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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 12/09/20 Better Choice Co. Inc. S-1 184:20M Edgarfilings Ltd. |
Document/Exhibit Description Pages Size 1: S-1 Registration Statement (General Form) HTML 4.56M 2: EX-5.1 Opinion of Counsel re: Legality HTML 55K 3: EX-23.1 Consent of Expert or Counsel HTML 45K 4: EX-23.2 Consent of Expert or Counsel HTML 48K 5: EX-23.3 Consent of Expert or Counsel HTML 46K 12: R1 Document and Entity Information HTML 58K 13: R2 Condensed Consolidated Balance Sheets (Q3) HTML 142K 14: R3 Consolidated Balance Sheets (Q3) (Parenthetical) HTML 67K 15: R4 Condensed Consolidated Statements of Operations HTML 100K and Comprehensive Loss (Q3) 16: R5 Condensed Consolidated Statements of Stockholders' HTML 327K Deficit (Q3) 17: R6 Condensed Consolidated Statements of Cash Flows HTML 137K (Q3) 18: R7 Condensed Consolidated Statements of Cash Flows HTML 62K (Q3) (Parenthetical) 19: R8 Consolidated Balance Sheets (Fy) HTML 142K 20: R9 Consolidated Balance Sheets (Fy) (Parentheticals) HTML 83K 21: R10 Consolidated Statements of Operations and HTML 98K Comprehensive Loss (Fy) 22: 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accounting policies, Goodwill (Fy) (Details) 133: R122 Nature of business and summary of significant HTML 55K accounting policies, Advertising & Share-based compensation (Fy) (Details) 134: R123 Nature of business and summary of significant HTML 48K accounting policies, Segment information (Fy) (Details) 135: R124 Nature of business and summary of significant HTML 50K accounting policies, Commitments and contingencies (Fy) (Details) 136: R125 Nature of business and summary of significant HTML 53K accounting policies, Recently issued accounting pronouncements (Fy) (Details) 137: R126 Acquisitions, Acquisition of Halo (Fy) (Details) HTML 135K 138: R127 Acquisitions, Pro Forma Information (Fy) HTML 52K (Unaudited) (Details) 139: R128 Acquisitions, Reverse Acquisitions of Better HTML 131K Choice and Bona Vida by TruPet (Fy) (Details) 140: R129 Revenue (Fy) (Details) HTML 87K 141: R130 Inventories (Fy) (Details) HTML 59K 142: R131 Prepaid expenses and other current assets (Fy) HTML 93K 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DELAWARE | | | 5961 | | | 83-4284557
|
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) | | | (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) | | | (I.R.S.
EMPLOYER IDENTIFICATION NUMBER) |
Large accelerated filer | | | ☐ | | | Accelerated
filer | | | ☐ |
Non-accelerated filer | | | ☒ | | | Smaller
reporting company | | | ☒ |
| | | | Emerging
growth company | | | ☐ |
Title of Each Class of Securities to be Registered | | | Amount
to be Registered(1) | | | Proposed Maximum Offering
Price Per Share | | | Proposed Maximum Aggregate Offering
Price | | | Amount of Registration Fee(4) |
Common Stock, $0.001 par value share, issuable upon conversion of our Series F preferred stock held by selling stockholders | | | 43,603,130 | | | $0.97(2) | | | $42,295,036.10 | | | $4,614.38 |
Common
Stock, $0.001 par value share, held by selling stockholders | | | 25,641 | | | $0.97(2) | | | $24,871.77 | | | $2.71 |
Common
Stock, $0.001 par value per share, underlying warrants held by selling stockholders | | | 43,833,902 | | | $0.97(3) | | | $42,518,884.90 | | | $4,638.81 |
Total: | | | 87,462,673 | | | | | $84,838,792.80 | | | $9,255.91 |
(1) | In the event of a stock split, stock dividend, or similar transaction involving our common stock, the number of shares registered shall automatically be increased to cover the additional shares of common stock issuable pursuant to Rule 416 under the Securities Act of 1933, as amended (“Securities Act”). |
(2) | Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(c) under the Securities Act. Shares of the registrant’s common stock are eligible for trading on the over-the-counter market. The maximum price per share is based on the average of the $0.98
(high) and $0.95 (low) sale price of the registrant’s common stock as reported on the over-the-counter market on December 7, 2020. |
(3) | Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(g) under the Securities Act. The maximum price per share is based on the average of the $0.98 (high) and $0.95 (low) sale price of the registrant’s common stock as reported on the over-the-counter market on December 7, 2020. |
(4) | To
be paid in connection with the initial public filing of the registration statement. |
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• | We
may not be able to successfully implement our growth strategy on a timely basis or at all; |
• | We may have difficulties managing our anticipated growth, or we may not grow at all; |
• | We have a history of losses, we expect to incur losses in the future and we may not be able to achieve or maintain profitability; |
• | We require a significant amount of cash to operate our business or increase our production to meet consumer demand for our products; |
• | The combined business may be unable to integrate Bona Vida, Halo and TruPet’s businesses successfully and realize the anticipated benefits of the acquisitions; |
• | If
we do not successfully develop additional products and services, or if such products and services are developed but not successfully commercialized, we could lose revenue opportunities; |
• | If we fail to attract new customers, or retain existing customers, or fail to do either in a cost-effective manner, we may not be able to increase sales; |
• | We are vulnerable to fluctuations in the price and supply of ingredients, packaging materials, and freight; |
• | We may be subject to product liability claims or regulatory action if
our products are alleged to have caused significant loss or injury; |
• | We may not be able to manage our manufacturing and supply chain effectively, which may adversely affect our results of operations; |
• | Interruption in our sourcing operations could disrupt production, shipment or receipt of our merchandise, which would result in lost sales and could increase our costs; |
• | If the ingredients used in our products are contaminated, alleged to be contaminated or are otherwise rumored to have adverse effects, our results of
operations could be adversely affected; |
• | If we are unable to achieve desired results from, or maintain our advertising and marketing arrangements with certain third-party advertising or marketing providers to generate customers, our ability to generate revenue and our business could be adversely affected; |
• | Our intellectual property rights may be inadequate to protect our business; |
• | We depend on the knowledge and skills of our senior management and other key employees, and if we are unable to retain and motivate them
or recruit additional qualified personnel, our business may suffer; |
• | We rely heavily on third-party commerce platforms to conduct our businesses and if one of those platforms is compromised, our business, financial condition and results of operations could be harmed; |
• | We and our third-party contract manufacturers and suppliers are subject to extensive governmental regulation and may be subject to enforcement if we are not in compliance with applicable requirements; and |
• | Our
recurring losses and significant accumulated deficit have raised substantial doubt regarding our ability to continue as a going concern. |
• | Reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration
statements; |
• | Not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002; and |
• | Reduced disclosure obligations for our annual and quarterly reports, proxy statements and registration statements. |
• | 63,455,837 warrants to purchase our common stock at a weighted average exercise price of $1.18 per share that we issued in the Series F Private Placement, the Acquisitions, the May Private Placement, the December Private Placement (as defined herein) and certain other compensation and financing transactions described herein; |
• | 7,453,480 shares of common stock underlying options to purchase common stock at a weighted average exercise price of $1.74 per share that we granted under the Company’s 2019 Incentive Award Plan (the “2019 Plan” and the “2019 Amended
Plan”) to our directors, executive officers key employees and third-party contractors (of which 4,946,658 options have vested as of November 17, 2020); |
• | 7,346,568 shares of common stock issuable upon conversion of convertible notes that we issued in connection with the December Private Placement, the Halo Acquisition and certain other financing transactions described herein. |
• | 43,603,130 shares of common stock issuable upon the conversion of our Series F Preferred Stock issued in the Series F Private Placement. |
• | establish our brands and reputation as a well-managed enterprise committed to delivering premium quality products to the pet health and wellness industry; |
• | enter into distribution and other strategic arrangements with retailers and other potential distributors of our products; |
• | continue to effectively compete in specialty channels and respond to competitive developments; |
• | continue to
market and sell our products through a multi-channel distribution strategy and achieve joint growth targets with our distribution partners; |
• | expand and maintain brand loyalty; |
• | develop new proprietary value-branded products and product line extensions that appeal to consumers; |
• | maintain and, to the extent necessary, improve our high standards for product quality, safety and integrity; |
• | maintain
sources from suppliers that comply with all federal, state and local laws for the required supply of quality ingredients to meet our growing demand; |
• | identify and successfully enter and market our products in new geographic markets and market segments; |
• | execute value-focused pricing strategies that position our products as premium, great tasting, all natural products offered at a competitive price; |
• | maintain compliance with all federal, state and local laws related to our products; and |
• | attract,
integrate, retain and motivate qualified personnel. |
• | the inability to integrate the respective businesses of Bona Vida, Halo and TruPet in a manner that permits the combined business to achieve the synergies anticipated to result from the acquisitions, which could result in the anticipated benefits of the acquisitions not being realized partly or wholly in the time frame currently anticipated or at all; |
• | integrating personnel from the three companies while maintaining focus on safety and providing consistent, high quality products and customer service; and |
• | performance
shortfalls at one or all of the companies as a result of the diversion of management's attention caused by the acquisitions and integrating the companies' operations. |
• | problems integrating the purchased business, facilities, technologies or products; |
• | issues maintaining uniform standards, procedures, controls and policies; |
• | assumed liabilities, including for compliance issues
prior to the time we will enter into a transaction with such party; |
• | unanticipated costs associated with acquisitions, investments or strategic alliances; |
• | diversion of management's attention from our existing business; |
• | adverse effects on existing business relationships with suppliers, third-party contract manufacturers, and retail customers; |
• | risks
associated with entering new markets in which we have limited or no experience; |
• | potential write-offs of acquired assets and/or an impairment of any goodwill recorded as a result of an acquisition; |
• | potential loss of key employees of acquired businesses; and |
• | increased legal and accounting compliance costs. |
• | the number of shares
of our common stock publicly owned and available for trading; |
• | actual or anticipated quarterly variations in our results of operations or those of our competitors; |
• | our actual or anticipated operating performance and the operating performance of similar companies in our industry; |
• | our announcements or our competitors’ announcements regarding, significant contracts, acquisitions, or strategic investments; |
• | general
economic conditions and their impact on the pet food markets; |
• | the overall performance of the equity markets; |
• | threatened or actual litigation; |
• | changes in laws or regulations relating to our industry; |
• | any major change in our board of directors or management; |
• | publication
of research reports about us or our industry or changes in recommendations or withdrawal of research coverage by securities analysts; and |
• | sales or expected sales of shares of our common stock by us, and our officers, directors, and significant stockholders. |
• | Reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; |
• | Not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002; and |
• | Reduced disclosure obligations for our annual and quarterly reports, proxy statements and registration
statements. |
• | We
will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to the fullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. |
• | We may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law. |
• | We are required
to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that such directors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification. |
• | We will not be obligated pursuant to the indemnification agreements entered into with our directors and executive officers to indemnify a person with respect to proceedings initiated by that person, except with respect to proceedings to enforce an indemnitees right to indemnification or advancement of expenses, proceedings authorized by our board of directors and if offered by us in our sole discretion. |
• | The
rights conferred in our certificate of incorporation are not exclusive, and we are authorized to enter into indemnification agreements with our directors, officers, employees and agents and to obtain insurance to indemnify such persons. |
• | We may not retroactively amend our certificate of incorporation or indemnification agreement provisions to reduce our indemnification obligations to directors, officers, employees and agents. |
• | adverse impacts from the pandemic involving the novel coronavirus known as COVID-19; |
• | our ability to successfully implement our growth strategy; |
• | failure to achieve growth or manage anticipated growth; |
• | our ability to achieve or maintain profitability; |
• | our
significant indebtedness; |
• | our ability to continue as a going concern; |
• | our ability to generate sufficient cash flow to run our operations, service our debt and make necessary capital expenditures; |
• | our ability to establish and maintain effective internal control over financial reporting; |
• | our limited operating history; |
• | our
ability to successfully integrate Bona Vida’s, Halo’s and TruPet’s businesses and realize anticipated benefits with these acquisitions and with other acquisitions or investments we may make; |
• | our dependence on our subsidiaries for payments, advances and transfers of funds due to our holding company status; |
• | our ability to successfully develop additional products and services or successfully commercialize such products and services; |
• | competition
in our market; |
• | our ability to attract new and retain existing customers; |
• | our exposure to product liability claims; |
• | interruption in our sourcing operations; |
• | our or our third-party contract manufacturers’ and suppliers’ ability to comply with legal and regulatory requirements; |
• | our
brand reputation; |
• | compliance with data privacy rules; |
• | our compliance with applicable regulations issued by the U.S. Drug Enforcement Administration (“DEA”), the U.S. Food and Drug Administration (“FDA”), the U.S. Federal Trade Commission (“FTC”), the U.S. Department of Agriculture (“USDA”), and other federal, state and local regulatory authorities, including those regarding marketing pet food, products and supplements with CBD; |
• | uncertainty regarding the status of hemp and hemp-based
products under U.S. law; |
• | risk of our products being recalled for a variety of reasons, including product defects, packaging safety and inadequate or inaccurate labeling disclosure; |
• | risk of shifting customer demand in relation to raw pet foods, premium kibble and canned pet food products, CBD and hemp products for pets and failure to respond to such changes in customer taste quickly and effectively; and |
• | the other risks identified in this prospectus including, without limitation, those under “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as such factors may updated from time to time in our other filings with the SEC. |
In thousands (except shares) | | | 2020 (unaudited) |
Cash and cash equivalents | | | $563 |
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Long-term
debt, including current maturities: | | | |
Loan facilities, net | | | $24,417 |
Notes
payable, net | | | 18,240 |
PPP Loans | | | 852 |
Total
debt, net of debt issuance costs and discounts | | | 43,509 |
Series E preferred stock, $0.001 par value, 2,900,000 shares authorized, 1,387,378 shares issued and outstanding(1) | | | 10,566
|
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Stockholders’ Deficit: | | | |
Common
stock, $0.001 par value, 200,000,000 shares authorized, 49,139,708 shares issued and outstanding | | | 49 |
Additional paid-in capital | | | 214,305 |
Accumulated
deficit | | | (230,923) |
Total stockholders’ deficit | | | (16,569) |
Total
capitalization | | | $26,940 |
(1) | On October 1, 2020, all outstanding shares of Series
E Preferred Stock were exchanged for 3,500 Series F Units, consisting of 3,500 shares of Series F Preferred Stock and 7,000,000 Series F Warrants. |
| | Consolidated | | | Historical
Halo | | | Adjustments | | | Ref. | | | Combined
Pro Forma | |
Net sales | | | $15,577 | | | $32,576 | | | $(3,657) | | | A | | | $44,496
|
Cost of goods sold | | | 9,717 | | | 21,352 | | | (1,418) | | | A | | | 29,651
|
Gross profit | | | 5,860 | | | 11,224 | | | (2,239) | | | | | 14,845
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Operating
expenses: | | | | | | | | | | | |||||
General
and administrative | | | 19,782 | | | 7,521 | | | (4,898) | | | A,
B, C | | | 22,405 |
Share-based compensation | | | 10,280 | | | — | | | 309 | | | D | | | 10,589
|
Sales and marketing | | | 10,138 | | | 6,711 | | | — | | | | | 16,849
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Customer service and warehousing | | | 1,097 | | | — | | | — | | | | | 1,097
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Impairment of intangible asset | | | 889 | | | — | | | — | | | | | 889
| |
Loss on disposal of equipment | | | — | | | 64 | | | — | | | | | 64
| |
Total operating expenses | | | 42,186 | | | 14,296 | | | (4,589) | | | | | 51,893
| |
Loss from operations | | | (36,326) | | | (3,072) | | | 2,350 | | | | | (37,048)
| |
Other (expense) income | | | | | | | | | | | |||||
Interest
expense | | | (670) | | | (272) | | | (3,995) | | | E,F | | | (4,937)
|
Loss on acquisitions | | | (147,376) | | | — | | | — | | | | | (147,376)
| |
Change in fair value of warrant derivative liability | | | (90) | | | — | | | — | | | | | (90)
| |
Total other (expense) income | | | (148,136) | | | (272) | | | (3,995) | | | | | (152,403)
| |
Net and comprehensive loss | | | $(184,462) | | | $(3,344) | | | $(1,645) | | | | | $(189,451)
| |
Preferred dividends | | | 109 | | | — | | | — | | | | | 109
| |
Net and comprehensive loss available to common stockholders | | | $(184,571) | | | $(3,344) | | | $(1,645) | | | | | $(189,560)
| |
Earnings per Share, Basic & Diluted | | | $(5.55) | | | | | | | | | $(5.36)
| |||
Weighted average shares, basic and diluted | | | 33,238,600 | | | | | | | | | 35,372,990 |
1. | Basis of presentation |
2. | Purchase price |
3. | Pro forma adjustments |
A. | Adoption
of ASC 606, Revenue Recognition. To reflect Halo’s adoption of ASC 606 as of the beginning of the fiscal year. The impact of the adoption of this standard on net sales, cost of goods sold, and general and administrative expense approximates $3.7 million, $1.4 million, and $2.3 million, respectively for the period from January 1, 2019 through the Acquisition Date. |
B. | Amortization expense—purchase accounting intangibles. To reflect the amortization of trade name and customer base intangible assets recorded as of the Acquisition Date. The trade name is a finite-lived intangible asset and is being amortized over its
estimated life of 15 years using the straight-line method, which reflects the pattern of economic benefits associated with this asset. Acquired customer relationships are finite-lived intangible assets and are amortized over their estimated life of 7 years using the straight-line method, which approximates the customer attrition rate, reflecting the pattern of economic benefits associated with these assets. Amortization expense relating to these intangible assets approximates $1.5 million for the period from January 1, 2019 through the Acquisition Date. |
C. | Costs of Halo Acquisition. To remove the one-time legal and transaction
related expenses incurred by both Halo and the Company on the acquisition date. The general and administrative expenses associated with the transaction is approximately $4.2 million for the period from January 1, 2019 through the Acquisition Date. |
D. | Stock options granted. To reflect the share-based compensation expense associated with stock options granted to five Halo employees in connection with the closing of the Acquisition. The share-based compensation expense for the options granted approximates $0.3 million for the period from January 1,
2019 through the Acquisition Date. |
E. | Interest expense reduction. To reflect the reduction in interest expense associated with the repayment of the Halo debt on the Acquisition Date offset by the write off of remaining deferred financing costs associated with the Halo debt. The interest expense reduction approximates $0.3 million for the period from January 1, 2019 through the Acquisition Date. Additionally, as a result of the Company settling its line of credit with Franklin Synergy Bank, interest expense is reduced by an additional $0.1 million
for the period from May 6, 2019 (inception date of the Franklin Synergy line of credit) through the Acquisition Date. |
F. | Interest expense—acquisition debt. To reflect the interest expense associated with the incurrence of acquisition related debt under (i) the Facilities Agreement that includes a $20.5 million term loan facility and $7.5 million revolving credit facility and (ii) the Seller Notes. The interest expense associated with such debt approximates $4.4 million for the period from January 1, 2019 through the Acquisition Date. |
Dollars
in thousands | | | 2020 | | | 2019 | | | Change | | | % |
Net
sales | | | $33,302 | | | $11,567 | | | $21,735 | | | 188% |
Cost
of goods sold | | | 20,567 | | | 7,178 | | | 13,389 | | | 187% |
