid cash consideration will be settled in shares of the Company’s common stock with the number of shares issued determined based on the quotient of unpaid cash consideration divided by the 10-day volume weighted average trading price of the Company’s common stock on NASDAQ. The Company elected to account for the Non-current Cash Consideration of $ 5.9 million under the fair value option of accounting under ASC 825-10. At the Closing Date, the fair value of the Non-current Cash Consideration was $ 4.2 million. In connection with the reverse recapitalization, the cash consideration would be akin to a distribution of capital. As a result, the Company recorded the fair value of the distribution at the Closing Date of $ 13.3 million, which included the $ 4.1 million paid at the Closing Date, $ 5.0 million Current Cash Consideration and $ 4.2 million Non-current Cash Consideration, against accumulated deficit. As of March 31, 2023, the fair value of the Non-current Cash Consideration was $ 3.6 million which is included in other long-term liabilities on the condensed consolidated balance sheets. The change in fair value from the Closing Date for the three months ended March 31, 2023 of $ 0.2 million is included in other loss on the condensed consolidated statements of operations. The significant inputs to the valuation of the deferred cash consideration at fair value are Level 3 inputs since they are not directly observable. The Company primarily used a discounted cash flow method to value the deferred cash consideration, based on the expected future payment discounted to present value. The significant input is the discount rate which is based on the Company’s credit rating. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 10. INCOME TAXES The income tax expense for the three months ended March 31, 2023 and March 31, 2022 was a benefit of $ 26 thousand and an expense of $ 158 thousand, respectively. Income tax expense differs from the income taxes expected at the U.S. federal statutory tax rate of 21 %, primarily due to state taxes and additional valuation allowance for the period ended March 31, 2023 and December 31, 2022. |
COMMON STOCK
COMMON STOCK | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
COMMON STOCK | 11. COMMON STOCK Holders of common stock are entitled to one vote per share and, upon liquidation or dissolution, are entitled to receive all assets available for distribution to common stockholders. The holders of common stock have no preemptive or other subscription rights, and there is no redemption or sinking fund provisions with respect to such shares. Common stock will be subordinate to any preferred stock the Company issues in the future with respect to rights upon liquidation of the Company. |
STOCK COMPENSATION PLAN
STOCK COMPENSATION PLAN | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK COMPENSATION PLAN | 12. STOCK COMPENSATION PLAN In 2013, Legacy Nogin adopted the 2013 Plan pursuant to which Legacy Nogin was authorized to issue stock options or nonvested shares to officers and key employees in an amount up to 132,770 shares of its common stock. In connection with the Business Combination, the Company adopted the 2022 Plan, which became effective on the Closing Date. The aggregate number of shares of the Company’s common stock available for issuance under the 2022 Plan is equal to (i) 255,147 shares plus (ii) an annual increase for ten years on the first day of each calendar year beginning on January 1, 2023, equal to the lesser of (A) 15 % of the aggregate number of shares of the Company’s common stock outstanding on the last day of the immediately preceding calendar year and (B) such smaller amount of shares as determined by the Company’s board of directors. Following the effectiveness of the 2022 Plan, the Company will not grant additional awards under the 2013 Plan. At March 31, 2023 and December 31, 2022, there were 172,147 and 59,028 shares available respectively, for grant under the Company's stock incentive plans. Stock Options Stock options have been granted under the 2013 and 2022 Plans. Such options have a 10-year term and generally vest ratably over a period of four years . Summary information related to stock options outstanding as of March 31, 2023 and December 31, 2022 is as follows: Outstanding Stock Options Outstanding at January 1, 2022 42,546 Granted 87,323 Exercised ( 9,957 ) Forfeited / Terminated ( 46,171 ) Outstanding at December 31, 2022 73,741 Granted 83,000 Exercised — Forfeited / Terminated ( 4,666 ) Outstanding at March 31, 2023 152,075 The weighted average exercise price of the outstanding options was $ 36.06 and $ 255.40 per share as of March 31, 2023 and December 31, 2022, respectively. There were 64,966 and 46,660 fully vested and exercisable options as of March 31, 2023 and December 31, 2022, respectively. The Company recognized $ 200 thousand and $ 58 thousand in stock compensation expense for the three months ending March 31, 2023 and 2022, respectively. The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. Expected volatility was computed based on the historical volatility of similar entities with publicly traded shares. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield to curve in effect at the time of grant. The Company has no history or expectations of paying dividends on its common stock. The following table summarizes the assumptions used in the calculation of the fair market value for awards granted during the three months ended March 31, 2023: Valuations assumptions Expected dividend yield — % Expected volatility 61 % Expected term (years) 6 Risk-free interest rate 3.9 % Restricted Stock Units As of March 31, 2023, restricted stock units ("RSUs") of 506,250 shares were granted under the 2022 Plan. The RSUs are issued upon vesting. The RSUs vest over a period of 1 - 3 years and are expected to be settled in shares upon vesting. The weighted average exercise price of each RSU was $ 15.40 per share as of March 31, 2023. The Company recognized $ 53 thousand in stock compensation expense for the three months ending March 31, 2023. There were no RSUs granted in fiscal year 2022. |
ACQUISITION
ACQUISITION | 3 Months Ended |
Mar. 31, 2023 | |
Asset Acquisition [Abstract] | |
ACQUISITION | 13. ACQUISITION Prior to December 1, 2022, the Company owned a 50 % equity interest in a joint venture, ModCloth Partners, LLC. (“ModCloth”), which was accounted for under the fair value option of accounting. On December 1, 2022, the Company acquired the remaining 50 % equity interest in ModCloth (the “ModCloth Acquisition”) from Tiger Capital Group, LLC (“Tiger Capital”), pursuant to Tiger Capital’s exercise of their put option to require the Company to purchase all of Tiger Capital’s equity interest for $ 1.5 million in cash. As a result of the ModCloth Acquisition, ModCloth is now a wholly owned consolidated subsidiary of the Company. Total purchase consideration in connection with the ModCloth Acquisition was $ 6.9 million, including $ 1.5 million in cash and $ 5.4 million for the settlement of a preexisting relationship. Under the terms of the ModCloth Tiger Assignment (“Equity Assignment Agreement”), control of ModCloth transferred to the Company on December 1, 2022 (the “Acquisition Date”). Cash consideration was funded with cash previously recorded as restricted cash in our consolidated balance sheets as of December 31, 2022. We did not incur material fees and expenses in connection with the ModCloth Acquisition. Prior to the closing of the ModCloth Acquisition, the Company accounted for the existing 50% equity interest in ModCloth using the fair value option of accounting. As of September 30, 2022 the Company’s investment in ModCloth had a fair value and carrying value of $ 4.5 million. The Company accounted for the acquisition of the remaining 50% equity interest in ModCloth as a step acquisition, which required remeasurement of the Company’s existing 50% ownership interest in ModCloth to fair value as of December 1, 2022. The Company utilized weighted discounted cash flow, guideline public company and comparable market transaction valuation approaches to determine the fair value of the existing equity interest. This resulted in a fair value of $ 1.92 million and the recognition of a loss of $ 2.58 million, which was included in Change in fair value of unconsolidated affiliates on the consolidated statements of operations. The ModCloth Acquisition was accounted for as a business combination by applying the acquisition method of accounting pursuant to ASC Topic 805, “Business Combinations”. The following table summarizes the purchase price consideration in connection with the ModCloth Acquisition as of December 1, 2022 (amounts in thousands): Total cash consideration $ 1,500 Settlement of pre-existing relationship (a) 5,415 Total consideration 6,915 Fair value of previously held equity interest 1,920 Total 8,835 (a) Effective settlement of pre-existing accounts receivable of $ 5.4 million for services provided to ModCloth under the Company’s Master Services Agreement with ModCloth and additional operational funding provided by the Company to ModCloth. The $ 5.4 million accounts receivable balance as of the acquisition date was based on the Company’s estimate of the amount that will ultimately be collected from ModCloth. The following table summarizes the preliminary fair values of the assets acquired, liabilities assumed and resulting goodwill in the ModCloth Acquisition as of December 1, 2022 (amounts in thousands): As of Acquired assets Cash $ 3 Accounts receivable, net 25 Inventory 4,787 Prepaid expenses and other current assets 30 Property and equipment, net 108 Right-of-use asset, net 895 Other non-current asset 80 Intangible assets, net 4,610 Goodwill 6,748 Total acquired assets $ 17,286 Liabilities assumed Accounts payable $ 5,544 Accrued expenses and other liabilities 2,908 Total liabilities assumed $ 8,452 The fair value of ModCloth’s identifiable intangible assets and useful lives are as follows (amounts in thousands, except years): Fair Value Useful Life (Years) Trade name 4,610 10 Total identifiable intangible assets $ 4,610 Fair value measurement methodology used to estimate the fair value of the trade name is based on the relief from royalty method, which estimates the value of the trade names based on the hypothetical royalty payments that are saved by owning the asset. Some of the more significant assumptions inherent in the development of intangible asset fair values, from the perspective of a market participant, include, but are not limited to (i) the amount and timing of projected future cash flows (including revenue and expenses), (ii) the discount rate selected to measure the risks inherent in the future cash flows, and (iii) the assessment of the asset’s life cycle. The goodwill of $ 6.7 million represents future economic benefits expected to arise from synergies from combining operations and commercial organizations to increase market presence and the extension of existing customer relationships. The goodwill recorded is not deductible for income tax purposes. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 14. RELATED PARTY TRANSACTIONS The Company provides services to its joint venture, IPCO, under Master Services agreements (“MSA”), which were entered into on December 31, 2021. Sales under the MSA to IPCO were $ 1.2 million for the three months ended March 31, 2023 and March 31, 2022. In addition, the Company sold inventory to IPCO for $ 0.6 million during the first quarter of 2022, and such amount is included in net revenue to related parties in the consolidated statement of operations. As of March 31, 2023 and December 31, 2022, the Company had payables to IPCO of $ 0.2 million and $ 1.0 million, respectively, which were included in related party payables on the consolidated balance sheets. Prior to December 1, 2022, the Company owned a 50 % equity interest in a joint venture, ModCloth Partners, LLC. (“ModCloth”), which was accounted for under the fair value option of accounting. On December 1, 2022, the Company acquired the remaining 50 % equity interest in ModCloth (the “ModCloth Acquisition”) from Tiger Capital Group, LLC (“Tiger Capital”), pursuant to Tiger Capital’s exercise of their put option to require the Company to purchase all of Tiger Capital’s equity interest for $ 1.5 million in cash. As a result of the ModCloth Acquisition, ModCloth is now a wholly owned consolidated subsidiary of the Company, and the results of ModCloth are consolidated into the results of the company post-assignment. Sales under the MSA to ModCloth prior to the assignment were $ 2.0 million for the three months ended March 31, 2022. The Company’s chief executive officer and his immediate family member (together, the “PIPE Related Parties”) were investors in the PIPE issuance of Convertible Notes (Note 7) for total proceeds of $ 1.5 million. In addition to the $ 1.5 million in Convertible Notes, the PIPE Related Parties also received 32,142 equity classified Convertible Note Warrants (Note 8). As of March 31, 2023, the fair value of the Convertible Notes with the PIPE Related Parties was $ 1.3 million, which is included in Convertible Notes on the consolidated balance sheets. The terms of the Convertible Notes with the PIPE Related Parties are consistent with the rest of the holders of the Convertible Note. In March 2023, in lieu of the missed Interest Payments, the PIPE Related Parties received the 2023 Promissory Notes (Note 7) totaling $ 106 thousand. As of March 31, 2023, the fair value of the 2023 Promissory Notes with the PIPE Related Parties were $ 106 thousand, which is included in Promissory Notes on the condensed consolidated balance sheets. The terms of the 2023 Promissory Notes with the PIPE Related Parties are consistent with the rest of the holders of the Convertible Note. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2023 | |
