S-1/A

As filed with the Securities and Exchange Commission on December 20, 2019.

Registration No. 333-235440

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

to

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Mohawk Group Holdings, Inc.

(Exact name of Registrant as specified in its charter)

Delaware	3634	83-1739858
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

Mohawk Group Holdings, Inc.

37 East 18th Street, 7th Floor

New York, NY 10003

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Yaniv Sarig

Chief Executive Officer

Mohawk Group Holdings, Inc.

37 East 18th Street, 7th Floor

New York, NY 10003

(347) 676-1681

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Jeffrey T. Hartlin, Esq. Samantha H. Eldredge, Esq. Paul Hastings LLP 1117 S. California Avenue Palo Alto, California 94304 (650) 320-1800 Joseph A. Risico, Esq. General Counsel Mohawk Group Holdings, Inc. 37 East 18th Street, 7th Floor New York, NY 10003 (347) 676-1681

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box:  ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

This Amendment No. 1 (this “Amendment No. 1”) to the Registration Statement on Form S-1 (Registration No. 333-235440) (the “Registration Statement”) is being filed solely for the purpose of filing XBRL exhibits that were omitted from the Registration Statement, as indicated in Part II, Item 16 of this Amendment No. 1. Accordingly, this Amendment No. 1 consists only of the facing page, this explanatory note, an updated Part II of the Registration Statement, the signature page to this Amendment No. 1 and the filed exhibits. The preliminary prospectus is unchanged and has been omitted from this Amendment No. 1.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth all expenses to be paid by Mohawk Group Holdings, Inc. (the “Registrant”) in connection with the sale of the common stock being registered. The security holders will not bear any portion of such expenses. All amounts shown are estimates except for the registration fee.

SEC registration fee	$	8,270
Legal fees and expenses		75,000
Accounting fees and expenses		25,000
Printing, transfer agent fees and miscellaneous expenses		50,000
Total	$	158,270

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 102 of the General Corporation Law of the State of Delaware (the “DGCL”) permits a corporation to eliminate or limit the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty to the corporation or its stockholders, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase or redemption in violation of the DGCL or derived an improper personal benefit. The Registrant’s amended and restated certificate of incorporation provides that no director of the Registrant shall be personally liable to it or its stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability, except to the extent that the DGCL prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty.

Section 145 of the DGCL provides that a corporation has the power to indemnify a director, officer, employee or agent of the corporation, or a person serving at the request of the corporation for another corporation, partnership, joint venture, trust or other enterprise in related capacities against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with an action, suit or proceeding to which he was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding by reason of such position, if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to judgments, fines and amounts paid in settlement in connection with such action, suit or proceeding or with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

The Registrant’s amended and restated bylaws provide that the Registrant will indemnify each person who was or is a party or threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the Registrant) by reason of the fact that he or she is or was, or has agreed to become, a director or officer, or is or was serving, or has agreed to serve, at its request as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (including, without limitation, any employee benefit plan) (all such persons being referred to as an “Indemnitee”), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including, without limitation, attorneys’ fees), liabilities, losses, judgments, fines (including, without limitation, excise taxes and penalties arising under the Employee Retirement Income Security Act of 1974), and amounts paid in settlement actually and reasonably incurred in connection with such action,

suit or proceeding and any appeal therefrom, if such Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the Registrant’s best interests, and, with respect to any criminal action or proceeding, he or she had no reasonable cause to believe his or her conduct was unlawful. The Registrant’s amended and restated bylaws also provide that the Registrant will indemnify any Indemnitee who was or is a party to an action or suit by or in the right of the Registrant to procure a judgment in the Registrant’s favor by reason of the fact that the Indemnitee is or was, or has agreed to become, a director or officer, or is or was serving, or has agreed to serve, at the Registrant’s request as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (including, without limitation, any employee benefit plan), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including, without limitation, attorneys’ fees) actually and reasonably incurred by or on behalf of such Indemnitee in connection with such action, suit or proceeding and any appeal therefrom, if the Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the Registrant’s best interests, except that no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the Registrant, unless, and only to the extent, that a court determines, despite such adjudication but in view of all of the circumstances, he or she is entitled to indemnification of such expenses. Notwithstanding the foregoing, to the extent that any Indemnitee has been successful, on the merits or otherwise, he or she will be indemnified to the fullest extent permitted by law by the Registrant against all expenses (including, without limitation, attorneys’ fees) actually and reasonably incurred in connection therewith. Expenses must be advanced to an Indemnitee under certain circumstances.

The Registrant has entered into indemnification agreements with each of its directors and executive officers that may be broader than the specific indemnification provisions contained in the DGCL. These indemnification agreements require the Registrant, among other things, to indemnify its directors and executive officers against liabilities that may arise by reason of their status or service. These indemnification agreements also require the Registrant to advance all expenses incurred by the directors and executive officers in investigating or defending any such action, suit or proceeding, subject to certain exceptions.

The Registrant’s amended and restated bylaws provide that the Registrant may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Registrant or another corporation, partnership, joint venture, trust or other enterprise (including, without limitation, any employee benefit plan) against any expense, liability or loss incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Registrant would have the power to indemnify such person against such expense, liability or loss under the DGCL. The Registrant has obtained insurance under which, subject to the limitations of the insurance policies, coverage is provided to the Registrant’s directors and executive officers against loss arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or executive officer, including claims relating to public securities matters, and to the Registrant with respect to payments that may be made by the Registrant to these directors and executive officers pursuant to the Registrant’s indemnification obligations or otherwise as a matter of law.

See also the undertakings set out in response to Item 17 herein.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Since its incorporation in March 2018 the Registrant has issued the following securities (after giving effect to the 1-for-3.9 reverse stock split effected on May 24, 2019) that were not registered under the Securities Act of 1933, as amended (the “Securities Act”):

(1) On March 26, 2018, the Registrant issued and sold an aggregate of 897,435 shares of common stock at a price of $0.00039 per share to accredited investors for aggregate gross proceeds of approximately $350.

The issuance of shares of the Registrant’s common stock in the above transaction was not registered under the Securities Act in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated by the Securities and Exchange Commission (the “SEC”).

(2) On September 4, 2018, pursuant to an Agreement and Plan of Merger and Reorganization among the Registrant, MGH Merger Sub, Inc. and Mohawk Group, Inc. (“Mohawk Opco”), as amended by Amendment No. 1 dated as of April 1, 2018 (the “Merger Agreement”), MGH Merger Sub, Inc. merged with and into Mohawk Opco, with Mohawk Opco remaining as the surviving entity and becoming a wholly-owned operating subsidiary the Registrant (the “Merger”). The Merger became effective as of September 4, 2018 upon the filing of a Certificate of Merger with the Secretary of State of the State of Delaware (the “Effective Time”).

At the Effective Time, each outstanding share of Mohawk Opco’s common and preferred stock (other than shares of Mohawk Opco’s Series C Preferred Stock) issued and outstanding immediately prior to the closing of the Merger was exchanged for 0.31310798 shares of the Registrant’s common stock, each outstanding share of Mohawk Opco’s Series C Preferred Stock issued and outstanding immediately prior to the closing of the Merger was exchanged for 0.2564103 shares of the Registrant’s common stock and each outstanding warrant to purchase shares of Mohawk Opco’s Series C Preferred Stock was exchanged for a warrant to purchase 0.2564103 shares of the Registrant’s common stock and retained the exercise price per share of $15.60. As a result, an aggregate of 10,636,755 shares of the Registrant’s common stock were issued to the holders of Mohawk Opco’s capital stock after adjustments due to rounding for fractional shares and warrants to purchase 44,871 shares of the Registrant’s common stock were issued to former holders of warrants to purchase shares of Mohawk Opco’s Series C Preferred Stock. In addition, pursuant to the Merger Agreement, options to purchase 302,911 shares of Mohawk Opco’s common stock issued and outstanding immediately prior to the closing of the Merger with a weighted-average exercise price of $7.49 were assumed and exchanged for options to purchase 369,885 shares of the Registrant’s common stock with a weighted-average exercise price of $6.16.

The issuance of shares of the Registrant’s common stock and options to purchase shares of the Registrant’s common stock to holders of Mohawk Opco’s capital stock and options in connection with the Merger was not registered under the Securities Act in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated by the SEC. Of the 10,636,755 shares of the Registrant’s common stock issued to holders of Mohawk Opco’s capital stock, (1) 10,630,919 shares of the Registrant’s common stock were issued to 208 stockholders, each of which was an “accredited investor” as defined in Rule 501(a) under the Securities Act (the “Accredited Stockholders”), and (2) 5,836 shares of the Registrant’s common stock were issued to six stockholders (the “Other Stockholders”). The shares of the Registrant’s common stock were issued to (1) the Accredited Investors pursuant to Rule 506(b) of Regulation D promulgated by the SEC, and (2) the Other Stockholders pursuant to Section 4(a)(2) of the Securities Act. Each of the Other Stockholders received an information statement regarding the Merger, Mohawk Opco and the Registrant prior to the issuance of the Registrant’s common stock.

(3) On September 4, 2018, the Registrant issued warrants to purchase an aggregate of 196,364 shares of its common stock with an exercise price of $15.60 per share to certain accredited investors as consideration for providing certain placement agent services to Mohawk Opco.

The issuance of shares of the Registrant’s common stock and warrants in the above transaction was not registered under the Securities Act in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated by the SEC.

(4) On December 31, 2018, the Registrant issued warrants to purchase an aggregate of 76,923 shares of its common stock with an exercise price of $15.60 per share to Horizon Technology Finance Corporation as part of a loan agreement.

The issuance of the warrants to purchase shares of the Registrant’s common stock in the above transaction was not registered under the Securities Act in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D promulgated by the SEC.

(5) From the date of the closing of the Merger through December 28, 2018, the Registrant granted to certain of its directors, officers, employees, consultants and other service providers options to purchase an aggregate of 1,547,938 shares of its common stock under its 2018 Equity Incentive Plan with an exercise price of $9.72 per share.

The issuance of the options to purchase shares of the Registrant’s common stock pursuant to the above was not registered under the Securities Act in reliance upon Rule 701 promulgated under the Securities Act pursuant to benefit plans and contracts relating to compensation as provided under Rule 701.

(6) On March 20, 2019, the Registrant issued an aggregate of 2,406,618 restricted shares of the Registrant’s common stock to certain of its directors, officers, employees, consultants and other service providers pursuant to the Registrant’s 2019 Equity Plan.

The issuance of the restricted shares of the Registrant’s common stock pursuant to the above was not registered under the Securities Act in reliance upon Rule 701 promulgated under the Securities Act pursuant to benefit plans and contracts relating to compensation as provided under Rule 701.

(7) On May 17, 2019, the Registrant issued an aggregate of 88,548 restricted shares of the Registrant’s common stock to certain of its directors, officers, employees, consultants and other service providers pursuant to the Registrant’s 2019 Equity Plan.

The issuance of the restricted shares of the Registrant’s common stock pursuant to the above was not registered under the Securities Act in reliance upon Rule 701 promulgated under the Securities Act pursuant to benefit plans and contracts relating to compensation as provided under Rule 701.

(8) On June 12, 2019, the Registrant issued an aggregate of 64,982 restricted shares of its common stock to an executive officer pursuant to its 2018 Equity Incentive Plan. On June 12, 2019, the Registrant granted to certain of its directors, officers and employees options to purchase an aggregate of 131,905 shares of its common stock pursuant to its 2018 Equity Incentive Plan with an exercise price of $10.00 per share.

The issuance of the restricted shares of the Registrant’s common stock and the options to purchase shares of the Registrant’s common stock pursuant to the above was not registered under the Securities Act in reliance upon Rule 701 promulgated under the Securities Act pursuant to benefit plans and contracts relating to compensation as provided under Rule 701.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits.

		Incorporated by Reference
Exhibit Number	Description	Form		File Number		Filing Date		Exhibit
3.1	Amended and Restated Certificate of Incorporation of Mohawk Group Holdings, Inc.		8-K		001-38937		6/14/2019		3.1
3.2	Amended and Restated Bylaws of Mohawk Group Holdings, Inc.		8-K		001-38937		6/14/2019		3.2
4.1	Form of Common Stock Certificate.		S-1/A		333-231381		5/24/2019		4.1
4.2+	Form of Registration Rights Agreement, dated as of April 6, 2018, among Mohawk Group Holdings, Inc. and the purchasers party thereto.		S-1		333-231381		5/10/2019		4.2
4.3	Warrant to Purchase Stock, issued to MidCap Financial Trust on September 4, 2018.		S-1		333-231381		5/10/2019		4.3
4.4	Form of Warrant, issued to Katalyst Securities LLC and its assigns on September 4, 2018.		S-1		333-231381		5/10/2019		4.4
4.5	Form of Warrant, issued to Horizon Technology Finance Corporation on December 31, 2018.		S-1		333-231381		5/10/2019		4.5
4.6	Amendment No. 1 to Registration Rights Agreement, dated as of March  2, 2019, among Mohawk Group Holdings, Inc. and the investors party thereto.		S-1		333-231381		5/10/2019		4.6
5.1†	Opinion of Paul Hastings LLP.
10.1#	Form of Indemnification Agreement.		S-1/A		333-231381		5/24/2019		10.1
10.2#	2014 Amended and Restated Equity Incentive Plan.		S-1		333-231381		5/10/2019		10.2
10.3#	Form of Stock Option Grant Notice and Form of Stock Option Agreement (2014 Amended and Restated Equity Incentive Plan).		S-1		333-231381		5/10/2019		10.3
10.4#	2018 Equity Incentive Plan.		S-8		333-232087		6/12/2019		10.3
10.5#	Form of Notice of Stock Option Grant and Form of Stock Option Award Agreement (2018 Equity Incentive Plan).		S-1		333-231381		5/10/2019		10.5
10.6#	Form of Notice of Grant of Restricted Shares and Form of Restricted Share Award Agreement (2018 Equity Incentive Plan).		S-8		333-232087		6/12/2019		10.4
10.7#	Mohawk Group Holdings, Inc. 2019 Equity Plan.		S-1		333-231381		5/10/2019		10.17
10.8#	Form of Notice of Grant of Restricted Shares and Form of Restricted Share Award Agreement (Mohawk Group Holdings, Inc. 2019 Equity Plan).		S-1		333-231381		5/10/2019		10.18
10.9#	Transaction Bonus Plan.		S-1		333-231381		5/10/2019		10.9
10.10#+	Employment Agreement, dated May 14, 2018, by and between Mohawk Group, Inc. and Joseph Risico.		S-1		333-231381		5/10/2019		10.10
10.11#+	Employment Agreement, dated January  1, 2016, by and between Mohawk Group, Inc. and Mihal Chaouat-Fix.		S-1		333-231381		5/10/2019		10.11

		Incorporated by Reference
Exhibit Number	Description	Form		File Number		Filing Date		Exhibit
10.12#	Independent Contractor Agreement, dated July 1, 2017, by and between Mohawk Group, Inc. and Fabrice Hamaide.		S-1		333-231381		5/10/2019		10.12
10.13#+	Employment Agreement, dated August 15, 2018, by and between Mohawk Group, Inc. and Peter Datos.		S-1		333-231381		5/10/2019		10.13
10.14#	Employment Agreement, dated April 1, 2015, by and between Mohawk Group, Inc. and Yaniv Sarig.		S-1		333-231381		5/10/2019		10.14
10.15#	Independent Contractor Agreement, dated August 14, 2017, by and between Mohawk Group, Inc. and Tomer Pascal.		S-1		333-231381		5/10/2019		10.15
10.16#+	Employment Agreement, dated November 27, 2018, by and between Mohawk Group, Inc. and Roi Zahut.		S-1		333-231381		5/10/2019		10.16
10.17	Restated Voting Agreement, dated March  13, 2019, by and among MV II, LLC, Maximus Yaney, Larisa Storozhenko and Mohawk Group Holdings, Inc.		S-1		333-231381		5/10/2019		10.19
10.18	Voting Agreement, dated April 12, 2019, by and between Mohawk Group Holdings, Inc. and Asher Delug.		S-1		333-231381		5/10/2019		10.20
10.19+	Amended and Restated Credit and Security Agreement, dated November  23, 2018, by and among Mohawk Group Holdings, Inc., Mohawk Group, Inc., certain subsidiaries of Mohawk Group, Inc. set forth on Annex B thereto, MidCap Funding X Trust, individually as a Lender, and as Agent, and the financial institutions or other entities from time to time parties thereto.		S-1		333-231381		5/10/2019		10.6
10.20+	Omnibus Amendment No. 1 to Amended and Restated Credit and Security Agreement and Agreement No.  2 to Pledge Agreement, dated as of December  31, 2018, by and among Mohawk Group Holdings, Inc., Mohawk Group, Inc., certain subsidiaries of Mohawk Group, Inc. set forth on the signature pages thereto, MidCap Funding X Trust, as agent, and the Lenders party thereto.		S-1		333-231381		5/10/2019		10.7
10.21	Amendment No. 2 to Amended and Restated Credit and Security Agreement, dated as of March  29, 2019, by and among Mohawk Group Holdings, Inc., Mohawk Group, Inc., certain subsidiaries of Mohawk Group, Inc. set forth on the signature pages thereto, MidCap Funding IV Trust, as agent, and the Lenders party thereto.		S-1		333-231381		5/10/2019		10.21
10.22	Amendment No. 3 to Amended and Restated Credit and Security Agreement, dated as of May  13, 2019, by and among Mohawk Group Holdings, Inc., Mohawk Group, Inc., certain subsidiaries of Mohawk Group, Inc. set forth on the signature pages thereto, MidCap Funding IV Trust, as agent, and the Lenders party thereto.		S-1/A		333-231381		5/24/2019		10.22

		Incorporated by Reference
Exhibit Number	Description	Form		File Number		Filing Date		Exhibit
10.23	Venture Loan and Security Agreement and form of Note issued thereunder, dated December  31, 2018, by and among Mohawk Group Holdings, Inc., Mohawk Group, Inc. and their subsidiaries from time to time party thereto and Horizon Technology Finance Corporation as a Lender and Collateral Agent.		S-1		333-231381		5/10/2019		10.8
10.24	Omnibus Limited Consent, Joinder and Amendment No.  4 to Amended and Restated Credit and Security Agreement and Amendment No. 3 to Pledge Agreement, dated as of September  10, 2019, by and among Mohawk Group Holdings, Inc., Mohawk Group, Inc., certain subsidiaries of Mohawk Group, Inc. set forth on the signature pages thereto, Aussie Health Co, LLC, MidCap Funding IV Trust, as agent, and the Lenders party thereto.		10-Q		001-38937		11/5/2019		10.1
10.25	Omnibus Limited Consent, Joinder and Amendment to Venture Loan and Security Agreement, dated as of September  10, 2019, by and among Mohawk Group Holdings, Inc., Mohawk Group, Inc., certain subsidiaries of Mohawk Group, Inc. set forth on the signature pages thereto, Aussie Health Co, LLC, Horizon Technology Finance Corporation, as collateral agent, Horizon Credit II LLC, as assignee of Horizon Technology Finance Corporation, and Horizon Funding Trust 2019-1.		10-Q		001-38937		11/5/2019		10.2
21.1	List of Subsidiaries of the Registrant.		S-1		333-231381		5/10/2019		21.1
23.1†	Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
23.2†	Consent of Paul Hastings LLP (included in Exhibit 5.1).
24.1†	Power of Attorney (included on the signature page to this Registration Statement).
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

# Indicates management contract or compensatory plan or arrangement.

+ Non-material schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted schedules and exhibits upon request by the Securities and Exchange Commission.

† Previously filed.

(b) Financial Statement Schedules.

Schedule II—Valuation and Qualifying Accounts and Reserves

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) to include any prospectus required by Section 10(a)(3) of the Securities Act;

(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.

(iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

Provided, however, that:

Paragraphs (1)(i), (1)(ii) and (1)(iii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the Registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.

(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(5) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and,

where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(6) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on December 20, 2019.

MOHAWK GROUP HOLDINGS, INC.
By:	/s/ Yaniv Sarig
	Yaniv Sarig
	President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 1 to the registration statement on Form S-1 has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Yaniv Sarig Yaniv Sarig	President, Chief Executive Officer and Director (Principal Executive Officer)	December 20, 2019
/s/ Fabrice Hamaide Fabrice Hamaide	Chief Financial Officer and Director (Principal Accounting and Financial Officer)	December 20, 2019
* William Kurtz	Director	December 20, 2019
* Stephen Liu, M.D.	Director	December 20, 2019
* Greg B. Petersen	Director	December 20, 2019
* Amy von Walter	Director	December 20, 2019

*By:	/s/ Yaniv Sarig
	Yaniv Sarig Attorney-in-Fact

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COMMITMENT AND CONTINGENCIES

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENT AND CONTINGENCIES

9. COMMITMENTS AND CONTINGENCIES

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 condensed consolidated 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 condensed consolidated 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.

Recall

In April 2018, the Company retained outside counsel to assist it in evaluating a safety issue related to certain hair dryers that it imported and sold through its subsidiaries between 2014 and 2018 (the “Xtava Allure Hair Dryer”). The Company had received communications directly from consumers and identified online reviews of overheating or fires associated with these hair dryers. The Company sold approximately 170,000 net units from the introduction of the product in 2015 through its discontinuance in the first quarter of 2018 totaling approximately $6.2 million in net revenue.

In May 2018, the Company’s board of directors approved a voluntary recall of the Xtava Allure Hair Dryer. In June 2018, the Company filed an application for a voluntary recall with the US Consumer Product Safety Commission (“CPSC”) pursuant to Section 15(b) of the Consumer Product Safety Act (“CPSA”). The Company received approval from the CPSC to provide consumers with replacement units and publicly announced the recall on August 15, 2018. The Company had estimated that it would incur approximately $1.6 million in costs related to the recall for procurement, manufacturing, fulfillment and delivery to consumers who apply and qualify for the recall costs. The Company has incurred and settled all but one consumer legal matter related to Xtava Allure Hair Dryer for insignificant amounts. As of September 30, 2019, the Company has incurred $0.1 million in recall costs. In August 2019, the Company received notice that it has materially completed its obligations under the recall program and, as a result, has reversed $1.4 million of the remaining liability pertaining to the program. As of September 30, 2019, the remaining recall liability is $0.1 million.

U.S. Department of Energy

In September 2019, the Company received a Test Notice from the U.S. Department of Energy (“DOE”) indicating that a certain dehumidifier model may not comply with applicable energy-conservation standards. The DOE requested that the Company provide it with several model units for DOE testing. If the Company is determined to have violated certain energy-conservation standard, it could be fined pursuant to DOE guidelines, and this civil penalty may be material to the Company’s consolidated financial statements. The Company intends to vigorously defend itself. The Company has submitted to the DOE testing process, made a good-faith effort to provide necessary notice as practicable, and included in a formal response to the DOE copies of the energy-efficiency report and certification that were issued for the dehumidifier model at the time of production. The Company believes that its products are compliant, and the Company, in conjunction with its manufacturing partner, has disputed the Test Notice received from the DOE. As of the date of the issuance of these financial statements, the Company cannot reasonably estimate what, if any, penalties may be levied.

U.S. Environmental Protection Agency

In September 2019, the Company received notice from the U.S. Environmental Protection Agency (“EPA”) that certain of its dehumidifier products were identified by the Association of Home Appliance Manufacturers (“AHAM”) as failing to comply with EPA ENERGY STAR requirements. For an appliance to be ENERGY STAR certified, it must meet standards promulgated by the EPA and enforced through EPA-accredited certification bodies and laboratories. The Company believes that its products are compliant, and the Company, in conjunction with its manufacturing partner, has disputed the AHAM testing determination pursuant to EPA guidelines. While a resolution remains pending, the Company is not selling or marketing the products identified by the EPA. The Company cannot be certain that these products will eventually be certified by the EPA, and the Company may incur costs that cannot presently be calculated in the event that the Company needs to make changes to the manner in which these products are manufactured and sold.

