Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 02, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-41275 | |
Entity Registrant Name | BRC Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 87-3277812 | |
Entity Address, Address Line One | 1144 S. 500 W | |
Entity Address, City or Town | Salt Lake City | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84101 | |
City Area Code | 801 | |
Local Phone Number | 874-1189 | |
Title of 12(b) Security | Class A Common Stock, $0.0001 par value | |
Trading Symbol | BRCC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001891101 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A Common Stock, $0.0001 par value | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 64,021,915 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 148,019,892 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 6,667 | $ 38,990 |
Restricted cash | 1,465 | 0 |
Accounts receivable, net | 24,621 | 22,337 |
Inventories, net | 91,373 | 77,183 |
Prepaid expenses and other current assets | 13,959 | 6,783 |
Total current assets | 138,085 | 145,293 |
Property, plant and equipment, net | 64,883 | 59,451 |
Operating lease, right-of-use asset | 35,963 | 20,050 |
Identifiable intangibles, net | 382 | 225 |
Other | 313 | 315 |
Total assets | 239,626 | 225,334 |
Current liabilities: | ||
Accounts payable | 26,128 | 12,429 |
Accrued liabilities | 33,437 | 36,660 |
Deferred revenue and gift card liability | 10,160 | 9,505 |
Current maturities of long-term debt, net | 1,896 | 2,143 |
Current operating lease liability | 2,402 | 1,360 |
Current maturities of finance lease obligations | 82 | 95 |
Total current liabilities | 74,105 | 62,192 |
Non-current liabilities: | ||
Long-term debt, net | 70,094 | 47,017 |
Finance lease obligations, net of current maturities | 99 | 221 |
Operating lease liability | 35,252 | 19,466 |
Other non-current liabilities | 623 | 502 |
Total non-current liabilities | 106,068 | 67,206 |
Total liabilities | 180,173 | 129,398 |
Commitments and Contingencies (Note 14) | ||
Stockholders' equity: | ||
Preferred stock, $0.0001 par value, 1,000,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Additional paid in capital | 137,457 | 129,508 |
Accumulated deficit | (115,993) | (103,733) |
Total BRC Inc.'s stockholders' equity | 21,485 | 25,796 |
Non-controlling interests | 37,968 | 70,140 |
Total stockholders' equity | 59,453 | 95,936 |
Total liabilities and stockholders' equity | 239,626 | 225,334 |
Class A Common Stock | ||
Stockholders' equity: | ||
Common stock | 5 | 5 |
Class B Common Stock | ||
Stockholders' equity: | ||
Common stock | 16 | 16 |
Class C Common Stock | ||
Stockholders' equity: | ||
Common stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Preferred stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock issued (in shares) | 0 | 0 |
Preferred stock outstanding (in shares) | 0 | 0 |
Class A Common Stock | ||
Common stock par value (in dollars per share) | $ 0.0001 | |
Common shares authorized (in shares) | 2,500,000,000 | |
Common shares issued (in shares) | 63,641,996 | |
Common shares outstanding (in shares) | 63,641,996 | |
Class B Common Stock | ||
Common stock par value (in dollars per share) | $ 0.0001 | |
Common shares authorized (in shares) | 300,000,000 | |
Common shares issued (in shares) | 148,395,692 | |
Common shares outstanding (in shares) | 148,395,692 | |
Class C Common Stock | ||
Common stock par value (in dollars per share) | $ 0.0001 | |
Common shares authorized (in shares) | 1,500,000 | |
Common shares issued (in shares) | 0 | |
Common shares outstanding (in shares) | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |||
Income Statement [Abstract] | ||||||
Revenue, net | $ 100,536 | $ 75,494 | $ 275,974 | $ 207,695 | ||
Cost of goods sold | 66,477 | 51,549 | 182,197 | 137,981 | ||
Gross profit | 34,059 | 23,945 | 93,777 | 69,714 | ||
Operating expenses | ||||||
Marketing and advertising | 8,260 | 7,414 | 22,418 | 24,591 | ||
Salaries, wages and benefits | 13,907 | 15,848 | 52,087 | 47,405 | ||
General and administrative | 19,474 | 16,301 | 56,529 | 46,019 | ||
Other operating (income) expense, net | (596) | 0 | 734 | 0 | ||
Total operating expenses | 41,045 | 39,563 | 131,768 | 118,015 | ||
Operating loss | (6,986) | (15,618) | (37,991) | (48,301) | ||
Non-operating income (expense) | ||||||
Interest expense, net | (3,544) | (470) | (4,658) | (1,136) | ||
Other income (expense), net | (108) | 57 | 138 | 350 | ||
Change in fair value of earn-out liability | 0 | 0 | 0 | (209,651) | ||
Change in fair value of warrant liability | 0 | 0 | 0 | (56,675) | ||
Change in fair value of derivative liability | 0 | 0 | 0 | (2,335) | ||
Total non-operating expenses | (3,652) | (413) | (4,520) | (269,447) | ||
Loss before income taxes | (10,638) | (16,031) | (42,511) | (317,748) | ||
Income tax expense | 56 | 71 | 169 | 266 | ||
Net loss | (10,694) | (16,102) | (42,680) | (318,014) | ||
Less: Net loss attributable to non-controlling interest | (7,462) | (12,059) | (30,420) | (240,295) | ||
Net loss attributable to BRC Inc. | $ (3,232) | $ (4,043) | $ (12,260) | $ (77,719) | ||
Net loss per share attributable to Class A Common Stock | ||||||
Basic (in dollars per share) | $ (0.05) | $ (0.08) | $ (0.21) | |||
Diluted (in dollars per share) | $ (0.05) | [1] | $ (0.08) | [1] | $ (0.21) | |
Weighted- average shares of Class A Common Stock outstanding | ||||||
Basic (in shares) | 61,964,157 | [1] | 53,013,720 | 59,738,542 | ||
Diluted (in shares) | 61,964,157 | 53,013,720 | 59,738,542 | |||
[1] For the nine months ended September 30, 2022, net loss per share of Class A Common Stock and weighted-average shares of Class A Common Stock outstanding is representative of the period from February 9, 2022 through September 30, 2022, the period following the Business Combination, as defined in Note 1 - Organization and Nature of Business . Shares of Class B Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted loss per share of Class B Common Stock under the two-class method has not been presented. For more information, refer to Note 12 - Net Loss per Share . |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Employee | Non-employee | Members’ Interest | Members’ Interest Employee | Members’ Interest Non-employee | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Common Stock Class C Common Stock | Additional Paid-In Capital | Additional Paid-In Capital Employee | Accumulated Deficit | Non-Controlling Interest | Non-Controlling Interest Employee | Non-Controlling Interest Non-employee |
Beginning balance at Dec. 31, 2021 | $ (149,491) | $ (129,495) | $ 0 | $ 0 | $ 0 | $ 0 | $ (19,996) | $ 0 | |||||||
Beginning balance (in shares) at Dec. 31, 2021 | 0 | 0 | 0 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Equity-based compensation prior to Business Combination | $ 308 | $ 241 | $ 308 | $ 241 | |||||||||||
Series A preferred discount amortization prior to Business Combination | (6,621) | (6,621) | |||||||||||||
Repurchase of member units prior to Business Combination | (1,599) | (1,599) | |||||||||||||
Net loss prior to Business Combination | (2,691) | (2,691) | |||||||||||||
Effect of Business Combination | 53,332 | 137,166 | $ 4 | $ 14 | 0 | (831) | (83,021) | ||||||||
Effect of Business Combination (in shares) | 44,009,874 | 139,106,323 | 1,388,125 | ||||||||||||
Equity-based compensation after Business Combination | $ 217 | 114 | $ 31 | $ 186 | $ 114 | ||||||||||
First Tier Vesting Event (in shares) | 694,062 | 9,926,563 | (694,062) | ||||||||||||
First Tier Vesting Event | 172,373 | $ 1 | 38,783 | 133,589 | |||||||||||
Net loss after Business Combination | (254,136) | (60,230) | (193,906) | ||||||||||||
Ending balance at Mar. 31, 2022 | (187,953) | 0 | $ 4 | $ 15 | $ 0 | 38,814 | (83,748) | (143,038) | |||||||
Ending balance (in shares) at Mar. 31, 2022 | 44,703,936 | 149,032,886 | 694,063 | ||||||||||||
Beginning balance at Dec. 31, 2021 | (149,491) | (129,495) | $ 0 | $ 0 | $ 0 | 0 | (19,996) | 0 | |||||||
Beginning balance (in shares) at Dec. 31, 2021 | 0 | 0 | 0 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net loss | (318,014) | ||||||||||||||
Ending balance at Sep. 30, 2022 | 114,470 | 0 | $ 5 | $ 16 | $ 0 | 128,850 | (98,546) | 84,145 | |||||||
Ending balance (in shares) at Sep. 30, 2022 | 53,765,690 | 157,794,609 | 0 | ||||||||||||
Beginning balance at Mar. 31, 2022 | (187,953) | 0 | $ 4 | $ 15 | $ 0 | 38,814 | (83,748) | (143,038) | |||||||
Beginning balance (in shares) at Mar. 31, 2022 | 44,703,936 | 149,032,886 | 694,063 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Effect of Business Combination | 52 | 12 | 40 | ||||||||||||
Equity-based compensation | 979 | 175 | 804 | ||||||||||||
Equity-based compensation after Business Combination | 384 | 384 | |||||||||||||
Second Tier Vesting Event (in shares) | 694,063 | 9,926,562 | (694,063) | ||||||||||||
Second Tier Vesting Event | 255,958 | $ 1 | 60,803 | 195,154 | |||||||||||
Warrant Redemption (in shares) | 6,376,346 | ||||||||||||||
Warrant Redemption | 93,160 | $ 1 | 24,924 | 68,235 | |||||||||||
Applicable Premium Vesting (in share) | 6,196 | 820,310 | |||||||||||||
Applicable Premium Vesting | 12,075 | 3,153 | 8,922 | ||||||||||||
Common Unit redemption (in shares) | 825,442 | (825,442) | |||||||||||||
Common Unit redemption | 0 | 364 | (364) | ||||||||||||
Net loss | (45,085) | (10,755) | (34,330) | ||||||||||||
Ending balance at Jun. 30, 2022 | 129,570 | 0 | $ 5 | $ 16 | $ 0 | 128,245 | (94,503) | 95,807 | |||||||
Ending balance (in shares) at Jun. 30, 2022 | 52,605,983 | 158,954,316 | 0 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Effect of Business Combination | (453) | (115) | (338) | ||||||||||||
Equity-based compensation | 1,345 | 286 | 1,059 | ||||||||||||
Equity-based compensation after Business Combination | $ 110 | $ 110 | |||||||||||||
Common Unit redemption (in shares) | 1,159,707 | (1,159,707) | |||||||||||||
Common Unit redemption | 0 | 434 | (434) | ||||||||||||
Net loss after Business Combination | (16,102) | ||||||||||||||
Net loss | (16,102) | (4,043) | (12,059) | ||||||||||||
Ending balance at Sep. 30, 2022 | 114,470 | 0 | $ 5 | $ 16 | $ 0 | 128,850 | (98,546) | 84,145 | |||||||
Ending balance (in shares) at Sep. 30, 2022 | 53,765,690 | 157,794,609 | 0 | ||||||||||||
Beginning balance at Dec. 31, 2022 | 95,936 | 0 | $ 5 | $ 16 | $ 0 | 129,508 | (103,733) | 70,140 | |||||||
Beginning balance (in shares) at Dec. 31, 2022 | 57,661,274 | 153,899,025 | 0 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Equity-based compensation | 2,506 | 2,287 | 219 | ||||||||||||
Common Unit redemption (in shares) | 742,583 | (742,583) | |||||||||||||
Common Unit redemption | 0 | 299 | (299) | ||||||||||||
Employee stock purchase plan (in shares) | 59,521 | ||||||||||||||
Employee stock purchase plan | 305 | 305 | |||||||||||||
Net loss | (17,321) | (4,800) | (12,521) | ||||||||||||
Ending balance at Mar. 31, 2023 | 81,426 | 0 | $ 5 | $ 16 | $ 0 | 132,399 | (108,533) | 57,539 | |||||||
Ending balance (in shares) at Mar. 31, 2023 | 58,463,378 | 153,156,442 | 0 | ||||||||||||
Beginning balance at Dec. 31, 2022 | 95,936 | 0 | $ 5 | $ 16 | $ 0 | 129,508 | (103,733) | 70,140 | |||||||
Beginning balance (in shares) at Dec. 31, 2022 | 57,661,274 | 153,899,025 | 0 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net loss after Business Combination | (42,680) | ||||||||||||||
Net loss | (42,680) | ||||||||||||||
Ending balance at Sep. 30, 2023 | 59,453 | 0 | $ 5 | $ 16 | $ 0 | 137,457 | (115,993) | 37,968 | |||||||
Ending balance (in shares) at Sep. 30, 2023 | 63,641,996 | 148,395,692 | 0 | ||||||||||||
Beginning balance at Mar. 31, 2023 | 81,426 | 0 | $ 5 | $ 16 | $ 0 | 132,399 | (108,533) | 57,539 | |||||||
Beginning balance (in shares) at Mar. 31, 2023 | 58,463,378 | 153,156,442 | 0 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Equity-based compensation | 2,543 | 2,324 | 219 | ||||||||||||
Common Unit redemption (in shares) | 2,112,345 | (2,112,345) | |||||||||||||
Common Unit redemption | 0 | 230 | (230) | ||||||||||||
Vesting of stock awards, net of shares withheld for taxes (in shares) | 174,530 | ||||||||||||||
Net loss | (14,665) | (4,228) | (10,437) | ||||||||||||
Ending balance at Jun. 30, 2023 | 69,304 | 0 | $ 5 | $ 16 | $ 0 | 134,953 | (112,761) | 47,091 | |||||||
Ending balance (in shares) at Jun. 30, 2023 | 60,750,253 | 151,044,097 | 0 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Equity-based compensation | 596 | 1,496 | (900) | ||||||||||||
Common Unit redemption (in shares) | 2,648,405 | (2,648,405) | |||||||||||||
Common Unit redemption | 0 | 761 | (761) | ||||||||||||
Employee stock purchase plan (in shares) | 97,523 | ||||||||||||||
Employee stock purchase plan | 368 | 368 | |||||||||||||
Vesting of stock awards, net of shares withheld for taxes (in shares) | 145,815 | ||||||||||||||
Vesting of stock awards, net of shares withheld for taxes | (121) | (121) | |||||||||||||
Net loss after Business Combination | (10,694) | ||||||||||||||
Net loss | (10,694) | (3,232) | (7,462) | ||||||||||||
Ending balance at Sep. 30, 2023 | $ 59,453 | $ 0 | $ 5 | $ 16 | $ 0 | $ 137,457 | $ (115,993) | $ 37,968 | |||||||
Ending balance (in shares) at Sep. 30, 2023 | 63,641,996 | 148,395,692 | 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating activities | ||
Net loss | $ (42,680) | $ (318,014) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 5,354 | 3,055 |
Equity-based compensation | 5,645 | 4,584 |
Non-employee equity-based compensation | 0 | 849 |
Amortization of debt issuance costs | 260 | 281 |
Other | (483) | 0 |
Change in fair value of earn-out liability | 0 | 209,651 |
Change in fair value of warrant liability | 0 | 56,675 |
Change in fair value of derivative liability | 0 | 2,335 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (2,284) | (15,306) |
Inventories, net | (14,190) | (20,061) |
Prepaid expenses and other assets | (7,374) | (3,110) |
Accounts payable | 10,350 | (12,811) |
Accrued liabilities | (3,285) | 11,041 |
Deferred revenue and gift card liability | 655 | 1,286 |
Operating lease liability | 915 | 425 |
Other liabilities | 122 | 149 |
Net cash used in operating activities | (46,995) | (78,971) |
Investing activities | ||
Purchases of property, plant and equipment | (12,236) | (19,950) |
Proceeds from sale of property and equipment | 5,576 | 0 |
Net cash used in investing activities | (6,660) | (19,950) |
Financing activities | ||
Proceeds from issuance of long-term debt, net of discount | 294,501 | 21,593 |
Debt issuance costs paid | (3,876) | (53) |
Repayment of long-term debt | (267,381) | (24,467) |
Financing lease obligations | (73) | 31 |
Repayment of promissory note | (1,047) | 0 |
Issuance of stock from the Employee Stock Purchase Plan | 673 | 0 |
Distribution and redemption of Series A preferred equity | 0 | (127,853) |
Proceeds from Business Combination, including PIPE investment | 0 | 337,957 |
Payment of Business Combination costs | 0 | (31,638) |
Redemption of Class A and Class B units | 0 | (20,145) |
Redemption of incentive units | 0 | (3,627) |
Net cash provided by financing activities | 22,797 | 151,798 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (30,858) | 52,877 |
Cash and cash equivalents, beginning of period | 38,990 | 18,334 |
Restricted cash, beginning of period | 0 | 0 |
Cash and cash equivalents, end of period | 6,667 | 71,211 |
Restricted cash, end of period | 1,465 | 0 |
Non-cash operating activities | ||
Recognition of right-of-use operating lease assets | 15,913 | 14,915 |
Recognition of revenue for inventory exchanged for prepaid advertising | 7,480 | 0 |
Non-cash investing and financing activities | ||
Property and equipment purchased but not yet paid | 3,349 | 135 |
Series A preferred exchange for PIPE shares | 0 | 26,203 |
Series A preferred equity amortization | 0 | 5,390 |
Supplemental cash flow information | ||
Cash paid for income taxes | 665 | 255 |
Cash paid for interest | $ 2,591 | $ 903 |
Organization and Nature of Busi
Organization and Nature of Business | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business | Organization and Nature of Business BRC Inc., a Delaware public benefit corporation ("BRC Inc."), previously entered into a Business Combination Agreement, dated as of November 2, 2021, as amended by the First Amendment to Business Combination Agreement, dated as of January 4, 2022 (the "First Amendment" and the Business Combination Agreement as so amended, the "Business Combination Agreement"), each by and among BRC Inc., SilverBox Engaged Merger Corp I, a Delaware corporation ("SilverBox"), Authentic Brands LLC, a Delaware limited liability company ("Authentic Brands"), and certain other parties thereto. On February 9, 2022, as contemplated by the Business Combination Agreement, a series of transactions (the "Business Combination") were completed for an estimated value of $1,839,815 as a result of which Authentic Brands became a subsidiary of BRC Inc., with BRC Inc. acting as sole managing member thereof as a public benefit corporation. BRC Inc. conducts substantially all of its business through its solely managed subsidiary, Authentic Brands, and Authentic Brands' subsidiaries, all of which are consolidated in these financial statements. Authentic Brands, through its wholly owned subsidiaries, purchases, roasts, and sells high quality coffee, coffee accessories, and branded apparel through its online channels and business networks. Authentic Brands also develops and promotes online content for the purpose of growing its brands, which include Black Rifle Coffee Company ("BRCC"). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation and Consolidation The Company has prepared the accompanying unaudited consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information. The unaudited consolidated financial statements reflect the financial position and operating results of the Company including wholly-owned subsidiaries. These financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for a fair statement of the operating results for the interim periods. Intercompany transactions and balances have been eliminated in consolidation. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2022. The Business Combination was accounted for as a reverse recapitalization transaction between entities under common control, whereas Authentic Brands was considered the accounting acquirer and predecessor entity. The Business Combination was reflected as the equivalent of Authentic Brands issuing stock for the net assets of SilverBox, accompanied by a recapitalization with no incremental goodwill or intangible assets recognized. Authentic Brands was determined to be the predecessor entity to the Business Combination based on a number of considerations, including: • Authentic Brands former management making up the majority of the management team of BRC Inc.; • Authentic Brands former management nominating or representing the majority of BRC Inc.'s board of directors; • Authentic Brands representing the majority of the continuing operations of BRC Inc.; and • The chief executive officer of Authentic Brands having voting control of the combined company. Use of Estimates The preparation of unaudited consolidated financial statements in conformity with US GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the unaudited consolidated financial statements and accompanying notes. Such estimates include but are not limited to estimated losses on accounts receivable, inventory reserves, undiscounted future cash flows and the fair value of assets or asset groups for the purpose of assessing impairment of long-lived assets, liabilities for contingencies, equity-based compensation, estimates for sales returns and related allowance, loyalty rewards, deferred revenue, and measurement and realization of deferred tax assets. Actual results could differ materially from those estimates. Revenue Recognition The Company recognizes revenue in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers , or Accounting Standards Codification ("ASC 606"). Revenue is recognized when, or as, control of a promised product or service transfers to a customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products. Revenue also excludes any amounts collected on behalf of third parties, including sales and indirect taxes. Revenue recognition is evaluated through the following five steps: 1. Identification of the contract with a customer; 2. Identification of the performance obligations in the contract; 3. Determination of the transaction price; 4. Allocation of the transaction price to the performance obligations in the contract; and 5. Recognition of revenue when or as a performance obligation is satisfied. Sources and Timing of Revenue The Company's revenue is derived from product sales through its e-commerce websites and to Wholesale customers who sell the products to end users. In addition, the Company derives revenues from Company-operated store locations, and franchise and license agreements. Revenues from the sale of products and merchandise are recognized when control of the product passes to the customer, typically at the date of delivery of the merchandise to the customer and in an amount that reflects the expected consideration to be received in exchange for such goods. As such, customer orders are recorded as deferred revenue prior to delivery of products. As the Company ships high volumes of packages through multiple carriers, it is not practical for the Company to track the actual delivery date of each shipment. Therefore, the Company uses estimates to determine which shipments are delivered and, therefore, recognizes revenue at the end of the period. Delivery date estimates are based on average transit times calculated based on factors such as the type of carrier, the fulfillment source, the delivery destination and historical transit time experience. Actual shipping times may differ from the Company's estimates. Costs to obtain or fulfill a contract with a customer are expensed as incurred and are generally not significant. Revenues from Company-operated stores are recognized when payment is tendered at the point of sale as the performance obligation has been satisfied. Store revenues are reported excluding sales tax, use or other transaction taxes that are collected from customers and remitted to taxing authorities. Deferred Revenue Deferred revenue consists of amounts billed to or received from customers prior to delivery of products. The Company recognizes such amounts in revenues as the product is delivered. Gift Cards Gift cards are offered through the Company's e-commerce websites through the form of an e-certificate. When a gift card is purchased, the Company recognizes a corresponding liability for the full amount of the gift card, which is recorded in "Deferred revenue and gift card liability" on the unaudited consolidated balance sheets. Gift cards can be redeemed online on the Company's website. When a gift card is redeemed, the Company reduces the corresponding liability and recognizes revenue. There are no expiration dates to the gift cards. While the Company will continue to honor all gift cards presented for payment, the Company may determine the likelihood of redemption, based on historical experience, is deemed to be remote for certain cards due to long periods of inactivity. In these circumstances if the Company also determines there is no requirement for remitting balances to government agencies under unclaimed property laws, unredeemed card balances may then be recognized as breakage income, which is included in "Revenue, net" on the unaudited consolidated statements of operations. Loyalty Rewards Program In August 2020, BRCC established its BRCC Loyalty Points rewards program (the “Loyalty Program”), which is primarily a spend-based program. BRCC customers who establish an online account are enrolled in the Loyalty Program. Under the program, there are multiple levels in which customers can participate and earn loyalty points. Subscription customers (customers in the BRCC Coffee Club or subscribed to another subscription product type) are in the highest tier and earn 5% on purchases. Non-subscription customers earn 1% on purchases. Any customer who spends $200 or more annually can also earn 5% on purchases, after the spending criteria is met. In addition to earning points on purchases, customers can earn points through certain other activities. BRCC reserves the right in its sole discretion to modify, change, add, or remove activities which can be accomplished to earn points at any time. Under the Loyalty Program, customers may redeem rewards as they reach minimum thresholds per reward. The Company reserves the right to modify, change, add, or remove rewards and their points thresholds at any time. BRCC loyalty points will expire if there is no account activity (i.e., if there is no new purchase made or order placed) in a period of twelve months. Conversion of rewards are non-changeable after redemption, have no cash value, and are nontransferable. A portion of rewards are expected to expire and not be redeemed and will be recognized as income over time. Based on historical expiration rates, the Company estimates a certain percentage of rewards to expire and reassesses this estimate on a quarterly basis. The Company defers revenue associated with the points earned through purchases that are expected to be redeemed, net of estimated unredeemed loyalty points. When a customer redeems an earned reward, the Company recognizes revenue for the redeemed product and reduces the related deferred revenue liability. The deferred revenue liability is included in "Deferred revenue and gift card liability" on the unaudited consolidated balance sheets. For those points that are earned through other activities, the Company recognizes the redemption of these points as a discount to the transaction price at time of sale. Refer to Note 5, Deferred Revenue and Gift Card Liability for information about changes in the current portion of deferred revenue and gift card liability for the three and nine months ended September 30, 2023 and 2022. Franchise Store Revenues Franchise rights may be granted through franchise agreements that set out the terms of the arrangement with the franchisee. The franchise agreements require that the franchisee remit continuing fees to the Company as a percentage of the applicable store’s revenues in exchange for the license of the intellectual property associated with BRCC’s brands. A portion of these fees are dedicated for national marketing campaigns, promotional programs and materials, and other activities that we believe enhance the image of the BRCC brand. Continuing fees represent a portion of the consideration the Company receives under the franchise agreement. Continuing fees are typically billed and collected weekly. Continuing fees are recognized as the related store sales occur. Revenues from continuing fees are included in "Revenue, net" on the unaudited consolidated statements of operations. Under the franchise agreements, BRCC sells products and equipment to its franchisees. The revenue associated with these product and equipment sales are recognized when control passes to the franchisee, typically at the date of delivery of the merchandise to the franchisee and in an amount that reflects the expected consideration to be received in exchange for such goods. The franchise agreements also typically require upfront franchise fees such as initial fees paid for the execution of a franchise agreement. The fees associated with these agreements are typically billed and paid when a new franchise agreement becomes effective. The Company has determined that the services it provides in exchange for upfront franchise fees, which primarily relate to pre-opening support, are highly interrelated with the franchise right and are not individually distinct from the ongoing services provided to the Company’s franchisees. As a result, upfront franchise fees are recognized as revenue over the term of each respective franchise agreement, generally ten years. Revenues for these upfront franchise fees are recognized on a straight-line basis, which is consistent with the franchisee’s right to use and benefit from the intellectual property associated with BRCC's brands. The current portion of revenues from upfront franchise fees are included in "Deferred revenue and gift card liability" and the long-term portion of revenues from upfront franchisee fees are included in "Other non-current liabilities" on the unaudited consolidated balance sheets. License Revenues License rights may be granted through license agreements that set out the terms of the Company’s arrangement with the licensee. The Company’s license agreements require that the licensee remit continuing fees to the Company as a percentage of the applicable store’s revenues in exchange for the license of the intellectual property associated with BRCC’s brands. In addition, licensed store revenues consist of product sales to the licensee. The revenue associated with these product sales are recognized when control of the product passes to the licensee, typically at the date of delivery of the merchandise to the licensee and in an amount that reflects the expected consideration to be received in exchange for such goods. Continuing fees are recognized as the related store sales occur. The Company’s license agreements also typically require upfront license fees such as initial fees paid for the execution of a license agreement. The fees associated with these agreements are typically billed and paid when a new license agreement becomes effective. The Company has determined the services it provides in exchange for upfront license fees, which primarily relate to initial license set up and are not individually distinct from the ongoing services it provides to its licensees. As a result, upfront license fees are recognized as revenue over the term of each respective license agreement, generally ten years. Revenues for these upfront license fees are recognized on a straight-line basis, which is consistent with the licensee’s right to use and benefit from the intellectual property. Revenues from continuing fees and upfront license fees are presented within “Revenue, net” on the unaudited consolidated statements of operations. Disaggregation of Revenue The Company disaggregates revenue by sales channel. The Wholesale channel includes product revenue sold to an intermediary and not directly to the consumer. The Direct to Consumer ("DTC") channel is principally comprised of revenue from our e-commerce websites and subscription services directly to the consumer. The Outpost channel includes revenue from Company-operated stores, gift cards, franchise store and licensing. The following table disaggregates revenue by sales channel: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Wholesale $ 61,527 $ 32,247 $ 151,534 $ 78,173 Direct to Consumer 32,794 38,082 104,160 113,376 Outpost 6,215 5,165 20,280 16,146 Total net sales $ 100,536 $ 75,494 $ 275,974 $ 207,695 Substantially all revenue is derived from customers located in the United States. One Wholesale customer and its affiliate represented 28% of revenue for the three months ended September 30, 2023 and one Wholesale customer represented 13% of revenue for the three months ended September 30, 2022. One Wholesale customer and its affiliate represented 26% of revenue for the nine months ended September 30, 2023 and no single customer represented more than 10% of revenue for the nine months ended September 30, 2022. Sales Returns and Discounts The Company’s product sales contracts include terms that could cause variability in the transaction price for items such as discounts, credits, charge backs, or sales returns. Accordingly, the transaction price for product sales includes estimates of variable consideration to the extent it is probable that a significant reversal of revenue recognized will not occur. The Company inspects returned items when they arrive at its processing facilities. The Company refunds the full cost of the merchandise returned if the returned item is defective or the Company or its partners have made an error, such as shipping the wrong product. If the return is not a result of a product defect or a fulfillment error and the customer initiates a return of an unopened item within 30 days of delivery, for most products the Company refunds the full cost of the merchandise less the original shipping charge and actual return shipping fees. If the customer returns an item that has been opened or shows signs of wear, the Company issues a partial refund minus the original shipping charge and actual return shipping fees. Coffee products are not eligible for returns. Revenue is recorded net of estimated returns. The Company records an allowance for returns based on current period revenues and historical returns experience. The Company analyzes actual historical returns, current economic trends and changes in order volume and acceptance of its products when evaluating the adequacy of the sales returns allowance in any accounting period. The allowance for sales returns and charge backs was $497 and $942 as of September 30, 2023 and December 31, 2022, respectively, and included in "Accounts receivable, net" on the unaudited consolidated balance sheets. Shipping and Handling Fees and Costs Shipping and handling is considered a fulfillment activity, as it takes place prior to the customer obtaining control of the merchandise, and fees charged to customers are included in net revenue upon completion of the performance obligation. Segment Information The Company reports operations as a single reportable segment and manages the business as a single-brand consumer products business. This is supported by the operational structure, which includes sales, product design, operations, marketing, and administrative functions focused on the entire product suite rather than individual product categories or sales channels. Our chief operating decision maker reviews financial information on a consolidated basis and does not regularly review financial information for individual sales channels, product categories or geographic regions that would allow decisions to be made about allocation of resources or performance. Cost of Goods Sold Cost of goods sold includes product costs, labor costs, occupancy costs, outbound shipping costs, handling and fulfillment costs, credit card fees, and royalty fees, and is recorded in the period incurred. Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents also include proceeds due from credit card transactions with settlement terms of less than five days. The Company maintains cash and cash equivalent balances with financial institutions that exceed federally insured limits. The Company has not experienced any losses related to these balances, and it believes credit risk to be minimal. Restricted cash relates to amounts that are held by former lenders to secure certain commercial credit obligations until such obligations have been satisfied. Accounts Receivable, Net Accounts receivable consist primarily of trade amounts due from business customers at period end. Accounts receivable are recorded at invoiced amounts and do not bear interest. From time to time, the Company grants credit to business customers on normal credit terms. The Company maintains an allowance for doubtful accounts receivable based upon its business customers’ financial condition and payment history, and its historical collection experience and expected collectability of accounts receivable. The allowance for doubtful accounts receivable was $695 and $156 as of September 30, 2023 and December 31, 2022, respectively. Inventories, Net Inventories are stated at the lower of standard cost, which approximates First In, First Out ("FIFO"), or net realizable value. The Company records inventory reserves for obsolete and slow-moving inventory. Inventory reserves are based on inventory obsolescence trends, historical experience and application of the specific identification method. Finished goods includes allocations of labor, occupancy expenses, and inbound transportation costs. Property, Plant and Equipment, Net Property, plant and equipment are stated at cost with depreciation calculated using the straight-line method over the estimated useful lives of the related assets or the term of the related finance lease, whichever is shorter. Leasehold improvements are amortized over the shorter of the term of the related leases or estimated useful lives. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in earnings for the period. The cost of maintenance and repairs are charged to earnings as incurred; significant renewals and improvements are capitalized. Estimated useful lives are as follows: Land — Building and Leasehold improvements 5 — 39 years Computer equipment and software 3 years Machinery and equipment 5 — 15 years Vehicles 5 years Identifiable Intangibles - Internal Use Software In accordance with ASC 350-40, Intangibles - Goodwill and Other, Internal-Use Software ("ASC 350-40"), the Company capitalizes qualifying internal use software costs that are incurred during the application development stage if management with the relevant authority authorizes the project, it is probable the project will be completed, and the software will be used to perform the function intended. Capitalized internal use software costs are reported in property and equipment on the unaudited consolidated balance sheets and are amortized over the expected economic life of three years using the straight-line method once the software is ready for intended use. Costs incurred for enhancements that are expected to result in additional significant functionality are capitalized and amortized over the estimated useful life of the enhancement. Costs related to preliminary project activities and post-implementation activities, including training and maintenance, are expensed as incurred. Capitalized software costs net of accumulated amortization are included as a component of "Property, plant and equipment, net" on the unaudited consolidated balance sheets. Impairment of Long-Lived Assets The Company reviews the recoverability of its long-lived assets, such as property and equipment and identifiable intangible assets, when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset or asset group from the expected future undiscounted pre-tax cash flows of the related operations. If these undiscounted cash flows are less than the carrying amount of the related asset, an impairment is recognized for the excess of the carrying value over its fair value. Leases The Company leases certain property and equipment under non-cancelable finance and operating leases which expire at various dates through 2043. The Company’s operating leases relate to the roasting facility in Tennessee and Outposts. At the inception of each lease, the Company determines the appropriate classification for each lease as operating or finance. The Company has estimated that the lease term for Outposts is generally 10 to 15 years. Any initial direct costs are capitalized and amortized over the life of the lease. Earn-out Liability The earn-out shares that were payable in Common Units (as defined below) of Authentic Brands pursuant to the Business Combination Agreement were recorded as a liability under ASC 480 and the earn-out shares that were payable in BRC Inc. common stock pursuant to the Business Combination Agreement were recorded as a liability under ASC 815. The earn-out liability was initially measured at fair value at the closing of the Business Combination using a Monte Carlo simulation in an option pricing framework that simulated the future path of the Company's stock price over the earn-out period. The earn-out shares vested in March and April 2022. The Company recognized the earn-out shares as liabilities at fair value and adjusted the earn-out shares to fair value at each reporting period. The earn-out liabilities were subject to re-measurement at each balance sheet date until vesting, and any change in fair value was recognized on the Company’s unaudited consolidated statement of operations. The liabilities were settled prior to December 31, 2022 and therefore not recurring as of September 30, 2023. Warrant Liability The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company