Disaggregation of Revenue [Abstract] | |
REVENUE | 15. REVENUE Disaggregation of Revenue The Company has five major streams of revenue. CaaS service revenue, product revenue and shipping revenue are considered transferred to customers at the point of sale. Marketing and other revenue (other than B2C fulfillment services for rental space) are considered transferred to customers when services are performed. Thus, these revenues streams are recognized at a point in time. B2C fulfillment services for rental space is recognized over time. The following table presents a disaggregation of the Company’s revenues by revenue source for the three months ended March 31, 2023 and 2022 (in thousands): Three Months Ended March 31, 2023 2022 Commerce-as-a-Service Revenue $ 3,733 $ 5,201 Product sales revenue 6,544 12,922 Marketing revenue 2,658 3,670 Shipping revenue 1,867 1,881 Other revenue 1,873 1,525 Total revenue $ 16,675 $ 25,199 |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | 16. SEGMENT REPORTING The Company conducts business domestically and our revenue is managed on a consolidated basis. Our Chief Executive Officer, Jonathan S. Huberman, who is our Chief Operating Decision Maker, reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. There are no segment managers who are held accountable for operations, operating results, and plans for levels, components, or types of products or services below the consolidated unit level. Accordingly, the Company is considered to be a single reportable segment. All of the Company’s long-lived assets and external customers are located within the United States. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 17. EARNINGS PER SHARE Basic and diluted net income (loss) per share are computed using the two-class method as required when there are participating securities. The shares of the Company’s redeemable convertible preferred stock were participating securities as the holders of the redeemable convertible preferred stock were entitled to participate with any dividends payable in common stock. In periods of net income, net income is attributed to common stockholders and participating securities based on their participating rights. Net losses are not allocated to the participating securities as the participating securities do not have a contractual obligation to share in any losses. The following table presents the Company’s basic and diluted net income (loss) per share: Three Months Ended March 31, (In thousands, except share and per share amounts) 2023 2022 Numerator: Basic EPS Net loss $ ( 9,901 ) $ ( 9,942 ) Net loss attributable to common stockholders-basic $ ( 9,901 ) $ ( 9,942 ) Denominator: Basic EPS Weighted average shares of common stock outstanding-basic 4,688,331 1,981,097 Net loss per share attributable to common stock-basic $ ( 2.11 ) $ ( 5.02 ) Three Months Ended March 31, (In thousands, except share and per share amounts) 2023 2022 Numerator: Diluted EPS Net loss attributable to common stockholders-diluted $ ( 9,901 ) $ ( 9,942 ) Denominator: Diluted EPS Adjusted weighted average shares of common stock outstanding-basic 4,688,331 1,981,097 Dilutive potential shares of common stock: Options to purchase shares of common stock — — Warrants to purchase shares of common stock — — Weighted average shares of common stock outstanding-diluted 4,688,331 1,981,097 Net loss per share attributable to common stock-diluted $ ( 2.11 ) $ ( 5.02 ) The Company’s potentially dilutive securities below, have been excluded from the computation of diluted net loss per share as they would be anti-dilutive. Weighted-average number of potentially anti-dilutive shares excluded from calculation of dilutive earnings per share Three Months Ended March 31, 2023 2022 Series A convertible, redeemable preferred shares — 443,224 Series B convertible, redeemable preferred shares — 316,707 Stock-based compensation awards 370,075 60,663 Legacy Nogin Warrants 28,639 31,652 PIPE Warrants 24,294 — SWAG Warrants 372,070 — Shares Underlying Convertible Notes 99,089 — |
MEZZANINE EQUITY AND SHAREHOLDE
MEZZANINE EQUITY AND SHAREHOLDERS' DEFICIT | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
MEZZANINE EQUITY AND SHAREHOLDERS' DEFICIT | 18. MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT There were no significant changes in the Company’s mezzanine equity and shareholders’ deficit during the three months ended March 31, 2023. Common Stock Subsequent to the Business Combination, the Company is authorized to issue up to 500 million shares of common stock with a par value of $ 0.0001 per share. Each share of common stock entitles the shareholder to one vote. Preferred Stock As part of the Business Combination, all of the convertible preferred stock of Legacy Nogin, (including both the Series A preferred stock and Series B preferred stock) were converted into approximately 15.2 million shares of the Company’s Common Stock. As a result of the conversion of the Series A preferred stock and Series B preferred stock, the Company reclassified the amounts previously recorded in mezzanine equity to additional paid-in capital. Subsequent to the Business Combination, the Company is authorized to issue 50 million shares of preferred stock with a par value of $ 0.0001 per share. There were no shares of preferred stock issue d and outstanding as of March 31, 2023. |
OPERATING LEASES
OPERATING LEASES | 3 Months Ended |
Mar. 31, 2023 | |
Leases, Operating [Abstract] | |
OPERATING LEASES | 19. OPERATING LEASES The Company has entered into lease agreements for offices and warehouses located in California and Pennsylvania. On January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) 2016-02 and all subsequent amendments, collectively codified in ASC Topic 842, “Leases” (“ASC 842”), using the modified retrospective transition method. Accordingly, comparative period financial information was not restated for the effects of adopting ASC 842. As of the date of adoption on January 1, 2022, the impact of ASC 842 resulted in the recognition of a right-of-use asset (“ROU asset”) and lease liability for our operating leases on our consolidated balance sheets of approximately $ 13.0 million and $ 15.1 million, respectively. Lease liabilities were recognized based on the present value of remaining lease payments over the remaining lease term. ROU assets were recognized utilizing the lease liability as of January 1, 2022 adjusted for certain ASC 840 operating lease related balances. As the Company’s operating lease agreements do not provide a rate implicit in the lease, we discounted the remaining lease payments using an estimated incremental borrowing rate, which was based on the information available at the adoption date. Operating lease cost is recognized on a straight-line basis over the lease term. Variable lease costs such as common area costs and other operating costs are expensed as incurred. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The adoption of this new guidance did not have a material net impact on the Company’s consolidated statements of operations or consolidated statements of cash flows. Our operating leases primarily consist of office space, distribution centers and equipment used within our operations. Most of the leases have lease terms ranging from three to eight years, although the terms and conditions of our leases can vary significantly from lease to lease. The following schedule represents the components of the Company’s operating lease assets and liabilities as of March 31, 2023 (in thousands): Leases Classification March 31, 2023 Assets Operating Operating lease right-of-use assets $ 17,350 Liabilities Operating lease liabilities (current) Operating lease liabilities, current $ 4,565 Operating lease liabilities (non-current) Operating lease liabilities, non-current 14,775 The following schedule represents the components of lease expense for the fiscal year ended March 31, 2023 (in thousands): March 31, 2023 Lease Costs: Operating lease costs $ 1,501 Variable lease costs 317 Short-term lease costs — Sublease income — Total lease costs $ 1,818 As of March 31, 2023, the Company’s maturity of operating lease liabilities for the next five years and thereafter are as follows (in thousands): Operating Leases 2023 (remaining payments) $ 4,127 2024 5,214 2025 5,310 2026 3,453 2027 2,222 Thereafter 899 Total lease payments 21,225 Less: imputed interest ( 2,708 ) Total operating lease payments $ 18,517 Other operating leases information: Cash paid for amounts included in the measurement of lease liabilities $ 1,711 Right-of-use assets obtained in exchange for new lease liabilities $ 1,120 Weighted-average remaining term (in years) 4.1 Weighted-average discount rate 6.9 % In accordance with ASC 840, the following is a schedule by years of future minimum lease payments required under the operating leases that have initial or noncancelable lease terms in excess of one year as of March 31, 2022. As of March 31, 2022: 2022 (remaining payments) $ 2,250 2023 1,272 2024 873 2025 900 2026 927 Thereafter 1,853 Total minimum lease payments $ 8,075 In July 2018, the Company assumed the operating lease for office space of the entity with which an asset purchase agreement was executed. The monthly lease payment was $ 75 thousand and expires in May 2023. The future minimum lease payments are included in the table above. The Company subleased the office space to a third-party in December 2018 for approximately $ 87 thousand per month. The sublease agreement will expire in May 2023 . Future rental income is as follows: approximately $ 1.0 million per year during 2022 and approximately $ 435 thousand in 2023 until the expiration of the lease. Rent expense for the three months ended March 31, 2022 was approximately $ 1.4 million, and is included in general and administrative expenses in the condensed consolidated statements of operations. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 20. SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed consolidated financial statements were issued. On April 4, 2023, the Company entered into Securities Purchase Agreements (the “Purchase Agreements”) with certain investors (the “Investors”), pursuant to which the Company agreed to sell, issue, and deliver to Investors, in a registered public offering (the “Offering”) (i) 7,333,334 shares of Common Stock and (ii) warrants to purchase 7,333,334 shares of Common Stock (the “Common Warrants”) (collectively, the “April 2023 Offering”). Under the terms of the Purchase Agreements, the Company agreed to sell its Common Stock and accompanying Common Warrants at a combined offering price of $ 3.00 per share of Common Stock and accompanying Common Warrant. On April 6, 2023, the Company consummated the April 2023 Offering and received gross proceeds of approximately $ 22 million in connection with the offering before deducting placement agent fees and other offering expenses. In April 2023, the 2023 Promissory Notes and Convertible Promissory Notes (Note 7) were repaid in full. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying condensed financial statements should be read in conjunction with the Company’s Consolidated Financial Statements for the year ended December 31, 2022. The interim results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the period ending December 31, 2023, or for any future annual or interim periods. |
Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. |
Liquidity and Capital Resources | Liquidity and Capital Resources Our primary requirements for short-term liquidity and capital are working capital, inventory management, capital expenditures, public company costs and general corporate needs. We expect these needs to continue as we develop and grow our business. Our future capital requirements will depend on many factors, including our levels of revenue, the expansion of sales and marketing activities, successful customer acquisitions, the results of business initiatives, the timing of new product introductions and overall economic conditions. Prior to the Business Combination, the Company’s available liquidity and operations were financed through equity contributions, a line of credit, promissory notes and cash flow from operations. Moving forward, the Company expects to fund operations through equity contributions and cash flow from operations. Because we are in the growth stage of our business and operate in an emerging field of technology, we expect to continue to invest in research and development and expand our sales and marketing teams worldwide. We are likely to require additional capital to respond to technological advancements, competitive dynamics or technologies, customer demands, business opportunities, challenges, acquisitions or unforeseen circumstances and in either the short-term or long-term may determine to engage in equity or debt financings or enter into credit facilities for other reasons. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited. The accompanying consolidated financial statements as of and for the three months ended March 31, 2023 have been prepared assuming the Company will continue as a going concern. The Company has sustained recurring losses and negative cash flows from operations and had a cash balance of $ 0.6 million as of March 31, 2023. Our independent auditors, in their report on our audited financial statements for the year ended December 31, 2022, expressed substantial doubt about our ability to continue as a going concern for at least twelve months from the date that such consolidated financial statements were issued. In March 2023, the Company did not timely make the payment of the accrued interest on the Convertible Notes due on March 1, 2023 of $ 2.3 million, resulting in a default. On March 26, 2023, the Company, the Notes Guarantors and the holders of the Convertible Notes (collectively, the “Holders”) entered into limited waivers and consents (each, a “Waiver” and collectively, the “Waivers”) pursuant to which, among other things, each Holder agreed to (i) waive the Specified Default and any payment obligation of the Company under the Indenture with respect to the March Interest Payment (as defined below), (ii) in lieu of the Interest Payments (as defined below), (a) receive a Promissory Note or Convertible Promissory Note, as applicable, and (b) amend the Warrant Agreement to reduce the exercise price of the warrants governed thereby from $ 11.50 to $ 0.01 , and (iii) consent to the entry into the Supplemental Indenture (as defined below). The Supplemental Indenture, among other things, lowered the minimum amounts of liquidity the Company must maintain on a consolidated basis for each quarter in 2023 and the first quarter of 2024. In April 2023, the Company completed a registered public offering of common stock and common warrants for aggregate gross proceeds of $ 22 million, before deducting placement agent fees and other offering expenses. In addition, the Company is currently executing on various strategies to improve available cash balances, liquidity and cash generated from operations, including strategic growth plans, ongoing comprehensive cost reduction and performance improvement programs, reduced headcount and elimination of certain discretionary and general and administrative expenses, and taking steps to improve the operational efficiency of our fulfillment operations. With these strategies in place, the Company believes it will be able to continue as a going concern for at least the next twelve months. |
COVID-19 Pandemic | COVID-19 Pandemic The worldwide spread of COVID-19 and its variants have had, and continue to have a significant impact around the world. The COVID-19 pandemic has resulted in a global slowdown of economic activity which altered the demand for a broad variety of goods and services, including those provided by our clients, while also disrupting sales channels and advertising and marketing activities until economic activity normalized. Our revenue growth and results of operations have been resilient despite the headwinds created by the COVID-19 pandemic and its variants. The extent to which ongoing and future developments related to the global impact of the COVID-19 pandemic and related vaccination measures designed to curb its spread continue to impact our business, financial condition, and results of operations, all of which cannot be predicted with certainty. Many of these ongoing and future developments are beyond our control, including the speed of contagion, the development, distribution and implementation of effective preventative or treatment measures, including vaccines (and vaccination rates), the scope of governmental and other restrictions on travel, discretionary services and other activity, and the public reactions and receptiveness to these developments. The impacts of the COVID-19 pandemic and its variants will depend on future developments, including the duration and spread of the pandemic. These developments and the impacts of the COVID-19 pandemic on the financial markets and overall economy are highly uncertain and cannot be predicted. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. The Company prepared these estimates based on the most current and best available information, but actual results could differ materially from these estimates and assumptions. Significant estimates and assumptions reflected in the financial statements include, but are not limited to, the allowance for credit losses and revenue recognition, including variable consideration for estimated reserves for returns and other allowances, forecasts and other assumptions used in valuations. Management bases its estimates on historical experience and on assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying value of assets and liabilities that are not readily apparent from other sources. |
Accounts Receivable, Net | Accounts Receivable, Net The allowance for credit losses was $ 333 thousand as of March 31, 2023 and $ 425 thousand as of December 31, 2022. |
Inventory | Inventory Inventory is comprised entirely of finished goods for resale. The reserve for returns was $ 159 thousand as of March 31, 2023 and $ 535 thousand as of December 31, 2022. |
Concentration of Credit Risk | Concentration of Risks Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, restricted cash and accounts receivables. The Company maintains cash balances at financial institutions. Amounts on deposit at these institutions are secured by the Federal Deposit Insurance Corporation (“FDIC”). At various times, the Company has had bank deposits in excess of the FDIC's insurance limit. The Company has not experienced any losses in its cash accounts to date. Management believes that the Company is not exposed to any significant credit risk with respect to its cash. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. As of March 31, 2023, receivables from two customers amounted to $ 619 thousand (or 36 % of accounts receivable) and $ 298 thousand (or 18 % of accounts receivable), respectively. As of December 31, 2022, receivables from two customers amounted to $ 771 thousand (or 44 % of accounts receivable) and $ 153 thousand (or 9 % of accounts receivable), respectively. Major Customers For the three months ended March 31, 2023, revenue from our top three customers amounted to $ 2.9 million (or 17 % of total revenue), $ 1.8 million (or 11 % of total revenue), and $ 1.7 million (or 10 % of total revenue), respectively. For the three months ended March 31, 2022, revenue from our top three customers amounted to $ 9.2 million (or 36 % of total revenue), $ 3.7 million (or 15 % of total revenue), and $ 2.0 million (or 8 % of total revenue), respectively. Major Suppliers For the three months ended March 31, 2023, our top three vendors accounted for operating expense of $ 2.1 million (or 12 % of total operating expense purchases), $ 2.0 million (or 12 % of total operating expense purchases) and $ 1.4 million (or 8 % of total operating expense purchases), respectively. For the three months ended March 31, 2022, our top three vendors accounted for operating expense of $ 4.8 million (or 20 % of total operating expense purchases), $ 2.3 million (or 10 % of total operating expense purchases) and $ 2.1 million (or 9 % of total operating expense purchases), respectively. |
Right-of-use Assets and Lease Liabilities | Right-of-use Assets and Lease Liabilities On January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) 2016-02 and all subsequent amendments, collectively codified in ASC Topic 842, “Leases” (“ASC 842”), using the current period adjustment method. Accordingly, comparative period financial information was not restated for the effects of adopting ASC 842. The significant practical expedients we adopted include the following: • We elected the practical expedient to apply the transition approach as of the beginning of the period of adoption and not restate comparative periods; • We elected to utilize the “package of three” expedients, as defined in ASC 842, whereby we did not reassess whether contracts existing prior to the effective date contain leases, nor did we reassess lease classification determinations nor whether initial direct costs qualify for capitalization; • We elected the practical expedient to not capitalize any leases with initial terms of twelve months or less on our consolidated balance sheet; • For all underlying classes of leased assets, we elected the practical expedient to not separate lease and non-lease components; and • We elected not to use hindsight in determining the lease term for lease contracts that have historically been renewed or amended. As of the date of adoption on January 1, 2022, the impact of ASC 842 resulted in the recognition of a right-of-use asset (“ROU asset”) and lease liability for our operating leases on our consolidated balance sheets of approximately $ 13.0 million and $ 15.1 million, respectively. Lease liabilities were recognized based on the present value of remaining lease payments over the remaining lease term. ROU assets were recognized utilizing the lease liability as of January 1, 2022 adjusted for deferred rent recorded as under ASC 840 operating lease related balances. As the Company’s operating lease agreements do not provide a rate implicit in the lease, we discounted the remaining lease payments using an estimated incremental borrowing rate, which was based on the information available at the adoption date. Operating lease cost is recognized on a straight-line basis over the lease term. Variable lease costs such as common area costs and other operating costs are expensed as incurred. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The adoption of this new guidance did not have a material net impact on the Company’s consolidated statements of operations or consolidated statements of cash flows. Our operating leases primarily consist of office space, distribution centers and equipment used within our operations. Most of the leases have lease terms ranging from three to eight years, although the terms and conditions of our leases can vary significantly from lease to lease. |
Long-lived Assets | Long-lived Assets There was no impairment of long-lived assets at March 31, 2023. |
Goodwill | Goodwill There was no impairment of goodwill at March 31, 2023. |
Intangibles | Intangibles Intangible assets include acquired technology, trade names and other intangibles. Intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the asset, which range from five to fifteen years . Indefinite lived assets such as trade names are expected to generate cash flows indefinitely. Consequently, these assets were classified as indefinite-lived intangibles and accordingly are not amortized but reviewed for impairment annually, or sooner under certain circumstances. There was no impairment of indefinite-lived assets at March 31, 2023. |