12. COMMITMENT AND CONTINGENCIES

The Company has operating leases for its offices expiring at various dates through 2020. Rental expense for operating leases was $0.5 million and $0.7 million for the years ended December 31, 2017 and 2018, respectively. The following is a schedule by year of future minimum lease payments required under the operating leases that have initial or non-cancelable lease terms in excess of one year as of December 31, 2018.

Future minimum lease payments under these operating leases consisted of the following as of December 31, 2018:

	Year-Ending December 31
2019	$	629
2020		123
2021		3
2022		—
Thereafter		—
Total minimum lease payments	$	755

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 consolidated 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 may not materially impact the Company’s consolidated 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.

Inventory Purchases—As of December 31, 2017 and 2018, the Company had $8.4 million and $10.2 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 in the following states: New Jersey, New York, Florida, Texas, Pennsylvania, Tennessee, Virginia and California. 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 December 31, 2017 and 2018, the Company estimates that the potential liability, including current sales tax payable is approximately $0.4 million and $0.7 million, respectively, 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.

Transaction Bonus Plan

Effective July 9, 2018, the Company established the Transaction Bonus Plan (the “Transaction Bonus Plan”) to provide a means by which select employees may be given incentives to remain with the Company through a liquidity transaction.

Under the Transaction Bonus Plan, the Company’s board of directors may, by unanimous approval, grant contractual rights to receive payments (each right, a “Participation Unit”) to any full-time employees or independent contractors that have at least three months of service with the Company. Participation Units shall vest in nine monthly installments on each of the nine monthly anniversaries of the date of grant, subject to continued employment with the Company or a subsidiary of the Company. Additionally, upon the closing of a “Sale of the Company” or “Qualified IPO”, the Participation Units shall immediately and fully vest, subject to continued employment with the Company or a subsidiary of the Company. Each Participation Unit represents a proportional interest in the amount set aside for participants of the Transaction Bonus Plan (the “Plan Pool”). Payments from the Plan Pool shall occur under the Transaction Bonus Plan upon either a sale of the company or a “Qualified IPO”. A “Qualified IPO” is defined as either (i) a firm commitment underwritten public offering pursuant to an effective registration statement filed under the Securities Act covering the offer and sale of the Company’s common stock or (ii) a transaction pursuant to which the Company reverse merges directly or indirectly with a publicly listed special purpose acquisition company, provided that, in each case, the surviving company’s common stock is listed for trading on The Nasdaq Stock Market LLC, the New York Stock Exchange or another exchange or marketplace approved by the Company’s board of directors, and provided further that the aggregate gross proceeds to the Company are not less than $50,000,000. Following a Qualified IPO, on each of the first four six-month anniversaries of the Qualified IPO, a participant shall be entitled to payments and distributions equal to 25% of the participant’s proportional interest of the Plan Pool. In a Qualified IPO, the Plan Pool shall be deemed funded one-third in cash and two-thirds in the Company’s common stock.

As of December 31, 2018, the Company had allocated 99.20% of the total Participation Units under the Transaction Bonus Plan, including 66.65% of the total Participation Units to the Company’s executive officers. No expense has been recorded as of December 31, 2018, as the Transaction Bonus Plan as the plan was contingent on closing of the sale of the company or a Qualified IPO and the amount shares to be issued and value of such shares was to be determined based upon the value of such Qualified IPO or sale of the Company. The Transaction Bonus Plan has subsequently been terminated and subsequently replaced by the Mohawk Group Holdings, Inc. 2019 Equity Plan. See Subsequent Event Note 16.

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SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2018

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

16. SUBSEQUENT EVENTS

The Company has evaluated events that have occurred subsequent to December 31, 2018 through February 27, 2019, the date the consolidated financial statements were originally available to be issued and April 17, 2019 as it relates to the paragraphs below through the re-issuance date April 17, 2019.

Restated Voting Agreement

On March 13, 2019, the Voting Agreement by and among MV II, LLC, Dr. Larisa Storozhenko, Mr. Maximus Yaney, Mr. Delug and the Company was restated.

Under the Restated Voting Agreement, each of MV II, LLC, Dr. Larisa Storozhenko and Mr. Yaney (collectively, the “Designating Parties”) agreed to relinquish the right to vote their shares of the Company’s capital stock, and any of the Company’s other equity interests (collectively, the “Voting Interests”) by granting the Company’s board of directors the sole right to vote all of the Voting Interests as the Designating Parties’ proxyholder. The Voting Interests include all shares of the Company’s common stock currently held by the Designating Parties, as well as any of the Company’s securities or other equity interests acquired by the Designating Parties in the future. Pursuant to the proxy granted by the Designating Parties, the Company’s board of directors are required to vote all of the Voting Interests in direct proportion to the voting of the shares and equity interests voted by all holders other than the Designating Parties. The proxy granted by the Designating Parties under the Restated Voting Agreement is irrevocable. In addition, the Restated Voting Agreement proxyholder may not be changed unless the Company receives the prior approval of The Nasdaq Stock Market LLC.

Under the Restated Voting Agreement, each of the Designating Parties further agreed not to purchase or otherwise acquire any shares of the Company’s capital stock or other equity securities, or any interest in any of the foregoing.

Once the Restated Voting Agreement becomes effective, it will continue until the earlier to occur of (a) a Deemed Liquidation Event unless, immediately upon such Deemed Liquidation Event, the Company’s common stock is and remains listed on The Nasdaq Stock Market LLC, or (b) Mr. Yaney’s death. For purposes of the agreement, a “Deemed Liquidation Event” means (i) the acquisition of the Company by another entity by means of any transaction or series of related transactions to which the Company is party other than a transaction or series of transactions in which the holders of the Company’s voting securities outstanding immediately prior to such transaction or series of transactions retain, immediately after such transaction or series of transactions, as a result of the Company’s shares held by such holders prior to such transaction or series of transactions, a majority of the total voting power represented by the Company’s outstanding voting securities or such other surviving or resulting entity; (ii) a sale, lease or other disposition of all or substantially all of the Company’s or its subsidiaries’ assets taken as a whole by means of any transaction or series of related transactions, except where such sale, lease or other disposition is to a wholly-owned subsidiary of the Company; or (iii) any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary; however, a Deemed Liquidation Event shall not include any transaction effected primarily to raise capital for the Company or a spin-off or similar divestiture of the Company’s product or SaaS business as part of reorganization of the Company approved by the Company’s board of directors.

2019 Equity Plan and Former Transaction Bonus Plan

Effective March 20, 2019, the Company established the Mohawk Group Holdings, Inc. 2019 Equity Plan (the “2019 Equity Plan”). All awards previously allocated under the Company’s Transaction Bonus Plan were terminated and subsequently replaced with grants under the 2019 Equity Plan. No expense or modification has been recorded from the replacement of the Transaction Bonus Plan as the total value and potential shares be granted under the plan were contingent on closing of the sale of the company or a Qualified IPO.

A total of 2,426,036 shares of the Company’s common stock have been reserved for issuance under the 2019 Equity Plan. On March 20, 2019, the Company issued, pursuant to the 2019 Equity Plan, an aggregate of 2,406,618 shares of restricted common stock to the former holders of Participation Units.

Recognizing that awards under the 2019 Equity Plan are intended to replace awards under the Transaction Bonus Plan, the Company’s board of directors determined that the terms of awards to be granted under the 2019 Equity Plan shall, in general, match the terms of awards previously allocated under the Transaction Bonus Plan. Restricted shares granted under the 2019 Equity Plan shall vest in substantially equal installments on the 6th, 12th, 18th and 24th monthly anniversary of an initial public offering.

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 expects to record stock-based compensation expense related to grants made under the 2019 Equity Plan over the vesting period when the contingency of an initial public offering is achieved.

Voting Agreement with Asher Delug

On April 12, 2019, the Company entered into a Voting Agreement with Asher Delug (the “Delug Voting Agreement”). The terms of the Delug Voting Agreement are substantially similar to the terms of the Restated Voting Agreement.

Under the Delug Voting Agreement, Mr. Delug agreed to relinquish his right to vote his shares of the Company’s capital stock, and any of the Company’s other equity interests (collectively, the “Delug Voting Interests”) by granting the Company’s board of directors the sole right to vote all of the Delug Voting Interests as Mr. Delug’s proxyholder. The Delug Voting Interests include all shares of the Company’s common stock currently held by Mr. Delug, as well as any of the Company’s securities or other equity interests acquired by Mr. Delug in the future. Pursuant to the proxy granted by Mr. Delug, the Company’s board of directors are required to vote all of the Delug Voting Interests in direct proportion to the voting of the shares and equity interests voted by all holders other than Mr. Delug. The proxy granted by Mr. Delug under the Delug Voting Agreement is irrevocable. In addition, the Delug Voting Agreement proxyholder may not be changed unless the Company receives the prior approval of The Nasdaq Stock Market LLC.

Under the Delug Voting Agreement, Mr. Delug further agreed not to purchase or otherwise acquire any shares of the Company’s capital stock or other equity securities, or any interest in any of the foregoing.

Once the Delug Voting Agreement becomes effective, it will continue until the earlier to occur of (a) a Deemed Liquidation Event unless, immediately upon such Deemed Liquidation Event, the Company’s common stock is and remains listed on The Nasdaq Stock Market LLC, or (b) Mr. Delug’s death. For purposes of the Delug Voting Agreement, a “Deemed Liquidation Event” has the same meaning as in the Restated Voting Agreement.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Accounting Policies [Abstract]

Schedule of Estimated Useful Lives of Propery and Equipment

The estimated useful lives for significant property and equipment categories are as follows:

Computer equipment and software	3 years
Furniture, fixtures, and equipment	3-5 years
Leasehold improvements and capital leases	Shorter of remaining lease term or estimated useful life

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:

	Three Months Ended September 30, 2018 (in thousands)
	Direct		Wholesale		Managed SaaS		Total
North America	$	24,343	$	136	$	116	$	24,595
Other		77		—		—		77
Total net revenue	$	24,420	$	136	$	116	$	24,672

	Three Months Ended September 30, 2019 (in thousands)
	Direct		Wholesale		Managed SaaS		Total
North America	$	40,007	$	259	$	318	$	40,584
Other		19		—		—		19
Total net revenue	$	40,026	$	259	$	318	$	40,603

	Nine Months Ended September 30, 2018 (in thousands)
	Direct		Wholesale		Managed SaaS		Total
North America	$	49,498	$	3,668	$	184	$	53,350
Other		164		62		—		226
Total net revenue	$	49,662	$	3,730	$	184	$	53,576

	Nine Months Ended September 30, 2019 (in thousands)
	Direct		Wholesale		Managed SaaS		Total
North America	$	86,312	$	1,171	$	1,248	$	88,731
Other		86		—		—		86
Total net revenue	$	86,398	$	1,171	$	1,248	$	88,817

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:

	Direct		Year-Ended December 31, 2017
			Wholesale		Managed SaaS		Total
North America	$	35,356	$	491	$	—	$	35,847
Other		612		—		—		612
Total net revenue	$	35,968	$	491	$	—	$	36,459

	Direct		Year-Ended December 31, 2018
			Wholesale		Managed SaaS		Total
North America	$	68,884	$	3,666	$	496	$	73,046
Other		171		62		—		233
Total net revenue	$	69,055	$	3,728	$	496	$	73,279

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Property and Equipment - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 0.3	$ 0.3

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Inventory - Schedule of Inventory (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Inventory on-hand	$ 20,214	$ 24,595	$ 15,703
Inventory in-transit	5,694	5,957	4,875
Inventory	$ 25,908	$ 30,552	$ 20,578

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Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended		39 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) Segment	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Mar. 31, 2018 USD ($)
Significant Accounting Policies [Line Items]
Allowance for doubtful accounts					$ 0	$ 500
Income tax benefit recognition, minimum percentage of likelihood being realized			50.00%
Revenues	$ 40,603	$ 24,672	$ 88,817	$ 53,576	73,279	36,459	$ 6,200
Deferred offering costs					1,218
Number of reportable segments | Segment			1
Level 2 | Horizon Term Loan
Significant Accounting Policies [Line Items]
Fair value of borrowings	14,700		$ 14,700		14,700
Level 1
Significant Accounting Policies [Line Items]
Cash and restricted cash	36,100		36,100		20,700	5,800
Shipping and Handling
Significant Accounting Policies [Line Items]
Revenues	0	$ 0	100		0	100
Maximum | Shipping and Handling
Significant Accounting Policies [Line Items]
Revenues				$ 100
Accrued Liabilities
Significant Accounting Policies [Line Items]
Refund liabilities for sales returns	$ 500		$ 500		300	200
Prepaid Expenses and Other Current Assets
Significant Accounting Policies [Line Items]
Restricted cash deposit associated with credit facility					600	300
Deferred offering costs					1,200	0
Other Noncurrent Assets
Significant Accounting Policies [Line Items]
Restricted cash deposit associated with credit facility					100	300
Sales and distribution expenses
Significant Accounting Policies [Line Items]
Advertising cost					4,500	2,900
Shipping and handling cost					11,400	8,200
Other Expense, Net | Maximum
Significant Accounting Policies [Line Items]
Net loss from foreign currency transactions					$ (100)	$ (100)
Customer Concentration Risk | Revenue Benchmark
Significant Accounting Policies [Line Items]
Number of customers accounted					0	0
Customer Concentration Risk | Revenue Benchmark | Amazon
Significant Accounting Policies [Line Items]
Percentage of concentration of credit risk					95.00%	98.00%
Customer Concentration Risk | Accounts Receivable
Significant Accounting Policies [Line Items]
Number of customers accounted					0	0
Customer Concentration Risk | Accounts Receivable | Amazon
Significant Accounting Policies [Line Items]
Percentage of concentration of credit risk					79.00%	90.00%

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Commitment And Contingencies - Additional Information (Detail)		1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended		39 Months Ended
	Aug. 15, 2018 USD ($)	Aug. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Mar. 31, 2018 USD ($) HairDryer	May 31, 2018 Consumer
Rental expense							$ 700,000	$ 500,000
Inventory purchased							10,200,000	8,400,000
Sales tax payable current			$ 641,000		$ 641,000		$ 707,000	405,000
Percentage of units under transaction plan							99.20%
NET REVENUE			40,603,000	$ 24,672,000	88,817,000	$ 53,576,000	$ 73,279,000	$ 36,459,000	$ 6,200,000
Remaining recall liability			90,000		90,000		1,512,000
Xtava Allure Hair Dryer
Number of Product sold | HairDryer									170,000
Recall costs	$ 1,600,000				100,000
Legal matter yet to settle, remaining number of consumers | Consumer										1
Amount of recall liability eliminated, due to materially completed obligation		$ 1,400,000
Remaining recall liability			$ 100,000		$ 100,000		$ 1,500,000
Executive Officer [Member]
Percentage of units under transaction plan							66.65%
Initial Public Offering
Qualified IPO description							Following a Qualified IPO, on each of the first four six-month anniversaries of the Qualified IPO, a participant shall be entitled to payments and distributions equal to 25% of the participant's proportional interest of the Plan Pool. In a Qualified IPO, the Plan Pool shall be deemed funded one-thirdin cash and two-thirds in the Company's common stock.
Percentage of units under transaction plan							25.00%
Initial Public Offering | Minimum
Aggregate gross proceeds							$ 50,000,000,000

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Income Taxes - Components of deferred tax assets and liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Deferred tax assets:
Sales returns reserve	$ 79	$ 60
Allowance for doubtful accounts		114
Net operating loss carryforwards	14,204	8,008
Stock options	180	82
Deferred revenue	12	30
Fixed assets	21	12
Interest expense limitation	574
Other	97	9
Less: valuation allowances	(15,167)	(7,890)
Net deferred tax assets		425
Deferred tax liabilities:
Foreign currency exchange gain/loss	0	0
Accrued expenses		(425)
Net deferred tax liabilities		(425)
Net deferred tax assets (liabilities)	$ 0	$ 0

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Cover	9 Months Ended
	Sep. 30, 2019
Cover page.
Entity Registrant Name	Mohawk Group Holdings, Inc.
Entity Central Index Key	0001757715
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Document Type	S-1/A
Amendment Flag	false
Document Period End Date	Sep. 30, 2019

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Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and restricted cash	$ 36.1	$ 20.7	$ 5.8

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Credit Facility and Term Loans - Schedule of Credit Facility and Term Loans (Details) (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Less: deferred debt issuance costs		$ (400)	$ (100)
Total Mid Cap credit facility	$ 13,640	14,451	3,631
Term loan-non current portion	13,339	13,049	4,732
Mid Cap Credit Facility
Debt Instrument [Line Items]
Mid Cap Credit facility	15,114	16,455	4,575
Less: deferred debt issuance costs	(1,442)	(1,960)	(876)
Less discount associated with issuance of warrants		(44)	(68)
Total Mid Cap credit facility	13,640	14,451	3,631
Midcap Term Loan
Debt Instrument [Line Items]
Mid Cap Term loan			6,841
Less: deferred debt issuance costs			(204)
Less discount associated with issuance of warrants			(16)
Total Mid Cap term loan			6,621
Less-current portion			(1,889)
Term loan-non current portion			$ 4,732
Horizon Term Loan
Debt Instrument [Line Items]
Horizon term loan	15,000	15,000
Less: deferred debt issuance costs	(906)	(1,022)
Less discount associated with issuance of warrants	(755)	(929)
Total Horizon term loan	13,339	13,049
Less-current portion	0	0
Term loan-non current portion	$ 13,339	$ 13,049

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Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Statement of Comprehensive Income [Abstract]
Net loss	$ (11,317)	$ (5,127)	$ (27,331)	$ (23,233)	$ (31,823)	$ (23,067)
OTHER COMPREHENSIVE INCOME (LOSS):
Foreign currency translation adjustments	13	(19)	26	57	83	40
Other comprehensive income (loss)	13	(19)	26	57	83	40
COMPREHENSIVE LOSS	$ (11,304)	$ (5,146)	$ (27,305)	$ (23,176)	$ (31,740)	$ (23,027)

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Organization and description of business

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Organization Consolidation And Presentation Of Financial Statements Abstract

Organization and Description of Business

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Mohawk Group Holdings, Inc. and subsidiaries (“Mohawk” or the “Company”) is a rapidly growing technology-enabled consumer products company that uses machine learning and data analytics to design, develop, market and sell products. Mohawk predominately operates through online retail channels such as Amazon and Walmart.

Headquartered in New York, Mohawk’s offices can be found in China, Philippines, Israel, Poland, and the United States.

Merger—On September 4, 2018, pursuant to an Agreement and Plan of Merger and Reorganization among the Company, MGH Merger Sub, Inc. and Mohawk Group, Inc. (“MGI”), as amended by Amendment No. 1 dated as of April 1, 2018 (the “Merger Agreement”), MGI merged with Merger Sub, Inc., with MGI remaining as the surviving entity and becoming a wholly-owned operating subsidiary of the Company (the “Merger”). The Merger was a reverse recapitalization for financial reporting purposes. The Merger is reflected in the financial statements and financial disclosures as if the Merger was effective on January 1, 2017. Operations prior to the Merger are the historical operations of MGI.

Under the Merger Agreement, all outstanding shares of common stock, shares of preferred stock and warrants, excluding MGI’s Series C preferred stock (“Series C”) and warrants to purchase shares of Series C, converted to shares of common stock of the Company at a ratio of 1 to 0.3131 (the “Conversion”). All outstanding Series C converted on a 1 to 0.2564 basis to shares of common stock of the Company and all outstanding warrants to purchase shares of Series C converted to warrants to purchase shares of common stock of the Company on a 1 to 0.2564 basis. At the time of the merger, the Company had 0.9 million shares outstanding held by certain Series C holders.

Initial Public Offering—On June 14, 2019, the Company completed its initial public offering (“IPO”), selling 3,600,000 shares of common stock at a public offering price of $10.00 per share. Net proceeds to the Company from the offering were approximately $29.6 million, after deducting legal, underwriting and other offering expenses.

Liquidity, Going Concern and Initial Public Offering—The Company is an early-stage growth company. As a result, the Company is investing in launching new products, advancing its software, and its sales and distribution infrastructure to accelerate revenue growth and scale operations to support such growth. To fund this investment, the Company has incurred losses with the expectation that it will generate profitable revenue streams in the future. While management and the Company’s board of directors believes that the Company will eventually reach a scale where the growth of its product revenues will offset the continued investments required in launching new products, completing the development of its software, and managing its sales and distribution operations, they believe that the size and nascent stage of the Company’s target market justify continuing to invest in growth at the expense of short-term profitability.

In pursuit of the foregoing growth strategy, the Company incurred operating losses of $22.6 million and $29.4 million for the years ended December 31, 2017 and 2018, respectively, primarily due to the impact from its continued investment in launching new products, advancing its AIMEE software platform and building out its sales and distribution infrastructure. In addition, at December 31, 2017 and 2018, the Company had an accumulated deficit of $39.2 million and $71.0 million, respectively, cash on hand amounted to $5.3 million and $20.0 million, respectively, total outstanding borrowings from lenders amounted to $10.3 million and $27.5 million, respectively, and total available capacity on borrowings amounted to $5.6 million and $1.4 million at December 31, 2017 and 2018, respectively. Moreover, the Company has not had a sufficient track record of improvement of its operating cash outflows. As such, in the event that the Company was unsuccessful in its ability to continue to reduce its cash outflows or obtain additional financing if such reduction in cash outflows was not achieved, the Company would have been unable to meet its obligations as they became due within one year from the date these condensed consolidated financial statements were issued. These negative financial conditions raised substantial doubt about the Company’s ability to continue as a going concern.

Management plans to continue pursuing its growth strategy. In the past, the Company has successfully funded its losses to-date through equity financings, beginning in July 2014. As of December 31, 2018, the Company has raised over $72.6 million in equity financing to fund its operations since inception. Further, in October 2017, the Company improved its working capital flexibility by securing a $15 million credit facility (which could be increased, subject to certain conditions, to $30.0 million) and a $7.0 million term loan with MidCap Financial Trust (“MidCap”) and in November 2018, the Company exited the original credit facility with MidCap and entered into a new three-year, $25.0 million revolving credit facility with MidCap, which can be increased, subject to certain conditions, to $50.0 million. Furthermore, on December 31, 2018, the Company entered into a new term loan agreement with Horizon Technology Finance Corporation (“Horizon”) obtaining a five-year, $15.0 million term loan and repaying the outstanding amount of MidCap’s term loan of approximately $4.9 million. While there was no assurance that future investments in the Company’s equity or issuances of debt will occur, management believes its success in obtaining funding since inception will continue in the foreseeable future.

During the audit of the Company’s December 31, 2018 consolidated financial statements, the Company’s financial forecast for the next 12 months included revenue growth, margin expansion, a reduction of certain fixed costs, an improvement in inventory management and a reduction in operating cash deficit. In addition, management anticipated that the Company would not breach its financial covenants associated with its existing credit facility or term loan for the next twelve months. However, there was no assurance that management’s forecast would be attained or that the Company would be able to maintain its liquidity to fund operations and/or maintain compliance with its covenants without future equity investments or issuance of debt from outside sources. In the event of a breach of the Company’s financial covenants under the credit facility and/or its term loan, outstanding borrowings would become due on demand absent a waiver from the lenders.

These condensed consolidated financial statements have been prepared on the basis that the Company will continue to operate as a going concern and as such, include no adjustments that might be necessary in the event that the Company was unable to operate on this basis.

For the three and nine months ended September 30, 2019, the Company incurred operating losses of $10.4 million and $23.9 million, respectively. As of September 30, 2019, the Company had accumulated deficit of $98.4 million, cash on hand of $35.7 million, and total outstanding borrowing from lenders of $27.0 million with a total available capacity on borrowings of $0.8 million. On June 14, 2019, the Company completed its IPO, receiving net proceeds of approximately $29.6 million after deducting legal, underwriting and other offering expenses. As of September 30, 2019, the Company has raised over $102.3 million in equity financing to fund its operations since inception, including the net proceeds from the IPO.