had public and private warrants, both of which did not meet the criteria for equity classification and were accounted for as liabilities. Accordingly, the Company recognized the warrants as liabilities at fair value and adjusted the warrants to fair value at each reporting period with any changes in fair value recognized on the Company’s unaudited consolidated statement of operations. The public and private warrants were redeemed in May 2022. The liabilities were settled prior to December 31, 2022 and therefore not recurring as of September 30, 2023. Income Taxes The Company accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided if it is determined that it is more likely than not that the deferred tax asset will not be realized. The Company records interest and penalty expense related to income taxes as interest and other expense, respectively. The Company evaluates and accounts for uncertain tax positions using a two-step approach: Step 1. Recognition – occurs when the Company concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustainable upon examination. Step 2. Measurement – determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Derecognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more likely-than-not threshold of being sustained. Equity-Based Compensation The Company recognizes the cost of equity-based compensation awards and incentive unit awards based on the fair value estimated in accordance with ASC 718, Stock Based Compensation ("ASC 718"). The Company records equity-based compensation expense for awards with only a service based vesting condition based on the fair value of such awards at the grant date and recognizes compensation expense on a straight-line basis over the requisite service period. Equity-based compensation expense for awards with market based vesting conditions is recorded based on the fair value of such awards at the grant date and recognized on an accelerated basis over the requisite service period. The assumptions used to calculate the fair value of equity awards granted are evaluated and revised, as necessary, to reflect the Company's historical experience and current market conditions. For more information, see Note 9, Equity-Based Compensation . Earnings per Share Basic net income/(loss) per share is calculated by dividing net income/(loss) attributable to holders of Class A Common Stock by the weighted-average shares of Class A Common Stock outstanding without the consideration for potential dilutive securities. Diluted net loss per share represents basic net loss per share adjusted to include the potentially dilutive effect of outstanding unvested share awards, and units of Authentic Brands designated as common units (the "Common Units") and restricted units (the "Restricted Common Units") in the Third Amended and Restated Limited Liability Company Operating Agreement of Authentic Brands (the "LLC Agreement") that are exchangeable into shares of Class A Common Stock. Diluted net loss per share is computed by dividing the net income attributable to holders of Class A Common Stock by the weighted-average number of shares of Class A Common Stock outstanding for the period determined using the treasury stock method and if-converted, as applicable. As the impact of these if-converted securities is generally antidilutive during periods of net loss, the diluted net loss per share calculation for periods such as ours with net losses is the same as the basic net loss per share. For more information, see Note 12, Net Loss per Share . Concentrations of Credit Risk The Company’s assets that are potentially subject to concentrations of credit risk are cash and accounts receivable. Cash balances are maintained in financial institutions which at times exceed federally insured limits. The Company monitors the financial condition of the financial institutions in which its accounts are maintained and has not experienced any losses in such accounts. The accounts receivable of the Company are spread over a number of customers, of which two customers and their affiliates accounted for 41% of total outstanding receivables as of September 30, 2023 and three customers accounted for 51% of total outstanding receivables as of December 31, 2022. The Company performs ongoing credit evaluations as to the financial condition of its customers and creditors with respect to trade accounts. Marketing and Advertising Expenses The Company’s marketing and advertising expenses are primarily internet marketing expenses, commercial sponsorships and advertising time slots. Marketing expenses are recognized as incurred based on the terms of the individual agreements, which are generally, but not limited to: a commission for traffic driven to its websites that generate a sale, programmatic targeting advertisements, national television and radio advertisements, or payments to social media influencers. The Company may also enter into marketing service agreements with third party production and content providers where the Company prepays for certain services or deliverables and recognizes the expense when the service is completed. Prepaid marketing and advertising expenses totaled $7,799 and $1,050 as of September 30, 2023 and December 31, 2022, respectively. This includes $7,480 of prepaid advertising recorded in the third quarter of 2023 in connection with a transaction whereby prepaid advertising was received by BRCC in exchange for finished goods inventory and revenue was recognized for the amount of prepaid advertising credits received. Fair Value Measurements The Company’s financial instruments consist primarily of accounts receivable, accounts payable and long-term debt. The carrying amounts of accounts receivable and accounts payable are representative of their respective fair values due to the short-term maturity of these instruments. The fair value of variable rate long-term debt is based upon the current market rates for debt with similar credit risk and maturity, which approximated its carrying value, as interest is based upon the Secured Overnight Financing Rate ("SOFR"), or the the PNC Base Rate (see further explanation of the Base Rate in Note 7 , Long- Term Debt ), or prior to our August 2023 refinancing, the Bloomberg Short Term Bank Yield Index ("BSBY") or Prime rates plus an applicable floating margin. In measuring fair value, the Company reflects the impact of credit risk on liabilities, as well as any collateral. The Company also considers the credit standing of counterparties in measuring the fair value of assets. The Company uses any of three valuation techniques to measure fair value: the market approach, the income approach, and the cost approach in determining the appropriate valuation technique based on the nature of the asset or liability being measured and the reliability of the inputs used in arriving at fair value. The Company follows the provisions of ASU No. 2022-03- Fair Value Measurement ("Topic 820") for non-financial assets and liabilities measured on a non-recurring basis. The inputs used in applying valuation techniques include assumptions that market participants would use in pricing the asset or liability (i.e., assumptions about risk). Inputs may be observable or unobservable. The Company uses observable inputs in the Company’s valuation techniques and classifies those inputs in accordance with the fair value hierarchy established by applicable accounting guidance, which prioritizes those inputs. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels are defined as follows: Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — inputs to the valuation methodology include |
Inventories, Net
Inventories, Net | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Inventories, Net Inventories consist of the following: September 30, December 31, 2023 2022 Coffee: Unroasted $ 4,584 $ 4,867 Finished Goods 16,999 15,365 Ready-to-Drink (raw materials) 16,963 16,610 Ready-to-Drink (finished goods) 47,094 33,413 Apparel and other merchandise 5,733 6,928 Total inventories, net $ 91,373 $ 77,183 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment, net consists of the following: September 30, December 31, 2023 2022 Building and leasehold improvements $ 26,805 $ 25,024 Machinery and equipment 18,299 15,977 Computer equipment and software 6,585 6,071 Furniture and fixtures 2,622 1,804 Land 1,547 3,245 Vehicles 1,191 1,283 Construction in progress 20,161 15,780 Property, plant, and equipment, gross 77,210 69,184 Less: accumulated depreciation and amortization (12,327) (9,733) Total property, plant and equipment, net $ 64,883 $ 59,451 The portion of depreciation expense related to production and distribution facilities is included in cost of goods sold including occupancy costs on the unaudited consolidated statements of operations. Depreciation expense recorded in cost of goods sold and general and administrative expenses was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Cost of goods sold $ 363 $ 207 $ 1,049 $ 619 General and administrative 1,625 825 4,262 2,411 Total depreciation expense $ 1,988 $ 1,032 $ 5,311 $ 3,030 The total depreciation expense for internal use software included in the above table was $440 and $971 for the three and nine months ended September 30, 2023, respectively, and $183 and $549 for the three and nine months ended September 30, 2022, respectively. The Company accelerated depreciation for the internal use software beginning January 1, 2023 and fully depreciated the assets as of June 30, 2023. This additional depreciation expense recorded was zero and $227 for the three and nine months ended September 30, 2023, respectively. Substantially all long-lived assets are located in the United States. Assets Held for Sale The Company sold the land, building and improvements for one of BRCC's company-owned Outposts during the current quarter for a total sale price of $1,500. The net book value of the assets sold was approximately $2,692 which resulted in a loss on the assets sale of $1,201, which reflects closing costs of approximately $9. This loss is presented within "Other operating (income) expense, net" in the unaudited consolidated statement of operations. This loss is netted with the gain on sale of an office property discussed below. Simultaneously with the sale of the property, the Company entered into a lease with the buyer to continue the Company's operations of this Outpost location. The Company sold an office property including the land, building and improvements during the current quarter for a total sale price of $4,058. The net book value of the assets sold was approximately $2,648 which resulted in a gain on the asset sale of approximately $1,097, which reflects closing costs of approximately $313. This gain is presented within "Other operating (income) expense, net" in the unaudited consolidated statement of operations. This gain is netted with the loss on the sale of the Outpost location described above. |
Deferred Revenue and Gift Card
Deferred Revenue and Gift Card Liability | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Deferred Revenue and Gift Card Liability | Deferred Revenue and Gift Card Liability The following table provides information about deferred revenue, gift cards, and the Loyalty Program, including significant changes in deferred revenue balances for the below designated periods: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Balance at beginning of period $ 10,075 $ 8,010 $ 9,505 $ 7,334 Sales of gift cards 194 393 755 751 Redemption of gift cards (194) (317) (683) (620) Increase from deferral of revenue 2,843 3,411 2,843 3,411 Decrease from revenue recognition (2,847) (3,335) (3,560) (3,586) Loyalty Program points earned 1,070 632 2,634 1,880 Loyalty Program points redeemed/expired (981) (174) (1,334) (550) Balance at end of period $ 10,160 $ 8,620 $ 10,160 $ 8,620 |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2023 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consist of the following: September 30, December 31, 2023 2022 Accrued inventory purchases $ 4,879 $ 15,035 Accrued compensation and benefits 4,470 7,393 Accrued freight 2,684 2,153 Accrued marketing 2,116 3,077 Accrued sales and other taxes 1,017 1,179 Credit card liabilities 215 888 Other accrued expenses 18,056 6,935 Total accrued liabilities $ 33,437 $ 36,660 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The Company’s credit facilities and related balances, net of the unamortized portion of debt issuance costs and Original Issue Discount ("OID") were as follows: September 30, December 31, 2023 2022 Term loan facility $ 50,850 $ — ABL facility 23,940 — Notes payable 2,493 3,540 Senior credit facility — 30,000 Mortgages — 7,102 Equipment term loan — 3,814 Equipment financing loan — 3,336 Retail facility — 1,768 Total principal 77,283 49,560 Less debt issuance costs and OID (5,293) (400) Long-term debt, net $ 71,990 $ 49,160 Current maturities: Current maturities of principal $ 1,896 $ 2,259 Less current portion of debt issuance costs — (116) Current maturities of long-term debt, net $ 1,896 $ 2,143 Long-term debt: Non-current principal $ 75,387 $ 47,301 Less non-current portion of debt issuance costs and OID (5,293) (284) Long-term debt, net $ 70,094 $ 47,017 Future contractual maturities of credit facilities (not including debt issuance costs) as of September 30, 2023 are as follows: Remainder of 2023 $ 850 2024 2,295 2025 4,797 2026 6,025 2027 6,250 Thereafter 57,066 Total $ 77,283 ABL Facility and Term Loan Facility On August 10, 2023 (the “Closing Date”), Authentic Brands and certain of its subsidiaries (collectively, the “Borrowers”) entered into a Credit Agreement (the “ABL Credit Agreement”) with PNC Bank, National Association, as administrative agent and collateral agent (“PNC”), and the lenders from time to time party thereto, pursuant to which the lenders thereunder agreed to provide the Borrowers with a senior secured asset-based revolving credit facility in an aggregate principal amount of up to $75,000 (including a sub-facility for letters of credit in an amount up to $7,500) (the “ABL Facility”), and a Credit Agreement (the “Term Loan Credit Agreement” and together with the ABL Credit Agreement, the “Credit Agreements”) with Whitehawk Capital Partners LP, as administrative agent and collateral agent, and the lenders from time to time party thereto, pursuant to which the lenders thereunder provided the Borrowers with senior secured term loans on the Closing Date in an aggregate principal amount of $50,000 (the “Term Loan”) and a bridge loan in the amount of $6,000 (the “Bridge Loan” and together with the Term Loan, the “Term Loan Facility”). The proceeds of the Term Loan were issued net of a $1,525 discount which will be recorded against the outstanding amount of debt on our consolidated balance sheet and amortized over the life of the Term Loan Credit Agreement. Debt issuance costs of $3,876 were incurred in connection with the origination of the ABL Facility and these costs will be reported as a reduction to the outstanding balance of long-term debt on our consolidated balance sheet and amortized over the life of the ABL Credit Agreement. The Bridge Loan incurred a Bridge Loan fee of 10% of the aggregate amount of the Bridge Loan on the Closing Date. The Bridge Loan fee is payable when the Bridge Loan principal is repaid. The obligations under the Credit Agreements are guaranteed by each Borrower and each Borrower’s direct and indirect, existing and future domestic subsidiaries, subject to certain exceptions (collectively, the “Guarantors” and each, a “Guarantor”). The obligations under the ABL Credit Agreement are secured by a first priority lien on certain deposit accounts, cash and cash equivalents, credit card payments, accounts receivable, inventory and other related assets of the Guarantors (the “ABL Priority Collateral”) and a second priority lien on substantially all of the other assets of the Guarantors. The obligations under the Term Loan Credit Agreement are secured by a second priority lien on the ABL Priority Collateral and a first priority lien on substantially all of the other assets of the Guarantors. Each Credit Agreement includes certain conditions to borrowings, representations and warranties, affirmative and negative covenants, and events of default customary for financings of their type and size. Each Credit Agreement requires the Borrowers to maintain (i) consolidated EBITDA (as defined in the Credit Agreements) of at least $(2,460) for the fiscal quarter ended September 30, 2023, which amount increases incrementally over the next 15 quarters to $40,000 for the 5 fiscal quarters ended June 30, 2028; (ii) a fixed charge coverage ratio of not less than 1.10 to 1.00, measured quarterly on a trailing 12 month basis, following the Availability Block Release Date (as defined below); (iii) minimum liquidity of at least $15,000, which amount is reduced to $7,500 following the Availability Block Release Date; and (iv) minimum average liquidity of at least $9,375 following the Availability Block Release Date. The Credit Agreements also limit the Borrowers’ ability to, among other things, incur additional indebtedness, create liens on any assets, pay dividends or make certain restricted payments, make certain investments, consummate certain asset sales, make certain payments on indebtedness, and merge, consolidate or engage in other fundamental changes. Under the terms of the ABL Credit Agreement, the amount available for advances is subject to a borrowing base, which is calculated by reference to the value of certain eligible deposit accounts, cash and cash equivalents, credit card payments, accounts receivable and inventory, offset by certain reserves. The amount available for advances will be reduced by $15,000 until the Borrowers have maintained a fixed charge coverage ratio of not less than 1.10 to 1.00 for two consecutive fiscal quarters following the Closing Date and no defaults or events of default are then continuing (the date such condition is satisfied, the “Availability Block Release Date”). PNC may also reduce the amount available for advances upon certain findings or if PNC determines, in good faith and in the exercise of reasonable business judgment, that such reductions are necessary for other purposes. Our available borrowing under the ABL Credit Facility at September 30, 2023 was approximately $19,946. Borrowings under the ABL Facility bear interest at a rate per annum of either (i) the Base Rate (as defined below) plus a margin ranging from 1.50% to 2.00% or (ii) term SOFR plus a margin ranging from 2.60% to 3.10%, in each case subject to a 0.25% reduction following the Availability Block Release Date. “Base Rate” means, for any day, the base commercial lending rate of PNC as publicly announced to be in effect from time to time. The Borrowers are also required to pay certain fees in connection with the ABL Credit Agreement, including an unused commitment fee based on the average daily unused portion of the ABL Facility, equal to 0.375% on an annual basis. Borrowings under the Term Loan Facility bear interest at a rate per annum equal to either (i) a base rate plus 7.50% or (ii) term SOFR plus 8.50%. The base rate and term SOFR rate are subject to floors of 4.00% and 3.00%, respectively. The Bridge Loan began accruing interest on November 8, 2023. The ABL Facility matures on the earlier of (i) August 10, 2028 and (ii) the date that is 91 days prior to the scheduled maturity date of any other debt in excess of $2,500, subject to certain exceptions. The Term Loan Facility requires the Borrowers to make quarterly principal repayments in an aggregate principal amount equal to (i) 1.25% of the original aggregate principal amount of the Term Loan commencing with the fiscal quarter ending September 30, 2024 through the fiscal quarter ending June 30, 2025, (ii) 2.50% of the original aggregate principal amount of the Term Loan commencing with the fiscal quarter ending September 30, 2025 through the fiscal quarter ending June 30, 2026, and (iii) 3.125% of the original aggregate principal amount of the Term Loan commencing with the fiscal quarter ending September 30, 2026 through the maturity date of the Term