Warrants | Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480 and ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own shares of common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter until settlement. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the condensed statements of operations. |
Income Taxes | Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC Topic 740, “Income Taxes” (ASC 740). Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since its inception. |
Revenue Recognition | Revenue Recognition Revenue is accounted for using FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers. In accordance with ASC Topic 606, the Company recognizes revenue when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. The Company determines revenue recognition through the following steps: • Identification of a contract with a customer, • Identification of the performance obligations in the contract, • Determination of the transaction price, • Allocation of the transaction price to the performance obligations in the contract, and • Recognition of revenue when or as the performance obligations are satisfied. A performance obligation is a promise in a contract to transfer a distinct product. Performance obligations promised in a contract are identified based on the goods that will be transferred that are both capable of being distinct and are distinct in the context of the contract, whereby the transfer of the goods is separately identifiable from other promises in the contract. Performance obligations include establishing and maintaining customer online stores, providing access to the Company’s e-commerce platform, customer service support, photography services, warehousing, and fulfillment. Most of the contracts of the Company with customers contain multiple promises, which may result in multiple performance obligations, while others are combined into one performance obligation. For contracts with customers, the Company accounts for individual promises separately if they are distinct. The transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company determines the standalone selling prices based on its overall pricing objectives, taking into consideration market conditions and other factors. The Company has concluded the sale of goods and related shipping and handling on behalf of our customers are accounted for as a single performance obligation, while the expenses incurred for actual shipping charges are included in cost of sales. The Company’s revenue is mainly commission fees derived from contractually committed gross revenue processed by customers on the Company's e-commerce platform. The Company is acting as an agent in these arrangements and customers do not have the contractual right to take possession of the Company's software. Revenue is recognized in an amount that reflects the consideration that the Company expects to ultimately receive in exchange for those promised goods, net of expected discounts for sales promotions and customary allowances. CaaS Revenue is recognized on a net basis from maintaining e-commerce platforms and online orders, as the Company is engaged primarily in an agency relationship with its customers and earns defined amounts based on the individual contractual terms for the customer and the Company does not take possession of the customers' inventory or any credit risks relating to the products sold. Variable consideration is included in revenue for potential product returns. The Company uses an estimate to constrain revenue for the expected variable consideration at each period end. The Company reviews and updates its estimates and related accruals of variable consideration each period based on the terms of the agreements, historical experience, and expected levels of returns. Any uncertainties in the ultimate resolution of variable consideration due to factors outside of the Company’s influence are typically resolved within a short timeframe therefore not requiring any additional constraint on the variable consideration. The estimated reserve for returns is included on the balance sheet in accrued expenses with changes to the reserve in revenue on the accompanying statement of operations. The reserve for returns as of March 31, 2023 was $ 0.6 million and as of December 31, 2022 was $ 1.4 million. In most cases the Company acts as the merchant of record, resulting in a due to client liability (discussed below). However, in some instances, the Company may perform services without being the merchant of record in which case there is a receivable from the customer. Payment terms and conditions are generally consistent for customers, including credit terms to customers ranging from seven days to 60 days, and the Company’s contracts do not include any significant financing component. The Company performs credit evaluations of customers and evaluates the need for allowances for potential credit losses based on historical experience, as well as current and expected general economic conditions. Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and, therefore, are excluded from net revenue in the condensed consolidated statements of operations. |
Commerce as a Service | Commerce as a Service As noted above, the Company’s main revenue stream is CaaS revenue in which it receives commission fees derived from contractually committed gross revenue processed by customers on the Company's e-commerce platform. Consideration for online sales is collected directly from the end customer by the Company and amounts not owed to the Company are remitted to the customer. Revenue is recognized on a net basis from maintaining e-commerce platforms and online orders, as the Company is engaged in an agency relationship with its customers and earns defined amounts based on the individual contractual terms for the customer and the Company does not take possession of the customers' inventory or any credit risks relating to the products sold. |
Product sales | Product sales Under certain licensee agreements, the Company is the owner of inventory and reseller of record. As a result, the Company is the principal in sales to end customers and records these revenues on a gross basis at a point in time. |
Fulfillment services | Fulfillment services Revenue for business-to-business (“B2B”) fulfillment services is recognized on a gross basis either at a point in time or over a point in time. For example, inbound and outbound services are recognized when the service is complete, while monthly storage services are recognized over the service period. |
Marketing services | Marketing services Revenue for marketing services is recognized on a gross basis as marketing services are complete. Performance obligations include providing marketing and program management such as procurement and implementation. |
Shipping services | Shipping services Revenue for shipping services is recognized on a gross basis as shipments are completed and products are shipped to end customers. |
Set up and implementation services | Set up and implementation services The Company provides set up and implementation services for new clients. The revenue is recognized on a gross basis at the completion of the service, with the unearned amounts received for incomplete services recorded as deferred revenue, if any. |
Other services | Other services Revenue for other services such as photography, business to customer (“B2C”) fulfillment, customer service, development and web design are reimbursable costs and recognized on the gross basis, and are services rendered as part of the performance obligations to clients for which an online platform and online orders are managed. All reimbursable costs are the responsibility of the Company as the Company uses such services to fulfill its performance obligations. |
Cost Of Services | Cost of services Cost of services reflects costs directly related to providing services under the master service agreements with customers, which primarily includes service provider costs directly related to processing revenue transactions, marketing expenses and shipping and handling expenses which correspond to marketing and shipping revenues, as well as credit card merchant fees. Cost of services is exclusive of depreciation and amortization and general salaries and related expenses. |
Cost of product revenue | Cost of product revenue Cost of product revenue reflects costs directly related to selling inventory acquired from select clients, which primarily includes product cost, warehousing costs, fulfillment costs, credit card merchant fees and third-party royalty costs. Cost of product revenue is exclusive of depreciation and amortization and general salaries and related expenses. |
Due to Clients | Due to Clients Due to clients consists of amounts payable to clients pertaining to the client’s last month pro rata share of revenue earned and collected by the Company, less any returns and any expenses incurred by the Company on behalf of the clients. In most cases, the Company acts as the merchant and seller of record and thus directly collects the funds from sales on the online store. As such, at the end of each month, there is an amount owed to the Company’s clients net of the Company’s fees, and expenses incurred on the client’s behalf. |
Fair Value Measurement | Fair Value Measurement The Company applies the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures (“ASC 820”), which provides a single authoritative definition of fair value, sets out a framework for measuring fair value, and expands on required disclosures about fair value measurement. The Company applies the provisions of ASC 820 to all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company defines fair value as an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 - Quoted prices in active markets for identical assets or liabilities. • Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 - Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. In determining fair value, the Company utilized valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counter party credit risk and nonperformance risk in its assessment of fair value. The carrying value of the Company’s short-term financial instruments, such as cash and cash equivalents, restricted cash, accounts receivable, notes payable, and accounts payable, approximate the fair value due to the immediate or short-term maturity of these instruments. The carrying value of the Company’s long-term debt approximates fair value as the interest rate on the Company’s secured credit facility and certain other debt has a variable component, which is reflective of the market. |
Recent Accounting Standards | Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses” (Topic 326). The FASB issued this update to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this update replace the existing guidance of incurred loss impairment methodology with an approach that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses,” which clarifies the scope of guidance in the ASU 2016-13. This update is effective for interim and annual periods beginning after December 15, 2022, with amendments generally applied prospectively. The Company adopted this update effective January 1, 2023, and it did not have a material impact on the Company's financial statements as a result of adoption. In August 2020, the FASB issued Accounting Standards Update ("ASU") 2020-06 Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which improves Convertible Instruments and Contracts in an Entity’s Own Equity and is expected to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU also simplifies the diluted earnings per share (EPS) calculation in certain areas. ASU 2020-06 is effective for the Company beginning January 1, 2024, with early adoption permitted as of January 1, 2021. The Company early adopted the provisions of ASU 2020-06 effective January 1, 2022 and it did not have a material impact on the Company’s financial statements as a result of adoption. Other recently issued accounting standards are not expected to have a material effect on the Company's financial statements. |
DESCRIPTION OF BUSINESS (Tables
