0000950170-23-008509 | 10-K | XBRL Viewer

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Organization and Description of Business - Additional Information (Details) $ in Millions	12 Months Ended
	Dec. 31, 2022 USD ($)
Organization And Description Of Business [Line Items]
Going concern, net loss	$ 196.3
Going concern, net cash used in operating activities	17.5
Going concern, unrestricted cash and cash equivalents	43.6
Going concern, accumulated deficit	$ 625.3

Inventory

12 Months Ended

Dec. 31, 2022

Inventory Disclosure [Abstract]

Inventory

3. INVENTORY

Inventory consisted of the following as of December 31, 2021 and 2022 (in thousands):


	Year-Ended December 31,
	2021		2022
Inventory on-hand	$	48,079	$	34,374
Inventory in-transit		14,966		9,292
Inventory	$	63,045	$	43,666

The Company’s Inventory on-hand is held either with Amazon, Walmart or the Company’s other third-party warehouses. The Company does not have any contractual right of returns with its contract manufacturers. The Company’s Inventory on-hand held by Amazon was approximately $8.4 million and $8.6 million as of December 31, 2021 and December 31, 2022, respectively.

Commitment and Contingencies - Additional Information (Details) $ in Thousands									1 Months Ended	3 Months Ended	12 Months Ended
	Dec. 29, 2022 USD ($)	Dec. 12, 2022 USD ($)	May 06, 2022 USD ($)	Nov. 30, 2021 USD ($)	Sep. 30, 2021 USD ($)	Jun. 10, 2021 USD ($) shares	May 31, 2021 USD ($)	May 02, 2021 USD ($) Installment	Apr. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Jun. 30, 2022 USD ($)
Commitment And Contingencies [Line Items]
Inventory purchased											$ 13,500	$ 32,300
Sales tax payable current											711	678
General and administrative expenses											38,239	45,099
Settlement Agreement
Commitment And Contingencies [Line Items]
Agreement date								May 2, 2021
Proceeds to be received from settlement agreement								$ 3,000
Number of installments \| Installment								3
Settlement Agreement \| Prepaid Expenses and Other Current Assets
Commitment And Contingencies [Line Items]
Prepaid asset												4,100
Securities Class Action
Commitment And Contingencies [Line Items]
Litigation settlement amount payable			$ 1,300										$ 1,300
Litigation settlement expense			$ 1,300
Litigation settlement												1,300
Securities Purchase Agreement \| Sabby Volatility Warrant Master Fund Ltd
Commitment And Contingencies [Line Items]
Litigation settlement expense											1,600
Sale of stock, number of shares issued in transaction \| shares						400,000
Sale of stock, proceeds net of offering costs						$ 6,000
General and administrative expenses											$ 1,600
Securities Purchase Agreement \| Settlement Agreement
Commitment And Contingencies [Line Items]
Litigation settlement										$ 800
Litigation settlement in cash									$ 500
Litigation settlement coupons awarded									$ 300
Stipulation
Commitment And Contingencies [Line Items]
Litigation settlement expense	$ 300	$ 300
First Payment \| Settlement Agreement
Commitment And Contingencies [Line Items]
Proceeds to be received from settlement agreement							$ 1,000
Settlement received												$ 1,000
Second Payment \| Settlement Agreement
Commitment And Contingencies [Line Items]
Proceeds to be received from settlement agreement					$ 1,000
Third Payment \| Settlement Agreement
Commitment And Contingencies [Line Items]
Proceeds to be received from settlement agreement				$ 1,000

Acquisition - Additional Information (Details)				12 Months Ended
Acquisition - Additional Information (Details)	May 05, 2021 USD ($) shares	Feb. 02, 2021 USD ($) shares	Dec. 01, 2020 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2021 USD ($)	Oct. 04, 2022 USD ($)	Nov. 30, 2021 USD ($)	Dec. 31, 2020 USD ($)
Business Acquisition [Line Items]
Business acquisition, earn-out payments				$ 3,983,000	$ 3,750,000
Cash purchase price						$ 700,000
Common stock issued				8,000	5,000
Acquisition date, initial fair value anoint of earn-out payment					5,200,000
Change in fair value of contingent earn-out liabilities				(5,240,000)	(30,529,000)
Business combination, contingent consideration earn out amount				$ 0	9,223,000			$ 22,531,000
Smash Assets
Business Acquisition [Line Items]
Total consideration			$ 25,000,000.0
Business combination, consideration transferred, common stock issued \| shares			4,220,000
Closing stock price \| $ / shares			$ 6.89
Value of certain inventory			$ 15,600,000
Business combination, contingent consideration earn out amount					5,240,000			$ 22,531,000
Smash Assets \| Sellers Brokers
Business Acquisition [Line Items]
Business combination, consideration transferred, common stock issued \| shares			164,000
Smash Assets \| Year One Earn-Out
Business Acquisition [Line Items]
Business combination contingent consideration contribution margin ratio				1.67
Business combination contingent consideration earn out margin \| $ / shares				$ 1.00
Business combination, contingent consideration earn out amount, minimum				$ 15,500,000
Business combination, contingent consideration earn out amount, maximum				18,500,000
Business combination contingent consideration arrangements earn out maximum				5,000,000.0
Smash Assets \| Year Two Earn-Out
Business Acquisition [Line Items]
Business combination, contingent consideration earn out amount, maximum				15,500,000
Business combination contingent consideration earn out generated amount				500,000
Business combination contingent consideration subject to cap				27,500,000
Business combination contingent consideration entitled to receive amount in cash equal to shares				100,000
Healing Solutions LLC
Business Acquisition [Line Items]
Total consideration paid by cash		$ 15,300,000
Business combination, consideration transferred, common stock issued \| shares		1,387,759
Withheld of cash purchase price to serve collateral for sellers payment		$ 2,000,000.0
Withheld of cash purchase price payment period		within 60 days of the Closing Date
Business combination, acquired payables, description		The shares will be issued to Healing Solutions following the final determination of inventory values pursuant to the terms of the Asset Purchase Agreement, which determination is expected to occur approximately nine to ten months following the Closing Date and such shares will be subject to vesting restrictions which will lapse on the date that is the one-year anniversary after the Closing Date.
Business acquisition, earn-out payments					3,750,000
Inventory		$ 5,285,000
Cash purchase price		15,280,000
Acquisition date, initial fair value anoint of earn-out payment		$ 16,500,000
Business combination contingent consideration earnout fair value							$ 1,400,000
Change in fair value of contingent earn-out liabilities				$ 0
Healing Solutions LLC \| After 15 Months Following Closing Date
Business Acquisition [Line Items]
Business combination, consideration transferred, common stock issued \| shares				0
Healing Solutions LLC \| Nine Months Following Closing Date
Business Acquisition [Line Items]
Business combination, consideration transferred, common stock issued \| shares				528,670
Healing Solutions LLC \| After Nine Months But Before 12 Months Following Closing Date
Business Acquisition [Line Items]
Business combination, consideration transferred, common stock issued \| shares				396,502
Healing Solutions LLC \| After12 Months But Before 15 Months Following Closing Date
Business Acquisition [Line Items]
Business combination, consideration transferred, common stock issued \| shares				264,335
Healing Solutions LLC \| Common Stock
Business Acquisition [Line Items]
Business combination, consideration transferred, common stock issued \| shares		1,387,759
Entitled to receive number of shares of common stock \| shares		170,042
Healing Solutions LLC \| Common Stock \| Maximum
Business Acquisition [Line Items]
Entitled to receive number of shares of common stock \| shares		280,000
Healing Solutions LLC \| Common Stock \| After 15 Months Following Closing Date \| Maximum
Business Acquisition [Line Items]
Entitled to payable number of shares of common stock \| shares		528,670
Squatty Potty, LLC
Business Acquisition [Line Items]
Total consideration paid by cash	$ 19,000,000.0
Business acquisition, earn-out payments				$ 3,983,000	4,000,000.0
Inventory	1,100,000
Business acquisition, payment for transition services					8,000,000.0
Cash purchase price	19,040,000
Acquisition date, initial fair value anoint of earn-out payment	3,500,000
Business combination, contingent consideration earn out amount					3,983,000
Squatty Potty, LLC \| Event Occurs in 12 Months Ending 12/31/2021
Business Acquisition [Line Items]
Business combination, contingent consideration earn out amount, maximum					3,900,000
Squatty Potty, LLC \| Event Occurs in Nine Months Following Closing Date
Business Acquisition [Line Items]
Business combination, contingent consideration earn out amount					$ 3,900,000
Photo Paper Direct Ltd.
Business Acquisition [Line Items]
Total consideration paid by cash	$ 8,300,000
Business combination, consideration transferred, common stock issued \| shares	704,548
Business acquisition, earn-out payments				6,000,000.0
Cash purchase price	$ 8,293,000
Common stock issued				$ 2,000,000.0
Acquisition date, initial fair value anoint of earn-out payment	900,000
Photo Paper Direct Ltd. \| Inventory and Other Working Capital Assets, Including Cash on Hand
Business Acquisition [Line Items]
Business acquisition, assets acquired	5,400,000
Cash purchase price	$ 3,000,000.0
Photo Paper Direct Ltd. \| Common Stock
Business Acquisition [Line Items]
Business combination, consideration transferred, common stock issued \| shares	704,500
Step and Go
Business Acquisition [Line Items]
Cash purchase price						$ 700,000

Acquisition - Pro Forma Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Net revenue as reported	$ 221,170	$ 247,767
Net revenue pro forma		264,725
Operating loss as reported	(178,159)	(34,077)
Operating loss (income) pro forma		(30,771)
Healing Solutions LLC
Business Acquisition [Line Items]
Net revenue as reported		33,100
Net revenue		4,600
Operating loss as reported	10,700
Operating income		382
Squatty Potty, LLC
Business Acquisition [Line Items]
Net revenue as reported		10,100
Net revenue		6,024
Operating loss as reported	4,200
Operating income		1,772
Photo Paper Direct Ltd.
Business Acquisition [Line Items]
Net revenue as reported		11,600
Net revenue		6,334
Operating loss as reported	$ 1,300
Operating income		$ 1,152

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Dec. 31, 2022	Mar. 13, 2023	Jun. 30, 2022
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Entity Registrant Name	Aterian, Inc.
Entity Central Index Key	0001757715
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		81,000,989
Entity File Number	001-38937
Entity Tax Identification Number	83-1739858
Entity Address, Address Line One	37 East 18th Street
Entity Address, Address Line Two	7th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10003
City Area Code	(347)
Local Phone Number	676-1681
Entity Incorporation, State or Country Code	DE
Document Annual Report	true
Document Transition Report	false
Title of each class	Common stock, par value $0.0001 per share
Trading Symbol(s)	ATER
Name of each exchange on which registered	NASDAQ
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Public Float			$ 142.1
ICFR Auditor Attestation Flag	false
Auditor Name	Deloitte & Touche LLP
Auditor Firm ID	34
Auditor Location	New York, New York

Fair Value Measurements

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

6. FAIR VALUE MEASUREMENTS

The Company’s financial instruments consist of Level 1 assets at December 31, 2021 and 2022. The Company’s cash and restricted cash was $38.3 million and $46.6 million at December 31, 2021 and 2022, respectively, and included savings deposits and overnight investments.

The Company’s credit facility and term loans are carried at amortized cost at December 31, 2021 and December 31, 2022 and the carrying amount approximates fair value as the stated interest rate approximates market rates currently available to the Company.

The Company considers the inputs utilized to determine the fair value of the borrowings to be Level 3 inputs. The Company categorizes its warrants potentially settleable in cash as Level 3 fair value measurements. The warrants potentially settleable in cash are measured at fair value on a recurring basis and are being marked to fair value at each reporting date until they are completely settled or meet the requirements to be accounted for as a component of stockholders’ equity.

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following table summarizes the fair value of the Company’s financial assets that are measured at fair value for the years-ended December 31, 2021 and 2022 (in thousands):


	Year-Ended December 31, 2021
	Fair Value Measurement Category
	Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	30,317	$	—	$	—
Restricted Cash		7,998		—		—
Liabilities:
Estimated fair value of contingent earn-out considerations		—		—		9,223

	Year-Ended December 31, 2022
	Fair Value Measurement Category
	Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	43,574	$	—	$	—
Restricted cash		3,055		—		—
Liabilities:
Warrant liability						3,473

The following table summarizes the Company's warrant activity during the year-ended December 31, 2022 (in thousands):


	Year-Ended December 31, 2022
Warrants liability as of January 1, 2022	$	—
Change in fair value of warrants		3,473
Warrants liability as of December 31, 2022.	$	3,473

The fair value of the outstanding warrants were measured using the Black Scholes model. Due to the complexity of the warrants issued, the Company uses an outside expert to assist in providing the mark to market fair valuation of the liabilities over the reporting periods in which the original agreement was in effect. Inputs used to determine estimated fair value of the warrant liabilities include the fair value of the underlying stock at the valuation date, the term of the warrants, and the expected volatility of the underlying stock. The significant unobservable input used in the fair value measurement of the warrant liabilities is the estimated term of the warrants. Generally, increases (decreases) in the fair value of the underlying stock and estimated term result in a directionally similar impact to the periodic fair value measurement of the outstanding warrant liability, and are recorded within the Change in fair market value of warrant line item on the statement of operations.

The fair value of the contingent consideration related to business combinations is estimated using a probability-adjusted discounted cash flow model. These fair value measurements are based on significant inputs not observable in the market. The key internally developed assumptions used in these models are discount rates and the probabilities assigned to the milestones to be achieved. The Company remeasures the fair value of the contingent consideration at each reporting period, and any changes in fair value resulting from either the passage of time or events occurring after the acquisition date, such as changes in discount rates, or in the expectations of achieving the performance targets, are recorded within the change in fair value of contingent earn-out liabilities line item on the statement of operations.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 1,894	$ 1,813
Less: accumulated depreciation and amortization	(1,041)	(559)
Property and equipment-net	853	1,254
Computer Equipment and Software
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	1,109	943
Furniture, Fixtures and Equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	91	91
Leasehold Improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	56	56
Building
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 638	$ 723

Accrued and Other Current Liabilities

12 Months Ended

Dec. 31, 2022

Accrued Liabilities And Other Liabilities [Abstract]

Accrued and Other Current Liabilities

8. ACCRUED AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following as of December 31, 2021 and 2022 (in thousands):


	December 31, 2021		December 31, 2022
Accrued compensation costs	$	162	$	53
Accrued professional fees and consultants		331		461
Accrued logistics costs		578		609
Product related accruals		2,984		1,248
Sales tax payable		678		711
Sales return reserve		590		646
Accrued fulfillment expense		744		755
Accrued insurance		967		356
Federal payroll taxes payable		4,449		1,467
Accrued interest payable		338		190
Warrant liability		-		3,473
All other accruals		5,800		4,285
Accrued and current liabilities	$	17,621	$	14,254

The Company sponsors, through its professional employer organization provider, a 401(k) defined contribution plan covering all eligible U.S. employees. Contributions to the 401(k) plan are discretionary. Currently, the Company does not match or make any contributions to the 401(k) plan.

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of Provision for Income Tax Expense

Loss before provision for income taxes consisted of the following for the periods indicated (in thousands):


	December 31, 2021			December 31, 2022
Domestic	$	(233,846	)	$	(196,166	)
International		(1,646	)		(502	)
Total	$	(235,492	)	$	(196,668	)

Schedule of Components of Income Tax Provision

The components of the Company’s income tax provision were as follows for the periods indicated (in thousands):


	December 31, 2021			December 31, 2022
Current:
Federal	$	—		$	—
State		72			101
Foreign		265			69
Total current income tax expense		337			170

Deferred:
Federal		253			(270	)
State		32			(35	)
Foreign		(90	)		(241	)
Total deferred income tax expense (benefit)		195			(546	)
Total income tax provision (benefit)	$	532		$	(376	)

Schedule of Federal Statutory Income Tax Rate Reconciliation

The reconciliation of the Federal statutory income tax provision to the Company’s effective income tax provision is as follows for the periods indicated (in thousands):


	December 31, 2021			December 31, 2022
Income tax benefit at statutory rates	$	(49,454	)	$	(41,300	)
Permanent differences		3			—
Debt extinguishment		33,746			(481	)
Warrant liabilities		11,066			4,455
Stock compensation		10,602			4,410
Change in FV contingent consideration		(3,143	)		—
Other permanent differences		—			3
Foreign rate differential		(44	)		14
State income taxes, net of federal tax benefit		(6,424	)		(5,644	)
Other		264			(389	)
Prior year true-up adjustments		(5,577	)		(352	)
Valuation allowance		9,493			38,908
Total income tax expense (benefit)	$	532		$	(376	)

Components of Deferred Tax Assets and Liabilities

The Company’s deferred tax assets and liabilities as of the dates indicated were as follows (in thousands):


	December 31, 2021			December 31, 2022
Deferred tax assets:
Sales returns reserve	$	130		$	—
Net operating loss carryforwards		36,250			51,889
Stock options		3,592			1,712
Deferred revenue		15			—
Interest expense limitation		10,151			10,959
Intangibles (definite life)		—			181
Intangibles (indefinite life)		—			21,386
Other		2,364			1,972
Total deferred tax assets before valuation allowance		52,502			88,099
Valuation allowance		(47,316	)		(86,224	)
Net deferred tax assets		5,186			1,875
Deferred tax liabilities:
Fixed assets		(18	)		(3	)
Goodwill		(1,528	)		—
Prepaid expenses		(3,562	)		(1,808	)
Intangibles		(560	)		—
Contingent consideration		(1,084	)		(1,092	)
Other		(130	)		(130	)
Net deferred tax liabilities		(6,882	)		(3,033	)

Deferred tax liability, net	$	(1,696	)	$	(1,158	)

At December 31, 2022, the Company had approximately $216.4 million of gross net operating losses ("NOLs") which expire in fiscal 2034 if not used. The Company also has approximately $121.3 million of apportioned state and local NOLs that expire between 2026 and 2036, depending on the state.

Acquisition - Summary of Changes in Carrying Value of Estimated Contingent Earn-Out Liabilities (Details) - USD ($)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Beginning Balance	$ 9,223,000	$ 22,531,000
Acquisition date fair value of contingent earn-out liabilities and inventory to be settled in shares		20,971,000
Change in fair value of contingent earn-out liabilities	(5,240,000)	(30,529,000)
Payment of contingent earn-out liability	(3,983,000)	(3,750,000)
Ending Balance	0	9,223,000
Smash Assets
Business Acquisition [Line Items]
Beginning Balance	5,240,000	22,531,000
Change in fair value of contingent earn-out liabilities	(5,240,000)	(17,291,000)
Ending Balance		5,240,000
Healing Solutions LLC
Business Acquisition [Line Items]
Acquisition date fair value of contingent earn-out liabilities and inventory to be settled in shares		16,558,000
Change in fair value of contingent earn-out liabilities		(12,808,000)
Payment of contingent earn-out liability		(3,750,000)
Squatty Potty, LLC
Business Acquisition [Line Items]
Beginning Balance	3,983,000
Acquisition date fair value of contingent earn-out liabilities and inventory to be settled in shares		3,502,000
Change in fair value of contingent earn-out liabilities		481,000
Payment of contingent earn-out liability	(3,983,000)	(4,000,000.0)
Ending Balance		3,983,000
Photo Paper Direct Ltd.
Business Acquisition [Line Items]
Acquisition date fair value of contingent earn-out liabilities and inventory to be settled in shares		911,000
Change in fair value of contingent earn-out liabilities		$ (911,000)
Payment of contingent earn-out liability	$ (6,000,000.0)

Organization and Description of Business

12 Months Ended

Dec. 31, 2022

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Description of Business

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Aterian, Inc. is a technology-enabled consumer products company that builds, acquires and partners with e-commerce brands. Aterian predominantly operates through online retail channels such as Amazon and Walmart, Inc. The Company owns and operates fifteen brands, which were either incubated or purchased, selling products in multiple categories, including home and kitchen appliances, kitchenware, heating, cooling and air quality appliances (dehumidifiers, humidifiers and air conditioners), health and beauty products and essential oils.

Headquartered in New York, Aterian’s offices can also be found in China, Philippines, and Poland.

Liquidity and Going Concern

As an emerging growth company in the early commercialization stage of its lifecycle, we are subject to inherent risks and uncertainties associated with the development of our enterprise. In this regard, substantially all of our efforts to date have been devoted to the development and sale of our products in the marketplace, which includes our investment in organic growth at the expense of short-term profitably, our investment in incremental growth through mergers & acquisitions (“M&A strategy”), our recruitment of management and technical staff, and raising capital to fund the development of our enterprise. As a result of these efforts, we have incurred significant losses and negative cash flows from operations since our inception and expect to continue to incur such losses and negative cash flows for the foreseeable future until such time that we reach a scale of profitability to sustain our operations. In addition, our recent financial performance has been adversely impacted by the COVID-19 global pandemic and related global shipping disruption, in particular with respect to substantial increases in supply chain costs for shipping containers (See COVID-19 Pandemic and the Supply Chain below for additional details).

In order to execute our growth strategy, we have historically relied on outside capital through the issuance of equity, debt, and borrowings under financing arrangements (collectively “outside capital”) to fund our cost structure and we expect to continue to rely on outside capital for the foreseeable future, specifically for M&A. While we believe we will eventually reach a scale of profitability to sustain our operations, there can be no assurance we will be able to achieve such profitability or do so in a manner that does not require our continued reliance on outside capital. Moreover, while we have historically been successful in raising outside capital, there can be no assurance we will be able to continue to obtain outside capital in the future or do so on terms that are acceptable to us.

As of the date the accompanying Consolidated Financial Statements were issued (the “issuance date”), we evaluated the significance of the following adverse financial conditions in accordance with Accounting Standard Codification 205-40, Going Concern:

•

Since our inception, we have incurred significant losses and used cash flows from operations to fund our enterprise. In this regard, during the year ended December 31, 2022, we incurred a net loss of $196.3 million and used net cash flows in our operations of $17.5 million. In addition, as of December 31, 2022, we had unrestricted cash and cash equivalents of $43.6 million available to fund our operations and an accumulated deficit of $625.3 million.

•

We are required to remain in compliance with certain financial covenants required by the MidCap Credit facility (See Note 9, Credit Facility and Term Loans). We were in compliance with these financial covenant as of December 31, 2022, and expect to remain in compliance through at least March 31, 2024. However, with our short history of forecasting our business during the ongoing COVID-19 global pandemic, the current record global inflation and related global supply chain disruptions, we can provide no assurances that we will remain in compliance with our financial covenants. Further, absent our ability to generate cash inflows from our operations or secure additional outside capital, we may be unable to remain in compliance with these financial covenants. In the event we are unable to remain in compliance with these financial covenants (or other non-financial covenants required by the MidCap Credit Facility), and we are unable to secure a waiver or forbearance, MidCap may, at its discretion, exercise any and all of its existing rights and remedies, which may include, among others, accelerating repayment of the outstanding borrowings and/or asserting its rights in the assets securing the loan.

•

As of the issuance date, we have no firm commitments to secure additional outside capital from lenders or investors. While we are continually exploring additional outside capital, specifically to fund our M&A growth strategy, there can be no assurance we will be able obtain capital or do so on terms that are acceptable to us. Accordingly, absent our ability to generate cash inflows from our operations and/or secure additional outside capital in the near term, we may be unable to meet our obligations as they become due over the next twelve months beyond the issuance date.