Loan. The Term Loan Facility is also subject to mandatory prepayment (x) to the extent the outstanding obligations under the Term Loan Facility exceed a borrowing base calculated by reference to the value of certain eligible intellectual property, equipment and real property, offset by certain reserves, and (y) of up to 50% of the Borrowers’ excess cash flows beginning in 2026. The Borrowers may voluntarily prepay amounts outstanding under the Term Loan Facility at any time, subject in certain cases to a prepayment premium. The Term Loan matures on the earlier of (i) August 10, 2028 and (ii) the date that is 91 days prior to the scheduled maturity date of any other debt in excess of $2,500, subject to certain exceptions. The Bridge Loan matures on November 8, 2023, provided that up to $1,600 of the Bridge Loan may be extended to December 8, 2023 subject to the satisfaction of certain conditions. $5,235 of the Bridge Loan was repaid during the third quarter of 2023 with the proceeds from the sale of certain properties in accordance with the terms of the Credit Agreements. A ratable portion of the Bridge Loan fee was repaid along with the repayment of the Bridge Loan. Regions Bank Senior Credit Facility In November 2022, Authentic Brands and certain of its subsidiaries entered into a credit agreement with Regions Bank, which provided for a revolving credit facility of up to $65,000, subject to a borrowing base determined from eligible accounts receivable and inventory. On the Closing Date, Authentic Brands used the proceeds from the Term Loan Facility and approximately $13,900 of borrowings under the ABL Facility (i) to retire the Regions Bank revolving credit facility and real estate term loan facility with Regions Bank (see further discussion under "Mortgages" below) and the equipment financing facility with Regions Commercial Equipment Finance, LLC and Regions Equipment Finance Corporation (see further discussion under "Equipment financing Loan" below), (ii) to pay transaction fees, costs and expenses related to the Credit Agreements, and (iii) for other general corporate and working capital purposes. A loss on extinguishment of debt of $732 was recorded as a result of the early retirement of debt. Mortgages In July 2020, the Company entered into mortgage loan agreements to refinance Company-owned buildings for a total of $5,500 at an interest rate of 3.67% per annum. The loans were secured by the real property financed. The loans were scheduled to mature on July 29, 2025. In April 2021, the Company entered into a mortgage loan agreement to purchase a building for a total of $2,200 at an interest rate of 3.60% per annum. The loan was secured by the real property financed. This loan was scheduled to mature on April 29, 2026. These mortgage loans were repaid with the proceeds of the Term Loan Facility on the Closing Date. Equipment Term Loan In August 2022, borrowings under the equipment financing loan of $4,043 were converted into the Equipment Term Loan. The Equipment Term Loan was secured by the equipment financed and was scheduled to mature in June 2029 bearing an interest rate of 6.88%. The Equipment Term Loan was repaid with the proceeds of the Term Loan Facility on the Closing Date. Equipment Financing Loan In July 2020, the Company entered into an equipment financing agreement which provided a credit line totaling $3,250 at an interest rate of BSBY plus 3.50%. The credit line was secured by the equipment financed. In April 2021, the Company increased its equipment credit line by $10,000. Further, in July 2021, an additional $6,000 was added to the available credit on the equipment finance loan. In September 2021, $1,998 outstanding on the equipment credit line was converted to a 60-month term loan at an interest rate of 4.05% to be utilized for retail expansion (“Retail Facility”). The Retail Facility was repaid with the proceeds of the Term Loan Facility on the Closing Date. Notes Payable In July and September 2021, the Company entered into note payable agreements for $2,588 at an interest rate of approximately 1.00% per annum to repurchase Incentive Units from former employees. The notes are payable in four annual installment payments. As of September 30, 2023, the outstanding balance on the notes payable is $1,294. In January 2022, the Company entered into a note payable agreement for $1,599 at an interest rate of 1.30% per annum to repurchase Incentive Units from a former employee. As of September 30, 2023, the outstanding balance on the notes payable is $1,199. Guaranty In March 2022, the Company entered into a guaranty payment of all the Authentic Brands' outstanding mortgage loans, the equipment financing loan, and the Retail Facility. That guaranty agreement was terminated in November 2022 in connection with the entry into the Regions Bank revolving credit facility. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity In conjunction with the Business Combination, 18,769 Class A common units and 73,890 Class B common units of Authentic Brands (the holders thereof, the "Existing Members") were converted into an aggregate of 139,106,323 common units in Authentic Brands (the “Common Units”) and 19,853,125 restricted common units in Authentic Brands (the “Restricted Common Units”). The Existing Members also received 139,106,323 shares of Class B Common Stock of the Company. Subsequent to the Business Combination, the Company's authorized capital stock consists of 2,802,500,000 shares including (i) 2,500,000,000 shares of Class A Common Stock, (ii) 300,000,000 shares of Class B Common Stock, (iii) 1,500,000 shares of Class C common stock, par value $0.0001 per share (the "Class C Common Stock"), and (iv) 1,000,000 shares of preferred stock, par value $0.0001 per share (the "Preferred Stock"). The Class C Common Stock is divided into two series as follows: (a) 750,000 shares of Series C-1 Common Stock, par value $0.0001 per share; and (b) 750,000 shares of Series C-2 Common Stock, par value $0.0001 per share. Holders of the Company's Class A Common Stock and the Class B Common Stock are each entitled to one vote per share, and holders of the Class C Common Stock do not have any voting rights. Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of our Class A Common Stock are entitled to receive dividends and other distributions as may from time to time be declared by the our board of directors at its discretion out of legally available Company assets, ratably in proportion to the number of shares held by each such holder, and at such times and in such amounts as the board of directors in its discretion may determine. No dividends or other distributions will be declared or paid on the Class B Common Stock or the Class C Common Stock. A holder of Class B Common Stock may transfer or assign shares of Class B Common Stock only if such holder also simultaneously transfers an equal number of such holder’s Common Units in compliance with and as permitted by the LLC Agreement. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, after payment of debts and other liabilities and after the rights of holders of preferred stock, if any, have been satisfied, the holders of all outstanding shares of Class A Common Stock will be entitled to receive the remaining assets of the Company available for distribution ratably in proportion to the number of shares held by each such stockholder. The board of directors of the Company may establish one or more classes or series of preferred stock. Our board of directors may determine, with respect to any class or series of preferred stock, the terms and rights of such class or series. The Company currently does not have any preferred stock issued and outstanding. Common Units are entitled to share in the profits and losses of Authentic Brands and to receive distributions declared and have no voting rights. Holders of Common Units receive one share of Class B Common Stock, which are voting, non-economic shares in the Company, for each Common Unit they own. From and after a lock-up period and subject to the terms of the LLC Agreement, the Common Unit holders have the option to redeem all or any portion of their Common Units. However, upon redemption, the Company's board of directors determines whether the Common Units are redeemed in cash or Class A Common Stock. Common Units that are redeemed for shares, are exchanged for a number of Class A Common Stock equal to the number of exchanged Common Units. Simultaneously, a number of Class B Common Stock held by the unitholder is surrendered equal to the number of Common Units being redeemed. For Common Units redeemed for cash, cash redemption may only be effected if a concurrent fundraising activity takes place by the Company. Non-Controlling Interests Non-controlling interests represent the ownership interests in Authentic Brands held by holders other than the Company. The Business Combination occurred on February 9, 2022. As a result, net loss for the quarter ended March 31, 2022 was attributed to the pre-Business Combination period from January 1, 2022 through February 8, 2022 and to the post-Business Combination period from February 9, 2022 through March 31, 2022. During the pre-Business Combination period, net loss was attributable to Authentic Brands. During the post-Business Combination period, net loss was attributable to the Company and its respective non-controlling interests. Following the Business Combination, the |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation Incentive Units Authentic Brands' maintained an equity incentive plan (the “Plan”) under which it could grant incentive units (“Incentive Units”) to employees or non-employee directors. In connection with the Plan, 200,000 non-voting units have been authorized. These units may contain certain service and performance related vesting provisions. The Incentive Units are awarded to eligible employees and non-employee directors and entitle the grantee to receive non-voting member units upon vesting, subject solely to the employee’s continuing employment or the non-employee director’s continuing service on the board of directors. The grant date estimated fair value of the Incentive Units was based upon an option pricing model valuation of the awards at the grant date. The Company did not change pricing models during the year, however, the Company began to incorporate and consider the probability-weighted expected return method. The Incentive Units have no strike price; however, participation thresholds, as defined in the Plan were established at grant date that must be exceeded for the holder of the unit to participate in any distributions of the Company. The following assumptions were utilized in determining the fair value of the units at the grant date: Expected dividend — Expected volatility 60% to 85% Risk-free interest rate 0.13% to 2.53% Expected life of incentive awards (in years) 1 to 5 years Grant date performance and market threshold $35,000 to $1,250,000 The computation of expected volatility is based on a weighted average of comparable public companies within the Company’s industry. Expected life is based on the estimated liquidity event timing. The risk-free interest rate is based on the yield of zero-coupon U.S. Treasury securities of comparable terms. The Company does not anticipate paying dividends in the foreseeable future. The Company recognizes pre-vesting forfeitures as they occur rather than estimate the forfeiture rate at the grant date. The following table summarizes the changes in the number of Incentive Units for the nine months ended September 30, 2023: Incentive Units Weighted Average Grant Date Fair Value Granted and outstanding at January 1, 2023 14,210 $ 192.52 Granted — — Forfeited (5,000) 215.31 Granted and outstanding at September 30, 2023 9,210 $ 213.91 Vested at September 30, 2023 5,474 $ 212.95 As of September 30, 2023, total unrecognized equity compensation expense related to nonvested Incentive Units to be recognized over a weighted average period of approximately two years was $686. In connection with the Business Combination, 28,990 Incentive Units under the Plan fully vested and converted into Common Units in Authentic Brands that allow for their exchange into Class A Common Stock of the Company. The Company recognized $1,856 of compensation costs as a result of the accelerated vesting of incentive units under the "Change in Control" provision of the Plan. The Company accounted for the accelerated vesting of the Incentive Units as a modification. However, because the fair value of the modified awards was the same immediately before and after the modification, no incremental compensation expense was recognized. In connection with the Business Combination, the Company adopted the 2022 Omnibus Incentive Plan ("Omnibus Plan"), which replaced the Plan, and the 2022 Employee Stock Purchase Plan (the "ESPP"). Stock Options The Company granted stock options to employees under the Omnibus Plan that vest ratably over three years and expire after seven years. The grant date estimated fair value of the stock options was based upon a Black Scholes model valuation of the options at the grant date. The following weighted average assumptions were utilized in determining the fair value of options granted: Weighted average grant date fair value $3.00 Expected dividend — Expected volatility 63% Risk-free interest rate 3.80% Options term (in years) 4.5 The computation of expected volatility is based on a weighted average of comparable public companies within the Company’s industry. Expected term assumption is based on the mid-point between vesting and maturity of the stock options. The risk-free interest rate is based on the yield of zero-coupon U.S. Treasury securities of comparable terms. The Company does not anticipate paying dividends in the foreseeable future. The Company recognizes pre-vesting forfeitures as they occur rather than estimate the forfeiture rate at the grant date. The following table summarizes information about stock option activities for the nine months ended September 30, 2023: Stock Options Weighted Average Exercise Price Outstanding at January 1, 2023 792,370 $ 9.77 Granted 3,623,794 4.75 Forfeited (802,028) 6.50 Outstanding at September 30, 2023 3,614,136 $ 5.43 Vested at September 30, 2023 228,670 $ 9.74 As of September 30, 2023, total unrecognized equity compensation expense related to stock options to be recognized over a weighted average period of approximately three years was $8,715. Restricted Stock Units The Company granted restricted stock unit (“RSU”) awards to employees and non-employee directors under the Omnibus Plan that vest annually over approximately three years. The grant date fair values were based on the closing price of the Class A Common Stock of the Company on the date of grant. The following table summarizes information about the RSUs under the Omnibus Plan for the nine months ended September 30, 2023: Restricted Stock Units Weighted Average Grant Date Fair Value Nonvested at January 1, 2023 823,829 $ 10.68 Granted 1,877,546 5.04 Forfeited (335,392) 7.38 Vested (357,758) 10.65 Nonvested at September 30, 2023 2,008,225 $ 5.96 As of September 30, 2023, total unrecognized equity compensation expense related to RSUs to be recognized over a weighted average period of approximately two years was $10,468. Performance-Based Restricted Stock Units On December 29, 2022, the Company granted 8,462,412 performance-based restricted stock units (“PSUs”) to a key employee which vest if certain market capital growth rates are achieved each year through April 2027. Vested PSUs are settled in shares of the Company Class A common stock equal to the number of PSUs granted. The PSUs are forfeited upon termination of employment before the performance period ends. PSUs granted during the year ended December 31, 2022 have a weighted-average grant date fair value of $0.46 per share. All PSUs were unvested as of September 30, 2023. The Company used the Monte Carlo pricing model to estimate the fair value of PSUs utilizing the following assumptions at the grant date: Expected dividend — Expected volatility 65% Risk-free interest rate 3.97% Award term years 4.3 Valuation date share price $6.21 As of September 30, 2023, total unrecognized equity-based compensation expense related to PSUs to be recognized over a weighted average period of approximately four years was $2,191. In September 2022, the Company began offering an ESPP whereby eligible employees may acquire an equity interest in the Company through payroll contributions. At the end of a six-month offering period, shares are purchased at 85% of the stock price at enrollment date or purchase date, whichever is lower. On September 8, 2023, the Company issued 97,523 shares for a total of $433 under the March 9, 2023 ESPP period, which covered the period between March 9, 2023 and September 8, 2023. Under the September 9, 2023 ESPP period, which covers a period through March 8, 2024, the Company expects to issue 98,710 shares based on the Company's stock price of $4.44 on September 8, 2023. |
Defined Contribution Plan
Defined Contribution Plan | 9 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | Defined Contribution PlanThe Company maintains a voluntary qualified defined contribution plan covering eligible employees as defined by the plan documents. Participating employees may elect to defer and contribute a portion of their eligible compensation to the plan up to limits stated in the plan documents, not to exceed the dollar amounts set by applicable laws. The Company’s matching contributions to the plan were $150 and $661 for the three and nine months ended September 30, 2023, respectively, and $250 and $667 for the three and nine months ended September 30, 2022, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company is subject to U.S. federal and state taxes with respect to our allocable share of any taxable income or loss of Authentic Brands, as well as any stand-alone income or loss the Company generates. Authentic Brands is treated as a partnership for U.S. income tax purposes and for most applicable state and local income tax purposes and generally does not pay income taxes in most jurisdictions. Instead, Authentic Brands' taxable income or loss is passed through to its members, including the Company. Our effective tax rate for the period ended September 30, 2023 differs from the U.S. federal statutory rate primarily due to changes in the valuation allowance and non-controlling interest. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss attributable to holders of Class A Common Stock by the weighted-average shares of Class A outstanding without the consideration for potential dilutive securities. Diluted net loss per share represents basic net loss per share adjusted to include the potentially dilutive effect of outstanding unvested share awards, warrants, Common Units and Restricted Common Units that are exchangeable into shares of Class A Common Stock. Diluted net loss per share is computed by dividing the net income attributable to holders of Class A Common Stock by the weighted-average number of shares of Class A Common Stock outstanding for the period determined using the treasury stock method and if-converted method, as applicable. Shares of Class B Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted loss per share of Class B Common Stock under the two-class method has not been presented. The following table sets forth the computation of basic and diluted net loss per share are presented below: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (2) Numerator: Net loss $ (10,694) $ (16,102) $ (42,680) $ (315,323) Less: Net loss attributable to non-controlling interests (7,462) (12,059) (30,420) (238,663) Net loss attributable to Class A Common Stock - basic and diluted (1) $ (3,232) $ (4,043) $ (12,260) $ (76,660) Denominator: Weighted-average shares of Class A Common Stock outstanding (1) 61,964,157 53,013,720 59,738,542 49,843,715 Net loss per share attributable to holders of Class A Common Stock, basic and diluted $ (0.05) $ (0.08) $ (0.21) $ (1.54) (1) For the nine months ended September 30, 2022, net loss per share of Class A Common Stock and weighted-average shares of Class A Common Stock outstanding is representative of the period from February 9, 2022 through September 30, 2022, the period following the Business Combination, as defined in Note 1, Organization and Nature of Business . The Company excluded the following potentially dilutive securities, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to holders of Class A Common Stock because including them would have had an antidilutive effect: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (2) Stock options 3,614,136 720,010 3,614,136 720,010 Common Units 148,395,692 157,794,609 148,395,692 157,794,609 RSUs 2,008,225 666,076 2,008,225 666,076 PSUs 8,462,412 — 8,462,412 — Incentive Units 9,210 16,445 9,210 16,445 Employee Stock Purchase 98,710 — 98,710 — Total units excluded from computation of diluted net loss per share 162,588,385 159,197,140 162,588,385 159,197,140 (2) The Company analyzed the calculation of net loss per share for periods prior to the Business Combination on February 9, 2022 and determined that it resulted in values that would not be meaningful to the users of the consolidated financial statements, as the capital structure completely changed as a result of the Business Combination. Therefore, net loss per share information has not been presented for periods prior to the Business Combination. This represents only the period from February 9, 2022 through September 30, 2022, the period following the Business Combination, as defined in Note 1, Organization and Nature of Business . |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Concentrations The Company has significant suppliers and service providers that are important to its sourcing, roasting, manufacturing, and any related ongoing servicing of merchandise and content. The Company does not have any long-term arrangements with these vendors or its other suppliers and service providers to guarantee availability of inventory, content, or services. The loss of these vendors, the numbers and concentrations of which are set for in the table below, could have an adverse impact on the operations of the Company until a suitable replacement could be engaged. The following tables summarize the Company's significant vendors/suppliers and the proportion of their impact on the following operations for the periods indicated: Three Months Ended September 30, 2023 2022 Number of Vendors Concentration Rate Number of Vendors Concentration Rate Coffee supplier accounts 5 53.9% 4 68.2% Shipping provider accounts 4 67.2% 3 67.8% Primary fulfillment service provider accounts 3 89.8% 1 89.2% Marketing provider accounts 8 52.5% 7 51.3% Nine Months Ended September 30, 2023 2022 Number of Vendors Concentration Rate Number of Vendors Concentration Rate Coffee supplier accounts 5 52.9% 2 56.5% Shipping provider accounts 5 72.2% 4 77.8% Primary fulfillment service provider accounts 3 85.7% 1 95.1% Marketing provider accounts 8 50.5% 8 42.8% |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Agreements The Company has entered into manufacturing and purchase agreements to purchase and produce coffee product from third-party suppliers. These purchase agreements are typically obligations to purchase minimum volumes with fixed pricing if the volume terms are not fulfilled, in the form of a take-or-pay provision. The Company is negotiating with suppliers to amend or terminate certain purchase agreements and the Company may agree to prolonged terms, or other terms which may not be advantageous to the Company, in connection with such amendments. If negotiations to amend or terminate the agreements are not successful, the Company may incur losses in future periods. The amounts in the table below represents the Company's future minimum purchase commitments as of September 30, 2023: Remainder of 2023 $ 19,040 2024 49,900 2025 22,410 Thereafter — Total $ 91,350 Contingencies The Company is the subject of various legal actions in the ordinary course of business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, property damage, punitive damages, civil penalties or other losses, or injunctive or declaratory relief. With respect to such lawsuits, the Company accrues reserves when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. Although the outcomes of these proceedings cannot be predicted with certainty, the Company does not believe any of these proceedings, individually or in the aggregate, would be expected to have a material adverse effect on results of operations, cash flows or financial condition. The Company could be subject to additional sales tax or other tax liabilities. The Company follows the guidelines of ASC 450, Accounting for Contingencies , and the unaudited consolidated financial statements reflect the current impact of such legislation through the Company’s best estimates. However, any of these events could have a material effect on the Company’s business and operating results depending on the previous periods of applied enforcement by certain jurisdictions. The Company is also subject to U.S. (federal and state) laws, regulations, and administrative practices that require us to collect information from its customers, vendors, merchants, and other third parties for tax reporting purposes and report such information to various government agencies. The scope of such requirements continues to expand, requiring us to develop and implement new compliance systems. Failure to comply with such laws and regulations could result in significant penalties and interest which might have an adverse effect on the Company’s business and operating results. The Company has accrued $326 related to potential sales and other tax exposure as of September 30, 2023 and December 31, 2022, which is included in accrued liabilities on the accompanying unaudited consolidated balance sheets. Legal Disputes On April 28, 2022, Tang Capital Partners, LP (“Tang Capital”) filed a lawsuit in federal district court in the Southern District of New York against the Company: Tang Capital Partners, LP v. BRC Inc., Case 22-CV-3476 (RWL) (Southern District of New York). The complaint alleges that Tang Capital suffered damages arising from the Company’s refusal on two occasions to permit Tang Capital to exercise warrants. On March 8, 2023, the court granted the Company’s motion to dismiss Tang Capital’s claim for declaratory judgment but denied the Company’s motion to dismiss Tang Capital’s breach of contract claim. The lawsuit seeks unspecified general and compensatory damages, attorneys’ fees, and other reasonable costs and disbursements. The Company believes that it has meritorious defenses to the cause of action asserted against it and will defend itself vigorously in these proceedings; however, there can be no assurances that it will be successful in its efforts. Fact discovery is expected to close in January 2024, and expert discovery is expected to close in March 2024. The Company is not able at this time to determine or predict the ultimate outcome of this lawsuit or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter. On June 22, 2023, John Brian Clark, JBC Structured Products LLC, and Marathon Capital LLC (collectively, “Clark”) filed a complaint against BRC Inc. and Black Rifle Coffee Company LLC: John Brian Clark, et al. v. BRC Inc., et al., Case 1:23-CV-5340 (RWL) (Southern District of New York). Clark alleges a breach of contract and is seeking a declaratory judgment. The complaint alleges that Clark suffered damages arising from the Company’s refusal to allow Clark to exercise warrants. The lawsuit seeks unspecified general and compensatory damages, attorneys’ fees, and other reasonable costs and disbursements. The Company believes that it has meritorious defenses to the causes of action asserted against it and will defend itself vigorously in these proceedings; however, there can be no assurances that it will be successful in its efforts. Currently the case is stayed through the resolution of the Tang Capital matter, but Clark has the option to end the stay at any time after the end of June 2024 or a summary judgment decision in Tang Capital, whichever comes first. The Company is not able at this time to determine or predict the ultimate outcome of this lawsuit or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter. On February 3, 2023, Strategy and Execution, Inc. ("SEI") filed a lawsuit in federal district court in Texas against one of the Company's wholly owned subsidiaries: Strategy and Execution, Inc. v. Black Rifle Coffee Company LLC, Case 23-CV-00135 (FB) (Western District of Texas). The complaint alleges that SEI, a former consultant to the Company, is owed certain disputed royalties and expense reimbursements from the Company. On April 4, 2023, the Company filed a partial motion to dismiss several of the claims which is currently pending. The Company maintains all royalties expire upon expiration of the parties’ contract on December 31, 2023, and prior to such expiration, only SKUs manufactured at co-manufacturers SEI introduced the Company to, are subject to such royalty. Through September 30, 2023, the Company has expensed all royalties for co-manufacturers which SEI introduced, and all agreed upon expense reimbursements. Disputed expense reimbursements are immaterial to the Company’s operations. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) Attributable to Parent | $ (3,232) | $ (4,043) | $ (12,260) | $ (77,719) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation and ConsolidationThe Company has prepared the accompanying unaudited consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) for interim financial information. |
Basis of Consolidation | The unaudited consolidated financial statements reflect the financial position and operating results of the Company including wholly-owned subsidiaries. These financial statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for a fair statement of the operating results for the interim periods. Intercompany transactions and balances have been eliminated in consolidation. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2022. The Business Combination was accounted for as a reverse recapitalization transaction between entities under common control, whereas Authentic Brands was considered the accounting acquirer and predecessor entity. The Business Combination was reflected as the equivalent of Authentic Brands issuing stock for the net assets of SilverBox, accompanied by a recapitalization with no incremental goodwill or intangible assets recognized. Authentic Brands was determined to be the predecessor entity to the Business Combination based on a number of considerations, including: • Authentic Brands former management making up the majority of the management team of BRC Inc.; • Authentic Brands former management nominating or representing the majority of BRC Inc.'s board of directors; • Authentic Brands representing the majority of the continuing operations of BRC Inc.; and • The chief executive officer of Authentic Brands having voting control of the combined company. |
Use of Estimates | Use of Estimates The preparation of unaudited consolidated financial statements in conformity with US GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the unaudited consolidated financial statements and accompanying notes. Such estimates include but are not limited to estimated losses on accounts receivable, inventory reserves, undiscounted future cash flows and the fair value of assets or asset groups for the purpose of assessing impairment of long-lived assets, liabilities for contingencies, equity-based compensation, estimates for sales returns and related allowance, loyalty rewards, deferred revenue, and measurement and realization of deferred tax assets. Actual results could differ materially from those estimates. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with the provisions of Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers , or Accounting Standards Codification ("ASC 606"). Revenue is recognized when, or as, control of a promised product or service transfers to a customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products. Revenue also excludes any amounts collected on behalf of third parties, including sales and indirect taxes. Revenue recognition is evaluated through the following five steps: 1. Identification of the contract with a customer; 2. Identification of the performance obligations in the contract; 3. Determination of the transaction price; 4. Allocation of the transaction price to the performance obligations in the contract; and 5. Recognition of revenue when or as a performance obligation is satisfied. Sources and Timing of Revenue The Company's revenue is derived from product sales through its e-commerce websites and to Wholesale customers who sell the products to end users. In addition, the Company derives revenues from Company-operated store locations, and franchise and license agreements. Revenues from the sale of products and merchandise are recognized when control of the product passes to the customer, typically at the date of delivery of the merchandise to the customer and in an amount that reflects the expected consideration to be received in exchange for such goods. As such, customer orders are recorded as deferred revenue prior to delivery of products. As the Company ships high volumes of packages through multiple carriers, it is not practical for the Company to track the actual delivery date of each shipment. Therefore, the Company uses estimates to determine which shipments are delivered and, therefore, recognizes revenue at the end of the period. Delivery date estimates are based on average transit times calculated based on factors such as the type of carrier, the fulfillment source, the delivery destination and historical transit time experience. Actual shipping times may differ from the Company's estimates. Costs to obtain or fulfill a contract with a customer are expensed as incurred and are generally not significant. Revenues from Company-operated stores are recognized when payment is tendered at the point of sale as the performance obligation has been satisfied. Store revenues are reported excluding sales tax, use or other transaction taxes that are collected from customers and remitted to taxing authorities. Deferred Revenue Deferred revenue consists of amounts billed to or received from customers prior to delivery of products. The Company recognizes such amounts in revenues as the product is delivered. Gift Cards Gift cards are offered through the Company's e-commerce websites through the form of an e-certificate. When a gift card is purchased, the Company recognizes a corresponding liability for the full amount of the gift card, which is recorded in "Deferred revenue and gift card liability" on the unaudited consolidated balance sheets. Gift cards can be redeemed online on the Company's website. When a gift card is redeemed, the Company reduces the corresponding liability and recognizes revenue. There are no expiration dates to the gift cards. While the Company will continue to honor all gift cards presented for payment, the Company may determine the likelihood of redemption, based on historical experience, is deemed to be remote for certain cards due to long periods of inactivity. In these circumstances if the Company also determines there is no requirement for remitting balances to government agencies under unclaimed property laws, unredeemed card balances may then be recognized as breakage income, which is included in "Revenue, net" on the unaudited consolidated statements of operations. Loyalty Rewards Program In August 2020, BRCC established its BRCC Loyalty Points rewards program (the “Loyalty Program”), which is primarily a spend-based program. BRCC customers who establish an online account are enrolled in the Loyalty Program. Under the program, there are multiple levels in which customers can participate and earn loyalty points. Subscription customers (customers in the BRCC Coffee Club or subscribed to another subscription product type) are in the highest tier and earn 5% on purchases. Non-subscription customers earn 1% on purchases. Any customer who spends $200 or more annually can also earn 5% on purchases, after the spending criteria is met. In addition to earning points on purchases, customers can earn points through certain other activities. BRCC reserves the right in its sole discretion to modify, change, add, or remove activities which can be accomplished to earn points at any time. Under the Loyalty Program, customers may redeem rewards as they reach minimum thresholds per reward. The Company reserves the right to modify, change, add, or remove rewards and their points thresholds at any time. BRCC loyalty points will expire if there is no account activity (i.e., if there is no new purchase made or order placed) in a period of twelve months. Conversion of rewards are non-changeable after redemption, have no cash value, and are nontransferable. A portion of rewards are expected to expire and not be redeemed and will be recognized as income over time. Based on historical expiration rates, the Company estimates a certain percentage of rewards to expire and reassesses this estimate on a quarterly basis. The Company defers revenue associated with the points earned through purchases that are expected to be redeemed, net of estimated unredeemed loyalty points. When a customer redeems an earned reward, the Company recognizes revenue for the redeemed product and reduces the related deferred revenue liability. The deferred revenue liability is included in "Deferred revenue and gift card liability" on the unaudited consolidated balance sheets. For those points that are earned through other activities, the Company recognizes the redemption of these points as a discount to the transaction price at time of sale. Refer to Note 5, Deferred Revenue and Gift Card Liability for information about changes in the current portion of deferred revenue and gift card liability for the three and nine months ended September 30, 2023 and 2022. Franchise Store Revenues Franchise rights may be granted through franchise agreements that set out the terms of the arrangement with the franchisee. The franchise agreements require that the franchisee remit continuing fees to the Company as a percentage of the applicable store’s revenues in exchange for the license of the intellectual property associated with BRCC’s brands. A portion of these fees are dedicated for national marketing campaigns, promotional programs and materials, and other activities that we believe enhance the image of the BRCC brand. Continuing fees represent a portion of the consideration the Company receives under the franchise agreement. Continuing fees are typically billed and collected weekly. Continuing fees are recognized as the related store sales occur. Revenues from continuing fees are included in "Revenue, net" on the unaudited consolidated statements of operations. Under the franchise agreements, BRCC sells products and equipment to its franchisees. The revenue associated with these product and equipment sales are recognized when control passes to the franchisee, typically at the date of delivery of the merchandise to the franchisee and in an amount that reflects the expected consideration to be received in exchange for such goods. The franchise agreements also typically require upfront franchise fees such as initial fees paid for the execution of a franchise agreement. The fees associated with these agreements are typically billed and paid when a new franchise agreement becomes effective. The Company has determined that the services it provides in exchange for upfront franchise fees, which primarily relate to pre-opening support, are highly interrelated with the franchise right and are not individually distinct from the ongoing services provided to the Company’s franchisees. As a result, upfront franchise fees are recognized as revenue over the term of each respective franchise agreement, generally ten years. Revenues for these upfront franchise fees are recognized on a straight-line basis, which is consistent with the franchisee’s right to use and benefit from the intellectual property associated with