DESCRIPTION OF BUSINESS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Consolidated Statements of Cash Flows and the Condensed Consolidated Statements of Convertible Redeemable Preferred Stock | The following table reconciles the elements of the Business Combination to the condensed consolidated statements of cash flows and the condensed consolidated statements of convertible redeemable preferred stock and stockholders’ deficit for the three months ended March 31, 2023: Recapitalization Cash - SWAG trust and cash, net of redemptions 58,841 Cash - PIPE equity financing 1,052 Less: Transaction and advisory fees paid in cash ( 54,409 ) Less: Cash election consideration paid in cash at the Closing Date ( 4,109 ) Net proceeds from Business Combination 1,375 Plus: Issuance of common stock to settle certain transaction costs 3,588 Less: non-cash items charged against additional paid-in capital ( 17,510 ) Less: Deferred cash election consideration (Note 9) ( 9,198 ) Net contributions from Business Combination and PIPE equity financing ( 21,745 ) |
Schedule of Common Shares Outstanding | The number of shares of Common Stock outstanding immediately following the consummation of the Business Combination was as follows: Number of Shares SWAG Common Stock, outstanding prior to the Business Combination 1,425,492 Less: Redemption of SWAG shares ( 851,080 ) SWAG Common Stock 574,412 Shares issued in PIPE equity financing 25,854 Shares issued to financial advisors to settle transaction and issuance costs 20,375 Business Combination and PIPE equity financing shares 620,641 Nogin shares 2,714,073 Total shares of common stock immediately after Business Combination 3,334,714 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | Property and equipment, net as of March 31, 2023 and December 31, 2022, consisted of the following (in thousands): March 31, December 31, Furniture and equipment $ 2,402 $ 2,406 Leasehold improvements 572 572 Property and equipment, gross 2,974 2,978 Less accumulated depreciation ( 1,498 ) ( 1,383 ) Property and equipment, net $ 1,476 $ 1,595 |
ACQUISITION (Tables)
ACQUISITION (Tables) - Mod Cloth [Member] | 3 Months Ended |
Mar. 31, 2023 | |
Summary of finalized fair value of assets and assumed liabilities | The following table summarizes the preliminary fair values of the assets acquired, liabilities assumed and resulting goodwill in the ModCloth Acquisition as of December 1, 2022 (amounts in thousands): As of Acquired assets Cash $ 3 Accounts receivable, net 25 Inventory 4,787 Prepaid expenses and other current assets 30 Property and equipment, net 108 Right-of-use asset, net 895 Other non-current asset 80 Intangible assets, net 4,610 Goodwill 6,748 Total acquired assets $ 17,286 Liabilities assumed Accounts payable $ 5,544 Accrued expenses and other liabilities 2,908 Total liabilities assumed $ 8,452 |
Summary of the purchase price consideration | The following table summarizes the purchase price consideration in connection with the ModCloth Acquisition as of December 1, 2022 (amounts in thousands): Total cash consideration $ 1,500 Settlement of pre-existing relationship (a) 5,415 Total consideration 6,915 Fair value of previously held equity interest 1,920 Total 8,835 (a) Effective settlement of pre-existing accounts receivable of $ 5.4 million for services provided to ModCloth under the Company’s Master Services Agreement with ModCloth and additional operational funding provided by the Company to ModCloth. The $ 5.4 million accounts receivable balance as of the acquisition date was based on the Company’s estimate of the amount that will ultimately be collected from ModCloth. |
Schedule of fair value of identifiable intangible assets and useful lives | The fair value of ModCloth’s identifiable intangible assets and useful lives are as follows (amounts in thousands, except years): Fair Value Useful Life (Years) Trade name 4,610 10 Total identifiable intangible assets $ 4,610 |
STOCK COMPENSATION PLAN (Tables
STOCK COMPENSATION PLAN (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Stock Options | Summary information related to stock options outstanding as of March 31, 2023 and December 31, 2022 is as follows: Outstanding Stock Options Outstanding at January 1, 2022 42,546 Granted 87,323 Exercised ( 9,957 ) Forfeited / Terminated ( 46,171 ) Outstanding at December 31, 2022 73,741 Granted 83,000 Exercised — Forfeited / Terminated ( 4,666 ) Outstanding at March 31, 2023 152,075 |
Summary of the Fair Market Value for Awards Granted | The following table summarizes the assumptions used in the calculation of the fair market value for awards granted during the three months ended March 31, 2023: Valuations assumptions Expected dividend yield — % Expected volatility 61 % Expected term (years) 6 Risk-free interest rate 3.9 % |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Schedule of Company Amortization of Intangibles For The Next Five Years | As of March 31, 2023, the Company’s amortization of intangibles for the next five years are as follows (in thousands): 2023 (remaining payments) $ 164 2024 219 2025 219 2026 219 2027 - Total remaining intangible amortization $ 821 |
Branded Online Inc dba Nogin [Member] | |
Summary of Finite-Lived Intangible Assets | As of March 31, 2023 and December 31, 2022, intangible assets consist of the following (in thousands): March 31, December 31, Software $ 1,166 $ 1,166 Trade Name 4,617 4,617 5,783 5,783 Less: Accumulated amortization ( 344 ) ( 290 ) Intangible assets-net $ 5,439 $ 5,493 As of March 31, 2023, the Company’s amortization of intangibles for the next five years are as follows (in thousands): 2023 (remaining payments) $ 164 2024 219 2025 219 2026 219 2027 - Total remaining intangible amortization $ 821 |
INVESTMENT IN UNCONSOLIDATED _2
INVESTMENT IN UNCONSOLIDATED AFFILIATES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Schedule of Investments in and Advances to Affiliates, Schedule of Investments | The following table presents summarized financial information for the joint venture for the three months ended March 31, 2023 and 2022, and as of March 31, 2023 and December 31, 2022 (in thousands): IPCO For the Three Months For The Three Months 2023 2022 Net revenue $ 4,018 $ 6,507 Gross margin 2,674 1,356 Net loss ( 1,397 ) ( 561 ) IPCO As of March 31, As of December 31, Current assets $ 3,564 $ 4,254 Long term assets 5,366 5,509 Current liabilities 6,940 6,142 Long term liabilities 907 1,032 |
Investments in and Advances to Affiliates | The following table summarizes the changes in the IPCO investment Level 3 fair value measurement (in thousands): IPCO Balance as of January 1, 2022 $ 7,133 Change in fair value 271 Balance as of December 31, 2022 7,404 Change in fair value ( 645 ) Balance as of March 31, 2023 $ 6,759 |
CERTAIN LIABILITY ACCOUNTS (Tab
CERTAIN LIABILITY ACCOUNTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Liabilities [Abstract] | |
Schedule Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities as of March 31, 2023 and December 31, 2022 were as follows (in thousands): March 31, December 31, Business Combination consideration payable $ 5,000 $ 5,000 Contract liability 4,054 5,058 Payroll and other employee costs 2,215 1,300 Sales tax payable 557 1,191 Accrued interest 5 1,622 Accrued transaction costs — 840 Inventory accrual — 503 Other accrued expenses and current liabilities 3,197 2,312 Total $ 15,028 $ 17,826 |
Schedule of Other Long-term Liabilities | Other long-term liabilities as of March 31, 2023 and December 31, 2022 were as follows (in thousands): March 31, December 31, Deferred transaction costs payable $ 10,979 $ 10,979 Business Combination consideration payable 3,555 3,355 Deferred PIPE issuance costs payable 1,160 1,160 PIPE principal accretion 1,104 617 Legal settlement 940 621 Standby agreement derivative liability — 847 Other long-term liabilities 102 187 Total $ 17,840 $ 17,766 |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Disaggregation of Revenue [Abstract] | |
Summary of Disaggregation of Revenue | The following table presents a disaggregation of the Company’s revenues by revenue source for the three months ended March 31, 2023 and 2022 (in thousands): Three Months Ended March 31, 2023 2022 Commerce-as-a-Service Revenue $ 3,733 $ 5,201 Product sales revenue 6,544 12,922 Marketing revenue 2,658 3,670 Shipping revenue 1,867 1,881 Other revenue 1,873 1,525 Total revenue $ 16,675 $ 25,199 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Net Loss per Share | The following table presents the Company’s basic and diluted net income (loss) per share: Three Months Ended March 31, (In thousands, except share and per share amounts) 2023 2022 Numerator: Basic EPS Net loss $ ( 9,901 ) $ ( 9,942 ) Net loss attributable to common stockholders-basic $ ( 9,901 ) $ ( 9,942 ) Denominator: Basic EPS Weighted average shares of common stock outstanding-basic 4,688,331 1,981,097 Net loss per share attributable to common stock-basic $ ( 2.11 ) $ ( 5.02 ) Three Months Ended March 31, (In thousands, except share and per share amounts) 2023 2022 Numerator: Diluted EPS Net loss attributable to common stockholders-diluted $ ( 9,901 ) $ ( 9,942 ) Denominator: Diluted EPS Adjusted weighted average shares of common stock outstanding-basic 4,688,331 1,981,097 Dilutive potential shares of common stock: Options to purchase shares of common stock — — Warrants to purchase shares of common stock — — Weighted average shares of common stock outstanding-diluted 4,688,331 1,981,097 Net loss per share attributable to common stock-diluted $ ( 2.11 ) $ ( 5.02 ) |
Summary Of Antidilutive Securities Excluded From Computation Of Earnings Per Share | The Company’s potentially dilutive securities below, have been excluded from the computation of diluted net loss per share as they would be anti-dilutive. Weighted-average number of potentially anti-dilutive shares excluded from calculation of dilutive earnings per share Three Months Ended March 31, 2023 2022 Series A convertible, redeemable preferred shares — 443,224 Series B convertible, redeemable preferred shares — 316,707 Stock-based compensation awards 370,075 60,663 Legacy Nogin Warrants 28,639 31,652 PIPE Warrants 24,294 — SWAG Warrants 372,070 — Shares Underlying Convertible Notes 99,089 — |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases, Operating [Abstract] | |
Schedule of Operating Lease Assets And Liabilities | The following schedule represents the components of the Company’s operating lease assets and liabilities as of March 31, 2023 (in thousands): Leases Classification March 31, 2023 Assets Operating Operating lease right-of-use assets $ 17,350 Liabilities Operating lease liabilities (current) Operating lease liabilities, current $ 4,565 Operating lease liabilities (non-current) Operating lease liabilities, non-current 14,775 |
Components of Lease Expense | The following schedule represents the components of lease expense for the fiscal year ended March 31, 2023 (in thousands): March 31, 2023 Lease Costs: Operating lease costs $ 1,501 Variable lease costs 317 Short-term lease costs — Sublease income — Total lease costs $ 1,818 |
Schedule of Maturity of Operating Lease Liability | As of March 31, 2023, the Company’s maturity of operating lease liabilities for the next five years and thereafter are as follows (in thousands): Operating Leases 2023 (remaining payments) $ 4,127 2024 5,214 2025 5,310 2026 3,453 2027 2,222 Thereafter 899 Total lease payments 21,225 Less: imputed interest ( 2,708 ) Total operating lease payments $ 18,517 |
Schedule of Other Operating Lease Information | Other operating leases information: Cash paid for amounts included in the measurement of lease liabilities $ 1,711 Right-of-use assets obtained in exchange for new lease liabilities $ 1,120 Weighted-average remaining term (in years) 4.1 Weighted-average discount rate 6.9 % |
Schedule of Future Minimum Lease Payments under Non-Cancelable Terms | In accordance with ASC 840, the following is a schedule by years of future minimum lease payments required under the operating leases that have initial or noncancelable lease terms in excess of one year as of March 31, 2022. As of March 31, 2022: 2022 (remaining payments) $ 2,250 2023 1,272 2024 873 2025 900 2026 927 Thereafter 1,853 Total minimum lease payments $ 8,075 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments under Non-Cancelable Terms | In accordance with ASC 840, the following is a schedule by years of future minimum lease payments required under the operating leases that have initial or noncancelable lease terms in excess of one year as of March 31, 2022. As of March 31, 2022: 2022 (remaining payments) $ 2,250 2023 1,272 2024 873 2025 900 2026 927 Thereafter 1,853 Total minimum lease payments $ 8,075 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following details the Company’s recurring measurements for assets and liabilities at fair value (in thousands): March 31, December 31, Investment in unconsolidated affiliates (Level 3) - Note 5 6,759 7,404 Convertible Note (Level 3) - Note 7 56,260 60,852 Standby Agreement derivative liability (Level 3)- Note 8 — 847 Non-current Business Combination Cash Consideration (Level 3) 3,555 3,355 |
