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Acquisition (Tables) | 9 Months Ended
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Sep. 30, 2024
Business Combinations [Abstract] |
Schedule of Consideration Transferred and Recognized Amounts of Identifiable Assets Acquired and Liabilities Assumed | The following table outlines the Company’s consideration transferred and the identifiable net assets acquired at their estimated fair value as of February 2024.
Consideration |  | (in thousands) |
Cash Paid to Seller |  |  | 30 |
Common stock issued |  |  | 1,015 |
Series B preferred stock issued |  |  | 2,954 |
Payoff of Vertical debt (plus accrued interest) |  |  | 1,447 |
Retirement of Vertical Debt (including fees) |  |  | 9,379 |
Fair value of earn-out consideration |  |  | 1,300 |
Total |  |  | 16,125 |
Acquisition related costs (including in general and administrative in the condensed consolidated statement of operations and comprehensive loss) |  |  | 1,380 |
Recognized amounts of identifiable assets acquired and liabilities assumed |  |  |
Cash |  |  | 50 |
Accounts receivable, net of allowances |  |  | 134 |
Inventories, net |  |  | 3,490 |
Vendor deposits |  |  | 61 |
Prepaid expenses and other current assets |  |  | 93 |
Property and equipment, net |  |  | 139 |
Right-of-use-assets |  |  | 412 |
Intangible assets, net |  |  | 6,900 |
Accounts payable |  |  | (3,692 | )
Accrued expenses and other current liabilities |  |  | (2,437 | )
Operating lease liability, current portion |  |  | (263 | )
Deferred revenue |  |  | (215 | )
Loan payable |  |  | (1,887 | )
Operating lease liability, net of current portion |  |  | (179 | )
Total identifiable net assets |  |  | 2,606 |
Goodwill |  |  | 13,519 |
Total |  |  | 16,125 |
Acquisition-related costs of $0.9 million and $1.4 million were included in general and administrative expenses in the Company's statement of operations for the three and nine months ended September 30, 2024, respectively. Compensation Arrangements In connection with the acquisition CLMBR, Inc. the Company has agreed to pay additional consideration in future periods. Certain employees of CLMBR, Inc. will be paid a total of $0.5 million of which $0.3 million was paid as of September 30, 2024. These payments are accounted for as transactions separate from the business combination as the payments are contingent upon continued employment and will be recorded as post-combination compensation expense in the Company's financial statements during the service period in general and administrative expenses for the nine months ended September 30, 2024. Accrued Earn Out As part of the Acquisition of CLMBR, Inc., the Sellers shall be entitled to receive a contingent payment in the form of shares of Common Stock (collectively, the “Earn-Out Shares”) calculated in the manner set forth in the Asset Purchase Agreement based on the 2024 Unit Sales (as defined in the Asset Purchase Agreement) and the volume-weighted average price (“VWAP”) for the Company’s common stock based on the 10 consecutive trading days ending on (and including) December 31, 2024, subject to the VWAP Collar. In addition, there were 2 contingent payments (1) based on total CLMBR sales in 2024 (5,000 units sold in 2024) and (2) based on CLMBR sales through B2B channel in 2024 (2,400 in B2B channel in 2024). Contingent payment (1) was determined at inception to be remote and therefore, $0 was recognized for the earn out as of the acquisition date. Contingent payment (2) was probable and a contingent liability of $1.3 million was recorded based on in the event the 2024 Unit Sales include at least 2,400 Units sold in the business-to-business channel, the Sellers shall be entitled to an additional number of Earn-Out Shares calculated in the manner set forth in the Asset Purchase Agreement subject to total maximum number of 566,642 Earn-Out Shares. The Company assessed the fair value as of September 30, 2024 and it was determined based on current sales that achieving the projection and likelihood of contingent payment (2) was deemed remote and as a result the Company marked the contingent liability to $0. The Company recognized a gain equal to $1.3 million for the nine months ended September 30, 2024 related to change in fair value of the earn out recorded in the condensed consolidated statements of operations in change in fair value of earnout. The following unaudited pro forma condensed consolidated results of operations for the three and nine months ended September 30, 2024 and 2023 present condensed consolidated information of the Company as if the CLMBR, Inc. acquisition had occurred as of January 1, 2023 (in thousands):
|  | Proforma |  |  | Proforma |  |
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |  |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |  |