•

We plan to continue to closely monitor our operating forecast, pursue our M&A strategy, pursue additional sources of outside capital on terms that are acceptable to us, and secure a waiver or forbearance from MidCap if we are unable to remain in compliance with one or more of the covenants required by the MidCap Credit Facility. If some or all of our plans prove unsuccessful, we may need to implement short-term changes to our operating plan, such as delaying expenditures, reducing investments in new products, delaying the development of our software, or reducing our sale and distribution infrastructure. We may also need to seek long-term strategic alternatives, such as a significant curtailment of our operations, a sale of certain of our assets, a divestiture of certain product lines, a sale of the entire enterprise to strategic or financial investors, and/or allow our enterprise to become insolvent.

These uncertainties raise substantial doubt about our ability to continue as a going concern. The accompanying Consolidated Financial Statements have been prepared on the basis that we will continue to operate as a going concern, which contemplates that we will be able to realize assets and settle liabilities and commitments in the normal course of business for the foreseeable future. Accordingly, the accompanying Consolidated Financial Statements do not include any adjustments that may result from the outcome of these uncertainties.

COVID-19 Pandemic and the Supply Chain

During 2022 we were impacted by the COVID-19 pandemic and related global shipping disruption. Together these led to substantial increases in supply chain costs, in particular for shipping containers, which we rely on to import our goods,reduced the reliability and timely delivery of shipping containers and substantially increased our last mile shipping costs on our oversized goods, which are a material part of our business. The reduced reliability and delivery of such shipping containers forced us to spend more on premium shipping to ensure goods were delivered . Further, the global shipping disruption led us to increase our inventory on-hand, including advance ordering and taking possession of inventory earlier than expected, impacting our working capital.

Third party last mile shipping partners, such as UPS and FedEx, continue to increase the cost of delivering goods to the end consumers as their delivery networks continue to be adjusted following the onset of COVID-19 pandemic. There remains significant uncertainty to consumer demand and buying habits as price increases related to raw materials, the importing of goods, including tariffs, and the cost of delivering goods to consumers has led to inflation across the U.S. and potentially reduced demand for our products.

We continue to consider the impact of the COVID-19 and the related supply chain disruptions on the assumptions and estimates used when preparing our consolidated financial statements including inventory valuation, and the impairment of long-lived assets. These assumptions and estimates may change. If the economic conditions worsen beyond what is currently estimated by management, such future changes may have an adverse impact on our business, operations, financial results, and liquidity.

Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

13. INCOME TAXES

Loss before provision for income taxes consisted of the following for the periods indicated (in thousands):


	December 31, 2021			December 31, 2022
Domestic	$	(233,846	)	$	(196,166	)
International		(1,646	)		(502	)
Total	$	(235,492	)	$	(196,668	)

The components of the Company’s income tax provision were as follows for the periods indicated (in thousands):


	December 31, 2021			December 31, 2022
Current:
Federal	$	—		$	—
State		72			101
Foreign		265			69
Total current income tax expense		337			170

Deferred:
Federal		253			(270	)
State		32			(35	)
Foreign		(90	)		(241	)
Total deferred income tax expense (benefit)		195			(546	)
Total income tax provision (benefit)	$	532		$	(376	)

The reconciliation of the Federal statutory income tax provision to the Company’s effective income tax provision is as follows for the periods indicated (in thousands):


	December 31, 2021			December 31, 2022
Income tax benefit at statutory rates	$	(49,454	)	$	(41,300	)
Permanent differences		3			—
Debt extinguishment		33,746			(481	)
Warrant liabilities		11,066			4,455
Stock compensation		10,602			4,410
Change in FV contingent consideration		(3,143	)		—
Other permanent differences		—			3
Foreign rate differential		(44	)		14
State income taxes, net of federal tax benefit		(6,424	)		(5,644	)
Other		264			(389	)
Prior year true-up adjustments		(5,577	)		(352	)
Valuation allowance		9,493			38,908
Total income tax expense (benefit)	$	532		$	(376	)

The Company’s effective tax rate was 0.08% and (0.19)% for the years-ended December 31, 2021 and December 31, 2022, respectively. The effective tax rate in 2021 was principally due to minimum state taxes accrued against the Company's pre-tax operating loss in the fiscal period. The effective tax rate for 2022 was principally due to tax expense incurred on the operation of acquired goodwill that is deductible for tax purposes and which was fully impaired for book purposes during the year.

The Company’s deferred tax assets and liabilities as of the dates indicated were as follows (in thousands):


	December 31, 2021			December 31, 2022
Deferred tax assets:
Sales returns reserve	$	130		$	—
Net operating loss carryforwards		36,250			51,889
Stock options		3,592			1,712
Deferred revenue		15			—
Interest expense limitation		10,151			10,959
Intangibles (definite life)		—			181
Intangibles (indefinite life)		—			21,386
Other		2,364			1,972
Total deferred tax assets before valuation allowance		52,502			88,099
Valuation allowance		(47,316	)		(86,224	)
Net deferred tax assets		5,186			1,875
Deferred tax liabilities:
Fixed assets		(18	)		(3	)
Goodwill		(1,528	)		—
Prepaid expenses		(3,562	)		(1,808	)
Intangibles		(560	)		—
Contingent consideration		(1,084	)		(1,092	)
Other		(130	)		(130	)
Net deferred tax liabilities		(6,882	)		(3,033	)

Deferred tax liability, net	$	(1,696	)	$	(1,158	)

The Company has temporary differences due to differences in recognition of revenue and expenses for tax and financial reporting purposes, principally related to net operating losses, inventory, depreciation, and other expenses that are not currently deductible or realizable. At December 31, 2021, the Company had approximately $152.0 million of gross federal NOLs, which will begin to expire in fiscal year 2034 if unused and approximately $79.5 million apportioned state and local NOLs. At December 31, 2022, the Company had approximately $216.4 million of gross federal NOLs which will begin to expire in fiscal year 2034 if unused. The Company also has approximately $121.3 million apportioned state and local NOLs that expire between 2026 and 2036, depending on the state, if not used. The NOL carryforwards for federal and state income tax purposes which, generally, can be used to reduce future taxable income. The Company’s ability to utilize its NOL carryforwards may be limited pursuant to Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), if the Company has had a change in ownership of more than 50% of its capital stock over a three-year period pursuant to Section 382 of the Code. These complex changes of ownership rules generally focus on ownership changes involving stockholders owning directly or indirectly 5% or more of a company’s stock, including certain public “groups” of stockholders as set forth by Section 382 of the Code, including those arising from new stock issuances and other equity transactions.

In response to COVID-19, various governments worldwide have enacted, or are in the process of enacting, measures to provide relief to businesses negatively affected by the pandemic. On March 27, 2021, the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") was signed into law in the U.S. The CARES Act provides relief to U.S. corporations through financial assistance programs and modifications to certain payroll and income tax provisions. In connection with the CARES Act and other financial relief measures worldwide, the Company has utilized $1.3 million of payroll related credits for the year-ended December 31, 2021. The payroll related credits are recorded in other current liabilities within the consolidated balance sheet.

The Company regularly assesses the realizability of its deferred tax assets and establishes a valuation allowance if it is more-likely-than-not that some portion of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Due to the Company’s history of net operating losses, the Company believes it is more likely than not its federal, state and foreign deferred tax assets will not be realized as of December 31, 2022.

The Company’s major taxing jurisdictions are New Jersey, New York, Florida, Texas, Pennsylvania, Tennessee, Virginia and California. The Company files a U.S. Consolidated income tax return as well as tax returns in certain foreign jurisdictions. The Company is subject to examination in these jurisdictions for all years since inception. Fiscal years outside the normal statute of limitations remain open to audit due to tax attributes generated in the early years which have been carried forward and may be audited in subsequent years when utilized. The Company is not currently under examination for income taxes in any jurisdiction. The Company may be subject to audits covering a variety of tax matters by taxing authorities in any taxing jurisdiction where the Company conducts business. While the Company believes that the tax returns filed, and tax positions taken are supportable and accurate, some tax authorities may not agree with the positions taken. This can give rise to tax uncertainties which, upon audit, may not be resolved in the Company’s favor. As of December 31, 2021 and 2022, the Company has not recorded any tax contingency accruals for uncertain tax positions.

On August 16, 2022, Congress passed the Inflation Reduction Act of 2022 (the “IRA”). The IRA introduces a new 15% corporate alternative minimum tax and includes a substantial package of energy and climate-related provisions, among other revenue raisers and incentives. A 1% excise tax on stock repurchases was also introduced in the IRA and this is effective January 1, 2023. On June 11, 2022, Congress passed the CHIPS Act of 2022. CHIPS adds a one-time investment tax credit equal to 25% of a company’s investment in facilities that manufacture semiconductors or semiconductor manufacturing equipment. We evaluated the provisions of the IRA and the CHIPS Act and determined that there was no material impact for the year ended December 31, 2022.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI https://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares outstanding	80,752,290	55,090,237

Fair Value Measurements - Summary of Financial Assets Measured at Fair Value (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Level 1 \| Cash and Cash Equivalents
Assets:
Assets	$ 43,574	$ 30,317
Level 1 \| Restricted Cash
Assets:
Assets	3,055	7,998
Level 3 \| Estimated Fair Value of Contingent Earn-out Considerations
Liabilities:
Liabilities		$ 9,223
Level 3 \| Fair Market Value of Warrant Liability
Liabilities:
Liabilities	$ 3,473

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2022

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock Options Activity

The following is a summary of stock options activity during the year-ended December 31, 2022:


	Options Outstanding
	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (years)		Aggregate Intrinsic Value
Balance—January 1, 2022		522,905		$	9.25		6.77	$	25,971
Options granted		—		$	—	—		$	—
Options exercised		—		$	—	—		$	—
Options canceled		(154,309	)	$	9.24	—		$	—
Balance—December 31, 2022		368,596		$	9.26		5.89	$	—
Exercisable as of December 31, 2022		368,596		$	9.26		5.89	$	—
Vested and expected to vest as of December 31, 2022		368,596		$	9.26		5.89	$	—

Summary of Restricted Stock Activity

A summary of restricted stock activity within the Company’s equity plans and changes for the year-ended December 31, 2022, is as follows:


Restricted Stock Awards	Shares			Weighted Average Grant- Date Fair Value
Nonvested at January 1, 2022		2,106,180		$	14.94
Granted		4,428,662		$	3.14
Vested		(1,888,337	)	$	10.38
Forfeited		(423,482	)	$	10.27
Nonvested at December 31, 2022		4,223,023		$	4.85

Summary of Total Stock-based Compensation Expense by Function

Stock-based compensation expense is allocated based on the cost center to which the award holder belongs. The following table summarizes the total stock-based compensation expense by function, including expense related to consultants for years-ended December 31, 2021 and 2022.


	Years-Ended December 31,
	2021		2022
	(in thousands, except percentages)
Sales and distribution expenses	$	6,809	$	5,014
Research and development expenses		5,339		1,871
General and administrative expenses		16,839		7,709
Total stock-based compensation expense	$	28,987	$	14,594

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Net Revenue Disaggregated by Sales Channel and Geographic Region

Net Revenue by Category: The following table sets forth the Company’s net revenue disaggregated by sales channel and geographic region based on the billing addresses of its customers:


	Year-Ended December 31, 2021
	(in thousands)
	Direct		Wholesale/Other		Total
North America	$	232,067	$	11,950	$	244,017
Other		3,750		—		3,750
Total net revenue	$	235,817	$	11,950	$	247,767

	Year-Ended December 31, 2022
	(in thousands)
	Direct		Wholesale/Other		Total
North America	$	209,336	$	7,002	$	216,338
Other		4,832		—		4,832
Total net revenue	$	214,168	$	7,002	$	221,170

Net Revenue Disaggregated by Product Categories

Net Revenue by Product Categories: The following table sets forth the Company’s net revenue disaggregated by product categories:


	Year-Ended December 31,
	2021		2022
	(in thousands)
Heating, cooling and air quality	$	73,685	$	67,797
Kitchen appliances		43,180		40,551
Health and beauty		15,579		17,485
Personal protective equipment		6,073		1,564
Cookware, kitchen tools and gadgets		22,933		19,526
Home office		12,352		13,322
Housewares		33,951		33,041
Essential oils and related accessories		27,444		23,604
Other		12,570		4,280
Total net revenue	$	247,767	$	221,170

Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Deferred tax assets:
Sales returns reserve		$ 130
Net operating loss carryforwards	$ 51,889	36,250
Stock options	1,712	3,592
Deferred revenue		15
Interest expense limitation	10,959	10,151
Intangibles (definite life)	181
Intangibles Indefinite Life	21,386
Other	1,972	2,364
Total deferred tax assets before valuation allowance	88,099	52,502
Valuation allowance	(86,224)	(47,316)
Net deferred tax assets	1,875	5,186
Deferred tax liabilities:
Fixed assets	(3)	(18)
Goodwill		(1,528)
Prepaid expenses	(1,808)	(3,562)
Intangibles		(560)
Contingent consideration	(1,092)	(1,084)
Other	(130)	(130)
Net deferred tax (liabilities)	(3,033)	(6,882)
Deferred tax liability, net	$ (1,158)	$ (1,696)

Stock-Based Compensation - Summary of Total Stock-based Compensation Expense by Function (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 14,594	$ 28,987
Sales and Distribution Expenses
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	5,014	6,809
Research and Development Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	1,871	5,339
General and Administrative Expense
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 7,709	$ 16,839

Stock-Based Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock	12 Months Ended
	Dec. 31, 2022 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares, Nonvested at January 1, 2022 \| shares	2,106,180
Shares, Granted \| shares	4,428,662
Shares, Vested \| shares	(1,888,337)
Shares, Forfeited \| shares	(423,482)
Shares, Nonvested at December 31, 2022 \| shares	4,223,023
Weighted Average Grant-Date Fair Value, Nonvested at January 1, 2022 \| $ / shares	$ 14.94
Weighted Average Grant-Date Fair Value, Granted \| $ / shares	3.14
Weighted Average Grant-Date Fair Value, Vested \| $ / shares	10.38
Weighted Average Grant-Date Fair Value, Forfeited \| $ / shares	10.27
Weighted Average Grant-Date Fair Value, Nonvested at December 31, 2022 \| $ / shares	$ 4.85

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Asset Purchase Agreement	High Trail	Common Stock	Common Stock Asset Purchase Agreement	Common Stock High Trail	Additional Paid-in Capital	Additional Paid-in Capital Asset Purchase Agreement	Additional Paid-in Capital High Trail	Accumulated Deficit	Accumulated Other Comprehensive Income
Beginning balance at Dec. 31, 2020	$ 23,382			$ 3			$ 216,305			$ (192,935)	$ 9
Beginning balance, shares at Dec. 31, 2020				27,074,791
Net loss	(236,024)									(236,024)
Issuance of restricted common stock, shares				2,025,597
Forfeiture of restricted common stock, shares				(647,659)
Reclassification of warrants to equity	97,088						97,088
Issuance of common stock upon exercise of stock option grants	9,033						9,033
Issuance of common stock upon exercise of stock option grants, shares				1,011,422
Issuance of common stock related to exercise of warrants	40,318						40,318
Issuance of common stock related to exercise of warrants, shares				6,405,605
Issuance of common stock in connection with acquisition of Healing Solutions assets	47,369						47,369
Issuance of common stock in connection with acquisition of Healing Solutions assets, shares				2,796,001
Issuance of restricted stock awards	7,669						7,669
Issuance of restricted stock awards, shares				769,104
Issuance of warrants to High Trail	39,016						39,016
Issuance of warrants to Midcap	589						589
Reclassification of warrants to liability	(21,260)						(21,260)
Warrant modification on extinguishment	17,399						17,399
Issuance of common stock	36,735	$ 11,075	$ 129,620			$ 2	36,735	$ 11,075	$ 129,618
Issuance of common stock, shares				2,666,667	704,548	12,284,161
Stock-based compensation	22,696						22,696
Other comprehensive income (loss)	(477)										(477)
Ending balance at Dec. 31, 2021	224,228			$ 5			653,650			(428,959)	(468)
Ending balance, shares at Dec. 31, 2021				55,090,237
Net loss	(196,292)									(196,292)
Issuance of restricted common stock	1			$ 1
Issuance of restricted common stock, shares				4,428,662
Forfeiture of restricted common stock, shares				(423,482)
Exercise of Prefunded Warrants, shares				3,013,850
Exercise of Prefunded Warrants	15,039						15,039
Issuance of common stock for settlement of seller note, shares				292,887
Adjustments to Additional Paid in Capital, Equity Component of Convertible Debt	767						767
Reclassification of warrants to equity	18,982						(18,982)
Issuance of common stock	46,834			$ 2			46,832
Issuance of common stock, shares				18,277,948
Issuance of common stock, shares				72,188
Issuance of common stock	43						43
Loss on initial issuance of equity	18,669						18,669
Issuance of warrant to contractors	1,137						1,137
Stock-based compensation	11,184						11,184
Other comprehensive income (loss)	(676)										(676)
Ending balance at Dec. 31, 2022	$ 101,952			$ 8			$ 728,339			$ (625,251)	$ (1,144)
Ending balance, shares at Dec. 31, 2022				80,752,290

Credit Facility and Term Loans - Schedule of Interest Expense, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Debt Disclosure [Abstract]
Interest expense	$ 2,696	$ 13,250
Interest income	(93)	(595)
Total interest expense, net	$ 2,603	$ 12,655

Inventory - Additional Information (Details) - USD ($) $ in Millions	Dec. 31, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Inventory on-hand held by Amazon	$ 8.6	$ 8.4

Commitment and Contingencies

12 Months Ended

Dec. 31, 2022

Commitments And Contingencies Disclosure [Abstract]

Commitment and Contingencies

12. COMMITMENT AND CONTINGENCIES

Inventory Purchases—As of December 31, 2021 and 2022, the Company had $32.3 million and $13.5 million, respectively, of inventory purchase orders placed with vendors waiting to be fulfilled.

Sales or Other Similar Taxes—Based on the location of the Company’s current operations, the majority of sales tax is collected and remitted either by the Company or on its behalf by e-commerce marketplaces in most states within the U.S. To date, the Company has had no actual or threatened sales and use tax claims from any state where it does not already claim nexus or any state where it sold products prior to claiming nexus. However, the Company believes that the likelihood of incurring a liability as a result of sales tax nexus being asserted by certain states where it sold products prior to claiming nexus is probable. As of each of December 31, 2021 and December 31, 2022, the Company estimates that the potential liability, including current sales tax payable is approximately $0.7 million which has been recorded as an accrued liability. The Company believes this is the best estimate of an amount due to taxing agencies, given that such a potential loss is an unasserted liability that would be contested and subject to negotiation between the Company and the state, or decided by a court.

Settlement Agreement—On May 2, 2021, the Company entered into a settlement agreement with one of the Company’s suppliers who agreed to pay the amount of $3.0 million to the Company in three installments of $1.0 million each, with the first payment to be paid on or before May 31, 2021, the second payment to be paid on or before September 30, 2021, and the third payment to be paid on or before November 30, 2021. Further, the supplier agreed to deliver certain goods as part of this settlement by September 30, 2021. Through the date of the accompanying Consolidated Financial Statements, the supplier has not paid in full its required first payment of $1.0 million nor has it delivered the required quantity of goods. The Company fully reserved $4.1 million within prepaid and other current assets on its Consolidated Financial Statements during the year-ended December 31, 2021 and December 31, 2022. The Company has commenced legal action against the supplier and certain other parties to the matter. One of the parties to the matter has filed for bankruptcy and such legal action is being stayed until the resolution of such bankruptcy. The Company continues to reserve its legal options and rights on this matter as of December 31, 2022.

Legal Proceedings—The Company is party to various actions and claims arising in the normal course of business. The Company does not believe that the final outcome of these matters will have a material adverse effect on the Company’s financial position or results of operations. In addition, the Company maintains what it believes is adequate insurance coverage to further mitigate risk. However, no assurance can be given that the final outcome of such proceedings will not materially impact the Company’s financial condition or results of operations. Further, no assurance can be given that the amount or scope of existing insurance coverage will be sufficient to cover losses arising from such matters.

Securities Class Action—Following a mediation, an initial settlement-in-principle, and further negotiations, on April 22, 2022, the Company, in conjunction with its codefendants Yaniv Sarig, Fabrice Hamaide, and Arturo Rodriguez, entered into a formal settlement agreement to resolve the purported class action lawsuits filed in the U.S. District Court for the Southern District of New York (the “Court”) by Andrew Tate on May 13, 2021, and by Jeff Coon, on June 10, 2021, consolidated under the caption Tate v. Aterian, Inc., et. al., 21-cv-04323-VM (the “Action”).

In the Action, plaintiffs claimed that defendants made false and materially misleading statements and failed to disclose material adverse facts regarding the Company’s business, operations, and prospects, and that this was revealed on May 4, 2021, in a report issued by Culper Research. The Company and its codefendants denied, and continue to deny, that these allegations have any merit. The settlement agreement contains no admission of wrongdoing and expressly states that the Company and its codefendants have entered into a settlement solely to avoid the uncertainties, burden, and expense of further litigation.

The settlement class consists of purchasers of the Company’s securities during the period from August 24, 2020, through May 3, 2021, inclusive (the “Class Period”). Under the terms of the proposed settlement, members of the settlement class release the Company and its codefendants from, among other things, all claims and causes of action of every nature and description, whether known or unknown, that were asserted in the Action; could have been asserted in the Action; relate in any way to transactions in the Company’s securities during the Class Period and any facts, transactions, or occurrences referred to in any of the pleadings or other documents filed in the Action. Under the agreement, the Company was to pay $1.3 million, within 10 business days of the Court’s preliminary approval of the settlement, which would, after final court approval, be distributed to claimants in the settlement class pursuant to the plan of allocation filed with the Court on May 4, 2022. To the extent permitted by the Court, this payment will also fund the legal fees of plaintiffs’ counsel and the costs of administering the settlement.

The proposed settlement was preliminarily approved by the Court on May 6, 2022, and the Company thereafter paid $1.3 million into the designated escrow. On September 12, 2022, the Court entered a final judgment approving the class action settlement. The claims administrator is in the process of distributing funds to claimants. The Company does not anticipate any further action in this matter. In connection with the settlement, the Company accrued approximately $1.3 million during the year ended December 31, 2021 and paid approximately $1.3 million in the second quarter of 2022.

Shareholder Derivative Actions Related to the Securities Class Action—On October 21, October 25 and November 10, 2021, three shareholder derivative actions were filed on behalf of the Company by Shaoxuan Zhang, Michael Sheller and Tyler Magnus in the U.S. District Court for the Southern District of New York. These actions, collectively, name Yaniv Sarig, Fabrice Hamaide, Arturo Rodriguez, Greg B. Petersen, Bari A. Harlam, Amy von Walter, William Kurtz, Roi Zion Zahut, Joseph A. Risico, Tomer Pascal and Mihal Chaouat-Fix as individual defendants, and the Company as a nominal defendant. These actions are predicated on substantively the same factual allegations contained in the above-described securities class action which was resolved via settlement in September 2022 The Company believes the allegations are without merit and continues to deny each of the claims and allegations of wrongdoing. On December 12, 2022, the parties reached an agreement and entered into a Stipulation and Agreement of Settlement (the “Stipulation”) to resolve this derivative action. Under the Stipulation, the Company agreed to adopt certain corporate governance reforms, the terms of which are outlined in Exhibit A to the Stipulation, and a payment of the Plaintiffs’ attorneys’ fees and expenses of $0.3 million The proposed settlement was preliminarily approved by the Court on December 29, 2022, the Company made the agreed $0.3 million payment, and a hearing to determine whether the Court should give final approval to the settlement is scheduled for March 2023.