The Company believes that, based on its current sales and expense level projections, the credit facility with MidCap (see Note 6), and the proceeds from the IPO, the Company will satisfy its estimated liquidity needs for the twelve months from the condensed consolidated financial statements issuance date. As such, the substantial doubt raised by the Company’s historical operating results has been mitigated.

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

Mohawk Group Holdings, Inc. and subsidiaries (“Mohawk” or the “Company”) is a rapidly growing technology-enabled consumer products company that uses machine learning, natural language processing, and data analytics to design, develop, market and sell products. Mohawk predominately operates through online retail channels such as Amazon, eBay, and Walmart.

Headquartered in New York, Mohawk’s offices can be found in China, Canada and the United States.

Merger—On September 4, 2018, pursuant to an Agreement and Plan of Merger and Reorganization among the Company, MGH Merger Sub, Inc. and Mohawk Group, Inc. (“MGI”), as amended by Amendment No. 1 dated as of April 1, 2018 (the “Merger Agreement”), MGI merged with Merger Sub, Inc., with MGI remaining as the surviving entity and becoming a wholly-owned operating subsidiary of the Company (the “Merger”). The Merger was a reverse recapitalization for financial reporting purposes. Before the Merger, the Company had no operations, no cash, and no debt. No stockholder obtained control of the Company, as a result of the Merger. MGI stockholders obtained 92% of the voting interests in the Company and continued to control the Company after the Merger. As a result, no step-up in basis was recorded and the net assets of the Company are stated at historical cost. The Merger was a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended.

The Merger is reflected in the financial statements and financial disclosures as if the merger was effective on January 1, 2017. Operations prior to the Merger are the historical operations of MGI.

Liquidity and Going Concern—The Company is an early-stage growth company. As a result, the Company is investing in launching new products, advancing its software, and its sales and distribution infrastructure to accelerate revenue growth and scale operations to support such growth. To fund this investment, the Company has incurred losses with the expectation that it will generate profitable revenue streams in the future. While management and the Company’s board of directors believes that the Company will eventually reach a scale where the growth of its product revenues will offset the continued investments required in launching new products, completing the development of its software, and its sales and distribution operations, they believe that the size and nascent stage of the Company’s target market justify continuing to invest in growth at the expense of short-term profitability.

In pursuit of the foregoing growth strategy, the Company incurred operating losses of $22.6 million and $29.4 million for the years ended December 31, 2017 and 2018, respectively, primarily due to the impact from its continued investment in launching new products, advancing its artificial intelligence software and building out its sales and distribution infrastructure. In addition, at December 31, 2017 and 2018, the Company had an accumulated deficit of $39.2 million and $71.0 million, respectively, cash on hand amounted to $5.3 million and $20.0 million at December 31, 2017 and 2018, respectively, total outstanding borrowings from lenders amounted to $10.3 million and $27.5 million at December 31, 2017 and 2018, respectively, and total available capacity on borrowings amounted to $5.6 million and $1.4 million at December 31, 2017 and 2018, respectively. Moreover, the Company has not had a sufficient track record of improvement of its operating cash outflows. As such, in the event that the Company is unsuccessful in its ability to continue to reduce its cash outflows or obtain additional financing if such reduction in cash outflows is not achieved, the Company would be unable to meet its obligations as they become due within one year from the date these consolidated financial statements were issued. These negative financial conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Management plans to continue pursuing its growth strategy and fund its operations through additional external investment in the form of either equity or debt. In the past, the Company has successfully funded its losses to-date through three rounds of equity financing, beginning in July 2014 and continuing through its Series C financing round, which was completed in September 2018. As of December 31, 2018, the Company has raised over $72.6 million in equity financing to fund its operations. Further, in October 2017, the Company improved its working capital flexibility by securing a $30.0 million credit facility with Midcap Financial Trust (“Midcap”) and $7.0 million term loan and in November 2018, the Company exited the original credit facility with MidCap and entered into a new three-year $25.0 million revolving credit facility with MidCap, which can be increased, subject to certain conditions, to $50.0 million. Furthermore, on December 31, 2018, the Company entered into a new term loan agreement with Horizon Technology Finance Corporation (“Horizon”) obtaining a five-year $15.0 million term loan and repaying the outstanding amount of MidCap’s term loan of approximately $4.9 million. While there can be no assurance that future investments in the Company’s equity or issuance of debt will occur, management believes its success in funding since inception will continue in the foreseeable future.

In addition, the Company’s financial forecast for the next 12 months includes revenue growth, margin expansion, a reduction of certain fixed costs, an improvement in inventory management, and reduction in operating cash deficit. In addition, management anticipates that the Company will not breach its financial covenant associated with its existing credit facility for the next twelve months. However, there can be no assurance that management’s forecast will be attained to maintain its liquidity to fund operations and/or maintain compliance with its covenants without future investments in the Company’s equity or issuance of debt from outside sources. In the event of a breach of the Company’s financial covenant under the credit facility, outstanding borrowings would become due on demand absent a waiver from the lender.

These consolidated financial statements have been prepared on the basis that the Company will continue to operate as a going concern and as such, include no adjustments that might be necessary in the event that the Company was unable to operate on this basis.

Reverse Stock Split

On May 24, 2019, the Company effected a one-for-3.9 reverse stock split of its issued and outstanding shares of common stock. Accordingly, all share and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock split.

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Stockholders Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands				1 Months Ended			9 Months Ended	12 Months Ended
	Sep. 30, 2018	Sep. 04, 2018	Jan. 01, 2017	Apr. 30, 2018	Aug. 31, 2017	Mar. 31, 2017	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2014
Stockholders Equity [Line Items]
Common shares outstanding							17,710,659	11,534,190	8,575,950
Conversion of common stock			1,300,000
Conversion of common stock,description	-		At the date of the merger, 1.1 million common shares were converted into 1.3 million shares of common shares of the Company
Share issued, value							$ 29,607
Stock issuance price								$ 0.0001	$ 0.0001
Warrants issued to purchase common shares		196,364
Common stock warrants exercise price		$ 15.60
Issuance of warrants related to debt								$ 929	$ 90
Series A Preferred Stock
Stockholders Equity [Line Items]
Share issued										18,300,000
Stock issuance price										$ 1.44
Share issued, value										$ 26,300
Conversion of preferred stock in common shares		5,700,000
Series B Preferred Stock
Stockholders Equity [Line Items]
Share issued						2,852,239
Stock issuance price						$ 2.98
Share issued, value						$ 8,400
Conversion of preferred stock in common shares		900,000
Series B-1 Preferred Stock
Stockholders Equity [Line Items]
Share issued					2,109,787
Stock issuance price					$ 5.03
Share issued, value					$ 10,600
Conversion of preferred stock in common shares		700,000
Series C Preferred Stock
Stockholders Equity [Line Items]
Share issued		1,900,000		5,992,750
Stock issuance price		$ 4.00
Share issued, value		$ 6,400
Conversion of preferred stock in common shares		1,500,000
Preferred stock additional shares authorized				15,000,000
Preferred stock additional shares authorized, value				$ 40,000
Stock issuance price				$ 4.00
Share issued, value net of transaction expenses				$ 21,000
Number of Preferred shares converted into common shares		500,000
Merger Agreement
Stockholders Equity [Line Items]
Description common stock conversion		1 to 0.3131
Merger Agreement | Series C
Stockholders Equity [Line Items]
Description common stock conversion		One to 0.2564
Common shares outstanding		900,000
Horizon Term Loan
Stockholders Equity [Line Items]
Warrants issued to purchase common shares								76,923
Common stock warrants exercise price								$ 15.60
Issuance of warrants related to debt								$ 900
Mid Cap Credit Facility
Stockholders Equity [Line Items]
Warrants issued to purchase common shares								44,871
Common stock warrants exercise price								$ 15.60
Warrants expire period								10 years
Issuance of warrants related to debt								$ 100
Maximum
Stockholders Equity [Line Items]
Conversion of common stock	100,000

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2019 Acquisition - Amounts Assigned to Goodwill and Major Intangibles Asset Classifications (Detail) - Aussie Health Assets $ in Thousands	Sep. 10, 2019 USD ($)
Business Acquisition [Line Items]
Goodwill	$ 745
Intangible assets	333
Total	1,078
Trademarks
Business Acquisition [Line Items]
Intangible assets	$ 310
Useful life (in years)	5 years
Transition Services Agreement
Business Acquisition [Line Items]
Intangible assets	$ 11
Transition Services Agreement | Maximum
Business Acquisition [Line Items]
Useful life (in years)	1 year
Non-Competition Agreement
Business Acquisition [Line Items]
Intangible assets	$ 12
Useful life (in years)	3 years

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Stock-Based Compensation - Summary of Restricted Stock Activity (Detail) - Restricted Stock	9 Months Ended
	Sep. 30, 2019 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Granted	2,645,123
Shares, Vested	0
Shares, Forfeited	(69,141)
Shares, Nonvested	2,575,982
Weighted Average Grant-Date Fair Value, Granted | $ / shares	$ 18.89
Weighted Average Grant-Date Fair Value, Forfeited | $ / shares	19.50
Weighted Average Grant-Date Fair Value, Nonvested | $ / shares	$ 18.87

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ACCOUNTS RECEIVABLE

12 Months Ended

Dec. 31, 2018

Accounts Receivable Net Current Abstract

ACCOUNTS RECEIVABLE

4. ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following as of December 31, 2017 and 2018:

	December 31, 2017			December 31, 2018
Trade accounts receivable	$	1,798		$	1,403
Allowance for doubtful accounts		(465	)		—
Accounts receivable—net	$	1,333		$	1,403

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Accrued and Other Current Liabilities

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Payables and Accruals [Abstract]

Accrued and Other Current Liabilities

5. ACCRUED AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following as of December 31, 2018 and September 30, 2019:

	December 31, 2018		September 30, 2019
	(in thousands)
Accrued compensation costs	$	2,585	$	1,355
Accrual for insurance financing		—		2,062
Accrual for deferred financing fees		936		—
Accrued professional fees and consultants		484		585
Accrued logistics costs		1,424		3,015
Product related accruals		1,042		1,631
Sales tax payable		707		641
Sales return reserve		322		550
Accrued recall liability		1,512		90
Note payable (see note 11)		—		195
All other accruals		696		756
Accrued and other current liabilities	$	9,708	$	10,880

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

8. ACCRUED AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following as of December 31, 2017 and 2018:

	December 31, 2017		December 31, 2018
Accrued compensation costs	$	250	$	2,585
Accrual for deferred financing fees		205		936
Accrued professional fees and consultants		444		484
Accrued logistics costs		2,017		1,424
Product related accruals		565		1,042
Sales tax payable		405		707
Sales return reserve		244		322
Accrued recall liability		—		1,512
All other accruals		564		696
Accrued and other current liabilities	$	4,694	$	9,708

The Company sponsors, through its professional employer organization provider, a 401(k) defined contribution plan covering all eligible US employees. Contributions to the 401(k) plan are discretionary. Currently, the Company does not match nor make any contributions to the 401(k) plan.

Recall

In April 2018, the Company retained outside counsel to assist it in evaluating a safety issue related to certain hair dryers that it imported and sold through its subsidiaries between 2014 and 2018 (the “Xtava Allure Hair Dryer”). The Company had received communications directly from consumers and identified online reviews of overheating or fires associated with these hair dryers. The Company sold approximately 170,000 net units from the introduction of the product in 2015 through its discontinuance in the first quarter of 2018 totaling approximately $6.2 million in net revenue.

In May 2018 the Company’s board of directors approved a voluntary recall of the Xtava Allure Hair Dryer. In June 2018, the Company filed an application for a voluntary recall with the US Consumer Product Safety Commission (“CPSC”) pursuant to Section 15(b) of the Consumer Product Safety Act (“CPSA”). The Company has received approval from the CPSC to provide consumers with replacement units and publicly announced the recall on August 15, 2018. The Company estimates it will incur approximately $1.6 million in costs related to the recall for procurement, manufacturing, fulfillment and delivery to consumers who apply and qualify for the recall costs. The Company also estimates it will incur legal and other expenses of approximately $0.4 million related to the recall which will be expensed as incurred. The Company has also incurred and settled all but one consumer legal matter related to Xtava Allure Hair Dryer for insignificant amounts. The Company believes the remaining legal matter will be settled for an insignificant amount. As of December 31, 2018, the remaining recall liability is $1.5 million.

Pursuant to the CPSC and the guidelines set forth by the CPSA, a company may be subject to a late reporting investigation when a recall is announced. If a company is deemed to be a late reporter upon investigation by the CPSC, it may be subject to penalties. The Company believes it is likely that the CPSC will launch a discovery process to understand if a late reporting penalty is warranted. The investigation would evaluate a number of statutory and regulatory factors in determining a penalty amount, such as the severity of the risk of injury, the occurrence or absence of injury, the appropriateness of such penalty in relation to the size of the business and other factors. As of the date of issuance of this report, the Company believes it has met all the appropriate reporting requirements. If the Company is determined to have violated the reporting guidelines a penalty may be material to the consolidated financial statements. If CPSC seeks significant civil penalties for late reporting, the Company intends to vigorously defend itself. As of the date of the issuance of these financial statements the Company cannot reasonably estimate what, if any, penalties for potential late reporting may be levied.

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2019 Acquisition (Tables)

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

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

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

	Total
	(in thousands)
Inventory	$	297
Goodwill		745
Intangible assets		333
Net assets acquired	$	1,375

Amounts Assigned to Goodwill and Major Intangibles Asset Classifications

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

	Amount allocated		Useful life (in years)
	(in thousands)
Goodwill	$	745	n.a.
Trademarks		310	5
Transition services agreement		11	< 1
Non-competition agreement		12	3
Total	$	1,078

Unaudited Pro Forma Information

The acquisition of the Aussie Health Assets is reflected in the following unaudited pro forma information as if the acquisition had been effective on January 1, 2018.

	Three Months Ended September 30,			Three Months Ended September 30,			Nine Months Ended September 30,			Nine Months Ended September 30,
	2018			2019			2018			2019
	(in thousands)						(in thousands)
Net revenue as reported	$	24,672		$	40,603		$	53,576		$	88,817
Aussie Health net revenue	$	485		$	1,350		$	512		$	1,759
Net revenue pro forma	$	25,157		$	41,953		$	54,088		$	90,576
Operating loss as reported	$	(4,707	)	$	(10,413	)	$	(21,772	)	$	(23,887	)
Aussie Health operating income	$	90		$	243		$	85		$	310
Operating loss pro forma	$	(4,617	)	$	(10,170	)	$	(21,687	)	$	(23,577	)

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Stock-Based Compensation (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Share-based Payment Arrangement [Abstract]

Summary of Stock Options Activity

The following is a summary of stock options activity during the nine months ended September 30, 2019:

	Options Outstanding
	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (years)		Aggregate Intrinsic Value
Balance—January 1, 2019		1,867,747		$	9.01		9.64	$	19,573,295
Options granted		195,975		$	9.49
Options exercised		(487	)	$	4.14			$	1,630
Options cancelled		(165,622	)	$	8.76
Balance—September 30, 2019		1,897,613		$	9.10		9.02	$	498,451
Exercisable as of September 30, 2019		218,096		$	6.31		7.55	$	359,753
Vested and expected to vest as of September 30, 2019		1,954,263		$	9.13		8.75	$	498,451

The following is a summary of stock options activity during the year-ended December 31, 2018:

	Options Outstanding
	Number of Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (years)		Aggregate Intrinsic Value
Balance—January 1, 2018		437,400		$	6.01
Options granted		1,547,938		$	9.72
Options exercised		(4,465	)	$	4.13			$	14,410
Options cancelled		(113,126	)	$	7.02
Balance—December 31, 2018		1,867,747		$	9.01		9.64	$	19,573,295
Exercisable as of December 31, 2018		181,701		$	5.85		7.65	$	2,480,184
Vested and expected to vest as of December 31, 2018		1,867,747		$	9.01		9.64	$	19,573,295

Summary of Weighted Average Assumptions Used in Black-Scholes Option-Pricing Model to Determine Grant Fair Value

The following are weighted-average assumptions used in the Black-Scholes option-pricing model to determine grant fair value:

	September 30, 2018			September 30, 2019
	Weighted- Average			Weighted- Average
Expected term (in years)		0.00			5.77
Volatility		0.00	%		66.72	%
Risk-free interest rate		0.00	%		1.76	%
Dividend Yield		0.000			0.000

The following are weighted-average assumptions used in the Black-Scholes option-pricing model with to determine grant fair value:

	2017			2018
	Weighted- Average			Weighted- Average
Expected term (in years)		5.91			5.73
Volatility		53.51	%		55.06	%
Risk-free interest rate		2.16	%		2.59	%
Dividend Yield		0.000			0.000

Summary of Restricted Stock Activity

A summary of restricted stock activity within the Company’s equity plans and changes for the nine months ended September 30, 2019, is as follows:

Restricted Stock Awards	Shares			Weighted Average Grant- Date Fair Value
Nonvested at January 1, 2019		—		$	—
Granted		2,645,123		$	18.89
Vested		—		$	—
Forfeited		(69,141	)	$	19.50
Nonvested at September 30, 2019		2,575,982		$	18.87

Summary of Total Stock-based Compensation Expense by Function

The following table summarizes the total stock-based compensation expense by function for the three and nine months ended September 30, 2018 and 2019:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2019		2018		2019
	(in thousands)				(in thousands)
Sales and distribution expenses		5		1,617		11		2,533
Research and development expenses		8		1,327		21		1,878
General and administrative expenses		128		4,772		450		7,424
Total stock-based compensation expense	$	141	$	7,716	$	482	$	11,835

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PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Summary of Property and Equipment

Property and equipment consisted of the following as of December 31, 2017 and 2018:

	December 31, 2017			December 31, 2018
Computer equipment and software	$	392		$	454
Furniture, fixtures and equipment		429			311
Leasehold improvements		47			47
Subtotal		868			812
Less: accumulated depreciation and amortization		(374	)		(544	)
Property and equipment—net	$	494		$	268

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
OPERATING ACTIVITIES:
Net loss	$ (27,331)	$ (23,233)	$ (31,823)	$ (23,067)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	136	188	253	258
Provision for sales returns	236	128	78	119
Amortization of deferred financing costs and debt discounts	914	337	667	105
Stock-based compensation	11,835	482	619	1,046
Other	101	62	90	40
Loss on early extinguishment on Midcap term loan			97
Changes in assets and liabilities:
Accounts receivable	(1,784)	48	(70)	(526)
Inventory	4,944	(515)	(9,974)	(15,646)
Prepaid and other current assets	(2,307)	(2,757)	(1,153)	(2,030)
Accounts payable, accrued and other liabilities	110	5,731	10,871	10,942
Cash used in operating activities	(13,146)	(19,529)	(30,345)	(28,759)
INVESTING ACTIVITIES:
Purchase of fixed assets	(48)	(25)	(61)	(125)
Purchase of Aussie Health Co. assets	(1,105)
Proceeds on sale of fixed assets	6	35	35
Cash provided by (used in) investing activities	(1,147)	10	(26)	(125)
FINANCING ACTIVITIES:
Proceeds from exercise of stock options	2	18	18
Proceeds from Initial Public Offering	36,000
Borrowings from Mid Cap credit facility	69,740	37,048	62,665	10,891
Repayments from Mid Cap credit facility	(71,082)	(32,519)	(50,784)	(6,385)
Prepayment penalty incurred with the Midcap term loan extinguishment			(97)
Issuance costs of stock		(17)
Borrowings from other term loans				784
Repayments from other term loans				(1,536)
Deferred offering costs			(947)
Insurance financing proceeds	3,833
Insurance obligation payments	(1,818)
Capital lease financing proceeds		20	20	99
Capital lease obligation payments	(42)	(40)	(54)	(25)
Cash provided by financing activities	29,706	30,186	45,293	28,596
EFFECT OF EXCHANGE RATE ON CASH	1		(11)	(34)
NET CHANGE IN CASH AND RESTRICTED CASH FOR PERIOD	15,414	10,667	14,911	(322)
CASH AND RESTRICTED CASH AT BEGINNING OF PERIOD	20,708	5,797	5,797	6,119
CASH AND RESTRICTED CASH AT END OF PERIOD	36,122	16,464	20,708	5,797
RECONCILIATION OF CASH AND RESTRICTED CASH
CASH	35,686	15,785	20,029	5,297
RESTRICTED CASH-Prepaid and other assets	307	550	550	250
RESTRICTED CASH-Other non-current assets	129	129	129	250
CASH AND RESTRICTED CASH AT END OF PERIOD	36,122	16,464	20,708	5,797
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	2,467	1,112	1,555	213
Cash paid for taxes	15	3	3	5
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Debt issuance costs not paid			1,388	205
Discount of debt relating to warrants issuance			929	84
Capital lease		25	25	102
Note payable on acquisition	195
Initial Public Offering
FINANCING ACTIVITIES:
Issuance costs of stock	(5,446)
Series C Preferred Stock
FINANCING ACTIVITIES:
Proceeds from issuance of preferred stock - converted to common stock		23,061	23,969
Issuance costs of stock		(3,000)	(2,997)
Series C-1 Preferred Stock
FINANCING ACTIVITIES:
Proceeds from issuance of preferred stock - converted to common stock		8,364	7,660
Issuance costs of stock		(1,036)	(1,243)
Series B Preferred Stock
FINANCING ACTIVITIES:
Proceeds from issuance of preferred stock - converted to common stock				8,500
Issuance costs of stock				(85)
Series B-1 Preferred Stock
FINANCING ACTIVITIES:
Proceeds from issuance of preferred stock - converted to common stock				10,610
Issuance costs of stock				(60)
Horizon Term Loan
FINANCING ACTIVITIES:
Borrowings from term loan			15,000
Repayments of term loan			(4,900)
Debt issuance costs	(900)		(215)
Midcap Term Loan
FINANCING ACTIVITIES:
Borrowings from term loan				7,000
Repayments of term loan		(1,344)	(6,776)	(224)
Debt issuance costs				(124)
Mid Cap Credit Facility
FINANCING ACTIVITIES:
Debt issuance costs	$ (581)	$ (369)	$ (926)	$ (849)

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Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Mar. 01, 2017	Mar. 31, 2017	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding to purchase common stock	369,885		1,897,613		1,897,613		1,867,747	437,400
Weighted-average exercise price	$ 6.16				$ 4.14		$ 4.13
Options exercisable period					10 years		10 years
Share based compensation expense			$ 7,716	$ 141	$ 11,835	$ 482	$ 400	$ 200
Weighted-average grant date fair value of options granted					$ 5.67		$ 11.78	$ 3.51
Total unrecognized compensation expense related to unvested options			13,700		$ 13,700		$ 18,200	$ 800
Total unrecognized compensation expense related to unvested options, expects to recognize over estimated weighted average period					2 years 3 months 4 days		2 years 10 months 24 days	1 year 4 months 24 days
Options granted					195,975	0	1,547,938
Founder [Member] | Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options vesting period		18 months
Share based compensation expense							$ 200	$ 300
Total fair value of shares vested		$ 500
Second Founder [Member] | Agreement [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total fair value of shares vested		$ 500
Share-based Compensation Award, Tranche One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options vesting period					4 years		4 years
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%		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		36 months
Options vesting percentage					75.00%		75.00%
Share-based Compensation Award, Tranche Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options vesting period					3 years
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					66.33%
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation expense			$ 6,200		$ 7,400
Total unrecognized compensation expense related to unvested options, expects to recognize over estimated weighted average period					1 year 9 months
Restricted stock awards outstanding to purchase common stock			2,575,982		2,575,982
Shares, Granted					2,645,123
Shares, Vested					0
Weighted Average Grant-Date Fair Value, Granted					$ 18.89
Total unrecognized compensation expense related to unvested restricted shares			$ 41,300		$ 41,300
Mohawk 2014 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding to purchase common stock	302,911		366,790		366,790		362,693
Weighted-average exercise price	$ 7.49
Shares reserved for future issuance			2,608		2,608		7,192
Mohawk 2018 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance			27,366		27,366		203,092
Mohawk 2018 Plan | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock awards outstanding to purchase common stock			149,957		149,957
Shares, Granted					149,957
Mohawk 2018 Plan | Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding to purchase common stock			1,530,823		1,530,823		1,505,054
2019 Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future issuance			0		0
2019 Equity Plan | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate shares of restricted stock outstanding			2,426,025		2,426,025