DESCRIPTION OF ORGANIZATION AND
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2022 | Aug. 26, 2022 | |
Description Of Organization And Business Operations [Line Items] | |||
Cash | $ 617 | $ 15,385 | |
Common stock shares issued | 3,334,714 | 3,334,714 | |
Nogins [Member] | |||
Description Of Organization And Business Operations [Line Items] | |||
Public offering | $ 58,800 | ||
Proceeds from Convertible Debt | $ 65,500 | ||
Cash | $ 15,000 | ||
Deferred Costs, Total | $ 10,900 | ||
Common stock shares issued | 2,700,000 |
DESCRIPTION OF BUSINESS - Summa
DESCRIPTION OF BUSINESS - Summary of statements of cash flows and preferred stock and stockholders deficit (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Aug. 26, 2022 | Aug. 26, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | |
Description Of Organization And Business Operations [Line Items] | ||||
Cash | $ 617 | $ 15,385 | ||
Less: Cash election consideration paid in cash at the Closing Date | $ (4,109) | |||
Net proceeds from Business Combination | 1,375 | |||
Plus: Issuance of common stock to settle certain transaction costs | 3,588 | |||
Less: non-cash items charged against additional paid-in capital | (17,510) | |||
Less: Deferred cash election consideration | (9,198) | |||
Net contributions from Business Combination and PIPE equity financing | (21,745) | |||
Nogins [Member] | ||||
Description Of Organization And Business Operations [Line Items] | ||||
Cash | $ 15,000 | $ 15,000 | ||
Less: transaction and advisory fees paid in cash | $ (54,409) | |||
Cash - SWAG trust and cash, net of redemptions [Member] | ||||
Description Of Organization And Business Operations [Line Items] | ||||
Cash | 58,841 | |||
Cash - PIPE equity financing [Member] | ||||
Description Of Organization And Business Operations [Line Items] | ||||
Cash | $ 1,052 |
DESCRIPTION OF BUSINESS - Sched
DESCRIPTION OF BUSINESS - Schedule of common shares outstanding (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||
Common Stock, Shares, Outstanding | 3,334,714 | 3,334,714 |
Common Stock, Shares, Issued | 3,334,714 | 3,334,714 |
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Additional Shares Authorized | 20,375 | |
Software Acquisition Group Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Financial Instruments Subject to Mandatory Redemption, Settlement Terms, Number of Shares | (851,080) | |
Legacy Nogin [Member] | ||
Business Acquisition [Line Items] | ||
Conversion of Stock, Shares Issued | 2,714,073 | |
PIPE [Member] | ||
Business Acquisition [Line Items] | ||
Common Stock, Shares, Issued | 25,854 | |
Prior Business Combination [Member] | ||
Business Acquisition [Line Items] | ||
Stockholders' Equity, Other Shares | 620,641 | |
Prior Business Combination [Member] | Software Acquisition Group Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Common Stock, Shares, Outstanding | 1,425,492 | |
After Business Combination Adjustment [Member] | ||
Business Acquisition [Line Items] | ||
Common Stock, Shares, Outstanding | 3,334,714 | |
After Business Combination Adjustment [Member] | Software Acquisition Group Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Common Stock, Shares, Outstanding | 574,412 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Apr. 30, 2023 | Jan. 01, 2022 | |
Offering costs charged to stockholders equity | $ 600 | |||||
Accounts receivable | 347 | $ 363 | ||||
Inventory Valuation Reserves | $ 159 | $ 159 | $ 535 | |||
Lease Initial Term | 12 months | |||||
Accounts receivable net | 1,924 | $ 1,924 | 1,578 | |||
Revenue | 16,675 | $ 25,199 | ||||
Right-of-use asset, net (Note 19) | 17,350 | 17,350 | 17,391 | $ 13,000 | ||
Operating lease liability | 18,517 | 18,517 | $ 15,100 | |||
Impairment of Long-Lived Assets to be Disposed of | 0 | |||||
Goodwill And Intangible Asset Impairment | 0 | |||||
Impairment of intangible assets | 0 | |||||
Unrecognized Tax Benefits Interest and Penalties | 0 | |||||
Unrecognized Tax Benefits, Income Tax Penalties Accrued | 0 | 0 | ||||
Allowance For Doubtful Accounts Receivable | 333 | 333 | 425 | |||
Reserve for Returns | 600 | $ 600 | 1,400 | |||
Accrued interest on the Convertible Notes | $ 2,300 | |||||
Warrant, Exercise Price, Increase | $ 11.50 | |||||
Warrant, Exercise Price, Decrease | $ 0.01 | |||||
Proceeds for Common warrants aggregate gross | $ 22,000 | |||||
Branded Online Inc dba Nogin [Member] | Purchases [Member] | Supplier Concentration Risk [Member] | Major Supplier One [Member] | ||||||
Concentration risk percentage | 12% | 20% | ||||
Purchases | $ 2,100 | $ 4,800 | ||||
Branded Online Inc dba Nogin [Member] | Purchases [Member] | Supplier Concentration Risk [Member] | Major Supplier Two [Member] | ||||||
Concentration risk percentage | 12% | 10% | ||||
Purchases | $ 2,000 | $ 2,300 | ||||
Branded Online Inc dba Nogin [Member] | Purchases [Member] | Supplier Concentration Risk [Member] | Major Supplier Three [Member] | ||||||
Concentration risk percentage | 8% | 9% | ||||
Purchases | $ 1,400 | $ 2,100 | ||||
Branded Online Inc dba Nogin [Member] | Major Customer One [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||
Accounts receivable net | $ 619 | $ 619 | $ 771 | |||
Concentration risk percentage | 36% | 44% | ||||
Branded Online Inc dba Nogin [Member] | Major Customer One [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||||||
Concentration risk percentage | 17% | 36% | ||||
Revenue | $ 2,900 | $ 9,200 | ||||
Branded Online Inc dba Nogin [Member] | Major Customer Two [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||||||
Accounts receivable net | $ 298 | $ 298 | $ 153 | |||
Concentration risk percentage | 18% | 9% | ||||
Branded Online Inc dba Nogin [Member] | Major Customer Two [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||||||
Concentration risk percentage | 11% | 15% | ||||
Revenue | $ 1,800 | $ 3,700 | ||||
Branded Online Inc dba Nogin [Member] | Major Customer Three [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | ||||||
Concentration risk percentage | 10% | 8% | ||||
Revenue | $ 1,700 | $ 2,000 | ||||
Minimum [Member] | ||||||
Finite lived intangible assets useful life | 5 years | |||||
Maximum [Member] | ||||||
Finite lived intangible assets useful life | 15 years |
PROPERTY AND EQUIPMENT - Summar
PROPERTY AND EQUIPMENT - Summary of Property and Plant Equipment (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 2,974 | $ 2,978 |
Less accumulated depreciation | (1,498) | (1,383) |
Property and equipment, net | 1,476 | 1,595 |
Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 2,402 | 2,406 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 572 | $ 572 |
PROPERTY AND EQUIPMENT - Additi
PROPERTY AND EQUIPMENT - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation on property plant and equipment | $ 138 | $ 143 |
STOCKHOLDERS' DEFICIT - Additio
STOCKHOLDERS' DEFICIT - Additional information (Detail) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Class of Stock [Line Items] | ||
Preferred stock par value | $ 0.0001 | |
Preferred stock shares authorized | 50,000,000 | |
Preferred stock shares issued | 0 | |
Preferred stock shares outstanding | 0 | |
Common stock shares authorized | 500,000,000 | 500,000,000 |
Common stock par value | $ 0.0001 | $ 0.0001 |
Common stock shares issued | 3,334,714 | 3,334,714 |
Common stock shares outstanding | 3,334,714 | 3,334,714 |
STOCK COMPENSATION PLAN - Addi
STOCK COMPENSATION PLAN - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share based compensation by share based payment award vested ad exercisable | 64,966 | 46,660 | ||
Share-Based Payment Arrangement, Option [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share based compensation by share based payment award options outstanding weighted average exercise price | $ 36.06 | $ 255.40 | ||
Allocated share based compensation expense | $ 200 | $ 58 | ||
Restricted Stock Units (RSUs) [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share based compensation by share based payment award options outstanding weighted average exercise price | $ 15.40 | |||
Allocated share based compensation expense | $ 53 | |||
Two Thousand And Thirteen Stock Incentive Plan [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share based compensation by share based payment award number of shares authorized | 132,770 | |||
Number of stock options granted | 172,147 | 59,028 | ||
Two Thousand And Thirteen Stock Incentive Plan [Member] | Share-Based Payment Arrangement, Option [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share based compensation by share based payment award vesting period | 4 years | |||
Two Thousand Twenty Two Plan [Member] | Share-Based Payment Arrangement, Option [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share based compensation by share based payment award number of shares issued | 255,147 | |||
Aggregate number of shares percentage | 15% | |||
Two Thousand Twenty Two Plan [Member] | Restricted Stock Units (RSUs) [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Number of stock options granted | 506,250 | 0 | ||
Two Thousand Twenty Two Plan [Member] | Restricted Stock Units (RSUs) [Member] | Maximum [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share based compensation by share based payment award vesting period | 3 years | |||
Two Thousand Twenty Two Plan [Member] | Restricted Stock Units (RSUs) [Member] | Minimum [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share based compensation by share based payment award vesting period | 1 year | |||
Branded Online Inc dba Nogin [Member] | Share-Based Payment Arrangement, Option [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Number of stock options granted | 83,000 | 87,323 | ||
Share based compensation by share based payment award options outstanding shares | 152,075 | 73,741 | 42,546 |
STOCK COMPENSATION PLAN - Summa
STOCK COMPENSATION PLAN - Summary of Stock Options (Detail) - Branded Online Inc dba Nogin [Member] - Share-Based Payment Arrangement, Option [Member] - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Beginning balance | 73,741 | 42,546 |
Granted | 83,000 | 87,323 |
Exercised | 0 | (9,957) |
Forfeited / Terminated | (4,666) | (46,171) |
Ending balance | 152,075 | 73,741 |
STOCK COMPENSATION PLAN - Sum_2
STOCK COMPENSATION PLAN - Summary of the Fair Market Value for Awards Granted (Detail) - Branded Online Inc dba Nogin [Member] | 3 Months Ended |
Mar. 31, 2023 | |
Expected dividend yield | 0% |
Expected volatility | 61% |
Expected term (years) | 6 years |
Risk-free interest rate | 3.90% |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Summary of Finite-Lived Intangible Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Contract acquisition cost | $ 5,783 | $ 5,783 |
Less: Accumulated amortization | (344) | (290) |
Intangible assets-net | 5,439 | 5,493 |
Software Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Contract acquisition cost | 1,166 | 1,166 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Contract acquisition cost | $ 4,617 | $ 4,617 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 01, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill | $ 6,748 | $ 6,748 | ||
Mod Cloth [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill | 6,700 | $ 6,748 | ||
Software Development [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 55 | $ 58 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Schedule of Company amortization of intangibles for the next five years (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2023 (remaining payments) | $ 164 |
2024 | 219 |
2025 | 219 |
2026 | 219 |
2027 | 0 |
Total remaining intangible amortization | $ 821 |
INVESTMENT IN UNCONSOLIDATED _3
INVESTMENT IN UNCONSOLIDATED AFFILIATES - Summary of financial information for the joint ventures from formation (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Schedule of Investments [Line Items] | |||
Total net revenue | $ 16,675 | $ 25,199 | |
Net loss | (9,901) | (9,942) | |
Current assets | 20,795 | $ 35,228 | |
Current liabilities | 52,631 | 53,722 | |
Corporate Joint Venture [Member] | IPCO | |||
Schedule of Investments [Line Items] | |||
Total net revenue | 4,018 | 6,507 | |
Gross margin | 2,674 | 1,356 | |
Net loss | (1,397) | $ (561) | |
Current assets | 3,564 | 4,254 | |
Long term assets | 5,366 | 5,509 | |
Current liabilities | 6,940 | 6,142 | |
Long term liabilities | $ 907 | $ 1,032 |
