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BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended
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Sep. 30, 2025
Accounting Policies [Abstract] |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation — The accomp anying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, the condensed consolidated financial statements do not include all of the information and notes required by U.S. GAAP for annual audited consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. The preparation of our condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts, based on historical experience and other reasonable factors. These estimates and assumptions are reviewed on an ongoing basis and revised as circumstances change. Accordingly, the results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results expected for any future period or the full year. These condensed consolidated financial statements have been prepared on a basis that is substantially consistent with the accounting principles applied in the Company's Annual Report, as filed with the SEC. These condensed consolidated financial statements and the accompanying notes should be read in conjunction with such Annual Report. Certain prior period amounts have been reclassified to conform to the current period's presentation in the condensed consolidated financial statements and accompanying notes. These reclassifications were made for consistency with current period presentation and had no effect on operating results.
Line Items – As Previously Reported |  | Line Item – As Reclassified
Balance Sheets |  |
Right of use assets-operating leases |  | Other long-term assets
Right of use assets-finance leases-net |  | Other long-term assets
Intangibles-net |  | Customer relationships-net
Intangibles-net |  | Brands-net
Lease liability operating leases (previously presented in current liabilities) |  | Other current liabilities
Lease liability finance leases (previously presented in current liabilities) |  | Other current liabilities
Lease liability operating leases (previously presented in non-current liabilities) |  | Other long term liabilities
Lease liability finance leases (previously presented in non-current liabilities) |  | Other long term liabilities
Deferred tax liability |  | Other long term liabilities
Statements of Operations and Comprehensive Income |  |
Foreign exchange gain (loss) |  | Other, net
Statements of Cash Flows |  |
Loss on disposal of property and equipment |  | Other operating activities
Foreign exchange loss |  | Other operating activities
Change in right of use and lease obligation-net |  | Other long-term liabilities
Proceeds from exercise of stock options |  | Other financing activities
Principal payments on finance and lease obligations |  | Other financing activities
Principles of Consolidation — These condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in accordance with U.S. GAAP. Business Combinations — The Company accounts for business combinations in accordance with ASC 805. Under this guidance, the results of operations of an acquired business are included in the Company’s condensed consolidated financial statements and related notes prospectively from the acquisition date. The Company allocates the purchase consideration to the identifiable tangible and intangible assets acquired and liabilities assumed based on their fair values as of the acquisition date. Any excess of the purchase consideration over the fair value of net assets acquired is recognized as goodwill. During the measurement period, which does not exceed twelve months from the acquisition date, adjustments to the preliminary fair value estimates may be recorded as additional information becomes available. Measurement period adjustments, if applicable, are recognized in the reporting period in which the adjustments are determined and are reflected as a prospective adjustment to goodwill. See Note 5. Acquisitions. Contingent Consideration — In connection with the Alani Nu Acquisition, the Company recorded a liability at fair value for the contingent consideration potentially payable to the Sellers subject to achievement of certain 2025 revenue targets, with a maximum payment of $25 million. The acquisition date fair value of the liability was estimated using discounted future cash flows based on a probability-weighted expected return methodology using Level 3 inputs such as forecasts of revenue. The Company evaluates the fair value of the contingent consideration quarterly and adjusts the carrying value as new information becomes available. See Note 5. Acquisitions. Goodwill and Intangible Assets — Goodwill and indefin ite-lived inta ngible assets recognized as part of acquisitions are subsequently tested for impairment in accordance with the Company’s accounting policy for goodwill and indefinite-lived intangible assets. Indefinite-lived intangible assets are not amortized and are tested for impairment at least annually, or more frequently if indicators arise. Intangible assets with defined useful lives are generally measured at cost, net of accumulated amortization and impairment, and are amortized on a straight-line basis over their estimated useful lives. Useful lives are determined based on expected cash flows and other relevant facts and circumstances specific to each asset. See Note 7. Goodwill and Intangibles for further discussion of impairment testing. Debt — The Company accounts for all debt instruments in accordance with the guidance provided under ASC 470. Debt is initially recognized at the amount of proceeds received, net of any original issue discounts or premiums and debt issuance costs, and is subsequently carried at amortized cost. Debt is classified as current or non-current based on the contractual maturity dates. Issuance costs for the revolving credit arrangement are recorded in other assets on the Company’s condensed consolidated balance sheets. Original issue discounts and debt issuance costs are recognized as interest expense over the term of the debt using the effective interest method. See Note 6. Debt for additional information. Segment Reporting — Operating segments are defined as components of an enterprise that engage in business activities, maintain discrete financial information, and undergo regular review by the CODM, who is the Chief Executive Officer, to assess performance and allocate resources. Al though the Company operates in multiple geographical regions and offers a range of products under distinct brands, it functions as a