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Prepaid Expenses and Other Current Assets - Summary of Prepaids and Other Current Assets (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Prepaid Expense and Other Assets, Current [Abstract]
Prepaid inventory	$ 2,329	$ 2,284	$ 2,230
Restricted cash	307	550	250
Prepaid insurance	2,904	434
Deferred offering costs		1,218
Other	1,196	932
Other, including prepaid insurance		1,366	537
Prepaid and other current assets	$ 6,736	$ 5,418	$ 3,017

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Credit Facility And Term Loans - Additional Information (Detail) - USD ($)			1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Nov. 23, 2018	Oct. 16, 2017	Oct. 31, 2017	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017	Sep. 04, 2018
Debt Instrument [Line Items]
Debt issuance costs								$ 400,000	$ 100,000
Available balance of credit facility				$ 800,000		$ 800,000		1,400,000	5,600,000
Warrants to purchase shares, exercise price										$ 15.60
Interest expense of credit facilities								1,200,000	200,000
Interest expense				955,000	$ 439,000	3,456,000	$ 1,503,000	2,354,000	413,000
Mid Cap Prior Term Loan
Debt Instrument [Line Items]
Term loan, borrowing		$ 7,000,000						7,000,000
Interest expense					200,000		700,000
Repaying of term loan								4,900,000
Prepayment penalty								$ 100,000
London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate								9.90%
Description of variable rate basis								One-month LIBOR
Maximum | Mid Cap Prior Term Loan
Debt Instrument [Line Items]
Amortization of debt issuance costs					100,000		100,000	$ 200,000
Mid Cap Credit Facility
Debt Instrument [Line Items]
Credit facility maximum borrowing amount	$ 25,000,000
Additional increase in borrowing amount	$ 50,000,000	$ 30,000,000
Line of credit facility, unused capacity, commitment fee percentage	0.50%	0.50%
Line of credit, outstanding				15,100,000		15,100,000		16,500,000	4,600,000
Available balance of credit facility				800,000		800,000		$ 1,400,000	5,600,000
Debt offset against and expense over the term								3 years
Warrants to purchase shares, exercise price								$ 15.60
Line of credit facility, minimum liquidity financial covenant requirement in cash on hand	$ 5,000,000
Debt issuance costs	$ 700,000							$ 1,300,000
Unamortized debt issuance costs								700,000
Current borrowing capacity								25,000,000
Mid Cap Credit Facility | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	5.75%	5.75%
Credit Facility And Term Loan
Debt Instrument [Line Items]
Line of credit facility covenant minimum liquidity requirement in unrestricted cash								5,000,000
Mid Cap Prior Credit Facility
Debt Instrument [Line Items]
Credit facility maximum borrowing amount		$ 15,000,000
Revolving Credit Facility
Debt Instrument [Line Items]
Interest expense				400,000	200,000	1,900,000	800,000
Amortization of debt issuance costs				200,000	$ 100,000	500,000	$ 300,000
Term Loan
Debt Instrument [Line Items]
Credit facility maximum borrowing amount	$ 25,000,000	$ 15,000,000						15,000,000
Interest expense				500,000		1,500,000		800,000	200,000
Amortization of debt issuance costs				100,000				$ 100,000	100,000
Debt instrument maturity month and year								2023-01
Borrowings, outstanding				15,000,000		$ 15,000,000
Term Loan | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		9.75%						9.90%
Description of variable rate basis		One month LIBOR				One-month LIBOR
Term Loan | Maximum
Debt Instrument [Line Items]
Amortization of debt issuance costs						$ 400,000
Term Loan | Minimum | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Potential additional interest								2.50%
Horizon Term Loan
Debt Instrument [Line Items]
Debt issuance costs				$ 1,022,000		$ 1,022,000		$ 1,000,000
Debt offset against and expense over the term						5 years		5 years
Warrants to purchase shares, exercise price								$ 15.60
Warrants term								10 years
Fair value on issuance			$ 100,000					$ 900,000
Debt discount			$ 100,000
Repaying of term loan								4,900,000
Borrowings, outstanding								$ 15,000,000
Horizon Term Loan | Series B-1 Preferred Stock
Debt Instrument [Line Items]
Warrants to purchase shares			139,194
Warrants to purchase shares, exercise price			$ 5.029
Horizon Term Loan | Common Stock
Debt Instrument [Line Items]
Warrants to purchase shares			44,871					76,923
Warrants to purchase shares, exercise price			$ 15.60					$ 15.60
Warrants term			10 years					10 years
Horizon Term Loan | Mid Cap Credit Facility
Debt Instrument [Line Items]
Debt issuance costs								$ 1,300,000
Other Term Loan [Member]
Debt Instrument [Line Items]
Additional increase in borrowing amount									700,000
Interest expense									100,000
Repaying of term loan									$ 1,500,000
Short-term debt, Interest rate increase								12.00%

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Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Income Statement [Abstract]
NET REVENUE	$ 40,603	$ 24,672	$ 88,817	$ 53,576	$ 73,279	$ 36,459
COST OF GOODS SOLD	23,076	14,262	52,859	35,919	47,296	22,781
GROSS PROFIT	17,527	10,410	35,958	17,657	25,983	13,678
OPERATING EXPENSES:
Research and development	2,634	790	5,657	2,810	3,655	3,698
Sales and distribution	17,307	11,560	38,409	28,516	40,467	26,928
General and administrative	7,999	2,767	15,779	8,103	11,290	5,645
TOTAL OPERATING EXPENSES:	27,940	15,117	59,845	39,429	55,412	36,271
OPERATING LOSS	(10,413)	(4,707)	(23,887)	(21,772)	(29,429)	(22,593)
INTEREST EXPENSE-net	875	439	3,368	1,503	2,353	412
OTHER EXPENSE (INCOME)-net	21	(19)	53	(45)	(14)	24
LOSS BEFORE INCOME TAXES	(11,309)	(5,127)	(27,308)	(23,230)	(31,768)	(23,029)
PROVISION FOR INCOME TAXES	8		23	3	55	38
NET LOSS	$ (11,317)	$ (5,127)	$ (27,331)	$ (23,233)	$ (31,823)	$ (23,067)
Net loss per share, basic and diluted	$ (0.75)	$ (0.49)	$ (2.11)	$ (2.40)	$ (3.13)	$ (2.88)
Weighted-average number of shares outstanding, basic and diluted	15,134,422	10,532,926	12,971,641	9,687,078	10,160,879	8,004,804

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2019 Acquisition - Preliminary Allocation of Purchase Price to Assets Acquired and Liabilities Assumed Based on Estimated Fair Values at Acquisition Date (Detail) - Aussie Health Assets $ in Thousands	Sep. 10, 2019 USD ($)
Business Acquisition [Line Items]
Inventory	$ 297
Goodwill	745
Intangible assets	333
Net assets acquired	$ 1,375

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Credit Facility and Term Loans - Schedule of Credit Facility and Term Loans (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Total Mid Cap credit facility	$ 13,640	$ 14,451	$ 3,631
Less: deferred debt issuance costs		(400)	(100)
Term loan-non current portion	13,339	13,049	4,732
Mid Cap Credit Facility
Debt Instrument [Line Items]
MidCap credit facility	15,114	16,455	4,575
Less: deferred debt issuance costs	(1,442)	(1,960)	(876)
Less discount associated with issuance of warrants	(32)	(44)
Total Mid Cap credit facility	13,640	14,451	3,631
Less discount associated with issuance of warrants		(44)	$ (68)
Horizon Term Loan
Debt Instrument [Line Items]
Horizon term loan	15,000	15,000
Less: deferred debt issuance costs	(906)	(1,022)
Less discount associated with issuance of warrants	(755)	(929)
Total Horizon term loan	13,339	13,049
Less-current portion	0	0
Term loan-non current portion	$ 13,339	$ 13,049

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PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

5. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of December 31, 2017 and 2018:

	December 31, 2017			December 31, 2018
Computer equipment and software	$	392		$	454
Furniture, fixtures and equipment		429			311
Leasehold improvements		47			47
Subtotal		868			812
Less: accumulated depreciation and amortization		(374	)		(544	)
Property and equipment—net	$	494		$	268

Depreciation expense for property and equipment totaled $0.3 million and $0.3 million during the years ended December 31, 2017 and 2018, respectively.

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Credit Facility and Term Loans

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Debt Disclosure [Abstract]

Credit Facility and Term Loans

6.    CREDIT FACILITY AND TERM LOANS

Credit facility and term loans consisted of the following as of December 31, 2018 and September 30, 2019:

	December 31, 2018			September 30, 2019
	(in thousands)
MidCap credit facility	$	16,455		$	15,114
Less: deferred debt issuance costs		(1,960	)		(1,442	)
Less discount associated with issuance of warrants		(44	)		(32	)
Total MidCap credit facility	$	14,451		$	13,640
Horizon term loan	$	15,000		$	15,000
Less: deferred debt issuance costs		(1,022	)		(906	)
Less discount associated with issuance of warrants		(929	)		(755	)
Total Horizon term loan		13,049			13,339
Less-current portion		—			—
Term loan-non current portion	$	13,049		$	13,339

MidCap Credit Facility and Term Loan

On October 16, 2017, the Company entered into a three-year, $15.0 million revolving credit facility (the “Prior Credit Facility”) with MidCap pursuant to a credit and security agreement (the “Credit and Security Agreement”). As part of the Credit and Security Agreement, the Company also obtained a three-year, $7.0 million term loan with MidCap (the “Prior Term Loan”). On November 23, 2018, the Company exited the Prior Credit Facility with MidCap and entered into a new three-year $25.0 million revolving credit facility (the “Credit Facility”) with MidCap. The Credit Facility can be increased, subject to certain conditions, to $50.0 million. Loans under the Credit Facility are determined based on percentages of the Company’s eligible accounts receivable and eligible inventory. The Credit Facility bears interest at LIBOR plus 5.75% for outstanding borrowings. The Company is required to pay a facility availability fee of 0.5% on the average unused portion of the facility. The Credit Facility contains a minimum liquidity financial covenant that requires the Company to maintain a minimum of $5.0 million in cash on hand or availability in the Credit Facility. In 2018, the Company incurred approximately $1.3 million in debt issuance costs which has been offset against the debt and will be expensed over the three years. Unamortized debt issuance costs of $0.7 million, relating to the Prior Credit Facility, will be amortized in accordance with the terms of the Credit Facility. As of December 31, 2018, there was $16.5 million outstanding on the Credit Facility and an available balance of approximately $1.4 million. As of September 30, 2019, there was $15.1 million outstanding on the Credit Facility and an available balance of approximately $0.8 million. As of September 30, 2019, the Company was in compliance with the financial covenants contained within the Credit Facility.

The Company recorded interest expense from the credit facilities of approximately $0.2 million and $0.4 million for the three months ended September 30, 2018 and 2019, respectively, which included $0.1 million and $0.2 million, respectively, relating to debt issuance costs. The Company recorded interest expense from the credit facilities of approximately $0.8 million and $1.9 million for the nine months ended September 30, 2018 and 2019, respectively, which included $0.3 million and $0.5 million, respectively, relating to debt issuance costs.

The Company recorded interest expense from the Prior Term Loan of $0.2 million and $0.7 million for the three and nine months ended September 30, 2018, respectively, which included less than $0.1 million relating to debt issuance costs for each period.

On December 31, 2018, the Company repaid the Prior Term Loan with MidCap for $4.9 million as part of the entry into a new term loan with Horizon, including $0.1 million of a prepayment penalty.

Horizon Term Loan

On December 31, 2018, the Company entered into a new term loan agreement with Horizon (the “Horizon Loan Agreement”). As part of the agreement, the Company obtained a five-year $15.0 million term loan (the “Term Loan”). The Term Loan bears interest at 9.90% plus the amount by which one-month LIBOR (or, if LIBOR is no longer widely used or available, a successor benchmark rate, which successor rate shall be applied in a manner consistent with market practice, or if there is no consistent market practice, such successor rate shall be applied in a manner reasonably determined by Horizon) exceeds 2.50% for outstanding borrowings and payments on principal are made on a monthly basis. The maturity date of the Term Loan is January 2023. The Term Loan contains minimum required EBITDA financial covenants that require the Company to achieve EBITDA of certain amounts based on the amount that the Company is permitted to borrow above $25.0 million under the Credit Facility.

In connection with the Horizon Term Loan Agreement, the Company issued to Horizon warrants to purchase 76,923 shares of its common stock at an exercise price of $15.60 per share. The warrants are exercisable and expire ten years from the date of issuance. The Company utilized the Binomial option-pricing model to determine the fair value of the warrants. The fair value of the warrants on issuance was $0.9 million, which has been recorded as a debt discount against the Term Loan.

The Company incurred approximately $1.0 million in debt issuance costs which has been offset against the debt and will expense over the five years.

The Credit Facility and the Term Loan contain a minimum liquidity covenant that requires the Company to maintain at minimum $5.0 million in unrestricted cash at all times, subject to increases based on amounts drawn. Further, there are additional covenants that, among other things, restrict the ability of the Company and certain of its subsidiaries to (i) incur, assume or guarantee additional indebtedness; (ii) pay dividends or redeem or repurchase capital stock; (iii) make other restricted payments; (iv) incur liens; (v) redeem debt that is junior in right of payment to the notes; (vi) sell or otherwise dispose of assets, including capital stock of subsidiaries; (vii) enter into mergers or consolidations; and (viii) enter into transactions with affiliates. These covenants are subject to a number of exceptions and qualifications.

As of September 30, 2019, there was $15.0 million outstanding on the Term Loan and the Company was in compliance with the financial covenants contained within the loan. The Company recorded interest expense from the Term Loan of $0.5 million and $1.5 million for the three and nine months ended September 30, 2019, respectively, which included $0.1 million and less than $0.4 million, respectively, relating to debt issuance costs.

Interest Expense, Net

Interest expense, net consisted of the following for the three and nine months ended September 30, 2018 and 2019:

	Three Months Ended
	September 30, 2018		September 30, 2019
	(in thousands)
Interest expense	$	439	$	955
Interest income		—		(80	)
Total Interest expense, net	$	439	$	875

	Nine Months Ended
	September 30, 2018		September 30, 2019
	(in thousands)
Interest expense	$	1,503	$	3,456
Interest income		—		(88	)
Total Interest expense, net	$	1,503	$	3,368

9. CREDIT FACILITY AND TERM LOANS

Credit facility and term loans consisted of the following as of December 31, 2017 and 2018:

	December 31, 2017			December 31, 2018
Mid Cap Credit facility	$	4,575		$	16,455
Less: deferred debt issuance costs		(876	)		(1,960	)
Less discount associated with issuance of warrants		(68	)		(44	)
Total Mid Cap credit facility	$	3,631		$	14,451
Mid Cap Term loan	$	6,841		$	—
Less: deferred debt issuance costs		(204	)		—
Less discount associated with issuance of warrants		(16	)		—
Total Mid Cap term loan		6,621			—
Less-current portion		(1,889	)		—
Term loan-non current portion	$	4,732		$	—
Horizon Term loan	$	—		$	15,000
Less: deferred debt issuance costs		—			(1,022	)
Less discount associated with issuance of warrants		—			(929	)
Total Horizon term loan		—			13,049
Less-current portion		—			—
Term loan-non current portion	$	—		$	13,049

Midcap Credit Facility and Term Loan

On October 16, 2017, the Company entered into a three-year $15.0 million revolving credit facility (“Credit Facility”) with Midcap pursuant to a Credit and Security Agreement. The Credit Facility can be, subject to certain conditions, increased to $30.0 million. Loans under the Credit Facility are determined based on percentages of its eligible accounts receivable and eligible inventory. The Credit Facility bears interest at LIBOR plus 5.75% for outstanding borrowings. The Company is required to pay a facility availability fee of 0.5% on the average unused portion of the facility. The Credit Facility contains certain financial covenants that require the Company to maintain minimum liquidity targets and other ratios starting in October 2018. The Company incurred approximately $1.2 million in debt issuance costs, which has been offset against the debt and will be expensed over the three years. As of December 31, 2017, there was $4.6 million outstanding on the Credit Facility and an available balance of approximately $5.6 million.

As part of the Credit and Security Agreement entered into on October 16, 2017, the Company also obtained a three-year $7.0 million term loan (“Term Loan”) with MidCap. The Term Loan bears interest at LIBOR plus 9.75% for outstanding borrowings and payments on principal are made on a monthly basis. The maturity date of the Term Loan is October 2020.

In October 2017, in connection with the Mid Cap Credit Facility and Term Loan agreement, MGI issued warrants to purchase 139,194 shares of its B-1 Preferred Shares at an exercise price of $5.029 per share. In connection with the Merger, the warrants became exercisable for 44,871 shares of the Company’s common stock at an exercise price of $15.60 per share. The warrants are currently exercisable and expire ten years from the date of issuance. The Company utilized the Binomial option-pricing model to determine the fair value of the warrants. The fair value of the warrants on issuance was $0.1 million, which has been recorded as a debt discount against the Mid Cap Credit Facility and Term Loan. For the year-ended December 31, 2017 and 2018, the Company expensed less than $0.1 million related to these warrants in each year.

On November 23, 2018, the Company exited the Credit Facility with MidCap and entered into a new three-year $25.0 million revolving credit facility (“New Credit Facility”) with MidCap. The New Credit Facility can be increased, subject to certain conditions, to $50.0 million. Loans under the New Credit Facility are determined based on percentages of the Company’s eligible accounts receivable and eligible inventory. The New Credit Facility bears interest at LIBOR plus 5.75% for outstanding borrowings. The Company is required to pay a facility availability fee of 0.5% on the average unused portion of the facility. The New Credit Facility contains a minimum liquidity financial covenant that requires the Company to maintain a minimum of $5.0 million in cash on hand or availability in the New Credit Facility. In 2018, the Company incurred approximately $1.3 million in debt issuance costs which has been offset against the debt and will be expensed over the three years. Unamortized debt issuance costs of $0.7 million, relating to the previous Credit Facility, will be amortized in accordance with the terms of the New Credit Facility. As of December 31, 2018, there was $16.5 million outstanding on the Credit Facility and an available balance of approximately $1.4 million.

The Company recorded interest expense from the credit facilities of approximately $0.2 million and $1.2 million for the year-ended December 31, 2017 and 2018, respectively, which included $0.1 million and $0.4 million relating to debt issuance costs, respectively.

The Company recorded interest expense from the Term Loan of less than $0.2 million and $0.8 million for the year-ended December 31, 2017 and 2018, respectively, which included less than $0.1 million and less than $0.1 million relating to debt issuance costs, respectively.

On the December 31, 2018, the Company repaid the Term Loan with MidCap for $4.9 million as part of the entering into a new term loan with Horizon Technology Finance Corporation, including $0.1 million of a prepayment penalty. The Company expensed the remaining debt issuance costs related to the Term Loan of $0.2 million, including warrants.

Horizon Term Loan

On December 31, 2018, the Company entered into a new term loan agreement with Horizon. As part of the agreement, the Company obtained a five-year $15.0 million term loan (“Horizon Term Loan”). The Horizon Term Loan bears interest at 9.90% plus the amount by which one-month LIBOR (or, if LIBOR is no longer widely used or available, a successor benchmark rate, which successor rate shall be applied in a manner consistent with market practice, or if there is no consistent market practice, such successor rate shall be applied in a manner reasonably determined by Horizon) exceeds 2.50% for outstanding borrowings and payments on principal are made on a monthly basis. The maturity date of the Horizon Term Loan is January 2023. The Horizon Term Loan contains minimum required EBITDA financial covenants that require the Company to achieve EBITDA of certain amounts based on the amount that the Company is permitted to borrow under the New Credit Facility (the “Revolving Line Indebtedness Cap”). The Horizon Loan Agreement also contains a cash collateral covenant that requires the Company to maintain a cash collateral account with an amount based on the Revolving Line Indebtedness Cap. The term loan payments of principal under the Horizon Term Loan as of December 31, 2018 are as follows:

	Year-Ending December 31
2019	$	—
2020		2,500
2021		6,000
2022		6,000
Thereafter		500
Total term loan payments	$	15,000

In connection with the Horizon Term Loan agreement, the Company issued warrants to purchase 76,923 shares of its common stock at an exercise price of $15.60 per share. The warrants are exercisable and expire ten years from the date of issuance. The Company utilized the Binomial option-pricing model to determine the fair value of the warrants. The fair value of the warrants on issuance was $0.9 million, which has been recorded as a debt discount against the Horizon Term Loan.

The Company incurred approximately $1.0 million in debt issuance costs which has been offset against the debt and will expense over the five years.

The Credit Facility and Horizon Term Loan contain a minimum liquidity covenant that requires the Company to maintain at minimum $5.0 million in unrestricted cash at all times, subject to increases based on amounts drawn. Further, there are additional covenants that, among other things, restrict the ability of the Company and certain of its subsidiaries to (i) incur, assume or guarantee additional indebtedness; (ii) pay dividends or redeem or repurchase capital stock; (iii) make other restricted payments; (iv) incur liens; (v) redeem debt that is junior in right of payment to the notes; (vi) sell or otherwise dispose of assets, including capital stock of subsidiaries; (vii) enter into mergers or consolidations; and (viii) enter into transactions with affiliates. These covenants are subject to a number of important exceptions and qualifications.

OTHER TERM LOANS

The Company at times has taken certain term loans from its key vendor as part of a program that assists in growth within the vendor’s online sales platform. These loans are short-term in nature and carry an interest rate of approximately 12%.

During 2017, the Company had borrowed an additional $0.7 million during the period and prior to obtaining the Credit Facility and Term Loan, the Company repaid all loans outstanding totaling $1.5 million. Interest paid during the year-ended December 31, 2017 was approximately $0.1 million. There have been no other term loans.