Investor Contract Action—On September 20, 2021, Sabby Volatility Warrant Master Fund Ltd. (the “Investor”) sued the Company in the Supreme Court of the State of New York, New York County, alleging that the Company breached the Securities Purchase Agreement, dated June 10, 2021 (the “Purchase Agreement”), pursuant to which the Investor purchased 400,000 shares of the Company’s common stock, for an aggregate price of approximately $6.0 million. The Investor contended that certain of the representations and warranties made by the Company in the Purchase Agreement concerning its financial condition and the accuracy of its prior disclosures were untrue and that the Company breached the Purchase Agreement’s anti-dilution and use-of-proceeds covenants on both August 9, 2021 and September 23, 2021, when the Company resolved certain defaults with High Trail. The parties reached a settlement agreement for $1.6 million. In this action, the Company denied, and it continues to deny, the Investor’s allegations, and the settlement agreement contains no admission of wrongdoing; the Company nevertheless determined that a resolution was warranted to minimize the costs and risks of ongoing litigation. The Company recorded a $1.6 million expense in general and administrative expenses on the Consolidated Statement of Operations for the year-ended December 31, 2022.

Mueller Action—In October 2021, the Company received a class action notification and pre-lawsuit demand letter demanding corrective action with respect to the marketing, advertising and labeling of certain products under the Mueller brand (the “Mueller Action”). In April 2022, the parties reached an agreement in principle to resolve this potential action for $0.5 million in cash and $0.3 million worth of coupons, which the Company accrued $0.8 million in the three months ended March 31, 2022, subject to negotiation and the execution of final settlement documents and court approval. If that process does not succeed, the Company is prepared to continue the full defense of this action.

Sentia Wellness Action—On June 7, 2022, Sentia Wellness Inc. (“Sentia”) filed an action in Multnomah County, Oregon against Boris Jordan; Measure 8 Ventures, LP; Gron Ventures Fund I, LP; Zola Global Investors Ltd.; Anson Advisors Inc.; AC Anson Investments Ltd.; Anson Investments Master Fund LP; Anson Opportunities Master Fund LP; Serendipity SPC -Trimble Fund SP; Lapid Us Investments LLC; Hadron Healthcare and Consumer Special Opportunities Master Fund; Alliance Global Partners LLC; Sunny Puri; Juan Martinez; Peter Clateman; Wilder Ramsey; Gregory Crowe; Igor Gimelshtein; Tarik Ouass; Andrea Oriani; Marco D’attanseo; Afzal Hasan; and the Company. Sentia asserts claims for breach of fiduciary duty, breach of duty of good faith and fair dealing, intentional interference with prospective economic relations, intentional interference with contractual relationship, negligent misrepresentation, and unjust enrichment against various of these defendants, based on the allegation that Sentia’s debt holders conspired to take control of Sentia and direct its resources and acquisition efforts to the debt holders’ individual financial interests. Sentia alleges that Aterian—then known as Mohawk —contemplated a partial acquisition of Sentia that played some role in these events. The Company filed a motion to dismiss the action and, in response, on December 8, 2022, counsel for Sentia agreed to dismiss the Company from the action (without prejudice).

Earn-out Payment Dispute—On February 24, 2022, the Company received a notice disputing the Company’s calculation of the earn-out payment to be paid to Josef Eitan and Ran Nir pursuant to the Stock Purchase Agreement (the “PPD Stock Purchase Agreement”), dated as of May 5, 2021, by and among the Company, Truweo, LLC, Photo Paper Direct Ltd, Josef Eitan and Ran Nir. The Company is in discussions with representatives of Mr. Eitan and Mr. Nir, who believe they are entitled to the full earn-out under the terms of the PPD Stock Purchase Agreement, whereas the Company believes they are not. Mr. Eitan and Mr. Nir filed a motion to compel arbitration in the Southern District of New York on September 14, 2022. The Company filed its motion to oppose such motion on October 28, 2022, believes its calculations are accurate and intends to vigorously defend itself.

Net Loss Per Share (Tables)

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Loss per Share

he following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share data):



	2021			2022
Net loss	$	(236,024	)	$	(196,292	)
Weighted-average number of shares used in computing net loss per share, basic and diluted		35,379,005			66,529,565
Net loss per share, basic and diluted	$	(6.67	)	$	(2.95	)

Anti-dilutive shares excluded from computation of net loss per share (in shares)		3,027,361			13,409,769

Credit Facility and Term Loans - Schedule of Credit Facility and Term Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Total MidCap Credit Facility - December 2021	$ 21,053	$ 32,845
MidCap Credit Facility
Debt Instrument [Line Items]
MidCap Credit Facility - December 2021	21,899	34,119
Less: deferred debt issuance costs	(459)	(691)
Less: discount associated with issuance of warrants	(387)	(583)
Total MidCap Credit Facility - December 2021	$ 21,053	$ 32,845
High Trail Loan December 2020 Note
Debt Instrument [Line Items]
High Trail Note			$ 43,000
Less: deferred debt issuance costs			(2,207)
Less: discount associated with issuance of warrants			9,839
Less: discount associated with original issuance of loan			4,692
High Trail warrant			31,821
Total December 2020 Note			58,083
Less-current portion			(21,600)
Term loan non-current portion			$ 36,483

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
OPERATING ACTIVITIES:
Net loss	$ (196,292)	$ (236,024)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	7,521	7,326
Provision for sales returns	56	43
Amortization of deferred financing cost and debt discounts	429	7,742
Stock-based compensation	14,594	28,987
Gain from decrease of contingent earn-out liability fair value	(5,240)	(30,529)
Loss in connection with settlement of earn-out		4,164
Loss (gain) in connection with the change in warrant fair value	(470)	26,455
Gain in connection with settlement of note payable	(2,012)
Loss on initial issuance of warrants		20,147
Issuance of common stock	43
Loss on initial issuance of equity	18,669
Loss on extinguishment		138,859
Provision for barter credits	1,643	1,000
Loss from derivative liability discount related to term loan		3,254
Impairment loss on goodwill	120,409
Impairment loss on intangibles	3,118
Allowance for doubtful accounts and other	367	4,200
Changes in assets and liabilities:
Accounts receivable	5,596	(4,554)
Inventory	19,438	(19,303)
Prepaid and other current assets	5,564	(7,856)
Accounts payable, accrued and other liabilities	(10,910)	14,120
Cash used in operating activities	(17,477)	(41,969)
INVESTING ACTIVITIES:
Purchase of fixed assets	(82)	(32)
Purchase of assets	(595)
Cash used in investing activities	(677)	(44,905)
FINANCING ACTIVITIES:
Proceeds from warrant exercise		9,085
Proceeds from cancellation of warrant		16,957
Proceeds from issuance of common stock from follow-on public offering, net of issuance costs		36,735
Proceeds from equity offering, net of issuance costs	46,834
Proceeds from exercise of stock options		9,033
Repayment of note payable to Smash	(3,423)	(10,495)
Payment of earnout to Squatty Potty	(3,983)	(7,971)
Borrowings from MidCap credit facilities	136,687	48,750
Repayments for MidCap credit facilities	(148,907)	(28,274)
Insurance financing proceeds	2,099	2,424
Insurance obligation payments	(2,311)	(3,048)
Cash provided by financing activities	26,996	95,569
EFFECT OF EXCHANGE RATE ON CASH	(528)	(477)
NET CHANGE IN CASH AND RESTRICTED CASH FOR THE YEAR	8,314	8,218
CASH AND RESTRICTED CASH AT BEGINNING OF YEAR	38,315	30,097
CASH AND RESTRICTED CASH AT END OF YEAR	46,629	38,315
RECONCILIATION OF CASH AND RESTRICTED CASH
CASH	43,574	30,317
RESTRICTED CASH—Prepaid and other current assets	2,926	7,849
RESTRICTED CASH—Other non-current assets	129	149
TOTAL CASH AND RESTRICTED CASH	46,629	38,315
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	1,875	5,611
Cash paid for taxes	100	41
Modification of warrants between equity and liability		75,828
Non-cash consideration paid to contractors	1,137	7,289
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Original issue discount		2,475
Discount of debt relating to warrants issuance		51,284
Notes payable of acquisition		16,550
Fair value of contingent consideration		20,971
Issuance of common stock - debt repayment		125,562
Issuance of common stock - Healing Solutions earn-out settlement		7,914
Issuance of common stock related to exercise of warrants	767
Initial issuance of equity	18,669
Fair value of warrants issued in connection with equity offering	18,982
Issuance of common stock	43
Exercise of prefunded warrants	15,039
High Trail December 2020 Note and February 2021 Term Loan
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Loss on extinguishment		28,240
High Trail April 2021 Term Loan
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Loss on extinguishment		106,991
High Trails Term Loan
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Loss on extinguishment		2,096
High Trail December 2020 and February 2021 Note
FINANCING ACTIVITIES:
Repayments of debt		(59,500)
High Trail February 2021 Note
FINANCING ACTIVITIES:
Debt issuance costs		(1,462)
Borrowings from term loan		14,025
High Trail April 2021 Note
FINANCING ACTIVITIES:
Debt issuance costs		(2,202)
Repayments of debt		(10,139)
Borrowings from term loan		110,000
High Trail December 2021 Note
FINANCING ACTIVITIES:
Repayments of debt		(27,500)
Revolving Credit Facility
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Loss on extinguishment		1,532
MidCap Credit Facility
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Loss on extinguishment		1,500
FINANCING ACTIVITIES:
Debt issuance costs		(849)
Healing Solutions LLC
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Gain from decrease of contingent earn-out liability fair value	$ 0
INVESTING ACTIVITIES:
Purchase of assets		(15,250)
Photo Paper Direct Ltd.
INVESTING ACTIVITIES:
Purchase of Photo Paper Direct, net of cash acquired		(10,583)
Squatty Potty, LLC
INVESTING ACTIVITIES:
Purchase of assets		(19,040)
Healing Solutions and Photo Paper Direct
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock in connection with Healing Solutions and Photo Paper Direct acquisitions		$ 50,529

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Statement [Abstract]
NET REVENUE	$ 221,170	$ 247,767
COST OF GOODS SOLD	115,652	125,904
GROSS PROFIT	105,518	121,863
OPERATING EXPENSES:
Sales and distribution	121,139	127,369
Research and development	6,012	9,837
General and administrative	38,239	45,099
Impairment loss on goodwill	120,409
Impairment loss on intangibles	3,118
Settlement of a contingent earn-out liability		4,164
Change in fair value of contingent earn-out liabilities	(5,240)	(30,529)
TOTAL OPERATING EXPENSES:	283,677	155,940
OPERATING LOSS	(178,159)	(34,077)
INTEREST EXPENSE—net	2,603	12,655
GAIN ON EXTINGUISHMENT OF SELLER NOTE	(2,012)
Loss on initial issuance of equity	18,669
CHANGE IN FAIR VALUE OF DERIVATIVE LIABILITY		3,254
LOSS ON EXTINGUISHMENT OF DEBT		138,859
CHANGE IN FAIR VALUE OF WARRANT LIABILITY	(470)	26,455
LOSS ON INITIAL ISSUANCE OF WARRANTS		20,147
OTHER EXPENSE (INCOME)—net	(281)	45
LOSS BEFORE INCOME TAXES	(196,668)	(235,492)
PROVISION (BENEFIT) FOR INCOME TAXES	(376)	532
NET LOSS	$ (196,292)	$ (236,024)
Net loss per share, basic	$ (2.95)	$ (6.67)
Net loss per share, diluted	$ (2.95)	$ (6.67)
Weighted-average number of shares outstanding, basic	66,529,565	35,379,005
Weighted-average number of shares outstanding, diluted	66,529,565	35,379,005

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation—The Consolidated Financial Statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Use of Estimates—Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period covered by the financial statements and accompanying notes. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from those estimates.

Principles of Consolidation—The Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Restricted Cash— As of December 31, 2021, the Company has classified the following as restricted cash: $0.1 million related to its Chinese subsidiary within “other non-current assets” on the consolidated balance sheets, $2.0 million related to a letter of credit and $5.9 million for cash sweep accounts related to the Midcap Credit facility within “prepaid and other current assets” on the consolidated balance sheets.

As of December 31, 2022, the Company has classified the following as restricted cash: $0.1 million related to its Chinese subsidiary within “other non-current assets” on the consolidated balance sheets, $2.0 million related to a letter of credit and $0.9 million for cash sweeps account related to the Midcap Credit Facility within "prepaid and other current assets" on the consolidated balance sheets.

Accounts Receivable—Accounts receivable are stated at historical cost less allowance for doubtful accounts. On a periodic basis, management evaluates its accounts receivable and determines whether to provide an allowance or if any accounts should be written off based on a past history of write-offs, collections and current credit conditions. A receivable is considered past due if the Company has not received payments based on agreed-upon terms. The Company generally does not require any security or collateral to support its receivables. The Company performs on-going evaluations of its customers and maintains an allowance for bad and doubtful receivables. On December 31, 2021 and 2022, the Company had an allowance for doubtful accounts of $0.0 and $0.4 million, respectively.

Concentration of Credit Risk—Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company maintains cash and restricted cash with various domestic and foreign financial institutions of high credit quality. The Company performs periodic evaluations of the relative credit standing of all of the aforementioned institutions. The Company does have cash deposits at financial institutions in excess of the insured amount of $0.3 million by the Federal Deposit Insurance Corporation.

The Company’s accounts receivables are derived from sales contracts with a large number of customers. The Company maintains reserves for potential credit losses on customer accounts when deemed necessary. Significant customers are those which represent more than 10% of the Company’s total net revenue or gross accounts receivable balance at the balance sheet date. During the years-ended December 31, 2021 and 2022, the Company had no one customer that accounted for 10% or more of total net revenue. In addition, as of December 31, 2021 and 2022, the Company had three customers that accounted for 10% or more of gross accounts receivable. As of December 31, 2021 and 2022, approximately 42% and 43%, respectively, of its accounts receivable is held by the Company’s sales platform vendor, Amazon, which collects money on the Company’s behalf from its customers.

The Company’s business is reliant on one key vendor which currently provides the Company with its sales platform, logistics and fulfillment operations, including certain warehousing for the Company’s net goods, and invoicing and collection of its revenue from the Company’s end customers. In 2021, approximately 93% of the Company’s revenue was through or with the Amazon sales platform and in 2022, 89% of its net revenue was through or with the Amazon sales platform.

Property and Equipment—Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is provided for using the straight-line method over the estimated useful lives of the assets. Capital leases and leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life of the asset. Costs of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred.

Income Taxes—The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to operating loss carry-forwards and temporary differences between financial statement bases of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in the income tax rates on deferred tax asset and liability balances is recognized in income in the period that includes the enactment date of such rate change. A valuation allowance is recorded for loss carry-forwards and other deferred tax assets when it is determined that it is more likely than not that such loss carry-forwards and deferred tax assets will not be realized. The Company recognizes the tax benefits on any uncertain tax positions taken or expected to be taken in the Consolidated Financial Statements when it is more likely than not the position will be realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The tax benefits recognized in the Consolidated Financial Statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes estimated interest and penalties related to uncertain tax positions as a part of the provision for income taxes.

Revenue Recognition—The Company accounts for revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”). The Company derives its revenue from the sale of consumer products. The Company sells its products directly to consumers through online retail channels and through wholesale channels.

For direct-to-consumer sales, the Company considers customer order confirmations to be a contract with the customer. Customer confirmations are executed at the time an order is placed through third-party online channels. For wholesale sales, the Company considers the customer purchase order to be the contract.

For all of the Company’s sales and distribution channels, revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs at shipment date. As a result, the Company has a present and unconditional right to payment and record the amount due from the customer in accounts receivable.

Revenue from consumer product sales is recorded at the net sales price (transaction price), which includes an estimate of future returns based on historical return rates. There is judgment in utilizing historical trends for estimating future returns. The Company’s refund liability for sales returns was $0.6 million at December 31, 2021 and 2022, which is included in accrued liabilities and represents the expected value of the refund that will be due to its customers.

The Company evaluated principal versus agent considerations to determine whether it is appropriate to record platform fees paid to Amazon as an expense or as a reduction of revenue. Platform fees are recorded as sales and distribution expenses and are not recorded as a reduction of revenue because it owns and controls all the goods before they are transferred to the customer. The Company can, at any time, direct Amazon, similarly, other third-party logistics providers (“Logistics Providers”), to return the Company’s inventory to any location specified by the Company. It is the Company’s responsibility to make customers whole following any returns made by customers directly to Logistic Providers and the Company retains the back-end inventory risk. Further, the Company is subject to credit risk (i.e., credit card chargebacks), establishes prices of its products, can determine who fulfills the goods to the customer (Amazon or the Company) and can limit quantities or stop selling the goods at any time. Based on these considerations, the Company is the principal in this arrangement.

Performance Obligations. A performance obligation is a promise in a contract to transfer a distinct good to the customer and is the unit of account in ASC Topic 606. A contract’s transaction price is recognized as revenue when the performance obligation is satisfied. Each of the Company’s contracts have a single distinct performance obligation, which is the promise to transfer individual goods.

For consumer product sales, the Company has elected to treat shipping and handling as fulfillment activities, and not a separate performance obligation. Accordingly, the Company recognizes revenue for its single performance obligation related to product sales at the time control of the merchandise passes to the customer, which is generally at the time of shipment. The Company bills customers for charges for shipping and handling on certain sales and such charges are recorded as part of net revenue. Shipping and handling revenue for each of the years-ended December 31, 2021 and 2022 were de minimis.

For each contract, the Company considers the promise to transfer products to be the only identified performance obligation. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled.

Sales taxes—Consistent with prior periods, sales taxes collected from customers are presented on a net basis and as such are excluded from net revenue.

Net Revenue by Category: The following table sets forth the Company’s net revenue disaggregated by sales channel and geographic region based on the billing addresses of its customers:


	Year-Ended December 31, 2021
	(in thousands)
	Direct		Wholesale/Other		Total
North America	$	232,067	$	11,950	$	244,017
Other		3,750		—		3,750
Total net revenue	$	235,817	$	11,950	$	247,767

	Year-Ended December 31, 2022
	(in thousands)
	Direct		Wholesale/Other		Total
North America	$	209,336	$	7,002	$	216,338
Other		4,832		—		4,832
Total net revenue	$	214,168	$	7,002	$	221,170

Net Revenue by Product Categories: The following table sets forth the Company’s net revenue disaggregated by product categories:


	Year-Ended December 31,
	2021		2022
	(in thousands)
Heating, cooling and air quality	$	73,685	$	67,797
Kitchen appliances		43,180		40,551
Health and beauty		15,579		17,485
Personal protective equipment		6,073		1,564
Cookware, kitchen tools and gadgets		22,933		19,526
Home office		12,352		13,322
Housewares		33,951		33,041
Essential oils and related accessories		27,444		23,604
Other		12,570		4,280
Total net revenue	$	247,767	$	221,170

Fair Value of Financial Instruments—The Company’s financial instruments, including net accounts receivable, accounts payable, and accrued and other current liabilities are carried at historical cost. At December 31, 2022, the carrying amounts of these instruments approximated their fair values because of their short-term nature. The Company’s credit facility is carried at amortized cost at December 31, 2021 and December 31, 2022 and the carrying amount approximates fair value as the stated interest rate approximates market rates currently available to the Company. The Company considers the inputs utilized to determine the fair value of the borrowings to be Level 2 inputs.

The fair value of the contingent consideration related to business combinations is estimated using a probability-adjusted discounted cash flow model. These fair value measurements are based on significant inputs not observable in the market. The key internally developed assumptions used in these models are discount rates and the probabilities assigned to the milestones to be achieved. The company remeasures the fair value of the contingent consideration at each reporting period, and any changes in fair value resulting from either the passage of time or events occurring after the acquisition date, such as changes in discount rates, or in the expectations of achieving the performance targets, are recorded within the change in fair value of contingent earn-out liabilities line item on the statement of operations.

Assets and liabilities recorded at fair value on a recurring basis in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:

Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2—Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and

Level 3—Unobservable inputs that are supported by little or no market data for the related assets or liabilities.

Goodwill—The Company operates under one business component which is the same as its reporting unit based on the guidance in ASC Topic 350-20.

We assess goodwill for impairment at least annually during the fourth quarter and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. During 2022, we had events and conditions in the first quarter and third quarter that required an interim assessment of goodwill.

We evaluated current economic conditions, including the impact of the Federal Reserve further increasing the risk-free interest rate, as well as the inflationary pressure on product and labor costs and operational impacts attributable to continued global supply chain disruptions. We believe that these conditions were factors in our market capitalization falling below the book value of net assets as of March 31, 2022 and September 30, 2022. Accordingly, we concluded a triggering event had occurred and performed interim goodwill impairment analyses.

The Company engaged a third-party valuation specialist to assist management in performing interim goodwill impairment tests. For goodwill, impairment testing is based upon the best information available using a combination of the discounted cash flow method (a form of the income approach) and the guideline public company method, while also taking into consideration our market capitalization. Under the income approach, or discounted cash flow method, the significant assumptions used are projected net revenue, projected contribution margin (product operating margin before fixed costs), fixed costs and terminal growth rates. Projected net revenue, projected contribution margin and terminal growth rates were determined to be significant assumptions because they are the three primary drivers of the projected cash flows in the discounted cash flow fair value model. Under the guideline public company method, significant assumptions relate to the selection of appropriate guideline companies, the valuation multiples used in the market analysis and the Company’s market capitalization.

Due to the sustained decline in the Company’s stock price leading up to and subsequent to the fiscal quarters ending March 31, 2022 and September 30, 2022, the Company used the market capitalization as of quarter-end in each case to determine the fair value of the reporting unit. As a result, the Company recorded goodwill impairment charges of $29.0 million and $90.9 million during the three months ended March 31, 2022 and September 30, 2022, respectively. There was no remaining goodwill on the balance sheet as of September 30, 2022.

On October 4, 2022, the Company acquired Step and Go, a brand in the health and wellness category, for $0.7 million. As part of the purchase price allocation of the acquisition, $0.5 million was attributed to goodwill. As our market capitalization was below net assets as of December 31, 2022, an impairment loss on goodwill of $0.5 million was recorded for the three months ended December 31, 2022, which is included in impairment loss on goodwill in the Consolidated Statement of Operations for the year-ended December 31, 2022.

Total loss on goodwill impairment for the year-ended December 31, 2022 was $120.4 million.

Intangibles—The Company reviews long-lived intangible assets for impairment when performance expectations, events, or changes in circumstances indicate that the asset's carrying value may not be recoverable. The evaluation is performed at the lowest level of identifiable cash flows by comparing the carrying value of the asset group to the undiscounted cash flows. If the evaluation indicates that the carrying amount of the assets may not be recoverable, any potential impairment is measured based upon the fair value of the related asset or asset group as determined by an appropriate market appraisal or other valuation technique.