Gross
profit | | | 12,735 | | | 4,389 | | | 8,346 | | | 190% |
| | | | | | | | |||||
Operating
expenses: | | | | | | | | | ||||
General
and administrative | | | 23,298 | | | 12,031 | | | 11,267 | | | 94% |
Share-based
compensation | | | 7,047 | | | 6,708 | | | 339 | | | 5% |
Sales
and marketing | | | 6,203 | | | 8,452 | | | (2,249) | | | (27)% |
Customer
service and warehousing | | | 500 | | | 854 | | | (354) | | | (41)% |
Total
operating expenses | | | 37,048 | | | 28,045 | | | 9,003 | | | 32% |
Loss
from operations | | | $(24,313) | | | $(23,656) | | | $(657) | | | 3% |
Dollars
in thousands | | | 2020 | | | 2019 | | | Change | | | % |
Net
sales | | | $11,135 | | | $3,932 | | | $7,203 | | | 183% |
Cost
of goods sold | | | 6,681 | | | 3,096 | | | 3,585 | | | 116% |
Gross
profit | | | 4,454 | | | 836 | | | 3,618 | | | 433% |
Operating
expenses: | | | | | | | | | ||||
General
and administrative | | | 3,648 | | | 4,856 | | | (1,208) | | | (25)% |
Share-based
compensation | | | 1,543 | | | 2,496 | | | (953) | | | (38)% |
Sales
and marketing | | | 2,396 | | | 2,856 | | | (460) | | | (16)% |
Customer
service and warehousing | | | 148 | | | 303 | | | (155) | | | (51)% |
Total
operating expenses | | | 7,735 | | | 10,511 | | | (2,776) | | | (26)% |
Loss
from operations | | | $(3,281) | | | $(9,675) | | | $6,394 | | | (66)% |
| | Nine Months Ended September 30, | ||||
Dollars
in thousands | | | 2020 | | | 2019 |
Cash
flows (used in) provided by: | | | | | ||
| | $(4,523) | | | $(13,224) | |
Investing
activities | | | (42) | | | 364 |
Financing
activities | | | 4,112 | | | 17,915 |
Net
(decrease) increase in cash and cash equivalents and restricted cash | | | $(453) | | | $5,055 |
• | restrictions on the marketing or manufacturing of a product; |
• | required modification of promotional materials or issuance of corrective marketing information; |
• | issuance
of safety alerts, press releases, or other communications containing warnings or other safety information about a product; |
• | warning or untitled letters; |
• | product seizure or detention; |
• | refusal to permit the import or export of products; |
• | fines, injunctions, or consent decrees;
and |
• | imposition of civil or criminal penalties. |
Name | | | Age | | | Position | | | Director
Since |
| | 80 | | | Chief
Executive Officer | | | n/a | |
| | 40 | | | Chief
Financial Officer | | | n/a | |
Donna Bowden | | | 49 | | | Executive
Vice President | | | n/a |
Anthony Santarsiero | | | 37 | | | Executive
Vice President | | | n/a |
Robert Sauermann | | | 28 | | | Executive
Vice President | | | n/a |
| | 41 | | | Chairman
of the Board of Directors | | | 2019 | |
| | 60 | | | Director | | | 2020 | |
| | 36 | | | Director and Executive Vice President | | | 2019 | |
| | 59 | | | Director | | | 2019 | |
| | 56 | | | Director | | | 2020 | |
| | 51 | | | Director | | | 2019 | |
| | 71 | | | Director | | | 2020 |
Name and Principal Position | | | Year(1) | | | Salary ($) | | | Bonus ($) | | | Stock
Awards ($) | | | Option Awards ($)(2) | | | Non-Equity
Incentive Plan Compensation ($) | | | All Other Compensation ($) | | | Total |
Chief Executive Officer | | | 2019 | | | $192,857 | | | $100,000 | | | $600,000 | | | $3,572,699 | | | $0 | | | $0 | | | $4,465,556 |
| | | | | | | | | | | | | | | | |||||||||
Andreas
Schulmeyer(4) Chief Financial Officer | | | 2019 | | | $105,769 | | | $0 | | | $0 | | | $1,877,285 | | | $0 | | | $37,011 | | | $2,020,065 |
| | | | | | | | | | | | | | | | |||||||||
Anthony
Santarsiero(5) President and Chief Operating Officer | | | 2019 | | | $166,047 | | | 25,000 | | | $0 | | | $3,077,101 | | | $0 | | | $5,740 | | | $3,273,888 |
| | | | | | | | | | | | | | | | |||||||||
Lori
Taylor(6) Former Co-Chief Executive Officer | | | 2019 | | | $139,615 | | | 155,000 | | | $0 | | | $3,424,828 | | | $0 | | | $414,237 | | | $4,133,680 |
| | | | | | | | | | | | | | | | |||||||||
David
Lelong(7) Former President, CEO and CFO | | | 2019 | | | $156,000 | | | $0 | | | $0 | | | $0 | | | $0 | | | $29,982 | | | $185,982
|
| 2018 | | | $96,000 | | | $0 | | | $0 | | | $154,983 | | | $0 | | | $0 | | | $250,983 |
(1) | Messrs. Dalla-Longa and Santarsiero and Ms. Taylor each commenced employment with us in May 2019. Mr. Schulmeyer was appointed as our Chief Financial Officer in June 2019 and commenced employment with us in July 2019. |
(2) | The value in this column reflects the aggregate grant date fair value of the stock option award and the incremental value due to the repricing on December 19, 2019 as computed in accordance with ASC Topic 718. Information regarding the valuation assumptions used in the calculations are included in “Note 15 – Stockholders’ deficit” to our audited consolidated financial statements included in this
prospectus. |
(3) | Mr. Dalla-Longa received (i) a signing bonus of $100,000 as per his employment contract with Better Choice, and (ii) an award of 100,000 shares in lieu of the change of control payment contained in his Bona Vida employment contract. On February 5, 2020, Mr. Dalla-Longa resigned as our Chief Executive Officer and was simultaneously appointed to Executive Vice President, Corporate Development. |
(4) | Mr. Schulmeyer received
(i) $32,876 in compensation for work prior to joining the Company and (ii) $4,135 in matching 401(k) payments. On May 8, 2020, we entered into an agreement with Mr. Schulmeyer pursuant to which he resigned as our Chief Financial Officer effective on May 22, 2020. |
(5) | Mr. Santarsiero received (i) a signing bonus of $25,000 as per his employment contract and (ii) $5,740 in matching 401(k) payments. |
(6) | Ms. Taylor
ceased serving as our co-Chief Executive Officer on September 13, 2019 and her employment with us terminated as of November 12, 2019. She received (i) a sign on bonus of $155,000 as per her employment contract, (ii) $14,000 in car allowance payments, (iii) $300,000 of severance pay, (iv) $70,567 of insurance payments, and (v)$29,670 as a consultant to TruPet. |
(7) | Mr. Lelong ceased serving as our Chief Executive Officer on March 14, 2019 and as our President and Chief Financial Officer on May 28, 2019. Salary includes $124,000 in
accrued compensation. Mr. Lelong received $5,982 in interest on accrued salary payments and $24,000 as a contractor. |
• | “cause” means (i) executive is convicted of, or pleads guilty or nolo contendere to, a felony related to our business; (ii) executive, in carrying out his duties hereunder, has acted with gross negligence or intentional misconduct resulting, in any case, in material harm to us; (iii) executive misappropriates Company funds or otherwise defrauds us including a material amount of money or property; (iv) executive breaches his fiduciary duty to the
Company resulting in material profit to him, directly or indirectly; (v) executive materially breaches any agreement with the Company and fails to cure such breach within 10 days of receipt of notice, unless the act is incapable of being cured; (vi) executive breaches any non-compete or confidential information provision of the NEO Employment Agreement; (vii) executive becomes subject to a preliminary or permanent injunction issued by a United States District Court enjoining executive from violating any securities law administered or regulated by the SEC; (viii) executive becomes subject to a cease and desist order or other order issued by the SEC after an opportunity for a hearing; (ix) executive refuses to carry out a resolution adopted by the board of directors at a meeting in which executive was offered a reasonable opportunity to argue that the resolution
should not be adopted; or (x) executive abuses alcohol or drugs in a manner that interferes with the successful performance of executive’s duties; |
• | “good reason” means any one or more of the following: (i) a material diminution in executive’s authority, duties or responsibilities due to no fault of executive other than temporarily while executive is physically or mentally incapacitated or as required by applicable law; (ii) we require executive to change his principal business office to a location that is greater than 20 miles from executive’s current office, (iii) a change in the executive’s overall compensation or bonus structure such that the executive’s overall compensation is materially diminished; or (iv) any other action or inaction that constitutes a material breach by us under the NEO
Employment Agreement. |
• | “cause” means (i) executive is convicted of, or pleads guilty or nolo contendere to, a felony related to our business; (ii) executive, in carrying out his duties hereunder, has acted with gross negligence or intentional misconduct resulting, in any case, in material harm to us; (iii) executive misappropriates Company funds or otherwise defrauds us including a material
amount of money or property; (iv) executive breaches his fiduciary duty to the Company resulting in material profit to him, directly or indirectly; (v) executive materially breaches any agreement with the Company and fails to cure such breach within 10 days of receipt of notice, unless the act is incapable of being cured; (vi) executive breaches any non-compete or confidential information provision of the Lelong Employment Agreement; (vii) executive becomes subject to a preliminary or permanent injunction issued by a United States District Court enjoining executive from violating any securities law administered or regulated by the SEC; (viii) executive becomes subject to a cease and desist order or other order issued by the SEC after an opportunity for a hearing; (ix) executive
refuses to carry out a resolution adopted by the board of directors at a meeting in which executive was offered a reasonable opportunity to argue that the resolution should not be adopted; or (x) executive abuses alcohol or drugs in a manner that interferes with the successful performance of his duties; |
• | “change of control” has the same meaning given to such term in Treasury Regulation Section 1.409A-3(i)(5); and |
• | “good reason” means any one or more of the following: (i) a material diminution in executive’s authority, duties or responsibilities due to no fault of executive other than temporarily while executive is physically or mentally
incapacitated or as required by applicable law; (ii) we require executive to change his principal business office to a location other than the New York, New York metropolitan area, or (iii) any other action or inaction that constitutes a material breach by us under the Lelong Employment Agreement. |
Named Executive Officer | | | Annual
Base Salary |
| | $300,000 | |
Andreas
Schulmeyer | | | $250,000 |
Anthony Santarsiero | | | $250,000 |
| | $300,000 | |
David Lelong | | | $64,000 |
| | Option
Awards | |||||||||||||
Name | | | Number of Securities Underlying Unexercised
Options (#) Exercisable | | | Number of Securities Underlying
Unexercised Options (#) Unexercisable | | | Equity Incentive Plan
Awards: Number of Securities Underlying Unexercised Unearned Options
(#) | | | Option Exercise Price ($) | | | Option
Expiration Date |
David Lelong | | | 19,231 | | | (a) | | | — | | | $6.76 | | | 12/21/23 |
Anthony
Santarsiero | | | 333,333 | | | —(b) | | | 766,667 | | | 1.82 | | | various |
Andreas
Schulmeyer | | | 141,666 | | | —(c) | | | 728,705 | | | various | | | various |
| | 400,000 | | | —(d) | | | 800,000 | | | 1.82 | | | 5/2/2029 | |
| | 1,150,000 | | | —(e) | | | — | | | 1.82 | | | 5/2/2029 |
(a) | Options fully vested upon the consummation of the May Acquisitions. |
(b) | Options vest on a monthly basis over a two year period (1/24 of award per month). Mr. Santarsiero’s options were issued at various times during the year. |
• | 1,000,000 options were issued at $5.00 per share on May 2, 2019 and repriced to $1.82 per share on December 19, 2019; |
• | 100,000
options were issued at $1.82 per share on December 19, 2019. |
(c) | Options vest on a monthly basis over a two year period (1/24 of award per month). Mr. Schulmeyer’s options were issued at various times during the year. |
• | 500,000 options were issued at $6.35 per share on June 29, 2019 and repriced to $1.82 per share on December 19, 2019; |
• | 100,000 options were issued at
$3.90 per share on August 30, 2019 and repriced to $1.82 per share on December 19, 2019; |
• | 250,000 options were issued at $1.94 per share on December 11, 2019 and repriced to $1.82 per share on December 19, 2019; and |
• | 20,371 options were issued at $2.70 per share on December 31, 2019. |
(d) | Options
vest on a monthly basis over a two year period (1/24 of award per month). The options were issued at $5.00 per share on May 2, 2019 and repriced to $1.82 per share on December 19, 2019. |
(e) | Options fully vested on November 12, 2019 as per the Separation Agreement by and between the Company and Ms. Taylor. The options were issued at $5.00 per share on May 2, 2019 and repriced to $1.82 per share on December 19, 2019. |
Name | | | Fees
Earned or Paid in Cash | | | Stock Awards | | | Option
Awards | | | Non-equity Incentive Plan Compensation | | | All
Other Compensation | | | Total Compensation |
| | $32,534 | | | $N/A | | | $1,488,624 | | | $ | | | $ | | | $1,521,158 | |
Jeff
Davis | | | 32,534 | | | N/A | | | 1,488,624 | | | | | | | 1,521,158 | ||
Michael
Galego | | | 32,534 | | | N/A | | | 1,488,624 | | | | | 15,534(a) | | | 1,536,692 |
(a) | Cash compensation as director of Bona Vida prorated from January 1, 2019 to May 5, 2019. |
Name | | | Options
Outstanding at Fiscal Year End |
Michael Galego | | | 500,000 |
| | 519,231 | |
Jeff Davis | | | 500,000 |
| | Amount
and Nature of Beneficial Ownership(1) | | | % of Total Voting Power | ||||
| | Common
Stock | | | % | | | ||
Name
of Beneficial Owner | | | | | | | |||
Holders
of More than 5% | | | | | | | |||
Navy
Capital Green Fund LP(2) 575 Lexington Avenue, 4th Floor | | | 2,636,533 | | | 5.4% | | | 5.3%
|
Thriving Paws LLC(3) 750 E Main Street, Suite 600 | | | 3,642,452 | | | 7.4% | | | 7.2% |
HH-Halo
LP(4) 2200 Ross Avenue, 50th Floor | | | 3,801,158 | | | 7.7% | | | 7.2% |
Edward
J. Brown Jr TTEE(5) 20 Boulder View | | | 22,666,907 | | | 46.1% | | | 31.9% |
Cavalry
Fund LP(6) 61 Kinderkamack Rd. | | | 17,167,746 | | | 34.9% | | | 26.1% |
James
Frank Allan(7) 127 S. Ocean Rd. New Providence, Bahamas | | | 8,977,890 | | | 18.3% | | | 15.5% |
Filipp
Chebotarev(8) 1900 Main St, Suite 375 | | | 6,402,896 | | | 13.0% | | | 11.7% |
Xuesong
Wu(9) 610 Newport Center Drive, Suite 1260 | | | 3,505,874 | | | 7.1% | | | 6.7% |
Directors
and Executive Officers | | | | | | | |||
Werner
von Pein(10) | | | 216,425 | | | 0.4% | | | 0.4% |
Anthony
Santarserio(11) | | | 1,880,542 | | | 3.8% | | | 3.8% |
Donna
Bowden(12) | | | 90,000 | | | 0.2% | | | 0.2% |
Robert
Sauermann(13) | | | 575,995 | | | 1.2% | | | 1.2% |
Sharla
Cook(14) | | | 40,000 | | | 0.1% | | | 0.1% |
| | 2,839,891 | | | 5.8% | | | 5.7% | |
Michael
Young(16) | | | 6,033,013 | | | 12.3% | | | 11.2% |
John
M. Word III(17) | | | 32,048,732 | | | 65.2% | | | 42.0% |
Michael
Close(18) | | | 1,150,000 | | | 2.3% | | | 2.3% |
Clinton
Gee(19) | | | 1,150,000 | | | 2.3% | | | 2.3% |
Jeff
Davis(20) | | | 416,666 | | | 0.8% | | | 0.8% |
Lori
Taylor(21) | | | 8,082,027 | | | 16.4% | | | 15.7% |
All
directors and executive officers as a group (12 persons)(22) | | | 54,523,290 | | | 111.0% | | | 85.6% |
* | Represents beneficial ownership of less than 1% |
(1) | Beneficial ownership of shares and percentage ownership are determined in accordance with the SEC’s rules. In calculating the number of shares beneficially owned by an individual or entity and the percentage ownership of that individual or entity, shares underlying options, warrants or restricted stock units held by that individual or entity that are either currently exercisable or exercisable within 60 days from the date hereof are deemed outstanding. These shares, however, are not deemed outstanding for the purpose of computing
the percentage ownership of any other individual or entity. Unless otherwise indicated and subject to community property laws where applicable, the individuals and entities named in the table above have sole voting and investment power with respect to all shares of our common stock shown as beneficially owned by them. |
(2) | Includes (i) 2,482,687 shares of common stock and (ii) 153,846 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020. Navy Capital Green Management, LLC (“Navy Management”) is the investment advisor of Navy Capital Green Fund LP (“Green Fund”) and consequently has voting control and investment discretion over securities held by Green Fund. Mr. Sean Stiefel, Chief Executive Officer of Navy Management
has voting control over Green Fund. As a result of the foregoing, each of Mr. Sean Stiefel and Navy Management may be deemed to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended) of the shares of common stock beneficially owned by Green Fund. |
(3) | Includes (i) 1,884,989 shares of common stock, (ii) 1,450,469 shares of common stock underlying subordinated convertible notes exercisable within 60 days of November 17, 2020, and (iii) 306,994 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020. Thriving Paws, LLC (“Thriving Paws”) is controlled by Pegasus Partners III, L.P. (“PP III”). PP III is managed by Pegasus
Capital Advisors III, L.P. (“PCA III”), which is controlled, indirectly, by Craig Cogut. As a result of the foregoing, each of Mr. Cogut, PCA III and PP III may be deemed to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended) of the shares of common stock beneficially owned by Thriving Paws. |
(4) | Includes (i) 232,976 shares of common stock, (ii) 2,944,891 shares of common stock underlying subordinated convertible notes exercisable within 60 days of November 17, 2020 and (iii) 623,291 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020. Thomas O. Hicks is the managing member of HEP Partners LLC, which is the investment
manager of HH-Halo LP (“HH-Halo”), and consequently has voting control and investment discretion over securities held by HH-Halo. Mack H. Hicks is the manager of HH-Halo GP LLC, which is the general partner of HH-Halo GP LP, the general partner of HH-Halo. As a result of the foregoing, each of Thomas O. Hicks and Mack H. Hicks may be deemed to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended) of the shares of common stock beneficially owned by HH-Halo. Each of Thomas O. Hicks and Mack H. Hicks disclaims beneficial ownership of such shares. |
(5) | Includes (i) 699,999 shares of common stock, (ii) 1,461,408 shares of common stock underlying subordinated convertible notes exercisable within 60 days of November 17,
2020, (iii) 10,505,500 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iv) 10,000,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. Edward Brown may be deemed to have beneficial ownership of such shares. |
(6) | Includes (i) 503,641 shares of common stock, (ii) 8,664,105 shares of our common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iii) 8,000,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. Thomas Walsh is the managing member of
Cavalry Fund LP (“Cavalry”), and consequently has voting control and investment discretion over securities held by Cavalry. As a result of the foregoing, Thomas Walsh may be deemed to have beneficial ownership of the shares of common stock beneficially owned by Cavalry. |
(7) | Includes (i) 182,692 shares of common stock held by Roundtable Growth Fund, (ii) 264,744 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held by Roundtable Growth Fund, (iii) 25,000 shares of common stock held by Roundtable Growth Fund Ltd., (iv) 25,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held by Roundtable Growth Fund Ltd., (v) 80,454 shares
of common stock held by James Allan, (vi) 4,200,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held by James Allan and (vii) 4,200,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020 held by James Allan. Roundtable Growth Fund and Roundtable Growth Fund Ltd. are managed by James Allan, who may be deemed to have beneficial ownership. |
(8) | Includes (i) 483,011 shares of common stock held by CSPG TP Holdings LLC, (ii) 1,230,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held by CSPG TP Holdings LLC, (iii) 1,230,000 shares of common
stock underlying preferred stock convertible within 60 days of November 17, 2020 held by CSPG TP Holdings LLC, (iv) 459,885 shares of common stock held by Cambridge SPG IRA Fund, (v) 1,500,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held by Cambridge SPG IRA Fund and (vi) 1,500,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020 held by Cambridge SPG IRA Fund. CSPG TP Holdings LLC and Cambridge SPG IRA Fund are managed by Filipp Chebotarev, who may be deemed to have beneficial ownership. |
(9) | Includes (i) 505,874 shares of common stock held by Everplus F&B Fund LLC,
(ii) 800,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held by Everplus F&B Fund LLC, (iii) 800,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020 held by Everplus F&B Fund LLC, (iv) 700,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held by Everplus Capital LLC and (v) 700,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020 held by Everplus Capital LLC. Everplus F&B Fund LLC and Everplus Capital LLC are managed by Xuesong Yu, who may be deemed to have beneficial ownership. |
(10) | Includes
(i) 16,425 shares of common stock and (ii) 200,000 shares of common stock underlying options exercisable within 60 days of November 17, 2020. |
(11) | Includes (i) 957,209 shares of common stock, (ii) 883,333 shares of common stock underlying options exercisable within 60 days of November 17, 2020, (iii) 20,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iv) 20,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(12) | Includes
(i) 50,000 shares of common stock underlying options exercisable within 60 days of November 17, 2020, (ii) 20,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iii) 20,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(13) | Includes (i) 133,334 shares of common stock underlying options exercisable within 60 days of November 17, 2020, (ii) 35,446 shares of common stock underlying subordinated convertible notes exercisable within 60 days of November 17, 2020, (iii) 207,215
shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iv) 200,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(14) | Includes (i) 20,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 20,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(15) | Includes (i) 1,759,891 shares of common stock, (ii) 1,000,000 shares of common stock underlying options exercisable within 60 days of November 17, 2020, (iii) 40,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iv) 40,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(16) | Includes
(i) 1,046,281 shares of common stock, (ii) 435,897 shares of common stock underlying options exercisable within 60 days of November 17, 2020, (iii) 2,325,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020, (iv) 2,000,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020 and (v) 225,835 shares of common stock held by Cottingham Capital Partners LLC, which is managed by Mr. Young. |