Interest expense, net

Interest expense, net consisted of the following for the years-ended December 31, 2017 and 2018:

	December 31, 2017			December 31, 2018
Interest expense	$	413		$	2,354
Interest income		(1	)		(1	)
Total Interest expense, net	$	412		$	2,353

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Credit Facility and Term Loans (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Debt Disclosure [Abstract]

Schedule of Credit Facility and Term Loans

Credit facility and term loans consisted of the following as of December 31, 2018 and September 30, 2019:

	December 31, 2018			September 30, 2019
	(in thousands)
MidCap credit facility	$	16,455		$	15,114
Less: deferred debt issuance costs		(1,960	)		(1,442	)
Less discount associated with issuance of warrants		(44	)		(32	)
Total MidCap credit facility	$	14,451		$	13,640
Horizon term loan	$	15,000		$	15,000
Less: deferred debt issuance costs		(1,022	)		(906	)
Less discount associated with issuance of warrants		(929	)		(755	)
Total Horizon term loan		13,049			13,339
Less-current portion		—			—
Term loan-non current portion	$	13,049		$	13,339

Credit facility and term loans consisted of the following as of December 31, 2017 and 2018:

	December 31, 2017			December 31, 2018
Mid Cap Credit facility	$	4,575		$	16,455
Less: deferred debt issuance costs		(876	)		(1,960	)
Less discount associated with issuance of warrants		(68	)		(44	)
Total Mid Cap credit facility	$	3,631		$	14,451
Mid Cap Term loan	$	6,841		$	—
Less: deferred debt issuance costs		(204	)		—
Less discount associated with issuance of warrants		(16	)		—
Total Mid Cap term loan		6,621			—
Less-current portion		(1,889	)		—
Term loan-non current portion	$	4,732		$	—
Horizon Term loan	$	—		$	15,000
Less: deferred debt issuance costs		—			(1,022	)
Less discount associated with issuance of warrants		—			(929	)
Total Horizon term loan		—			13,049
Less-current portion		—			—
Term loan-non current portion	$	—		$	13,049

Schedule of Term Loan Payments of Principal Under the Horizon Term Loan

The term loan payments of principal under the Horizon Term Loan as of December 31, 2018 are as follows:

	Year-Ending December 31
2019	$	—
2020		2,500
2021		6,000
2022		6,000
Thereafter		500
Total term loan payments	$	15,000

Schedule of Interest Expense, Net

Interest expense, net consisted of the following for the three and nine months ended September 30, 2018 and 2019:

	Three Months Ended
	September 30, 2018		September 30, 2019
	(in thousands)
Interest expense	$	439	$	955
Interest income		—		(80	)
Total Interest expense, net	$	439	$	875

	Nine Months Ended
	September 30, 2018		September 30, 2019
	(in thousands)
Interest expense	$	1,503	$	3,456
Interest income		—		(88	)
Total Interest expense, net	$	1,503	$	3,368

Interest expense, net consisted of the following for the years-ended December 31, 2017 and 2018:

	December 31, 2017			December 31, 2018
Interest expense	$	413		$	2,354
Interest income		(1	)		(1	)
Total Interest expense, net	$	412		$	2,353

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ACCOUNTS RECEIVABLE (Tables)

12 Months Ended

Dec. 31, 2018

Accounts Receivable Net Current Abstract

Summary of Accounts Receivable

Accounts receivable consisted of the following as of December 31, 2017 and 2018:

	December 31, 2017			December 31, 2018
Trade accounts receivable	$	1,798		$	1,403
Allowance for doubtful accounts		(465	)		—
Accounts receivable—net	$	1,333		$	1,403

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Net Loss Per Share (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Loss per Share

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

	Three Months Ended September 30,
	2018			2019
	(in thousands)
Net loss	$	(5,127	)	$	(11,317	)
Weighted-average number of shares outstanding used in computing net loss per share, basic and diluted		10,532,926			15,134,422
Net loss per share, basic and diluted	$	(0.49	)	$	(0.75	)

	Nine Months Ended September 30,
	2018			2019
	(in thousands)
Net loss	$	(23,233	)	$	(27,331	)
Weighted-average number of shares outstanding used in computing net loss per share, basic and diluted		9,687,078			12,971,641
Net loss per share, basic and diluted	$	(2.40	)	$	(2.11	)

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

	Year-Ended December 31,
	2017			2018
Net loss	$	(23,067	)	$	(31,823	)
Weighted-average number of shares used in computing net loss per share, basic and diluted		8,004,804			10,160,879
Net loss per share, basic and diluted	$	(2.88	)	$	(3.13	)

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Inventory (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory consisted of the following as of December 31, 2018 and September 30, 2019:

	December 31, 2018		September 30, 2019
	(in thousands)
Inventory on-hand	$	24,595	$	20,214
Inventory in-transit		5,957		5,694
Inventory	$	30,552	$	25,908

Inventory consisted of the following as of December 31, 2017 and 2018:

	December 31, 2017		December 31, 2018
Inventory on-hand	$	15,703	$	24,595
Inventory in-transit		4,875		5,957
Inventory	$	20,578	$	30,552

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INCOME TAXES

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

13. INCOME TAXES

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

	December 31, 2017			December 31, 2018
Domestic	$	(22,978	)	$	(31,609	)
International		(51	)		(159	)
Total	$	(23,029	)	$	(31,768	)

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

	December 31, 2017		December 31, 2018
Current:
Federal	$	—	$	—
State		4		3
Foreign		34		52
Total current		38		55
Deferred:		—		—
Federal		—		—
State		—		—
Foreign		—		—
Total deferred		—		—
Income tax provision	$	38	$	55

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, 2017			December 31, 2018
Income tax benefit at statutory rates	$	(7,822	)	$	(6,666	)
Permanent differences		324			70
Foreign rate differential		13			14
State income taxes, net of federal tax benefit		(683	)		(1,081	)
Effect of tax rate change		4,045			—
Other		—			441
Valuation allowance		4,161			7,277
Total income tax expense	$	38		$	55

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

	December 31, 2017			December 31, 2018
Deferred tax assets:
Sales returns reserve	$	60		$	79
Allowance for doubtful accounts		114			—
Net operating loss carryforwards		8,008			14,204
Stock options		82			180
Deferred revenue		30			12
Fixed assets		12			21
Interest expense limitation		—			574
Other		9			97
Less: valuation allowances		(7,890	)		(15,167	)
Net deferred tax assets		425			—
Deferred tax liabilities:
Foreign currency exchange gain/loss		—			—
Accrued expenses		(425	)		—
Net deferred tax liabilities		(425	)		—
Net deferred tax assets		—			—
Net deferred tax assets (liabilities)	$	—		$	—

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, 2018, the Company had approximately $58.0 million of gross federal NOLs which will begin to expire in fiscal year 2034 if unused. The Company also has approximately $32.3 million apportioned state and local NOLs that expire between 2025 and 2035, depending on the state, if not used. The net operating loss (“NOL”) carryforwards for federal and state income tax purposes which, generally, can be used to reduce future taxable income. The Company’s use of its NOL carryforwards is limited under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), as it has had a change in ownership of more than 50% of its capital stock over a three-year period as measured under Section 382 of the Code. These complex changes of ownership rules generally focus on ownership changes involving shareholders owning directly or indirectly 5% or more of its stock, including certain public “groups” of shareholders as set forth under Section 382 of the Code, including those arising from new stock issuances and other equity transactions. Some of these NOL carryforwards will expire if they are not used within certain periods.

On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJ Act”) was enacted into law. The TCJ Act provides for significant changes to the Code that impact corporate taxation requirements, such as the reduction of the federal tax rate for corporations from 35% to 21% and changes or limitations to certain tax deductions. The impact of the rate change was $4.0 million for December 31, 2017, which had no tax impact due to offsetting movement in the Valuation Allowance. The reduction in the corporate tax rate under the TCJ Act will also require a one-time revaluation of certain tax-related assets to reflect their value at the lower corporate tax rate of 21%.

In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations where a company does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the TCJ Act. It allows companies to record provisional amounts during a measurement period, which is not to extend beyond one year. Consistent with SAB 118, the Company was able to make reasonable estimates and recorded provisional amounts related to the impact of tax reform. As of December 2018, all provisional amounts have been finalized and there will be no adjustments made to previously disclosed estimates.

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, 2018.

The Company’s major taxing jurisdictions are New Jersey, New York, Florida, Texas, Pennsylvania, Tennessee, Virginia and California. The Company files a US 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, 2017 and 2018, the Company has not recorded any tax contingency accruals for uncertain tax positions.

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Schedule II-Valuation and Qualifying Accounts and Reserves

12 Months Ended

Dec. 31, 2018

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

Schedule II-Valuation and Qualifying Accounts and Reserves

MOHAWK GROUP HOLDINGS, INC. AND SUBSIDIARIES

Schedule II—Valuation and Qualifying Accounts and Reserves

(All amounts in thousands)

Description	Balance at Beginning of Period		Charged to Costs & Expenses		Charged to Other Accounts		Accounts Written Off or Deductions		Balance at End of Period
Year-ended December 31, 2017
Allowance for doubtful accounts	$	465	$	—	$	—	$	—	$	465
Deferred tax valuation allowance	$	3,729	$	—	$	4,161	$	—	$	7,890
Year-ended December 31, 2018
Allowance for doubtful accounts	$	465	$	—	$	—	$	465	$	—
Deferred tax valuation allowance	$	7,890	$	—	$	7,277	$	—	$	15,167

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Summary of Significant Accounting Policies - Net Revenue Disaggregated by Product Categories (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended		39 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018
Disaggregation Of Revenue [Line Items]
Total net revenue	$ 40,603	$ 24,672	$ 88,817	$ 53,576	$ 73,279	$ 36,459	$ 6,200
Product Revenue
Disaggregation Of Revenue [Line Items]
Total net revenue	40,285	24,556	87,569	53,392	72,783	36,459
Product Revenue | Cookware, Kitchen Tools and Gadgets
Disaggregation Of Revenue [Line Items]
Total net revenue	1,320	2,954	5,279	9,463	11,463	12,057
Product Revenue | Environmental Appliances (i.e., Dehumidifiers and Air Conditioners)
Disaggregation Of Revenue [Line Items]
Total net revenue	27,083	16,329	52,757	27,601	34,017	7,815
Product Revenue | Hair Appliances and Accessories
Disaggregation Of Revenue [Line Items]
Total net revenue	732	935	2,590	2,991	6,510	6,196
Product Revenue | Small Home Appliances
Disaggregation Of Revenue [Line Items]
Total net revenue	8,100	3,669	17,426	10,776	14,800	4,242
Product Revenue | Portable Projectors, Speakers and Headphones
Disaggregation Of Revenue [Line Items]
Total net revenue	30	62	160	567	438	2,327
Product Revenue | Cosmetics, Skincare, and Heath Supplements
Disaggregation Of Revenue [Line Items]
Total net revenue	2,569	80	8,346	84	2,464
Product Revenue | All Others
Disaggregation Of Revenue [Line Items]
Total net revenue	451	527	1,011	1,910	1,331	2,614
Product Revenue | Batteries Chargers And Other Related Accessories
Disaggregation Of Revenue [Line Items]
Total net revenue					1,760	$ 1,208
Managed SaaS
Disaggregation Of Revenue [Line Items]
Total net revenue	$ 318	$ 116	$ 1,248	$ 184	$ 496

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Organization and Description of Business - Additional Information (Detail)					1 Months Ended			3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 14, 2019 USD ($) $ / shares shares	May 24, 2019	Sep. 04, 2018 $ / shares shares	Apr. 01, 2018 shares	Nov. 30, 2018 USD ($)	Apr. 30, 2018 shares	Oct. 31, 2017 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Nov. 23, 2018 USD ($)	Oct. 16, 2017 USD ($)
Organization And Description Of Business [Line Items]
Voting Interset Obtained By MGI Stockholders												92.00%
Operating losses								$ (10,413,000)	$ (4,707,000)	$ (23,887,000)	$ (21,772,000)	$ (29,429,000)	$ (22,593,000)
Accumulated deficit								(98,351,000)		(98,351,000)		(71,020,000)	(39,197,000)
Cash								35,686,000		35,686,000		20,029,000	5,297,000
Outstanding borrowings from lenders								27,000,000		27,000,000		27,500,000	10,300,000
Available capacity on borrowings								800,000		800,000		1,400,000	5,600,000
Equity financing								102,300,000		102,300,000		72,600,000
Reverse stock split of issued and outstanding shares of common stock		One-for-3.9
Term Loan
Organization And Description Of Business [Line Items]
Credit facility maximum borrowing amount												15,000,000		$ 25,000,000	$ 15,000,000
Outstanding borrowings from lenders								$ 15,000,000		$ 15,000,000
Term Loan | Midcap
Organization And Description Of Business [Line Items]
Credit facility maximum borrowing amount							$ 7,000,000
Outstanding borrowings from lenders					$ 0		0					0	$ 0
Horizon Term Loan
Organization And Description Of Business [Line Items]
Outstanding borrowings from lenders												15,000,000
Borrowings from term loan												15,000,000
Repaying of term loan												$ 4,900,000
Original Credit Facility | Midcap
Organization And Description Of Business [Line Items]
Credit facility maximum borrowing amount							15,000,000
Additional increase in borrowing amount							$ 30,000,000
Revolving Credit Facility | Midcap
Organization And Description Of Business [Line Items]
Credit facility maximum borrowing amount					25,000,000
Additional increase in borrowing amount					$ 50,000,000
Initial Public Offering
Organization And Description Of Business [Line Items]
Common stock, shares issued | shares	3,600,000
Shares issued, price per share | $ / shares	$ 10.00
Net proceeds from sale of common stock	$ 29,600,000
Series C Holders
Organization And Description Of Business [Line Items]
Shares outstanding | shares				900,000
All Stock And Warrants Other Than Series C Preferred Stock
Organization And Description Of Business [Line Items]
Common stock, warrants and preferred stock to common stock conversion ratio				0.3131
Series C Preferred Stock
Organization And Description Of Business [Line Items]
Preferred stock to common stock, conversion ratio				0.2564
Common stock warrants to common stock conversion ratio				0.2564
Common stock, shares issued | shares			1,900,000			5,992,750
Shares issued, price per share | $ / shares			$ 4.00

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Property and Equipment - Summary of Property and Equipment (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross		$ 812	$ 868
Less: accumulated depreciation and amortization		(544)	(374)
Property and equipment-net	$ 140	268	494
Computer Equipment and Software
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross		454	392
Furniture, Fixtures and Equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross		311	429
Leasehold Improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross		$ 47	$ 47

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Commitment And Contingencies - Schedule of future minimum lease payments under these operating leases (Detail) $ in Thousands	Dec. 31, 2018 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2019	$ 629
2020	123
2021	3
2022	0
Thereafter	0
Total minimum lease payments	$ 755

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands		12 Months Ended
	Dec. 22, 2017	Dec. 31, 2018	Dec. 31, 2017
Income Taxes Disclosure [Line Items]
Operating loss carry forwards		$ 58,000
Operating Loss Carry forwards Expiration Year		2034
Description of ownership limitations		The Company's use of its NOL carryforwards is limited under Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"), as it has had a change in ownership of more than 50% of its capital stock over a three-year period as measured under Section 382 of the Code. These complex changes of ownership rules generally focus on ownership changes involving shareholders owning directly or indirectly 5% or more of its stock, including certain public "groups" of shareholders as set forth under Section 382 of the Code, including those arising from new stock issuances and other equity transactions. Some of these NOL carryforwards will expire if they are not used within certain periods.
Federal statutory income tax rate	35.00%	21.00%
Impact of Federal Tax Rate Change			$ 4,045
State and Local Jurisdiction
Income Taxes Disclosure [Line Items]
Operating loss carry forwards		$ 32,300
State and Local Jurisdiction | Earliest Tax Year 2025
Income Taxes Disclosure [Line Items]
Operating Loss Carry forwards Expiration Year		2025
State and Local Jurisdiction | Latest Tax Year 2035
Income Taxes Disclosure [Line Items]
Operating Loss Carry forwards Expiration Year		2035

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2019 Acquisition - Unaudited Pro Forma Information (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended		39 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018
Business Acquisition [Line Items]
Net revenue as reported	$ 40,603	$ 24,672	$ 88,817	$ 53,576	$ 73,279	$ 36,459	$ 6,200
Net revenue pro forma	41,953	25,157	90,576	54,088
Operating losses	(10,413)	(4,707)	(23,887)	(21,772)	$ (29,429)	$ (22,593)
Operating loss pro forma	(10,170)	(4,617)	(23,577)	(21,687)
Aussie Health Assets
Business Acquisition [Line Items]
Net revenue as reported	1,350	485	1,759	512
Operating losses	$ 243	$ 90	$ 310	$ 85

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Stock-Based Compensation - Summary of Total Stock-based Compensation Expense by Function (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation expense	$ 7,716	$ 141	$ 11,835	$ 482	$ 400	$ 200
Sales and Distribution Expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation expense	1,617	5	2,533	11
Research and Development Expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation expense	1,327	8	1,878	21
General and Administrative Expense
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation expense	$ 4,772	$ 128	$ 7,424	$ 450

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Subsequent events - Additional Information (Detail) - Subsequent Event - 2019 Equity Plan	Mar. 20, 2019 shares
Subsequent Event [Line Items]
Common stock reserved for issuance	2,426,036
Restricted common stock	2,406,618

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Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
CURRENT ASSETS:
Cash	$ 35,686	$ 20,029	$ 5,297
Accounts receivable-net	3,152	1,403	1,333
Inventory	25,908	30,552	20,578
Prepaid and other current assets	6,736	5,418	3,017
Total current assets	71,482	57,402	30,225
PROPERTY AND EQUIPMENT-net	140	268	494
GOODWILL AND OTHER INTANGIBLES-net	1,071
OTHER NON-CURRENT ASSETS	135	337	452
TOTAL ASSETS	72,828	58,007	31,171
CURRENT LIABILITIES:
Credit facility	13,640	14,451	3,631
Term loans-current			1,889
Accounts payable	15,453	15,404	7,984
Accrued and other current liabilities	10,880	9,708	4,694
Total current liabilities	39,973	39,563	18,198
OTHER LIABILITIES	8	26	87
TERM LOANS	13,339	13,049	4,732
Total liabilities	53,320	52,638	23,017
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, value
Common stock, value	2	1	1
Additional paid-incapital	117,791	76,348	47,393
Accumulated deficit	(98,351)	(71,020)	(39,197)
Accumulated other comprehensive income	66	40	(43)
Total stockholders' equity	19,508	5,369	8,154
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 72,828	$ 58,007	$ 31,171

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Accrued and Other Current Liabilities -Additional Information (Details) (Detail) $ in Thousands		3 Months Ended		9 Months Ended		12 Months Ended		39 Months Ended
	Aug. 15, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Mar. 31, 2018 USD ($) HairDryer	May 31, 2018 Consumer
Accrued Expenses And Other Current Liabilities [Line Items]
NET REVENUE		$ 40,603	$ 24,672	$ 88,817	$ 53,576	$ 73,279	$ 36,459	$ 6,200
Remaining recall liability		90		90		1,512
Xtava Allure Hair Dryer
Accrued Expenses And Other Current Liabilities [Line Items]
Number of Product sold | HairDryer								170,000
Recall costs	$ 1,600			100
Legal and Other Expenses	$ 400
Legal matter yet to settle, remaining number of consumers | Consumer									1
Remaining recall liability		$ 100		$ 100		$ 1,500

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Credit Facility and Term Loans - Schedule of Interest Expense, Net (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Debt Disclosure [Abstract]
Interest expense	$ 955	$ 439	$ 3,456	$ 1,503	$ 2,354	$ 413
Interest income	(80)		(88)		(1)	(1)
Total Interest expense, net	$ 875	$ 439	$ 3,368	$ 1,503	$ 2,353	$ 412

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Consolidated Statements of Stockholders Equity - USD ($) $ in Thousands	Total	Series C Preferred Stock	Series C-1 Preferred Stock	Series B Preferred Stock	Series B-1 Preferred Stock	Common Stock	Common Stock Series C Preferred Stock	Common Stock Series C-1 Preferred Stock	Common Stock Series B Preferred Stock	Common Stock Series B-1 Preferred Stock	Common Stock March 20, 2019	Common Stock May 17, 2019	Common Stock August 2019	Common Stock June Twelve Two Thousand Nineteen	Additional Paid-in Capital	Additional Paid-in Capital Series C Preferred Stock	Additional Paid-in Capital Series C-1 Preferred Stock	Additional Paid-in Capital Series B Preferred Stock	Additional Paid-in Capital Series B-1 Preferred Stock	Accumulated Deficit	Accumulated Other Comprehensive Income/(Loss)
Beginning balance at Dec. 31, 2016	$ 11,080					$ 1									$ 27,292					$ (16,130)	$ (83)
Beginning balance, shares at Dec. 31, 2016						7,022,307
Net loss	(23,067)																			(23,067)
Issuance of preferred stock upon conversion of common stock				$ 8,415	$ 10,550													$ 8,415	$ 10,550
Issuance of preferred stock upon conversion of common stock, shares									893,056	660,587
Issuance of warrants related to debt	90														90
Stock-based compensation	1,046														1,046
Other comprehensive income (loss)	40																				40
Ending balance at Dec. 31, 2017	8,154					$ 1									47,393					(39,197)	(43)
Ending balance, shares at Dec. 31, 2017						8,575,950
Net loss	(23,233)																			(23,233)
Issuance of preferred stock upon conversion of common stock		$ 20,972	$ 6,417													$ 20,972	$ 6,417
Issuance of preferred stock upon conversion of common stock, shares							1,536,602	491,260
Issuance of common stock, shares						897,435			28,478
Stock-based compensation	482														482
Exercise of stock options	18														18
Exercise of stock options, shares						4,465
Other comprehensive income (loss)	57																				57
Ending balance at Sep. 30, 2018	12,867					$ 1									75,282					(62,430)	14
Ending balance, shares at Sep. 30, 2018						11,534,190
Beginning balance at Dec. 31, 2017	8,154					$ 1									47,393					(39,197)	(43)
Beginning balance, shares at Dec. 31, 2017						8,575,950
Net loss	(31,823)																			(31,823)
Issuance of preferred stock upon conversion of common stock		20,972	6,417													20,972	6,417
Issuance of preferred stock upon conversion of common stock, shares							1,536,602	491,260
Issuance of common stock, shares						897,435			28,478
Issuance of warrants related to debt	929														929
Stock-based compensation	619														619
Exercise of stock options	$ 18														18
Exercise of stock options, shares	4,465					4,465
Other comprehensive income (loss)	$ 83																				83
Ending balance at Dec. 31, 2018	5,369					$ 1									76,348					(71,020)	40
Ending balance, shares at Dec. 31, 2018						11,534,190
Beginning balance at Jun. 30, 2018	11,472					$ 1									68,741					(57,303)	33
Beginning balance, shares at Jun. 30, 2018						10,117,017
Net loss	(5,127)																			(5,127)
Issuance of preferred stock upon conversion of common stock		$ (17)	$ 6,417													$ (17)	$ 6,417
Issuance of preferred stock upon conversion of common stock, shares								491,260
Issuance of common stock, shares						897,435			28,478
Stock-based compensation	141														141
Other comprehensive income (loss)	(19)																				(19)
Ending balance at Sep. 30, 2018	12,867					$ 1									75,282					(62,430)	14
Ending balance, shares at Sep. 30, 2018						11,534,190
Beginning balance at Dec. 31, 2018	5,369					$ 1									76,348					(71,020)	40
Beginning balance, shares at Dec. 31, 2018						11,534,190
Net loss	(27,331)																			(27,331)
Issuance of common stock	29,607					$ 1									29,606
Issuance of restricted common stock, shares											2,406,618	19,407	84,975	64,982
Issuance of common stock, shares						3,600,000
Stock-based compensation	11,835														11,835
Exercise of stock options	$ 2														2
Exercise of stock options, shares	487					487
Other comprehensive income (loss)	$ 26																				26
Ending balance at Sep. 30, 2019	19,508					$ 2									117,791					(98,351)	66
Ending balance, shares at Sep. 30, 2019						17,710,659
Beginning balance at Jun. 30, 2019	23,115					$ 2									110,094					(87,034)	53
Beginning balance, shares at Jun. 30, 2019						17,625,241
Net loss	(11,317)																			(11,317)
Issuance costs from Initial Public Offering	(21)														(21)
Issuance of restricted common stock, shares													84,975
Stock-based compensation	7,716														7,716
Exercise of stock options	2														2
Exercise of stock options, shares						443
Other comprehensive income (loss)	13																				13
Ending balance at Sep. 30, 2019	$ 19,508					$ 2									$ 117,791					$ (98,351)	$ 66
Ending balance, shares at Sep. 30, 2019						17,710,659

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COMMITMENT AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of future minimum lease payments under these operating leases

Future minimum lease payments under these operating leases consisted of the following as of December 31, 2018:

	Year-Ending December 31
2019	$	629
2020		123
2021		3
2022		—
Thereafter		—
Total minimum lease payments	$	755

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Prepaid Expenses and Other Current Assets (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Prepaid Expense and Other Assets, Current [Abstract]

Summary of Prepaids and Other Current Assets

Prepaids and other current assets consisted of the following as of December 31, 2018 and September 30, 2019:

	December 31, 2018		September 30, 2019
	(in thousands)
Prepaid inventory	$	2,284	$	2,329
Restricted cash		550		307
Prepaid insurance		434		2,904
Deferred offering costs		1,218		—
Other		932		1,196
Prepaid and other current assets	$	5,418	$	6,736

Prepaids and other current assets consisted of the following as of December 31, 2017 and 2018:

	December 31, 2017		December 31, 2018
Prepaid inventory	$	2,230	$	2,284
Restricted cash		250		550
Deferred offering costs		—		1,218
Other		537		1,366
Prepaid and other current assets	$	3,017	$	5,418

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Inventory

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Inventory Disclosure [Abstract]

Inventory

3. INVENTORY

Inventory consisted of the following as of December 31, 2018 and September 30, 2019:

	December 31, 2018		September 30, 2019
	(in thousands)
Inventory on-hand	$	24,595	$	20,214
Inventory in-transit		5,957		5,694
Inventory	$	30,552	$	25,908

All of the Company’s inventory on-hand is held either with Amazon 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 $6.1 million and $3.9 million as of December 31, 2018 and September 30, 2019, respectively.

