XML 36 R11.htm IDEA: XBRL DOCUMENT v3.20.4
Note 5 - Equity Method Investment
12 Months Ended
Dec. 31, 2020
Notes to Financial Statements  
Equity Method Investments and Joint Ventures Disclosure [Text Block]

Note 5 – Equity Method Investment:

 

On September 2, 2020, the Company acquired a 19% interest in a privately held company that operates in our industry for $27.9 million. The total $27.9 million is comprised of an initial investment of $26.6 million and $1.3 million of transaction costs. The Company concluded that they are not the primary beneficiary, which is primarily the result of the Company's conclusion that it does not have the power to direct activities that most significantly impact the economic performance. However, the Company completed an analysis over the investment and determined that based on the circumstances within the agreement, the Company does have the ability to exercise significant influence even though the Company's percentage of ownership is below 20%. As a result, this investment is accounted for under the equity method of accounting. The basis difference between the Company's carrying value of its investment and the amount of underlying equity in net assets of the privately held company is not material to the Company's consolidated financial statements. 

 

There is no equity in income (loss) of equity method investment included in our Consolidated Statement of Operation and Comprehensive Loss for the periods presented as the results were not material to Freshpet's consolidated financial statements.