|  | (in thousands) |  |  | (in thousands) |  |
Revenue |  | $ | 2,014 |  |  | $ | 652 |  |  | $ | 3,107 |  |  | $ | 2,844 |  |
Operating Loss |  |  | (7,754 | ) |  |  | (11,203 | ) |  |  | (25,268 | ) |  |  | (46,890 | ) |
Net Loss |  |  | (7,141 | ) |  |  | (11,918 | ) |  |  | (29,386 | ) |  |  | (44,782 | ) |
Net loss per share – basic and diluted |  | $ | (1.53 | ) |  | $ | (29.13 | ) |  | $ | (15.33 | ) |  | $ | (128.59 | ) |
Weighted average common stock outstanding – basic and diluted |  |  | 4,653,452 |  |  |  | 409,130 |  |  |  | 1,916,375 |  |  |  | 348,247 |  |
The unaudited pro forma consolidated results for the three month and nine month periods were prepared using the acquisition method of accounting and are based on the historical financial information of CLMBR, Inc. and the Company. The unaudited pro forma consolidated results incorporate historical financial information for all significant acquisitions pursuant to SEC regulations since January 1, 2023. The historical financial information has been adjusted to give effect to pro forma adjustments that are: (i) directly attributable to the acquisition, (ii) factually supportable and (iii) expected to have a continuing impact on the combined results. The unaudited pro forma consolidated results are not necessarily indicative of what the Company’s consolidated results of operations actually would have been had it completed these acquisitions on January 1, 2023. The following unaudited condensed consolidated results of operations included in the condensed consolidated statements of loss for the three and nine months ended September 30, 2024.
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |  |
|  | 2024 |  |  | 2024 |  |
Revenue |  | $ | 1,801 |  |  | $ | 2,494 |  |
Operating Loss |  |  | 24 |  |  |  | (788 | ) |
Net Loss |  |  | (368 | ) |  |  | (1,477 | ) |
Schedule of Unaudited Financial Information | The following unaudited pro forma condensed consolidated results of operations for the three and nine months ended September 30, 2024 and 2023 present condensed consolidated information of the Company as if the CLMBR, Inc. acquisition had occurred as of January 1, 2023 (in thousands):
|  | Proforma |  |  | Proforma |  |
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |  |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |  |
|  | (in thousands) |  |  | (in thousands) |  |
Revenue |  | $ | 2,014 |  |  | $ | 652 |  |  | $ | 3,107 |  |  | $ | 2,844 |  |
Operating Loss |  |  | (7,754 | ) |  |  | (11,203 | ) |  |  | (25,268 | ) |  |  | (46,890 | ) |
Net Loss |  |  | (7,141 | ) |  |  | (11,918 | ) |  |  | (29,386 | ) |  |  | (44,782 | ) |
Net loss per share – basic and diluted |  | $ | (1.53 | ) |  | $ | (29.13 | ) |  | $ | (15.33 | ) |  | $ | (128.59 | ) |
Weighted average common stock outstanding – basic and diluted |  |  | 4,653,452 |  |  |  | 409,130 |  |  |  | 1,916,375 |  |  |  | 348,247 |  |
The unaudited pro forma consolidated results for the three month and nine month periods were prepared using the acquisition method of accounting and are based on the historical financial information of CLMBR, Inc. and the Company. The unaudited pro forma consolidated results incorporate historical financial information for all significant acquisitions pursuant to SEC regulations since January 1, 2023. The historical financial information has been adjusted to give effect to pro forma adjustments that are: (i) directly attributable to the acquisition, (ii) factually supportable and (iii) expected to have a continuing impact on the combined results. The unaudited pro forma consolidated results are not necessarily indicative of what the Company’s consolidated results of operations actually would have been had it completed these acquisitions on January 1, 2023. The following unaudited condensed consolidated results of operations included in the condensed consolidated statements of loss for the three and nine months ended September 30, 2024.
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |  |
|  | 2024 |  |  | 2024 |  |
Revenue |  | $ | 1,801 |  |  | $ | 2,494 |  |
Operating Loss |  |  | 24 |  |  |  | (788 | ) |
Net Loss |  |  | (368 | ) |  |  | (1,477 | ) |

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- Definition Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h)(2) -SubTopic 10 -Topic 805 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479328/805-10-50-2 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h)(3) -SubTopic 10 -Topic 805 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479328/805-10-50-2 + Details
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- Definition Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Paragraph 1 -Section 50 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-1 + Details
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