BRCC's brands. The current portion of revenues from upfront franchise fees are included in "Deferred revenue and gift card liability" and the long-term portion of revenues from upfront franchisee fees are included in "Other non-current liabilities" on the unaudited consolidated balance sheets. License Revenues License rights may be granted through license agreements that set out the terms of the Company’s arrangement with the licensee. The Company’s license agreements require that the licensee remit continuing fees to the Company as a percentage of the applicable store’s revenues in exchange for the license of the intellectual property associated with BRCC’s brands. In addition, licensed store revenues consist of product sales to the licensee. The revenue associated with these product sales are recognized when control of the product passes to the licensee, typically at the date of delivery of the merchandise to the licensee and in an amount that reflects the expected consideration to be received in exchange for such goods. Continuing fees are recognized as the related store sales occur. The Company’s license agreements also typically require upfront license fees such as initial fees paid for the execution of a license agreement. The fees associated with these agreements are typically billed and paid when a new license agreement becomes effective. The Company has determined the services it provides in exchange for upfront license fees, which primarily relate to initial license set up and are not individually distinct from the ongoing services it provides to its licensees. As a result, upfront license fees are recognized as revenue over the term of each respective license agreement, generally ten years. Revenues for these upfront license fees are recognized on a straight-line basis, which is consistent with the licensee’s right to use and benefit from the intellectual property. Revenues from continuing fees and upfront license fees are presented within “Revenue, net” on the unaudited consolidated statements of operations. Disaggregation of Revenue The Company disaggregates revenue by sales channel. The Wholesale channel includes product revenue sold to an intermediary and not directly to the consumer. The Direct to Consumer ("DTC") channel is principally comprised of revenue from our e-commerce websites and subscription services directly to the consumer. The Outpost channel includes revenue from Company-operated stores, gift cards, franchise store and licensing. The following table disaggregates revenue by sales channel: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Wholesale $ 61,527 $ 32,247 $ 151,534 $ 78,173 Direct to Consumer 32,794 38,082 104,160 113,376 Outpost 6,215 5,165 20,280 16,146 Total net sales $ 100,536 $ 75,494 $ 275,974 $ 207,695 Substantially all revenue is derived from customers located in the United States. One Wholesale customer and its affiliate represented 28% of revenue for the three months ended September 30, 2023 and one Wholesale customer represented 13% of revenue for the three months ended September 30, 2022. One Wholesale customer and its affiliate represented 26% of revenue for the nine months ended September 30, 2023 and no single customer represented more than 10% of revenue for the nine months ended September 30, 2022. Sales Returns and Discounts The Company’s product sales contracts include terms that could cause variability in the transaction price for items such as discounts, credits, charge backs, or sales returns. Accordingly, the transaction price for product sales includes estimates of variable consideration to the extent it is probable that a significant reversal of revenue recognized will not occur. The Company inspects returned items when they arrive at its processing facilities. The Company refunds the full cost of the merchandise returned if the returned item is defective or the Company or its partners have made an error, such as shipping the wrong product. If the return is not a result of a product defect or a fulfillment error and the customer initiates a return of an unopened item within 30 days of delivery, for most products the Company refunds the full cost of the merchandise less the original shipping charge and actual return shipping fees. If the customer returns an item that has been opened or shows signs of wear, the Company issues a partial refund minus the original shipping charge and actual return shipping fees. Coffee products are not eligible for returns. Revenue is recorded net of estimated returns. The Company records an allowance for returns based on current period revenues and historical returns experience. The Company analyzes actual historical returns, current economic trends and changes in order volume and acceptance of its products when evaluating the adequacy of the sales returns allowance in any accounting period. The allowance for sales returns and charge backs was $497 and $942 as of September 30, 2023 and December 31, 2022, respectively, and included in "Accounts receivable, net" on the unaudited consolidated balance sheets. Shipping and Handling Fees and Costs Shipping and handling is considered a fulfillment activity, as it takes place prior to the customer obtaining control of the merchandise, and fees charged to customers are included in net revenue upon completion of the performance obligation. |
Segment Information | Segment Information The Company reports operations as a single reportable segment and manages the business as a single-brand consumer products business. This is supported by the operational structure, which includes sales, product design, operations, marketing, and administrative functions focused on the entire product suite rather than individual product categories or sales channels. Our chief operating decision maker reviews financial information on a consolidated basis and does not regularly review financial information for individual sales channels, product categories or geographic regions that would allow decisions to be made about allocation of resources or performance. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold includes product costs, labor costs, occupancy costs, outbound shipping costs, handling and fulfillment costs, credit card fees, and royalty fees, and is recorded in the period incurred. |
Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents also include proceeds due from credit card transactions with settlement terms of less than five days. The Company maintains cash and cash equivalent balances with financial institutions that exceed federally insured limits. The Company has not experienced any losses related to these balances, and it believes credit risk to be minimal. |
Accounts Receivable, Net | Accounts Receivable, NetAccounts receivable consist primarily of trade amounts due from business customers at period end. Accounts receivable are recorded at invoiced amounts and do not bear interest. From time to time, the Company grants credit to business customers on normal credit terms. The Company maintains an allowance for doubtful accounts receivable based upon its business customers’ financial condition and payment history, and its historical collection experience and expected collectability of accounts receivable. |
Inventories, Net | Inventories, Net Inventories are stated at the lower of standard cost, which approximates First In, First Out ("FIFO"), or net realizable value. The Company records inventory reserves for obsolete and slow-moving inventory. Inventory reserves are based on inventory obsolescence trends, historical experience and application of the specific identification method. Finished goods includes allocations of labor, occupancy expenses, and inbound transportation costs. |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment are stated at cost with depreciation calculated using the straight-line method over the estimated useful lives of the related assets or the term of the related finance lease, whichever is shorter. Leasehold improvements are amortized over the shorter of the term of the related leases or estimated useful lives. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in earnings for the period. The cost of maintenance and repairs are charged to earnings as incurred; significant renewals and improvements are capitalized. Estimated useful lives are as follows: Land — Building and Leasehold improvements 5 — 39 years Computer equipment and software 3 years Machinery and equipment 5 — 15 years Vehicles 5 years |
Identifiable Intangibles - Internal Use Software | Identifiable Intangibles - Internal Use Software In accordance with ASC 350-40, Intangibles - Goodwill and Other, Internal-Use Software ("ASC 350-40"), the Company capitalizes qualifying internal use software costs that are incurred during the application development stage if management with the relevant authority authorizes the project, it is probable the project will be completed, and the software will be used to perform the function intended. Capitalized internal use software costs are reported in property and equipment on the unaudited consolidated balance sheets and are amortized over the expected economic life of three years using the straight-line method once the software is ready for intended use. Costs incurred for enhancements that are expected to result in additional significant functionality are capitalized and amortized over the estimated useful life of the enhancement. Costs related to preliminary project activities and post-implementation activities, including training and maintenance, are expensed as incurred. Capitalized software costs net of accumulated amortization are included as a component of "Property, plant and equipment, net" on the unaudited consolidated balance sheets. |
Impairment of Long-Lived Assets | Impairment of Long-Lived AssetsThe Company reviews the recoverability of its long-lived assets, such as property and equipment and identifiable intangible assets, when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset or asset group from the expected future undiscounted pre-tax cash flows of the related operations. If these undiscounted cash flows are less than the carrying amount of the related asset, an impairment is recognized for the excess of the carrying value over its fair value. |
Leases | Leases The Company leases certain property and equipment under non-cancelable finance and operating leases which expire at various dates through 2043. The Company’s operating leases relate to the roasting facility in Tennessee and Outposts. At the inception of each lease, the Company determines the appropriate classification for each lease as operating or finance. The Company has estimated that the lease term for Outposts is generally 10 to 15 years. Any initial direct costs are capitalized and amortized over the life of the lease. |
Earn-out Liability | Earn-out Liability The earn-out shares that were payable in Common Units (as defined below) of Authentic Brands pursuant to the Business Combination Agreement were recorded as a liability under ASC 480 and the earn-out shares that were payable in BRC Inc. common stock pursuant to the Business Combination Agreement were recorded as a liability under ASC 815. The earn-out liability was initially measured at fair value at the closing of the Business Combination using a Monte Carlo simulation in an option pricing framework that simulated the future path of the Company's stock price over the earn-out period. The earn-out shares vested in March and April 2022. The Company recognized the earn-out shares as liabilities at fair value and adjusted the earn-out shares to fair value at each reporting period. The earn-out liabilities were subject to re-measurement at each balance sheet date until vesting, and any change in fair value was recognized on the Company’s unaudited consolidated statement of operations. The liabilities were settled prior to December 31, 2022 and therefore not recurring as of September 30, 2023. |
Warrant Liability | Warrant Liability The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company had public and private warrants, both of which did not meet the criteria for equity classification and were accounted for as liabilities. Accordingly, the Company recognized the warrants as liabilities at fair value and adjusted the warrants to fair value at each reporting period with any changes in fair value recognized on the Company’s unaudited consolidated statement of operations. The public and private warrants were redeemed in May 2022. The liabilities were settled prior to December 31, 2022 and therefore not recurring as of September 30, 2023. |
Income Taxes | Income Taxes The Company accounts for income taxes under the liability method, and deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying values of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided if it is determined that it is more likely than not that the deferred tax asset will not be realized. The Company records interest and penalty expense related to income taxes as interest and other expense, respectively. The Company evaluates and accounts for uncertain tax positions using a two-step approach: Step 1. Recognition – occurs when the Company concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustainable upon examination. Step 2. Measurement – determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Derecognition of a tax position that was previously recognized would occur when the Company subsequently determines that a tax position no longer meets the more likely-than-not threshold of being sustained. |
Equity-Based Compensation | Equity-Based Compensation The Company recognizes the cost of equity-based compensation awards and incentive unit awards based on the fair value estimated in accordance with ASC 718, Stock Based Compensation |
Earnings per Share | Earnings per ShareBasic net income/(loss) per share is calculated by dividing net income/(loss) attributable to holders of Class A Common Stock by the weighted-average shares of Class A Common Stock outstanding without the consideration for potential dilutive securities. Diluted net loss per share represents basic net loss per share adjusted to include the potentially dilutive effect of outstanding unvested share awards, and units of Authentic Brands designated as common units (the "Common Units") and restricted units (the "Restricted Common Units") in the Third Amended and Restated Limited Liability Company Operating Agreement of Authentic Brands (the "LLC Agreement") that are exchangeable into shares of Class A Common Stock. Diluted net loss per share is computed by dividing the net income attributable to holders of Class A Common Stock by the weighted-average number of shares of Class A Common Stock outstanding for the period determined using the treasury stock method and if-converted, as applicable. As the impact of these if-converted securities is generally antidilutive during periods of net loss, the diluted net loss per share calculation for periods such as ours with net losses is the same as the basic net loss per share. |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company’s assets that are potentially subject to concentrations of credit risk are cash and accounts receivable. Cash balances are maintained in financial institutions which at times exceed federally insured limits. The Company monitors the financial condition of the financial institutions in which its accounts are maintained and has not experienced any losses in such accounts. The accounts receivable of the Company are spread over a number of customers, of which two customers and their affiliates accounted for 41% of total outstanding receivables as of September 30, 2023 and three customers accounted for 51% of total outstanding receivables as of December 31, 2022. The Company performs ongoing credit evaluations as to the financial condition of its customers and creditors with respect to trade accounts. |
Marketing and Advertising Expenses | Marketing and Advertising ExpensesThe Company’s marketing and advertising expenses are primarily internet marketing expenses, commercial sponsorships and advertising time slots. Marketing expenses are recognized as incurred based on the terms of the individual agreements, which are generally, but not limited to: a commission for traffic driven to its websites that generate a sale, programmatic targeting advertisements, national television and radio advertisements, or payments to social media influencers. The Company may also enter into marketing service agreements with third party production and content providers where the Company prepays for certain services or deliverables and recognizes the expense when the service is completed. |
Fair Value Measurements | Fair Value Measurements The Company’s financial instruments consist primarily of accounts receivable, accounts payable and long-term debt. The carrying amounts of accounts receivable and accounts payable are representative of their respective fair values due to the short-term maturity of these instruments. The fair value of variable rate long-term debt is based upon the current market rates for debt with similar credit risk and maturity, which approximated its carrying value, as interest is based upon the Secured Overnight Financing Rate ("SOFR"), or the the PNC Base Rate (see further explanation of the Base Rate in Note 7 , Long- Term Debt ), or prior to our August 2023 refinancing, the Bloomberg Short Term Bank Yield Index ("BSBY") or Prime rates plus an applicable floating margin. In measuring fair value, the Company reflects the impact of credit risk on liabilities, as well as any collateral. The Company also considers the credit standing of counterparties in measuring the fair value of assets. The Company uses any of three valuation techniques to measure fair value: the market approach, the income approach, and the cost approach in determining the appropriate valuation technique based on the nature of the asset or liability being measured and the reliability of the inputs used in arriving at fair value. The Company follows the provisions of ASU No. 2022-03- Fair Value Measurement ("Topic 820") for non-financial assets and liabilities measured on a non-recurring basis. The inputs used in applying valuation techniques include assumptions that market participants would use in pricing the asset or liability (i.e., assumptions about risk). Inputs may be observable or unobservable. The Company uses observable inputs in the Company’s valuation techniques and classifies those inputs in accordance with the fair value hierarchy established by applicable accounting guidance, which prioritizes those inputs. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels are defined as follows: Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 — inputs to the valuation methodology are unobservable and significant to the fair value measurement. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. As of September 30, 2023, the Company had no Level 3 financial assets or liabilities. |
Series A Redeemable Preferred Equity | Series A Redeemable Preferred EquityThe Company accounted for its preferred equity as temporary equity, given the Series A preferred units were probable of becoming redeemable (i.e., exercise of the exit rights in the passage of time). The Series A preferred units have been subsequently remeasured by accreting changes in the redemption value from the date of issuance to the expected redemption date using the effective interest method. The Series A preferred units were redeemed in February 2022 in connection with the Business Combination. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) The Company has no components of comprehensive income and comprehensive income (loss) is equivalent to net income (loss) in each of the periods presented. As such, no separate statement of comprehensive income (loss) is presented. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements On January 1, 2023, the Company adopted new guidance from the FASB, ASU No. 2022-02 - Financial Instruments - Credit Losses ("Topic 326"), that introduces a new credit loss methodology for estimating allowances for credit losses. The standard requires measurement and recognition of expected credit losses for financial assets held by the Company be recognized immediately over the remaining life of the financial assets. The estimate of expected losses is based on information about past and current economic conditions and reasonable forecasts of future economic conditions that affect financial assets deemed uncollectible. There was no material impact to the Company's financial statements as a result of this adoption. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Disaggregation of Revenue by Sales Channel | The following table disaggregates revenue by sales channel: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Wholesale $ 61,527 $ 32,247 $ 151,534 $ 78,173 Direct to Consumer 32,794 38,082 104,160 113,376 Outpost 6,215 5,165 20,280 16,146 Total net sales $ 100,536 $ 75,494 $ 275,974 $ 207,695 |