3. INVENTORY

Inventory consisted of the following as of December 31, 2017 and 2018:

	December 31, 2017		December 31, 2018
Inventory on-hand	$	15,703	$	24,595
Inventory in-transit		4,875		5,957
Inventory	$	20,578	$	30,552

All of the Company’s Inventory on-hand is held either with Amazon 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 is approximately $3.2 million and $6.1 million as of December 31, 2017 and December 31, 2018, respectively.

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Prepaid Expenses and Other Current Assets

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Prepaid Expense and Other Assets, Current [Abstract]

Prepaid Expenses and Other Current Assets

4. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaids and other current assets consisted of the following as of December 31, 2018 and September 30, 2019:

	December 31, 2018		September 30, 2019
	(in thousands)
Prepaid inventory	$	2,284	$	2,329
Restricted cash		550		307
Prepaid insurance		434		2,904
Deferred offering costs		1,218		—
Other		932		1,196
Prepaid and other current assets	$	5,418	$	6,736

7. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaids and other current assets consisted of the following as of December 31, 2017 and 2018:

	December 31, 2017		December 31, 2018
Prepaid inventory	$	2,230	$	2,284
Restricted cash		250		550
Deferred offering costs		—		1,218
Other		537		1,366
Prepaid and other current assets	$	3,017	$	5,418

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Stock-Based Compensation

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

7. STOCK-BASED COMPENSATION

The Company has three equity plans:

2014 Amended and Restated Equity Incentive Plan

The board of directors of MGI, a subsidiary of the Company adopted, and MGI’s stockholders approved, the Mohawk Group, Inc. 2014 Equity Incentive Plan on June 11, 2014. On March 1, 2017, MGI’s board of directors adopted, and MGI’s stockholders approved, an amendment and restatement of the 2014 Equity Incentive Plan (as amended, the “Mohawk 2014 Plan”). As of September 30, 2019, options to purchase an aggregate of 366,790 shares of the Company’s common stock were outstanding and 2,608 shares were reserved for awards available for future issuance under the Mohawk 2014 Plan.

2018 Equity Incentive Plan

The Company’s board of directors adopted the Mohawk Group Holdings, Inc. 2018 Equity Incentive Plan (the “Mohawk 2018 Plan”) on October 11, 2018. The Mohawk 2018 Plan was approved by its stockholders on May 24, 2019. As of September 30, 2019, 149,957 shares subject to restricted stock awards and options to purchase 1,530,823 shares of the Company’s common stock were outstanding and 27,366 shares were reserved for awards available for future issuance under the Mohawk 2018 Plan.

Options granted to date under the Mohawk 2014 Plan and the Mohawk 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 Mohawk Group Holdings, Inc. 2019 Equity Plan (the “2019 Equity Plan”) on March 20, 2019. The 2019 Equity Plan was approved by its stockholders on May 24, 2019. As of September 30, 2019, an aggregate of 2,426,025 shares of restricted common stock were outstanding, with no shares reserved for future issuance. Restricted shares granted under the 2019 Equity Plan shall vest in substantially equal installments on the 6th, 12th, 18th and 24th monthly anniversary of the closing of the IPO. 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, following the IPO, the Company records stock-based compensation expense related to grants made under the 2019 Equity Plan over the vesting period of the restricted shares.

The following is a summary of stock options activity during the nine months ended September 30, 2019:

	Options Outstanding
	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (years)		Aggregate Intrinsic Value
Balance—January 1, 2019		1,867,747		$	9.01		9.64	$	19,573,295
Options granted		195,975		$	9.49
Options exercised		(487	)	$	4.14			$	1,630
Options cancelled		(165,622	)	$	8.76
Balance—September 30, 2019		1,897,613		$	9.10		9.02	$	498,451
Exercisable as of September 30, 2019		218,096		$	6.31		7.55	$	359,753
Vested and expected to vest as of September 30, 2019		1,954,263		$	9.13		8.75	$	498,451

The weighted-average grant date fair value of options granted during the nine months ended September 30, 2019 was $5.67. There were no grants during the nine months ended September 30, 2018. As of September 30, 2019, the total unrecognized compensation expense related to unvested options was $13.7 million, which the Company expects to recognize over an estimated weighted average period of 2.26 years.

The following are weighted-average assumptions used in the Black-Scholes option-pricing model to determine grant fair value:

	September 30, 2018			September 30, 2019
	Weighted- Average			Weighted- Average
Expected term (in years)		0.00			5.77
Volatility		0.00	%		66.72	%
Risk-free interest rate		0.00	%		1.76	%
Dividend Yield		0.000			0.000

A summary of restricted stock activity within the Company’s equity plans and changes for the nine months ended September 30, 2019, is as follows:

Restricted Stock Awards	Shares			Weighted Average Grant- Date Fair Value
Nonvested at January 1, 2019		—		$	—
Granted		2,645,123		$	18.89
Vested		—		$	—
Forfeited		(69,141	)	$	19.50
Nonvested at September 30, 2019		2,575,982		$	18.87

Stock-based compensation expense for restricted shares granted was $6.2 million and $7.4 million for the three and nine months ended September 30, 2019, respectively. No restricted shares vested during the nine months ended September 30, 2019.

The weighted-average grant date fair value of restricted shares granted during the nine months ended September 30, 2019 was $18.89 As of September 30, 2019, the total unrecognized compensation expense related to unvested restricted shares was $41.3 million , which the Company expects to recognize over an estimated weighted-average period of 1.75 years.

The table above includes 149,957 of restricted shares that have been granted under the Mohawk 2018 Plan and included in the shares outstanding under that plan and carry dividend or voting rights applicable to the Company’s common shares.

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 for the three and nine months ended September 30, 2018 and 2019:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2019		2018		2019
	(in thousands)				(in thousands)
Sales and distribution expenses		5		1,617		11		2,533
Research and development expenses		8		1,327		21		1,878
General and administrative expenses		128		4,772		450		7,424
Total stock-based compensation expense	$	141	$	7,716	$	482	$	11,835

11. STOCK-BASED COMPENSATION

The Company has two equity plans:

2014 Amended and Restated Equity Incentive Plan

MGI’s board of directors adopted, and MGI’s stockholders approved, the Mohawk Group, Inc. 2014 Equity Incentive Plan on June 11, 2014. On March 1, 2017, MGI’s board of directors adopted, and MGI’s stockholders approved, an amendment and restatement of the 2014 Equity Incentive Plan (as amended, the “Mohawk 2014 Plan”). In addition, pursuant to the Merger Agreement, options to purchase 302,911 shares of MGI’s common stock with a weighted-average exercise price of $7.49 issued and outstanding immediately prior to the closing of the Merger were assumed and exchanged for options to purchase 369,885 shares of the Company’s common stock with a weighted-average exercise price of $6.16. As of December 31, 2018, options to purchase an aggregate of 362,693 shares of the Company’s common stock were outstanding and 7,192 shares were reserved for awards available for future issuance under the Mohawk 2014 Plan. Notwithstanding the foregoing, the Mohawk 2014 Plan will continue to govern outstanding awards granted thereunder.

2018 Equity Incentive Plan

The Company’s board of directors adopted the Mohawk Group Holdings, Inc. 2018 Equity Incentive Plan (the “Mohawk 2018 Plan”) on October 11, 2018. The Company’s Mohawk 2018 Plan has not been approved by its stockholders. As of December 31, 2018, options to purchase 1,505,054 shares of the Company’s common stock were outstanding and 203,092 shares were available for future under the Mohawk 2018 Plan.

Options granted to date generally vest 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. Options granted are generally exercisable for up to 10 years subject to continued service with the Company.

The following is a summary of stock options activity during the year-ended December 31, 2018:

	Options Outstanding
	Number of Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (years)		Aggregate Intrinsic Value
Balance—January 1, 2018		437,400		$	6.01
Options granted		1,547,938		$	9.72
Options exercised		(4,465	)	$	4.13			$	14,410
Options cancelled		(113,126	)	$	7.02
Balance—December 31, 2018		1,867,747		$	9.01		9.64	$	19,573,295
Exercisable as of December 31, 2018		181,701		$	5.85		7.65	$	2,480,184
Vested and expected to vest as of December 31, 2018		1,867,747		$	9.01		9.64	$	19,573,295

Stock-based compensation expense for options granted was $0.2 million and $0.4 million for the years ended December 31, 2017 and 2018, respectively.

The weighted-average grant date fair value of options granted during 2017 and 2018 was $3.51 and $11.78, respectively. As of December 31, 2017 and 2018, the total unrecognized compensation expense related to unvested options was $0.8 million and $18.2 million, respectively, which the Company expects to recognize over an estimated weighted-average period of 1.4 and 2.9 years, respectively.

The following are weighted-average assumptions used in the Black-Scholes option-pricing model with to determine grant fair value:

	2017			2018
	Weighted- Average			Weighted- Average
Expected term (in years)		5.91			5.73
Volatility		53.51	%		55.06	%
Risk-free interest rate		2.16	%		2.59	%
Dividend Yield		0.000			0.000

Founder Shares

As part of the initial creation of MGI each of the MGI founders contributed capital and intellectual property in connection with the formation of the business in exchange for shares of common stock. MGI and founders agreed to certain vesting provisions as part of the initial issuance of these shares. These vesting provisions gave the MGI a right to repurchase unvested shares if such founder would exit the Company prior to the completion of such vesting. As such, the MGI recorded no compensation expense upon issuance as the non-vested shares only have value if any of the founders left the business prior to shares fully vesting, and as it was not expected that any founders would terminate prior to full vesting of their shares.

In March 2017, the MGI entered into an agreement with one founder, extending the vesting provisions of these shares by 18 months. As such, MGI valued the remaining shares to vest at their estimated fair-market-value totaling $0.5 million and will expense that amount over the remaining vesting period. For years ended December 31, 2017 and 2018, the Company recorded $0.3 million and $0.2 million in stock-based compensation expense related to this modification.

In March 2017, the MGI entered into an agreement with a second founder, in which the founder agreed to step down from the Board of Directors and any management roles held at the Company and in turn the Company did not exercise its right to repurchase the shares. As such, the MGI valued the remaining unvested shares at their estimated fair-market-value totaling $0.5 million and the Company expensed that amount as stock-based compensation in the period. As of March 2017, that founder has no active role with MGI or the Company.

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Net Loss Per Share

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Earnings Per Share [Abstract]

Net Loss Per Share

8. 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 reflects 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 restricted shares 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 restricted shares are considered a participating security and the Company is required to apply the two-class method to consider the impact of the restricted shares 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 common shares and restricted shares.

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

	Three Months Ended September 30,
	2018			2019
	(in thousands)
Net loss	$	(5,127	)	$	(11,317	)
Weighted-average number of shares outstanding used in computing net loss per share, basic and diluted		10,532,926			15,134,422
Net loss per share, basic and diluted	$	(0.49	)	$	(0.75	)

	Nine Months Ended September 30,
	2018			2019
	(in thousands)
Net loss	$	(23,233	)	$	(27,331	)
Weighted-average number of shares outstanding used in computing net loss per share, basic and diluted		9,687,078			12,971,641
Net loss per share, basic and diluted	$	(2.40	)	$	(2.11	)

15. NET LOSS PER SHARE

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

	Year-Ended December 31,
	2017			2018
Net loss	$	(23,067	)	$	(31,823	)
Weighted-average number of shares used in computing net loss per share, basic and diluted		8,004,804			10,160,879
Net loss per share, basic and diluted	$	(2.88	)	$	(3.13	)

All other outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share because including them would have had an anti-dilutive effect.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation—The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial reporting and as required by Rule 10-01 of Regulation S-X. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of items of a normal and recurring nature) necessary to present fairly the financial position as of September 30, 2019, the results of operations for the three and nine months ended September 30, 2018 and 2019, the statements of stockholder’s equity for the three and nine months ended September 30, 2018 and 2019, and cash flows for the nine months ended September 30, 2018 and 2019. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year.

The condensed consolidated balance sheet as of December 31, 2018 included herein was derived from the Company’s audited consolidated financial statements as of that date, but does not include all of the information and notes required by GAAP for complete financial statements. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2018, included in the Company’s final prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”), on June 13, 2019 (the “Prospectus”).

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 (“US GAAP”).

Use of Estimates

Use of Estimates—Preparation of financial statements in conformity with 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. The most significant estimates relate to the determination of fair value of the Company’s common stock and stock-based compensation, prior to the Company’s IPO. 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.

Use of Estimates—Preparation of financial statements in conformity with US 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. The most significant estimates relate to the determination of fair value of the Company’s common stock and stock-based compensation. 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

Principles of Consolidation—The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.

Principles of Consolidation—The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.

Fair Value of Financial Instruments

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 September 30, 2019, the carrying amounts of these instruments approximated their fair values because of their short-term nature. The credit facility is carried at amortized cost and at December 31, 2018 and September 30, 2019, respectively, the carrying amount approximates fair value as the stated interest rate approximates market rates currently available to the Company. The Company estimates the fair value of the borrowings under the Horizon Term Loan to be approximately $14.7 million at each of December 31, 2018 and September 30, 2019. The Company considers the inputs utilized to determine the fair value of the borrowings to be Level 2 inputs. The Company’s financial instruments of cash and restricted cash consist of Level 1 assets at September 30, 2019. The Company’s cash and restricted cash was approximately $36.1 million and included savings deposits and overnight investments at September 30, 2019.

Assets and liabilities recorded at fair value on a recurring basis in the condensed 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.

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.

Fair Value of Financial Instruments—The Company’s financial instruments, including cash, restricted cash, net accounts receivable, accounts payable, and accrued and other current liabilities are carried at historical cost. At December 31, 2017 and 2018, the carrying amounts of these instruments approximated their fair values because of their short-term nature. The term loans and credit facility are carried at amortized cost and at December 31, 2018, the carrying amount approximates fair value as the stated interest rate approximates market rates currently available to the Company.

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.

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.

Restricted Cash

Restricted Cash—The Company has restricted cash with its primary banks for use as collateral with its credit cards and required minimum restricted capital for its Chinese subsidiary which commenced operations in 2017. As of December 31, 2017, the Company has classified $0.3 million in prepaid and other current assets for collateral of its credit cards and $0.3 million cash for its Chinese subsidiary, within other non-current assets, as restricted cash. As of December 31, 2018, the Company has classified $0.6 million in prepaid and other current assets for collateral of its credit cards and $0.1 million cash for its Chinese subsidiary, within other non-current assets, as restricted cash, on the Consolidated Balance Sheets.

Accounts Receivable

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 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. At December 31, 2017 and 2018, the allowance for doubtful accounts was $0.5 million and $0.0 million, respectively.

Concentration of Credit Risk

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’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, 2017 and 2018, the Company had no customer that accounted for 10% or more of total net revenue. In addition, as of December 31, 2017 and 2018, the Company has no customer that accounted for 10% or more of gross accounts receivable. As of December 31, 2017 and 2018, approximately 90% and 79%, 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 2017, approximately 98% of the Company’s revenue was through or with the Amazon sales platform and in 2018, 95% of its net revenue was through or with the Amazon sales platform.

Property and Equipment

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.

The estimated useful lives for significant property and equipment categories are as follows:

Computer equipment and software	3 years
Furniture, fixtures, and equipment	3-5 years
Leasehold improvements and capital leases	Shorter of remaining lease term or estimated useful life

Income Taxes

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 Recoginition

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.

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 $0.3 million and $0.5 million at December 31, 2018 and September 30, 2019, respectively, which is included in accrued liabilities and represents the expected value of the refunds 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 expense and are not recorded as a reduction of revenue because the Company owns and controls all the goods before they are transferred to the customer. The Company can, at any time, direct Amazon and similarly with other third party logistics providers (“Logistics Providers”) to return the Company’s inventory to any location specified by the Company. Any returns made by customers directly to Logistics Providers are the responsibility of the Company to make customers whole and the Company retains the back-end inventory risk. Further, the Company is subject to credit risk (i.e., credit card chargebacks), establishes the prices of its products, can determine who fulfills the goods to the customer (Amazon, a Logistics Provider 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. For the three months ended September 30, 2018 and 2019, the Company had no shipping and handling revenue. For the nine months ended September 30, 2018 and 2019, shipping and handling revenue was less than $0.1 million and $0.1 million, respectively.

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.

All of the Company’s revenues as reflected on the condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2019 are recognized at a point in time.

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:

	Three Months Ended September 30, 2018 (in thousands)
	Direct		Wholesale		Managed SaaS		Total
North America	$	24,343	$	136	$	116	$	24,595
Other		77		—		—		77
Total net revenue	$	24,420	$	136	$	116	$	24,672

	Three Months Ended September 30, 2019 (in thousands)
	Direct		Wholesale		Managed SaaS		Total
North America	$	40,007	$	259	$	318	$	40,584
Other		19		—		—		19
Total net revenue	$	40,026	$	259	$	318	$	40,603

	Nine Months Ended September 30, 2018 (in thousands)
	Direct		Wholesale		Managed SaaS		Total
North America	$	49,498	$	3,668	$	184	$	53,350
Other		164		62		—		226
Total net revenue	$	49,662	$	3,730	$	184	$	53,576

	Nine Months Ended September 30, 2019 (in thousands)
	Direct		Wholesale		Managed SaaS		Total
North America	$	86,312	$	1,171	$	1,248	$	88,731
Other		86		—		—		86
Total net revenue	$	86,398	$	1,171	$	1,248	$	88,817

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

	Three Months Ended September 30,
	2018		2019
	(in thousands)
Environmental appliances (i.e., dehumidifiers and air conditioners)	$	16,329	$	27,083
Small home appliances		3,669		8,100
Cosmetics, skincare, and heath supplements		80		2,569
Cookware, kitchen tools and gadgets		2,954		1,320
Hair appliances and accessories		935		732
Portable projectors, speakers and headphones		62		30
All others		527		451
Total net product revenue		24,556		40,285
Managed SaaS		116		318
Total net revenue	$	24,672	$	40,603

	Nine Months Ended September 30,
	2018		2019
	(in thousands)
Environmental appliances (i.e., dehumidifiers and air conditioners)	$	27,601	$	52,757
Small home appliances		10,776		17,426
Cosmetics, skincare, and heath supplements		84		8,346
Cookware, kitchen tools and gadgets		9,463		5,279
Hair appliances and accessories		2,991		2,590
Portable projectors, speakers and headphones		567		160
All others		1,910		1,011
Total net product revenue		53,392		87,569
Managed SaaS		184		1,248
Total net revenue	$	53,576	$	88,817

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. The Company adopted ASC Topic 606 as of January 1, 2017 using the full retrospective method. The standard did not affect the Company’s consolidated net loss, financial position, or cash flows. There were no changes to the timing of revenue recognition as a result of the adoption.

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 $0.2 million and $0.3 million at December 31, 2017 and 2018, respectively, 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 expense 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 and similarly with other 3rd party logistics providers (“Logistics Providers”), to return the Company’s inventory to any location specified by the Company. Any returns made by customers directly to Logistic Providers is the responsibility of the Company to make customers whole 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 year-end December 31, 2017 and 2018 were less than $0.1 million and $0.0 million, respectively.

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.

All of the Company’s revenues as reflected on the consolidated statements of operations for the years ended December 31, 2017 and 2018 are recognized at a point in time.

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:

	Direct		Year-Ended December 31, 2017
			Wholesale		Managed SaaS		Total
North America	$	35,356	$	491	$	—	$	35,847
Other		612		—		—		612
Total net revenue	$	35,968	$	491	$	—	$	36,459

	Direct		Year-Ended December 31, 2018
			Wholesale		Managed SaaS		Total
North America	$	68,884	$	3,666	$	496	$	73,046
Other		171		62		—		233
Total net revenue	$	69,055	$	3,728	$	496	$	73,279

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

	Year-ended December 31,
	2017		2018
Cookware, kitchen tools and gadgets	$	12,057	$	11,463
Environmental appliances (i.e., dehumidifiers and air conditioners)		7,815		34,017
Hair appliances and accessories		6,196		6,510
Small home appliances		4,242		14,800
Portable projectors, speakers and headphones		2,327		438
Batteries, chargers and other related accessories		1,208		1,760
Cosmetics, skincare, and heath supplements		—		2,464
All others		2,614		1,331
Total net product revenue		36,459		72,783
Managed SaaS		—		496
Total net revenue	$	36,459	$	73,279

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:

	Three Months Ended September 30,
	2018		2019
	(in thousands)
Environmental appliances (i.e., dehumidifiers and air conditioners)	$	16,329	$	27,083
Small home appliances		3,669		8,100
Cosmetics, skincare, and heath supplements		80		2,569
Cookware, kitchen tools and gadgets		2,954		1,320
Hair appliances and accessories		935		732
Portable projectors, speakers and headphones		62		30
All others		527		451
Total net product revenue		24,556		40,285
Managed SaaS		116		318
Total net revenue	$	24,672	$	40,603

	Nine Months Ended September 30,
	2018		2019
	(in thousands)
Environmental appliances (i.e., dehumidifiers and air conditioners)	$	27,601	$	52,757
Small home appliances		10,776		17,426
Cosmetics, skincare, and heath supplements		84		8,346
Cookware, kitchen tools and gadgets		9,463		5,279
Hair appliances and accessories		2,991		2,590
Portable projectors, speakers and headphones		567		160
All others		1,910		1,011
Total net product revenue		53,392		87,569
Managed SaaS		184		1,248
Total net revenue	$	53,576	$	88,817

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

	Year-ended December 31,
	2017		2018
Cookware, kitchen tools and gadgets	$	12,057	$	11,463
Environmental appliances (i.e., dehumidifiers and air conditioners)		7,815		34,017
Hair appliances and accessories		6,196		6,510
Small home appliances		4,242		14,800
Portable projectors, speakers and headphones		2,327		438
Batteries, chargers and other related accessories		1,208		1,760
Cosmetics, skincare, and heath supplements		—		2,464
All others		2,614		1,331
Total net product revenue		36,459		72,783
Managed SaaS		—		496
Total net revenue	$	36,459	$	73,279

Inventory and cost of goods sold

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 (“FIFO”) 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 “Cost of goods sold” line item in the consolidated statements of operations is comprised of the book value of inventory sold to customers during the reporting period. 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—Sales and distribution expenses consist of online advertising costs, marketing and promotional costs, sales and platform commissions, fulfillment, including shipping and handling, warehouse costs and employee compensation and benefits. 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, 2017 and 2018, the Company recognized $2.9 million and $4.5 million, respectively, for advertising costs, which consists primarily of online advertising expense. Shipping and handling expense 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 $8.2 million and $11.4 million during fiscal 2017 and 2018, respectively.

Research and Development

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.

General and Administrative

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—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 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:

• Fair Value of Common Stock. Because the Company’s common stock is not publicly traded, it must estimate the fair value of common stock, as discussed in the section “Common Stock Valuation” below.

• 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, use 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.