INVESTMENT IN UNCONSOLIDATED _4
INVESTMENT IN UNCONSOLIDATED AFFILIATES - Summary of changes in the ModCloth investment Level 3 fair value measurement (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Investments in and Advances to Affiliates [Line Items] | ||
Opening Balance | $ 7,404 | |
Closing Balance | 6,759 | $ 7,404 |
Fair Value, Inputs, Level 3 [Member] | ||
Investments in and Advances to Affiliates [Line Items] | ||
Opening Balance | 7,404 | |
Closing Balance | 6,759 | 7,404 |
Fair Value, Inputs, Level 3 [Member] | IPCO Holdings LLC [Member] | ||
Investments in and Advances to Affiliates [Line Items] | ||
Opening Balance | 7,404 | 7,133 |
Change in fair value | (645) | 271 |
Closing Balance | $ 6,759 | $ 7,404 |
INVESTMENT IN UNCONSOLIDATED _5
INVESTMENT IN UNCONSOLIDATED AFFILIATES - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Dec. 01, 2022 | Apr. 06, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Investments in and Advances to Affiliates [Line Items] | ||||||
Investments in and Advances to Affiliates, at Fair Value | $ 6,759 | $ 7,404 | ||||
Fair Value, Inputs, Level 3 [Member] | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Investments in and Advances to Affiliates, at Fair Value | 6,759 | 7,404 | ||||
Mod Cloth [Member] | Corporate Joint Venture [Member] | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Payments to Acquire Interest in Joint Venture | $ 1,500 | |||||
Inventory financing arrangement | $ 1,000 | |||||
Payments to Acquire Additional Interest in Joint Venture | $ 1,500 | |||||
Percentage Of Ownership Interest In Unconsolidated Affiliates | 50% | |||||
IPCO Holdings LLC [Member] | Corporate Joint Venture [Member] | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Investments in and Advances to Affiliates, at Fair Value | 6,800 | 7,400 | ||||
Other expense | $ 1,600 | |||||
IPCO Holdings LLC [Member] | Fair Value, Inputs, Level 3 [Member] | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Investments in and Advances to Affiliates, at Fair Value | 6,759 | 7,404 | $ 7,133 | |||
Investments in and Advances to Affiliates, at Fair Value, Period Increase (Decrease) | (645) | $ 271 | ||||
IPCO Holdings LLC [Member] | Fair Value, Inputs, Level 3 [Member] | Corporate Joint Venture [Member] | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Investments in and Advances to Affiliates, at Fair Value, Period Increase (Decrease) | $ 645 | $ 114 | ||||
IPCO Holdings LLC [Member] | Valuation Technique, Discounted Cash Flow [Member] | Measurement Input, Discount Rate [Member] | Fair Value, Inputs, Level 3 [Member] | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Discount rate | 14.70% | |||||
IPCO Holdings LLC [Member] | Guideline Public Company Method [Member] | Measurement Input, Revenue Multiple [Member] | Fair Value, Inputs, Level 3 [Member] | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Equity Securities, FV-NI, Measurement Input | 0.4 | |||||
IPCO Holdings LLC [Member] | Guideline Transaction Method [Member] | Measurement Input, Revenue Multiple [Member] | Fair Value, Inputs, Level 3 [Member] | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Equity Securities, FV-NI, Measurement Input | 0.45 |
CERTAIN LIABILITY ACCOUNTS - Sc
CERTAIN LIABILITY ACCOUNTS - Schedule Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Liabilities [Abstract] | ||
Business Combination consideration payable | $ 5,000 | $ 5,000 |
Deferred revenue | 4,054 | 5,058 |
Payroll and other employee costs | 2,215 | 1,300 |
Sales tax payable | 557 | 1,191 |
Accrued interest | 5 | 1,622 |
Accrued transaction costs | 0 | 840 |
Inventory accrual | 0 | 503 |
Other accrued expenses and current liabilities | 3,197 | 2,312 |
Total | $ 15,028 | $ 17,826 |
CERTAIN LIABILITY ACCOUNTS - _2
CERTAIN LIABILITY ACCOUNTS - Schedule of Other Long-term Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Liabilities [Abstract] | ||
Deferred transaction costs payable | $ 10,979 | $ 10,979 |
Business Combination consideration payable | 3,555 | 3,355 |
Deferred PIPE issuance costs payable | 1,160 | 1,160 |
PIPE principal accretion | 1,104 | 617 |
Legal settlement | 940 | 621 |
Standby agreement derivative liability | 0 | 847 |
Other long-term liabilities | 102 | 187 |
Total | $ 17,840 | $ 17,766 |
LONG-TERM DEBT - Additional Inf
LONG-TERM DEBT - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Aug. 27, 2023 | Aug. 26, 2022 | Apr. 19, 2022 | Mar. 31, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2022 | Mar. 26, 2023 | Feb. 28, 2023 | |
Debt Instrument [Line Items] | ||||||||||
Debt instrument, interest rate | 7% | 7% | ||||||||
Convertible Notes Payable, Current | $ 1,000,000 | |||||||||
Revenue Recognized | $ 0 | $ 1,611,000 | ||||||||
Proceeds from notes payable | 4,649,000 | 0 | ||||||||
Notes payable current | $ 4,807,000 | $ 4,807,000 | $ 0 | |||||||
Weighted average sale price | $ 1.76 | |||||||||
Fair Value Of Promissory Notes And Convertible Promissory Notes | $ 4,800,000 | $ 4,800,000 | $ 4,800,000 | |||||||
Loss on increase in fair value of the notes | 159,000 | $ 0 | ||||||||
Warrant Exercise Increased Price | $ 11.50 | |||||||||
Warrant Exercise Decrease Price | $ 0.01 | |||||||||
Underwritten Primary Equity Offering | 10,000,000 | |||||||||
Repaid in October 2023 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Senior Notes due | 39% | |||||||||
Outstanding balance of the loan | $ 2,700,000 | 2,700,000 | ||||||||
Loan Obtained | $ 3,000,000 | |||||||||
Debt Instrument, Interest Rate, Effective Percentage | 39% | |||||||||
Debt Issuance Cost | $ 75,000 | |||||||||
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid | 72,000 | 72,000 | $ 130,000 | |||||||
Repaid in August 2023 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Convertible Senior Notes due | 20.17% | |||||||||
Outstanding balance of the loan | 203,000 | 203,000 | ||||||||
Loan Obtained | $ 250,000 | |||||||||
Debt Instrument, Interest Rate, Effective Percentage | 20.17% | |||||||||
Promissory Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayments of debt | $ 3,500,000 | |||||||||
Debt conversion, converted instrument, warrants or options issued | 31,024 | |||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.01 | |||||||||
Proceeds from notes payable | $ 7,000,000 | |||||||||
Interest Expense on Debt | 1,100,000 | |||||||||
Change in fair value convertible notes | 4,600,000 | |||||||||
First Tranche Notes [Member] | Promissory Note Warrants [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Revenue Recognized | $ 400,000 | |||||||||
Minimum [Member] | Promissory Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument interest rate terms | 7.75 | |||||||||
Gain loss on notes payable fair value | $ 6,300,000 | |||||||||
Maximum [Member] | Pipe Warrants [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt conversion, converted instrument, warrants or options issued | 1,500,000 | |||||||||
Maximum [Member] | Promissory Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument interest rate terms | 3.50 | |||||||||
Gain loss on notes payable fair value | $ 700,000 | |||||||||
Convertible Notes and Indenture | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument, maturity date | Sep. 01, 2026 | |||||||||
Debt Instrument, Face Amount | $ 65,500,000 | $ 75,000,000 | ||||||||
Convertible Senior Notes due | 7% | |||||||||
Accrued expenses and other current liabilities | 1,100,000 | $ 1,100,000 | $ 1,600,000 | |||||||
Debt Instrument, Convertible, Conversion Price | $ 11.50 | |||||||||
Converted Instrument, Shares Issued | 86.9565 | |||||||||
Convertible Notes Payable, Current | $ 1,000 | |||||||||
Revenue Recognized | $ 175,000,000 | |||||||||
Debt Instrument, Covenant Compliance | This covenant will terminate once less than 15% of the aggregate principal amount of the Convertible Notes are outstanding. The Indenture also includes customary events of default and related provisions for potential acceleration of the Convertible Notes. | |||||||||
Debt conversion rate description | (a) 0.25% per annum for the first 90 days commencing on the first business day following a ten business day grace period and (b) 0.50% per annum thereafter, in each case, until the Company cures the lapse of effectiveness. | |||||||||
Fair value, discount rate | 15.04% | |||||||||
Expected volatility | 96.85% | |||||||||
Warrant Exercise Increased Price | $ 11.50 | |||||||||
Warrant Exercise Decrease Price | $ 0.01 | |||||||||
Debt Instrument, Interest Rate, Effective Percentage | 7% | |||||||||
Fair value of the Convertible Notes | $ 57,400,000 | $ 57,400,000 | $ 62,500,000 | |||||||
Convertible Notes and Indenture | First Tranche Notes [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Fair value of the Convertible Notes | $ 65,100,000 | |||||||||
Convertible Notes and Indenture | Subsequent Event [Member] | Minimum [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Weighted average sale price | $ 7.50 | |||||||||
Branded Online Inc dba Nogin [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Expected volatility | 61% |
WARRANTS AND DERIVATIVES - Addi
WARRANTS AND DERIVATIVES - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |||||
Mar. 28, 2023 | Mar. 26, 2023 | Mar. 31, 2023 | Aug. 26, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Class of Warrant or Right [Line Items] | |||||||
Warrant Exercise Price | $ 11.50 | ||||||
Warrant Exercise Decrease Price | 0.01 | ||||||
Common stock par value | 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Change in fair value of warrant liability | $ 430 | $ 0 | |||||
Liquidity fee percentages less | 3.50% | ||||||
Reverse Stock Split | 1-for-20 | ||||||
Standby Agreement [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Derivative liabilities | $ 847 | ||||||
Gain (Loss) fair value of derivative instruments | $ 847 | ||||||
Pipe Warrants [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Number of warrants granted to purchase shares of common stock | 1,396,419 | ||||||
Warrant exercise price | $ 0.01 | ||||||
Common stock par value | $ 11.50 | ||||||
Sale of Stock, Price Per Share | $ 18 | $ 18 | |||||
Proceeds from Issuance of Warrants | $ 377 | ||||||
Warrant Agreement Amendment [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Warrant exercise price | $ 11.50 | ||||||
Warrant Exercise Decrease Price | $ 0.01 | ||||||
loss related to the warrant amendment | $ 430 | ||||||
Financial Institution [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Ownership interest | 80% | ||||||
Aggregate Purchase Price Percentage | 20% | ||||||
Financial Institution [Member] | Subscription Agreement [Member] | |||||||
Class of Warrant or Right [Line Items] | |||||||
Number of warrants granted to purchase shares of common stock | 517,079 | ||||||
Warrant exercise price | $ 10.17 | ||||||
Aggregate Purchase Price Percentage | 20% |
WARRANTS AND DERIVATIVES - Sche
WARRANTS AND DERIVATIVES - Schedule of Significant Inputs And Valuation Technique Used To Measure Fair Value of The Warrants (Detail) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
WARRANTS AND DERIVATIVES - sc_2
WARRANTS AND DERIVATIVES - schedule of changes in the warrant liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Liabilities [Abstract] | ||
Fair value of equity classified warrants in common stock | $ 430 | $ 0 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Provision (benefit) for income taxes | $ 26 | $ (158) |
Statutory federal income tax rate | 21% |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Defined Benefit Plan Disclosure [Line Items] | ||
Investment in unconsolidated affiliates | $ 6,759 | $ 7,404 |
Convertible notes (Note 7) | 56,260 | 60,852 |
Non-current Business Combination Cash Consideration | 10,900 | |
Level 3 [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Investment in unconsolidated affiliates | 6,759 | 7,404 |
Convertible notes (Note 7) | 56,260 | 60,852 |
Standby Agreement derivative liability-Note 8 | 0 | 847 |
Non-current Business Combination Cash Consideration | $ 3,555 | $ 3,355 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Aug. 26, 2022 | Aug. 26, 2022 | Mar. 31, 2023 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Consideration in cash | $ 5.9 | ||
Payments for Merger Related Costs | $ 15 | ||
Cash Acquired in Excess of Payments to Acquire Business | 15 | ||
Accounts Payble | 5 | ||
Remaining Consideration In Cash | 5.9 | ||
Fair Value Of Distribution Against Accumulated Deficit | 13.3 | ||
Deferred cash consideration | 10.9 | ||
Assets Fair Value Adjustment | $ 4.1 | ||
other (loss) income | 0.2 | ||