Schedule of Estimated Useful Lives | Estimated useful lives are as follows: Land — Building and Leasehold improvements 5 — 39 years Computer equipment and software 3 years Machinery and equipment 5 — 15 years Vehicles 5 years Property, plant and equipment, net consists of the following: September 30, December 31, 2023 2022 Building and leasehold improvements $ 26,805 $ 25,024 Machinery and equipment 18,299 15,977 Computer equipment and software 6,585 6,071 Furniture and fixtures 2,622 1,804 Land 1,547 3,245 Vehicles 1,191 1,283 Construction in progress 20,161 15,780 Property, plant, and equipment, gross 77,210 69,184 Less: accumulated depreciation and amortization (12,327) (9,733) Total property, plant and equipment, net $ 64,883 $ 59,451 The portion of depreciation expense related to production and distribution facilities is included in cost of goods sold including occupancy costs on the unaudited consolidated statements of operations. Depreciation expense recorded in cost of goods sold and general and administrative expenses was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Cost of goods sold $ 363 $ 207 $ 1,049 $ 619 General and administrative 1,625 825 4,262 2,411 Total depreciation expense $ 1,988 $ 1,032 $ 5,311 $ 3,030 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following: September 30, December 31, 2023 2022 Coffee: Unroasted $ 4,584 $ 4,867 Finished Goods 16,999 15,365 Ready-to-Drink (raw materials) 16,963 16,610 Ready-to-Drink (finished goods) 47,094 33,413 Apparel and other merchandise 5,733 6,928 Total inventories, net $ 91,373 $ 77,183 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Estimated useful lives are as follows: Land — Building and Leasehold improvements 5 — 39 years Computer equipment and software 3 years Machinery and equipment 5 — 15 years Vehicles 5 years Property, plant and equipment, net consists of the following: September 30, December 31, 2023 2022 Building and leasehold improvements $ 26,805 $ 25,024 Machinery and equipment 18,299 15,977 Computer equipment and software 6,585 6,071 Furniture and fixtures 2,622 1,804 Land 1,547 3,245 Vehicles 1,191 1,283 Construction in progress 20,161 15,780 Property, plant, and equipment, gross 77,210 69,184 Less: accumulated depreciation and amortization (12,327) (9,733) Total property, plant and equipment, net $ 64,883 $ 59,451 The portion of depreciation expense related to production and distribution facilities is included in cost of goods sold including occupancy costs on the unaudited consolidated statements of operations. Depreciation expense recorded in cost of goods sold and general and administrative expenses was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Cost of goods sold $ 363 $ 207 $ 1,049 $ 619 General and administrative 1,625 825 4,262 2,411 Total depreciation expense $ 1,988 $ 1,032 $ 5,311 $ 3,030 |
Deferred Revenue and Gift Car_2
Deferred Revenue and Gift Card Liability (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Deferred Revenue, Gift Cards, and Loyalty Program, Including Significant Changes in Deferred Revenue | The following table provides information about deferred revenue, gift cards, and the Loyalty Program, including significant changes in deferred revenue balances for the below designated periods: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Balance at beginning of period $ 10,075 $ 8,010 $ 9,505 $ 7,334 Sales of gift cards 194 393 755 751 Redemption of gift cards (194) (317) (683) (620) Increase from deferral of revenue 2,843 3,411 2,843 3,411 Decrease from revenue recognition (2,847) (3,335) (3,560) (3,586) Loyalty Program points earned 1,070 632 2,634 1,880 Loyalty Program points redeemed/expired (981) (174) (1,334) (550) Balance at end of period $ 10,160 $ 8,620 $ 10,160 $ 8,620 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following: September 30, December 31, 2023 2022 Accrued inventory purchases $ 4,879 $ 15,035 Accrued compensation and benefits 4,470 7,393 Accrued freight 2,684 2,153 Accrued marketing 2,116 3,077 Accrued sales and other taxes 1,017 1,179 Credit card liabilities 215 888 Other accrued expenses 18,056 6,935 Total accrued liabilities $ 33,437 $ 36,660 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Company's Credit Facilities and Related Balances | The Company’s credit facilities and related balances, net of the unamortized portion of debt issuance costs and Original Issue Discount ("OID") were as follows: September 30, December 31, 2023 2022 Term loan facility $ 50,850 $ — ABL facility 23,940 — Notes payable 2,493 3,540 Senior credit facility — 30,000 Mortgages — 7,102 Equipment term loan — 3,814 Equipment financing loan — 3,336 Retail facility — 1,768 Total principal 77,283 49,560 Less debt issuance costs and OID (5,293) (400) Long-term debt, net $ 71,990 $ 49,160 Current maturities: Current maturities of principal $ 1,896 $ 2,259 Less current portion of debt issuance costs — (116) Current maturities of long-term debt, net $ 1,896 $ 2,143 Long-term debt: Non-current principal $ 75,387 $ 47,301 Less non-current portion of debt issuance costs and OID (5,293) (284) Long-term debt, net $ 70,094 $ 47,017 |
Schedule of Future Contractual Maturities of Credit Facilities | Future contractual maturities of credit facilities (not including debt issuance costs) as of September 30, 2023 are as follows: Remainder of 2023 $ 850 2024 2,295 2025 4,797 2026 6,025 2027 6,250 Thereafter 57,066 Total $ 77,283 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Assumptions were Utilized In Determining the Fair Value of the Units at the Grant Date | The following assumptions were utilized in determining the fair value of the units at the grant date: Expected dividend — Expected volatility 60% to 85% Risk-free interest rate 0.13% to 2.53% Expected life of incentive awards (in years) 1 to 5 years Grant date performance and market threshold $35,000 to $1,250,000 Weighted average grant date fair value $3.00 Expected dividend — Expected volatility 63% Risk-free interest rate 3.80% Options term (in years) 4.5 Expected dividend — Expected volatility 65% Risk-free interest rate 3.97% Award term years 4.3 Valuation date share price $6.21 |
Schedule of Changes in the Number of Incentive Units | The following table summarizes the changes in the number of Incentive Units for the nine months ended September 30, 2023: Incentive Units Weighted Average Grant Date Fair Value Granted and outstanding at January 1, 2023 14,210 $ 192.52 Granted — — Forfeited (5,000) 215.31 Granted and outstanding at September 30, 2023 9,210 $ 213.91 Vested at September 30, 2023 5,474 $ 212.95 The following table summarizes information about stock option activities for the nine months ended September 30, 2023: Stock Options Weighted Average Exercise Price Outstanding at January 1, 2023 792,370 $ 9.77 Granted 3,623,794 4.75 Forfeited (802,028) 6.50 Outstanding at September 30, 2023 3,614,136 $ 5.43 Vested at September 30, 2023 228,670 $ 9.74 The following table summarizes information about the RSUs under the Omnibus Plan for the nine months ended September 30, 2023: Restricted Stock Units Weighted Average Grant Date Fair Value Nonvested at January 1, 2023 823,829 $ 10.68 Granted 1,877,546 5.04 Forfeited (335,392) 7.38 Vested (357,758) 10.65 Nonvested at September 30, 2023 2,008,225 $ 5.96 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Losses per Share | The following table sets forth the computation of basic and diluted net loss per share are presented below: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (2) Numerator: Net loss $ (10,694) $ (16,102) $ (42,680) $ (315,323) Less: Net loss attributable to non-controlling interests (7,462) (12,059) (30,420) (238,663) Net loss attributable to Class A Common Stock - basic and diluted (1) $ (3,232) $ (4,043) $ (12,260) $ (76,660) Denominator: Weighted-average shares of Class A Common Stock outstanding (1) 61,964,157 53,013,720 59,738,542 49,843,715 Net loss per share attributable to holders of Class A Common Stock, basic and diluted $ (0.05) $ (0.08) $ (0.21) $ (1.54) (1) For the nine months ended September 30, 2022, net loss per share of Class A Common Stock and weighted-average shares of Class A Common Stock outstanding is representative of the period from February 9, 2022 through September 30, 2022, the period following the Business Combination, as defined in Note 1, Organization and Nature of Business . |
Schedule of Antidilutive Securities | The Company excluded the following potentially dilutive securities, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to holders of Class A Common Stock because including them would have had an antidilutive effect: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (2) Stock options 3,614,136 720,010 3,614,136 720,010 Common Units 148,395,692 157,794,609 148,395,692 157,794,609 RSUs 2,008,225 666,076 2,008,225 666,076 PSUs 8,462,412 — 8,462,412 — Incentive Units 9,210 16,445 9,210 16,445 Employee Stock Purchase 98,710 — 98,710 — Total units excluded from computation of diluted net loss per share 162,588,385 159,197,140 162,588,385 159,197,140 (2) The Company analyzed the calculation of net loss per share for periods prior to the Business Combination on February 9, 2022 and determined that it resulted in values that would not be meaningful to the users of the consolidated financial statements, as the capital structure completely changed as a result of the Business Combination. Therefore, net loss per share information has not been presented for periods prior to the Business Combination. This represents only the period from February 9, 2022 through September 30, 2022, the period following the Business Combination, as defined in Note 1, Organization and Nature of Business . |
Concentrations (Tables)
Concentrations (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | The following tables summarize the Company's significant vendors/suppliers and the proportion of their impact on the following operations for the periods indicated: Three Months Ended September 30, 2023 2022 Number of Vendors Concentration Rate Number of Vendors Concentration Rate Coffee supplier accounts 5 53.9% 4 68.2% Shipping provider accounts 4 67.2% 3 67.8% Primary fulfillment service provider accounts 3 89.8% 1 89.2% Marketing provider accounts 8 52.5% 7 51.3% Nine Months Ended September 30, 2023 2022 Number of Vendors Concentration Rate Number of Vendors Concentration Rate Coffee supplier accounts 5 52.9% 2 56.5% Shipping provider accounts 5 72.2% 4 77.8% Primary fulfillment service provider accounts 3 85.7% 1 95.1% Marketing provider accounts 8 50.5% 8 42.8% |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Purchase Commitments | The amounts in the table below represents the Company's future minimum purchase commitments as of September 30, 2023: Remainder of 2023 $ 19,040 2024 49,900 2025 22,410 Thereafter — Total $ 91,350 |
Organization and Nature of Bu_2
Organization and Nature of Business (Details) $ in Thousands | Feb. 09, 2022 USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Estimated value | $ 1,839,815 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Aug. 31, 2020 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Dec. 31, 2022 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Percentage of loyalty for subscription customers | 5% | ||||
Percentage of loyalty for non-subscription customers | 1% | ||||
Annual amount spent by customer to earn discount | $ 200 | ||||
Term of license agreement | 10 years | ||||
Term of franchise agreement | 10 years | ||||
Maximum number of days for refund for returns | 30 days | ||||
Allowance for sales returns and charge backs | $ 497,000 | $ 942,000 | |||
Maximum settlement terms of credit card transactions included in cash and cash equivalents | 5 days | ||||
Allowance for doubtful accounts receivable | $ 695,000 | $ 695,000 | 156,000 | ||
Prepaid marketing and advertising expenses | 7,799,000 | 7,799,000 | $ 1,050,000 | ||
Prepaid advertising | $ 7,480,000 | $ 7,480,000 | |||
Minimum | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Lease term | 10 years | 10 years | |||
Maximum | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Lease term | 15 years | 15 years | |||
Internal Use Software | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Internal use software, expected economic life | 3 years | 3 years | |||
One Customer | Total Revenue | Customer Concentration Risk | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Concentration Rate | 28% | 13% | 26% | ||
Two Customer | Accounts Receivable | Customer Concentration Risk | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Concentration Rate | 41% | ||||
Three Customer | Accounts Receivable | Customer Concentration Risk | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Concentration Rate | 51% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Disaggregation of Revenue by Sales Channel (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total net sales | $ 100,536 | $ 75,494 | $ 275,974 | $ 207,695 |
Wholesale | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 61,527 | 32,247 | 151,534 | 78,173 |
Direct to Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | 32,794 | 38,082 | 104,160 | 113,376 |
Outpost | ||||
Disaggregation of Revenue [Line Items] | ||||
Total net sales | $ 6,215 | $ 5,165 | $ 20,280 | $ 16,146 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Estimated Useful Lives (Details) | Sep. 30, 2023 |
Building and Leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Building and Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 39 years |
Computer equipment and software | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 15 years |
Vehicles | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Coffee: | ||
Unroasted | $ 4,584 | $ 4,867 |
Finished Goods | 16,999 | 15,365 |
Ready-to-Drink (raw materials) | 16,963 | 16,610 |
Ready-to-Drink (finished goods) | 47,094 | 33,413 |
Apparel and other merchandise | 5,733 | 6,928 |
Total inventories, net | $ 91,373 | $ 77,183 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 77,210 | $ 69,184 |
Less: accumulated depreciation and amortization | (12,327) | (9,733) |
Total property, plant and equipment, net | 64,883 | 59,451 |
Building and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 26,805 | 25,024 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 18,299 | 15,977 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 6,585 | 6,071 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 2,622 | 1,804 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 1,547 | 3,245 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | 1,191 | 1,283 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 20,161 | $ 15,780 |
Property, Plant and Equipment_4
Property, Plant and Equipment, Net - Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Cost of goods sold | $ 363 | $ 207 | $ 1,049 | $ 619 |
General and administrative | 1,625 | 825 | 4,262 | 2,411 |
Total depreciation expense | $ 1,988 | $ 1,032 | $ 5,311 | $ 3,030 |
Property, Plant and Equipment_5
Property, Plant and Equipment, Net - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation | $ 1,988 | $ 1,032 | $ 5,311 | $ 3,030 |
Proceeds from sale of property and equipment | 5,576 | 0 | ||
Internal use software | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation | 440 | $ 183 | 971 | $ 549 |
Additional depreciation | 0 | 227 | ||
Outpost Property | ||||
Property, Plant and Equipment [Line Items] | ||||
Proceeds from sale of property and equipment | 1,500 | |||
Assets held for sale | 2,692 | 2,692 | ||
Gain (loss) on sale of assets | 1,201 | |||
Sale of property, plant, and equipment, closing costs | 9 | 9 | ||
Office Property | ||||
Property, Plant and Equipment [Line Items] | ||||
Proceeds from sale of property and equipment | 4,058 | |||
Assets held for sale | 2,648 | 2,648 | ||
Gain (loss) on sale of assets | 1,097 | |||
Sale of property, plant, and equipment, closing costs | $ 313 | $ 313 |
Deferred Revenue and Gift Car_3
Deferred Revenue and Gift Card Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Information about deferred revenue, gift cards, and Loyalty Program | ||||
Balance at beginning of period | $ 10,075 | $ 8,010 | $ 9,505 | $ 7,334 |
Sales of gift cards | 194 | 393 | 755 | 751 |
Redemption of gift cards | (194) | (317) | (683) | (620) |
Increase from deferral of revenue | 2,843 | 3,411 | 2,843 | 3,411 |
Decrease from revenue recognition | (2,847) | (3,335) | (3,560) | (3,586) |
Loyalty Program points earned | 1,070 | 632 | 2,634 | 1,880 |
Loyalty Program points redeemed/expired | (981) | (174) | (1,334) | (550) |
Balance at end of period | $ 10,160 | $ 8,620 | $ 10,160 | $ 8,620 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accrued Liabilities, Current [Abstract] | ||
Accrued inventory purchases | $ 4,879 | $ 15,035 |
Accrued compensation and benefits | 4,470 | 7,393 |
Accrued marketing | 2,116 | 3,077 |
Accrued freight | 2,684 | 2,153 |
Accrued sales and other taxes | 1,017 | 1,179 |
Credit card liabilities | 215 | 888 |
Other accrued expenses | 18,056 | 6,935 |
Accrued liabilities | $ 33,437 | $ 36,660 |
Long-Term Debt - Company's Cred
Long-Term Debt - Company's Credit Facilities and Related Balances (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2021 | Jul. 31, 2020 |
Debt Instrument [Line Items] | ||||
Total principal | $ 77,283 | $ 49,560 | ||
Less debt issuance costs and OID | (5,293) | (400) | ||
Long-term debt, net | 71,990 | 49,160 | ||
Current maturities: | ||||
Current maturities of principal | 1,896 | 2,259 | ||
Less current portion of debt issuance costs | 0 | (116) | ||
Current maturities of long-term debt, net | 1,896 | 2,143 | ||
Long-term debt: | ||||
Non-current principal | 75,387 | 47,301 | ||
Less non-current portion of debt issuance costs and OID | (5,293) | (284) | ||
Long-term debt, net | 70,094 | 47,017 | ||
Term loan facility | ||||
Debt Instrument [Line Items] | ||||
Total principal | 50,850 | 0 | ||
ABL facility | ||||
Debt Instrument [Line Items] | ||||
Total principal | 23,940 | 0 | ||
Notes payable | ||||
Debt Instrument [Line Items] | ||||
Total principal | 2,493 | 3,540 | ||
Senior credit facility | ||||
Debt Instrument [Line Items] | ||||
Total principal | 0 | 30,000 | ||
Mortgages | ||||
Debt Instrument [Line Items] | ||||
Total principal | 0 | 7,102 | ||
Equipment term loan | ||||
Debt Instrument [Line Items] | ||||
Total principal | 0 | 3,814 | ||
Equipment financing loan | ||||
Debt Instrument [Line Items] | ||||
Total principal | 0 | 3,336 | $ 1,998 | $ 3,250 |
Retail facility | ||||
Debt Instrument [Line Items] | ||||
Total principal | $ 0 | $ 1,768 |
Long-Term Debt - Future Contrac
Long-Term Debt - Future Contractual Maturities of Credit Facilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Year ending December 31: | ||
Remainder of 2023 | $ 850 | |
2024 | 2,295 | |
2025 | 4,797 | |
2026 | 6,025 | |
2027 | 6,250 | |
Thereafter | 57,066 | |
Total | $ 77,283 | $ 49,560 |
Long-Term Debt - ABL Facility a
Long-Term Debt - ABL Facility and Term Loan Facility (Details) - Authentic Brands | 3 Months Ended | 9 Months Ended | 15 Months Ended | |
Aug. 10, 2023 USD ($) qtr | Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2028 USD ($) | |
ABL Credit Agreement | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Debt issuance costs, incurred | $ 3,876,000 | |||