(17) | Includes (i) 4,906,824 shares of common stock, (ii) 1,461,408 shares of common stock underlying subordinated convertible notes exercisable within 60 days of November 17,
2020, and (iii) 15,680,500 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iv) 10,000,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(18) | Includes (i) 150,000 shares of common stock, (ii) 800,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iii) 200,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(19) | Includes
(i) 150,000 shares of common stock, (ii) 800,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iii) 200,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(20) | Includes 416,666 shares of common stock underlying options exercisable within 60 days of November 17, 2020. |
(21) | Includes (i) 5,632,027 shares of common stock held directly by Blue Sky Holdings Trust which are beneficially owned by Lori
Taylor, (ii) 1,150,000 shares of common stock underlying options exercisable within 60 days of November 17, 2020 held directly by Ms. Taylor, and (iii) 1,300,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held directly by Ms. Taylor. Ms. Taylor is the trustee, compliance officer, and protector of Blue Sky Holdings Trust. |
| | Beneficial Ownership Prior
to Registration | | | Shares Registered Pursuant to this Prospectus (Maximum Number that May be Sold) | | | Beneficial
Ownership after Registration Assuming All Shares are Sold | |||||||
| | Shares | | | % | | | Shares
| | | % | ||||
Selling Stockholders | | | | | | | | | | | |||||
Holders
of More than 5% | | | | | | | | | | | |||||
Edward
J Brown Jr. TTEE(1) | | | 22,666,907 | | | 31.9% | | | 20,000,000 | | | — | | | — |
Cavalry
Fund LP(2) | | | 17,167,746 | | | 26.1% | | | 16,153,846 | | | — | | | — |
James
Frank Allan(3) | | | 8,977,890 | | | 15.5% | | | 8,400,000 | | | — | | | — |
Filipp
Chebotarev(4) | | | 6,402,896 | | | 11.7% | | | 5,460,000 | | | — | | | — |
Xuesong
Wu(5) | | | 3,505,874 | | | 6.7% | | | 3,000,000 | | | — | | | — |
| | | | | | | | | | ||||||
Directors
and Executive Officers | | | | | | | | | | | |||||
Anthony
Santarsiero(6) | | | 1,880,542 | | | 3.8% | | | 40,000 | | | 883,333 | | | 1.8% |
Donna
Bowden(7) | | | 90,000 | | | * | | | 40,000 | | | 50,000 | | | * |
Robert
Sauermann(8) | | | 575,995 | | | 1.2% | | | 400,000 | | | 133,333 | | | * |
Sharla
Cook(9) | | | 40,000 | | | * | | | 40,000 | | | — | | | — |
| | 2,839,891 | | | 5.6% | | | 80,000 | | | 1,000,000 | | | 2.0% | |
Michael
Young(11) | | | 6,033,013 | | | 11.1% | | | 4,000,000 | | | 435,897 | | | * |
John
M. Word III(12) | | | 32,048,732 | | | 42.0% | | | 20,000,000 | | | 150,000 | | | * |
Michael
Close(13) | | | 1,150,000 | | | 2.3% | | | 400,000 | | | 150,000 | | | * |
Clinton
Gee(14) | | | 1,150,000 | | | 2.3% | | | 400,000 | | | 150,000 | | | * |
| | | | | | | | | | ||||||
Other
Selling Stockholders | | | | | | | | | | | |||||
Glen
Gibbons(15) | | | 1,941,097 | | | 3.8% | | | 1,392,060 | | | — | | | — |
Richard
Feldman(16) | | | 188,000 | | | * | | | 48,000 | | | — | | | — |
Mark
Photoglou(17) | | | 1,200,000 | | | 2.4% | | | 1,200,000 | | | — | | | — |
Daniel
Crenshaw(18) | | | 320,000 | | | * | | | 320,000 | | | — | | | — |
Kimberly
Word(19) | | | 52,000 | | | * | | | 52,000 | | | — | | | — |
Jessica
Word(20) | | | 58,200 | | | * | | | 58,200 | | | — | | | — |
Jarrod
Word(21) | | | 60,000 | | | * | | | 60,000 | | | — | | | — |
| | Beneficial
Ownership Prior to Registration | | | Shares Registered Pursuant to this Prospectus (Maximum Number
that May be Sold) | | | Beneficial Ownership after Registration Assuming All Shares are Sold | |||||||
| | Shares
| | | % | | | Shares | | | % | ||||
David
Montalvo(22) | | | 4,000 | | | * | | | 4,000 | | | — | | | — |
Richard
Schefer(23) | | | 1,000,000 | | | 2.0% | | | 1,000,000 | | | — | | | — |
Brian
Freifeld(24) | | | 600,000 | | | 1.2% | | | 600,000 | | | — | | | — |
Reuben
Taub(25) | | | 400,000 | | | * | | | 400,000 | | | — | | | — |
Matthew
B. Silvers(26) | | | 400,000 | | | * | | | 400,000 | | | — | | | — |
Jon
Andrew Gordon(27) | | | 200,000 | | | * | | | 200,000 | | | — | | | — |
Feivel
Gottleib(28) | | | 120,000 | | | * | | | 120,000 | | | — | | | — |
Everett
A Sheslow(29) | | | 192,000 | | | * | | | 192,000 | | | — | | | — |
Samuel
Lobell(30) | | | 40,000 | | | * | | | 40,000 | | | — | | | — |
Nicole
J. Lopez(31) | | | 600,000 | | | 1.2% | | | 600,000 | | | — | | | — |
Mario
de Tomasi(32) | | | 400,000 | | | * | | | 400,000 | | | — | | | — |
Justin
M. Turner(33) | | | 760,000 | | | 1.5% | | | 760,000 | | | — | | | — |
David
Henry Miller(34) | | | 400,000 | | | * | | | 400,000 | | | — | | | — |
Stuart
Wollach(35) | | | 200,000 | | | * | | | 200,000 | | | — | | | — |
Gregory
Genske(36) | | | 240,000 | | | * | | | 240,000 | | | — | | | — |
Jason
DeAngelo(37) | | | 80,000 | | | * | | | 80,000 | | | — | | | — |
Joseph
Stanovich(38) | | | 80,000 | | | * | | | 80,000 | | | — | | | — |
Irene
Trujillo Garcia(39) | | | 60,000 | | | * | | | 60,000 | | | — | | | — |
Michael
Neligan(40) | | | 40,000 | | | * | | | 40,000 | | | — | | | — |
Alan
Uryniak(41) | | | 102,567 | | | * | | | 102,567 | | | — | | | — |
* | Represents beneficial ownership of less than 1% |
(1) | Includes (i) 699,999 shares of common stock, (ii) 1,461,408 shares of common stock underlying subordinated convertible notes exercisable within 60 days of November 17, 2020, (iii) 10,505,500 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iv) 10,000,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. Edward Brown may be deemed to have beneficial ownership (as determined under
Section 13(d) of the Securities Exchange Act of 1934, as amended) of such shares. |
(2) | Includes (i) 503,641 shares of common stock, (ii) 8,664,105 shares of our common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iii) 8,000,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. Thomas Walsh is the managing member of Cavalry Fund LP (“Cavalry”), and consequently has voting control and investment discretion over securities held by Cavalry. As a result of the foregoing, Thomas Walsh may be deemed to have beneficial ownership of the shares of common stock beneficially owned by Cavalry. |
(3) | Includes
(i) 182,692 shares of common stock held by Roundtable Growth Fund, (ii) 264,744 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held by Roundtable Growth Fund, (iii) 25,000 shares of common stock held by Roundtable Growth Fund Ltd., (iv) 25,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held by Roundtable Growth Fund Ltd., (v) 80,454 shares of common stock held by James Allan, (vi) 4,200,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held by James Allan and (vii) 4,200,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020 held by James Allan. Roundtable Growth Fund and Roundtable Growth
Fund Ltd. are managed by James Allan, who may be deemed to have beneficial ownership. |
(4) | Includes (i) 483,011 shares of common stock held by CSPG TP Holdings LLC, (ii) 1,230,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held by CSPG TP Holdings LLC, (iii) 1,230,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020 held by CSPG TP Holdings LLC, (iv) 459,885 shares of common stock held by Cambridge SPG IRA Fund, (v) 1,500,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held by Cambridge SPG IRA Fund and (vi) 1,500,000 shares of
common stock underlying preferred stock convertible within 60 days of November 17, 2020 held by Cambridge SPG IRA Fund. CSPG TP Holdings LLC and Cambridge SPG IRA Fund are managed by Filipp Chebotarev, who may be deemed to have beneficial ownership. |
(5) | Includes (i) 505,874 shares of common stock held by Everplus F&B Fund LLC, (ii) 800,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held by Everplus F&B Fund LLC, (iii) 800,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020 held by Everplus F&B Fund LLC, (iv) 700,000 shares of common stock underlying warrants
exercisable within 60 days of November 17, 2020 held by Everplus Capital LLC and (v) 700,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020 held by Everplus Capital LLC. Everplus F&B Fund LLC and Everplus Capital LLC are managed by Xuesong Yu, who may be deemed to have beneficial ownership. |
(6) | Includes (i) 957,209 shares of common stock, (ii) 883,333 shares of common stock underlying options exercisable within 60 days of November 17, 2020, (iii) 20,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iv) 20,000 shares
of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(7) | Includes (i) 50,000 shares of common stock underlying options exercisable within 60 days of November 17, 2020, (ii) 20,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iii) 20,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(8) | Includes
(i) 133,334 shares of common stock underlying options exercisable within 60 days of November 17, 2020, (ii) 35,446 shares of common stock underlying subordinated convertible notes exercisable within 60 days of November 17, 2020, (iii) 207,215 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iv) 200,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(9) | Includes (i) 20,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 20,000
shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(10) | Includes (i) 1,759,891 shares of common stock, (ii) 1,000,000 shares of common stock underlying options exercisable within 60 days of November 17, 2020, (iii) 40,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iv) 40,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(11) | Includes
(i) 1,046,281 shares of common stock, (ii) 435,897 shares of common stock underlying options exercisable within 60 days of November 17, 2020, (iii) 2,325,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020, (iv) 2,000,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020 and (v) 225,835 shares of common stock held by Cottingham Capital Partners LLC, which is managed by Mr. Young. |
(12) | Includes (i) 4,906,824 shares of common stock, (ii) 1,461,408 shares of common stock underlying subordinated convertible notes exercisable within 60 days of November 17,
2020, (iii) 15,680,500 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iv) 10,000,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(13) | Includes (i) 150,000 shares of common stock, (ii) 800,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iii) 200,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(14) | Includes
(i) 150,000 shares of common stock, (ii) 800,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iii) 200,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(15) | Includes (i) 411,426 shares of common stock, (ii) 696,030 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020, (iii) 696,030 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020 and (iv) 137,611 shares of common stock underlying warrants exercisable within 60 days of November 17,
2020 held by Caravel CAD Fund Ltd. Caravel CAD Fund Ltd. is managed by Mr. Gibbons, who may be deemed to have beneficial ownership. |
(16) | Includes (i) 70,000 shares of common stock, (ii) 94,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (iii) 24,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020, all held by Wilkins Heights Capital Management, LLC. Wilkins Heights Capital Management, LLC is managed by Richard Feldman, who may be deemed to have beneficial ownership. |
(17) | Includes
(i) 600,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 600,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(18) | Includes (i) 160,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 160,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(19) | Includes (i)
26,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 26,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(20) | Includes (i) 29,100 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 29,100 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(21) | Includes (i) 30,000
shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 30,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(22) | Includes (i) 2,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 2,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(23) | Includes (i) 500,000 shares of
common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 500,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(24) | Includes (i) 300,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 300,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020, held by Platinum Point Capital LLC. Platinum Point Capital LLC is managed by Brian Freifeld, who may be deemed to have beneficial ownership. |
(25) | Includes
(i) 200,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 200,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(26) | Includes (i) 200,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 200,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(27) | Includes (i)
100,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 100,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(28) | Includes (i) 60,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 60,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(29) | Includes (i) 50,000
shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held by Everett A. Sheslow (ii) 50,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020 held by Everett A. Sheslow, (iii) 26,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held by Everett A. Sheslow Trust (iv) 26,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020 held by Everett A. Sheslow Trust, (v) 20,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 held by EA Sheslow, Inc. and (vi) 20,000 shares of common stock underlying preferred stock convertible
within 60 days of November 17, 2020 held by EA Sheslow, Inc. Mr. Sheslow is the trustee of Everett A. Sheslow Trust. EA Sheslow, Inc. is managed by Mr. Sheslow, who may be deemed to have beneficial ownership. |
(30) | Includes (i) 20,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 20,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(31) | Includes (i) 300,000 shares of common
stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 300,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020, all held by Samwise Ventures LLC. Samwise Ventures LLC is managed by Nicole Lopez, who may be deemed to have beneficial ownership. |
(32) | Includes (i) 200,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 200,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020, all held by Simar Holdings Corp. Simar Holdings Corp. is managed by Mario
De Tomasi, who may be deemed to have beneficial ownership. |
(33) | Includes (i) 360,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 400,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(34) | Includes (i) 200,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 200,000 shares of common stock underlying preferred stock convertible within 60 days of November 17,
2020, all held by Access Asia Limited. Access Asia Limited is managed by David Miller, who may be deemed to have beneficial ownership. |
(35) | Includes (i) 100,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 100,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(36) | Includes (i) 140,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 100,000 shares of common
stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(37) | Includes (i) 40,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 40,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(38) | Includes (i) 40,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 40,000 shares of common stock underlying
preferred stock convertible within 60 days of November 17, 2020. |
(39) | Includes (i) 30,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 30,000 shares of common stock underlying preferred stock convertible within 60 days of November 17, 2020. |
(40) | Includes (i) 20,000 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020 and (ii) 20,000 shares of common stock underlying preferred
stock convertible within 60 days of November 17, 2020. |
(41) | Includes (i) 25,641 shares of common stock and (ii) 76,926 shares of common stock underlying warrants exercisable within 60 days of November 17, 2020, all held by Red Diamond Partners LLC. Red Diamond Partners LLC is managed by Alan Uryniak, who may be deemed to have beneficial ownership. |
Participants | | | TruPet
Acquisition | | | Bona Vida Acquisition | | | May
Private Placement | |||
| | Common Stock | | | Common
Stock | | | Common Stock | | | Warrants | |
5%
or Greater Shareholders(1) | | | | | | | | | ||||
Lori
R. Taylor | | | 5,632,027 | | | — | | | — | | | — |
| | 4,056,824 | | | | | 333,333 | | | 333,333 | ||
| | | | | | | | |||||
Officers
and Directors(2) | | | | | | | | | ||||
Damian
M. Dalla-Longa | | | — | | | 1,759,891 | | | — | | | — |
Andreas
Schulmeyer | | | — | | | — | | | — | | | — |
Anthony
Santarsiero | | | 957,209 | | | — | | | — | | | — |
Michael
Galego | | | — | | | 131,031 | | | — | | | — |
| | 17,504 | | | 724,286 | | | — | | | — | |
| | — | | | — | | | — | | | — |
(1) | Additional details regarding these shareholders and their equity holdings are provided in the section titled “Security Ownership of Principal Stockholders and Management.” |
(2) | Additional details regarding these shareholders and their equity holdings are provided in the section titled “Security Ownership of Principal Stockholders and Management.” |
• | for
any breach of their duty of loyalty to us or our stockholders; |
• | for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
• | for unlawful payment of dividend or unlawful stock repurchase or redemption, as provided under Section 174 of the DGCL; or |
• | for any transaction from which the director derived an improper personal benefit. |
• | any person who is, or at any time during the applicable period was, one of our executive officers, one of our directors, or a nominee to become one of our directors; |
• | any person who is known by us to be the beneficial owner of more than 5.0% of any class of our voting securities; |
• | any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent,
spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, executive officer or a beneficial owner of more than 5.0% of any class of our voting securities, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5.0% of any class of our voting securities; and |
• | any firm, corporation or other entity in which any of the foregoing persons is employed or is a general partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest in any class of the Company’s voting securities. |
• | for any breach of their duty of loyalty to us or our stockholders; |
• | for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
• | for unlawful payment of dividend or unlawful stock repurchase or redemption, as provided under Section 174 of the DGCL; or |
• | for
any transaction from which the director derived an improper personal benefit. |
Plan category | | | Number
of securities to be issued upon exercise of outstanding options, warrants and rights | | | Weighted
average exercise price of outstanding options, warrants and rights(2) | | | Number
of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in
column (a)) |
| | (a) | | | (b) | | | (c) | |
Equity
compensation plans approved by stockholders(1) | | | 7,753,371 | | | $1.82 | | | 1,246,629 |
Total | | | 7,753,371 | | | $1.82 | | | 1,246,629 |
(1) | On April 29, 2019, the Company adopted the 2019 Plan, which was subsequently amended and restated on December 19, 2019. |
(2) | As of December 31, 2019, the weighted-average exercise price of outstanding options under Incentive Plan was $1.82 per share. |
• | U.S. expatriates and former citizens or long-term residents of the United States; |
• | persons
subject to the alternative minimum tax; |
• | persons holding our common stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment; |
• | banks, insurance companies, and other financial institutions; |
• | brokers, dealers or traders in securities; |
• | “controlled foreign corporations,” “passive
foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax; |
• | partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein); |
• | tax-exempt organizations or governmental organizations; |
• | persons deemed to sell our common stock under the constructive sale provisions of the Code; |
• | persons
who hold or receive our common stock pursuant to the exercise of any employee stock option or otherwise as compensation; |
• | persons subject to special tax accounting rules as a result of any item of gross income with respect to our common stock being taken into account in an applicable financial statement; |
• | tax-qualified retirement plans; and |
• | “qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation created or organized in or under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate, the
income of which is subject to U.S. federal income tax regardless of its source; or |
• | a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code) or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes. |
• | the
gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such gain is attributable); |
• | the Non-U.S. Holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met; or |
• | our common stock constitutes a United States real property interest (“USRPI”) by reason of our status as a United States real property holding corporation (“USRPHC”) for U.S. federal income
tax purposes. |
• | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
• | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate
the transaction; |
• | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
• | an exchange distribution in accordance with the rules of the applicable exchange; |
• | privately negotiated transactions; |
• | settlement of short sales entered into after the effective date of the registration statement of which this prospectus
is a part; |
• | broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share; |
• | a combination of any such methods of sale; |
• | through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
• | any other method permitted pursuant
to applicable law; or |
• | under Rule 144, Rule 144A or Regulation S under the Securities Act, if available, rather than under this prospectus. |
| | Page | |
Better
Choice Company Inc. | | | |
Interim Condensed Consolidated Financial Statements (Unaudited) | | | |
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Annual Financial Statements | | | |
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TruPet LLC | | | |
Annual
Financial Statements | | | |
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Bona Vida, Inc. | | | |
Annual
Financial Statements | | | |
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Interim Financial Statements (Unaudited) | | | |
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Halo,