Certain asset groups experienced a significant decrease in sales and contribution margin through September 30, 2022. This was considered an interim triggering event for the three months ended September 30, 2022. The Company assessed the recoverability of the related intangible assets by using level 3 inputs and comparing carrying value of an asset group to the net undiscounted cash flows expected to be generated to determine if carrying value is not recoverable. The recoverability test indicated that certain definite-lived trademark intangible assets were impaired which resulted in an impairment charge of $3.1 million. The Company did not have a triggering event during the three month ended December 31, 2022. The impairment of intangibles of $3.1 million is included in loss on impairment of intangibles in the consolidated statement of operations for the year-ended December 31, 2022.

Business Combinations—In accordance with FASB ASC Topic 805 “Business Combinations", acquired assets and liabilities assumed as part of a business acquisition are generally recorded at their fair value at the date of acquisition. The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Determining fair value of identifiable assets, particularly intangibles, and liabilities acquired also requires management to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset.

Accounting and Contingent Consideration—The Company’s acquisitions include contingent consideration as part of the purchase price. The fair value of the contingent consideration is estimated as of the acquisition date based on the present value of the contingent payments to be made using a weighted probability of possible payments. The unobservable inputs used in the determination of the fair value of the contingent consideration include management’s assumptions about the likelihood of payment based on the established benchmarks and discount rates based on internal rate of return analysis. The fair value measurement includes inputs that are Level 3 measurements. If actual results increase or decrease as compared to the assumption used in the Company’s analysis, the fair value of the contingent consideration obligations will increase or decrease, up to the contracted limit, as applicable. Changes in the fair value of the contingent earn-out consideration could cause a material impact and volatility in the Company’s operating results.

Inventory and Cost of Goods Sold—The Company’s inventory consists almost entirely of finished goods. The Company currently records inventory on its balance sheet on a first-in first-out basis, or net realizable value, if it is below the Company’s recorded cost. The Company’s costs include the amounts it pays manufacturers for product, tariffs and duties associated with transporting product across national borders, and freight costs associated with transporting the product from its manufacturers to its warehouses, as applicable. The valuation of our inventory requires us to make judgments, based on available information such as historical data, about the likely method of disposition, such as through sales to individual customers or liquidations, and expected recoverable values of each disposition category. These assumptions about future disposition of inventory are inherently uncertain and changes in our estimates and assumptions may cause us to realize material write-downs in the future.

The “Cost of goods sold” line item in the consolidated statements of operations consists of the book value of inventory sold to customers during the reporting period and amortization of inventory step-up from acquisitions. When circumstances dictate that the Company use net realizable value as the basis for recording inventory, it bases its estimates on expected future selling prices less expected disposal costs.

Sales and Distribution—Sales and distribution expenses consist of online advertising costs, marketing and promotional costs, sales and e-commerce platform commissions, fulfillment, including shipping and handling, and warehouse costs (i.e. sales and distribution variable expenses). Further, sales and distribution expenses also include employee compensation and benefits and other related fixed costs. Costs associated with the Company’s advertising and sales promotion are expensed as incurred and are included in sales and distribution expenses. For the years-ended December 31, 2021 and 2022, the Company recognized $9.0 million and $11.6 million, respectively, for advertising costs, which consists primarily of online advertising expense. Shipping and handling expenses are included in the Company’s consolidated statements of operations within sales and distribution expenses. This includes pick and pack costs and outbound transportation costs to ship goods to customers performed by e-commerce platforms or incurred directly by the Company’s own fulfillment operations. The Company’s expense for shipping and handling was $43.4 million and $47.4 million during fiscal years 2021 and 2022, respectively.

Research and Development— Research and development expenses include compensation and employee benefits for technology development employees, travel related costs, and fees paid to outside consultants related to development of the Company’s owned intellectual property and technology.

General and Administrative—General and administrative expenses include compensation and employee benefits for executive management, finance administration, legal, and human resources, facility costs, travel, professional service fees and other general overhead costs.

Stock-Based Compensation—Stock-based compensation expense to employees is measured based on the grant-date fair value of the awards and recognized in the consolidated statements of operations over the period during which the employee is required to perform services in exchange for the award (the vesting period of the award). The fair value of restricted stock awards is based on the stock price on the date of the grant. The Company estimates the fair value of stock options granted using the Black-Scholes option valuation model.

The Black-Scholes option-pricing model requires the input of highly subjective assumptions, including the fair value of the Company’s underlying common stock, the expected term of stock options, the expected volatility of the price of its common stock, risk-free interest rates and the expected dividend yield of its common stock. The assumptions used in the Company’s option-pricing model represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, the Company’s stock-based compensation expense could be materially different in the future.

These assumptions are estimated as follows:

•

Risk-Free Interest Rate. The Company based the risk-free interest rate used in the Black-Scholes valuation model on the implied yield available on U.S. Treasury zero-coupon bonds with an equivalent remaining term of the stock options for each stock option group.

•

Expected Term. The Company determines the expected term based on the average period the stock options are expected to remain outstanding, generally calculated as the midpoint of the stock options vesting term and contractual expiration period, as it does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.

•

Expected Volatility. The Company determines the price volatility factor based on the historical volatility of publicly-traded industry peers. To determine its peer group of companies, the Company considers public companies in the technology industry and selects those that are similar to the Company in size, stage of life cycle and financial leverage. The Company does not rely on implied volatilities of traded options in its industry peers’ common stock because the volume of activity is relatively low.

•

Expected Dividend Yield. The Company has not paid and does not anticipate paying any cash dividends in the foreseeable future and, therefore, uses an expected dividend yield of zero.

If any of the assumptions used in the Black-Scholes option-pricing model changes significantly, stock-based compensation for future awards may differ materially compared with the awards granted previously. The Company recognizes forfeitures as they occur, which results in a reduction in compensation expense at the time of forfeiture.

Foreign Currency—The functional currency of the Company’s foreign subsidiaries is the local currency. All assets and liabilities of foreign subsidiaries are translated at the current exchange rate as of the end of the period, and revenues and expenses are translated at the average exchange rates in effect during the period. The gain or loss resulting from the process of translating foreign currency financial statements into U.S. dollars is reflected as a foreign currency cumulative translation, an adopted accounting standard adjustment and reported as a component of accumulated other comprehensive income loss. Foreign currency transaction gains and losses resulting from or expected to result from transactions denominated in a currency other than the functional currency are recognized in other expense, net in the consolidated statements of operations. The Company recorded net loss from foreign currency transactions of less than $0.1 million and $0.2 million for the years ended December 31, 2021 and 2022, respectively.

Net Loss Per Share—The Company computes basic earnings per share using the weighted-average number of shares of common stock outstanding during the period. For periods in which the Company reports net losses, diluted net loss per share attributable to stockholders is the same as basic net loss per share attributable to stockholders, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

Segment Information—The Company reports segment information in accordance with ASC Topic No. 280 “Segment Reporting.” The Company has one reportable segment.

Adopted Accounting Standards

In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASC 842”), which was amended by subsequent ASUs, to enhance the comparability and usefulness of financial reporting around leasing activity. The new standard supersedes the existing authoritative literature for lease accounting under ASC 840, with a focus on applying a “right-of-use model.” The guidance for leases under ASC 842 results in a right-of-use asset (“ROU asset”) and lease liability being reported on the balance sheet for leases with an original lease term greater than twelve months. ASC 842 is effective for the Company for annual reporting periods beginning after December 15, 2021, including interim periods within that fiscal year. The Company elected the standard on January 1, 2022 using the alternative modified retrospective transition approach in accordance with ASU 2018-11, Leases (Topic 842): Targeted Improvements. The cumulative effect of the transition adjustments was recognized as of the date of adoption.

Under the alternative modified retrospective transition approach, the reported results for 2022 reflect the application of ASC 842 guidance, whereas comparative periods and the respective disclosures prior to the adoption of ASC 842 are presented using the legacy guidance of ASC 840. The Company recorded an aggregate of approximately $0.7 million of right-of-use assets and a corresponding $0.7 million of lease liabilities upon adoption of this standard. Current Right-of-use assets of $0.2 million and corresponding lease liabilities are included in the prepaid and other current assets and accrued and other current liabilities line item respectively on the condensed consolidated balance sheets. Non-current Right-of-Use Assets of $0.1 million and corresponding lease liabilities are included in the prepaid and other non-current assets and accrued and other non-current liabilities line item respectively on the condensed consolidated balance sheets. The adoption of the standard did not have a material impact on the condensed consolidated statements of operations, or condensed consolidated statements of cash flows. The Company has elected to apply the package of practical expedients requiring no reassessment of whether any expired or existing contracts are or contain leases, the lease classification of any expired or existing leases, or the capitalization of initial direct costs for any existing leases. Additionally, the Company elected the practical expedient that permit the exclusions of leases considered to be short-term.

In August 2018, the FASB issued ASU No. 2018-15, “Customer’s Accounting for Implementation Cost Incurred in a Cloud Computing Arrangement That Is a Service Contract”. Under the new guidance, customers apply the same criteria for capitalizing implementation costs as they would for an arrangement that has a software license. This will result in certain implementation costs being capitalized; the associated amortization charge will, however, be recorded as an operating expense. Under the previous guidance, costs incurred when implementing a cloud computing arrangement deemed to be a service contract were recorded as an operating expense when incurred. The new guidance is effective for public business entities in fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the amendments in this update are effective for annual reporting periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. The new guidance was adopted on December 15, 2021 with no material impact on the Company’s Consolidated Financial Statements.

In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Topic 470) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Topic 814): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). ASU 2020-06 eliminates the number of accounting models used to account for convertible debt instruments and convertible preferred stock. The update also amends the disclosure requirements for convertible instruments and EPS in an effort to increase financial reporting transparency. ASU 2020-06 will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The new guidance was early adopted on January 1, 2022 with no material impact on the Company’s Consolidated Financial Statements.

Recent Accounting Pronouncements

The JOBS Act permits an emerging growth company to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to use this extended transition period until we are no longer an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13: Financial Instruments – Credit Losses (Topic 326). This ASU requires the use of an expected loss model for certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. For trade receivables, loans and held-to-maturity debt securities, an estimate of lifetime expected credit losses is required. For available-for-sale debt securities, an allowance for credit losses will be required rather than a reduction to the carrying value of the asset. In July 2019, the FASB delayed the effective date for this ASU for private companies (including emerging growth companies) and will be effective for annual reporting periods beginning after December 15, 2022, with early adoption permitted. The Company does not expect it to have a material impact on its Consolidated Financial Statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes. This ASU provides for certain updates to reduce complexity in accounting for income taxes, including the utilization of the incremental approach for intra-period tax allocation, among others. This standard is effective for fiscal years beginning after December 15, 2021, and for interim periods beginning after December 15, 2022 with early adoption permitted. While the Company has not completed its evaluation of the impact of adoption of this standard, the Company does not expect it to have a material impact on its Consolidated Financial Statements.

In October 2020, the FASB issued ASU 2020-10, Codification Improvements. The amendments in this Update represent changes to clarify the Codification, correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments are effective for annual periods beginning after December 15, 2020, for public business entities. For all other entities, the amendments are effective for annual periods beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022. While the Company has not completed its evaluation of the impact of adoption of this standard, the Company does not expect it to have a material impact on its Consolidated Financial Statements and will adopt it as of January 2023.

In September 2022, the FASB issued ASU 2022-04, Disclosures for Supplier Finance Arrangements. The amendments in this Update enhances the transparency of supplier finance programs. This standard is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022 except for amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. While the Company has not completed its evaluation of the impact of adoption of this standard, the Company does not expect it to have a material impact on its Consolidated Financial Statements and will adopt it as of January 2023.

Consolidated Balance Sheets - USD ($)	Dec. 31, 2022	Dec. 31, 2021
CURRENT ASSETS:
Cash	$ 43,574,000	$ 30,317,000
Accounts receivable—net	4,515,000	10,478,000
Inventory	43,666,000	63,045,000
Prepaid and other current assets	8,261,000	21,034,000
Total current assets	100,016,000	124,874,000
PROPERTY AND EQUIPMENT—net	853,000	1,254,000
GOODWILL—net		119,941,000
OTHER INTANGIBLES—net	54,757,000	64,955,000
OTHER NON-CURRENT ASSETS	813,000	2,546,000
TOTAL ASSETS	156,439,000	313,570,000
CURRENT LIABILITIES:
Credit facility	21,053,000	32,845,000
Accounts payable	16,035,000	21,716,000
Seller notes	1,693,000	7,577,000
Contingent earn-out liability		3,983,000
Accrued and other current liabilities	14,254,000	17,621,000
Total current liabilities	53,035,000	83,742,000
OTHER LIABILITIES	1,452,000	360,000
CONTINGENT EARN-OUT LIABILITY		5,240,000
Total liabilities	54,487,000	89,342,000
COMMITMENTS AND CONTINGENCIES (Note 12)
STOCKHOLDERS’ EQUITY:
Common stock, $0.0001 par value, 500,000,000 shares authorized and 55,090,237 and 80,752,290 shares outstanding at December 31, 2021 and December 31, 2022, respectively	8,000	5,000
Additional paid-in capital	728,339,000	653,650,000
Accumulated deficit	(625,251,000)	(428,959,000)
Accumulated other comprehensive income	(1,144,000)	(468,000)
Total stockholders’ equity	101,952,000	224,228,000
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 156,439,000	$ 313,570,000

Acquisitions

12 Months Ended

Dec. 31, 2022

Business Combinations [Abstract]

Acquisitions

16. ACQUISITIONS

2021 Acquisitions

Healing Solutions

On February 2, 2021 (the “Closing Date”), the Company entered into and closed the Asset Purchase Agreement with Healing Solutions, LLC (“Healing Solutions”). Pursuant to the Asset Purchase Agreement, the Company purchased and acquired certain assets of Healing Solutions (the “Healing Solutions Assets”) related to Healing Solutions’ retail and e-commerce business under the Healing Solutions’ brands, Tarvol, Sun Essential Oils and Artizen (among others), which primarily sells essential oils through Amazon and other marketplaces (the “Asset Purchase”). The Asset Purchase was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805, Business Combinations. As consideration for the Asset Purchase, the Company (i) paid to Healing Solutions $15.3 million in cash (the “Cash Purchase Price”), and (ii) issued 1,387,759 shares of common stock to Healing Solutions, the cost basis of which was the closing price per share of the common stock on the Closing Date. At the closing (the “Closing”), the Company withheld $2.0 million of the Cash Purchase Price to serve as collateral for Healing Solutions’ payment of certain overdue trade payables to be released to Healing Solutions in accordance with the terms of the Asset Purchase Agreement. This amount was paid by the Company within 60 days of the Closing Date.

In addition, Healing Solutions will be entitled to receive 170,042 shares of common stock (up to a maximum of 280,000 shares pursuant to certain terms and valuation at the measurement date) in respect of certain inventory. The shares will be issued to Healing Solutions following the final determination of inventory values pursuant to the terms of the Asset Purchase Agreement, which determination is expected to occur approximately nine to ten months following the Closing Date and such shares will be subject to vesting restrictions which will lapse on the date that is the one-year anniversary after the Closing Date. Pursuant to the terms of the Asset Purchase Agreement, Healing Solutions is required to use its commercially reasonable efforts to identify one or more suppliers of finished goods inventory of all SKUs that constitute assets acquired in the Asset Purchase (“New Suppliers”) and to initiate discussions with such New Suppliers for the purpose of negotiating new supply agreements between the Company or its affiliates, on the one hand, and the New Supplier, on the other hand, for the purchase of such SKUs following the Closing on terms acceptable to the Company in its sole discretion, acting reasonably. If, on or before the date that is 15 months after the Closing Date, an Earn-Out Consideration Event (as defined in the Asset Purchase Agreement) has occurred, then Healing Solutions shall be entitled to receive up to a maximum of 528,670 shares of common stock (the “Earn-Out Shares”), which number of shares is subject to reduction in accordance with the terms of the Asset Purchase Agreement based on the time period within which the Earn-Out Consideration Event occurs. See Contingent earn-out liability considerations section below.

The following presents the allocation of purchase price to the assets acquired and liabilities assumed, based on the estimated fair values at acquisition date:


	Amount allocated
	(in thousands)
Cash purchase price	$	15,280
1,387,759 shares of Common Stock issued at the Closing		39,454
Seller note for inventory		5,285
Estimated earn-out liability		11,273
Total consideration to be paid	$	71,292

The amounts assigned to goodwill and major intangible asset classifications were as follows:


	Total
	(in thousands)
Inventory	$	8,215
Working Capital		202
Trademarks (10 year useful life)		22,900
Goodwill		39,975
Net assets acquired	$	71,292

Goodwill is expected to be deductible for tax purposes. The goodwill is attributable to expected synergies resulting from integrating the Healing Solutions’ products into the Company’s existing sales channels.

Squatty Potty Assets

On May 5, 2021, the Company acquired the business of e-commerce and retail company Squatty Potty, LLC (“Squatty Potty”), a leading online seller of health and wellness products, in an asset purchase transaction. Currently, Squatty Potty products are sold in thousands of retail locations including Bed, Bath & Beyond, Walmart and Target. As consideration for Squatty Potty’s assets, the Company paid approximately $19.0 million in cash. The Company also paid approximately $1.1 million as consideration related to acquired inventory. In addition, and subject to the achievement of contribution margin metrics for the year-ended December 31, 2021, the Company agreed to pay Squatty Potty a maximum earn-out of approximately $4.0 million, payable in shares of common stock or cash at Squatty Potty’s discretion. The Company also agreed to pay Squatty Potty $8.0 million for transition services, payable in shares of common stock or cash at Squatty Potty’s discretion. See Contingent earn-out liability considerations section below.

The following presents the allocation of purchase price to the assets acquired and liabilities assumed, based on the estimated fair values at acquisition date:


	Amount
	allocated
	(in thousands)
Cash purchase price	$	19,040
Transition services payments		8,231
Estimated earn-out liability		3,502
Total consideration	$	30,773

The amounts assigned to goodwill and major intangible asset classifications were as follows:


	Total
	(in thousands)
Inventory	$	1,471
Working Capital		230
Trademarks (10 year useful life)		6,500
Customer relationships		5,700
Goodwill (1)		16,872
Net assets acquired	$	30,773

(1)

Goodwill is expected to be deductible for tax purposes. The goodwill is attributable to expected synergies resulting from integrating the Squatty Potty products into the Company’s existing sales channel.

Photo Paper Direct

On May 5, 2021, the Company closed the acquisition of all outstanding stock of e-commerce company Photo Paper Direct Ltd. (“Photo Paper Direct”), a leading online seller of printing supplies. As consideration for Photo Paper Direct’s stock, the Company paid approximately $8.3 million in cash and issued approximately 704,500 shares of the Company’s common stock. The Company also paid approximately $5.4 million in cash as consideration related to Photo Paper Direct’s inventory and other working capital assets, including cash on hand of approximately $3.0 million. In addition, and subject to the achievement of certain Adjusted EBITDA metrics by December 31, 2021, the Company agreed to issue to Photo Paper Direct a maximum earn-out of $6.0 million in cash and $2.0 million in the Company’s common stock. See Contingent Earn-out Liability Considerations section below.

The following presents the allocation of purchase price to the assets acquired and liabilities assumed, based on the estimated fair values at acquisition date:


	Amount
	allocated
	(in thousands)
Cash purchase price	$	8,293
704,548 shares of common stock issued		11,075
Working capital adjustment		5,338
Estimated earn-out liability		911
Total consideration	$	25,617

The amounts assigned to goodwill and major intangible asset classifications were as follows:


	Total
	(in thousands)
Inventory	$	2,846
PP&E		86
Real Property		848
Working Capital		2,144
Trademarks (10 year useful life)		5,400
Goodwill (1)		15,774
Deferred tax liability (2)		(1,481	)
Net assets acquired	$	25,617

(1)

Estimate based on preliminary purchase price and most recent book values of tangible assets and prior to any deferred tax assets/liabilities. Subject to change based on the actual closing balance sheet and any purchase accounting adjustments. Goodwill is expected to be deductible for tax purposes. The goodwill is attributable to expected synergies resulting from integrating the Photo Paper Direct products into the Company’s existing sales channels.

(2)

A measurement period adjustment was recorded that resulted in a deferred tax liability of $1.5 million, and corresponding increase in goodwill.

Pro Forma Information

The following unaudited pro forma information illustrates the impact of the acquisitions on the Company’s net revenue for the year-ended December 31, 2021. The acquisitions are reflected in the following pro forma information as if the acquisitions had occurred on January 1, 2021.


	Year-Ended December 31, 2021
Net revenue as reported	$	247,767
Healing Solutions net revenue (1)		4,600
Squatty Potty net revenue (2)		6,024
Photo Paper Direct net revenue (3)		6,334
Net revenue pro forma	$	264,725

Operating loss as reported		(34,077	)
Healing Solutions operating income (1)		382
Squatty Potty operating income (2)		1,772
Photo Paper Direct operating income (3)		1,152
Operating loss (income) pro forma	$	(30,771	)

(1)

In the accompanying Consolidated Financial Statements for the year-ended December 31, 2021, net revenue, as reported, includes $33.1 million of net revenue from this acquisition. For the year-ended December 31, 2022, operating income, as reported, includes $10.7 million of operating income from this acquisition.

(2)

In the accompanying Consolidated Financial Statements for the year-ended December 31, 2021, net revenue, as reported includes $10.1 million of net revenue from this acquisition. For the year-ended December 31, 2022, operating income, as reported, includes $4.2 million of operating income from this acquisition

(3)

In the accompanying Consolidated Financial Statements for the year-ended December 31, 2021, net revenue, as reported includes $11.6 million of net revenue from this acquisition. For the year-ended December 31, 2022, operating loss, as reported, includes $1.3 million of operating income from this acquisition.

The Company engaged a third-party valuation specialist to perform a valuation of the intangible assets acquired for all acquisitions. In performing the valuation, the Company’s management assessed the reasonableness of the projected financial information (“PFI”) by comparing it to the Company’s historical results and financial information for a peer group of the most similar public companies. Based on this review, the Company’s management determined the PFI is reasonable for business and intangible asset valuation purposes.

Step and Go

On October 4, 2022, the Company acquired Step and Go, a brand in the health and wellness category, for $0.7 million. The acquisition is deemed immaterial to the Company’s Consolidated Financial Statements.

Contingent Earn-out Liability Considerations

The Company reviews and re-assesses the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from the initial estimates. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income.

On December 1, 2020, the Company acquired the assets of leading e-commerce business brands Mueller, Pursteam, Pohl and Schmitt, and Spiralizer (the “Smash Assets”) for total consideration of (i) $25.0 million, (ii) 4,220,000 shares of common stock, the cost basis of which was $6.89 (closing stock price at closing of the transaction), of which 164,000 of such shares were issued to the sellers brokers and (iii) a seller note in the amount of $15.6 million, representing the value of certain inventory that the sellers had paid for but not yet sold as of the closing date.