Term Loan Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, unamortized discount | 1,525,000 | |||
Bridge Loan | Bridge Loan | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 6,000,000 | |||
Maximum borrowing capacity where maturity can be extended | $ 1,600,000 | |||
Debt repaid | $ 5,235,000 | |||
Debt interest rate | 10% | |||
Revolving Credit Facility | ABL Credit Agreement | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Minimum consolidated EBITDA | $ (2,460,000) | |||
Minimum consolidated EBITDA, number of quarters for incremental increase | qtr | 15 | |||
Minimum fixed charge coverage ratio | 1.10 | |||
Minimum liquidity | $ 15,000,000 | |||
Decrease in amount available for advances until minimum fixed charge coverage ratio is maintained for two quarters | $ 15,000,000 | |||
Number of quarters to maintain minimum fixed charge coverage ratio | qtr | 2 | |||
Available borrowing under ABL facility | $ 19,946,000 | |||
Commitment fee percentage | 0.375% | |||
Term of debt, number of days prior to scheduled maturity of debt in excess of $2.5 million | 91 days | |||
Amount of debt to trigger maturity | $ 2,500,000 | |||
Revolving Credit Facility | ABL Credit Agreement | Line of Credit | Minimum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 1.50% | |||
Revolving Credit Facility | ABL Credit Agreement | Line of Credit | Minimum | Secured Overnight Financing Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 2.60% | |||
Revolving Credit Facility | ABL Credit Agreement | Line of Credit | Maximum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 2% | |||
Revolving Credit Facility | ABL Credit Agreement | Line of Credit | Maximum | Secured Overnight Financing Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 3.10% | |||
Revolving Credit Facility | ABL Credit Agreement | Line of Credit | After Availability Block Release Date | ||||
Debt Instrument [Line Items] | ||||
Minimum fixed charge coverage ratio | 1.10 | |||
Minimum liquidity | $ 7,500,000 | |||
Minimum average liquidity | $ 9,375,000 | |||
Revolving Credit Facility | ABL Credit Agreement | Line of Credit | After Availability Block Release Date | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Decrease in basis spread | 0.25% | |||
Revolving Credit Facility | ABL Credit Agreement | Line of Credit | After Availability Block Release Date | Secured Overnight Financing Rate | ||||
Debt Instrument [Line Items] | ||||
Decrease in basis spread | 0.25% | |||
Revolving Credit Facility | ABL Credit Agreement | Line of Credit | Forecast | ||||
Debt Instrument [Line Items] | ||||
Minimum consolidated EBITDA | $ 40,000,000 | |||
Revolving Credit Facility | Revolving Credit Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 75,000,000 | |||
Letter of Credit | Letters of Credit | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 7,500,000 | |||
Secured Debt | Term Loan Credit Agreement | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Minimum consolidated EBITDA | $ (2,460,000) | |||
Minimum consolidated EBITDA, number of quarters for incremental increase | qtr | 15 | |||
Minimum liquidity | $ 15,000,000 | |||
Prepayment as a percentage of excess cash flows (up to) | 50% | |||
Secured Debt | Term Loan Credit Agreement | Line of Credit | Quarter ending September 30, 2024 through quarter ending June 30, 2025 | ||||
Debt Instrument [Line Items] | ||||
Periodic payment, percentage of outstanding aggregate principal | 1.25% | |||
Secured Debt | Term Loan Credit Agreement | Line of Credit | Quarter ending September 30, 2025 through quarter ending June 30, 2026 | ||||
Debt Instrument [Line Items] | ||||
Periodic payment, percentage of outstanding aggregate principal | 2.50% | |||
Secured Debt | Term Loan Credit Agreement | Line of Credit | Quarter ending September 30, 2026 through maturity | ||||
Debt Instrument [Line Items] | ||||
Periodic payment, percentage of outstanding aggregate principal | 3.125% | |||
Secured Debt | Term Loan Credit Agreement | Line of Credit | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 7.50% | |||
Secured Debt | Term Loan Credit Agreement | Line of Credit | Secured Overnight Financing Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 8.50% | |||
Secured Debt | Term Loan Credit Agreement | Line of Credit | Minimum | Base Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 4% | |||
Secured Debt | Term Loan Credit Agreement | Line of Credit | Minimum | Secured Overnight Financing Rate | ||||
Debt Instrument [Line Items] | ||||
Basis spread | 3% | |||
Secured Debt | Term Loan Credit Agreement | Line of Credit | After Availability Block Release Date | ||||
Debt Instrument [Line Items] | ||||
Minimum fixed charge coverage ratio | 1.10 | |||
Minimum liquidity | $ 7,500,000 | |||
Minimum average liquidity | 9,375,000 | |||
Secured Debt | Term Loan Credit Agreement | Line of Credit | Forecast | ||||
Debt Instrument [Line Items] | ||||
Minimum consolidated EBITDA | $ 40,000,000 | |||
Secured Debt | Term Loan | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 50,000,000 | |||
Term of debt, number of days prior to scheduled maturity of debt in excess of $2.5 million | 91 days | |||
Amount of debt to trigger maturity | $ 2,500,000 |
Long-Term Debt - Regions Bank S
Long-Term Debt - Regions Bank Senior Credit Facility (Details) - Revolving Credit Facility - Senior credit facility - Regions Senior Credit Facility $ in Thousands | 1 Months Ended |
Nov. 30, 2022 USD ($) | |
Debt Instrument [Line Items] | |
Amount borrowed | $ 65,000 |
Borrowed | 13,900 |
Loss on extinguishment of debt | $ 732 |
Long-Term Debt - Debt Issuance
Long-Term Debt - Debt Issuance Costs (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Disclosure [Abstract] | ||
Amortization of debt issuance costs | $ 260 | $ 281 |
Long-Term Debt - Mortgages (Det
Long-Term Debt - Mortgages (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Apr. 30, 2021 | Jul. 31, 2020 |
Debt Instrument [Line Items] | ||||
Debt instrument carrying amount | $ 77,283 | $ 49,560 | ||
Mortgages | ||||
Debt Instrument [Line Items] | ||||
Debt instrument carrying amount | $ 0 | $ 7,102 | ||
Mortgages | Building | ||||
Debt Instrument [Line Items] | ||||
Debt instrument carrying amount | $ 2,200 | $ 5,500 | ||
Debt interest rate | 3.60% | 3.67% |
Long-Term Debt - Equipment Term
Long-Term Debt - Equipment Term Loan (Details) - USD ($) $ in Thousands | Aug. 31, 2022 | Sep. 30, 2021 |
Equipment financing loan | ||
Debt Instrument [Line Items] | ||
Loan borrowings | $ 4,043 | |
Debt interest rate | 4.05% | |
Equipment term loan | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 6.88% |
Long-Term Debt - Equipment Fina
Long-Term Debt - Equipment Financing Loan (Details) - USD ($) $ in Thousands | 1 Months Ended | |||||
Sep. 30, 2021 | Jul. 31, 2020 | Sep. 30, 2023 | Dec. 31, 2022 | Jul. 31, 2021 | Apr. 30, 2021 | |
Debt Instrument [Line Items] | ||||||
Debt instrument carrying amount | $ 77,283 | $ 49,560 | ||||
Equipment financing loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument carrying amount | $ 1,998 | $ 3,250 | $ 0 | $ 3,336 | ||
Additional debt amount during year | $ 6,000 | $ 10,000 | ||||
Maturity of debt term | 60 months | |||||
Debt interest rate | 4.05% | |||||
Equipment financing loan | Bloomberg Short-Term Bank Yield | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread | 3.50% |
Long-Term Debt - Notes Payable
Long-Term Debt - Notes Payable (Details) $ in Thousands | 1 Months Ended | |||
Sep. 30, 2021 USD ($) installment | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jan. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | ||||
Debt instrument carrying amount | $ 77,283 | $ 49,560 | ||
Notes payable | ||||
Debt Instrument [Line Items] | ||||
Debt instrument carrying amount | 2,493 | $ 3,540 | ||
Notes payable | Notes Payable July And September 2021 | ||||
Debt Instrument [Line Items] | ||||
Amount borrowed | $ 2,588 | |||
Debt interest rate | 1% | |||
Number of annual installments | installment | 4 | |||
Debt instrument carrying amount | 1,294 | |||
Notes payable | Notes Payable January 2022 | ||||
Debt Instrument [Line Items] | ||||
Amount borrowed | $ 1,599 | |||
Debt interest rate | 1.30% | |||
Debt instrument carrying amount | $ 1,199 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | Feb. 09, 2022 | Sep. 30, 2023 | Dec. 31, 2022 |
Class of Stock [Line Items] | |||
Shares authorized (in shares) | 2,802,500,000 | ||
Preferred stock authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 |
Preferred stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Authentic Brands, Controlling Interest | |||
Class of Stock [Line Items] | |||
Ownership percentage | 22.50% | 29.90% | |
Authentic Brands, Noncontrolling Interest | |||
Class of Stock [Line Items] | |||
Ownership percentage | 77.50% | 70.10% | |
Common Stock | |||
Class of Stock [Line Items] | |||
Share consideration (in shares) | 139,106,323 | ||
Restricted Common Units | |||
Class of Stock [Line Items] | |||
Share consideration (in shares) | 19,853,125 | ||
Class B Common Stock | |||
Class of Stock [Line Items] | |||
Share consideration (in shares) | 139,106,323 | ||
Common shares authorized (in shares) | 300,000,000 | 300,000,000 | |
Common stock par value (in dollars per share) | $ 0.0001 | ||
Class A Common Stock | |||
Class of Stock [Line Items] | |||
Common shares authorized (in shares) | 2,500,000,000 | 2,500,000,000 | |
Common stock par value (in dollars per share) | $ 0.0001 | ||
Class C Common Stock | |||
Class of Stock [Line Items] | |||
Common shares authorized (in shares) | 1,500,000 | 1,500,000 | |
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Series C-1 Common Stock | |||
Class of Stock [Line Items] | |||
Common shares authorized (in shares) | 750,000 | ||
Common stock par value (in dollars per share) | $ 0.0001 | ||
Series C-2 Common Stock | |||
Class of Stock [Line Items] | |||
Common shares authorized (in shares) | 750,000 | ||
Common stock par value (in dollars per share) | $ 0.0001 | ||
Class A units | |||
Class of Stock [Line Items] | |||
Share consideration (in shares) | 18,769 | ||
Class B units | |||
Class of Stock [Line Items] | |||
Share consideration (in shares) | 73,890 |
Equity-Based Compensation - Add
Equity-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 08, 2023 | Dec. 29, 2022 | Feb. 09, 2022 | Sep. 30, 2022 | Sep. 30, 2023 | Mar. 08, 2024 | Sep. 30, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of non-voting units authorized (in shares) | 200,000 | 200,000 | ||||||
Vesting of stock awards, net of shares withheld for taxes | $ (121) | |||||||
Incentive Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total unrecognized equity compensation expense to be recognized over a weighted average period | 2 years | |||||||
Total unrecognized equity compensation expense | 686 | $ 686 | ||||||
Incentive units vested (in shares) | 28,990 | |||||||
Compensation costs | $ 1,856 | |||||||
Granted (in dollars per shares) | $ 0 | |||||||
Stock options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total unrecognized equity compensation expense to be recognized over a weighted average period | 3 years | |||||||
Total unrecognized equity compensation expense | 8,715 | $ 8,715 | ||||||
Common units, vesting period from grand date | 3 years | |||||||
Expiration period | 7 years | |||||||
RSUs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total unrecognized equity compensation expense to be recognized over a weighted average period | 2 years | |||||||
Total unrecognized equity compensation expense | 10,468 | $ 10,468 | ||||||
Incentive units vested (in shares) | 357,758 | |||||||
Common units, vesting period from grand date | 3 years | |||||||
Granted (in dollars per shares) | $ 5.04 | |||||||
PSUs | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Total unrecognized equity compensation expense to be recognized over a weighted average period | 4 years | |||||||
Total unrecognized equity compensation expense | $ 2,191 | $ 2,191 | ||||||
Common units granted (in shares) | 8,462,412,000 | |||||||
Granted (in dollars per shares) | $ 0.46 | |||||||
Employee Stock Purchase | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Offering period | 6 months | |||||||
Purchase of shares at stock price | 85% | |||||||
Shares issued under stock plans (in shares) | 97,523 | |||||||
Vesting of stock awards, net of shares withheld for taxes | $ 433 | |||||||
Issuance of shares at stock price (in dollars per share) | $ 4.44 | |||||||
Employee Stock Purchase | Forecast | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Shares issued under stock plans (in shares) | 98,710 |
Equity-Based Compensation -Fair
Equity-Based Compensation -Fair Value of the Units at the Grant Date (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Feb. 09, 2022 | Sep. 30, 2023 | |
Incentive Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend | 0% | |
Expected volatility, minimum | 60% | |
Expected volatility, maximum | 85% | |
Risk-free interest rate, minimum | 0.13% | |
Risk-free interest rate, maximum | 2.53% | |
Incentive Units | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options term (in years) | 1 year | |
Grant date performance and market threshold | $ 35,000 | |
Incentive Units | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options term (in years) | 5 years | |
Grant date performance and market threshold | $ 1,250,000 | |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant date fair value (in dollars per share) | $ 3 | |
Expected dividend | 0% | |
Expected volatility | 63% | |
Risk-free interest rate | 3.80% | |
Options term (in years) | 4 years 6 months | |
PSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend | 0% | |
Expected volatility | 65% | |
Risk-free interest rate | 3.97% | |
Options term (in years) | 4 years 3 months 18 days | |
Valuation date share price (in dollars per share) | $ 6.21 |
Equity-Based Compensation- Ince
Equity-Based Compensation- Incentive Units (Details) - $ / shares | 9 Months Ended | |
Feb. 09, 2022 | Sep. 30, 2023 | |
Incentive Units | ||
Incentive Units | ||
Granted and outstanding at beginning of period (in shares) | 14,210 | |
Granted (in shares) | 0 | |
Forfeited (in shares) | (5,000) | |
Vested (in shares) | (28,990) | |
Granted and outstanding at end of period (in shares) | 9,210 | |
Vested (in shares) | 5,474 | |
Weighted Average Grant Date Fair Value | ||
Granted and outstanding at beginning of period (in dollars per share) | $ 192.52 | |
Granted (in dollars per shares) | 0 | |
Forfeited (in dollars per shares) | 215.31 | |
Granted and outstanding at end of period (in dollars per share) | 213.91 | |
Vested (in dollars per share) | $ 212.95 | |
RSUs | ||
Incentive Units | ||
Granted and outstanding at beginning of period (in shares) | 823,829 | |
Granted (in shares) | 1,877,546 | |
Forfeited (in shares) | (335,392) | |
Vested (in shares) | (357,758) | |
Granted and outstanding at end of period (in shares) | 2,008,225 | |
Weighted Average Grant Date Fair Value | ||
Granted and outstanding at beginning of period (in dollars per share) | $ 10.68 | |
Granted (in dollars per shares) | 5.04 | |
Forfeited (in dollars per shares) | 7.38 | |
Vested (in dollars per share) | 10.65 | |
Granted and outstanding at end of period (in dollars per share) | $ 5.96 |
Equity-Based Compensation - Opt
Equity-Based Compensation - Options (Details) - Stock options | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Stock Options | |
Outstanding, beginning balance (in shares) | shares | 792,370 |
Granted (in shares) | shares | 3,623,794 |
Forfeited (in shares) | shares | (802,028) |
Outstanding, ending balance (in shares) | shares | 3,614,136 |
Vested (in shares) | shares | 228,670 |
Weighted Average Exercise Price | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 9.77 |
Granted (in dollars per share) | $ / shares | 4.75 |
Forfeited (in dollars per share) | $ / shares | 6.50 |
Outstanding, ending balance (in dollars per share) | $ / shares | 5.43 |
Vested (in dollars per share) | $ / shares | $ 9.74 |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Retirement Benefits [Abstract] | ||||
Company's matching contributions to defined contribution plan | $ 150 | $ 250 | $ 661 | $ 667 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Losses per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 8 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||||
Numerator: | |||||||||
Net loss | $ (10,694) | $ (16,102) | $ (254,136) | $ (315,323) | $ (42,680) | ||||
Less: Net loss attributable to non-controlling interests | (7,462) | (12,059) | (238,663) | (30,420) | $ (240,295) | ||||
Net loss attributable to Class A Common Stock - basic | (3,232) | (4,043) | (76,660) | (12,260) | |||||
Net loss attributable to Class A Common Stock - diluted | $ (3,232) | $ (4,043) | $ (76,660) | $ (12,260) | |||||
Denominator: | |||||||||
Weighted average shares of Class A Common Stock outstanding - basic (in shares) | 61,964,157 | [1] | 53,013,720 | 49,843,715 | [1] | 59,738,542 | |||
Weighted average shares of Class A common stock outstanding - diluted (in shares) | 61,964,157 | 53,013,720 | 49,843,715 | [1] | 59,738,542 | ||||
Net loss per share attributable to holders of Class A common stock, basic (in dollars per share) | $ (0.05) | $ (0.08) | $ (1.54) | [1] | $ (0.21) | ||||
Net loss per share attributable to holders of Class A common stock, diluted (in dollars per share) | $ (0.05) | [1] | $ (0.08) | [1] | $ (1.54) | [1] | $ (0.21) | ||
[1] For the nine months ended September 30, 2022, net loss per share of Class A Common Stock and weighted-average shares of Class A Common Stock outstanding is representative of the period from February 9, 2022 through September 30, 2022, the period following the Business Combination, as defined in Note 1 - Organization and Nature of Business . Shares of Class B Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted loss per share of Class B Common Stock under the two-class method has not been presented. For more information, refer to Note 12 - Net Loss per Share . |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Securities (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 162,588,385 | 159,197,140 | 162,588,385 | 159,197,140 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 3,614,136 | 720,010 | 3,614,136 | 720,010 |
Common Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 148,395,692 | 157,794,609 | 148,395,692 | 157,794,609 |
RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 2,008,225 | 666,076 | 2,008,225 | 666,076 |
PSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 8,462,412 | 0 | 8,462,412 | 0 |
Incentive Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 9,210 | 16,445 | 9,210 | 16,445 |
Employee Stock Purchase | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 98,710 | 0 | 98,710 | 0 |
Concentrations (Details)
Concentrations (Details) - Supplier, Shipping, Manufacturing, And Marketing - Supplier Concentration Risk - vendor | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Coffee supplier accounts | ||||
Concentration Risk [Line Items] | ||||
Number of Vendors | 5 | 4 | 5 | 2 |
Concentration Rate | 53.90% | 68.20% | 52.90% | 56.50% |
Shipping provider accounts | ||||
Concentration Risk [Line Items] | ||||
Number of Vendors | 4 | 3 | 5 | 4 |
Concentration Rate | 67.20% | 67.80% | 72.20% | 77.80% |
Primary fulfillment service provider accounts | ||||
Concentration Risk [Line Items] | ||||
Number of Vendors | 3 | 1 | 3 | 1 |
Concentration Rate | 89.80% | 89.20% | 85.70% | 95.10% |
Marketing provider accounts | ||||
Concentration Risk [Line Items] | ||||
Number of Vendors | 8 | 7 | 8 | 8 |
Concentration Rate | 52.50% | 51.30% | 50.50% | 42.80% |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Purchase Commitments (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of 2023 | $ 19,040 |
2024 | 49,900 |
2025 | 22,410 |
Thereafter | 0 |
Total | $ 91,350 |
Commitments and Contingencies-
Commitments and Contingencies- Additional Information (Details) $ in Thousands | Sep. 30, 2023 USD ($) | Feb. 03, 2023 subsidiary | Dec. 31, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |||
Sales and other tax exposure included in accrued liabilities | $ | $ 326 | $ 326 | |
Number of subsidiaries | subsidiary | 1 |