Purely for Pets, Inc. | | | |
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Financial
Statements | | | |
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Financial
Statements | | | |
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| | 2020 Unaudited | | | 2019 Audited | |
Assets | | | | | ||
Cash
and cash equivalents | | | $563 | | | $2,361 |
Restricted
cash | | | 1,518 | | | 173 |
Accounts
receivable, net | | | 5,629 | | | 5,824 |
Inventories,
net | | | 5,122 | | | 6,580 |
Prepaid
expenses and other current assets | | | 2,005 | | | 2,641 |
Total
Current Assets | | | 14,837 | | | 17,579 |
Property
and equipment, net | | | 305 | | | 417 |
Right-of-use
assets, operating leases | | | 718 | | | 951 |
Intangible
assets, net | | | 13,496 | | | 14,641 |
Goodwill | | | 18,614 | | | 18,614 |
Other
assets | | | 1,876 | | | 1,330 |
Total
Assets | | | $49,846 | | | $53,532 |
Liabilities
& Stockholders’ Deficit | | | | | ||
Current Liabilities | | | | | ||
Short
term loan, net | | | $19,369 | | | $16,061 |
Line
of credit, net | | | — | | | 4,819 |
PPP
loans | | | 458 | | | — |
Other
liabilities | | | 1,727 | | | 500 |
Accounts
payable | | | 4,090 | | | 4,049 |
Accrued
liabilities | | | 5,371 | | | 4,721 |
Deferred
revenue | | | 305 | | | 311 |
Operating
lease liability, current portion | | | 395 | | | 345 |
Warrant
derivative liability | | | 102 | | | 2,220 |
Total
Current Liabilities | | | 31,817 | | | 33,026 |
Non-current
Liabilities | | | | | ||
Notes payable, net | | | 18,240 | | | 16,370 |
Line
of credit, net | | | 5,048 | | | — |
PPP
loans | | | 394 | | | — |
Operating
lease liability | | | 350 | | | 641 |
Total
Non-current Liabilities | | | 24,032 | | | 17,011 |
Total
Liabilities | | | 55,849 | | | 50,037 |
Redeemable
Series E Convertible Preferred Stock | | | | | ||
Redeemable
Series E preferred stock, $0.001 par value, 2,900,000 shares authorized, 1,387,378 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively | | | 10,566 | | | 10,566 |
Stockholders’
Deficit | | | | | ||
Common
stock, $0.001 par value, 200,000,000 and 88,000,000 shares authorized as of September 30, 2020 and December 31, 2019, respectively, and 49,139,708 and 47,977,390 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively | | | 49 | | | 48 |
Additional
paid-in capital | | | 214,305 | | | 194,150 |
Accumulated
deficit | | | (230,923) | | | (201,269) |
Total
Stockholders’ Deficit | | | (16,569) | | | (7,071) |
Total
Liabilities, Redeemable Preferred Stock, and Stockholders’ Deficit | | | $49,846 | | | $53,532 |
| | Nine Months Ended September 30, | | | Three
Months Ended | |||||||
| | 2020 | | | 2019 | | | 2020 | | | 2019 | |
Net
sales | | | $33,302 | | | $11,567 | | | $11,135 | | | $3,932 |
Cost
of goods sold | | | 20,567 | | | 7,178 | | | 6,681 | | | 3,096 |
Gross
profit | | | 12,735 | | | 4,389 | | | 4,454 | | | 836 |
Operating
expenses: | | | | | | | | | ||||
General
and administrative | | | 23,298 | | | 12,031 | | | 3,648 | | | 4,856 |
Share-based
compensation | | | 7,047 | | | 6,708 | | | 1,543 | | | 2,496 |
Sales
and marketing | | | 6,203 | | | 8,452 | | | 2,396 | | | 2,856 |
Customer
service and warehousing | | | 500 | | | 854 | | | 148 | | | 303 |
Total
operating expenses | | | 37,048 | | | 28,045 | | | 7,735 | | | 10,511 |
Loss
from operations | | | (24,313) | | | (23,656) | | | (3,281) | | | (9,675) |
Other
expense (income): | | | | | | | | | ||||
Interest
expense, net | | | 7,268 | | | 165 | | | 2,537 | | | 41 |
Loss
on extinguishment of debt | | | 88 | | | — | | | 88 | | | — |
Loss
on acquisitions | | | — | | | 147,376 | | | — | | | (2,612) |
Change
in fair value of warrant derivative liability | | | (2,118) | | | (886) | | | (4,213) | | | (1,079) |
Total
other expense (income), net | | | 5,238 | | | 146,655 | | | (1,588) | | | (3,650) |
Net
and comprehensive loss | | | (29,551) | | | (170,311) | | | (1,693) | | | (6,025) |
Preferred
dividends | | | 103 | | | 70 | | | 35 | | | 43 |
Net
and comprehensive loss available to common stockholders | | | $(29,654) | | | $(170,381) | | | $(1,728) | | | $(6,068) |
| | | | | | | | |||||
Weighted
average number of shares outstanding, basic and diluted | | | 48,809,740 | | | 28,624,230 | | | 48,961,447 | | | 43,575,010 |
Loss
per share, basic and diluted | | | $(0.61) | | | $(5.95) | | | $(0.04) | | | $(0.14) |
| | Common Stock | | | | | | | | | Redeemable
Series E Convertible Preferred Stock | ||||||||||
| | Shares | | | Amount | | | Additional
Paid-In Capital | | | Accumulated Deficit | | | Total
Stockholders’ Deficit | | | Shares | | | Amount | |
Balance
as of December 31, 2019 | | | 47,977,390 | | | $48 | | | $194,150 | | | $(201,269) | | | $(7,071) | | | 1,387,378 | | | $10,566 |
Shares
issued pursuant to a private placement | | | 308,642 | | | — | | | 500 | | | — | | | 500 | | | — | | | — |
Share-based
compensation | | | 455,956 | | | 1 | | | 2,484 | | | — | | | 2,485 | | | — | | | — |
Shares
and warrants issued to third party for contract termination | | | 72,720 | | | — | | | 198 | | | — | | | 198 | | | — | | | — |
Shares
issued to third parties for services | | | 125,000 | | | — | | | 125 | | | — | | | 125 | | | — | | | — |
Warrants
issued to third parties for services | | | — | | | — | | | 2,594 | | | — | | | 2,594 | | | — | | | — |
Net
and comprehensive loss available to common stockholders | | | — | | | — | | | — | | | (9,488) | | | (9,488) | | | — | | | — |
Balance
as of March 31, 2020 | | | 48,939,708 | | | $49 | | | $200,051 | | | $(210,757) | | | $(10,657) | | | 1,387,378 | | | $10,566 |
Warrants
issued to third parties for services | | | — | | | — | | | 7,390 | | | — | | | 7,390 | | | — | | | — |
Share-based
compensation | | | — | | | — | | | 3,020 | | | — | | | 3,020 | | | — | | | — |
Warrants
issued in connection with June 2020 Notes | | | — | | | — | | | 337 | | | — | | | 337 | | | — | | | — |
Beneficial
conversion feature of June 2020 Notes | | | — | | | — | | | 1,163 | | | — | | | 1,163 | | | — | | | — |
Modification
of conversion feature for November 2019 Notes, Seller Notes, and ABG Notes | | | — | | | — | | | 528 | | | — | | | 528 | | | — | | | — |
Modification
of warrants | | | — | | | — | | | 43 | | | — | | | 43 | | | — | | | — |
Net
and comprehensive loss available to common stockholders | | | — | | | — | | | — | | | (18,438) | | | (18,438) | | | — | | | — |
Balance
as of June 30, 2020 | | | 48,939,708 | | | $49 | | | $212,532 | | | $(229,195) | | | $(16,614) | | | 1,387,378 | | | $10,566 |
Shares
issued pursuant to warrant exercise | | | 200,000 | | | — | | | — | | | — | | | — | | | — | | | — |
Share-based
compensation | | | — | | | — | | | 1,543 | | | — | | | 1,543 | | | — | | | — |
Warrants
issued in connection with ABL Facility | | | — | | | — | | | 230 | | | — | | | 230 | | | — | | | — |
Net
and comprehensive loss available to common stockholders | | | — | | | — | | | — | | | (1,728) | | | (1,728) | | | — | | | — |
Balance
as of September 30, 2020 | | | 49,139,708 | | | $49 | | | $214,305 | | | $(230,923) | | | $(16,569) | | | 1,387,378 | | | $10,566 |
| | Common Stock | | | Series
A Preferred Units | | | | | | | | | Redeemable
Series E Convertible Preferred Stock | |||||||||||||
| | Shares | | | Amount | | | Shares | | | Amount | | | Additional
paid-in capital | | | Accumulated deficit | | | Total
Stockholders’ Deficit | | | Shares | | | Amount | |
Balance
as of December 31, 2018 | | | 11,661,485 | | | $12 | | | 2,391,403 | | | $2 | | | $13,642 | | | $(16,698) | | | $(3,042) | | | — | | | $— |
Shares
issued pursuant to a private placement – net proceeds | | | — | | | — | | | 69,115 | | | — | | | 150 | | | — | | | 150 | | | | | ||
Share-based
compensation | | | 18,964 | | | — | | | — | | | — | | | 206 | | | — | | | 206 | | | — | | | — |
Net
and comprehensive loss available to common stockholders | | | — | | | — | | | — | | | — | | | — | | | (2,776) | | | (2,776) | | | — | | | — |
Balance
as of March 31, 2019 | | | 11,680,449 | | | $12 | | | 2,460,518 | | | $2 | | | $13,998 | | | $(19,474) | | | $(5,462) | | | — | | | $— |
Share-based
compensation | | | 1,199,822 | | | 2 | | | — | | | — | | | 4,006 | | | — | | | 4,008 | | | — | | | — |
Conversion
of Series A shares to common stock | | | 2,460,518 | | | 2 | | | (2,460,518) | | | (2) | | | — | | | — | | | — | | | — | | | — |
Acquisition
of treasury shares | | | (1,011,748) | | | (1) | | | — | | | — | | | (2,199) | | | — | | | (2,200) | | | — | | | — |
Acquisition
of Better Choice | | | 3,915,856 | | | 3 | | | — | | | — | | | 23,490 | | | — | | | 23,493 | | | 2,633,678 | | | 20,059 |
Acquisition
of Bona Vida | | | 18,003,273 | | | 18 | | | — | | | — | | | 108,002 | | | — | | | 108,020 | | | — | | | — |
Shares
and warrants issued pursuant to private issuance of public equity (PIPE) – net proceeds | | | 5,744,991 | | | 6 | | | — | | | — | | | 15,670 | | | — | | | 15,676 | | | — | | | — |
Conversion
of Series E Preferred Stock | | | 1,175,000 | | | 1 | | | — | | | — | | | 7,050 | | | — | | | 7,051 | | | (925,758) | | | (7,052) |
Net
and comprehensive loss available to common stockholders | | | — | | | — | | | — | | | — | | | — | | | (161,533) | | | (161,533) | | | — | | | — |
Balance
as of June 30, 2019 | | | 43,168,161 | | | $43 | | | — | | | $— | | | $170,017 | | | $(181,007) | | | $(10,947) | | | 1,707,920 | | | $13,007 |
Share-based
compensation | | | — | | | — | | | — | | | — | | | 2,496 | | | — | | | 2,496 | | | — | | | — |
Stock
issued to third parties for services | | | 1,000,000 | | | 1 | | | — | | | — | | | 3,439 | | | — | | | 3,440 | | | — | | | — |
Acquisition
of treasury shares | | | — | | | — | | | — | | | — | | | (3,870) | | | — | | | (3,870) | | | — | | | — |
Acquisition
of Better Choice | | | — | | | — | | | — | | | — | | | 69 | | | — | | | 69 | | | — | | | — |
Acquisition
of Bona Vida | | | — | | | — | | | — | | | — | | | 600 | | | — | | | 600 | | | — | | | — |
Private
issuance of public equity (“PIPE”) warrant exercise | | | 1,259,498 | | | 1 | | | — | | | — | | | 4,006 | | | — | | | 4,007 | | | — | | | — |
Net
and comprehensive loss available to common stockholders | | | — | | | — | | | — | | | — | | | — | | | (6,068) | | | (6,068) | | | — | | | — |
Balance
as of Balance as of September 30, 2019 | | | 45,427,659 | | | $45 | | | — | | | $— | | | $176,757 | | | $(187,075) | | | $(10,273) | | | 1,707,920 | | | $13,007 |
| | Nine
Months Ended | ||||
| | 2020 | | | 2019 | |
Cash
Flow from Operating Activities: | | | | | ||
Net
and comprehensive loss available to common stockholders | | | $(29,654) | | | $(170,381) |
Adjustments
to reconcile net and comprehensive loss to net cash used in operating activities: | | | | | ||
Non-cash
expenses: | | | | | ||
Shares and warrants issued to third parties for services | | | 10,182 | | | — |
Modification
of warrants | | | 43 | | | — |
Contract
termination costs | | | 649 | | | — |
Depreciation
and amortization | | | 1,298 | | | 76 |
Amortization
of debt issuance costs and discounts | | | 3,723 | | | — |
Share-based
compensation | | | 7,047 | | | 6,708 |
Lease
expenses | | | (8) | | | 39 |
Change
in fair value of warrant derivative liability | | | (2,118) | | | (886) |
Payment
In Kind (PIK) interest expense on notes payable | | | 1,465 | | | — |
Loss
on extinguishment of debt | | | 88 | | | — |
Loss
on acquisitions | | | — | | | 146,980 |
Changes
in operating assets and liabilities, net of effects of business acquisition: | | | | | ||
Accounts
receivable, net | | | 195 | | | 76 |
Inventories,
net | | | 1,458 | | | (705) |
Prepaid
expenses and other current assets | | | 224 | | | 437 |
Other
assets | | | (9) | | | 31 |
Accounts
payable | | | 41 | | | 889 |
Accrued
liabilities | | | 650 | | | 3,357 |
Deferred
revenue | | | (6) | | | 172 |
Other | | | 209 | | | (17) |
Cash
Used in Operating Activities | | | $(4,523) | | | $(13,224) |
| | | | |||
Cash
Flow from Investing Activities | | | | | ||
Cash
acquired in the May Acquisitions | | | $— | | | $416 |
Acquisition
of property and equipment | | | (42) | | | (52) |
Cash
(Used in) Provided by Investing Activities | | | $(42) | | | $364 |
| | | | |||
Cash
Flow from Financing Activities | | | | | ||
Proceeds from shares issued pursuant to
private placement, net | | | $— | | | $15,826 |
Payment
of related party note payable | | | — | | | (1,600) |
Proceeds
from issuance of debt | | | — | | | 6,200 |
Proceeds
from revolving lines of credit | | | 6,624 | | | — |
Payments
on revolving lines of credit | | | (6,297) | | | (4,600) |
Proceeds
from PPP loans | | | 852 | | | — |
Proceeds
from June 2020 Notes | | | 1,500 | | | — |
Cash
advance, net | | | — | | | (1,898) |
Proceeds
from investor prepayment | | | 1,518 | | | — |
PIPE
warrant exercise | | | — | | | 4,007 |
Debt
issuance costs | | | (85) | | | (20) |
Cash
Provided by Financing Activities | | | $4,112 | | | $17,915 |
| | | | |||
Net
(decrease) increase in Cash and cash equivalents and Restricted cash | | | $(453) | | | $5,055 |
Total
Cash and cash equivalents, Beginning of Period | | | 2,534 | | | 3,946 |
Total
Cash and cash equivalents and Restricted cash, End of Period | | | $2,081 | | | $9,001 |
Right-of-use assets and operating lease liability acquired under operating leases | | | |
Right-of-use
assets recorded upon adoption of ASC 842 | | | $421 |
Operating lease liability recorded upon adoption of ASC 842 | | | $(429) |
Noncash
acquisition of right-of-use assets for leases entered into during period | | | $607 |
Noncash acquisition of operating lease liability for leases entered into during the period | | | $(594) |
Dollars
in thousands | | | |
Total purchase price | | | $38,244 |
Assets | | | |
Property
and equipment | | | 260 |
Accounts receivable | | | 5,540 |
Inventories | | | 5,160 |
Intangible
assets | | | 14,690 |
Other assets | | | 329 |
Total
assets | | | 25,979 |
Liabilities | | | |
Accounts
payable | | | 4,628 |
Accrued liabilities | | | 1,553 |
Long
term liability | | | 168 |
Total liabilities | | | 6,349 |
Net
assets acquired | | | 19,630 |
Goodwill | | | $18,614 |
Dollars in thousands | | | Better Choice Company | | | Bona
Vida | | | Total |
Total purchase price | | | $37,949 | | | $108,620 | | | $146,569 |
Net
Assets (Liabilities) Acquired: | | | | | | | |||
Assets | | | | | | | |||
Cash
and cash equivalents | | | 7 | | | 384 | | | 391 |
Restricted
cash | | | — | | | 25 | | | 25 |
Accounts
receivable | | | — | | | 69 | | | 69 |
Inventories | | | — | | | 95 | | | 95 |
Prepaid
expenses and other current assets | | | 32 | | | 348 | | | 380 |
Intangible
assets | | | 986 | | | — | | | 986 |
Other
assets | | | — | | | 74 | | | 74 |
Total
assets | | | 1,025 | | | 995 | | | 2,020 |
Liabilities | | | | | | | |||
Warrant
derivative liability | | | (2,130) | | | — | | | (2,130) |
Accounts
payable & accrued liabilities | | | (544) | | | (153) | | | (697) |
Total
liabilities | | | (2,674) | | | (153) | | | (2,827) |
Net
assets (liabilities) acquired | | | (1,649) | | | 842 | | | (807) |
Loss
on acquisitions | | | $(39,598) | | | $(107,778) | | | $(147,376) |
Dollars
in thousands | | | 2020 | | | 2019 |
Food, treats and supplements | | | $5,054 | | | $6,425 |
Inventory
packaging and supplies | | | 564 | | | 504 |
Other
products and accessories | | | 12 | | | 73 |
Total
Inventories | | | 5,630 | | | 7,002 |
Inventory
reserve | | | (508) | | | (422) |
Inventories,
net | | | $5,122 | | | $6,580 |
Dollars
in thousands | | | 2020 | | | 2019 |
Equipment | | | $216 | | | $222 |
Furniture
and fixtures | | | 199 | | | 138 |
Computer
software | | | 111 | | | 115 |
Computer
equipment | | | 2 | | | 4 |
Total
property and equipment | | | 528 | | | 479 |
Accumulated
depreciation | | | (223) | | | (62) |
Property
and equipment, net | | | $305 | | | $417 |
Dollars
in thousands | | | 2020 | | | 2019 |
Accrued professional fees | | | $1,802 | | | $1,695 |
Accrued
sales tax | | | 1,041 | | | 1,233 |
Accrued
payroll and benefits | | | 1,154 | | | 994 |
Accrued
trade promotions | | | 360 | | | 357 |
Accrued
dividends | | | 359 | | | 256 |
Accrued
interest | | | 359 | | | 109 |
Other | | | 296 | | | 77 |
Total
accrued liabilities | | | $5,371 | | | $4,721 |
| | For the Nine Months Ended | | | For
the Three Months Ended | |||||||
Dollars in thousands | | | 2020 | | | 2019 | | | 2020 | | | 2019 |
Operating
lease costs | | | $331 | | | $219 | | | $110 | | | $95 |
Variable
lease costs | | | 27 | | | 24 | | | 11 | | | 8 |
Total
operating lease costs | | | $358 | | | $243 | | | $121 | | | $103 |
Dollars
in thousands | | | Operating Leases |
Remainder of 2020 | | | $114 |
2021 | | | 464 |
2022 | | | 246 |
2023 | | | 7 |
Total
minimum lease payments | | | $831 |
Less: amount of lease payments representing interest | | | 86 |
Present
value of future minimum lease payments | | | $745 |
Less: current obligations under leases | | | 395 |
Long-term
lease obligations | | | $350 |
| | | | |||||||||
Dollars in thousands | | | Estimated Useful Life | | | Gross Carrying Amount | | | Accumulated Amortization | | | Net
Carrying Amount |
Customer relationships | | | 7 | | | $7,500 | | | $(848) | | | $6,652 |
Trade
name | | | 15 | | | 7,190 | | | (346) | | | 6,844 |
Total
intangible assets | | | | | $14,690 | | | $(1,194) | | | $13,496 |
| | | | |||||||||
Dollars in thousands | | | Estimated Useful Life | | | Gross Carrying Amount | | | Accumulated Amortization | | | Net
Carrying Amount |
Customer relationships | | | 7 | | | $7,500 | | | $(35) | | | $7,465 |
Trade
name | | | 15 | | | 7,190 | | | (14) | | | 7,176 |
Total
intangible assets | | | | | $14,690 | | | $(49) | | | $14,641 |
Dollars in thousands | | | |
Remainder
of 2020 | | | $357 |
2021 | | | 1,551 |
2022 | | | 1,551 |
2023 | | | 1,551 |
2024 | | | 1,551 |
Thereafter | | | 6,935 |
| | $13,496 |
| | | | |||||||||||||||
Dollars in thousands | | | Amount | | | Rate | | | Maturity Date | | | Amount | | | Rate | | | Maturity Date |
Short
term loan, net | | | $19,369 | | | (1) | | | 12/19/2020 | | | $16,061 | | | (1) | | | 12/19/2020 |
Line
of credit, net | | | 5,048 | | | (2) | | | 7/5/2022 | | | 4,819 | | | (1) | | | 12/19/2020 |
| | | | | | | | | | | | |||||||
November
2019 notes payable, net (November 2019 Notes) | | | 2,736 | | | 10% | | | 6/30/2023 | | | 2,769 | | | 10% | | | 11/4/2021 |
December
2019 senior notes payable, net (Seller Notes) | | | 9,993 | | | 10% | | | 6/30/2023 | | | 9,191 | | | 10% | | | 6/30/2023 |
December
2019 junior notes payable, net (Seller Notes) | | | 4,797 | | | 10% | | | 6/30/2023 | | | 4,410 | | | 10% | | | 6/30/2023 |
ABG
Notes | | | 674 | | | 10% | | | 6/30/2023 | | | — | | | — | | | — |
June
2020 notes payable, net (June 2020 Notes) | | | 40 | | | 10% | | | 6/30/2023 | | | — | | | — | | | — |
Halo
PPP Loan | | | 431 | | | 1% | | | 5/3/2022 | | | — | | | — | | | |
TruPet
PPP Loan | | | 421 | | | .98% | | | 4/6/2022 | | | — | | | — | | | — |
Total
debt | | | 43,509 | | | | | | | 37,250 | | | | | ||||
Less
current portion | | | 19,827 | | | | | | | 20,880 | | | | | ||||
Total
long term debt | | | $23,682 | | | | | | | $16,370 | | | | |
(1) | Interest at Bank of Montreal Prime plus 8.05% |
(2) | Interest at a variable rate of LIBOR plus 250 basis points with an interest rate floor of 3.25% per annum |
Dollars
in thousands | | | Warrant derivative liability |
Balance as of December 31,
2019 | | | $2,220 |
Change in fair value of derivative liability | | | (1,379) |
Balance
as of March 31, 2020 | | | $841 |
Change in fair value of derivative liability | | | 3,474 |
Balance
as of June 30, 2020 | | | $4,315 |
Change in fair value of derivative liability | | | (4,213) |
Balance
as of September 30, 2020 | | | $102 |
Warrant derivative liability | | | 2019 | | | 2019 | | | 2020 |
Stock
price | | | $6.00 | | | $2.70 | | | $0.49 |
Exercise
price | | | $3.90 | | | $1.62 | | | $0.65 |
Expected
remaining term (in years) | | | 1.60 - 1.68 | | | 0.95 - 1.02 | | | 0.22 |
Volatility | | | 64% | | | 69% | | | 75% |
Risk-free
interest rate | | | 2.39% | | | 1.60% | | | 0.09% |
| | 2020 | | | 2019 | |
Conversion
of Series E | | | 1,760,903 | | | 1,760,903 |
Exercise
of options to purchase common stock | | | 7,241,942 | | | 7,791,833 |
Warrants
to purchase common stock | | | 19,898,859 | | | 16,981,854 |
Notes
payable | | | 7,346,568 | | | 4,437,500 |
Total | | | 36,248,272 | | | 30,972,090 |
| | Warrants | | | Weighted Average
Exercise Price | |
Warrants outstanding as of December 31, 2019 | | | 16,981,854 | | | $3.23 |
Issued | | | 6,125,339 | | | 0.91 |
Exercised | | | (250,000) | | | (0.10) |
Terminated | | | (2,958,334) | | | (5.12) |
Warrants
outstanding as of September 30, 2020 | | | 19,898,859 | | | $2.13 |
Dollars in thousands | | | Nine
Months Ended September 30, | | | Three Months Ended September 30, | ||||||
Common
stockholders | | | 2020 | | | 2019 | | | 2020 | | | 2019 |
Numerator: | | | | | | | | | ||||
Net
and comprehensive loss | | | $(29,551) | | | $(170,311) | | | $(1,693) | | | $(6,025) |
Less:
Preferred stock dividends | | | 103 | | | 70 | | | 35 | | | 43 |
Net
and comprehensive loss available to common stockholders | | | $(29,654) | | | $(170,381) | | | $(1,728) | | | $(6,068) |
Denominator: | | | | | | | | | ||||
Weighted
average shares used in computing net loss per share attributable to common stockholders, basic and diluted | | | 48,809,740 | | | 28,624,230 | | | 48,961,447 | | | 43,575,010 |
Net
loss per share attributable to common stockholders, basic and diluted | | | $(0.61) | | | $(5.95) | | | $(0.04) | | | $(0.14) |
| | ||
| | ||
| | Chartered
Professional Accountants | |
| | Licensed Public Accountants | |
We have served as the Company’s auditor since 2019. | | | |
Toronto,
Ontario | | | |
| | ||
| |
| | 12/31/2019 | | | 12/31/2018 | |
Assets | | | | | ||
Current
Assets | | | | | ||
Cash and cash equivalents | | | $2,361 | | | $3,946 |
Restricted
cash | | | 173 | | | — |
Accounts
receivable, net | | | 5,824 | | | 116 |
Inventories,
net | | | 6,580 | | | 1,557 |
Prepaid
expenses and other current assets | | | 2,641 | | | 269 |
Total
Current Assets | | | 17,579 | | | 5,888 |
Property
and equipment, net | | | 417 | | | 71 |
Right-of-use
asset, operating lease | | | 951 | | | — |
Intangible
assets, net | | | 14,641 | | | — |
Goodwill | | | 18,614 | | | — |
Other
assets | | | 1,330 | | | 28 |
Total
Assets | | | $53,532 | | | $5,987 |
Liabilities
& Stockholders’ Deficit | | | | | ||
Current
Liabilities | | | | | ||
Short term loan, net | | | $16,061 | | | $— |
Line
of credit, net | | | 4,819 | | | 4,600 |
Other
liabilities | | | 500 | | | 1,914 |
Accounts
payable | | | 4,049 | | | 765 |
Due
to related party | | | — | | | 1,600 |
Accrued
liabilities | | | 4,721 | | | 85 |
Deferred
revenue | | | 311 | | | 65 |
Operating
lease liability, current portion | | | 345 | | | — |
Warrant
derivative liability | | | 2,220 | | | — |
Total
Current Liabilities | | | 33,026 | | | 9,029 |
Noncurrent
Liabilities | | | | | ||
Notes
payable, net | | | 16,370 | | | — |
Operating
lease liability | | | 641 | | | — |
Total
Noncurrent Liabilities | | | 17,011 | | | — |
Total
Liabilities | | | 50,037 | | | 9,029 |
Redeemable
Series E Convertible Preferred Stock | | | | | ||
Redeemable Series E