As part of the acquisition of the Smash Assets, the sellers of the Smash Assets are entitled to earn-out payments based on the achievement of certain contribution margin thresholds on certain products of the acquired business. Earn-out payments will be due to the sellers for year one, or calendar year 2022 in the first quarter of 2022, and year two, or calendar year 2022, will be due in the first quarter of 2023. For the year-ended December 31, 2022 (year one of the earn-out), the earn-out payment will be calculated based on the contribution margin generated on certain products for an amount equal to $1.67 for every $1.00 of such contribution margin that is greater than $15.5 million and less than or equal to $18.5 million. Such earn-out payment cannot exceed $5.0 million. In addition, during the year-ending December 31, 2022 (year two of the earn-out), for each $0.5 million of contribution margin generated on certain products in excess of $15.5 million, subject to a cap of $27.5 million, the sellers shall be entitled to receive an amount in cash equal to the value of 0.1 million shares of the Company’s common stock multiplied by the average of the volume-weighted-average closing price per share of the Company’s common stock, for the 30 consecutive trading days ending on December 31, 2022.

As of December 31, 2021, the fair value amount of the earn-out payment was approximately $5.2 million. As of December 31, 2022, there is no remaining earn-out liability related to Smash assets as earn-out payment was not earned.

As part of the acquisition of the Healing Solutions Assets, Healing Solutions was entitled to earn-out payments based on the achievement of certain contribution margin thresholds on certain products of the acquired business. If the earn-out consideration event occurred: (i) prior to the date that is nine months following the Closing Date, the Company will issue 528,670 shares of its common stock to Healing Solutions; (ii) on or after the date that is nine months following the Closing Date but before the date that is 12 months following the Closing Date, the Company was to issue 396,502 shares of common stock to Healing Solutions; or (iii) on or after the date that is 12 months following the Closing Date but before the date that is 15 months following the Closing Date (the date that is 15 months following the Closing Date, the “Earn-Out Termination Date”), the Company was to issue 264,335 shares of common stock to Healing Solutions; or after 15 months, the Company would not had any obligation to issue any shares of its common stock to Healing Solutions.

As of February 2, 2021, the acquisition date, the initial fair value amount of the earn-out payment with respect to the Healing Solutions Assets was appropriately $16.5 million. In November 2021, the Company issued 1.4 million shares of common stock in full settlement of the earn-out. As of December 31, 2022 there is no remaining earn-out liability related to Healing Solutions.

As part of the acquisition of the Squatty Potty Assets, Squatty Potty is entitled to earn-out payments based on the achievement of certain contribution margin thresholds on certain products of the acquired business. If the earn-out consideration event occurs in 12 months ended December 31, 2021, the maximum payment amount is $3.9 million and if the termination of the transition service agreement is prior to the date that is nine months following the Closing Date, an additional $3.9 million.

As of May 5, 2021, the acquisition date, the initial fair value amount of the earn-out payment with respect to the Squatty Potty Assets was appropriately $3.5 million. As of December 31, 2022, there is no remaining earn-out liability related to Squatty Potty.

As of May 5, 2021, the acquisition date of Photo Paper Direct Ltd. (“Photo Paper Direct”), the initial fair value amount of the earn-out payment with respect to the Photo Paper Direct acquisition was appropriately $0.9 million. As of December 31, 2021 and 2022, the fair value amount of the earn-out payment with respect to the Photo Paper Direct acquisition was zero as earn-out payment was not earned.

The following table summarizes the changes in the carrying value of estimated contingent earn-out liabilities (in thousands) as of December 31, 2022 (in thousands):


				Year-Ended December 31, 2021
	Smash Assets			Healing Solutions			Squatty Potty			Photo Paper Direct			Total
Balance –January 1, 2021	$	22,531		$	—		$	—		$	—			22,531
Acquisition date fair value of contingent earn-out liabilities and inventory to be settled in shares		—			16,558			3,502			911			20,971
Change in fair value of contingent earn-out liabilities		(17,291	)		(12,808	)		481			(911	)		(30,529	)
Payment of contingent earn-out liability		—			(3,750	)		—			—			(3,750	)
Balance—December 31, 2021	$	5,240		$	—		$	3,983		$	—		$	9,223


	Year-ended December 31, 2022
	Smash Assets			Squatty Potty			Total
Balance—January 1, 2022	$	5,240		$	3,983		$	9,223
Change in fair value of contingent earn-out liabilities		(5,240	)		—			(5,240	)
Payment of contingent earn-out liability		—			(3,983	)		(3,983	)
Balance—December 31, 2022	$	—		$	—		$	—

Income Taxes - Additional Information (Details) - USD ($) $ in Millions			12 Months Ended
	Aug. 16, 2022	Jun. 11, 2022	Dec. 31, 2022	Dec. 31, 2021
Income Taxes Disclosure [Line Items]
Effective tax rate			(0.19%)	0.08%
Operating loss carry forwards			$ 216.4	$ 152.0
Operating loss carry forwards expiration year			2034	2034
Description of ownership limitations			The Company’s ability to utilize its NOL carryforwards may be limited pursuant to Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), if the Company has had a change in ownership of more than 50% of its capital stock over a three-year period pursuant to Section 382 of the Code. These complex changes of ownership rules generally focus on ownership changes involving stockholders owning directly or indirectly 5% or more of a company’s stock, including certain public “groups” of stockholders as set forth by Section 382 of the Code, including those arising from new stock issuances and other equity transactions.
Corporate alternative minimum tax	15.00%
Excise tax	1.00%
Percentage of investment tax credit		25.00%
Other Current Liabilities
Income Taxes Disclosure [Line Items]
Payroll related credits				$ 1.3
State and Local Jurisdiction
Income Taxes Disclosure [Line Items]
Operating loss carry forwards			$ 121.3	$ 79.5
State and Local Jurisdiction \| Earliest Tax Year
Income Taxes Disclosure [Line Items]
Operating loss carry forwards expiration year			2026
State and Local Jurisdiction \| Latest Tax Year
Income Taxes Disclosure [Line Items]
Operating loss carry forwards expiration year			2036
Federal
Income Taxes Disclosure [Line Items]
Operating loss carry forwards			$ 216.4
Operating loss carry forwards expiration year			2034

Goodwill and Intangibles

12 Months Ended

Dec. 31, 2022

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangibles

17. GOODWILL AND INTANGIBLES

The following tables summarize the changes in the Company’s intangible assets as of December 31, 2021 and December 31, 2022 (in thousands):


	December 31, 2020		For the Year-Ended December 31, 2021					December 31, 2021
	Gross Carrying Amount		Additions		Impairments			Net Book Value
Goodwill	$	47,318	$	72,623	$	—		$	119,941

	December 31, 2021		For the Year-Ended December 31, 2022					December 31, 2022
	Gross Carrying Amount		Additions		Impairments			Net Book Value
Goodwill	$	119,941	$	468		(120,409	)	$	—

(1) The Company evaluated current economic conditions during 2022, including the impact of the Federal Reserve further increasing the risk-free interest rate, as well as the inflationary pressure on product and labor costs and operational impacts attributable to continued global supply chain disruptions. The Company believes that these conditions were factors in our market capitalization falling below the book value of net assets during the fiscal quarters ending March 31, 2022 and September 30, 2022. Accordingly, the Company concluded a triggering event had occurred in each of these periods and performed interim goodwill impairment analyses. As a result, the Company recorded a goodwill impairment charge of approximately $29.0 million and $90.9 during the three months ended March 31, 2022 and September 30, 2022, respectively. There was no remaining goodwill on the balance sheet as of September 30, 2022.

On October 4, 2022, the Company acquired Step and Go, a brand in the health and Wellness category, for $0.7 million. As part of the purchase price allocation of the acquisition, $0.5 million was attributed to goodwill. As our market capitalization was further reduced below net assets as of December 31, 2022, we concluded a triggering event has occurred to test goodwill, an impairment loss on goodwill of $0.5 million was recorded for the three months ended December 31, 2022, which is included in impairment loss on goodwill in the Consolidated Statement of Operations for the year-ended December 31, 2022.

The total goodwill impairment charge was approximately $120.4 million for the year-ended December 31, 2022.

The following tables summarize the changes in the Company’s intangible assets as of December 31, 2021 and December 31, 2022 (in thousands):


	January 1, 2021		Year-Ended December 31, 2021					December 31, 2021			December 31, 2021
	Gross Carrying Amount		Additions		Impairments (1)			Accumulated Amortization			Net Book Value
Trademarks	$	31,810	$	34,100	$	—		$	(6,332	)	$	59,578
Non-competition agreement		111		—		—			(54	)		57
Transition services agreement		23		—		—			(23	)		—
Customer relations		—		5,700		—			(380	)		5,320
Other		—		700		—			(700	)		—
Total intangibles	$	31,944	$	40,500	$	—		$	(7,489	)	$	64,955

	January 1, 2022		Year-Ended December 31, 2022					December 31, 2022			December 31, 2022
	Gross Carrying Amount		Additions		Impairments (1)			Accumulated Amortization			Net Book Value
Trademarks	$	65,910		192	$	(3,087	)	$	(13,008	)	$	50,007
Non-competition agreement		111		—		(31	)		(80	)		—
Transition services agreement		23		—		—			(23	)		—
Customer relations		5,700		—		—			(950	)		4,750
Other		700		—		—			(700	)		—
Total intangibles	$	72,444	$	192	$	(3,118	)	$	(14,761	)	$	54,757

(1) Certain asset groups experienced a significant decrease in sales and contribution margin through September 30, 2022. This was considered an interim triggering event for the three months ended September 30, 2022. Based on the analysis of comparing the undiscounted cash flow to the carrying value of the asset group, one group tested indicated that the assets may not be recoverable. For this asset group, the Company compared the fair value to the carrying amount of the asset group and recorded an intangible impairment charge of $3.1 million. The Company did not have a triggering event during the three months ended December 31, 2022. For the year-ended December 31, 2022, the total impairment charge for intangibles was $3.1 million.

The following table sets forth the estimated aggregate amortization of our in-place intangible assets and favorable intangible assets for the next five years and thereafter (amounts in thousands):


2023	$	6,821
2024		6,801
2025		6,759
2026		6,759
Thereafter		27,617
Total	$	54,757

Income Taxes - Schedule of Federal Statutory Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Income tax benefit at statutory rates	$ (41,300)	$ (49,454)
Permanent differences		3
Debt extinguishment	(481)	33,746
Warrant liability	4,455	11,066
Stock compensation	4,410	10,602
Change in FV contingent consideration		(3,143)
Other permanent differences	3
Foreign rate differential	14	(44)
State income taxes, net of federal tax benefit	(5,644)	(6,424)
Other	(389)	264
Prior year true-up adjustments	(352)	(5,577)
Valuation allowance	38,908	9,493
Income tax provision (benefit)	$ (376)	$ 532
Effective tax rate	(0.19%)	0.08%

Stockholders' Equity

12 Months Ended

Dec. 31, 2022

Equity [Abstract]

Stockholders' Equity

10. STOCKHOLDERS’ EQUITY

Common Shares—The Company has one class of common shares issued and available. Each share of common stock has the right to one vote per share.

On June 10, 2021, the Company entered into a Securities Purchase Agreement with certain accredited investors (collectively, the “Investors”) pursuant to which, among other things, the Company issued and sold to the Investors, in a private placement transaction, an aggregate of 2,666,667 shares of common stock, of the Company (the “Shares”), at an offering price of $15.00 per Share, with proceeds to the Company, net of offering costs, of $36.7 million.

On March 1, 2022, we entered into Securities Purchase Agreements (the “Purchase Agreements”) with certain accredited investors identified on the signature pages to the Purchase Agreements (collectively, the “Purchasers”) pursuant to which, among other things, we issued and sold to the Purchasers, in a private placement transaction, (i) 6,436,322 shares of our common stock (the “Shares”), par value $0.0001 per share (“Common Stock”), and accompanying warrants to purchase an aggregate of 4,827,242 shares of common stock, and (ii) prefunded warrants to purchase up to an aggregate of 3,013,850 shares of common stock (the “Prefunded Warrants”) and accompanying warrants to purchase an aggregate of 2,260,388 shares of common stock. The accompanying warrants to purchase Common Stock are referred to herein collectively as the “Common Stock Warrants”, and the Common Stock Warrants and the Prefunded Warrants are referred to herein collectively as the “Warrants”. Under the Purchase Agreements, each Share and accompanying Common Stock Warrant were sold together at a combined price of $2.91, and each Prefunded Warrant and accompanying Common Stock Warrant were sold together at a combined price of $2.91, for gross proceeds of approximately $27.5 million.

On September 29, 2022, we entered into securities purchase agreements (the “September Purchase Agreements”) with certain accredited investors, pursuant to which, among other things, we agreed to sell and issue, in a registered direct offering (the “Registered Direct Offering”), an aggregate of 10,643,034 shares of its Shares and accompanying warrants to purchase an aggregate of 10,643,034 shares of its common stock. 10,526,368 of the shares and the accompanying warrants to purchase 10,526,368 shares of common stock were sold to certain accredited purchasers that are not affiliated with us at a combined offering price of $1.90 per share and accompanying

warrant to purchase one share of common stock. The remaining 116,666 shares of Common Stock and the accompanying warrants to purchase 116,666 shares of Common Stock were sold to certain of our insiders, comprised of our President and Chief Executive Officer, Chief Financial Officer, Chief Legal Officer and Global Head of M&A and Chief Technology Officer, at a combined offering price of $2.10 per share and accompanying warrant to purchase one share of common stock.

The Registered Direct Offering closed on October 4, 2022 and the Company issued and sold an aggregate of 10,643,034 shares of common stock to the Purchasers. The gross proceeds to us from the Registered Direct Offering were approximately $20.2 million, before deducting fees payable to the placement agent and other estimated offering expenses payable by us. We currently intend to use the net proceeds from the Registered Direct Offering for working capital purposes, the conduct of its business and other general corporate purposes, which may include acquisitions, investments in or licenses of complementary products, technologies or businesses.

Pursuant to the ASC 815-40, the September Purchase Agreement represents a legally binding contract that meets the definition of a firm commitment and as such we recorded a derivative related to the offering of common stock (“forward contract”). Additionally, we recorded $12.8 million derivative expense derived from the excess of the fair-value of the issuances of equity of common shares and common stock warrants over the anticipated proceeds to be received by us. This expense was recorded in loss on initial issuance of equity on the consolidated statement of operations for the year-ended December 31, 2022.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-Paragraph 13
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-Paragraph 14
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-Paragraph 18
-Subparagraph (d)
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008

+ Details

Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Inventory on-hand	$ 34,374	$ 48,079
Inventory in-transit	9,292	14,966
Inventory	$ 43,666	$ 63,045

Prepaid and Other Current Assets - Summary of Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Prepaid Expense And Other Assets Current [Abstract]
Prepaid inventory	$ 1,342	$ 4,137
Restricted cash	2,926	7,998
Prepaid insurance	1,991	2,440
Consulting fees		2,263
Amazon global logistics	576	2,865
Other	1,426	1,331
Prepaid and other current assets	$ 8,261	$ 21,034

Goodwill and Intangibles - Summary of Changes in Goodwill and Intangible Assets (Details) - USD ($)	3 Months Ended			12 Months Ended
	Dec. 31, 2022	Sep. 30, 2022	Mar. 31, 2022	Dec. 31, 2022	Dec. 31, 2021
Disclosure Of Goodwill And Intangible Assets [Line Items]
Impairment loss on goodwill	$ 500,000	$ 90,900,000	$ 29,000,000.0	$ 120,409,000
Net Book Value		0			$ 119,941,000
Gross Carrying Amount			72,444,000	72,444,000	31,944,000
Additions				192,000	40,500,000
Impairment loss on intangibles		$ 3,100,000		3,118,000
Gross Carrying Amount					72,444,000
Accumulated Amortization	(14,761,000)			(14,761,000)	7,489,000
Net Book Value	54,757,000			54,757,000	64,955,000
Trademarks
Disclosure Of Goodwill And Intangible Assets [Line Items]
Additions				192,000
Gross Carrying Amount			65,910,000	65,910,000	31,810,000
Additions					34,100,000
Impairment loss on intangibles				(3,087,000)
Gross Carrying Amount					65,910,000
Accumulated Amortization	(13,008,000)			(13,008,000)	6,332,000
Net Book Value	50,007,000			50,007,000	59,578,000
Non-Competition Agreement
Disclosure Of Goodwill And Intangible Assets [Line Items]
Gross Carrying Amount			111,000	111,000	111,000
Impairment loss on intangibles				(31,000)
Gross Carrying Amount					111,000
Accumulated Amortization	80,000			80,000	54,000
Net Book Value					57,000
Transition Services Agreement
Disclosure Of Goodwill And Intangible Assets [Line Items]
Gross Carrying Amount			23,000	23,000	23,000
Gross Carrying Amount					23,000
Accumulated Amortization	23,000			23,000	23,000
Customer Relations
Disclosure Of Goodwill And Intangible Assets [Line Items]
Gross Carrying Amount			5,700,000	5,700,000
Additions					5,700,000
Gross Carrying Amount					5,700,000
Accumulated Amortization	(950,000)			(950,000)	380,000
Net Book Value	4,750,000			4,750,000	5,320,000
Other
Disclosure Of Goodwill And Intangible Assets [Line Items]
Gross Carrying Amount			700,000	700,000
Additions					700,000
Gross Carrying Amount					700,000
Accumulated Amortization	700,000			700,000	700,000
Goodwill
Disclosure Of Goodwill And Intangible Assets [Line Items]
Gross Carrying Amount			$ 119,941,000	119,941,000	47,318,000
Additions				468,000	72,623,000
Gross Carrying Amount					119,941,000
Impairments	$ (120,409,000)			$ (120,409,000)
Net Book Value					$ 119,941,000

Credit Facility and Term Loans - Additional Information (Details)												12 Months Ended
	Apr. 08, 2024	Feb. 01, 2023	Dec. 31, 2021 USD ($) $ / shares	Dec. 22, 2021 USD ($) $ / shares shares	Sep. 22, 2021 USD ($) TradingDay $ / shares shares	Aug. 09, 2021 USD ($) $ / shares shares	Jun. 15, 2021	Apr. 08, 2021 USD ($) shares	Dec. 31, 2020 USD ($)	Dec. 01, 2020 USD ($) Installment	Nov. 23, 2018 USD ($)	Dec. 31, 2022 USD ($) $ / shares	Dec. 31, 2021 USD ($) $ / shares	Dec. 31, 2020 USD ($)	Dec. 31, 2018 USD ($)	Sep. 29, 2022 shares	Mar. 01, 2022 $ / shares shares	Sep. 23, 2021 shares	Feb. 02, 2021 USD ($)
Debt Instrument [Line Items]
Loss on extinguishment													$ 138,859,000
Interest expense of credit facilities													400,000
Expense related to debt issuance costs													100,000
Interest expense												$ 2,696,000	13,250,000
Common stock shares issued \| shares						2,666,667
Accounts receivable, net						$ 65,000,000.0
Cash and cash equivalents			$ 30,317,000									$ 43,574,000	$ 30,317,000
Warrants exercise period after resale							60 days
Common stock, par value \| $ / shares			$ 0.0001									$ 0.0001	$ 0.0001
Minimum
Debt Instrument [Line Items]
Increase minimum cash threshold covenant						15,000,000.0
Cash and cash equivalents						30,000,000
Maximum
Debt Instrument [Line Items]
Increase minimum cash threshold covenant						30,000,000.0
Restricted Stock
Debt Instrument [Line Items]
Loss on extinguishment								$ 4,100,000
February Warrant, Penny Warrant and Additional Warrant
Debt Instrument [Line Items]
Reclassification from a liability to component of equity													$ 80,000,000.0
Reclassification from a component of equity to liability													21,300,000
Private Placement
Debt Instrument [Line Items]
Gross proceeds received								14,800,000
Horizon Term Loan
Debt Instrument [Line Items]
Credit facility maximum borrowing amount															$ 15,000,000.0
Debt instrument maturity month and year															2023-01
Repaying of term loan										$ 15,000,000.0
Interest expense													0.0	$ 1,400,000
Amortization of debt issuance costs													0.0	600,000
High Trail Loan December 2020 Note
Debt Instrument [Line Items]
Gross proceeds received										38,000,000.0
Aggregate principal amount										$ 43,000,000.0
Number of repayment installments \| Installment										24
Line of credit facility, frequency of payments										monthly
Cash payments										$ 1,800,000
Line of credit facility covenant minimum liquidity requirement in unrestricted cash on hand										10,000,000.0
High Trail April 2021 Note
Debt Instrument [Line Items]
Loss on extinguishment								(28,200,000)
Repaying of term loan													10,139,000
Event of default description												On August 9, 2021, pursuant to those certain Letter Agreements entered into between the Company and High Trail with respect to each of the April 2021 Notes (collectively, the “August Letter Agreements”), High Trail notified the Company that High Trail declared an event of default under the April 2021 Notes as a result of the Company’s Adjusted EBITDA (as defined in the April 2021 Notes) not being equal to at least $12 million for the 12 month period ended June 30, 2021 and further notified the Company that High Trail immediately accelerated a total of $18.7 million of the principal amount of the April 2021 Notes, requiring the Company to immediately pay $21.5 million (such amount equal to 115% of the principal amount that was accelerated, as required under the terms of the April 2021 Notes, plus $0.3 million of accrued but unpaid interest on the principal amount that was accelerated) (the “Current Event of Default Acceleration Amount”).
Accelerated principal amount					$ 66,300,000	18,700,000
Debt instrument redemption amount						$ 21,500,000
Debt instrument redemption price percentage						115.00%
Accrued, Unpaid interest						$ 300,000
Base percentage used to calculate current event of default acceleration					0.80	0.80
Description of current event of default acceleration payment												Pursuant to the August Letter Agreements, the Company agreed, among other things, to pay the Current Event of Default Acceleration Amount in cash by August 9, 2021 and that any portion not paid in cash would be paid in shares of the Company’s common stock under the terms of the April 2021 Notes, with the number of shares issuable equal to the unpaid Current Event of Default Acceleration Amount divided by 80% of the lesser of (i) the Daily VWAP (as defined in the April 2021 Notes) on August 9, 2021 and (ii) the average of the lowest two (2) Daily VWAPs during the ten (10) day VWAP trading period ending on August 9, 2021.
High Trail April 2021 Note \| Minimum
Debt Instrument [Line Items]
Debt instrument default amount						$ 12,000,000
High Trail
Debt Instrument [Line Items]
Loss on extinguishment			$ 2,500,000										2,500,000
Repaying of term loan													25,000,000.0
Maturity date					Apr. 01, 2023
Debt instrument redemption amount					$ 76,900,000
Debt instrument redemption price percentage					115.00%
Accrued, Unpaid interest					$ 300,000
Warrant exercisable to common stock percentage					200.00%
Warrants consecutive trading days \| TradingDay					20
Warrants to purchase shares, exercise price \| $ / shares					$ 0.01
Common stock issued subject to satisfy obligation to repay acceleration amount \| shares					3,474,814													5,838,096
Notes extinguished in exchange for debt repayment					$ 25,000,000.0
High Trail \| High Trail Debt Repayment
Debt Instrument [Line Items]
Loss on extinguishment													107,000,000.0
High Trail \| High Trail April 2022 Notes Repayment
Debt Instrument [Line Items]
Loss on extinguishment													28,200,000
High Trail \| High Trails Term Loan
Debt Instrument [Line Items]
Available balance of credit facility			25,000,000.0										25,000,000.0
High Trail \| Credit Facility
Debt Instrument [Line Items]
Loss on extinguishment													1,500,000
High Trail \| Minimum
Debt Instrument [Line Items]
Increase minimum cash threshold covenant					$ 15,000,000.0
Beneficial ownership limit, percentage					9.99%
High Trail \| Maximum
Debt Instrument [Line Items]
Increase minimum cash threshold covenant					$ 30,000,000.0
Securities Purchase Agreement \| Common Stock
Debt Instrument [Line Items]
Warrants to purchase shares \| shares																10,643,034	4,827,242
Common stock, par value \| $ / shares																	$ 0.0001
Securities Purchase Agreement \| High Trail February 2021 Note
Debt Instrument [Line Items]
Cash payments								57,700,000
Securities Purchase Agreement \| High Trail February 2021 Note \| 0% Coupon Senior Secured Promissory Note \| Investor
Debt Instrument [Line Items]
Aggregate principal amount																			$ 16,500,000
Interest rate																			0.00%
Securities Purchase Agreement \| High Trail February 2021 Note \| 0% Coupon Senior Secured Promissory Note \| Investor \| Subsequent Event
Debt Instrument [Line Items]
Maturity date		Feb. 01, 2023
Securities Purchase Agreement \| High Trail February 2021 Note \| Senior Secured Promissory Notes \| Private Placement
Debt Instrument [Line Items]
Aggregate principal amount								$ 110,000,000.0
Securities Purchase Agreement \| High Trail April 2021 Note \| Common Stock
Debt Instrument [Line Items]
Warrants to purchase shares \| shares								2,259,166
Securities Purchase Agreement \| High Trail April 2021 Note \| Senior Secured Promissory Notes \| Private Placement
Debt Instrument [Line Items]
Interest rate								8.00%
Securities Purchase Agreement \| High Trail April 2021 Note \| Senior Secured Promissory Notes \| Private Placement \| Scenario Forecast
Debt Instrument [Line Items]
Maturity date	Apr. 08, 2024
April Letter Agreement
Debt Instrument [Line Items]
Common stock shares issued \| shares								130,000
SPA Amendment
Debt Instrument [Line Items]
Warrant amendment description												The Warrant Amendments amended the February Warrant, the Penny Warrant and the Additional Warrant to amend the definition of “Black Scholes Value” in each warrant to provide that the expected volatility used in the Black Scholes Value shall equal 100% instead of the greater of 100% and the 100-day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365-day annualization factor) as of the trading day immediately following the public announcement of a Change of Control (as defined in each of the warrants), or, if the Change of Control is not publicly announced, the date the Change of Control is consummated.
Letter Agreements \| High Trail April 2022 Note
Debt Instrument [Line Items]
Base percentage used to calculate current event of default acceleration						0.80
Payment in cash of current event of default acceleration amount						$ 10,100,000
Payment in shares of current event of default acceleration amount						$ 11,700,000
Payment in shares of current event of default acceleration shares \| shares						2,841,251
Share price \| $ / shares						$ 4.1007
London Interbank Offered Rate (LIBOR) \| Horizon Term Loan
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate															9.90%
Description of variable rate basis												one-month LIBOR
MidCap Credit Facility
Debt Instrument [Line Items]
Credit facility maximum borrowing amount				$ 40,000,000.0					$ 30,000,000.0		$ 25,000,000.0			30,000,000.0
Additional increase in borrowing amount											$ 50,000,000.0			50,000,000.0
Debt instrument, basis spread on variable rate				5.50%
Line of credit facility, unused capacity, commitment fee percentage				0.50%							0.50%
Debt offset against and expense over the term				3 years
Aggregate principal amount				$ 110,000,000.0
Line of credit facility, minimum liquidity financial covenant requirement in cash on hand									6,500,000
Line of credit, outstanding									$ 12,900,000			$ 0		$ 12,900,000
Available balance of credit facility			$ 1,400,000										1,400,000
Loss on extinguishment													1,500,000
Gross proceeds received				$ 27,600,000
Warrants to purchase shares \| shares				200,000
Warrants to purchase shares, exercise price \| $ / shares												$ 4.70
Common stock, par value \| $ / shares				$ 0.0001
Line of credit facility, maximum liquidity requirements during the period				$ 12,500,000
Line of credit facility, maximum liquidity requirements at all other times				$ 15,000,000.0
Line of credit facility, covenant terms												The Credit Agreement minimum liquidity covenant requires that Midcap shall not permit the credit party liquidity at any time to be less than (a) during the period commencing on February 1st through and including May 31st of each calendar year, $12.5 million and (b) at all other times, $15.0 million.
Warrants term												10 years
MidCap Credit Facility \| Senior Secured Note
Debt Instrument [Line Items]
Aggregate principal amount										$ 43,000,000.0
MidCap Credit Facility \| London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate											5.75%
MidCap Credit Facility \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate				0.10%
Revolving Credit Facility
Debt Instrument [Line Items]
Loss on extinguishment													$ 1,532,000
Revolving Credit Facility \| Terminated Credit Agreement
Debt Instrument [Line Items]
Prepayment fee, percentage								4.30%