Common Stock Valuation

Common Stock Valuation The fair value of the Company’s common stock underlying stock options has historically been determined by its board of directors, with assistance from management and contemporaneous third-party valuations. Given the absence of a public trading market for its common stock and in accordance with the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately Held Company Equity Securities Issued as Compensation, or the Practice Aid, the Company’s board of directors has exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of its common stock at each grant date. These factors include:

• contemporaneous third-party valuations of the Company’s common stock;

• the Company’s operating and financial performance;

• current business conditions and projections;

• the likelihood of achieving a liquidity event for the shares of common stock underlying these stock options, such as an initial public offering or sale of the company, given prevailing market conditions;

• the lack of marketability of the Company’s common stock;

• the market performance of comparable publicly-traded e-commerce and technology companies; and

• the U.S. and global economic and capital market conditions and outlook.

In determining the fair value of the Company’s common stock, it estimated the enterprise value of its business using the market approach and the income approach. Under the income approach, forecast cash flows are discounted to the present value at a risk-adjusted discount rate. The valuation analyses determine discrete free cash flows over several years based on forecast financial information provided by the Company’s management and a terminal value for the residual period beyond the discrete forecast, which are discounted at its estimated weighted-average cost of capital to estimate its enterprise value. Under the market approach, a group of guideline publicly-traded companies with similar financial and operating characteristics as the Company is selected, and valuation multiples based on the guideline public companies’ financial information and market data are calculated. Based on the observed valuation multiples, an appropriate multiple was selected to apply to the Company’s historical and forecasted revenue results. The estimated enterprise value is then allocated to the common stock using the Option Pricing Method (OPM), and the Probability Weighted Expected Return Method (PWERM), or the hybrid method. The hybrid method applied the PWERM utilizing the probability of an exit scenario, and the OPM was used in the remaining private scenario.

For options granted prior to October 2018, the Company has used a hybrid method to determine the fair value of its common stock. Under the hybrid method, multiple valuation approaches were used and then combined into a single probability weighted valuation using a PWERM. The Company’s approach for options granted starting in October 1, 2018 included the use of an initial public offering scenario and a scenario assuming continued operation as a private entity. Following the closing of the Company’s initial public offering, the fair value per share of its common stock for purposes of determining stock-based compensation will be the closing price of its common stock as reported on the applicable grant date.

Deferred Offering Costs

Deferred offering costs—Deferred offering costs, which consist of direct incremental legal, consulting, banking and accounting fees relating to anticipated equity offerings, are capitalized and will be offset against proceeds upon the consummation of the offerings within stockholders’ equity. In the event an anticipated offering is terminated, deferred offering costs will be expensed. As of December 31, 2017, there were no capitalized deferred offering costs in the consolidated balance sheets. As of December 31, 2018, there were $1.2 million of deferred offering costs categorized in prepaids and other current assets in the consolidated balance sheets.

Foreign Currency

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 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 less than $0.1 million for the years ended December 31, 2017 and 2018.

Net Loss Per Share

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

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

Recent Accounting Pronouncements

The Jumpstart Our Business Startups Act of 2012 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. The Company has elected to use this extended transition period until it is no longer an emerging growth company or until it affirmatively and irrevocably opts out of the extended transition period. As a result, the Company’s financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Adopted Accounting Standards

In November 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230) (“ASU 2016-18”). ASU 2016-18 requires that the statement of cash flows explains the change during the period in the total cash and restricted cash. Therefore, amounts generally described as restricted cash should be included with cash when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. ASU 2016-18 requires retrospective application for all periods presented and as a result the Company has recasted its condensed statement of cash flows for the nine months ended September 30, 2018 to reflect the adoption of ASU 2016-18, which was implemented on January 1, 2019.

In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718) Scope of Modification Accounting, which provides guidance on the various types of changes which would trigger modification accounting for share-based payment awards. In summary, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. The guidance is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The amendments are applied prospectively to awards modified on or after the adoption date. The new guidance was adopted on January 1, 2019 with no material impact on the condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to record most leases on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. This ASU is effective for all annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements.

In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220) (“ASU 2018-02”). ASU 2018-02 addresses the effect of the change in the U.S. federal corporate tax rate due to the enactment of the December 22, 2017 Tax Act on items within accumulated other comprehensive income (loss). The guidance will be effective for all annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements.

On August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which changes the fair value measurement disclosure requirements of ASC Topic 820. The amendments in this ASU are the result of a broader disclosure project called FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements. This ASU is effective for all annual reporting periods beginning after December 15, 2019, including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of this ASU. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting, which expands the scope of ASC Topic 718, Compensation—Stock Compensation, which currently only includes share-based payments issued to employees, to also include share-based payments issued to nonemployees for goods and services. This ASU is effective for all annual reporting periods beginning after December 15, 2019, including interim periods therein. The Company is currently evaluating the effect that the updated standard will have on its 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. The Company has elected to use this extended transition period until it is no longer an emerging growth company or until it affirmatively and irrevocably opts out of the extended transition period. As a result, the Company’s financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Adopted Accounting Standards

In March 2016, the FASB issued ASU No. 2016-09, “Compensation—Stock Compensation (Topic 718)”, which simplifies several aspects of the accounting for share-based payment transactions. This standard requires companies to record excess tax benefits and tax deficiencies as income tax benefit or expense in the statement of operations when the awards vest, or are settled, and eliminates the requirement to reclassify cash flows related to excess tax benefits from operating activities to financing activities on the statement of cash flows. This standard also allows an entity to make an accounting policy election to either estimate expected forfeitures or to account for them as they occur. For public business entities, this standard is effective for annual and interim reporting periods beginning after December 15, 2016. For all other entities, this standard is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted for all entities in any interim or annual period for which financial statements have not been issued or made available for issuance. The Company adopted this ASU beginning January 1, 2018 with no material impact on the consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230), or ASU 2016-18. ASU 2016-18 requires that the statement of cash flows explains the change during the period in the total cash and restricted cash. Therefore, amounts generally described as restricted cash should be included with cash when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. ASU 2016-18 requires retrospective application for all periods presented and as a result the Company has recasted its statement of cash flows for the years-ended December 31, 2017 and 2018 to reflect the adoption of ASU 2016-18, which was implemented on January 1, 2019.

Pending Accounting Standards

In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718) Scope of Modification Accounting,” which provides guidance on the various types of changes which would trigger modification accounting for share-based payment awards. In summary, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The guidance is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The amendments are applied prospectively to awards modified on or after the adoption date. The new guidance will be adopted on January 1, 2019 and the Company does not expect this standard to have a material impact on the consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), or ASU 2016-02, which requires lessees to record most leases on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. This ASU is effective for all annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements.

In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220) (“ASU 2018-02”). ASU 2018-02 addresses the effect of the change in the U.S. federal corporate tax rate due to the enactment of the December 22, 2017 Tax Act on items within accumulated other comprehensive income (loss). The guidance will be effective for all annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements.

On August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which changes the fair value measurement disclosure requirements of ASC 820. The amendments in this ASU are the result of a broader disclosure project called FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements. This ASU is effective for all annual reporting periods beginning after December 15, 2019, including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of this ASU. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting, which expands the scope of Topic 718, Compensation—Stock Compensation, which currently only includes share-based payments issued to employees, to also include share-based payments issued to nonemployees for goods and services. This ASU is effective for all annual reporting periods beginning after December 15, 2019, including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of this ASU. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements.

Goodwill

Goodwill—Goodwill is the excess of the acquisition cost of an acquired business over the fair value of the identifiable net assets acquired. Goodwill and other indefinite lived intangible assets are not amortized. These assets are reviewed annually (or more frequently under various conditions) for impairment using a fair value approach. The Company performs its annual, or interim, goodwill impairment test by comparing the fair value of its reporting units with their carrying amounts. The Company expects to perform its annual impairment testing during the fourth quarter of the calendar year. The Company would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. Additionally, the Company considers income tax effects from any tax-deductible goodwill on the carrying amount of its reporting unit when measuring the goodwill impairment loss, if applicable. The fair value of the reporting units is estimated using discounted cash flow methodologies, as well as considering third party market value indicators. The Company’s use of a discounted cash flow methodology includes estimates of future revenue based upon budgets and projections. The Company also develops estimates for future levels of gross and operating profits and projected capital expenditures. The Company’s methodology also includes the use of estimated discount rates based upon industry and competitor analysis as well as other factors. Calculating the fair value of the reporting units requires significant estimates and assumptions by management. Should the estimates and assumptions regarding the fair value of the reporting units prove to be incorrect, the Company may be required to record impairments to its goodwill in future periods and such impairments could be material.

The Company has the option to perform a qualitative assessment to determine whether it is necessary to perform the quantitative goodwill impairment test. However, the Company may elect to perform the quantitative goodwill impairment test even if no indications of a potential impairment exist.

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Stock-Based Compensation - Summary of Weighted Average Assumptions Used in Black-Scholes Option-Pricing Model to Determine Grant Fair Value (Detail)	9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Share-based Payment Arrangement [Abstract]
Weighted-Average, Expected term (in years)	5 years 9 months 7 days	0 years	5 years 8 months 23 days	5 years 10 months 28 days
Weighted-Average, Volatility	66.72%	0.00%	55.06%	53.51%
Weighted-Average, Risk-free interest rate	1.76%	0.00%	2.59%	2.16%
Weighted-Average, Dividend Yield	0.00%	0.00%	0.00%	0.00%

XML

Income Taxes - Schedule of Federal Statutory Income Tax Rate Reconciliation (Detail) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Income tax benefit at statutory rates				$ (6,666)	$ (7,822)
Permanent differences				70	324
Foreign rate differential				14	13
State income taxes, net of federal tax benefit				(1,081)	(683)
Effect of tax rate change					4,045
Other				441
Valuation allowance				7,277	4,161
Income tax provision	$ 8	$ 23	$ 3	$ 55	$ 38

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Net loss per share - Schedule of Basic and Diluted Net Loss per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Earnings Per Share [Abstract]
Net loss	$ (11,317)	$ (5,127)	$ (27,331)	$ (23,233)	$ (31,823)	$ (23,067)
Weighted-average number of shares outstanding used in computing net loss per share, basic and diluted	15,134,422	10,532,926	12,971,641	9,687,078	10,160,879	8,004,804
Net loss per share, basic and diluted	$ (0.75)	$ (0.49)	$ (2.11)	$ (2.40)	$ (3.13)	$ (2.88)

XML

Inventory - Additional Information (Detail) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Inventory on-hand held by Amazon	$ 3.9	$ 6.1	$ 3.2

XML

Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of property and Equipment (Detail)	9 Months Ended
	Sep. 30, 2019
Computer Equipment and Software
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful life	3 years
Furniture, Fixtures and Equipment | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful life	3 years
Furniture, Fixtures and Equipment | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful life	5 years
Leasehold Improvements and Capital Leases
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful life	Shorter of remaining lease term or estimated useful life

XML

RELATED PARTY TRANSACTION

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTION

10. RELATED PARTY TRANSACTIONS

Restated Voting Agreement

On November 1, 2018, Dr. Larisa Storozhenko, Maximus Yaney and Asher Maximus I, LLC (the “Initial Designating Parties”) entered into a voting agreement with Mr. Asher Delug, one of the stockholders of the Company and a member of the Company’s board of directors, pursuant to which Mr. Delug will have the power to vote such number of shares of common stock as is equal to: (a) all of the shares of the Company’s common stock beneficially held by the Initial Designating Parties minus (b) such number of shares of common stock representing 19.9% of the total voting power of the Company’s capital stock outstanding with respect to the election of directors, the appointment of officers and any amendments of the Company’s amended and restated certificate of incorporation or amended and restated bylaws (the “Voting Agreement”).

The Voting Agreement was amended and restated pursuant to a new Voting Agreement, dated March 13, 2019, by and among MV II, LLC, Dr. Larisa Storozhenko, Mr. Maximus Yaney, Mr. Delug and the Company (the “Restated Voting Agreement”). Under the Restated Voting Agreement, each of MV II, LLC, Dr. Larisa Storozhenko and Mr. Yaney (collectively, the “Designating Parties”) agreed to relinquish the right to vote their shares of the Company’s capital stock, and any of the Company’s other equity interests (collectively, the “Voting Interests”) by granting the Company’s board of directors the sole right to vote all of the Voting Interests as the Designating Parties’ proxyholder. The Voting Interests include all shares of the Company’s common stock currently held by the Designating Parties, as well as any of the Company’s securities or other equity interests acquired by the Designating Parties in the future. Pursuant to the proxy granted by the Designating Parties, the Company’s board of directors is required to vote all of the Voting Interests in direct proportion to the voting of the shares and equity interests voted by all holders other than the Designating Parties. The proxy granted by the Designating Parties under the Restated Voting Agreement is irrevocable. In addition, the Restated Voting Agreement proxyholder may not be changed unless the Company receives the prior approval of The Nasdaq Stock Market LLC.

Under the Restated Voting Agreement, each of the Designating Parties further agreed not to purchase or otherwise acquire any shares of the Company’s capital stock or other equity securities, or any interest in any of the foregoing.

The Restated Voting Agreement became effective on June 12, 2019 and will continue until the earlier to occur of (a) a Deemed Liquidation Event unless, immediately upon such Deemed Liquidation Event, the Company’s common stock is and remains listed on The Nasdaq Stock Market LLC, or (b) Mr. Yaney’s death. For purposes of the agreement, a “Deemed Liquidation Event” means (i) the acquisition of the Company by another entity by means of any transaction or series of related transactions to which the Company is party other than a transaction or series of transactions in which the holders of the Company’s voting securities outstanding immediately prior to such transaction or series of transactions retain, immediately after such transaction or series of transactions, as a result of the Company’s shares held by such holders prior to such transaction or series of transactions, a majority of the total voting power represented by the Company’s outstanding voting securities or such other surviving or resulting entity; (ii) a sale, lease or other disposition of all or substantially all of the Company’s or its subsidiaries’ assets taken as a whole by means of any transaction or series of related transactions, except where such sale, lease or other disposition is to a wholly-owned subsidiary of the Company; or (iii) any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary; however, a Deemed Liquidation Event shall not include any transaction effected primarily to raise capital for the Company or a spin-off or similar divestiture of the Company’s product or SaaS business as part of reorganization of the Company approved by the Company’s board of directors.

Voting Agreement with Asher Delug

On April 12, 2019, the Company entered into a Voting Agreement with Asher Delug (the “Delug Voting Agreement”). The terms of the Delug Voting Agreement are substantially similar to the terms of the Restated Voting Agreement.

Under the Delug Voting Agreement, Mr. Delug agreed to relinquish his right to vote his shares of the Company’s capital stock, and any of the Company’s other equity interests (collectively, the “Delug Voting Interests”) by granting the Company’s board of directors the sole right to vote all of the Delug Voting Interests as Mr. Delug’s proxyholder. The Delug Voting Interests include all shares of the Company’s common stock currently held by Mr. Delug, as well as any of the Company’s securities or other equity interests acquired by Mr. Delug in the future. Pursuant to the proxy granted by Mr. Delug, the Company’s board of directors is required to vote all of the Delug Voting Interests in direct proportion to the voting of the shares and equity interests voted by all holders other than Mr. Delug. The proxy granted by Mr. Delug under the Delug Voting Agreement is irrevocable. In addition, the Delug Voting Agreement proxyholder may not be changed unless the Company receives the prior approval of The Nasdaq Stock Market LLC.

Under the Delug Voting Agreement, Mr. Delug further agreed not to purchase or otherwise acquire any shares of the Company’s capital stock or other equity securities, or any interest in any of the foregoing.

The Delug Voting Agreement became effective on June 12, 2019 and will continue until the earlier to occur of (a) a Deemed Liquidation Event unless, immediately upon such Deemed Liquidation Event, the Company’s common stock is and remains listed on The Nasdaq Stock Market LLC, or (b) Mr. Delug’s death. For purposes of the agreement, a “Deemed Liquidation Event” has the same meaning as in the Restated Voting Agreement.

14. RELATED PARTY TRANSACTION

Mommy Guru

The Company used a third-party vendor called Mommy Guru LLC (“Mommy Guru”) for certain product promotions, marketing activities and product rebates. In September 2017, the Company hired Mommy Guru’s CEO as the Company’s Chief Marketing Officer (“CMO”) and continued to use the services of Mommy Guru during the CMO’s employment. During the years-ended December 31, 2017, the Company paid to Mommy Guru approximately $2.4 million in fees, of which $1.9 million was incurred during the CMO’s employment, which reduces the Company’s net revenue. The Company paid to the CMO approximately $0.1 million in compensation for years-ended December 31, 2017. The CMO is no longer employed with the Company.

Yaney Voting Agreement

On November 1, 2018, Dr. Larisa Storozhenko, Maximus Yaney and Asher Maximus I, LLC (the “Initial Designating Parties”) entered into a voting agreement with Mr. Asher Delug, one of the stockholders of the Company and a member of the Company’s board of directors, pursuant to which Mr. Delug will have the power to vote such number of shares of common stock as is equal to: (a) all of the shares of the Company’s common stock beneficially held by the Initial Designating Parties minus (b) such number of shares of common stock representing 19.9% of the total voting power of the Company’s capital stock outstanding with respect to the election of directors, the appointment of officers and any amendments of the Company’s amended and restated certificate of incorporation or amended and restated bylaws (the “Voting Agreement”). The Voting Agreement will become effective upon the effectiveness of a registration statement on Form S-1 with the SEC with respect to the registration of certain shares of common stock of the Company for sale or resale and will automatically expire (i) November 1, 2019, if such registration statement is withdrawn or not declared effective by the SEC on or before November 1, 2019, (ii) upon a dissolution, winding up, liquidation or change of control of the Company, or (iii) the first date that the number of shares of the Company’s capital stock that is held collectively by the Initial Designating Parties constitutes less than 20.0% of the outstanding shares of the Company’s capital stock. Through the Voting Agreement, Mr. Delug will have voting power over an aggregate of up to 6,301,882 shares of the Company’s common stock through (i) 2,367,041 shares of common stock held directly, and (ii) 3,934,841 shares of common stock held by the Initial Designating Parties; provided, however, that the maximum number of shares over which Mr. Delug will have voting power pursuant to the Voting Agreement at any time shall be equal to: (a) all of the shares of the Company’s common stock beneficially held by the Initial Designating Parties minus (b) such number of shares of common stock representing 19.9% of the total voting power of the Company’s capital stock outstanding. As consideration for entry into the Voting Agreement, the Company can either (i) pay Mr. Yaney $0.1 million or (ii) the Company can transfer all rights and interests in Patent Application No. 15/259,675, filed with the United States Patent and Trademark Office in respect of an optical device with an electrochromic lens cap to the Designating Parties. The Voting Agreement was amended and restated pursuant to a new Voting Agreement, dated March 13, 2019, by and among MV II, LLC, Dr. Larisa Storozhenko, Mr. Maximus Yaney, Mr. Delug and the Company (the “Restated Voting Agreement”). See Subsequent Event Note 16.

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2019 Acquisition

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

2019 Acquisition

11. 2019 ACQUISITION

On September 10, 2019, the Company completed the acquisition of the assets of a personal wellness company (the “Aussie Health Assets”), whose products sell primarily on the Amazon US marketplace, for total consideration of $1.3 million, which was comprised of cash of $1.1 million and a promissory note for $0.2 million that accrues interest at a rate of 8% per annum and matures on June 10, 2020. The Company also will pay $0.1 million in the form of a working capital payment related to the inventory purchased within sixty days of closing.

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

	Total
	(in thousands)
Inventory	$	297
Goodwill		745
Intangible assets		333
Net assets acquired	$	1,375

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

	Amount allocated		Useful life (in years)
	(in thousands)
Goodwill	$	745	n.a.
Trademarks		310	5
Transition services agreement		11	< 1
Non-competition agreement		12	3
Total	$	1,078

Unaudited Pro Forma Information

The following unaudited pro forma information illustrates the impact of the Aussie Health Assets acquisition on the Company’s net revenue for the three and nine months ended September 30, 2018 and 2019. The acquisition of the Aussie Health Assets is reflected in the following unaudited pro forma information as if the acquisition had been effective on January 1, 2018.

	Three Months Ended September 30,			Three Months Ended September 30,			Nine Months Ended September 30,			Nine Months Ended September 30,
	2018			2019			2018			2019
	(in thousands)						(in thousands)
Net revenue as reported	$	24,672		$	40,603		$	53,576		$	88,817
Aussie Health net revenue	$	485		$	1,350		$	512		$	1,759
Net revenue pro forma	$	25,157		$	41,953		$	54,088		$	90,576
Operating loss as reported	$	(4,707	)	$	(10,413	)	$	(21,772	)	$	(23,887	)
Aussie Health operating income	$	90		$	243		$	85		$	310
Operating loss pro forma	$	(4,617	)	$	(10,170	)	$	(21,687	)	$	(23,577	)

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Related Party Transactions - Additional Information (Detail) - USD ($) $ in Millions			12 Months Ended
	Nov. 02, 2018	Nov. 01, 2018	Dec. 31, 2017
Mommy Guru
Related Party Transaction [Line Items]
Marketing fee paid			$ 2.4
Voting Agreement
Related Party Transaction [Line Items]
Percentage of voting power of capital stock outstanding	1990.00%	19.90%
Voting power description		Mr. Delug will have voting power over an aggregate of up to 6,301,882 shares of the Company's common stock through (i) 2,367,041 shares of common stock held directly, and (ii) 3,934,841 shares of common stock held by the Initial Designating Parties
Organizational Design Initiative | Voting Agreement | Maximum
Related Party Transaction [Line Items]
Percentage of voting power of capital stock outstanding		20.00%
Chief Marketing Officer | Mommy Guru
Related Party Transaction [Line Items]
Marketing fee paid			1.9
Compensation expense			$ 0.1
Mr Yaney
Related Party Transaction [Line Items]
Payment for consideration		$ 0.1

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Stock-Based Compensation - Summary of Stock Options Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended		12 Months Ended
	Mar. 01, 2017	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Options Outstanding, Number of Options, Shares
Options Outstanding, Number of Options, Shares, Beginning Balance		1,867,747	437,400	437,400
Options Outstanding, Number of Options, Granted, Shares		195,975	0	1,547,938
Options Outstanding, Number of Options, Exercised, Shares		(487)		(4,465)
Options Outstanding, Number of Options, Cancelled, Shares		(165,622)		(113,126)
Options Outstanding, Number of Options, Shares, Ending Balance	369,885	1,897,613		1,867,747
Options Outstanding, Number of Options Exercisable, Shares, as of September 30, 2019		218,096		181,701
Options Outstanding, Number of Options, Vested and expected to vest, Shares as of September 30, 2019		1,954,263		1,867,747
Options Outstanding, Weighted Average Exercise Price
Options Outstanding, Weighted Average Exercise Price, Beginning Balance		$ 9.01	$ 6.01	$ 6.01
Options Outstanding, Weighted Average Exercise Price, Granted		9.49		9.72
Options Outstanding, Weighted Average Exercise Price, Exercised	$ 6.16	4.14		4.13
Options Outstanding, Weighted Average Exercise Price, Cancelled		8.76		7.02
Options Outstanding, Weighted Average Exercise Price, Ending Balance		9.10		9.01
Options Outstanding, Weighted Average Exercise Price, Exercisable as of September 30, 2019		6.31		5.85
Options Outstanding, Weighted Average Exercise Price, Vested and expected to vest as of September 30, 2019		$ 9.13		$ 9.01
Options Outstanding, Aggregate Intrinsic Value		$ 19,573,295	$ 0	$ 0
Options Outstanding, Weighted Average Remaining Contractual Life (Years)		9 years 7 days		9 years 7 months 20 days
Options Outstanding, Weighted Average Remaining Contractual Life (Years), Exercisable		7 years 6 months 18 days		7 years 7 months 24 days
Options Outstanding, Weighted Average Remaining Contractual Life (Years), Vested and expected to vest		8 years 9 months		9 years 7 months 20 days
Options Outstanding, Aggregate Intrinsic Value		$ 19,573,295	$ 0	$ 0
Options Options Outstanding, Aggregate Intrinsic Value, Exercisedxercised		1,630		14,410
Options Outstanding, Aggregate Intrinsic Value		498,451		19,573,295
Options Outstanding, Aggregate Intrinsic Value, Exercisable		359,753		2,480,184
Options Outstanding, Aggregate Intrinsic Value, Vested and expected to vest		498,451		19,573,295
Options Outstanding, Aggregate Intrinsic Value		498,451		19,573,295
Options Outstanding, Aggregate Intrinsic Value, Exercisable		359,753		2,480,184
Options Outstanding, Aggregate Intrinsic Value, Vested and expected to vest		$ 498,451		$ 19,573,295