preferred stock, $0.001 par value, 2,900,000 & 0 shares authorized, 1,387,378 & 0 shares issued and outstanding at December 31, 2019 and 2018, respectively. | | | 10,566 | | | — |
Stockholders’
Deficit | | | | | ||
Common stock, $0.001 par value, 88,000,000 and 16,303,928
shares authorized, 47,977,390 & 11,661,485 shares issued and outstanding at December 31, 2019 and 2018, respectively. | | | 48 | | | 12 |
Convertible
Series A Preferred Stock, $0.001 par value, 0 & 5,529,162 shares authorized, 0 & 2,391,403 shares issued and outstanding at December 31, 2019 and 2018, respectively. | | | — | | | 2 |
Additional
paid-in capital | | | 194,150 | | | 13,642 |
Accumulated
deficit | | | (201,269) | | | (16,698) |
Total
Stockholders’ Deficit | | | (7,071) | | | (3,042) |
Total
Liabilities, Redeemable Preferred Stock and Stockholders’ Deficit | | | $53,532 | | | $5,987 |
| | 2019 | | | 2018 | |
Net
sales | | | $15,577 | | | $14,785 |
Cost
of goods sold | | | 9,717 | | | 7,489 |
Gross
profit | | | 5,860 | | | 7,296 |
Operating
expenses: | | | | | ||
General and administrative | | | 19,782 | | | 6,055 |
Share-based
compensation | | | 10,280 | | | 431 |
Sales
and marketing | | | 10,138 | | | 4,981 |
Customer
service and warehousing | | | 1,097 | | | 987 |
Impairment
of intangible asset | | | 889 | | | — |
Total
operating expenses | | | 42,186 | | | 12,454 |
Loss
from operations | | | (36,326) | | | (5,158) |
Other
expense: | | | | | ||
Interest expense, net | | | (670) | | | (868) |
Loss
on acquisitions | | | (147,376) | | | — |
Change
in fair value of warrant derivative liability | | | (90) | | | — |
Total
other expense | | | (148,136) | | | (868) |
Net
and comprehensive loss | | | (184,462) | | | (6,026) |
Preferred
dividends | | | 109 | | | — |
Net
and comprehensive loss available to common stockholders | | | $(184,571) | | | $(6,026) |
Weighted
average number of shares outstanding | | | 33,238,600 | | | 11,516,421 |
Loss
per share, basic and diluted | | | $(5.55) | | | $(0.52) |
| | Common Stock | | | Convertible
Series A Preferred Stock | | | | | | | Redeemable
Series E Convertible Preferred Stock | |||||||||||||||
| | Number | | | Amount | | | Number | | | Amount | | | Additional
paid-in capital | | | Accumulated deficit | | | Total
Stockholders’ Deficit | | | Number | | | Amount | |
Balance
at January 1, 2019 | | | 11,661 | | | $12 | | | 2,391 | | | $2 | | | $13,642 | | | $(16,698) | | | $(3,042) | | | — | | | — |
Shares
issued pursuant to a private placement – net proceeds | | | — | | | — | | | 70 | | | — | | | 150 | | | — | | | 150 | | | — | | | — |
Shares
and warrants issued pursuant to private issuance of public equity (PIPE) – net proceeds | | | 5,745 | | | 6 | | | — | | | — | | | 15,670 | | | — | | | 15,676 | | | — | | | — |
Share-based
compensation | | | 1,119 | | | 1 | | | — | | | — | | | 10,280 | | | — | | | 10,281 | | | — | | | — |
Stock
issued to third parties for services | | | 1,009 | | | 1 | | | — | | | — | | | 3,476 | | | — | | | 3,477 | | | — | | | — |
Warrants
issued to third parties for services | | | — | | | — | | | — | | | — | | | 2,968 | | | — | | | 2,968 | | | — | | | — |
Conversion
of Series A shares to common stock | | | 2,461 | | | 2 | | | (2,461) | | | (2) | | | — | | | — | | | — | | | — | | | — |
Acquisition
of treasury shares | | | (1,012) | | | (1) | | | — | | | — | | | (6,070) | | | — | | | (6,071) | | | — | | | — |
Acquisition
of Better Choice | | | 3,915 | | | 4 | | | — | | | — | | | 23,560 | | | — | | | 23,564 | | | 2,634 | | | $20,058 |
Acquisition
of Bona Vida | | | 18,103 | | | 18 | | | — | | | — | | | 108,602 | | | — | | | 108,620 | | | — | | | — |
Guarantor
warrants | | | — | | | — | | | — | | | — | | | 4,180 | | | — | | | 4,180 | | | | | ||
Warrants
issued in connection with the Notes | | | — | | | — | | | — | | | — | | | 313 | | | — | | | 313 | | | — | | | — |
Acquisition
of Halo | | | 2,134 | | | 2 | | | — | | | — | | | 3,883 | | | — | | | 3,885 | | | — | | | — |
Conversion
of Series E Preferred Stock | | | 1,582 | | | 2 | | | — | | | — | | | 9,490 | | | — | | | 9,492 | | | (1,247) | | | (9,492) |
Warrant
exercise | | | 1,260 | | | 1 | | | — | | | — | | | 4,006 | | | — | | | 4,007 | | | — | | | — |
Net
and comprehensive loss available to common stockholders | | | — | | | — | | | — | | | — | | | (184,571) | | | (184,571) | | | — | | | — | | | |
Balance
at December 31, 2019 | | | 47,977 | | | $48 | | | — | | | $— | | | $194,150 | | | $(201,269) | | | $(7,071) | | | 1,387 | | | $10,566 |
| | Common Stock | | | Convertible
Series A Preferred Stock | | | Additional paid-in capital | | | Accumulated
deficit | | | Total Stockholders’ Deficit | ||||||||||
| | Units | | | Number | | | Amount | | | Number | | | Amount | | |||||||||
Reported
balance at January 1, 2018 | | | 10,397 | | | — | | | $— | | | — | | | $— | | | $8,545 | | | $(10,672) | | | $(2,127) |
Recapitalization
adjustment(1) | | | (10,397) | | | 11,497 | | | 11 | | | | | | | — | | | — | | | 11 | ||
Recast
balance at January 1, 2018 | | | — | | | 11,497 | | | 11 | | | | | | | 8,545 | | | (10,672) | | | (2,116) | ||
Share-based
compensation | | | 164 | | | 1 | | | | | | | | | 431 | | | | | 432 | ||||
Shares
issued pursuant to a private placement – net proceeds | | | | | | | | | 2,391 | | | 2 | | | 4,666 | | | — | | | 4,668 | |||
Net
and comprehensive loss available to common stockholders | | | | | — | | | — | | | — | | | — | | | — | | | (6,026) | | | (6,026) | |
Balance
at December 31, 2018 | | | | | 11,661 | | | $12 | | | 2,391 | | | $2 | | | $13,642 | | | $(16,698) | | | $(3,042) |
(1) | Certain prior year amounts were adjusted to retroactively reflect the legal capital of the Company from LLC units to common stock due to the May Acquisitions described in “Note 2—Acquisitions”. |
| | |||||
| | 2019 | | | 2018 | |
Cash
Flow from Operating Activities: | | | | | ||
Net
and comprehensive loss | | | $(184,462) | | | $(6,026) |
Adjustments
to reconcile net and comprehensive loss to net cash used in operating activities : | | | | | ||
Non-cash
expenses | | | — | | | — |
Stock
and warrants issued to third parties for services | | | 3,548 | | | — |
Impairment
of intangible asset | | | 889 | | | — |
Depreciation
and amortization | | | 171 | | | 14 |
Amortization
of debt issuance costs and discounts | | | 346 | | | — |
Share-based
compensation | | | 10,280 | | | 431 |
Lease
expenses | | | 41 | | | — |
Change
in fair value of warrant derivative liability | | | 90 | | | — |
Loss
on acquisitions | | | 146,980 | | | — |
Changes
in operating assets and liabilities, net of effects of business acquisition: | | | | | ||
Accounts
receivable, net | | | (99) | | | (196) |
Inventories,
net | | | 232 | | | (400) |
Prepaid
expenses and other current assets | | | (101) | | | (208) |
Other
assets | | | (140) | | | — |
Accounts
payable | | | (1,695) | | | 55 |
Accrued
liabilities | | | 2,738 | | | (645) |
Deferred
revenue | | | 245 | | | 66 |
Deferred
rent | | | (15) | | | 6 |
Other | | | (17) | | | — |
Cash
Used in Operating Activities | | | $(20,969) | | | $(6,903) |
| | | | |||
Cash
Flow from Investing Activities | | | | | ||
Acquisition
of property and equipment | | | $(110) | | | $(31) |
Cash
acquired in the May Acquisitions | | | 416 | | | — |
Acquisition
of Halo | | | (20,513) | | | — |
Cash
Used in Investing Activities | | | $(20,207) | | | $(31) |
| | | | |||
Cash
Flow from Financing Activities | | | | | ||
Cash
advance, net | | | $(1,899) | | | $1,840 |
Proceeds
from shares issued pursuant to private placement, net | | | 15,826 | | | 4,668 |
Proceeds
from investor prepayment | | | 500 | | | — |
Proceeds
from revolving line of credit | | | 5,000 | | | 2,615 |
Proceeds
from line of credit | | | 6,200 | | | — |
Payment
of line of credit | | | (6,200) | | | — |
Payment
of TruPet line of credit | | | (4,600) | | | — |
Proceeds
from related party note | | | — | | | 1,600 |
Payments
on related party note | | | (1,600) | | | — |
Proceeds
from short term loan | | | 20,500 | | | — |
Proceeds
from November 2019 Notes | | | 2,750 | | | — |
Proceeds
from warrant exercise | | | 4,007 | | | — |
Debt
issuance costs | | | (720) | | | — |
Cash
Provided by Financing Activities | | | $39,764 | | | $10,723 |
| | | | |||
Net
Increase in Cash and cash equivalents and Restricted cash | | | $(1,412) | | | $3,789 |
Total
Cash and cash equivalents, Beginning of Period | | | 3,946 | | | 157 |
Total
Cash and cash equivalents and Restricted cash, End of Period | | | $2,534 | | | $3,946 |
Right-of-use asset and operating lease liability acquired under operating leases | | | |
Right-of-use
asset recorded upon adoption of ASC 842 | | | $421 |
Operating lease liability recorded upon adoption of ASC 842 | | | (429) |
Noncash
acquisition of right-of-use asset for leases entered into during period | | | 607 |
Noncash acquisition of operating lease liability for leases entered into during the period | | | (594) |
Furniture
and Fixtures | | | 5 to 7 years |
Equipment | | | 3
to 7 years |
Computer equipment | | | 2 to 3 years |
Computer software | | | 3 years |
• | Identify a customer along with a corresponding contract; |
• | Identify
the performance obligation(s) in the contract to transfer goods to a customer; |
• | Determine the transaction price the Company expects to be entitled to in exchange for transferring promised goods to a customer; |
• | Allocate the transaction price to the performance obligation(s) in the contract; and |
• | Recognize
revenue when or as the Company satisfies the performance obligation(s). |
• | Level 1 – Observable inputs such as unadjusted quoted prices in active
markets for identical assets or liabilities. |
• | Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. |
• | Level 3 – Unobservable inputs for the asset or liability for which there is little, if any, market activity at the measurement date. Unobservable inputs reflect the Company’s own assumptions about what market participants
would use to price the asset or liability. The inputs are developed based on the best information available in the circumstances, which may include the Company’s own financial data, such as internally developed pricing models, discounted cash flow methodologies, as well as instruments for which the fair value determination requires significant management judgment. |
Dollars
in thousands | | | |
Total purchase price | | | $38,244 |
| | ||
Assets
and liabilities acquired: | | | |
Assets | | | |
Property
and equipment | | | 260 |
Accounts receivable | | | 5,540 |
Inventories | | | 5,160 |
Intangible
assets | | | 14,690 |
Other assets | | | 329 |
Total
assets | | | 25,979 |
Liabilities | | | |
Accounts
payable | | | 4,628 |
Accrued liabilities | | | 1,553 |
Long
term liability | | | 168 |
Total liabilities | | | 6,349 |
Net
assets acquired | | | 19,630 |
Goodwill | | | $18,614 |
| | Twelve
Months ended December 31, | ||||
Dollars in thousands | | | 2019 | | | 2018 |
Net
revenues | | | $48,152 | | | $51,388 |
Net
loss per share attributable to common stockholders | | | $192,592 | | | $25,958 |
Dollars
in thousands | | | Better Choice Company | | | Bona
Vida | | | Total |
Total Purchase Price | | | $37,949 | | | $108,620 | | | $146,569 |
| | | | | | ||||
Net
Assets (Liabilities) Acquired: | | | | | | | |||
Assets | | | | | | | |||
Cash
and cash equivalents | | | 7 | | | 384 | | | 391 |
Restricted
cash | | | — | | | 25 | | | 25 |
Accounts
receivable | | | — | | | 69 | | | 69 |
Inventories | | | — | | | 95 | | | 95 |
Prepaid
expenses and other current assets | | | 32 | | | 348 | | | 380 |
Intangible
assets | | | 986 | | | — | | | 986 |
Other
assets | | | — | | | 74 | | | 74 |
Total
Assets | | | 1,025 | | | 995 | | | 2,020 |
Liabilities | | | | | | | |||
Warrant
derivative liability | | | (2,130) | | | — | | | (2,130) |
Accounts
payable & accrued liabilities | | | (544) | | | (153) | | | (697) |
Total
Liabilities | | | (2,674) | | | (153) | | | (2,827) |
Net
Assets (Liabilities) Acquired | | | (1,649) | | | 842 | | | (807) |
Loss
on Acquisitions | | | $(39,598) | | | $(107,778) | | | $(147,376) |
Dollars in thousands | | | 2019 | | | 2018 |
Food,
treats and supplements | | | $6,425 | | | $1,301 |
Inventory
packaging and supplies | | | 504 | | | 133 |
Other
products and accessories | | | 73 | | | 191 |
| | 7,002 | | | 1,625 | |
Inventory
reserve | | | (422) | | | (68) |
| | $6,580 | | | $1,557 |
Dollars in thousands | | | 2019 | | | 2018 |
Prepaid
advertising & marketing | | | $1,776 | | | $— |
Prepaid
slotting fees | | | 425 | | | — |
Prepaid
insurance | | | 164 | | | 15 |
Deposits | | | 115 | | | — |
Prepaid
state registration fees | | | 81 | | | — |
Other | | | 80 | | | 254 |
Total
prepaid expenses and other current assets | | | $2,641 | | | $269 |
Dollars
in thousands | | | 2019 | | | 2018 |
Equipment | | | $222 | | | $49 |
Furniture
and fixtures | | | 138 | | | 46 |
Computer
software | | | 115 | | | — |
Computer
equipment | | | 4 | | | 14 |
Total
property and equipment | | | 479 | | | 109 |
Accumulated
depreciation | | | (62) | | | (38) |
Net
property and equipment | | | $417 | | | $71 |
Dollars
in thousands | | | 2019 | | | 2018 |
Accrued professional fees | | | $1,695 | | | $— |
Accrued
sales tax | | | 1,233 | | | — |
Accrued
payroll and benefits | | | 994 | | | 85 |
Accrued
trade promotions | | | 357 | | | — |
Accrued
dividends | | | 256 | | | — |
Accrued
interest | | | 109 | | | — |
Other | | | 77 | | | — |
Total
accrued liabilities | | | $4,721 | | | $85 |
Dollars in thousands | | | Classification
on the balance sheet 2019 | | | 2019 |
Assets | | | | | ||
Operating
lease right-of-use assets | | | Operating lease right-of-use assets | | | 421 |
Liabilities | | | | | ||
Current
- operating | | | Operating lease liability short term | | | 87 |
Noncurrent
- operating | | | Operating lease liability long term | | | 342 |
Total
lease liabilities | | | | | $429 |
| | Year ended December 31, | ||||
Dollars
in thousands | | | 2019 | | | 2018 |
Operating
lease costs | | | 369 | | | 189 |
Variable
lease costs | | | 31 | | | 42 |
Total
operating lease costs | | | $400 | | | 231 |
Operating
Leases | | | |
2020 | | | 444 |
2021 | | | 459 |
2022 | | | 240 |
2023 | | | 5 |
Total
minimum lease payments | | | 1,148 |
Less: amount of lease payments representing interest | | | 162 |
Present
value of future minimum lease payments | | | $986 |
Less: current obligations under leases | | | 345 |
Long-term
lease obligations | | | $641 |
Year
ending December 31, | | | |
2019 | | | 257 |
2020 | | | 296 |
2021 | | | 296 |
2022 | | | 123 |
2023 | | | — |
| | $972 |
| | | | | | ||||||||||||||||
Dollars in thousands | | | Weighted-
Average Remaining Useful Lives (in years) | | | Gross
Carrying Amount | | | Additions | | | Adjustments | | | Gross
Carrying Amount | | | Accumulated Amortization | | | Net
Carrying Amount |
License | | | — | | | $— | | | $986 | | | $(986) | | | $— | | | $— | | | $— |
Customer
relationships | | | 7 | | | — | | | 7,500 | | | — | | | 7,500 | | | (35) | | | 7,465 |
Trade
name | | | 15 | | | — | | | 7,190 | | | — | | | 7,190 | | | (14) | | | 7,176 |
Total
intangible assets | | | | | $— | | | $15,676 | | | $(986) | | | $14,690 | | | $(49) | | | $14,641 |
Dollars in thousands | | | |
Years
ended December 31, | | | |
2020 | | | $1,551 |
2021 | | | 1,551 |
2022 | | | 1,551 |
2023 | | | 1,551 |
2024 | | | 1,551 |
Thereafter | | | 6,886 |
| | $14,641 |
| | | | |||||||||||||||
| | Amount | | | Rate | | | Maturity
Date | | | Amount | | | Rate | | | Maturity
Date | |
Note payable (due to related parties) | | | $— | | | | | | | $1,600 | | | 26.6% | | | |||
Short term loan, net | | | 16,061(2) | | | | | | | | | | | |||||
Lines
of credit, net | | | 4,819(2) | | | | | | | 4,600(1) | | | | | ||||
November 2019 notes payable, net (November 2019 Notes) | | | 2,769 | | | 10.0% | | | | | | | | | ||||
December
2019 senior notes payable, net (Seller Notes) | | | 9,191 | | | 10.0% | | | | | — | | | | | |||
December
2019 junior notes payable, net (Seller Notes) | | | 4,410 | | | 10.0% | | | | | | | | | ||||
Total
debt | | | 37,250 | | | | | | | 6,200 | | | | |
(1) | Interest at LIBOR plus 3% |
(2) | Interest at Bank of Montreal Prime plus 8.05% |
Dollars
in thousands | | | Warrant liability |
Assumption of warrants in May Acquisitions | | | $2,130 |
Change
in fair value of warrant derivative liability | | | 90 |
Balance as of December 31, 2019 | | | $2,220 |
| | 2019 | | | 2019 | |
Warrant
liability | | | | | ||
Stock
price | | | $6.00 | | | $2.70 |
Exercise
price | | | $3.90 | | | $1.62 |
Expected
remaining term (in years) | | | 1.60 – 1.68 | | | 0.95 – 1.02 |
Volatility | | | 64% | | | 69% |
Risk-free
interest rate | | | 2.39% | | | 1.60% |
Dollars
in thousands | | | 2019 | | | 2018 |
Cash advance | | | $— | | | $1,899 |
Investor
prepayment | | | 500 | | | — |
Deferred
rent | | | — | | | 15 |
Total
other liabilities | | | $500 | | | $1,914 |
| | 2019 | |
Conversion
of Series E | | | 1,760,903 |
Exercise of options to purchase common stock | | | 7,791,833 |
Warrants
to purchase common stock | | | 16,981,854 |
Notes payable | | | 4,437,500 |
Total | | | 30,972,090 |
| | | | | | Vested
options | | | Non-vested options | ||||||
| | Total
number of options | | | Weighted average exercise
price | | | Number | | | Number | | | Weighted
average grant date fair value | |
Legacy options | | | 38,462 | | | $6.76 | | | 38,462 | | | — | | | $8.06 |
Acquired
on May 6, 2019 | | | 5,250,000 | | | 1.82 | | | — | | | 5,250,000 | | | 0.92 |
Granted | | | 2,503,371 | | | 1.83 | | | — | | | 2,503,371 | | | 0.97 |
Vested
during period | | | — | | | 1.89 | | | 2,678,329 | | | (2,678,329) | | | 1.02 |
Options
outstanding at December 31, 2019 | | | 7,791,833 | | | $1.85 | | | 2,716,791 | | | 5,075,042 | | | $0.97 |
Options
expected to vest | | | | | | | | | 5,075,042 | | | ||||
Weighted
average exercise price | | | | | | | $1.89 | | | $1.82 | | | |||
Weighted
average remaining contractual term (years) | | | | | | | 9.3 | | | 9.6 | | | |||
Aggregate
intrinsic value at December 31, 2019 (in thousands) | | | | | | | $2,357 | | | $4,448 | | |
• | Term: For executives and
directors, the estimated term is equal to the mid-point between the average vesting date and the contractual term. For all others, the estimated term is equal to the average vesting date plus three years. |
• | Dividend yield: 0% |
• | Exercise Price: $1.82 to $2.70 |
• | Risk-free rate: 1.41% to 2.39% |
• | Volatility: 55.0% to 62.1 |
| | Warrants | | | Exercise
Price | |
Warrants acquired on May 6, 2019 | | | 712,823 | | | $3.90 |
Issued | | | 17,414,030 | | | 3.27 |
Exercised | | | (1,144,999)(1) | | | 3.50 |
Warrants
outstanding at December 31, 2019 | | | 16,981,854 | | | $3.23 |
(1) | Exercised warrants were converted at 1.1 shares per warrant for a total of 1,259,498 shares. |
| | Year
Ended 2019 | ||||
Statutory U.S. Federal income tax | | | $(38,760) | | | 21.0% |
State
income taxes, net | | | (818) | | | 0.4% |
LLC
income not taxed | | | 2,376 | | | (1.3)% |
Loss
on acquisitions | | | 29,051 | | | (15.7)% |
Change
in valuation allowance | | | 7,892 | | | (4.3)% |
Other | | | 259 | | | 0.1% |
Total
provision | | | $— | | | 0% |
| | Year
Ended 2019 | |
Deferred income tax assets: | | | |
Net
operating loss carryforwards | | | 8,503 |
Stock options | | | 2,493 |
Other
assets | | | 301 |
Gross deferred tax assets | | | 11,297 |
Valuation
allowance | | | (7,913) |
Net deferred tax asset | | | 3,384 |
| | ||
Deferred
income liabilities: | | | |
Inventory | | | (137) |
Intangibles | | | (3,247) |
Deferred
tax assets, net of valuation allowance | | | — |
| | Year
Ended 2019 | |
Valuation allowance, at beginning of year | | | $— |
Increase
in valuation allowance | | | 7,892 |
Halo Acquisition | | | 21 |
Valuation
allowance, at end of year | | | $7,913 |
| | Years
Ended December 31, | ||||
Dollars in thousands except per share amounts | | | 2019 | | | 2018 |
Common
stockholders | | | | | ||
Numerator: | | | | | ||
Net
and comprehensive loss | | | $(184,462) | | | $(6,026) |
Less:
Preferred stock dividends | | | 109 | | | — |
Net
and comprehensive loss available to common stockholders | | | $(184,571) | | | $(6,026) |
| | | | |||
Denominator: | | | | | ||
Weighted
average shares used in computing net loss per share attributable to common stockholders, basic and diluted | | | 33,238,600 | | | 11,516,421 |
Net
loss per share attributable to common stockholders, basic and diluted | | | $(5.55) | | | $(0.52) |
| | 2018 | | | 2017 | |
Assets | | | | | ||
Current
Assets | | | | | ||
Cash and cash equivalents | | | $3,946,261 | | | $157,138 |
Accounts
receivable, net (Note 2) | | | 275,560 | | | 79,270 |
Inventories,
net (Note 3) | | | 1,556,946 | | | 1,156,830 |
Prepaid
expenses and other current assets | | | 269,073 | | | 60,898 |
Total
Current Assets | | | 6,047,840 | | | 1,454,136 |
Property
and equipment, net (Note 4) | | | 71,295 | | | 54,481 |
Other
assets | | | 27,559 | | | 27,559 |
Total
Assets | | | $6,146,694 | | | $1,536,176 |
| | | | |||
Liabilities
and Members’ Deficit | | | | | ||
Current Liabilities | | | | | ||
Line
of credit (Note 5) | | | $4,600,000 | | | $1,985,000 |
Other
liabilities (Note 7) | | | 1,898,759 | | | 58,407 |
Long-term
debt, current portion (Note 8) | | | 1,600,000 | | | — |
Accounts
payable | | | 764,715 | | | 676,884 |
Due
from related parties | | | — | | | 32,706 |
Accrued
liabilities | | | 244,593 | | | 889,069 |
Deferred
revenue (Note 6) | | | 65,965 | | | — |
Total
Current Liabilities | | | 9,174,032 | | | 3,642,066 |
Deferred
rent | | | 15,016 | | | 9,258 |
Total
Liabilities | | | 9,189,048 | | | 3,651,324 |
| | | | |||
Members’
Deficit (Note 9) | | | | | ||
Common
units, no par value, 13,651,461 and 10,396,808 units authorized 10,545,435 and 10,396,808 units issued and outstanding at December 31, 2018 and 2017, respectively | | | 8,913,647 | | | 8,556,943 |
Series
A Preferred Units, no par value, 5,000,000 units authorized, 2,162,536 units issued and outstanding December 31, 2018. | | | 4,668,000 | | | — |
Units
to be issued | | | 74,107 | | | — |
Accumulated
deficit | | | (16,698,108) | | | (10,672,091) |
Total
Members’ Deficit | | | (3,042,354) | | | (2,115,148) |
Total
Liabilities and Members’ Deficit | | | $6,146,694 | | | $1,536,176 |
| | 2018 | | | 2017 | |
Net
Sales | | | $14,784,831 | | | $7,931,780 |
Cost
of Goods Sold | | | 7,488,641 | | | 4,309,602 |
Gross
Profit | | | 7,296,190 | | | 3,622,178 |
Selling,
General, and Administrative Expenses | | | 12,454,023 | | | 8,964,329 |
Loss
from Operations | | | (5,157,833) | | | (5,342,151) |
Other
Income (Expense) | | | | | ||
Interest expense | | | (868,184) | | | (42,109) |
Other
income | | | — | | | 12,421 |
Net
Loss and Comprehensive Loss | | | $(6,026,017) | | | $(5,371,839) |
Weighted
average number of units outstanding | | | 10,474,541 | | | 10,205,688 |
Loss
per unit, basic and diluted | | | (0.58) | | | (0.53) |
| | Common
Units | | | Series A Preferred Units | | | Units to be
Issued | | | Deficit | | | Total | |||||||
| | Number | | | Amount | | | Number | | | Amount | | |||||||||
Balance
at January 1, 2017 | | | 5,208,354 | | | $1,471,000 | | | — | | | $— | | | $— | | | $(5,300,252) | | | $(3,829,252) |
Units