single operating segment. The CODM evaluates operating results and allocates resources on a consolidated basis due to the significant economic interdependencies between the Company's brands, geographical operations and product offerings. As a result, the Company and its brands are managed as a single operating segment, which also represents the Company’s single reportable segment. Although the Company has a single reportable segment, it is still required to comply with all disclosure requirements set forth in the existing guidance under Segment Reporting (Topic 280). See Note 15. Segment Reporting. Significant Estimates — The preparation of condensed consolidated financial statements and accompanying disclosures in conformity with U.S. GAAP requires management to make recurring estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as disclosure of contingent assets and liabilities at the date of the financial statements. Although these estimates are based on management's best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates. These estimates and judgments are reviewed on an ongoing basis and are revised when necessary. Significant estimates include promotional allowances, intangibles, assets and liabilities assumed as a part of business combinations, allowance for inventory obsolescence and sales returns, the useful lives of property, plant and equipment, impairment of goodwill and intangibles, deferred taxes and related valuation allowance, valuation of contingent consideration, stock-based compensation and preferred stock. Fair Value Measurements — ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices in active markets included in Level 1 that are observable, directly or indirectly. Level 3: Unobservable inputs, which rely on the reporting entity’s assumptions when there is little or no market data. The Company performs valuations of assets acquired and liabilities assumed in acquisitions accounted for as a business combination and recognizes the assets acquired and liabilities assumed at their acquisition-date fair value. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. For additiona l information on fair value measurement as part of the Rockstar and Alani Nu acquisitions, see Note 5. Acquisitions. For additional information on the fair value measurement as part of the Preferred Stock issuance and modification, see Note 13. Mezzanine Equity. Concentrations of Risk — T he majority of the Company’s revenue is derived from th e sale of functional energy drinks. Functional energy drink product revenue accounted for approximately 95.0% and 94.1% of revenue for the three and nine months ended September 30, 2025, respectively, and 94.5% and 95.4% o f revenue for the three and nine months ended September 30, 2024, respectively. Revenue from customers accounting for more than 10.0% of total revenue for the three and nine months ended September 30, 2025 and 2024 was as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Pepsi | 35.4% |  | 47.0% |  | 38.5% |  | 53.5%
Costco | 11.1% |  | 14.9% |  | 10.4% |  | 12.2%
Amazon | 5.5% |  | 10.2% |  | 7.5% |  | 9.3%
All others | 48.0% |  | 27.9% |  | 43.6% |  | 25.0%
Total | 100.0% |  | 100.0% |  | 100.0% |  | 100.0%
Accounts receivable from customers accounting for more than 10.0% of total accounts receivable-net as of September 30, 2025 and December 31, 2024 were as follows:
| September 30, 2025 |  | December 31, 2024
Pepsi | 37.4% |  | 62.2%
Amazon | 14.7% |  | 8.9%
Costco | 8.9% |  | 10.2%
All others | 39.0% |  | 18.7%
Total | 100.0% |  | 100.0%
Cash Equivalents — The Company considers all highly liquid instruments with original maturities of three months or less, when purchased, to be cash equivalents. As of September 30, 2025 and December 31, 2024, the Company did not hold any instruments with original maturities exceeding three months. Restricted Cash — In connection with the A&R U.S. Distribution Agreement, the Company received upfront payments from Pepsi that are contractually restricted. These funds are designated solely to satisfy termination payments to certain former Alani Nu distributors, are not available for general operating activities, and are classified as restricted cash on the Company’s condensed consolidated balance sheets. Any amounts not utilized for such termination payments are required to be returned to Pepsi. For additional information s ee Note 4. Revenue and Note 12. Related Party Transactions. Accounts Receivable and Current Expected Credit Losses — The Company is exposed to potential credit risks associated with its product revenue and related accounts receivable, as it generally does not require collateral from its customers. The Company’s expected loss allowance for accounts receivable is determined using historical collection experience, current and expected future economic and market conditions, an assessment of the current status of customers’ trade accounts receivable, and where available, an evaluation of the financial condition and credit ratings of larger customers, including credit reports. Customers are pooled based on common risk factors, and the Company reassesses these customer pools on a periodic basis. The allowance for credit losses is based on aging of the accounts receivable balances and estimated credit loss percentages. Changes in the allowance for expected credit losses for the nine-month period ended September 30, 2025 were as follows:
| Allowance for Expected Credit Losses
Balance as of December 31, 2024 | $5,278
Current period change for expected credit losses | 2,743
Balance as of September 30, 2025 | $8,021
Deferred Costs — The Company deferred the excess of the fair value of the shares of Preferred Stock issued to Pepsi over the consideration received. These deferred costs are amortized on a straight-line basis, as a reduction of revenue, over the term of the A&R U.S. Distribution Agreement, aligning expense recognition with the associated benefits. Deferred costs are classified and presented as separate current and non-current line items on the Company’s condensed consolidated balance sheets. Long-Lived Assets by Geographic Area — The following table consists of geographic long-lived asset information, which includes property, plant and equipment-net, customer relationships-net, definite lived brands-net, and a portion of other current and long- term assets and excludes goodwill and indefinite lived brands, for individual countries that represent a significant portion of the total. All of the Company’s North American long-lived assets are located in the U.S. and Canada.