Related Party Transactions

12 Months Ended

Dec. 31, 2022

Related Party Transactions

14. RELATED PARTY TRANSACTION

None.

Net Loss Per Share - Schedule of Basic and Diluted Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Earnings Per Share [Abstract]
Net loss	$ (196,292)	$ (236,024)
Weighted-average number of shares used in computing net loss per share, basic	66,529,565	35,379,005
Weighted-average number of shares used in computing net loss per share, diluted	66,529,565	35,379,005
Net loss per share, basic	$ (2.95)	$ (6.67)
Net loss per share, diluted	$ (2.95)	$ (6.67)
Anti-dilutive shares excluded from computation of net loss per share (in shares)	13,409,769	3,027,361

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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+ Details

Acquisitions (Tables)

12 Months Ended

Dec. 31, 2022

Business Acquisition [Line Items]

Pro Forma Information


	Year-Ended December 31, 2021
Net revenue as reported	$	247,767
Healing Solutions net revenue (1)		4,600
Squatty Potty net revenue (2)		6,024
Photo Paper Direct net revenue (3)		6,334
Net revenue pro forma	$	264,725

Operating loss as reported		(34,077	)
Healing Solutions operating income (1)		382
Squatty Potty operating income (2)		1,772
Photo Paper Direct operating income (3)		1,152
Operating loss (income) pro forma	$	(30,771	)

(1)

(2)

(3)

Summary of Changes in Carrying Value of Estimated Contingent Earn-Out Liabilities

The following table summarizes the changes in the carrying value of estimated contingent earn-out liabilities (in thousands) as of December 31, 2022 (in thousands):


				Year-Ended December 31, 2021
	Smash Assets			Healing Solutions			Squatty Potty			Photo Paper Direct			Total
Balance –January 1, 2021	$	22,531		$	—		$	—		$	—			22,531
Acquisition date fair value of contingent earn-out liabilities and inventory to be settled in shares		—			16,558			3,502			911			20,971
Change in fair value of contingent earn-out liabilities		(17,291	)		(12,808	)		481			(911	)		(30,529	)
Payment of contingent earn-out liability		—			(3,750	)		—			—			(3,750	)
Balance—December 31, 2021	$	5,240		$	—		$	3,983		$	—		$	9,223


	Year-ended December 31, 2022
	Smash Assets			Squatty Potty			Total
Balance—January 1, 2022	$	5,240		$	3,983		$	9,223
Change in fair value of contingent earn-out liabilities		(5,240	)		—			(5,240	)
Payment of contingent earn-out liability		—			(3,983	)		(3,983	)
Balance—December 31, 2022	$	—		$	—		$	—

Healing Solutions LLC

Business Acquisition [Line Items]

Allocation of Purchase Price to Assets Acquired and Liabilities Assumed Based on Estimated Fair Values at Acquisition Date

The following presents the allocation of purchase price to the assets acquired and liabilities assumed, based on the estimated fair values at acquisition date:


	Amount allocated
	(in thousands)
Cash purchase price	$	15,280
1,387,759 shares of Common Stock issued at the Closing		39,454
Seller note for inventory		5,285
Estimated earn-out liability		11,273
Total consideration to be paid	$	71,292

Amounts Assigned to Goodwill and Major Intangibles Asset Classifications

The amounts assigned to goodwill and major intangible asset classifications were as follows:


	Total
	(in thousands)
Inventory	$	8,215
Working Capital		202
Trademarks (10 year useful life)		22,900
Goodwill		39,975
Net assets acquired	$	71,292

Squatty Potty, LLC

Business Acquisition [Line Items]

Allocation of Purchase Price to Assets Acquired and Liabilities Assumed Based on Estimated Fair Values at Acquisition Date

The following presents the allocation of purchase price to the assets acquired and liabilities assumed, based on the estimated fair values at acquisition date:


	Amount
	allocated
	(in thousands)
Cash purchase price	$	19,040
Transition services payments		8,231
Estimated earn-out liability		3,502
Total consideration	$	30,773

Amounts Assigned to Goodwill and Major Intangibles Asset Classifications

The amounts assigned to goodwill and major intangible asset classifications were as follows:


	Total
	(in thousands)
Inventory	$	1,471
Working Capital		230
Trademarks (10 year useful life)		6,500
Customer relationships		5,700
Goodwill (1)		16,872
Net assets acquired	$	30,773

(1)

Photo Paper Direct Ltd.

Business Acquisition [Line Items]

Allocation of Purchase Price to Assets Acquired and Liabilities Assumed Based on Estimated Fair Values at Acquisition Date

The following presents the allocation of purchase price to the assets acquired and liabilities assumed, based on the estimated fair values at acquisition date:


	Amount
	allocated
	(in thousands)
Cash purchase price	$	8,293
704,548 shares of common stock issued		11,075
Working capital adjustment		5,338
Estimated earn-out liability		911
Total consideration	$	25,617

Amounts Assigned to Goodwill and Major Intangibles Asset Classifications

The amounts assigned to goodwill and major intangible asset classifications were as follows:


	Total
	(in thousands)
Inventory	$	2,846
PP&E		86
Real Property		848
Working Capital		2,144
Trademarks (10 year useful life)		5,400
Goodwill (1)		15,774
Deferred tax liability (2)		(1,481	)
Net assets acquired	$	25,617

(1)

(2)

A measurement period adjustment was recorded that resulted in a deferred tax liability of $1.5 million, and corresponding increase in goodwill.

Fair Value Measurements - Summary of Warrant Activity (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Fair Value Disclosures [Abstract]
Fair value of warrants	$ (470)	$ 26,455
Change in fair value of warrants	3,473
Warrants liability as of December 31, 2022.	$ 3,473

Credit Facility and Term Loans

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Credit Facility and Term Loans

9. CREDIT FACILITY AND TERM LOANS

MidCap Credit Facility and Term Loan – November 2018 Note

On November 23, 2018, the Company entered into the three-year $25.0 million revolving credit facility (the “Credit Facility”) with MidCap Funding IV Trust (“MidCap”) as agent and lenders party thereto. The Credit Facility could be increased, subject to certain conditions, to $50.0 million. Loans under the Credit Facility were determined based on percentages of the Company’s eligible accounts receivable and eligible inventory. The Credit Facility bore interest at a rate of the London Interbank Offered Rate (“LIBOR”) plus 5.75% for outstanding borrowings. The Company was required to pay a facility availability fee of 0.5% on the average unused portion of the Credit Facility. On December 1, 2020, the Company, certain of the Company’s subsidiaries and MidCap entered into an amendment to the Credit Facility, (i) providing for a $30.0 million revolving credit facility, which could be increased, subject to certain conditions, to $50.0 million, (ii) permitting the incurrence of certain debt under certain conditions and restrictions, including the senior secured note with an aggregate principal amount of $43.0 million issued on December 1, 2020 (as amended, the “December 2020 Note”), (iii) permitting certain payments to High Trail SA as required under the December 2020 Note, and (iv) permitting the acquisition of the assets of an e-commerce business under the brands Mueller, Pursteam, Pohl and Schmitt, and Spiralizer (the “Smash Assets”). Further, the Credit Facility was extended to November 23, 2022. The Credit Facility contained a minimum liquidity financial covenant that required the Company to maintain a minimum of $6.5 million in cash on hand or availability in the Credit Facility. The Company was in compliance with the financial covenants contained within the Credit Facility as of December 31, 2020. As of December 31, 2020, there was $12.9 million outstanding on the Credit Facility and an available balance of approximately $1.4 million and as of December 31, 2021, there was no outstanding balance on the Credit Facility. On April 8, 2021, the Company paid off all obligations owing under, and terminated, the Credit Facility. The Company recorded $1.5 million of extinguishment of debt for the year-ended December 31, 2021, which has been classified within loss on extinguishment of debt on the condensed consolidated statements of operations. Pursuant to the Credit Facility, upon the payment of the amounts outstanding under the Credit Facility, the Company paid a prepayment fee and a payoff letter preparation fee in an aggregate amount equal to 4.3% of the then outstanding principal balance of the Credit Facility. The Company recorded interest expense from the Credit Facility of approximately $0.4 million for the year-ended December 31, 2021, which included $0.1 million relating to debt issuance costs.

Horizon Term Loan – December 2018 Note

On December 31, 2018, the Company entered into a term loan agreement (the “Horizon Loan Agreement”) with Horizon Technology Finance Corporation (“Horizon”). As part of the Horizon Loan Agreement, the Company obtained a four-year $15.0 million term loan (the “Horizon Term Loan”). The Horizon Term Loan bore interest at 9.90% plus the amount by which one-month LIBOR exceeded 2.50% for outstanding borrowings, and payments on principal were made on a monthly basis. The maturity date of the Horizon Term Loan was January 2023.

On December 1, 2020, the Company paid off all remaining obligations under the Horizon Term Loan for $15.0 million and terminated the Horizon Term Loan. The Company recorded interest expense from the Horizon Term Loan of $1.4 million and $0.0 million for the years-ended December 31, 2020 and 2021, respectively, which included $0.6 million and $0.0 million, respectively, relating to debt issuance costs.

High Trail Loan - December 2020 Note

On December 1, 2020, the Company refinanced the Horizon Term Loan through the issuance of the December 2020 Note to High Trail SA. The Company received gross proceeds of $38.0 million in exchange for the December 2020 Note with an aggregate principal amount of $43.0 million. The December 2020 Note was to be repaid over 24 equal monthly cash payments of $1.8 million.

The December 2020 Note consisted of the following as of December 31, 2020:


	December 31, 2020
	(in thousands)
December 2020 Note	$	43,000
Less: deferred debt issuance costs		(2,207	)
Less: discount associated with issuance of warrants		(9,839	)
Less: discount associated with original issuance of loan		(4,692	)
High Trail warrant		31,821
Total December 2020 Note		58,083
Less-current portion		(21,600	)
Term loan non-current portion	$	36,483

The December 2020 Note contained a minimum liquidity financial covenant that required the Company to maintain a minimum of $10.0 million in unrestricted cash on hand. Additionally, as of the last day of each applicable fiscal quarter, the Company was required to maintain Adjusted EBITDA amounts for the 12-month period ending on such day, as defined in the December 2020 Note. The Company was in compliance with the December 2020 Note’s financial covenants as of December 31, 2020.

The December 2020 Note was extinguished on April 8, 2021 in exchange for an April 2021 Note (see the discussion under the heading High Trail April 2021 Note of this Note 9 below).

High Trail - February 2021 Note

On February 2, 2021, the Company entered into a second, separate transaction with High Trail, where it issued to High Trail ON a 0% coupon senior secured promissory note in an aggregate principal amount of $16.5 million (as amended, the “February 2022 Note”) that was to mature on February 1, 2023.

High Trail - April 2021 Note

On April 8, 2021, the Company refinanced all its existing debt with High Trail and Midcap. As such, the Company entered into a new securities purchase and exchange agreement (the “Securities Purchase Agreement”) with High Trail SA and High Trail ON, pursuant to which, among other things, the Company issued and sold to High Trail, in a private placement transaction (the “Private Placement”), (i) senior secured promissory notes in an aggregate principal amount of $110.0 million (the “April 2021 Notes”) that accrued interest at a rate of 8% per annum and were to mature on April 8, 2024, and (ii) warrants (the “Warrants” and each, a “Warrant”) to purchase up to an aggregate of 2,259,166 shares of the Company’s common stock in exchange for: (a) a cash payment by High Trail to the Company of $57.7 million, (b) the cancellation of the December 2020 Note, and (c) the cancellation of the February 2021 Note.

The Company used $14.8 million of the net proceeds from the Private Placement to repay all amounts owed under the Credit Facility on April 8, 2021.

Pursuant to ASC 470, Debt, the Company concluded the High Trail April 2021 Note transaction resulted in the extinguishment of the two prior High Trail December 2020 and February 2021 term loans in the amount of $28.2 million of extinguishment of which has been classified within loss on extinguishment of debt on the consolidated statements of operations.

The Company breached its Adjusted EBITDA covenant with its lender, High Trail, and in August 2021, the Company secured a waiver from its lender with the partial repayment of the loan. See the High Trail Letter Agreements and Omnibus Amendment section for additional information.

The April Letter Agreement

On April 8, 2021, the Company entered into a Letter Agreement (the “April Letter Agreement”) with High Trail SA and High Trail ON, pursuant to which, among other things, (i) the Company and High Trail SA agreed to amend the terms of the Letter Agreement to provide that the Company would prepare and file by June 30, 2021 a registration statement (the “Resale Registration Statement”) with the Securities and Exchange Commission for the purposes of registering for resale the December Warrant Shares, the Penny Warrant Shares and the Restricted Shares (as defined below), (ii) the Company issued 130,000 shares of its common stock to High Trail SA (the “Restricted Shares”), and (iii) High Trail SA and High Trail ON agreed to waive any Default or Event of Default (as such terms are defined in the December 2020 Note or the February 2021 Note) caused by the Company’s failure to file the Resale Registration Statement by March 26, 2021.

On April 8, 2021, the Company entered into (i) an amendment (the “SPA Amendment”) to that certain Securities Purchase Agreement, dated as of November 30, 2020, by and between the Company and High Trail SA (the “December 2020 SPA”), and to that certain Securities Purchase Agreement, dated as of February 2, 2021, by and between the Company and High Trail ON (the “February 2021 SPA”), (ii) an amendment to the February Warrant (the “February Warrant Amendment”), (iii) an amendment to the Penny Warrant (the “Penny Warrant Amendment”), and (iv) an amendment to the Additional Warrant (the “Additional Warrant Amendment” and, together with the February Warrant Amendment and the Penny Warrant Amendment, the “Warrant Amendments”). The SPA Amendment amended the December 2020 SPA and the February 2021 SPA to, among other things, allow for the issuance of the April 2021 Notes and to waive certain rights of High Trail under the December 2020 SPA and the February 2021 SPA. The Warrant Amendments amended the February Warrant, the Penny Warrant and the Additional Warrant to amend the definition of “Black Scholes Value” in each warrant to provide that the expected volatility used in the Black Scholes Value shall equal 100% instead of the greater of 100% and the 100-day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365-day annualization factor) as of the trading day immediately following the public announcement of a Change of Control (as defined in each of the warrants), or, if the Change of Control is not publicly announced, the date the Change of Control is consummated.

The Warrant Amendments to the February Warrant, the Penny Warrant and the Additional Warrant resulted in an $80.0 million reclassification from a liability to a component of equity and resulted in a $21.3 million reclassification from a component of equity to a liability as of December 31, 2021.

The Restricted Shares were expensed as part of extinguishment loss, valued based on the fair market value on April 8, 2021 for $4.1 million, with the offset impacting stockholders’ equity.

High Trail Letter Agreements and Omnibus Amendment

On August 9, 2021, pursuant to those certain Letter Agreements entered into between the Company and High Trail with respect to each of the April 2021 Notes (collectively, the “August Letter Agreements”), High Trail notified the Company that High Trail declared an event of default under the April 2021 Notes as a result of the Company’s Adjusted EBITDA (as defined in the April 2021 Notes) not being equal to at least $12 million for the 12 month period ended June 30, 2021 and further notified the Company that High Trail immediately accelerated a total of $18.7 million of the principal amount of the April 2021 Notes, requiring the Company to immediately pay $21.5 million (such amount equal to 115% of the principal amount that was accelerated, as required under the terms of the April 2021 Notes, plus $0.3 million of accrued but unpaid interest on the principal amount that was accelerated) (the “Current Event of Default Acceleration Amount”).

Pursuant to the August Letter Agreements, the Company agreed, among other things, to pay the Current Event of Default Acceleration Amount in cash by August 9, 2021 and that any portion not paid in cash would be paid in shares of the Company’s common stock under the terms of the April 2021 Notes, with the number of shares issuable equal to the unpaid Current Event of Default Acceleration Amount divided by 80% of the lesser of (i) the Daily VWAP (as defined in the April 2021 Notes) on August 9, 2021 and (ii) the average of the lowest two (2) Daily VWAPs during the ten (10) day VWAP trading period ending on August 9, 2021.

Pursuant to the August Letter Agreements, High Trail waived the events of default relating to the Company’s failure to satisfy the Adjusted EBITDA covenant under the April 2021 Notes, effective upon the payment in cash of $10.1 million of the Current Event of Default Acceleration Amount and the issuance of the shares of the Company’s common stock for the remaining $11.7 million of the Current Event of Default Acceleration Amount. The Company paid High Trail an aggregate of $10.1 million in cash on August 9, 2021 and in accordance with the April 2021 Notes and the August Letter Agreements, paid the remaining $11.7 million of the Current Event of Default Acceleration Amount by issuing to High Trail an aggregate of 2,841,251 shares of common stock (with the shares issued at a price of $4.1007 per share, which was, in accordance with the April 2021 Notes, equal to 80% of the Daily VWAP on August 9, 2021.

In connection with the August Letter Agreements, on August 9, 2021, the Company also entered into an Omnibus Amendment to Senior Secured Notes Due 2024 and Warrants to Purchase Common Stock with High Trail (the “Omnibus Amendment”), whereby: (i) the Company agreed to increase the minimum cash threshold covenant in the April 2021 Notes from $15.0 million to $30.0 million through October 31, 2021; (ii) the Company agreed to add a liquidity covenant to the April 2021 Notes whereby it must have liquidity, on each day through October 31, 2021, calculated as (A) inventory, net, plus (B) accounts receivable, net (each determined in accordance with GAAP) in an aggregate minimum amount equal to $65.0 million less (C) any amount of cash and cash equivalents in excess of $30 million; (iii) the definition of “Permitted Investment” in the April 2021 Notes was modified such that the consent of High Trail is now required for certain merger and acquisition activity; (iv) the Company agreed that the exercise prices of the following warrants to purchase shares of the Company’s common stock previously issued to High Trail will be modified to be equal to the lesser of: (X) the closing price of the Company’s common stock on August 9, 2021 or (Y) the VWAP of the Company’s common stock on August 9, 2021: (1) the February Warrant; (2) the Additional Warrant; and (3) the Warrants (collectively, the “High Trail Warrants”); (v) High Trail agreed that it would not exercise the High Trail Warrants prior to October 17, 2021 (the day that was 60 days after the registration statement registering for resale the 2,666,667 shares of common stock the Company issued on June 15, 2021 was declared effective); and (vi) if, at any time on or after January 7, 2022, High Trail is unable to exercise the High Trail Warrants due to the agreement described in clause (v), the Company agreed to pay High Trail, as liquidated damages, a cash payment that will be equal to (a) the weighted average price of the Company’s common stock on the date High Trail seeks to exercise any of the High Trail Warrants, minus the then-current exercise price of the High Trail Warrants, multiplied by (b) the number of shares subject to the High Trail Warrants that it then desires to exercise.