issued pursuant to private placement | | | 4,796,457 | | | 6,169,650 | | | — | | | — | | | — | | | — | | | 6,169,650 |
Units
issued pursuant to services provided | | | 391,997 | | | 916,293 | | | — | | | — | | | — | | | — | | | 916,293 |
Net
loss for the period | | | — | | | — | | | — | | | — | | | — | | | (5,371,839) | | | (5,371,839) |
Balance
at December 31, 2017 | | | 10,396,808 | | | 8,556,943 | | | — | | | — | | | — | | | (10,672,091) | | | (2,115,148) |
Units
issued pursuant to private placement | | | — | | | — | | | 2,162,536 | | | 4,668,000 | | | — | | | — | | | 4,668,000 |
Units
issued pursuant to services provided | | | 148,627 | | | 356,704 | | | — | | | — | | | 74,107 | | | — | | | 430,811 |
Net
loss | | | — | | | — | | | — | | | — | | | — | | | (6,026,017) | | | (6,026,017) |
Balance
at December 31, 2018 | | | 10,545,435 | | | $8,913,647 | | | 2,162,536 | | | $4,668,000 | | | $74,107 | | | $(16,698,108) | | | $(3,042,354) |
| | 2018 | | | 2017 | |
Cash
Flows from Operating Activities: | | | | | ||
Net
loss | | | $(6,026,017) | | | $(5,371,839) |
Adjustments
to reconcile net loss to net cash used in operating activities: | | | | | ||
Depreciation
and amortization | | | 14,123 | | | 11,883 |
Unit-based
compensation expense | | | 430,811 | | | 916,293 |
Change
in operating assets and liabilities: | | | | | ||
Accounts receivable | | | (196,290) | | | (50,447) |
Inventories | | | (400,116) | | | (373,323) |
Prepaid
expenses and other assets | | | (208,175) | | | (31,418) |
Accounts
payable | | | 55,125 | | | 479,946 |
Accrued
liabilities | | | (644,476) | | | 442,389 |
Deferred
revenue | | | 65,965 | | | — |
Deferred
rent | | | 5,758 | | | 9,258 |
Net
cash used in operating activities | | | (6,903,292) | | | (3,967,258) |
Cash
Flows from Investing Activities: | | | | | ||
Purchases
of property and equipment | | | (30,937) | | | (8,686) |
Cash
Flows from Financing Activities: | | | | | ||
Other
liabilities | | | 1,840,352 | | | 19,720 |
Net
borrowings on line of credit | | | 2,615,000 | | | 1,985,000 |
Borrowings
on long-term debt | | | 1,600,000 | | | — |
Proceeds
from shares issued pursuant to private placement, net | | | 4,668,000 | | | 1,836,450 |
Net
cash provided by financing activities | | | 10,723,352 | | | 3,841,170 |
Net
Increase (Decrease) in Cash | | | 3,789,123 | | | (134,774) |
Cash,
Beginning of Year | | | 157,138 | | | 291,912 |
Cash,
End of Year | | | $3,946,261 | | | $157,138 |
Supplemental
Cash Flow Disclosures: | | | | | ||
Interest paid | | | $868,184 | | | $42,109 |
Non-Cash
Financing Activities: | | | | | ||
Conversion of debt for equity | | | $0 | | | $4,333,200 |
• | The Company’s financial position for the year ended December 31, 2018; |
• | Significant
events and transactions the Company has entered into, including and through the date the financial statements were available to be issued; |
• | Sales and profitability forecasts for the Company for the next financial year; and |
• | The continued support of the Company’s members and lenders. |
• | The
refinancing of the line of credit with the same bank under similar terms. |
• | To continue to monitor the Company’s ongoing working capital requirements and minimum expenditure commitments; |
• | Continue their focus on maintaining an appropriate level of corporate overhead in line with the
Company’s available cash resources; and |
• | The Company currently has an offer to sell its interest to Sport Endurance, Inc. (“SENZ”) in return for stock in the combined entity. |
Furniture and Fixtures | | | 5
to 7 years |
Equipment | | | 7 years |
• | Identify a customer along with a corresponding contract; |
• | Identify the performance obligation(s) in the contract to transfer goods to a customer; |
• | Determine
the transaction price the Company expects to be entitled to in exchange for transferring promised goods to a customer; |
• | Allocate the transaction price to the performance obligation(s) in the contract; |
• | Recognize revenue when or as the Company satisfies the performance obligation(s). |
• | Level 1 – valuation based on quoted prices (unadjusted) observed in active markets for identical assets or liabilities. Cash is measured based on Level 1 inputs. |
• | Level
2 – valuation techniques based on inputs that are quoted prices of similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; inputs other than quoted prices used in a valuation model that are observable for that instrument; and inputs that are derived from or corroborated by observable market data by correlation or other means. |
• | Level 3 – valuation techniques with significant unobservable market inputs. |
| | 2018 | | | 2017 | |
Food,
treats and supplements | | | $1,301,274 | | | $709,561 |
Other
products and accessories | | | 191,292 | | | 283,132 |
Inventory
packaging and supplies | | | 132,681 | | | 164,137 |
| | 1,625,247 | | | 1,156,830 | |
Inventory
reserve | | | (68,301) | | | — |
| | $1,556,946 | | | $1,156,830 |
| | 2018 | | | 2017 | |
Warehouse
equipment | | | 49,431 | | | 49,431 |
Computer
equipment | | | 13,913 | | | 13,913 |
Furniture
and fixtures | | | 45,944 | | | 14,556 |
| | 109,288 | | | 77,900 | |
Accumulated
depreciation | | | (37,993) | | | (23,419) |
| | $71,295 | | | $54,481 |
| | Advance
#1 | | | Advance #2 | | | Advance #3 | | | Total | |
Opening
balance - January 1, 2018 | | | | | | | | | ||||
Initial
cash advance | | | $— | | | $— | | | $— | | | $— |
Advance
of outstanding amounts | | | 398,909 | | | 965,308 | | | 1,050,000 | | | 2,414,217 |
Total
initial advances | | | — | | | — | | | 824,486 | | | 824,486 |
Payments | | | (429,432) | | | (1,080,180) | | | (101,727) | | | (1,611,339) |
Advance
fixed fee | | | 30,523 | | | 114,872 | | | 126,000 | | | 271,395 |
Closing
balance - December 31, 2018 | | | $— | | | $— | | | $1,898,759 | | | $1,898,759 |
• | The
Company issued 148,627 shares of the Company’s common units to employees and consultants of the Company as compensation under the Equity Incentive Plan. The value of the units amounted to $430,811 and has been recorded as a component of selling, general and administrative expenses for the year ended December 31, 2017. |
• | The
Company issued an aggregate of 4,796,457 shares of the Company’s common units at a purchase price of $1.29 per share. The proceeds were approximately $6,170,000. |
• | The Company issued 391,997 shares of the Company’s common units to an employee and a service provider of the Company as compensation. The value of the units amounted to $916,293 and has been recorded as a component of selling, general and administrative expenses for the year
ended December 31, 2017. |
• | The Company issued an aggregate of 2,162,536 shares of the Company’s Series A Preferred Units
at a purchase price of $2.29 per unit. The proceeds were approximately $4,668,000, net of $532,000 of share issuance costs. |
Year
Ending December 31, | | | |
2019 | | | $257,296 |
2020 | | | 295,740 |
2021 | | | 295,740 |
2022 | | | 123,075 |
2023 | | | — |
| | $971,850 |
• | 6% of any deal completed with a person or entity that was referred by the third parties up to $10,000,000. |
• | 3% of $10,000,001 – $20,000,000. |
• | 1.5% above $20,000,001 |
• | Anthony Santarsiero – 397,862 units |
• | Michelle Ruble, supply chain and inventory control management (see Note 10) – 137,194 units |
• | Will Mullis – 137,194 units |
| | Note | | | ||
Assets | | | | | ||
Cash
and cash equivalents | | | | | $1,123,968 | |
Prepaid
expenses and deposits | | | 3 | | | 540,686 |
Total
current assets | | | | | 1,664,654 | |
Intangible
assets | | | | | 9,270 | |
Total
assets | | | | | $1,673,924 | |
Liabilities | | | | | ||
Accrued
liabilities | | | 6 | | | $115,946 |
Warrants | | | 4 | | | 1,125,861 |
Total
liabilities | | | | | 1,241,807 | |
Shareholders’
equity | | | | | ||
Capital
Stock | | | 4 | | | 2,889 |
Preferred
shares, 10,000,000 authorized, nil issued and outstanding; | | | | | ||
Common
stock, 75,000,000 authorized, par value $0.0001, 46,687,200 issued and outstanding | | | | | ||
Additional
paid in capital | | | 4 | | | 3,594,915 |
Shares
to be issued | | | 5 | | | 9,546 |
Contributed
surplus | | | 5 | | | 94,172 |
Deficit | | | | | (3,269,405) | |
Total
shareholders’ equity | | | | | 432,117 | |
Total
liabilities and shareholders’ equity | | | | | $1,673,924 |
| | Note | | | 2018 | |
For
the period ended December 31, | | | | | ||
Expenses | | | | | ||
Finance
placement fees | | | 4 | | | $12,526 |
Salary
and benefits | | | | | 153,241 | |
Selling,
general and administrative | | | | | 277,028 | |
Loss
on advanced royalties | | | 7 | | | 500,000 |
Stock
based compensation | | | 5 | | | 1,390,718 |
Fair
value adjustment on warrants | | | 4 | | | 935,892 |
| | | | 3,269,405 | ||
Net
loss and comprehensive loss | | | | | $3,269,405 | |
Weighted
average number of shares outstanding | | | | | 32,597,423 | |
Loss
per share basic and diluted | | | | | $0.10 |
| | Note | | | Equity
Interest | | | Shares to be issued | | | Contributed
Surplus | | | Deficit | | | Total
Equity | |||||||
| | Number | | | Amount | | | APIC | | |||||||||||||||
Balance
as at March 29, 2018 | | | | | — | | | $— | | | $— | | | $— | | | — | | | — | | | — | |
Shares
issued to founders | | | 4 | | | 17,800,000 | | | — | | | — | | | — | | | — | | | — | | | — |
Shares
issued pursuant to private placement | | | 4 | | | 10,600,000 | | | 1,060 | | | 316,940 | | | — | | | — | | | — | | | 318,000 |
Shares
issued pursuant to units offering | | | 4 | | | 12,287,200 | | | 1,229 | | | 1,991,575 | | | — | | | — | | | — | | | 1,992,804 |
Shares
issued pursuant to services provided | | | 5 | | | 6,000,000 | | | 600 | | | 1,286,400 | | | 9,546 | | | — | | | — | | | 1,296,546 |
Share-Based
payments | | | | | — | | | — | | | — | | | — | | | 94,172 | | | — | | | 94,172 | |
Net
loss for the period | | | | | — | | | — | | | — | | | — | | | — | | | (3,269,405) | | | (3,269,405) | |
Balance
as at December 31, 2018 | | | | | 46,687,200 | | | 2,889 | | | 3,594,915 | | | 9,546 | | | 94,172 | | | (3,269,405) | | | 432,117 |
| | Note | | | ||
Cash
flows from (used in) operating activities | | | | | ||
Net
loss and comprehensive loss | | | | | $(3,269,405) | |
Adjustments
for non-cash items and others | | | | | ||
Stock
based compensation | | | 5 | | | 1,390,718 |
Change
in FV of Warrants | | | 4 | | | 935,892 |
| | | | (942,795) | ||
Adjustments
for net changes in non-cash operating assets and liabilities | | | | | ||
Prepaid
expenses and deposits | | | 3 | | | (540,686) |
Accrued
liabilities | | | | | 115,946 | |
Net
cash used in operating activities | | | | | (1,367,535) | |
Cash
flows from investing activities | | | | | ||
Purchase
of intangible assets | | | | | (9,270) | |
Net
cash used in investing activities | | | | | (9,270) | |
Cash
flows from financing activities | | | | | ||
Shares/warrants issued pursuant
to units offering, net of transaction costs | | | | | 2,182,773 | |
Shares
issued pursuant to private placement | | | | | 318,000 | |
Net
cash from financing activities | | | | | 2,500,773 | |
Net
change in cash during the period | | | | | 1,123,968 | |
Cash
and cash equivalents at beginning of period | | | | | — | |
Cash,
end of period | | | | | $1,123,968 |
• | Level
1 – valuation based on quoted prices (unadjusted) observed in active markets for identical assets or liabilities. |
• | Level 2 – valuation techniques based on inputs that are quoted prices of similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; inputs other than quoted prices used in a valuation model that are observable for that instrument; and inputs that are derived from or corroborated by observable market data by correlation or other means. |
• | Level 3 – valuation techniques with significant unobservable market inputs. |
| | 2018 | |
Other deposits | | | $34,436 |
Inventory
deposit | | | 506,250 |
| | $540,686 |
| | Number
of Common Shares | | | Amount, $ | | | APIC,
$ | |
Opening balance - March 29, 2018 | | | — | | | — | | | — |
Shares
issued during the period | | | 28,400,000 | | | 1,060 | | | 316,940 |
Shares
issued pursuant to services | | | 6,000,000 | | | 600 | | | 1,286,400 |
Units
private placement on October 5, 2018 | | | 12,287,200 | | | 1,229 | | | 1,991,575 |
Balance-
December 31, 2018 | | | 46,687,200 | | | 2,889 | | | 3,594,915 |
Share price | | | $0.178 - $0.45 |
Stock
price volatility | | | 107% - 108% |
Expected life of the warrants | | | 1.25
- 1.5 years |
Risk free rate | | | 1.86% - 2.32% |
Grant date | | | Warrants | | | Exercise
Price ($) | | | Expiry |
| | 6,143,600 | | | 0.57 | | |
| | Date of grant | | | Vesting
period (years) | | | Number | | | Exercise
price ($) | | | Share- based payment
expense ($) | | | Share price ($) | | | Risk- free
rate | | | Volatility | | | Dividend
yield | | | Expiry (years) | |
Option grant | | | 10/05/18 | | | 1 | | | 1,000,000 | | | 1.00 | | | 35,141 | | | 0.178 | | | 2.32 | | | 108% | | | Nil | | | 10 |
Option
grant | | | 10/05/18 | | | 2 | | | 700,000 | | | 1.00 | | | 12,299 | | | 0.178 | | | 2.32 | | | 108% | | | Nil | | | 10 |
Option
grant | | | 10/29/18 | | | 1 | | | 600,000 | | | 0.45 | | | 16,197 | | | 0.178 | | | 2.32 | | | 108% | | | Nil | | | 10 |
Option
grant | | | 11/21/18 | | | 1 | | | 600,000 | | | 1.00 | | | 26,008 | | | 0.45 | | | 1.86 | | | 107% | | | Nil | | | 10 |
Option
grant | | | 12/21/18 | | | 1 | | | 400,000 | | | 0.45 | | | 4,527 | | | 0.45 | | | 1.86 | | | 107% | | | Nil | | | 10 |
Total
options grant | | | | | | | 3,300,000 | | | | | 94,172 | | | | | | | | | | |
Net
Loss before recovery of income taxes | | | $(3,269,405) |
Expected income tax (recovery) | | | $(914,897) |
Other
non-deductible expenses | | | 4,716 |
Fair value adjustment on warrants | | | 261,896 |
Change
in tax benefits not recognized | | | 648,285 |
Income tax (recovery) expense | | | $— |
The
Company’s income tax (recovery) is allocated as follows: | | | |
Current tax (recovery) expense | | | $— |
Deferred
tax (recovery) expense | | | — |
| | $— |
Stock Based Compensation | | | $1,390,718 |
Capitalized
start-up cost | | | 925,943 |
| | Note | | | Unaudited
As of 2019 | | | Audited As of 2018 | |
Assets | | | | | | | |||
Cash
and cash equivalents | | | | | $1,488,794 | | | $1,123,968 | |
Inventories | | | 3 | | | 351,402 | | | — |
Prepaid
expenses and deposits | | | 4 | | | 471,709 | | | 540,686 |
Total
current assets | | | | | 2,311,905 | | | 1,664,654 | |
Intangible
assets | | | | | 8,575 | | | 9,270 | |
Total
assets | | | | | $2,320,480 | | | $1,673,924 | |
| | | | | | ||||
Liabilities | | | | | | | |||
Accounts
Payable | | | | | $105,287 | | | $— | |
Accrued
liabilities | | | | | 33,707 | | | 115,946 | |
Other
Liabilities | | | | | 19,298 | | | — | |
Warrants | | | 5 | | | 927,926 | | | 1,125,861 |
Total
liabilities | | | | | 1,086,218 | | | 1,241,807 | |
| | | | | | ||||
Shareholders’
equity | | | | | | | |||
Capital
Stock | | | 5 | | | 4,172 | | | 2,889 |
Preferred
shares, 10,000,000 authorized, nil issued and outstanding as at March 31, 2019 and December 31, 2018; | | | | | | | |||
Common
stock, 75,000,000 authorized, par value $0.0001, 47,724,440 and 46,687,200 issued and outstanding as at March 31, 2019 and December 31,2018 accordingly | | | | | | | |||
Additional
paid in capital | | | 5 | | | 9,784,220 | | | 3,594,915 |
Shares
to be issued | | | 6 | | | 19,531 | | | 9,546 |
Contributed
surplus | | | | | 267,552 | | | 94,172 | |
Accumulated
Deficit | | | | | (8,841,213) | | | (3,269,405) | |
Total
shareholders’ equity | | | | | 1,234,262 | | | 432,117 | |
Total
liabilities and shareholders’ equity | | | | | $2,320,480 | | | $1,673,924 |
| | Note | | | ||
Net
Sales | | | | | $17,547 | |
Cost
of Goods Sold | | | | | 17,763 | |
Gross
Loss | | | | | (216) | |
Selling,
general and administrative | | | | | 5,159,654 | |
Other
Income (Expense) | | | | | ||
Fair
Value Adjustments | | | 5 | | | (144,782) |
Share
Based Compensation | | | 6 | | | 183,365 |
Net
Loss and Comprehensive Loss | | | | | $(5,198,453) | |
Weighted
average number of shares outstanding | | | | | 48,215,560 | |
Loss
per share basic and diluted | | | | | (0.11) |
| | Note | | | Equity
Interest | | | Shares to be issued | | | Contributed Surplus | | | Deficit | | | Total Equity | |||||||
| | Number | | | Amount | | | APIC | | |||||||||||||||
Balance
as at March 29, 2018 | | | | | | | | | | | | | | | | | ||||||||
Shares
issued to founders | | | | | 17,800,000 | | | $— | | | $— | | | — | | | $— | | | $— | | | $— | |
Shares
issued pursuant to private placement | | | | | 10,600,000 | | | 1,060 | | | 316,940 | | | | | | | | | 318,000 | ||||
Shares
issued pursuant to units offering | | | | | 12,287,200 | | | 1,229 | | | 1,991,575 | | | | | | | | | 1,992,804 | ||||
Shares
issued pursuant to services provided | | | | | 6,000,000 | | | 600 | | | 1,286,400 | | | 9,546 | | | | | | | 1,296,546 | |||
Share-Based
payments | | | | | — | | | — | | | — | | | — | | | 94,172 | | | — | | | 94,172 | |
Net
loss for the period | | | | | — | | | — | | | — | | | — | | | — | | | (3,269,405) | | | (3,269,405) | |
Balance
as at December 31, 2018 (Audited) | | | | | 46,687,200 | | | 2,889 | | | 3,594,915 | | | 9,546 | | | 94,172 | | | (3,269,405) | | | 432,117 | |
| | | | | | | | | | | | | | | | |||||||||
Shares
issued pursuant to investment | | | 5 | | | 10,000,000 | | | 1,000 | | | 4,499,000 | | | — | | | — | | | — | | | 4,500,000 |
Share
Buy-Back | | | 5 | | | (13,407,200) | | | (141) | | | (198,351) | | | — | | | — | | | (373,355) | | | (571,847) |
Shares
issued pursuant to private placement, net of transaction cost | | | 5 | | | 4,444,440 | | | 424 | | | 1,888,656 | | | — | | | — | | | — | | | 1,889,080 |
Shares
issued pursuant to services provided | | | 6 | | | — | | | — | | | | | 9,985 | | | — | | | — | | | 9,985 | |
Share-Based
payments | | | 6 | | | — | | | — | | | — | | | — | | | 173,380 | | | — | | | 173,380 |
Net
loss for the period | | | | | — | | | — | | | — | | | — | | | — | | | (5,198,453) | | | (5,198,453) | |
Balance
as at March 31, 2019 | | | | | 47,724,440 | | | $4,172 | | | $9,784,220 | | | 19,531 | | | $267,552 | | | $(8,841,213) | | | $1,234,262 |
| | Note | | | ||
Cash
flows from (used in) operating activities | | | | | ||
Net
loss and comprehensive loss | | | | | $(5,198,453) | |
Adjustments
for non-cash items and others | | | | | ||
Depreciation
and amortization | | | | | 696 | |
Stock
based compensation | | | 6 | | | 183,365 |
Change
in FV of Warrants | | | 5 | | | (144,782) |
Adjustments
for net changes in non-cash operating assets and liabilities | | | | | ||
Inventory | | | 3 | | | (351,402) |
Prepaid
expenses and deposits | | | 4 | | | 68,977 |
Other
Liabilities | | | | | 19,298 | |
Accrued
liabilities | | | | | (82,239) | |
Accounts
Payable | | | | | 105,286 | |
Net
cash used in operating activities | | | | | (5,399,254) | |
| | | | |||
Cash
flows from financing activities | | | | | ||
Shares
issued pursuant to investments | | | 5 | | | 4,500,000 |
Shares
issued pursuant to private placement, net of transaction cost | | | 5 | | | 1,889,080 |
Share
buyback | | | 5 | | | (625,000) |
Net
cash from financing activities | | | | | 5,764,080 | |
Net
change in cash during the period | | | | | 364,826 | |
| | | | |||
Cash
and cash equivalents at beginning of period | | | | | 1,123,968 | |
Cash,
end of period | | | | | $1,488,794 |
• | Identify a customer along with a corresponding contract; |
• | Identify
the performance obligation(s) in the contract to transfer goods to a customer; |
• | Determine the transaction price the Company expects to be entitled to in exchange for transferring promised goods to a customer; |
• | Allocate the transaction price to the performance obligation(s) in the contract; |
• | Recognize
revenue when or as the Company satisfies the performance obligation(s). |
| | 2019 | | | 2018 | |
Treats & Supplements | | | $351,402 | | | $— |
| | 2019 | | | 2018 | |
Other
deposits | | | $101,755 | | | $34,436 |
Inventory
deposit | | | 369,954 | | | 506,250 |
| | $471,709 | | | $540,686 |
| | Number of Common
Shares | | | Amount, $ | | | APIC,
$ | |
Opening balance- March 29, 2018 | | | — | | | — | | | — |
Shares
issued during the period | | | 28,400,000 | | | 1,060 | | | 316,940 |
Shares
issued pursuant to services | | | 6,000,000 | | | 600 | | | 1,286,400 |
Units
private placement on October 5, 2018 | | | 12,287,200 | | | 1,229 | | | 1,991,575 |
Balance-
December 31, 2018 | | | 46,687,200 | | | 2,889 | | | 3,594,915 |
GBX
Acquisition | | | 10,000,000 | | | 1,000 | | | 4,499,000 |
Share
Buy-Back | | | (13,407,200) | | | (141) | | | (198,351) |
Shares
issued during the period | | | 4,444,440 | | | 424 | | | 1,888,656 |
Balance
– March 31, 2019 | | | 47,724,440 | | | 4,172 | | | 9,784,220 |
Share
price | | | $0.45 |
Stock price volatility | | | 107% |
Remaining
life of the warrants | | | 1.01- 1.19 years |
Risk free rate | | | 2.41% |
Grant date | | | Warrants | | | Exercise
Price ($) | | | Expiry |
| | 5,840,000 | | | 0.60 | | |
| | Date
of grant | | | Vesting period (years) | | | Number | | | Exercise
price ($) | | | Share- based payment
expense ($) | | | Share price ($) | | | Risk- free
rate | | | Volatility | | | Dividend
yield | | | Expiry (years) | |
Option grant | | | 10/05/18 | | | 1 | | | 1,000,000 | | | 1.00 | | | 35,141 | | | 0.178 | | | 2.32 | | | 108% | | | Nil | | | 10 |
Option
grant | | | 10/05/18 | | | 2 | | | 700,000 | | | 1.00 | | | 12,299 | | | 0.178 | | | 2.32 | | | 108% | | | Nil | | | 10 |
Option
grant | | | 10/29/18 | | | 1 | | | 600,000 | | | 0.45 | | | 16,197 | | | 0.178 | | | 2.32 | | | 108% | | | Nil | | | 10 |
Option
grant | | | 11/21/18 | | | 1 | | | 600,000 | | | 1.00 | | | 26,008 | | | 0.45 | | | 1.86 | | | 107% | | | Nil | | | 10 |
Option
grant | | | 12/21/18 | | | 1 | | | 400,000 | | | 0.45 | | | 4,527 | | | 0.45 | | | 1.86 | | | 107% | | | Nil | | | 10 |
| | 2019 | | | 2018 | |
ASSETS | | | | | ||
CURRENT
ASSETS | | | | | ||
Cash | | | $2,364,436 | | | $1,226,489 |
Accounts
receivable, net of allowances of approximately $100,000 and $141,000 as of June 30, 2019 and 2018, respectively | | | 4,152,779 | | | 4,440,387 |
Inventories | | | 3,194,880 | | | 7,065,994 |
Prepaids
and other current assets | | | 349,491 | | | 487,791 |
Total
current assets | | | 10,061,586 | | | 13,220,661 |
PROPERTY
AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION | | | 372,962 | | | 650,660 |
OTHER
ASSETS | | | | | ||
Goodwill | | | 4,730,655 | | | 4,730,655 |
Other | | | 14,650 | | | 13,200 |
Total
other assets | | | 4,745,305 | | | 4,743,855 |
| | $15,179,853 | | | $18,615,176 | |
LIABILITIES
AND STOCKHOLDERS' EQUITY | | | | | ||
CURRENT LIABILITIES | | | | | ||
Accounts
payable | | | $2,529,480 | | | $3,757,667 |
Accrued
expenses | | | 417,199 | | | 618,611 |
Accrued
payroll liabilities | | | 520,125 | | | 196,025 |
Total
current liabilities | | | 3,466,804 | | | 4,572,303 |
LONG-TERM
LIABILITIES | | | | | ||
Due to related party | | | 60,391 | | | 146,898 |
Loan
payable, net of issuance costs | | | 3,829,521 | | | 5,247,316 |
Total
long-term liabilities | | | 3,889,912 | | | 5,394,214 |
| | | | |||
STOCKHOLDERS'
EQUITY | | | | | ||
Preferred
Stock; no par value; 110 shares authorized: | | | | | ||
Series A-1; 36.67 shares issued and outstanding at
