Acquisitions and Other Transactions

9 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

Acquisitions and Other Transactions

Acquisitions and Other Transactions

Betterware

On October 15, 2015, Trillium Pond AG, a corporation organized in Switzerland (“Trillium Pond”), wholly owned by a Swiss subsidiary (CVSL AG) of the Company, entered into and consummated a Share Purchase Agreement (the “SPA”) with Robert Way and Andrew Lynton Cohen (“Sellers”) pursuant to which Trillium Pond purchased from the Sellers all of the issued and outstanding share capital of Stanley House Distribution Limited (“Stanley House”), a company incorporated in England. Stanley House has one wholly owned subsidiary, Betterware.

Kleeneze

On March 24, 2015, the Company completed the acquisition of Kleeneze, a direct-to-consumer business based in the United Kingdom. Kleeneze offers a wide variety of cleaning, health, beauty, home, outdoor and other products to customers across the United Kingdom and Ireland.

Upon conclusion of the purchase price allocation in the third quarter of 2015, the Company realized a $3.6 million gain on the acquisition, which was recorded to 'Gain on acquisition of a business' in the condensed consolidated statement of operations. A $750,000 deferred tax expense was included in conjunction with the gain on acquisition. The transaction resulted in a gain primarily due to the significantly low purchase price, which is a result of the continual declines in revenues and operating profits Kleeneze had seen prior to the acquisition. Starting in 2015, changes to the purchase accounting are not shown retroactively in the condensed consolidated financial statements.

Pro-forma Condensed Consolidated Statement of Operations

The following unaudited pro-forma financial information presents the Company's condensed financial results for the three and nine months ended September 30, 2015 as if the Betterware and Kleeneze acquisitions had occurred as of January 1, 2015 (in thousands, except per share data):

	Three Months Ended			Nine Months Ended
	September 30, 2015			September 30, 2015
Revenue	$	46,132		$	135,667
Net loss	(4,826		)	(10,680		)
Net loss attributable to JRjr33, Inc.	(3,783		)	(7,745		)
Loss per common share attributable to JRjr33, Inc., basic and diluted	$	(0.11	)	$	(0.24	)

Notes to Pro-forma Condensed Consolidated Statements of Operations:

These pro-forma results have been prepared for comparative purposes only and are not necessarily indicative of the results of operations that actually would have resulted had the acquisitions been effective at the beginning of 2015 and are not necessarily representative of future results. The pro-forma results include the following adjustments:

• Losses were incurred by Kleeneze as a result of the write down of inter-company receivables in the amount of $33.1 million that were forgiven prior to and in accordance with the transaction. As these losses were direct and one-time events related specifically to the acquisition, the Company has excluded these items from the pro-forma results above; and

• The pro-forma results above exclude the transaction costs related to the acquisitions.