High Trail Debt Repayment

On September 22, 2021, the Company entered into letter agreements (the “September Letter Agreements”) with High Trail with respect to the April 2021 Notes. Pursuant to the September Letter Agreements, (i) High Trail notified the Company that High Trail declared events of default under the April 2021 Notes and further notified the Company that High Trail accelerated an aggregate of $66.3 million of the principal amount of the April 2021 Notes, requiring the Company to pay $76.9 million (such amount equal to 115% of the principal amount that was accelerated, as required under the terms of the April 2021 Notes, plus $0.3 million of accrued but unpaid interest on the principal amount that was accelerated) (collectively, the “Acceleration Amount”), (ii) High Trail agreed, contingent and effective upon the repayment of the Acceleration Amount in shares of the Company’s common stock in accordance with the April 2021 Notes and the September Letter Agreements and the satisfaction of all of the Company’s other obligations under the September Letter

Agreements and the Second Omnibus Amendment (as defined below), to waive the events of default, (iii) the Company agreed that until November 1, 2021, the Company will not, subject to certain exceptions, issue, offer, sell or otherwise dispose of any equity security, equity-linked security or related security, and (iv) the Company agreed that, as a result of the occurrence of the events of default, it no longer has the right to require High Trail to exercise the High Trail Warrants if the price of the Company’s common stock exceeds 200% of the exercise price of the High Trail Warrants for 20 consecutive trading days and certain other conditions were satisfied.

Under the terms of the April 2021 Notes, High Trail had the right, by delivering a notice to the Company (each, a “Stock Payment Notice”) to require the Company to satisfy its obligation to repay all or any portion of the Acceleration Amount in shares of the Company’s common stock, with the number of shares issuable determined by dividing the portion of the Acceleration Amount that High Trail requests, pursuant to a Stock Payment Notice, to be repaid in shares of the Company’s common stock, by 80% of the lesser of (A) the Daily VWAP (as defined in the April 2021 Notes) on the date of delivery of the Stock Payment Notice, and (B) the average of the lowest two Daily VWAPs during the ten (10) day VWAP trading period ending on the date of delivery of the Stock Payment Notice. Pursuant to the September Letter Agreements, High Trail agreed to deliver Stock Payment Notices as soon as it is practicable to do so without High Trail and its affiliates collectively beneficially owning in the aggregate in excess of 9.99% of the Company’s outstanding common stock.

In connection with the September Letter Agreements, on September 22, 2021, the Company also entered into a Second Omnibus Amendment to Senior Secured Notes Due 2024 and Warrants to Purchase Common Stock with High Trail (the “Second Omnibus Amendment”), whereby: (i) the maturity date of the April 2021 Notes was changed from April 8, 2024 to April 1, 2023; (ii) the definition of “Permitted Investment” in the April 2021 Notes was modified to include an exception for certain acquisitions of all or substantially all of the assets of another person or a majority of the equity interests of another person; (iii) the definition of “Target Adjusted EBITDA” was modified to reflect certain updated projections of the Company; (iv) the liquidity requirements as set forth in the Omnibus Amendment were removed; (v) the minimum cash threshold covenant was changed from $30.0 million to $15.0 million; (vi) the definition of “Adjusted EBITDA” in the April 2021 Notes was modified to be equal to not less than the Target Adjusted EBITDA for the three-month period ending on the last day of each applicable fiscal quarter instead of the 12-month period ending on such day; and (vii) the exercise prices of the High Trail Warrants were modified to be equal to $0.01. High Trail reserved the right to void the term of the Second Omnibus Amendment in full or in part in the event that the Company breaches any of the terms of the September Letter Agreements or otherwise fails to timely deliver shares of stock of the Company to High Trail as required thereunder.

In accordance with the April 2021 Notes and the September Letter Agreements, effective September 22, 2021, the Company issued to High Trail an aggregate of 3,474,814 shares of its common stock, and effective September 23, 2021, the Company issued to High Trail an aggregate of 5,838,096 shares of its common stock, satisfying its obligation to repay the Acceleration Amount in full.

Pursuant to ASC 470, Debt, the Company concluded that as a result of the High Trail Letter Agreements and Omnibus Amendment and the High Trail Debt Repayment, the April 2021 Notes were extinguished on September 22, 2021 in exchange for the Notes due April 2023 of $25.0 million.

The Company paid off the remaining $25.0 million High Trail Term Loan as of December 31, 2021 (see the discussion under the heading MidCap Credit Facility December 2021 of this Note 9 below). Pursuant to ASC 470, Debt, the Company concluded the High Trail Term Loan transaction resulted in the extinguishment of the High Trail Term Loan in the amount of $2.5 million of extinguishment of which has been classified within loss on extinguishment of debt on the Consolidated Statements of Operations.

For the year-ended December 31, 2021, the Company has recorded a total of $138.9 million of debt extinguishment loss which includes the $107.0 million from the High Trail Letter Agreements and Omnibus Amendment and the High Trail Debt Repayment, $28.2 million from the High Trail December 2020 and February 2021 term loans as part of the issuance of the April 2021 Notes, of $2.5 million of extinguishment from the remaining $25.0 million of High Trail Term Loan and $1.5 million from the repayment of the Credit Facility.

MidCap Credit Facility – December 2021

On December 22, 2021, the Company entered into a Credit and Security Agreement (the “Credit Agreement”) together with certain of its subsidiaries party thereto as borrowers, the entities party thereto as lenders, and Midcap Funding IV Trust, as administrative agent, pursuant to which, among other things, (i) the Lenders agreed to provide a three year revolving credit facility in a principal amount of up to $40.0 million subject to a borrowing base consisting of, among other things, inventory and sales receivables (subject to certain reserves), and (ii) the Company agreed to issue to MidCap Funding XXVII Trust a warrant (the “Midcap Warrant”) to purchase up to an aggregate of 200,000 shares of common stock of the Company, par value $0.0001 per share, in exchange for the Lenders extending loans and other extensions of credit to the Company under the Credit Agreement.

On December 22, 2021, the Company used $27.6 million of the net proceeds from the initial loan under the Credit Agreement to repay all remaining amounts owed under those certain senior secured promissory notes issued by the Company to High Trail Investments SA LLC and High Trail Investments ON LLC in an initial principal amount of $110.0 million, as amended (the “Terminated Notes”).

The obligations under the Credit Agreement are a senior secured obligation of the Company and rank senior to all indebtedness of the Company. Borrowings under the Credit Agreement bear interest at a rate of Term Secured Overnight Financing Rate ("Term SOFR"), which is defined as SOFR plus 0.10%, plus 5.50%. The Company will also be required to pay a commitment fee of 0.50% in respect of the undrawn portion of the commitments, which is generally based on average daily usage of the facility during the immediately preceding fiscal quarter. The Credit Agreement does not require any amortization payments.

The Credit Agreement imposes certain customary affirmative and negative covenants upon the Company including restrictions related to dividends and other foreign subsidiaries limitations. The Credit Agreement minimum liquidity covenant requires that Midcap shall not permit the credit party liquidity at any time to be less than (a) during the period commencing on February 1st through and including May 31st of each calendar year, $12.5 million and (b) at all other times, $15.0 million. The Credit Agreement includes events of default that are customary for these types of credit facilities, including the occurrence of a change of control. The Company was in compliance with the financial covenants contained within the Credit Agreement as of December 31, 2021.

The Midcap Warrant has an exercise price of $4.70 per share, subject to adjustment for stock splits, reverse stock splits, stock dividends and similar transactions, is immediately exercisable, has a term of ten years from the date of issuance and is exercisable on a cash or cashless basis.

The Company’s credit facility consisted of the following as of December 31, 2021 and 2022 (in thousands):


	December 31, 2021			December 31, 2022
MidCap Credit Facility – December 2021	$	34,119		$	21,899
Less: deferred debt issuance costs		(691	)		(459	)
Less: discount associated with issuance of warrants		(583	)		(387	)
Total MidCap Credit Facility – December 2021	$	32,845		$	21,053

Interest Expense, Net

Interest expense, net consisted of the following for the years-ended December 31, 2021 and 2022 (in thousands):


	Years-Ended December 31,
	2021			2022
Interest expense	$	13,250		$	2,696
Interest income		(595	)		(93	)
Total interest expense, net	$	12,655		$	2,603

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI https://asc.fasb.org/topic&trid=2208564

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (g)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1C
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1E
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI https://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Prepaid and Other Current Assets

12 Months Ended

Dec. 31, 2022

Prepaid Expense And Other Assets Current [Abstract]

Prepaid And Other Current Assets

7. PREPAID AND OTHER CURRENT ASSETS

Prepaid and other current assets consisted of the following as of December 31, 2021 and 2022 (in thousands):


	December 31, 2021		December 31, 2022
Prepaid inventory	$	4,137	$	1,342
Restricted cash		7,998		2,926
Prepaid insurance		2,440		1,991
Consulting fees		2,263		—
Amazon global logistics		2,865		576
Other		1,331		1,426
	$	21,034		8,261

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2022

Accounting Policies [Abstract]

Basis of Presentation

Use of Estimates

Principles of Consolidation

Restricted Cash

Accounts Receivable

Concentration of Credit Risk

Property and Equipment

Income Taxes

Revenue Recognition

Sales taxes—Consistent with prior periods, sales taxes collected from customers are presented on a net basis and as such are excluded from net revenue.

Net Revenue by Category: The following table sets forth the Company’s net revenue disaggregated by sales channel and geographic region based on the billing addresses of its customers:


	Year-Ended December 31, 2021
	(in thousands)
	Direct		Wholesale/Other		Total
North America	$	232,067	$	11,950	$	244,017
Other		3,750		—		3,750
Total net revenue	$	235,817	$	11,950	$	247,767

	Year-Ended December 31, 2022
	(in thousands)
	Direct		Wholesale/Other		Total
North America	$	209,336	$	7,002	$	216,338
Other		4,832		—		4,832
Total net revenue	$	214,168	$	7,002	$	221,170

Net Revenue by Product Categories: The following table sets forth the Company’s net revenue disaggregated by product categories:


	Year-Ended December 31,
	2021		2022
	(in thousands)
Heating, cooling and air quality	$	73,685	$	67,797
Kitchen appliances		43,180		40,551
Health and beauty		15,579		17,485
Personal protective equipment		6,073		1,564
Cookware, kitchen tools and gadgets		22,933		19,526
Home office		12,352		13,322
Housewares		33,951		33,041
Essential oils and related accessories		27,444		23,604
Other		12,570		4,280
Total net revenue	$	247,767	$	221,170

Fair Value of Financial Instruments

The fair value of the contingent consideration related to business combinations is estimated using a probability-adjusted discounted cash flow model. These fair value measurements are based on significant inputs not observable in the market. The key internally developed assumptions used in these models are discount rates and the probabilities assigned to the milestones to be achieved. The company remeasures the fair value of the contingent consideration at each reporting period, and any changes in fair value resulting from either the passage of time or events occurring after the acquisition date, such as changes in discount rates, or in the expectations of achieving the performance targets, are recorded within the change in fair value of contingent earn-out liabilities line item on the statement of operations.

Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 3—Unobservable inputs that are supported by little or no market data for the related assets or liabilities.

Goodwill

Goodwill—The Company operates under one business component which is the same as its reporting unit based on the guidance in ASC Topic 350-20.

Total loss on goodwill impairment for the year-ended December 31, 2022 was $120.4 million.

Intangible Assets

Business Combinations

Accounting and Contingent Consideration

Inventory and Cost of Goods Sold

Sales and Distribution

Research and Development

General and Administrative

Stock-Based Compensation

These assumptions are estimated as follows:

•

Expected Dividend Yield. The Company has not paid and does not anticipate paying any cash dividends in the foreseeable future and, therefore, uses an expected dividend yield of zero.

Foreign Currency

Net Loss Per Share

Segment Information

Segment Information—The Company reports segment information in accordance with ASC Topic No. 280 “Segment Reporting.” The Company has one reportable segment.

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2022

Fair Value Disclosures [Abstract]

Summary of Financial Assets Measured at Fair Value


	Year-Ended December 31, 2021
	Fair Value Measurement Category
	Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	30,317	$	—	$	—
Restricted Cash		7,998		—		—
Liabilities:
Estimated fair value of contingent earn-out considerations		—		—		9,223

	Year-Ended December 31, 2022
	Fair Value Measurement Category
	Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	43,574	$	—	$	—
Restricted cash		3,055		—		—
Liabilities:
Warrant liability						3,473

Summary of Warrant Activity

The following table summarizes the Company's warrant activity during the year-ended December 31, 2022 (in thousands):


	Year-Ended December 31, 2022
Warrants liability as of January 1, 2022	$	—
Change in fair value of warrants		3,473
Warrants liability as of December 31, 2022.	$	3,473

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

Credit Facility and Term Loans (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Interest Expense, Net

Interest expense, net consisted of the following for the years-ended December 31, 2021 and 2022 (in thousands):


	Years-Ended December 31,
	2021			2022
Interest expense	$	13,250		$	2,696
Interest income		(595	)		(93	)
Total interest expense, net	$	12,655		$	2,603

MidCap Credit Facility

Schedule of Credit Facility and Term Loans

The Company’s credit facility consisted of the following as of December 31, 2021 and 2022 (in thousands):


	December 31, 2021			December 31, 2022
MidCap Credit Facility – December 2021	$	34,119		$	21,899
Less: deferred debt issuance costs		(691	)		(459	)
Less: discount associated with issuance of warrants		(583	)		(387	)
Total MidCap Credit Facility – December 2021	$	32,845		$	21,053

High Trail Loan December 2020 Note

Schedule of Credit Facility and Term Loans

The December 2020 Note consisted of the following as of December 31, 2020:


	December 31, 2020
	(in thousands)
December 2020 Note	$	43,000
Less: deferred debt issuance costs		(2,207	)
Less: discount associated with issuance of warrants		(9,839	)
Less: discount associated with original issuance of loan		(4,692	)
High Trail warrant		31,821
Total December 2020 Note		58,083
Less-current portion		(21,600	)
Term loan non-current portion	$	36,483

Property and Equipment

12 Months Ended

Dec. 31, 2022

Property Plant And Equipment [Abstract]

Property and Equipment

5. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of December 31, 2021 and 2022 (in thousands):


	Year-Ended December 31,
	2021			2022
Computer equipment and software	$	943		$	1,109
Furniture, fixtures and equipment		91			91
Leasehold improvements		56			56
Building		723			638
Subtotal		1,813			1,894
Less: accumulated depreciation and amortization		(559	)		(1,041	)
Property and equipment–net	$	1,254		$	853

Depreciation expense for property and equipment totaled $0.2 million and $0.4 million during the years-ended December 31, 2021 and 2022, respectively.

Goodwill and Intangibles (Tables)

12 Months Ended

Dec. 31, 2022

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Changes in Goodwill and Intangible Assets

The following tables summarize the changes in the Company’s intangible assets as of December 31, 2021 and December 31, 2022 (in thousands):


	December 31, 2020		For the Year-Ended December 31, 2021					December 31, 2021
	Gross Carrying Amount		Additions		Impairments			Net Book Value
Goodwill	$	47,318	$	72,623	$	—		$	119,941

	December 31, 2021		For the Year-Ended December 31, 2022					December 31, 2022
	Gross Carrying Amount		Additions		Impairments			Net Book Value
Goodwill	$	119,941	$	468		(120,409	)	$	—

The total goodwill impairment charge was approximately $120.4 million for the year-ended December 31, 2022.

The following tables summarize the changes in the Company’s intangible assets as of December 31, 2021 and December 31, 2022 (in thousands):

Summary of Estimated Aggregate Amortization Expense of Intangible Assets

The following table sets forth the estimated aggregate amortization of our in-place intangible assets and favorable intangible assets for the next five years and thereafter (amounts in thousands):


2023	$	6,821
2024		6,801
2025		6,759
2026		6,759
Thereafter		27,617
Total	$	54,757

Stock-Based Compensation - Additional Information (Details) $ in Millions	12 Months Ended
	Dec. 31, 2022 USD ($) shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options exercisable period	10 years
Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total unrecognized compensation expense related to unvested options, expects to recognize over estimated weighted average period	1 year 1 month 6 days
Total unrecognized compensation expense related to unvested shares of restricted common stock \| $	$ 17.7
Share-based Compensation Award, Tranche One \| Vesting on First Anniversary
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options vesting percentage	25.00%
Share-based Compensation Award, Tranche One \| Vesting Over Succeeding 36 Months
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options vesting period	36 months
Options vesting percentage	75.00%
Share-based Compensation Award, Tranche Two \| Vesting on First Anniversary
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options vesting percentage	33.33%
Share-based Compensation Award, Tranche Two \| Vesting Over Succeeding 24 Months
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options vesting period	24 months
Options vesting percentage	66.66%
Aterian 2014 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares reserved for future issuance	81,935
2018 Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares reserved for future issuance	724,880
2019 Equity Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares reserved for future issuance	0
2019 Equity Plan \| Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of restricted shares issued and outstanding	70.00%
2019 Equity Plan \| Share-based Compensation Award, Tranche One \| Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting date	Mar. 13, 2020
2019 Equity Plan \| Share-based Compensation Award, Tranche Two \| Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting date	Dec. 15, 2020
2019 Equity Plan \| Share-based Compensation Award, Tranche Three, Vesting Date 1 \| Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting date	Jan. 18, 2021
2019 Equity Plan \| Share-based Compensation Award, Tranche Three, Vesting Date 2 \| Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting date	Mar. 10, 2021
2019 Equity Plan \| Share-based Compensation Award, Tranche Four, Vesting Date 1 \| Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting date	Jul. 01, 2021
2019 Equity Plan \| Share-based Compensation Award, Tranche Four, Vesting Date 2 \| Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting date	Dec. 14, 2021
2022 Inducement Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares reserved for future issuance	2,050,000
Options exercisable period	10 years
Number of shares available for grant	2,700,000

Net Loss Per Share

12 Months Ended

Dec. 31, 2022

Earnings Per Share [Abstract]

Net Loss Per Share

15. NET LOSS PER SHARE

Basic net loss per share is determined by dividing net loss by the weighted-average shares of common stock outstanding during the period. Diluted net loss per share is determined by dividing net loss by diluted weighted-average shares outstanding. Diluted weighted-average shares reflect the dilutive effect, if any, of potentially dilutive shares of common stock, such as options to purchase common stock calculated using the treasury stock method and convertible notes using the “if-converted” method. In periods with reported net operating losses, all options to purchase common stock are deemed anti-dilutive such that basic net loss per share and diluted net loss per share are equal.

The Company’s shares of restricted common stock are entitled to receive dividends and hold voting rights applicable to the Company’s common stock, irrespective of any vesting requirement. Accordingly, although the vesting commences upon the elimination of the contingency, the shares of restricted common stock are considered a participating security and the Company is required to apply the two-class method to consider the impact of the shares of restricted common stock on the calculation of basic and diluted earnings per share. The Company is currently in a net loss position and is therefore not required to present the two-class method; however, in the event the Company is in a net income position, the two-class method must be applied by allocating all earnings during the period to shares of common stock and shares of restricted common stock.

The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share data):



	2021			2022
Net loss	$	(236,024	)	$	(196,292	)
Weighted-average number of shares used in computing net loss per share, basic and diluted		35,379,005			66,529,565
Net loss per share, basic and diluted	$	(6.67	)	$	(2.95	)

Anti-dilutive shares excluded from computation of net loss per share (in shares)		3,027,361			13,409,769

All other outstanding potentially dilutive securities, including shares of restricted common stock, common stock options (See Note 11) and common stock warrants (See Note 2) were excluded from the computation of diluted net loss per share because including them would have had an anti-dilutive effect.

Accounts Receivable - Summary of Accounts Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Accounts Notes Loans And Financing Receivable Gross Allowance And Net [Abstract]
Trade accounts receivable	$ 4,882	$ 10,478
Allowance for doubtful accounts	(367)
Accounts receivable—net	$ 4,515	$ 10,478

Stock-Based Compensation - Summary of Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Options Outstanding, Number of Options, Shares, Beginning Balance	522,905
Options Outstanding, Number of Options, Cancelled, Shares	(154,309)
Options Outstanding, Number of Options, Shares, Ending Balance	368,596	522,905
Options Outstanding, Number of Options Exercisable, Shares, as of December 31, 2022	368,596
Options Outstanding, Number of Options, Vested and expected to vest, Shares as of December 31, 2022	368,596
Options Outstanding, Weighted Average Exercise Price, Beginning Balance	$ 9.25
Options Outstanding, Weighted Average Exercise Price, Cancelled	9.24
Options Outstanding, Weighted Average Exercise Price, Ending Balance	9.26	$ 9.25
Options Outstanding, Weighted Average Exercise Price, Exercisable as of December 31, 2022	9.26
Options Outstanding, Weighted Average Exercise Price, Vested and expected to vest as of December 31, 2022	$ 9.26
Options Outstanding, Weighted Average Remaining Contractual Life (Years)	5 years 10 months 20 days	6 years 9 months 7 days
Options Outstanding, Weighted Average Remaining Contractual Life (Years), Exercisable as of December 31, 2022	5 years 10 months 20 days
Options Outstanding, Weighted Average Remaining Contractual Life (Years), Vested and expected to vest as of December 31, 2022	5 years 10 months 20 days
Options Outstanding, Aggregate Intrinsic Value, Beginning Balance	$ 25,971
Options Outstanding, Aggregate Intrinsic Value, Ending Balance		$ 25,971

Income Taxes - Schedule of Components of Income Tax Provision (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Current:
Federal	$ 0	$ 0
State	101	72
Foreign	69	265
Total current income tax expense	170	337
Deferred:
Federal	(270)	253
State	(35)	32
Foreign	(241)	(90)
Total deferred income tax expense (benefit)	(546)	195
Income tax provision (benefit)	$ (376)	$ 532

Prepaid and Other Current Assets (Tables)

12 Months Ended

Dec. 31, 2022

Prepaid Expense And Other Assets Current [Abstract]

Schedule of Prepaid And Other Current Assets

Prepaid and other current assets consisted of the following as of December 31, 2021 and 2022 (in thousands):


	December 31, 2021		December 31, 2022
Prepaid inventory	$	4,137	$	1,342
Restricted cash		7,998		2,926
Prepaid insurance		2,440		1,991
Consulting fees		2,263		—
Amazon global logistics		2,865		576
Other		1,331		1,426
	$	21,034		8,261

Accounts Receivable

12 Months Ended

Dec. 31, 2022

Accounts Receivable Net Current [Abstract]

Accounts Receivable

4. ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following as of December 31, 2021 and 2022 (in thousands):


	Year-Ended December 31,
	2021		2022
Trade accounts receivable	$	10,478	$	4,882
Allowance for doubtful accounts		—		(367	)
Accounts receivable--net	$	10,478	$	4,515

Acquisition - Allocation of Purchase Price to Assets Acquired and Liabilities Assumed Based on Estimated Fair Values at Acquisition Date (Details) - USD ($) $ in Thousands	Oct. 04, 2022	May 05, 2021	Feb. 02, 2021
Business Acquisition [Line Items]
Cash purchase price	$ 700
Total consideration to be paid	$ 700
Healing Solutions LLC
Business Acquisition [Line Items]
Inventory			$ 5,285
Cash purchase price			15,280
Shares of common stock issued			39,454
Estimated earn-out liability			11,273
Total consideration to be paid			$ 71,292
Squatty Potty, LLC
Business Acquisition [Line Items]
Inventory		$ 1,100
Cash purchase price		19,040
Estimated earn-out liability		3,502
Total consideration to be paid		30,773
Transition services payments		8,231
Photo Paper Direct Ltd.
Business Acquisition [Line Items]
Cash purchase price		8,293
Shares of common stock issued		11,075
Estimated earn-out liability		911
Total consideration to be paid		25,617
Working capital adjustment		$ 5,338

Acquisition - Pro Forma Information (Parenthetical) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
NET REVENUE	$ 221,170	$ 247,767
Operating income (loss)	(178,159)	(34,077)
Healing Solutions LLC
Business Acquisition [Line Items]
NET REVENUE		33,100
Operating income (loss)	10,700
Squatty Potty, LLC
Business Acquisition [Line Items]
NET REVENUE		10,100
Operating income (loss)	4,200
Photo Paper Direct Ltd.
Business Acquisition [Line Items]
NET REVENUE		$ 11,600
Operating income (loss)	$ 1,300

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Inventory (Tables)

12 Months Ended

Dec. 31, 2022

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory consisted of the following as of December 31, 2021 and 2022 (in thousands):


	Year-Ended December 31,
	2021		2022
Inventory on-hand	$	48,079	$	34,374
Inventory in-transit		14,966		9,292
Inventory	$	63,045	$	43,666

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2022

Property Plant And Equipment [Abstract]

Summary of Property and Equipment

Property and equipment consisted of the following as of December 31, 2021 and 2022 (in thousands):


	Year-Ended December 31,
	2021			2022
Computer equipment and software	$	943		$	1,109
Furniture, fixtures and equipment		91			91
Leasehold improvements		56			56
Building		723			638
Subtotal		1,813			1,894
Less: accumulated depreciation and amortization		(559	)		(1,041	)
Property and equipment–net	$	1,254		$	853

Stock-Based Compensation

12 Months Ended

Dec. 31, 2022

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

11. STOCK-BASED COMPENSATION

The Company has four equity plans:

2014 Amended and Restated Equity Incentive Plan

The board of directors of Aterian Group, Inc., a subsidiary of the Company (“AGI”), adopted, and AGI’s stockholders approved, the Aterian Group, Inc. 2014 Equity Incentive Plan on June 11, 2014. On March 1, 2017, AGI’s board of directors adopted, and AGI’s stockholders approved, an amendment and restatement of the 2014 Equity Incentive Plan (as amended, the “Aterian 2014 Plan”). As of December 31, 2022, 81,935 shares were reserved for awards available for future issuance under the Aterian 2014 Plan.