fair value option | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Cash Consideration | 4.2 | 4.2 | |
Current Cash Consideration | 5 | 5 | |
fair value of the deferred cash [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Cash Consideration | 4.2 | $ 4.2 | |
Deferred cash consideration | $ 3.6 | ||
Maximum [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Consideration in cash | 15 | ||
Minimum [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Consideration in cash | $ 4.1 |
ACQUISITION - Additional Inform
ACQUISITION - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 01, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Sep. 30, 2022 | ||
Business Acquisition [Line Items] | |||||
Goodwill | $ 6,748 | $ 6,748 | |||
Loss on Fair Value Hedge Ineffectiveness | 2,580 | ||||
Total Goodwill | 6,748 | 6,748 | |||
Mod Cloth [Member] | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 6,748 | 6,700 | |||
Equity interest | 50% | ||||
Remaining equity interest | 50% | ||||
Payments to Acquire Interest in Joint Venture | $ 1,500 | ||||
Total consideration | 6,915 | ||||
Total cash consideration | 1,500 | ||||
Settlement of pre-existing relationship | [1] | 5,415 | |||
Fair value and carrying value | $ 4,500 | ||||
Fair value of previously held equity interest | 1,920 | $ 1,920 | |||
Total Goodwill | $ 6,748 | $ 6,700 | |||
[1] (a) Effective settlement of pre-existing accounts receivable of $ 5.4 million for services provided to ModCloth under the Company’s Master Services Agreement with ModCloth and additional operational funding provided by the Company to ModCloth. The $ 5.4 million accounts receivable balance as of the acquisition date was based on the Company’s estimate of the amount that will ultimately be collected from ModCloth. |
ACQUISITION - Summary of finali
ACQUISITION - Summary of finalized fair value of the assets and assumed liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 01, 2022 | Jan. 01, 2022 |
Acquired assets | ||||
Cash | $ 617 | $ 15,385 | ||
Prepaid expenses and other current assets | 3,810 | 2,539 | ||
Property and equipment, net | 1,476 | 1,595 | ||
Property and equipment | 2,974 | 2,978 | ||
Right-of-use asset, net (Note 19) | 17,350 | 17,391 | $ 13,000 | |
Other non-current asset | 1,065 | 1,074 | ||
Goodwill | 6,748 | $ 6,748 | ||
Mod Cloth [Member] | ||||
Acquired assets | ||||
Cash | $ 3 | |||
Accounts receivable, net | 25 | |||
Inventory | 4,787 | |||
Prepaid expenses and other current assets | 30 | |||
Property and equipment, net | 108 | |||
Right-of-use asset, net (Note 19) | 895 | |||
Other non-current asset | 80 | |||
Intangible assets, net | 4,610 | |||
Goodwill | $ 6,700 | 6,748 | ||
Total identifiable assets | 17,286 | |||
Liabilities assumed | ||||
Accounts payable | 5,544 | |||
Accrued expenses and other liabilities | 2,908 | |||
Total Liabilities | $ 8,452 |
ACQUISITION - Summary of the pu
ACQUISITION - Summary of the purchase price consideration (Details) - Mod Cloth [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 01, 2022 | Dec. 31, 2022 | ||
Restructuring Cost and Reserve [Line Items] | |||
Total cash consideration | $ 1,500 | ||
Settlement of pre-existing relationship | [1] | 5,415 | |
Total consideration | 6,915 | ||
Fair value of previously held equity interest | 1,920 | $ 1,920 | |
Purchase price consideration | $ 8,835 | ||
[1] (a) Effective settlement of pre-existing accounts receivable of $ 5.4 million for services provided to ModCloth under the Company’s Master Services Agreement with ModCloth and additional operational funding provided by the Company to ModCloth. The $ 5.4 million accounts receivable balance as of the acquisition date was based on the Company’s estimate of the amount that will ultimately be collected from ModCloth. |
ACQUISITION - Summery Of Accoun
ACQUISITION - Summery Of Accounts Receivable (Parenthetical) (Details) - Mod Cloth [Member] $ in Thousands | Dec. 01, 2022 USD ($) |
Restructuring Cost and Reserve [Line Items] | |
Accounts receivable, net | $ 25 |
Master Services Agreement [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Accounts Receivable On Sale | 5,400 |
Accounts receivable, net | $ 5,400 |
Acquisitions - Schedule of fair
Acquisitions - Schedule of fair value of identifiable intangible assets and useful lives (Details) - Mod Cloth [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Intangible Assets Fair Value | $ 4,610 |
Trade Names [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Intangible Assets Fair Value | $ 4,610 |
Finite lived intangible assets useful life | 10 years |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Detail) - USD ($) | 3 Months Ended | |||||
Dec. 01, 2022 | Aug. 26, 2022 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Apr. 06, 2021 | |
Related Party Transaction [Line Items] | ||||||
Revenues | $ 16,675,000 | $ 25,199,000 | ||||
Mod Cloth [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership interest | 50% | |||||
Remaining equity interest | 50% | |||||
IPCO Holdings LLC [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Revenues | 1,200,000 | 1,200,000 | ||||
Inventory | 600,000 | |||||
IPCO Holdings LLC [Member] | Promissory Note [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Promissory notes from related parties | 200,000 | $ 1,000,000 | ||||
Tiger Capital | ||||||
Related Party Transaction [Line Items] | ||||||
Payments to Acquire Interest in Joint Venture | $ 1,500,000 | |||||
PIPE Related Parties [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Convertible Debt | $ 1,500,000 | |||||
Promissory note | 106,000 | |||||
Promissory Notes fair value | 106,000 | |||||
PIPE Related Parties [Member] | Chief Executive Officer [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Proceeds from Issuance of Long-Term Debt | 1,500,000 | |||||
PIPE Related Parties [Member] | Promissory Note Warrants [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Convertible Debt | $ 32,142 | |||||
PIPE Related Parties [Member] | Promissory Note [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Long-Term Debt, Fair Value | $ 1,300,000 | |||||
MOD Cloth Partners LLC [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Revenues | $ 2,000,000 |
REVENUE - Summary of Disaggrega
REVENUE - Summary of Disaggregation Of Revenue (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue | $ 16,675 | $ 25,199 |
Commerce-as-a-Service Revenue | ||
Revenue | 3,733 | 5,201 |
Product sales revenue | ||
Revenue | 6,544 | 12,922 |
Marketing revenue | ||
Revenue | 2,658 | 3,670 |
Shipping revenue | ||
Revenue | 1,867 | 1,881 |
Other revenue | ||
Revenue | $ 1,873 | $ 1,525 |
EARNINGS PER SHARE - Summary of
EARNINGS PER SHARE - Summary of Basic and Diluted Net Loss per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: Basic EPS | ||
Net loss | $ (9,901) | $ (9,942) |
Net loss attributable to common stockholders-basic | $ (9,901) | $ (9,942) |
Denominator: Basic EPS | ||
Weighted average shares of common stock outstanding-basic | 4,688,331 | 1,981,097 |
Earnings Per Share, Basic | $ (2.11) | $ (5.02) |
Numerator: Diluted EPS | ||
Net loss attributable to common stockholders-diluted | $ (9,901) | $ (9,942) |
Denominator: Diluted EPS | ||
Weighted average shares of common stock outstanding diluted | 4,688,331 | 1,981,097 |
Dilutive potential shares of common stock: | ||
Options to purchase shares of common stock | 0 | 0 |
Warrants to purchase shares of common stock | 0 | 0 |
Weighted average shares of common stock outstanding-diluted | 4,688,331 | 1,981,097 |
Net loss per common share - diluted | $ (2.11) | $ (5.02) |
EARNINGS PER SHARE - Summary _2
EARNINGS PER SHARE - Summary Of Antidilutive Securities Excluded From Computation Of Earnings Per Share (Detail) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 99,089 | 0 |
Series A Convertible, Redeemable Preferred Shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 0 | 443,224 |
Series B Convertible, Redeemable Preferred Shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 0 | 316,707 |
Share-Based Payment Arrangement [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 370,075 | 60,663 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 28,639 | 31,652 |
Pipe Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 24,294 | 0 |
Swag Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities | 372,070 | 0 |
MEZZANINE EQUITY AND SHAREHOL_2
MEZZANINE EQUITY AND SHAREHOLDERS DEFICIT (Additional Information) (Details) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Business Combination, Description [Abstract] | ||
Common stock shares authorized | 500,000,000 | 500,000,000 |
Common stock par value | $ 0.0001 | $ 0.0001 |
Convertible Preferred Stock, Shares Issued upon Conversion | 15,200,000 | |
Preferred stock shares authorized | 50,000,000 | |
Preferred stock par value | $ 0.0001 | |
Preferred stock shares issued | 0 | |
Preferred stock shares outstanding | 0 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional Information (Detail) $ in Thousands | Jul. 31, 2018 USD ($) |
Other Commitments [Line Items] | |
Operating Lease Monthly Lease Payments | $ 75 |
Operating Sublease Monthly Payments Receivable | $ 87 |
Operating Sublease Expiration Description | May 2023 |
Lessee Operating Sublease Income Receivable Year One and Year Two | $ 1,000 |
Lessee Operating Sublease Income Receivable Year Three | $ 435 |
OPERATING LEASES (Additional In
OPERATING LEASES (Additional Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Jul. 31, 2018 | Mar. 31, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2022 | |
Leases, Operating [Abstract] | |||||
Right-of-use asset, net (Note 19) | $ 17,350 | $ 17,391 | $ 13,000 | ||
Operating lease liability | $ 18,517 | $ 15,100 | |||
Operating lease monthly lease payments | $ 75 | ||||
Operating sublease monthly payments receivable | $ 87 | ||||
Operating sublease expiration description | May 2023 | ||||
Operating leases remaining rental income | $ 1,400 | ||||
Future rental income during 2022 | $ 1,000 | ||||
Future rental income in 2023 | $ 435 |
OPERATING LEASES - Schedule of
OPERATING LEASES - Schedule of Operating Lease Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Jan. 01, 2022 |
Leases, Operating [Abstract] | |||
Operating assets right-of-use | $ 17,350 | $ 17,391 | $ 13,000 |
Operating lease liabilities (current) | 4,565 | 4,367 | |
Operating lease liabilities (non-current) | $ 14,775 | $ 15,223 |
OPERATING LEASES - Components o
OPERATING LEASES - Components of Lease Expense (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Leases, Operating [Abstract] | |
Operating lease costs | $ 1,501 |
Variable lease costs | 317 |
Short-term lease costs | 0 |
Sublease income | 0 |
Total lease costs | $ 1,818 |
OPERATING LEASES - Schedule o_2
OPERATING LEASES - Schedule of Maturity of Operating Lease Liability (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Jan. 01, 2022 |
Leases, Operating [Abstract] | ||
2023 (remaining payments) | $ 4,127 | |
2024 | 5,214 | |
2025 | 5,310 | |
2025 | 3,453 | |
2027 | 2,222 | |
Thereafter | 899 | |
Total minimum lease payments | 21,225 | |
Less: imputed interest | (2,708) | |
Total operating lease payments | $ 18,517 | $ 15,100 |
OPERATING LEASES - Schedule o_3
OPERATING LEASES - Schedule of Other Operating Lease Information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Leases, Operating [Abstract] | |
Cash paid for amounts included in the measurement of lease liabilities | $ 1,711 |
Right-of-use assets obtained in exchange for new lease liabilities | $ 1,120 |
Weighted-average remaining term (in years) | 4 years 1 month 6 days |
Weighted-average discount rate | 6.90% |
OPERATING LEASES - Schedule o_4
OPERATING LEASES - Schedule of Future Minimum Lease Payments Under Non Cancelable Terms (Detail) $ in Thousands | Mar. 31, 2022 USD ($) |
Lessee, Operating Lease, Liability, to be Paid [Abstract] | |
2022 (remaining payments) | $ 2,250 |
2023 | 1,272 |
2024 | 873 |
2025 | 900 |
2026 | 927 |
Thereafter | 1,853 |
Total minimum lease payments | $ 8,075 |
SUBSEQUENT EVENTS (Additional I
SUBSEQUENT EVENTS (Additional Information) (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 06, 2023 | Apr. 04, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Subsequent Event [Line Items] | ||||
Common Stock, Shares, Issued | 3,334,714 | 3,334,714 | ||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Public offering | $ 22 | |||
Subsequent Event [Member] | Securities Purchase Agreements [Member] | ||||
Subsequent Event [Line Items] | ||||
Common Stock, Shares, Issued | 7,333,334 | |||
Warrants Purchase | 7,333,334 | |||
Common warrants offering price | $ 3 |