| September 30, 2025 |  | December 31, 2024
North America | $197,635 |  | $72,115
Finland | 12,133 |  | 10,950
Sweden | 4,441 |  | 2,523
Ireland | 3,598 |  | 3,599
Other | 29 |  | 29
Long-lived assets related to foreign operations | 20,201 |  | 17,101
Long-lived assets-net | $217,836 |  | $89,216
Deferred Revenue — The Company receives payments fr om certain distributors as rei mbursement for contract termination costs paid to the prior distributors. Amounts received or contractually due under new or amended distribution agreements related to these termination cost reimbursements are accounted for as deferred revenue and are recognized ratably over the anticipated life of the respective new or amended distribution agreements. Deferred revenue is classified and presented as separate current and non- current line items on the Company’s condensed consolidated balance sheets. Accrued Distributor Termination Fees — In connection with the A&R U.S. Distribution Agreement, the Company accrued distributor termination fees related to the transition of certain Alani Nu distribution to Pepsi. These accruals represent amounts expected to be paid to former distributors and, where applicable, amounts to be returned to Pepsi if actual termination costs are less than the upfront payments received from Pepsi. The Company recognizes these accruals when a loss is probable and reasonably estimable, based on current available information, and updates estimates as facts change. Termination charges are presented as distributor termination fees in the Company's condensed consolidated statements of operations and comprehensive income. Termination accruals are presented as accrued distributor termination fees on the Company’s consolidated balance sheets. For additional information see Note 4. Revenue and Note 11. Accrued Distributor Termination Fees. Advertising Costs — Advertising costs are expensed as incurred and charged to selling, general and administrative expenses. The Company primarily utilizes targeted marketing initiatives across various channels, including print (e.g., print displays), radio, digital and streaming platforms, online and social media, television, direct sponsorships, endorsements and in-store displays. The Company incurred advertising expenses of approximately $87.4 million and $64.4 million for the three months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025 and 2024 the Company incurred advertising expenses of approximately $223.3 million and $170.3 million, respectively. Income Taxes — Starting in 2025, the Company has come within the scope of the Organization for Economic Co-operation and Development's Pillar Two framewo rk, which establishes a global minimum corporate tax of 15% for companies with global revenues and profits above certain thre sholds. Certain jurisdictions in which the Company operates have enacted their respective tax laws to comply with Pillar Two. As of now, the Company does not expect Pillar Two to have a material impact on its consolidated r esults of operation, financial position, or cash flows. The Company will continue to monitor pending legislation and implementation by individual countries. Recently Issued Accounting Pronouncemen ts In June 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40). The ASU updates the guidance on the capitalization, amortization and impairment of internal-use software. The standard is effective for fiscal years beginning after June 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated financial statements. In March 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU introduces a practical expedient that allows entities to estimate expected credit losses on current trade receivables and contract assets without incorporating macroeconomic factors, assuming current conditions persist over the asset’s remaining life. The Company currently incorporates macroeconomic factors, along with other inputs, into its allowance methodology, including forward-looking economic and market conditions. As such, the practical expedient under ASU 2025-05 would only apply if the Company elects to modify its current model. ASU 2025-05 is effective for all entities for annual reporting periods (including interim reporting periods within those annual periods) beginning after December 15, 2025, with early adoption permitted. The Company will continue to monitor developments and assess the potential impact of the ASU on future reporting periods. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, introducing changes to income tax disclosures, primarily relating to effective tax rates and cash paid for taxes. This ASU requires companies to provide an annual rate reconciliation in both dollar figures and percentages, and changes the way annual income taxes paid are disclosed by all entities, necessitating a breakdown by federal, state, and foreign jurisdictions. The standard became effective for the Company beginning with fiscal year 2025. The Company is applying the new guidance on a prospective basis and expects ASU 2023-09 to impact only disclosures with no effect on the Company's financial condition, results of operations or cash flows. In November 2024, the FASB issued ASU 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40). The effective date was further clarified by 2025-01 in January 2025. These standards enhance expense disclosures by requiring more detailed information on the types of expenses included in certain captions within the condensed consolidated financial statements, including employee compensation, depreciation, amortization, and costs incurred related to inventory and manufacturing activities in income statement expense captions such as cost of sales and selling, general and administrative expenses. The guidance is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted. The Company will apply the new guidance on a prospective basis and expects ASU 2024-03 to impact only disclosures with no effect on the Company's financial condition, results of operations or cash flows.

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- Definition The entire disclosure for the basis of presentation and significant accounting policies concepts. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). Accounting policies describe all significant accounting policies of the reporting entity. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147483426/235-10-50-1 + Details
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