2018 Equity Incentive Plan

The Company’s board of directors adopted the Aterian, Inc. 2018 Equity Incentive Plan (the “2018 Plan”) on October 11, 2018. The 2018 Plan was approved by its stockholders on May 24, 2020. As of December 31, 2022, 724,880 shares were reserved for awards available for future issuance under the 2018 Plan.

Options granted to date under the Aterian 2014 Plan and the 2018 Plan generally vest either: (i) over a four-year period with 25% of the shares underlying the options vesting on the first anniversary of the vesting commencement date with the remaining 75% of the shares vesting on a pro-rata basis over the succeeding thirty-six months, subject to continued service with the Company through each vesting date, or (ii) over a three-year period with 33 1/3% of the shares underlying the options vesting on the first anniversary of the vesting commencement date with the remaining 66 2/3% of the shares vesting on a pro-rata basis over the succeeding twenty-four months, subject to continued service with the Company through each vesting date. Options granted are generally exercisable for up to 10 years subject to continued service with the Company.

2019 Equity Plan

The Company’s board of directors adopted the Aterian, Inc. 2019 Equity Plan (the “2020 Equity Plan”) on March 20, 2019. The 2019 Equity Plan was approved by its stockholders on May 24, 2019. As of December 31, 2022, no shares were reserved for future issuance. Shares of restricted common stock granted under the 2019 Equity Plan initially vested in substantially equal installments on the 6th, 12th, 18th and 24th monthly anniversary of the closing of the Company’s initial public offering (“IPO”). The Company and the 2021 Equity Plan participants subsequently agreed to extend (i) the vesting date for the first installment of shares of restricted common stock under the 2019 Equity Plan to March 13, 2020, (ii) the vesting date for the second installment of shares of restricted common stock to December 15, 2020, (iii) the vesting date for the third installment of shares of restricted common stock to either January 18, 2021 or March 10, 2021, and (iv) the vesting date for the fourth installment of shares of restricted common stock to July 1, 2021 or December 14, 2021. Awards granted under the 2019 Equity Plan and not previously forfeited upon termination of service carry dividend and voting rights applicable to the Company’s common stock, irrespective of any vesting requirement. Under ASC Topic 718, the Company treats each award in substance as multiple awards as a result of the graded vesting and the fact that there is more than one requisite service period. Upon the prerequisite service period becoming probable, the day of the IPO, the Company recorded a cumulative catch-up expense and the remaining expense will be recorded under graded vesting. In the event the service of a participant in the 2019 Equity Plan (each, a “Participant”) is terminated due to an “involuntary termination”, then all of such Participant’s unvested shares of restricted common stock shall vest on the date of such involuntary termination unless, within three business days of such termination (1) the Company’s board of directors unanimously determines that such vesting shall not occur and (2) the remaining Participants holding

restricted share awards covering at least 70% of the shares of restricted common stock issued and outstanding under the 2019 Equity Plan determine that such vesting shall not occur. In the event of a forfeiture, voluntary or involuntary, of shares of restricted common stock granted under the 2019 Equity Plan, such shares are automatically reallocated to the remaining Participants in proportion to the number of shares of restricted common stock covered by outstanding awards that each such Participant holds.

Inducement Equity Incentive Plan

On May 27, 2022, the Compensation Committee of the Board (the “Compensation Committee”) adopted the Aterian, Inc. 2022 Inducement Equity Incentive Plan (the “Inducement Plan”). The Inducement Plan serves to advance the interests of the Company by providing a material inducement for the best available individuals to join the Company as employees by affording such individuals an opportunity to acquire a proprietary interest in the Company.

The Inducement Plan provides for the grant of equity-based awards in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units and performance shares solely to prospective employees of the Company or an affiliate of the Company provided that certain criteria are met. Awards under the Inducement Plan may only be granted to an individual, as a material inducement to such individual to enter into employment with the Company or an affiliate of the Company, who (i) has not previously been an employee or director of the Company or (ii) is rehired following a bona fide period of non-employment with the Company. The maximum number of shares available for grant under the Inducement Plan is 2,700,000 shares of the Company’s common stock (subject to adjustment for recapitalizations, stock splits, reorganizations and similar transactions). The Inducement Plan is administered by the Compensation Committee and expires ten years from the date of effectiveness. As of December 31, 2022, 2,050,000 shares were reserved for future issuance under the Inducement Plan.

The Inducement Plan has not been and will not be approved by the Company’s stockholders. Awards under the Inducement Plan will be made pursuant to the exemption from Nasdaq stockholder approval requirements for equity compensation provided by Nasdaq Listing Rule 5635(c)(4), which permits Nasdaq listed companies to make inducement equity awards to new employees without first obtaining stockholder approval of the award.

The following is a summary of stock options activity during the year-ended December 31, 2022:


	Options Outstanding
	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (years)		Aggregate Intrinsic Value
Balance—January 1, 2022		522,905		$	9.25		6.77	$	25,971
Options granted		—		$	—	—		$	—
Options exercised		—		$	—	—		$	—
Options canceled		(154,309	)	$	9.24	—		$	—
Balance—December 31, 2022		368,596		$	9.26		5.89	$	—
Exercisable as of December 31, 2022		368,596		$	9.26		5.89	$	—
Vested and expected to vest as of December 31, 2022		368,596		$	9.26		5.89	$	—

During the year-ended December 31, 2022, no options were granted. All Options have vested and have been fully expensed as of December 31, 2022.

A summary of restricted stock activity within the Company’s equity plans and changes for the year-ended December 31, 2022, is as follows:


Restricted Stock Awards	Shares			Weighted Average Grant- Date Fair Value
Nonvested at January 1, 2022		2,106,180		$	14.94
Granted		4,428,662		$	3.14
Vested		(1,888,337	)	$	10.38
Forfeited		(423,482	)	$	10.27
Nonvested at December 31, 2022		4,223,023		$	4.85

As of December 31, 2022, the total unrecognized compensation expense related to unvested shares of restricted common stock was $17.7 million, which the Company expects to recognize over an estimated weighted-average period of 1.1 years.


	Years-Ended December 31,
	2021		2022
	(in thousands, except percentages)
Sales and distribution expenses	$	6,809	$	5,014
Research and development expenses		5,339		1,871
General and administrative expenses		16,839		7,709
Total stock-based compensation expense	$	28,987	$	14,594

Goodwill and Intangibles - Summary of Estimated Aggregate Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Goodwill And Intangible Assets Disclosure [Abstract]
2023	$ 6,821
2024	6,801
2025	6,759
2026	6,759
Thereafter	27,617
Total	$ 54,757	$ 64,955

Goodwill and Intangibles - Additional Information (Details) - USD ($)	3 Months Ended			12 Months Ended
	Dec. 31, 2022	Sep. 30, 2022	Mar. 31, 2022	Dec. 31, 2022	Oct. 04, 2022	Dec. 31, 2021
Goodwill [Line Items]
Purchase price					$ 700,000
Goodwill		$ 0			$ 500,000	$ 119,941,000
Impairment loss on goodwill	$ 500,000	$ 90,900,000	$ 29,000,000.0	$ 120,409,000

- Definition

Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.

+ References + Details

Accounts Receivable (Tables)

12 Months Ended

Dec. 31, 2022

Accounts Receivable Net Current [Abstract]

Summary of Accounts Receivable

Accounts receivable consisted of the following as of December 31, 2021 and 2022 (in thousands):


	Year-Ended December 31,
	2021		2022
Trade accounts receivable	$	10,478	$	4,882
Allowance for doubtful accounts		—		(367	)
Accounts receivable--net	$	10,478	$	4,515

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Statement Of Income And Comprehensive Income [Abstract]
NET LOSS	$ (196,292)	$ (236,024)
OTHER COMPREHENSIVE INCOME:
Foreign currency translation adjustments	(676)	(477)
Other comprehensive income (loss)	(676)	(477)
COMPREHENSIVE LOSS	$ (196,968)	$ (236,501)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Acquisition - Amounts Assigned to Goodwill and Major Intangibles Asset Classifications (Details) - USD ($)	May 05, 2021	Feb. 02, 2021	Oct. 04, 2022	Sep. 30, 2022	Dec. 31, 2021
Business Acquisition [Line Items]
Goodwill			$ 500,000	$ 0	$ 119,941,000
Total consideration to be paid			$ 700,000
Healing Solutions LLC
Business Acquisition [Line Items]
Goodwill		$ 39,975,000
Net intangible assets		71,292,000
Total consideration to be paid		71,292,000
Squatty Potty, LLC
Business Acquisition [Line Items]
Goodwill	$ 16,872,000
Total consideration to be paid	30,773,000
Photo Paper Direct Ltd.
Business Acquisition [Line Items]
Goodwill	15,774,000
Total consideration to be paid	25,617,000
Deferred tax liability	(1,481,000)
Trademarks \| Healing Solutions LLC
Business Acquisition [Line Items]
Intangible assets		$ 22,900,000
Useful life (in years)		10 years
Trademarks \| Squatty Potty, LLC
Business Acquisition [Line Items]
Intangible assets	$ 6,500,000
Useful life (in years)	10 years
Trademarks \| Photo Paper Direct Ltd.
Business Acquisition [Line Items]
Intangible assets	$ 5,400,000
Useful life (in years)	10 years
Inventory \| Healing Solutions LLC
Business Acquisition [Line Items]
Intangible assets		$ 8,215,000
Inventory \| Squatty Potty, LLC
Business Acquisition [Line Items]
Intangible assets	$ 1,471,000
Inventory \| Photo Paper Direct Ltd.
Business Acquisition [Line Items]
Intangible assets	2,846,000
Working Capital \| Healing Solutions LLC
Business Acquisition [Line Items]
Intangible assets		$ 202,000
Working Capital \| Squatty Potty, LLC
Business Acquisition [Line Items]
Intangible assets	230,000
Working Capital \| Photo Paper Direct Ltd.
Business Acquisition [Line Items]
Intangible assets	2,144,000
Customer Relations \| Squatty Potty, LLC
Business Acquisition [Line Items]
Intangible assets	5,700,000
PP&E \| Photo Paper Direct Ltd.
Business Acquisition [Line Items]
Intangible assets	86,000
Real Property \| Photo Paper Direct Ltd.
Business Acquisition [Line Items]
Intangible assets	$ 848,000

Income Taxes - Schedule of Provision for Income Tax Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Income Tax Disclosure [Abstract]
Domestic	$ (196,166)	$ (233,846)
International	(502)	(1,646)
LOSS BEFORE INCOME TAXES	$ (196,668)	$ (235,492)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Fair Value Measurements - Additional Information (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and restricted cash	$ 46,629	$ 38,315	$ 30,097
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and restricted cash	$ 46,600	$ 38,300

Summary of Significant Accounting Policies - Additional Information (Details)	3 Months Ended			12 Months Ended
	Dec. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($) Customer Segment	Dec. 31, 2021 USD ($) Customer	Oct. 04, 2022 USD ($)	Jan. 01, 2022 USD ($)
Significant Accounting Policies [Line Items]
Allowance for doubtful accounts	$ 400,000			$ 400,000	$ 0.0
Cash deposits at financial institutions in excess of insured amount	300,000			$ 300,000
Income tax benefit recognition, minimum percentage of likelihood being realized				50.00%
Impairment loss on goodwill	500,000	$ 90,900,000	$ 29,000,000.0	$ 120,409,000
Goodwill		0			119,941,000	$ 500,000
Purchase price						$ 700,000
Impairment loss on intangibles		$ 3,100,000		$ 3,118,000
Number of reportable segments \| Segment				1
Right-of-use asset							$ 700,000
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]							Prepaid and other current assets
Current right-of-use assets							$ 200,000
Non-current right-of-use assets							100,000
Operating lease, liability							$ 700,000
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]							Accrued and other current liabilities
Sales and distribution expenses
Significant Accounting Policies [Line Items]
Advertising cost				$ 600,000	0.0
Shipping and handling cost				47,400,000	43,400,000
Other Expense, Net \| Maximum
Significant Accounting Policies [Line Items]
Net loss from foreign currency transactions				$ (200,000)	$ (100,000)
Customer Concentration Risk \| Revenue Benchmark
Significant Accounting Policies [Line Items]
Number of customer accounted \| Customer				0	0
Customer Concentration Risk \| Revenue Benchmark \| Amazon
Significant Accounting Policies [Line Items]
Percentage of concentration of credit risk				89.00%	93.00%
Customer Concentration Risk \| Accounts Receivable
Significant Accounting Policies [Line Items]
Number of customer accounted \| Customer				3	3
Customer Concentration Risk \| Accounts Receivable \| Amazon
Significant Accounting Policies [Line Items]
Percentage of concentration of credit risk				43.00%	42.00%
Other Noncurrent Assets
Significant Accounting Policies [Line Items]
Restricted cash deposit associated with credit facility	100,000			$ 100,000	$ 100,000
Prepaid Expenses and Other Current Assets \| MidCap Credit Facility
Significant Accounting Policies [Line Items]
Restricted cash deposit associated with credit facility	900,000			900,000	5,900,000
Prepaid Expenses and Other Current Assets \| Letter of Credit
Significant Accounting Policies [Line Items]
Restricted cash deposit associated with credit facility	2,000,000.0			2,000,000.0	2,000,000.0
Accrued Liabilities
Significant Accounting Policies [Line Items]
Refund liabilities for sales returns	$ 600,000			$ 600,000	$ 600,000

Goodwill and Intangibles - Summary of Changes in Goodwill and Intangible Assets (Parenthetical) (Details) - USD ($) $ in Thousands	3 Months Ended			12 Months Ended
	Dec. 31, 2022	Sep. 30, 2022	Mar. 31, 2022	Dec. 31, 2022
Goodwill And Intangible Assets Disclosure [Abstract]
Impairment loss on goodwill	$ 500	$ 90,900	$ 29,000	$ 120,409
Intangible impairment charge		$ 3,100		$ 3,118

Accrued and Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 2022

Accrued Liabilities And Other Liabilities [Abstract]

Schedule of Components of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of December 31, 2021 and 2022 (in thousands):


	December 31, 2021		December 31, 2022
Accrued compensation costs	$	162	$	53
Accrued professional fees and consultants		331		461
Accrued logistics costs		578		609
Product related accruals		2,984		1,248
Sales tax payable		678		711
Sales return reserve		590		646
Accrued fulfillment expense		744		755
Accrued insurance		967		356
Federal payroll taxes payable		4,449		1,467
Accrued interest payable		338		190
Warrant liability		-		3,473
All other accruals		5,800		4,285
Accrued and current liabilities	$	17,621	$	14,254

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2022
Subsequent Events [Abstract]
Subsequent Events	18. SUBSEQUENT EVENTS None.

Property and Equipment - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Property Plant And Equipment [Abstract]
Depreciation expense	$ 0.4	$ 0.2

Acquisition - Allocation of Purchase Price to Assets Acquired and Liabilities Assumed Based on Estimated Fair Values at Acquisition Date (Parenthetical) (Details) - shares	May 05, 2021	Feb. 02, 2021
Healing Solutions LLC
Business Acquisition [Line Items]
Business acquisition shares issued		1,387,759
Photo Paper Direct Ltd.
Business Acquisition [Line Items]
Business acquisition shares issued	704,548

Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands					12 Months Ended
	Oct. 04, 2022	Sep. 29, 2022	Mar. 01, 2022	Jun. 10, 2021	Dec. 31, 2022	Dec. 31, 2021
Stockholders Equity [Line Items]
Common stock, voting rights					The Company has one class of common shares issued and available. Each share of common stock has the right to one vote per share
Proceeds from equity offering, net of issuance costs					$ 46,834
Common stock, par value					$ 0.0001	$ 0.0001
Proceeds from warrant exercise						$ 9,085
Common Stock
Stockholders Equity [Line Items]
Issuance of common stock, net of issuance costs					18,277,948	2,666,667
Common Stock \| Securities Purchase Agreement
Stockholders Equity [Line Items]
Proceeds from equity offering, net of issuance costs	$ 20,200
Sale of stock, number of shares issued in transaction	10,643,034	10,643,034	6,436,322
Common stock, par value			$ 0.0001
Warrants to purchase shares		10,643,034	4,827,242
Common Stock Warrant \| Securities Purchase Agreement
Stockholders Equity [Line Items]
Warrants to purchase shares			2,260,388
Share price			$ 2.91
Proceeds from warrant exercise			$ 27,500
Expense derived from anticipated fair-value of issuances of equity					$ 12,800
Private Placement
Stockholders Equity [Line Items]
Sale of stock, number of shares issued in transaction				2,666,667
Sale of stock, price per share				$ 15.00
Sale of stock, proceeds net of offering costs				$ 36,700
Pre-Funded Warrants \| Common Stock Warrant \| Securities Purchase Agreement
Stockholders Equity [Line Items]
Warrants to purchase shares			3,013,850
Share price			$ 2.91
Accredited Purchasers \| Common Stock \| Securities Purchase Agreement
Stockholders Equity [Line Items]
Sale of stock, number of shares issued in transaction		10,526,368
Warrants to purchase shares		10,526,368
Share price		$ 1.90
Insiders \| Common Stock \| Securities Purchase Agreement
Stockholders Equity [Line Items]
Sale of stock, number of shares issued in transaction		116,666
Warrants to purchase shares		116,666
Share price		$ 2.10

Accrued and Other Current Liabilities - Schedule of Components of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Accrued Liabilities And Other Liabilities [Abstract]
Accrued compensation costs	$ 53	$ 162
Accrued professional fees and consultants	461	331
Accrued logistics costs	609	578
Product related accruals	1,248	2,984
Sales tax payable	711	678
Sales return reserve	646	590
Accrued fulfillment expense	755	744
Accrued insurance	356	967
Federal payroll taxes payable	1,467	4,449
Accrued interest payable	190	338
Warrant liability	3,473
All other accruals	4,285	5,800
Accrued and current liabilities	$ 14,254	$ 17,621

Acquisition - Amounts Assigned to Goodwill and Major Intangibles Asset Classifications (Parenthetical) (Details) - USD ($) $ in Thousands	May 05, 2021	Feb. 02, 2021
Photo Paper Direct Ltd.
Business Acquisition [Line Items]
Deferred tax liability	$ 1,481
Trademarks \| Healing Solutions LLC
Business Acquisition [Line Items]
Useful life (in years)		10 years
Trademarks \| Squatty Potty, LLC
Business Acquisition [Line Items]
Useful life (in years)	10 years
Trademarks \| Photo Paper Direct Ltd.
Business Acquisition [Line Items]
Useful life (in years)	10 years

Summary of Significant Accounting Policies - Net Revenue Disaggregated by Product Categories (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Disaggregation Of Revenue [Line Items]
Total net revenue	$ 221,170	$ 247,767
Product Revenue \| Heating, Cooling and Air Quality
Disaggregation Of Revenue [Line Items]
Total net revenue	67,797	73,685
Product Revenue \| Kitchen Appliances
Disaggregation Of Revenue [Line Items]
Total net revenue	40,551	43,180
Product Revenue \| Health and Beauty
Disaggregation Of Revenue [Line Items]
Total net revenue	17,485	15,579
Product Revenue \| Personal Protective Equipment
Disaggregation Of Revenue [Line Items]
Total net revenue	1,564	6,073
Product Revenue \| Cookware, Kitchen Tools and Gadgets
Disaggregation Of Revenue [Line Items]
Total net revenue	19,526	22,933
Product Revenue \| Home Office
Disaggregation Of Revenue [Line Items]
Total net revenue	13,322	12,352
Product Revenue \| Housewares
Disaggregation Of Revenue [Line Items]
Total net revenue	33,041	33,951
Product Revenue \| Essential Oils and Related Accessories
Disaggregation Of Revenue [Line Items]
Total net revenue	23,604	27,444
Product Revenue \| Other
Disaggregation Of Revenue [Line Items]
Total net revenue	$ 4,280	$ 12,570

Summary of Significant Accounting Policies - Net Revenue Disaggregated by Sales Channel and Geographic Region (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Disaggregation Of Revenue [Line Items]
Total net revenue	$ 221,170	$ 247,767
Direct
Disaggregation Of Revenue [Line Items]
Total net revenue	214,168	235,817
Wholesale
Disaggregation Of Revenue [Line Items]
Total net revenue	7,002	11,950
North America
Disaggregation Of Revenue [Line Items]
Total net revenue	216,338	244,017
North America \| Direct
Disaggregation Of Revenue [Line Items]
Total net revenue	209,336	232,067
North America \| Wholesale
Disaggregation Of Revenue [Line Items]
Total net revenue	7,002	11,950
Other
Disaggregation Of Revenue [Line Items]
Total net revenue	4,832	3,750
Other \| Direct
Disaggregation Of Revenue [Line Items]
Total net revenue	$ 4,832	$ 3,750

- Definition

+ References

+ Details