June 30, 2019 | | | — | | | — |
Series
A; 73.33 shares issued and outstanding at June 30, 2019 and 2018 | | | — | | | — |
Common
Stock; no par value; 10,000 shares authorized; 890 and 100 shares issued and outstanding at June 30, 2019 and 2018, respectively | | | — | | | — |
Additional
paid-in capital - Series A-1 Preferred Stock, net of issuance costs | | | 2,403,125 | | | — |
Additional
paid-in capital - Series A Preferred Stock | | | 5,000,000 | | | 5,000,000 |
Additional
paid-in capital - Common Stock | | | 57,141,157 | | | 57,141,157 |
Accumulated
deficit | | | (56,721,145) | | | (53,492,498) |
Total
stockholders' equity | | | 7,823,137 | | | 8,648,659 |
| | $15,179,853 | | | $18,615,176 |
| | 2019 | | | 2018 | |
SALES | | | $31,106,144 | | | $38,359,679 |
COST
OF SALES | | | 20,532,995 | | | 24,322,252 |
GROSS
PROFIT | | | 10,573,149 | | | 14,037,427 |
SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES | | | 13,378,974 | | | 20,297,838 |
LOSS
ON DISPOSAL OF EQUIPMENT | | | 73,975 | | | 25,929 |
LOSS
FROM OPERATIONS | | | (2,879,800) | | | (6,286,341) |
OTHER
(EXPENSE) INCOME | | | | | ||
Interest
expense, related party | | | — | | | (2,106,059) |
Interest
expense, other | | | (348,997) | | | (278,406) |
Interest
income | | | 150 | | | 1,167 |
Total
other expense | | | (348,847) | | | (2,383,298) |
NET
LOSS | | | $(3,228,647) | | | $(8,669,639) |
| | | | | | | | | | | | | | Additional
Paid-In Capital | | | |||||||||||||||||
| | Common
Stock | | | Series A-1 Preferred Stock | | | Series
A Preferred Stock | | | Series A-1 | | | Series
A | | | | | | | |||||||||||||
| | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | | Preferred
Stock | | | Preferred Stock | | | Common
Stock | | | Accumulated Deficit | | | Total | |
BALANCE,
JUNE 30, 2017 | | | 100 | | | $— | | | — | | | $— | | | — | | | $— | | | $— | | | $— | | | $13,511,905 | | | $(44,822,859) | | | $(31,310,954) |
Issuance
of preferred stock | | | | | | | | | | | 73.33 | | | | | | | 5,000,000 | | | | | | | 5,000,000 | ||||||||
Conversion
of debt to common stock | | | 790 | | | | | | | | | | | | | | | | | 43,629,252 | | | | | 43,629,252 | ||||||||
Net
loss | | | | | | | | | | | | | | | | | | | | | (8,669,639) | | | (8,669,639) | |||||||||
BALANCE,
JUNE 30, 2018 | | | 890 | | | — | | | — | | | — | | | 73.33 | | | — | | | — | | | 5,000,000 | | | 57,141,157 | | | (53,492,498) | | | 8,648,659 |
Issuance
of preferred stock, net of stock issuance costs | | | | | | | 36.67 | | | | | | | | | 2,403,125 | | | | | | | | | 2,403,125 | ||||||||
Net
loss | | | | | | | | | | | | | | | | | | | | | (3,228,647) | | | (3,228,647) | |||||||||
BALANCE,
JUNE 30, 2019 | | | 890 | | | $ — | | | 36.67 | | | $ — | | | 73.33 | | | $ — | | | $2,403,125 | | | $5,000,000 | | | $57,141,157 | | | $(56,721,145) | | | $7,823,137 |
CASH
FLOWS FROM OPERATING ACTIVITIES | | | 2019 | | | 2018 |
Net
loss | | | $(3,228,647) | | | $(8,669,639) |
Adjustments
to reconcile net loss to net cash provided by (used in) operating activities: | | | | | ||
Depreciation
and amortization | | | 391,557 | | | 250,351 |
Loss
on disposal of equipment | | | 73,975 | | | 25,929 |
(Increase)
decrease in: | | | | | ||
Accounts
receivable | | | 287,608 | | | (2,278,355) |
Inventories | | | 3,871,114 | | | (4,995,647) |
Prepaids
and other assets | | | 136,848 | | | (60,070) |
Increase
(decrease) in: | | | | | ||
Accounts
payable | | | (1,228,365) | | | 1,044,126 |
Accrued
expenses | | | 122,688 | | | 1,319,214 |
Total
adjustments | | | 3,655,425 | | | (4,694,452) |
Net
cash provided by (used in) operating activities | | | 426,778 | | | (13,364,091) |
| | | | |||
CASH
FLOWS FROM INVESTING ACTIVITIES | | | | | ||
Purchases
of property and equipment | | | (147,654) | | | (421,886) |
Net
cash used in investing activities | | | (147,654) | | | (421,886) |
| | | | |||
CASH
FLOWS FROM FINANCING ACTIVITIES | | | | | ||
Due
to related party | | | (86,507) | | | — |
Proceeds
from loan | | | 9,178,065 | | | 7,863,165 |
Loan
payments | | | (10,635,860) | | | (3,503,349) |
Stock
issuance costs | | | (96,875) | | | (112,500) |
Proceeds
from issuance of Series A-1 Preferred Stock | | | 2,500,000 | | | 5,000,000 |
Net
cash provided by financing activities | | | 858,823 | | | 9,247,316 |
NET
INCREASE (DECREASE) IN CASH | | | 1,137,947 | | | (4,538,661) |
CASH
AT BEGINNING OF YEAR | | | 1,226,489 | | | 5,765,150 |
CASH
AT END OF YEAR | | | $2,364,436 | | | $1,226,489 |
| | 2019 | | | 2018 | |
Finished
goods | | | $3,501,829 | | | $6,689,275 |
Raw
materials | | | 285,574 | | | 825,220 |
| | 3,787,403 | | | 7,514,495 | |
Less
inventory reserve | | | (592,523) | | | (448,501) |
| | $3,194,880 | | | $7,065,994 |
| | 2019 | | | 2018 | |
Furniture
and fixtures | | | $94,771 | | | $94,771 |
Computer
equipment | | | 80,666 | | | 78,898 |
Computer
software | | | 430,563 | | | 430,563 |
Equipment | | | 380,650 | | | 483,980 |
Assets
not in service: | | | | | ||
Computer
software | | | — | | | 80,123 |
Equipment | | | — | | | 1,768 |
| | 986,650 | | | 1,170,102 | |
Less
accumulated depreciation | | | (613,688) | | | (519,443) |
| | $372,962 | | | $650,660 |
Year
Ending June 30, | | | |
2020 | | | $62,916 |
2021 | | | $55,882 |
2022 | | | $55,882 |
2023 | | | $32,958 |
| | 2019 | | | 2018 | |
Deferred | | | $(799,800) | | | $3,656,900 |
Change
in valuation allowance | | | 799,800 | | | (3,656,900) |
Total
provision for income taxes | | | $— | | | $— |
| | 2019 | | | 2018 | |
Deferred
tax assets (liabilities): | | | | | ||
Net
operating loss carryforward | | | $14,513,986 | | | $13,673,348 |
Goodwill | | | (1,003,396) | | | (925,749) |
Property
and equipment | | | (73,366) | | | (100,655) |
Charitable
contributions | | | 64,793 | | | 114,854 |
Other | | | 245,419 | | | 185,879 |
| | 13,747,437 | | | 12,947,677 | |
Less
valuation allowance | | | (13,747,437) | | | (12,947,677) |
Total
provision for income taxes | | | $— | | | $— |
| | As
of 2019 (Unaudited) | | | As of 2019 | |
CURRENT ASSETS | | | | | ||
Cash | | | $1,611,147 | | | $2,364,436 |
Accounts
receivable, net of allowances of approximately $100,000 and $100,000 as of September 30, 2019 and June 30, 2019, respectively | | | 4,640,257 | | | 4,152,779 |
Inventories | | | 3,433,099 | | | 3,194,880 |
Prepaids
and other current assets | | | 461,008 | | | 349,491 |
Total
current assets | | | 10,145,511 | | | 10,061,586 |
Property
and equipment, net of accumulated depreciation | | | 314,071 | | | 372,962 |
Goodwill | | | 4,730,655 | | | 4,730,655 |
Other | | | 14,650 | | | 14,650 |
Total
assets | | | $15,204,887 | | | $15,179,853 |
CURRENT
LIABILITIES | | | | | ||
Accounts
payable | | | $1,900,140 | | | $2,529,480 |
Accrued
expenses | | | 691,710 | | | 417,199 |
Accrued
payroll liabilities | | | 197,247 | | | 520,125 |
Total
current liabilities | | | 2,789,097 | | | 3,466,804 |
LONG-TERM
LIABILITIES | | | | | ||
Due to related party | | | 60,391 | | | 60,391 |
Loan
payable, net of issuance costs | | | 4,043,255 | | | 3,829,521 |
Total
liabilities | | | 6,892,743 | | | 7,356,716 |
STOCKHOLDERS'
EQUITY | | | | | ||
Preferred Stock; no par value; 110 shares authorized: | | | | | ||
Series
A-1; 36.67 shares issued and outstanding | | | — | | | — |
Series
A; 73.33 shares issued and outstanding Common stock; no par value; 10,000 shares authorized; 890 issued and outstanding | | | — | | | — |
Additional
paid-in capital - Series A-1 Preferred Stock, net of issuance costs | | | 2,403,125 | | | 2,403,125 |
Additional
paid-in capital - Series A Preferred Stock | | | 5,000,000 | | | 5,000,000 |
Additional
paid-in capital - Common Stock | | | 57,141,157 | | | 57,141,157 |
Accumulated
deficit | | | (56,232,138) | | | (56,721,145) |
Total
stockholders' equity | | | 8,312,144 | | | 7,823,137 |
Total
liabilities and stockholders' equity | | | $15,204,887 | | | $15,179,853 |
| | For
the three months ended | ||||
| | 2019 | | | 2018 | |
SALES | | | $8,442,822 | | | $7,607,605 |
COST
OF SALES | | | 5,128,392 | | | 4,686,922 |
GROSS
PROFIT | | | 3,314,430 | | | 2,920,683 |
SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES | | | 2,751,162 | | | 3,594,401 |
LOSS
ON DISPOSAL OF EQUIPMENT | | | — | | | 10,290 |
INCOME
(LOSS) FROM OPERATIONS | | | 563,268 | | | (684,008) |
OTHER
(EXPENSE) INCOME | | | | | ||
Interest
expense, other | | | (74,299) | | | (101,554) |
Interest
income | | | 38 | | | 38 |
Total
other expense | | | (74,261) | | | (101,516) |
NET
INCOME (LOSS) | | | $489,007 | | | $(785,524) |
| | | | | | | | | | | | | | Additional
Paid-In Capital | | | | | |||||||||||||||
| | Common
Stock | | | Series A-1 Preferred Stock | | | Series
A Preferred Stock | | | Series A-1 Preferred Stock | | | Series
A Preferred Stock | | | Common Stock | | | Accumulated
Deficit | | | Total | ||||||||||
| | Shares | | | Amount | | | Shares | | | Amount | | | Shares | | | Amount | | |||||||||||||||
Balance,
June 30, 2017 | | | 100 | | | $— | | | — | | | $— | | | — | | | $— | | | $— | | | $— | | | $13,511,905 | | | $(44,822,859) | | | $(31,310,954) |
Issuance
of preferred stock | | | — | | | — | | | — | | | — | | | 73.33 | | | — | | | — | | | 5,000,000 | | | — | | | — | | | 5,000,000 |
Conversion
of debt to common stock | | | 790 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 43,629,252 | | | — | | | 43,629,252 |
Net
Loss | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (8,669,639) | | | (8,669,639) |
Balance,
June 30, 2018 | | | 890 | | | — | | | — | | | — | | | 73.33 | | | — | | | — | | | $5,000,000 | | | $57,141,157 | | | $(53,492,498) | | | $8,648,659 |
Net
Loss (Unaudited) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | $(785,524) | | | $(785,524) |
Balance,
September 30, 2018 (Unaudited) | | | 890 | | | — | | | — | | | — | | | 73.33 | | | — | | | — | | | $5,000,000 | | | $57,141,157 | | | $(54,278,022) | | | 7,863,135 |
Issuance
of preferred stock, | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
net
of stock issuance costs | | | — | | | — | | | 36.67 | | | — | | | — | | | — | | | 2,403,125 | | | — | | | — | | | — | | | 2,403,125 |
Net
Loss | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (2,443,123) | | | (2,443,123) |
Balance,
June 30, 2019 | | | 890 | | | — | | | 36.67 | | | — | | | 73.33 | | | — | | | $2,403,125 | | | $5,000,000 | | | $57,141,157 | | | $(56,721,145) | | | $7,823,137 |
Net
Income (Unaudited) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 489,007 | | | 489,007 |
Balance,
September 30, 2019 (Unaudited) | | | 890 | | | — | | | 36.67 | | | — | | | 73.33 | | | — | | | $2,403,125 | | | $5,000,000 | | | $57,141,157 | | | $(56,232,138) | | | $8,312,144 |
| | 2019 | | | 2018 | |
CASH
FLOWS FROM OPERATING ACTIVITIES | | | | | ||
Net
Income (loss) | | | $489,007 | | | $(785,524) |
Adjustments
to reconcile net loss to net cash (used) provided by operating activities: | | | | | ||
Depreciation
& Amortization | | | 61,386 | | | 84,266 |
Loss
on disposal of equipment | | | — | | | 10,290 |
(Increase)
decrease in: | | | | | ||
Accounts receivable | | | (487,478) | | | (107,096) |
Inventories | | | (238,220) | | | 771,641 |
Prepaids
and other assets | | | (101,517) | | | (31,364) |
Increase
(decrease) in: | | | | | ||
Accounts payable | | | (629,342) | | | (679,703) |
Accrued
expenses | | | (48,366) | | | (146,588) |
Total
adjustments | | | (1,443,537) | | | (98,554) |
Net
cash provided (used) by operating activities | | | (954,530) | | | (884,078) |
| | | | |||
CASH
FLOWS FROM INVESTING ACTIVITIES | | | | | ||
Purchases of property and equipment | | | (2,495) | | | (37,947) |
Net
cash used by investing activities | | | (2,495) | | | (37,947) |
| | | | |||
CASH
FLOWS FROM FINANCING ACTIVITIES | | | | | ||
Proceeds from loan | | | — | | | 384,958 |
Loan
payments | | | 203,736 | | | — |
Net
cash provided by financing activities | | | 203,736 | | | 384,958 |
| | | | |||
NET
INCREASE (DECREASE) IN CASH | | | (753,289) | | | (537,067) |
CASH
AT BEGINNING OF PERIOD | | | 2,364,436 | | | 1,226,489 |
CASH
AT END OF PERIOD | | | $1,611,147 | | | $689,422 |
| | (Unaudited)
| ||||
| | 2019 | | | 2019 | |
Finished goods | | | $3,555,653 | | | $3,501,829 |
Raw
materials | | | 434,304 | | | 285,574 |
| | 3,989,957 | | | 3,787,403 | |
Less
inventory reserve | | | (556,858) | | | (592,523) |
| | $3,433,099 | | | $3,194,880 |
| | (Unaudited) | ||||
| | 2019 | | | 2019 | |
Furniture
and fixtures | | | $78,195 | | | $94,771 |
Computer
equipment | | | 80,666 | | | 80,666 |
Computer
software | | | 430,563 | | | 430,563 |
Equipment | | | 397,226 | | | 380,650 |
Assets
not in service: | | | | | ||
Equipment | | | 2,495 | | | — |
| | 989,145 | | | 986,650 | |
Less
accumulated depreciation | | | (675,074) | | | (613,688) |
| | $314,071 | | | $372,962 |
ITEM 13. | OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. |
Item | | | Amount |
SEC
registration fee | | | $9,255.91 |
Exchange listing fee | | | $N/A |
Legal
fees and expenses | | | $75,000 |
Accounting fees and expenses | | | $75,000 |
Printing
expenses | | | $30,000 |
Transfer agent and registrar fees | | | $10,000 |
Blue
sky fees and expenses | | | $N/A |
FINRA filing fees | | | $N/A |
Miscellaneous | | | $25,000 |
Total | | | $224,255.91 |
ITEM
14. | INDEMNIFICATION OF DIRECTORS AND OFFICERS |
• | for any breach of their duty of loyalty to the corporation or its stockholders; |
• | for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; |
• | for unlawful payment of dividend or unlawful stock repurchase or redemption, as provided under Section 174 of the DGCL; or |
• | for
any transaction from which the director derived an improper personal benefit. |
ITEM
15. | RECENT SALES OF UNREGISTERED SECURITIES |
(1) | On May 11,
2016, the registrant issued 200,000 shares of common stock, valued at $360,000 as commitment shares to convertible note holders of the registrant. These shares were issued at fair value based on the market price at issuance of $1.80 per share. |
(2) | On May 11, 2016, the registrant issued senior secured convertible promissory notes to an investor in the principal amount of $440,000 with an original issue discount of 3.5% (the “3.5% OID Convertible Notes”). |
(3) | On
December 28, 2016, the registrant issued an investor of the registrant 35,000 shares of common stock as partial consideration for entering into a forbearance agreement with respect to debt held by such investor. |
(4) | In January 2017 and February 2017, the registrant entered into restructuring agreements with holders of its 3.5% OID Convertible Notes. Pursuant to these agreements, the registrant agreed to issue new notes (the
“January and February 2017 Convertible Notes”) for the amounts due under the 3.5% OID Convertible Notes; penalties, fees, and accrued interest in the aggregate amount of $212,702 would be added to the principal amount due under the January and February 2017 Convertible Notes; 35,000 shares of common stock were issued as a commitment fee. |
(5) | On May 2, 2017, the registrant issued 208,333 shares of common stock, for the conversion of $15,000 of principal and $10,000 of accrued interest of convertible notes payable. |
(6) | On
June 2, 2017, the registrant issued 208,333 shares of common stock as consideration for the conversion of $25,000 of principal of convertible notes. |
(7) | On November 17, 2017, the registrant issued a senior secured convertible note to an investor in the principal amount of $250,000 with an original issue discount of 3.5% and received gross proceeds of $241,250. |
(8) | On January 29,
2018, the registrant issued 998,540 shares of common stock in exchange for the conversion of $28,148 of principal and $1,808 of accrued interest of convertible notes payable. |
(9) | On February 15, 2018, the registrant issued (i) senior secured convertible promissory notes to an investor in the amount of $250,000 with an original issue discount of 3.5% and (ii) 500,000 five-year warrants to purchase the registrant’s common stock, exercisable at $0.01 per share, and received gross proceeds of $241,250. |
(10) | On
March 14, 2018, a subsidiary of the registrant issued (i) a 10% original issue discount senior secured convertible note in the principal amount of $5,500,000 and (ii) 25,000,000 five-year warrants to purchase the registrant’s common stock, exercisable at $0.01 per share, and received $5,000,000 of bitcoin valued as of such date. |
(11) | On March 19, 2018, the registrant issued (i) a senior secured convertible note to an investor in the principal amount of $777,202
with an original issue discount of 3.5% and (ii) 1,554,405 five-year warrants to purchase the registrant’s common stock, exercisable at $0.01 per share, and received gross proceeds of $750,000. |
(12) | On October 22, 2018, the registrant issued 2,846,356 shares of Series E Convertible Preferred Stock to existing holders of the registrant’s securities in exchange for the cancellation of all outstanding secured promissory notes, 803,969.73 shares of Series B Convertible Preferred Stock and 12,054,405 of the
registrant’s outstanding warrants. The shares of Series E Convertible Preferred Stock were issued and sold in reliance upon the exemption from registration contained in Section 3(a)(9) of the Securities Act. |
(13) | On December 12, 2018, the registrant issued 1,425,641 units to new investors, with each unit consisting of (i) one share of our common stock and (ii) a warrant to purchase one half of a share of common stock. The units were offered at a fixed price of $1.95 per unit for gross proceeds of approximately $2.7 million. |
(14) | On
December 21, 2018, the registrant issued certain directors and employees stock options to purchase 38,462 shares of the registrant’s common stock. The stock options have an exercise price of $6.76 per share. |
(15) | In connection with the acquisition of Bona Vida, Inc., on May 6, 2019, the registrant issued an aggregate of 18,003,273 shares of common stock to new investors and certain of our directors and executive officers in exchange for all outstanding shares
of common stock of Bona Vida, Inc. |
(16) | In connection with the acquisition of TruPet LLC, on May 6, 2019, the registrant issued an aggregate of 15,027,533 shares of common stock to new investors and certain of our directors and executive officers in exchange for all remaining outstanding membership interests of TruPet LLC. |
(17) | On May 6, 2019, the registrant issued an aggregate of 5,744,991
shares of common stock and 5,744,991 warrants at an offering price of $3.00 per share to new investors and certain of our directors. The warrants have an exercise price of $4.25 per share. |
(18) | On May 6, 2019, the registrant issued certain directors and employees stock options to purchase 5,520,000 shares of the registrant’s common stock. The stock options have an exercise price of $5.00 per share. |
(19) | On August 28,
2019, the registrant issued an aggregate of 1,000,000 shares of common stock at a price per share of $5.00 to an affiliate of iHeartMedia + Entertainment, Inc. (“iHeart”) as consideration for iHeart’s provision of advertising inventory with an aggregate value of $5.0 million. |
(20) | On September 17, 2019, the registrant issued Bruce Linton (i) 2,500,000 share purchase warrants, with each warrant entitling Mr. Linton to acquire one share of common stock at a price of $0.10 per share and (ii) an additional 1,500,000 share purchase warrants entitling Mr. Linton to acquire one share of
common stock at a price of $10.00 per share as consideration for Mr. Linton’s services as a special advisor to our Chief Executive Officer, other senior executives and our board of directors. |
(21) | On November 11, 2019, the registrant issued subordinated convertible notes and warrants to one of our directors and an investor in an aggregate principal amount of $2,750,000. |
(22) | On December 19, 2019, the
registrant issued a total of 2,134,390 shares of common stock, 937,500 warrants and an aggregate amount of $15,000,000 of convertible subordinated notes as consideration to the former stockholders of Halo as part of the Halo Acquisition. |
(23) | On December 19, 2019, the registrant issued a total of 6,500,000 warrants to certain of our directors as consideration for the shareholder guaranty in connection with the Halo Acquisition. |
(25) | On January 2, 2020, the
registrant issued 308,642 shares of common stock to an investor for net proceeds of $0.5 million, net of issuance costs of less than $0.1 million. |
(26) | On January 13, 2020 and January 20, 2020, respectively, the registrant issued 72,720 shares of common stock and 61,224 common stock warrants to a third party in connection with a contract termination. |
(27) | On March 3,
2020, the registrant issued 450,000 shares of restricted common stock to three nonemployee directors in return for services provided in their capacity as directors. |
(28) | On March 5, 2020, the registrant issued 125,000 shares of common stock to an affiliate of iHeartMedia Entertainment, Inc. (“iHeart”) for future advertising to be incurred through August 2021 . |
(29) | On March 17,
2020, the registrant issued an additional 1,003,232 warrants to holders of warrants acquired on May 6, 2019 due to dilutive impact of subsequent issuances. |
(30) | On March 30, 2020, the registrant issued 5,956 restricted shares of common stock to an officer of the Company. |
(31) | On June 24, 2020, the registrant issued an aggregate principal amount of $1.5 million subordinated convertible promissory notes and 1,000,000 warrants to one of our directors and one of our shareholders. The subordinated convertible promissory notes are convertible at a conversion price of $0.75 per share and the warrants have an exercise price of $1.25 per share. |
(32) | On
June 24, 2020, the registrant issued 1,000,000 warrants to two of our directors. The warrants have an exercise price of $1.25 per share. |
(33) | On July 20, 2020, the registrant issued a total of 300,000 common stock purchase warrants to certain of our directors as consideration for the shareholder guaranty in connection with the Citizens ABL Agreement. The warrants are exercisable at a price equal to $1.05 per share. |
(34) | On
July 20, 2020, the registrant issued a total of 200,000 common stock purchase warrants to certain of our directors. The warrants are exercisable at a price equal to $1.05 per share. |
(35) | On October 1, 2020, October 12, 2020 and October 23, 2020, the registrant issued (i) 17,763.550 shares, 1,106.015 shares and 2,832 shares, respectively, of Series F Preferred Stock and (ii) 35,527,100 warrants, 2,212,030 warrants, 5,664,000 warrants, respectively,
to acquire shares of registrant’s common stock. The Series F Preferred Stock and related warrants were issued as units, with each (i) share of Series F Preferred Stock having a Stated Value of $1,000 and is convertible into shares of registrant’s common stock at a price of $.50 per share and (ii) related warrant being exercisable to acquire such number of shares of common stock as the related share of Series F Preferred Stock is convertible into with an exercise price of $.75 per share of common stock. |
(36) | On October 23, 2020, the registrant issued (i) a total of 100 shares of Series F Preferred Stock and (ii) 200,000 warrants to acquire shares of registrant’s common stock, each
in connection with a marketing agreement. The Series F Preferred Stock and related warrants were issued as units, with each (i) share of Series F Preferred Stock having a Stated Value of $1,000 and is convertible into shares of registrant’s common stock at a price of $.50 per share and (ii) related warrant being exercisable to acquire such number of shares of common stock as the related share of Series F Preferred Stock is convertible into with an exercise price of $.75 per share of common stock. |
ITEM 16. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
Exhibit | | | Exhibit
Description | | | Form | | | File No. | | | Exhibit | | | Filing
date | | | Filed / Furnished Herewith |
| | Agreement
and Plan of Merger, dated February 28, 2019, by and among the Company, BBC Merger Sub, Inc. and Bona Vida, Inc. | | | 8-K | | | | | 2.1 | | | 05/10/2019 | | | |||
| | | | | | | | | | | | |||||||
| | First
Amendment to Agreement and Plan of Merger, dated February 28, 2019, by and among the Company, BBC Merger Sub, Inc., and Bona Vida, Inc., dated May 3, 2019 | | | 8-K | | | | | 2.2 | | | 05/10/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Securities
Exchange Agreement, dated February 2, 2019, by and among the Company, TruPet LLC and the members of TruPet LLC | | | 8-K | | | | | 2.3 | | | 05/10/2019 | | | |||
| | | | | | | | | | | | |||||||
| | First
Amendment to Securities Exchange Agreement, dated February 2, 2019, by and among the Company, TruPet LLC and the members of TruPet LLC, dated May 6, 2019 | | | 8-K | | | | | 2.4 | | | 05/10/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Amended
and Restated Stock Purchase Agreement, dated December 18, 2019, by and among the Company, Halo, Purely For Pets, Inc., Thriving Paws, LLC and HH-Halo LP | | | 8-K | | | | | 2.1 | | | 12/26/2019 | | | |||
| | | | | | | | | | | | |||||||
| | | | 10-Q | | | | | 3.1 | | | 04/15/2019 | | | ||||
| | | | | | | | | | | | |||||||
| | Certificate
of Amendment to Certificate of Incorporation, dated February 1, 2019 | | | 10-Q | | | | | 3.2 | | | 04/15/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Certificate
of Amendment to Certificate of Incorporation, dated March 13, 2019 | | | 8-K | | | | | 3.1 | | | 03/20/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Certificate
of Amendment to Certificate of Incorporation, dated April 18, 2019 | | | 10-KT | | | | | 3.5 | | | 07/25/2019 | | | |||
| | | | | | | | | | | |
Exhibit | | | Exhibit
Description | | | Form | | | File No. | | | Exhibit | | | Filing
date | | | Filed / Furnished Herewith |
| | Certificate
of Amendment to Certificate of Incorporation, dated July 30, 2020 | | | 8-K | | | | | 99.1 | | | 07/30/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Certificate
of Merger of Sport Endurance, Inc. with and into the Company | | | 10-Q | | | | | 3.4 | | | 04/15/2019 | | | |||
| | | | | | | | | | | | |||||||
| | | | 10-Q | | | | | 3.5 | | | 04/15/2019 | | | ||||
| | | | | | | | | | | | |||||||
| | Amended
and Restated Certificate of Designation for Series E Convertible Preferred Stock | | | 8-K | | | | | 3.1 | | | 05/23/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Certificate
of Designation for Series F Convertible Preferred Stock | | | 8-K | | | | | 3.1 | | | 10/02/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Common Stock Purchase Warrant in connection with the May 2019 private placement | | | 8-K | | | | | 4.1 | | | 04/30/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Tranche 1 Common Stock Purchase Warrant, dated September 17, 2019, by and between the Registrant and Bruce Linton | | | 8-K | | | | | 4.1 | | | 09/23/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Tranche 2 Common Stock Purchase Warrant, dated September 17, 2019, by and between the Company and Bruce Linton | | | 8-K | | | | | 4.2 | | | 09/23/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Additional Common Stock Purchase Warrant, dated September 17, 2019, by and between the Company and Bruce Linton | | | 8-K | | | | | 4.3 | | | 09/23/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Subordinated Convertible Promissory Note in connection with the November 2019 private placement | | | 8-K | | | | | 4.1 | | | 11/15/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Common Stock Purchase Warrant in connection with the November 2019 private placement | | | 8-K | | | | | 4.2 | | | 11/15/2019 | | | |||
| | | | | | | | | | | |
Exhibit | | | Exhibit
Description | | | Form | | | File No. | | | Exhibit | | | Filing
date | | | Filed / Furnished Herewith |
| | Form
of Subordinated Convertible Promissory Note, dated December 19, 2019, by and among the Company and the Halo Sellers listed on the signature pages thereto | | | 10-Q | | | | | 4.7 | | | 01/31/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Common Stock Purchase Warrant, dated December 19, 2019, by and among the Company and the Halo Sellers | | | 10-Q | | | | | 4.8 | | | 01/31/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Common Stock Purchase Warrant, dated December 19, 2019, by and among the Company and the Shareholder Personal Guarantors | | | 10-Q | | | | | 4.10 | | | 01/31/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Common Stock Purchase Warrant Agreement in connection with the December 2018 private placement | | | 8-K | | | | | 4.1 | | | 12/13/2018 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Common Stock Purchase Warrant in connection with the June 2020 private placement. | | | 10-Q | | | | | 4.11 | | | 06/25/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Subordinated Convertible Promissory Note in connection with the June 2020 private placement. | | | 10-Q | | | | | 4.12 | | | 06/25/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Subscription Agreement in connection with the June 2020 private placement. | | | 10-Q | | | | | 4.13 | | | 06/25/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Registration Rights Agreement by and among the Company and the persons listed on the signature pages thereto in connection with the June 2020 private placement. | | | 10-Q | | | | | 4.14 | | | 06/25/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Amendment to November 2019 Notes, Seller Notes and ABG Notes | | | 10-Q | | | | | 4.15 | | | 08/14/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of July 2020 Common Stock Purchase Warrants | | | 8-K | | | | | 10.5 | | | 07/21/2020 | | | |||
| | | | | | | | | | | |
Exhibit | | | Exhibit
Description | | | Form | | | File No. | | | Exhibit | | | Filing
date | | | Filed / Furnished Herewith |
| | Form
of Warrant in connection with the October 2020 Series F Private Placement | | | 8-K | | | | | 4.1 | | | 10/02/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Opinion
of Meister Seelig & Fein, LLP | | | | | | | | | | | * | |||||
| | | | | | | | | | | | |||||||
| | Loan
Agreement dated May 6, 2019, between the Company and Franklin Synergy Bank | | | 8-K | | | | | 10.1 | | | 05/10/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Security
Agreement dated May 6, 2019, between the Company and Franklin Synergy Bank | | | 8-K | | | | | 10.2 | | | 05/10/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Guaranty
Agreement, dated April 8, 2019, by TruPet LLC in favor of Franklin Synergy Bank | | | S-1 | | | | | 10.17 | | | 10/28/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Revolving Line of Credit Promissory Note dated 2019 | | | 8-K | | | | | 10.3 | | | 05/10/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Guaranty
Agreement, dated April 8, 2019, by Bona Vida, Inc. in favor of Franklin Synergy Bank | | | S-1 | | | | | 10.16 | | | 10/28/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Loan
Facilities Credit Letter Agreement, dated December 19, 2019, by and among the Better Choice Company Inc., Halo, Purely for Pets, Inc., Bona Vida Inc., TruPet LLC and Bridging Finance Inc., as agent. | | | 10-Q | | | | | 10.1 | | | 01/31/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Pledge
and Security Agreement, dated December 19, 2019, by and among the Company, Halo, Purely or Pets, Inc., Bona Vida, Inc., TruPet LLC and Bridging Finance Inc., as Administrative Agent | | | 10-Q | | | | | 10.2 | | | 01/31/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Continuing
Guaranty of Halo, Purely for Pets, Inc., Bona Vida Inc., TruPet LLC, dated December 19, 2019 | | | 10-Q | | | | | 10.3 | | | 01/31/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Subscription Agreement, dated December 19, 2019, by and among the Company and the Halo Sellers | | | 10-Q | | | | | 10.6 | | | 01/31/2020 | | | |||
| | | | | | | | | | | |
Exhibit | | | Exhibit
Description | | | Form | | | File No. | | | Exhibit | | | Filing
date | | | Filed / Furnished Herewith |
| | | | 10-Q | | | | | 10.4 | | | 01/31/2020 | | | ||||
| | | | | | | | | | | | |||||||
| | Registration
Rights Agreement, dated May 6, 2019, by and among the Company and the persons listed on the signature pages thereto in connection with the May 2019 private placement | | | S-1 | | | | | 10.2 | | | 10/28/2019 | | | |||
| | | | | | | | | | | | |||||||
| | First
Amendment, dated June 10, 2019, to Registration Rights Agreement, dated May 6, 2019, by and among the Company and the stockholders party thereto | | | S-1 | | | | | 10.3 | | | 10/28/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Subscription Agreement dated April 25, 2019 in connection with the May 2019 private placement | | | 8-K | | | | | 10.1 | | | 04/30/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Registration
Rights Agreement, dated as of May 6, 2019, by and among Better Choice Company Inc. and the former stockholders of Bona Vida listed on the signature pages thereto | | | 8-K | | | | | 4.1 | | | 05/10/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Registration
Rights Agreement, dated as of May 6, 2019, by and among Better Choice Company Inc. and the former member of TruPet listed on the signature pages thereto | | | 8-K | | | | | 4.2 | | | 05/10/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Registration Rights Agreement by and among the Company and the persons listed on the signature pages thereto in connection with the November 2019 private placement | | | 8-K | | | | | 4.3 | | | 11/15/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Subscription Agreement in connection with the November 2019 private placement | | | 8-K | | | | | 10.1 | | | 11/15/2019 | | | |||
| | | | | | | | | | | |
Exhibit | | | Exhibit
Description | | | Form | | | File No. | | | Exhibit | | | Filing
date | | | Filed / Furnished Herewith |
| | Business
Loan Agreement, dated as of July 16, 2020, by and among the Company, Halo, TruPet, Bona Vida (the “Credit Parties”), and Citizens Bank | | | 8-K | | | | | 10.1 | | | 07/21/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Promissory
Note, dated as of July 16, 2020, issued by the Credit Parties in favor of Citizens Bank | | | 8-K | | | | | 10.2 | | | 07/21/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Commercial
Security Agreement, dated as of July 16, 2020, by and among the Credit Parties and Citizens Bank | | | 8-K | | | | | 10.3 | | | 07/21/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Commercial
Guaranty, dated as of July 16, 2020, by and between Citizens Bank and John M. Word, III | | | 8-K | | | | | 10.4 | | | 07/21/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Better
Choice Company Inc. Amended and Restated 2019 Incentive Award Plan | | | 10-K | | | | | 10.19 | | | 05/04/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of 2019 Incentive Aware Plan Stock Option Agreement | | | S-1 | | | | | 10.7 | | | 10/28/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Indemnification Agreement by and among the Company and its officers and directors | | | S-1 | | | | | 10.8 | | | 10/28/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Independent
Contractor Agreement, dated September 17, 2019, by and between the Company and Bruce Linton | | | 8-K | | | | | 10.1 | | | 09/23/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Employment
Agreement, dated February 1, 2019, for David Lelong | | | 8-K | | | | | 10.1 | | | 02/07/2019 | | | |||
| | | | | | | | | | | | |||||||
| | | | 10-Q | | | | | 10.6 | | | 10/09/2019 | | | ||||
| | | | | | | | | | | | |||||||
| | Resignation
Letter from Damian Dalla-Longa, dated February 5, 2020 | | | 8-K | | | | | 10.3 | | | 02/11/2020 | | | |||
| | | | | | | | | | | |
Exhibit | | | Exhibit
Description | | | Form | | | File No. | | | Exhibit | | | Filing
date | | | Filed / Furnished Herewith |
| | Amendment
to Employment Agreement, dated February 10, 2020, by and between Damian Dalla-Longa and the Company | | | 8-K | | | | | 10.4 | | | 02/11/2020 | | | |||
| | | | | | | | | | | | |||||||
| | | | 10-Q | | | | | 10.7 | | | 10/09/2019 | | | ||||
| | | | | | | | | | | | |||||||
| | | | 10-K | | | | | 10.28 | | | 05/04/2020 | | | ||||
| | | | | | | | | | | | |||||||
| | Employment
Agreement, dated May 6, 2019, by and among the Company and Anthony Santarsiero | | | S-1 | | | | | 10.11 | | | 10/28/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Employment
Agreement, dated June 29, 2019, by and among the Company and Andreas Schulmeyer | | | S-1 | | | | | 10.12 | | | 10/28/2019 | | | |||
| | | | | | | | | | | | |||||||
| | Employment
Agreement, dated December 19, 2019, by and between the Company, Werner von Pein, and Halo | | | 8-K | | | | | 10.1 | | | 02/11/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Amendment
to Employment Agreement, dated February 10, 2020, by and between Werner von Pein and the Company | | | 8-K | | | | | 10.2 | | | 02/11/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Securities Purchase Agreement in connection with the October 2020 Series F Private Placement | | | 8-K | | | | | 10.1 | | | 10/02/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of Registration Rights Agreement in connection with the October 2020 Series F Private Placement | | | 8-K | | | | | 10.2 | | | 10/02/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Exchange
Agreement by and between the Company and Cavalry Fund LP dated September 30, 2020 | | | 8-K | | | | | 10.3 | | | 10/02/2020 | | | |||
| | | | | | | | | | | |
Exhibit | | | Exhibit
Description | | | Form | | | File No. | | | Exhibit | | | Filing
date | | | Filed / Furnished Herewith |
| | Limited
Consent and Second Amendment to Loan Facilities Letter Agreement by and among the Company, Halo, Purely for Pets, Inc., a Delaware corporation, TruPet LLC, a Delaware limited liability company, Bona Vida, Inc., a Delaware corporation, and the lenders party thereto | | | 8-K | | | | | 10.4 | | | 10/02/2020 | | | |||
| | | | | | | | | | | | |||||||
| | Form
of First Amendment to Registration Rights Agreement in connection with the October 2020 Series F Private Placement | | | 10-Q | | | | | 10.40 | | | 11/16/2020 | | | |||
| | | | | | | | | | | | |||||||
| | | | 10-K | | | | | 21.1 | | | 5/4/2020 | | | ||||
| | | | | | | | | | | | |||||||
| | Consent
of Ernst & Young LLP, Independent Registered Public Accounting Firm, relating to the Financial Statements of the Company | | | | | | | | | | | * | |||||
| | | | | | | | | | | | |||||||
| | Consent
of MNP LLP, Independent Registered Public Accounting Firm, relating to the Financial Statements of Bona Vida, Inc. and TruPet LLC | | | | | | | | | | | * | |||||
| | | | | | | | | | | | |||||||
| | Consent
of Warren Averett, LLC, Independent Registered Public Accounting Firm, relating to the Financial Statements of Halo, Purely for Pets, Inc. | | | | | | | | | | | * | |||||
| | | | | | | | | | | | |||||||
| | Consent
of Meister Seelig & Fein LLP (included in Exhibit 5.1) | | | | | | | | | | | * | |||||
| | | | | | | | | | | | |||||||
| | | | S-1 | | | | | (included
on the signature page) | | | | | * | ||||
| | | | | | | | | | | | |||||||
101.INS | | | iXBRL
Instance Document | | | | | | | | | | | * | ||||
| | | | | | | | | | | | |||||||
101.SCH | | | iXBRL
Taxonomy Extension Schema Document | | | | | | | | | | | * | ||||
| | | | | | | | | | | | |||||||
101.CAL | | | iXBRL
Taxonomy Extension Calculation Document | | | | | | | | | | | * | ||||
| | | | | | | | | | | |
Exhibit | | | Exhibit
Description | | | Form | | | File No. | | | Exhibit | | | Filing
date | | | Filed / Furnished Herewith |
101.DEF | | | iXBRL
Taxonomy Extension Definition Linkbase Document | | | | | | | | | | | * | ||||
| | | | | | | | | | | | |||||||
101.LAB | | | iXBRL
Taxonomy Extension Labels Linkbase Document | | | | | | | | | | | * | ||||
| | | | | | | | | | | | |||||||
101.PRE | | | iXBRL
Taxonomy Extension Presentation Link Document | | | | | | | | | | | * | ||||
| | | | | | | | | | | | |||||||
104 | | | Cover
Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document) | | | | | | | | | | | * |
† |
# | Certain schedules and similar attachments to this agreement have been omitted in accordance with Item 601(b)(5) of Regulation S-K. The Company will furnish copies of any schedules or similar attachments to the SEC upon request. |
*** | Certain
information in this document has been excluded pursuant to Regulation S-K, Item 601(b)(10). Such excluded information is not material and would likely cause competitive harm to the registrant if publicly disclosed. |
ITEM
17. | UNDERTAKINGS |
(a) | The undersigned registrant hereby undertakes: |
(1) | To file, during any period in which offers or issuances are being made, a post-effective amendment to this registration statement: |
(i) | To include any prospectus required by Section 10(a)(3) of the Securities Act; |
(ii) | To reflect
in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(iii) | To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering; and |
(4) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after |
(b) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Better Choice Company Inc. pursuant to the foregoing provisions, or otherwise, Better Choice Company Inc. has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Better Choice Company Inc. of expenses incurred or paid by a director, officer or controlling
person of Better Choice Company Inc. in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Better Choice Company Inc. will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
(c) | The undersigned hereby further undertakes that: |
(1) | For purposes of determining any liability under the Securities
Act the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by Better Choice Company Inc. pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. |
(2) | For the purpose of determining any liability under the Securities Act each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) | For
the purpose of determining any liability under the Securities Act, each filing of Better Choice Company Inc.’s annual report pursuant to section 13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| | BETTER
CHOICE COMPANY INC. | ||||
| | | | |||
| | By: | | | /s/
Werner von Pein | |
| | | | |||
| | | | Chief Executive Officer |
Signature | | | Title | | | Date |
| | | | |||
/s/
Werner von Pein | | | Chief Executive Officer (Principal Executive Officer) | | | |
| | |||||
| | | | |||
/s/
Sharla Cook | | | Chief Financial Officer (Principal Financial and Accounting Officer) | | | |
| | |||||
| | | | |||
/s/
Michael Close | | | Director | | | |
| | |||||
| | | | |||
| | Director | | | ||
| | | | |||
| | | | |||
/s/
Jeff D. Davis | | | Director | | | |
| | | | |||
| | | | |||
/s/
Clinton Gee | | | Director | | | |
| | | | |||
| | | | |||
/s/
Lori Taylor | | | Director | | | |
| | | | |||
| | | | |||
/s/
John M. Word III | | | Director | | | |
| | | | |||
| | | | |||
/s/
Michael Young | | | Director | | | |
| | | |
This ‘S-1’ Filing | Date | Other Filings | ||
---|---|---|---|---|
6/30/30 | ||||
9/17/29 | ||||
5/2/29 | ||||
1/1/29 | ||||
1/1/24 | ||||
6/30/23 | ||||
1/31/23 | ||||
1/1/23 | ||||
12/1/22 | ||||
10/31/22 | ||||
8/28/22 | ||||
7/5/22 | ||||
5/3/22 | ||||
4/30/22 | ||||
4/6/22 | ||||
11/4/21 | SC 13G | |||
9/30/21 | 10-Q | |||
8/28/21 | ||||
5/5/21 | ||||
4/30/21 | ||||
1/15/21 | ||||
1/1/21 | ||||
12/31/20 | 10-K | |||
12/19/20 | ||||
12/15/20 | ||||
Filed on: | 12/9/20 | |||
12/7/20 | ||||
12/1/20 | ||||
11/25/20 | 8-K | |||
11/17/20 | ||||
11/6/20 | ||||
11/1/20 | ||||
10/31/20 | ||||
10/23/20 | ||||
10/22/20 | ||||
10/12/20 | ||||
10/2/20 | 8-K | |||
10/1/20 | 8-K | |||
9/30/20 | 10-Q | |||
9/22/20 | ||||
9/18/20 | 8-K | |||
8/28/20 | ||||
8/5/20 | ||||
7/31/20 | ||||
7/30/20 | 8-K | |||
7/20/20 | 8-K | |||
7/16/20 | 8-K, EFFECT | |||
6/30/20 | 10-Q, D | |||
6/24/20 | ||||
6/1/20 | 8-K | |||
5/22/20 | ||||
5/8/20 | 8-K | |||
5/7/20 | 8-K | |||
5/4/20 | 10-K | |||
5/1/20 | 10-K | |||
4/10/20 | ||||
4/6/20 | ||||
4/4/20 | ||||
3/31/20 | 10-Q | |||
3/30/20 | ||||
3/27/20 | 8-K | |||
3/17/20 | ||||
3/5/20 | ||||
3/4/20 | ||||
3/3/20 | ||||
2/18/20 | 8-K/A | |||
2/15/20 | ||||
2/10/20 | ||||
2/5/20 | 8-K | |||
1/20/20 | ||||
1/13/20 | 8-K | |||
1/6/20 | 8-K | |||
1/3/20 | ||||
1/2/20 | ||||
1/1/20 | ||||
12/31/19 | 10-K, 10-K/A | |||
12/19/19 | ||||
12/18/19 | 8-K, 8-K/A | |||
12/15/19 | ||||
12/11/19 | ||||
11/21/19 | ||||
11/12/19 | ||||
11/11/19 | 8-K | |||
11/4/19 | ||||
10/31/19 | ||||
10/15/19 | 8-K | |||
10/1/19 | ||||
9/30/19 | 10-Q, NT 10-Q | |||
9/17/19 | 8-K | |||
9/13/19 | 8-K | |||
9/1/19 | ||||
8/30/19 | ||||
8/28/19 | 8-K | |||
8/21/19 | CORRESP | |||
8/16/19 | ||||
8/9/19 | ||||
7/29/19 | 8-K | |||
6/30/19 | 10-Q, NT 10-Q | |||
6/29/19 | ||||
6/10/19 | 8-K | |||
5/31/19 | ||||
5/28/19 | 8-K | |||
5/21/19 | D | |||
5/14/19 | ||||
5/13/19 | ||||
5/10/19 | 8-K | |||
5/6/19 | 8-K, 8-K/A | |||
5/5/19 | ||||
5/3/19 | 8-K | |||
5/2/19 | 8-K | |||
4/29/19 | 8-K | |||
4/26/19 | ||||
4/25/19 | 8-K | |||
4/22/19 | ||||
4/18/19 | ||||
4/9/19 | ||||
4/8/19 | ||||
3/31/19 | ||||
3/15/19 | 8-K | |||
3/14/19 | 8-K | |||
3/13/19 | ||||
3/11/19 | 8-K | |||
3/4/19 | 8-K | |||
2/28/19 | 10-Q | |||
2/12/19 | 8-K | |||
2/6/19 | ||||
2/2/19 | 8-K | |||
2/1/19 | ||||
1/29/19 | ||||
1/9/19 | ||||
1/8/19 | ||||
1/1/19 | ||||
12/31/18 | 10-KT | |||
12/30/18 | ||||
12/21/18 | 10-K, 10-Q/A | |||
12/20/18 | D | |||
12/17/18 | ||||
12/15/18 | ||||
12/12/18 | 8-K | |||
11/21/18 | ||||
11/1/18 | ||||
10/29/18 | 8-K | |||
10/22/18 | 8-K | |||
10/5/18 | ||||
10/4/18 | ||||
9/30/18 | ||||
8/31/18 | 10-K, NT 10-K | |||
7/6/18 | ||||
6/30/18 | ||||
6/21/18 | 8-K | |||
3/31/18 | ||||
3/29/18 | D | |||
3/19/18 | ||||
3/14/18 | 8-K | |||
2/15/18 | 8-K | |||
1/29/18 | ||||
1/1/18 | ||||
12/31/17 | ||||
12/30/17 | ||||
12/22/17 | ||||
12/15/17 | ||||
11/17/17 | 8-K | |||
10/31/17 | ||||
8/31/17 | 10-K | |||
7/6/17 | ||||
6/30/17 | ||||
6/2/17 | ||||
5/5/17 | ||||
5/2/17 | ||||
1/1/17 | ||||
12/28/16 | 8-K | |||
12/15/16 | ||||
5/11/16 | 8-K | |||
2/25/16 | ||||
1/1/16 | ||||
7/9/15 | ||||
8/2/13 | ||||
List all Filings |
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 2/16/21 Better Choice Co. Inc. S-1/A 186:20M Broadridge Fin’l So… Inc |