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Income Taxes - Schedule of Provision for Income Tax Expense (Benefit) (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Domestic					$ (31,609)	$ (22,978)
International					(159)	(51)
LOSS BEFORE INCOME TAXES	$ (11,309)	$ (5,127)	$ (27,308)	$ (23,230)	(31,768)	(23,029)
Current:
Federal					0	0
State					3	4
Foreign					52	34
Total current					55	38
Deferred:
Federal					0	0
State					0	0
Foreign					0	0
Total deferred					0	0
Income tax provision	$ 8		$ 23	$ 3	$ 55	$ 38

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Accounts Receivable - Summary of Accounts Receivable (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]
Trade accounts receivable		$ 1,403	$ 1,798
Allowance for doubtful accounts			(465)
Accounts receivable-net	$ 3,152	$ 1,403	$ 1,333

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Summary of Significant Accounting Policies - Net Revenue Disaggregated by Sales Channel and Geographic Region (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended		39 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017	Mar. 31, 2018
Disaggregation Of Revenue [Line Items]
Total net revenue	$ 40,603	$ 24,672	$ 88,817	$ 53,576	$ 73,279	$ 36,459	$ 6,200
Direct
Disaggregation Of Revenue [Line Items]
Total net revenue	40,026	24,420	86,398	49,662	69,055	35,968
Wholesale
Disaggregation Of Revenue [Line Items]
Total net revenue	259	136	1,171	3,730	3,728	491
Managed SaaS
Disaggregation Of Revenue [Line Items]
Total net revenue	318	116	1,248	184	496
North America
Disaggregation Of Revenue [Line Items]
Total net revenue	40,584	24,595	88,731	53,350	73,046	35,847
North America | Direct
Disaggregation Of Revenue [Line Items]
Total net revenue	40,007	24,343	86,312	49,498	68,884	35,356
North America | Wholesale
Disaggregation Of Revenue [Line Items]
Total net revenue	259	136	1,171	3,668	3,666	491
North America | Managed SaaS
Disaggregation Of Revenue [Line Items]
Total net revenue	318	116	1,248	184	496
Other
Disaggregation Of Revenue [Line Items]
Total net revenue	19	77	86	226	233	612
Other | Direct
Disaggregation Of Revenue [Line Items]
Total net revenue	$ 19	$ 77	$ 86	164	171	$ 612
Other | Wholesale
Disaggregation Of Revenue [Line Items]
Total net revenue				$ 62	$ 62

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2019 Acquisition - Additional Information (Detail) - Aussie Health Assets $ in Millions	Sep. 10, 2019 USD ($)
Business Acquisition [Line Items]
Total consideration	$ 1.3
Total consideration paid by cash	1.1
Working capital to be paid, related to inventory purchased within sixty days of closing	$ 0.1
Maximum period after closing date to pay working capital related to inventory purchased	60 days
Promissory Note
Business Acquisition [Line Items]
Total consideration paid by promissory note	$ 0.2
Accrued interest rate per annum	8.00%
Maturity date	Jun. 10, 2020

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Schedule II - Valuation and Qualifying Accounts and Reserves (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Allowance for doubtful accounts
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of Period	$ 465	$ 465
Charged to Costs and Expenses	0	0
Accounts Written off or Deduction	465
Balance at End of Period		465
Deferred tax valuation allowance
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of Period	7,890	3,729
Charged to Costs and Expenses	0	0
Charged to Other Accounts	7,277	4,161
Balance at End of Period	$ 15,167	$ 7,890

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value		$ 0.0001	$ 0.0001
Preferred stock, shares authorized		10,000,000	0
Preferred stock, shares outstanding		0	0
Common stock, par value	$ 0.0001	$ 0.0001	$ 0.0001
Common stock, shares authorized	500,000,000	500,000,000	17,332,719
Common stock, shares outstanding	17,710,659	11,534,190	8,575,950

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Accrued and Other Current Liabilities - Schedule of Components of Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Accrued Liabilities and Other Liabilities [Abstract]
Accrued compensation costs	$ 1,355	$ 2,585	$ 250
Accrual for insurance financing	2,062
Accrual for deferred financing fees		936	205
Accrued professional fees and consultants	585	484	444
Accrued logistics costs	3,015	1,424	2,017
Product related accruals	1,631	1,042	565
Sales tax payable	641	707	405
Sales return reserve	550	322	244
Accrued recall liability	90	1,512
Note payable (see note 11)	195
All other accruals	756	696	564
Accrued and other current liabilities	$ 10,880	$ 9,708	$ 4,694

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Credit Facility And Term Loans - Schedule of Long Term Debt (Details) (Detail) - Horizon Term Loan $ in Thousands	Dec. 31, 2018 USD ($)
2019	$ 0
2020	2,500
2021	6,000
2022	6,000
Thereafter	500
Total term loan payments	$ 15,000

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Consolidated Statements of Stockholders Equity (Parenthetical) - $ / shares				1 Months Ended
	Jun. 12, 2019	May 20, 2019	May 17, 2019	Aug. 31, 2019	Sep. 30, 2018	Apr. 30, 2018	Aug. 31, 2017	Mar. 31, 2017
Common Stock
Issuance of preferred stock upon conversion of common stock, shares					491,260	1,536,602
Issuance of restricted common stock	64,982	2,406,618	88,548	84,975
Restricted common stock, forfeitures			69,141
Series C Preferred Stock
Issuance of common stock, shares						5,992,750
Preferred stock conversion price, per share						$ 0.2564
Series C-1 Preferred Stock
Issuance of common stock, shares					1,915,916
Preferred stock conversion price, per share					$ 0.2564
Series B Preferred Stock
Issuance of common stock, shares								2,852,239
Preferred stock conversion price, per share								$ 0.3131
Series B-1 Preferred Stock
Issuance of common stock, shares							2,109,787
Preferred stock conversion price, per share							$ 0.3131

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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Schedule of Provision for Income Tax Expense (Benefit)

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

	December 31, 2017			December 31, 2018
Domestic	$	(22,978	)	$	(31,609	)
International		(51	)		(159	)
Total	$	(23,029	)	$	(31,768	)

	December 31, 2017		December 31, 2018
Current:
Federal	$	—	$	—
State		4		3
Foreign		34		52
Total current		38		55
Deferred:		—		—
Federal		—		—
State		—		—
Foreign		—		—
Total deferred		—		—
Income tax provision	$	38	$	55

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, 2017			December 31, 2018
Income tax benefit at statutory rates	$	(7,822	)	$	(6,666	)
Permanent differences		324			70
Foreign rate differential		13			14
State income taxes, net of federal tax benefit		(683	)		(1,081	)
Effect of tax rate change		4,045			—
Other		—			441
Valuation allowance		4,161			7,277
Total income tax expense	$	38		$	55

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, 2017			December 31, 2018
Deferred tax assets:
Sales returns reserve	$	60		$	79
Allowance for doubtful accounts		114			—
Net operating loss carryforwards		8,008			14,204
Stock options		82			180
Deferred revenue		30			12
Fixed assets		12			21
Interest expense limitation		—			574
Other		9			97
Less: valuation allowances		(7,890	)		(15,167	)
Net deferred tax assets		425			—
Deferred tax liabilities:
Foreign currency exchange gain/loss		—			—
Accrued expenses		(425	)		—
Net deferred tax liabilities		(425	)		—
Net deferred tax assets		—			—
Net deferred tax assets (liabilities)	$	—		$	—

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Accrued and Other Current Liabilities (Tables)

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Payables and Accruals [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, 2018 and September 30, 2019:

	December 31, 2018		September 30, 2019
	(in thousands)
Accrued compensation costs	$	2,585	$	1,355
Accrual for insurance financing		—		2,062
Accrual for deferred financing fees		936		—
Accrued professional fees and consultants		484		585
Accrued logistics costs		1,424		3,015
Product related accruals		1,042		1,631
Sales tax payable		707		641
Sales return reserve		322		550
Accrued recall liability		1,512		90
Note payable (see note 11)		—		195
All other accruals		696		756
Accrued and other current liabilities	$	9,708	$	10,880

Accrued expenses and other current liabilities consisted of the following as of December 31, 2017 and 2018:

	December 31, 2017		December 31, 2018
Accrued compensation costs	$	250	$	2,585
Accrual for deferred financing fees		205		936
Accrued professional fees and consultants		444		484
Accrued logistics costs		2,017		1,424
Product related accruals		565		1,042
Sales tax payable		405		707
Sales return reserve		244		322
Accrued recall liability		—		1,512
All other accruals		564		696
Accrued and other current liabilities	$	4,694	$	9,708

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STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2018

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 September 4, 2018, under the Merger Agreement, all outstanding common shares, preferred shares and warrants, excluding MGI’s Series C preferred stock (“Series C”) and warrants for Series C, converted to new common shares of the Company at a ratio of 1 to 0.3131 (the “Conversion”). All outstanding Series C, including any warrants for Series C converted on a one to 0.2564 basis to new common shares of the Company. At the time of the merger, the Company had 0.9 million shares outstanding held by certain Series C holders.

The Merger is reflected in the financial statements and financial disclosures as if the merger was effective on January 1, 2017, including the Conversion. Operations prior to the Merger are the historical operations of MGI.

After the completion of the Merger and within sixty days of the effective date of the Merger, the Company was required to file with the Securities and Exchange Commissions (the “SEC”) a registration statement on Form S-1 and must have filed becoming effective with the SEC within a one hundred and thirty-five days from such initial filing. If the Company’s filings and registrations are not completed timely, the Company may be subject to liquidation damages to Series C holders which are capped at 8% of the total proceeds invested by Series C holders. To date, the Company has met its milestone and expects that all remaining milestones will be met.

The outstanding common shares as of December 31, 2017 and 2018 were 8,575,950 and 11,534,190, respectively, derived predominantly from the conversions below.

MGI Common Shares—MGI had one class of common shares at the time of the merger. At the date of the merger, 1.1 million common shares were converted into 1.3 million shares of common shares of the Company. These shares have been reflected in the financial statements and related disclosures to have converted as follows: 1.3 million shares converted as of January 1, 2017 and less than 0.1 million shares, resulting from the exercise of stock options, was converted as of September 2018.

MGI Preferred Shares—In 2014, the MGI issued approximately 18.3 million shares of Series A preferred stock (“Series A”) with original issuance prices of $1.44 for a total of $26.3 million, net of transaction expenses. On September 4, 2018, these preferred shares converted into 5.7 million of common shares of the Company at the time of the merger. These shares have been reflected in the financial statements and related disclosures to have converted as of January 1, 2017.

In March 2017, MGI issued approximately 2.9 million shares of Series B preferred stock (“Series B”) with original issuance prices of $2.98 for a total of $8.4 million, net of transaction expenses. On September 4, 2018, these preferred shares converted into 0.9 million of common shares of the Company at the time of the merger. These shares have been reflected in the financial statements and related disclosures to have converted as of the date of issuance.

In August 2017, MGI issued approximately 2.1 million shares of Series B-1 preferred stock (“Series B-1”) with original issuance prices of $5.03 for a total of $10.6 million, net of transaction expenses. On September 4, 2018, these preferred shares converted into 0.7 million of common shares of the Company at the time of the merger. These shares have been reflected in the financial statements and related disclosures to have converted as of the date of issuance.

In April 2018, MGI commenced a Series C fundraise, which allowed it to issue 15.0 million shares or $40.0 million in Series C preferred stock. As of April 2018, MGI issued approximately 6.0 million shares Series C with original issuance prices of $4.00 for a total of $21.0 million, net of transaction expenses. On September 4, 2018, these preferred shares converted into 1.5 million of common shares of the Company at the time of the merger. These shares have been reflected in the financial statements and related disclosures to have converted as of the date of issuance.

On September 4, 2018, MGI raised additional funds as part of its Series C preferred stock financing and issued approximately 1.9 million shares of Series C preferred stock with an issuance price of $4.00 for a total of $6.4 million, net of transaction expenses. On September 4, 2018, these preferred shares converted into 0.5 million of common shares of the Company at the time of the merger. These shares have been reflected in the financial statements and related disclosures to have converted as of the date of issuance. In addition, on September 4, 2018, the Company issued warrants to purchase an aggregate of 196,364 shares of its common stock with an exercise price of $15.60 per share to certain accredited investors as consideration for providing certain placement agent services to MGI.

In connection with the Mid Cap Credit Facility and Term Loan agreement and as amended through the Merger, warrants for 44,871 shares of the Company’s common stock at an exercise price of $15.60 per share were issued. The warrants are currently exercisable and expire ten years from the date of issuance. The Company utilized the Binomial option-pricing model to determine the fair value of the warrants. The fair value of the warrants on issuance was $0.1 million.

In connection with the Horizon Term Loan agreement, the Company issued warrants to purchase 76,923 shares of its common stock at an exercise price of $15.60 per share. The Company utilized the Binomial option-pricing model to determine the fair value of the warrants. The fair value of the warrants on issuance was $0.9 million.

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Summary of Significant Accounting Policies

9 Months Ended

12 Months Ended

Sep. 30, 2019

Dec. 31, 2018

Accounting Policies [Abstract]

Summary of significant accounting policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation—The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial reporting and as required by Rule 10-01 of Regulation S-X. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of items of a normal and recurring nature) necessary to present fairly the financial position as of September 30, 2019, the results of operations for the three and nine months ended September 30, 2018 and 2019, the statements of stockholder’s equity for the three and nine months ended September 30, 2018 and 2019, and cash flows for the nine months ended September 30, 2018 and 2019. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results to be expected for the full year.

The condensed consolidated balance sheet as of December 31, 2018 included herein was derived from the Company’s audited consolidated financial statements as of that date, but does not include all of the information and notes required by GAAP for complete financial statements. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2018, included in the Company’s final prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”), on June 13, 2019 (the “Prospectus”).

Use of Estimates—Preparation of financial statements in conformity with 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. The most significant estimates relate to the determination of fair value of the Company’s common stock and stock-based compensation, prior to the Company’s IPO. 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 condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.

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.

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 $0.3 million and $0.5 million at December 31, 2018 and September 30, 2019, respectively, which is included in accrued liabilities and represents the expected value of the refunds 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 expense and are not recorded as a reduction of revenue because the Company owns and controls all the goods before they are transferred to the customer. The Company can, at any time, direct Amazon and similarly with other third party logistics providers (“Logistics Providers”) to return the Company’s inventory to any location specified by the Company. Any returns made by customers directly to Logistics Providers are the responsibility of the Company to make customers whole and the Company retains the back-end inventory risk. Further, the Company is subject to credit risk (i.e., credit card chargebacks), establishes the prices of its products, can determine who fulfills the goods to the customer (Amazon, a Logistics Provider 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. For the three months ended September 30, 2018 and 2019, the Company had no shipping and handling revenue. For the nine months ended September 30, 2018 and 2019, shipping and handling revenue was less than $0.1 million and $0.1 million, respectively.

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.

All of the Company’s revenues as reflected on the condensed consolidated statements of operations for the three and nine months ended September 30, 2018 and 2019 are recognized at a point in time.

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:

	Three Months Ended September 30, 2018 (in thousands)
	Direct		Wholesale		Managed SaaS		Total
North America	$	24,343	$	136	$	116	$	24,595
Other		77		—		—		77
Total net revenue	$	24,420	$	136	$	116	$	24,672

	Three Months Ended September 30, 2019 (in thousands)
	Direct		Wholesale		Managed SaaS		Total
North America	$	40,007	$	259	$	318	$	40,584
Other		19		—		—		19
Total net revenue	$	40,026	$	259	$	318	$	40,603

	Nine Months Ended September 30, 2018 (in thousands)
	Direct		Wholesale		Managed SaaS		Total
North America	$	49,498	$	3,668	$	184	$	53,350
Other		164		62		—		226
Total net revenue	$	49,662	$	3,730	$	184	$	53,576

	Nine Months Ended September 30, 2019 (in thousands)
	Direct		Wholesale		Managed SaaS		Total
North America	$	86,312	$	1,171	$	1,248	$	88,731
Other		86		—		—		86
Total net revenue	$	86,398	$	1,171	$	1,248	$	88,817

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

	Three Months Ended September 30,
	2018		2019
	(in thousands)
Environmental appliances (i.e., dehumidifiers and air conditioners)	$	16,329	$	27,083
Small home appliances		3,669		8,100
Cosmetics, skincare, and heath supplements		80		2,569
Cookware, kitchen tools and gadgets		2,954		1,320
Hair appliances and accessories		935		732
Portable projectors, speakers and headphones		62		30
All others		527		451
Total net product revenue		24,556		40,285
Managed SaaS		116		318
Total net revenue	$	24,672	$	40,603

	Nine Months Ended September 30,
	2018		2019
	(in thousands)
Environmental appliances (i.e., dehumidifiers and air conditioners)	$	27,601	$	52,757
Small home appliances		10,776		17,426
Cosmetics, skincare, and heath supplements		84		8,346
Cookware, kitchen tools and gadgets		9,463		5,279
Hair appliances and accessories		2,991		2,590
Portable projectors, speakers and headphones		567		160
All others		1,910		1,011
Total net product revenue		53,392		87,569
Managed SaaS		184		1,248
Total net revenue	$	53,576	$	88,817

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 September 30, 2019, the carrying amounts of these instruments approximated their fair values because of their short-term nature. The credit facility is carried at amortized cost and at December 31, 2018 and September 30, 2019, respectively, the carrying amount approximates fair value as the stated interest rate approximates market rates currently available to the Company. The Company estimates the fair value of the borrowings under the Horizon Term Loan to be approximately $14.7 million at each of December 31, 2018 and September 30, 2019. The Company considers the inputs utilized to determine the fair value of the borrowings to be Level 2 inputs. The Company’s financial instruments of cash and restricted cash consist of Level 1 assets at September 30, 2019. The Company’s cash and restricted cash was approximately $36.1 million and included savings deposits and overnight investments at September 30, 2019.

Assets and liabilities recorded at fair value on a recurring basis in the condensed 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.

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.

Goodwill—Goodwill is the excess of the acquisition cost of an acquired business over the fair value of the identifiable net assets acquired. Goodwill and other indefinite lived intangible assets are not amortized. These assets are reviewed annually (or more frequently under various conditions) for impairment using a fair value approach. The Company performs its annual, or interim, goodwill impairment test by comparing the fair value of its reporting units with their carrying amounts. The Company expects to perform its annual impairment testing during the fourth quarter of the calendar year. The Company would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. Additionally, the Company considers income tax effects from any tax-deductible goodwill on the carrying amount of its reporting unit when measuring the goodwill impairment loss, if applicable. The fair value of the reporting units is estimated using discounted cash flow methodologies, as well as considering third party market value indicators. The Company’s use of a discounted cash flow methodology includes estimates of future revenue based upon budgets and projections. The Company also develops estimates for future levels of gross and operating profits and projected capital expenditures. The Company’s methodology also includes the use of estimated discount rates based upon industry and competitor analysis as well as other factors. Calculating the fair value of the reporting units requires significant estimates and assumptions by management. Should the estimates and assumptions regarding the fair value of the reporting units prove to be incorrect, the Company may be required to record impairments to its goodwill in future periods and such impairments could be material.

The Company has the option to perform a qualitative assessment to determine whether it is necessary to perform the quantitative goodwill impairment test. However, the Company may elect to perform the quantitative goodwill impairment test even if no indications of a potential impairment exist.

Recent Accounting Pronouncements

The Jumpstart Our Business Startups Act of 2012 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. The Company has elected to use this extended transition period until it is no longer an emerging growth company or until it affirmatively and irrevocably opts out of the extended transition period. As a result, the Company’s financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Adopted Accounting Standards

In November 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230) (“ASU 2016-18”). ASU 2016-18 requires that the statement of cash flows explains the change during the period in the total cash and restricted cash. Therefore, amounts generally described as restricted cash should be included with cash when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. ASU 2016-18 requires retrospective application for all periods presented and as a result the Company has recasted its condensed statement of cash flows for the nine months ended September 30, 2018 to reflect the adoption of ASU 2016-18, which was implemented on January 1, 2019.

In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718) Scope of Modification Accounting, which provides guidance on the various types of changes which would trigger modification accounting for share-based payment awards. In summary, an entity would not apply modification accounting if the fair value, vesting conditions and classification of the awards are the same immediately before and after the modification. The guidance is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The amendments are applied prospectively to awards modified on or after the adoption date. The new guidance was adopted on January 1, 2019 with no material impact on the condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to record most leases on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. This ASU is effective for all annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements.

In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220) (“ASU 2018-02”). ASU 2018-02 addresses the effect of the change in the U.S. federal corporate tax rate due to the enactment of the December 22, 2017 Tax Act on items within accumulated other comprehensive income (loss). The guidance will be effective for all annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements.

On August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which changes the fair value measurement disclosure requirements of ASC Topic 820. The amendments in this ASU are the result of a broader disclosure project called FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements. This ASU is effective for all annual reporting periods beginning after December 15, 2019, including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of this ASU. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting, which expands the scope of ASC Topic 718, Compensation—Stock Compensation, which currently only includes share-based payments issued to employees, to also include share-based payments issued to nonemployees for goods and services. This ASU is effective for all annual reporting periods beginning after December 15, 2019, including interim periods therein. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements.

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 (“US GAAP”).

Use of Estimates—Preparation of financial statements in conformity with US 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. The most significant estimates relate to the determination of fair value of the Company’s common stock and stock-based compensation. 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 inter-company balances and transactions have been eliminated in consolidation.

Fair Value of Financial Instruments—The Company’s financial instruments, including cash, restricted cash, net accounts receivable, accounts payable, and accrued and other current liabilities are carried at historical cost. At December 31, 2017 and 2018, the carrying amounts of these instruments approximated their fair values because of their short-term nature. The term loans and credit facility are carried at amortized cost and at December 31, 2018, the carrying amount approximates fair value as the stated interest rate approximates market rates currently available to the Company.

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.

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.

Restricted Cash—The Company has restricted cash with its primary banks for use as collateral with its credit cards and required minimum restricted capital for its Chinese subsidiary which commenced operations in 2017. As of December 31, 2017, the Company has classified $0.3 million in prepaid and other current assets for collateral of its credit cards and $0.3 million cash for its Chinese subsidiary, within other non-current assets, as restricted cash. As of December 31, 2018, the Company has classified $0.6 million in prepaid and other current assets for collateral of its credit cards and $0.1 million cash for its Chinese subsidiary, within other non-current assets, as restricted cash, 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 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. At December 31, 2017 and 2018, the allowance for doubtful accounts was $0.5 million and $0.0 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’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, 2017 and 2018, the Company had no customer that accounted for 10% or more of total net revenue. In addition, as of December 31, 2017 and 2018, the Company has no customer that accounted for 10% or more of gross accounts receivable. As of December 31, 2017 and 2018, approximately 90% and 79%, 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 2017, approximately 98% of the Company’s revenue was through or with the Amazon sales platform and in 2018, 95% 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.

The estimated useful lives for significant property and equipment categories are as follows:

Computer equipment and software	3 years
Furniture, fixtures, and equipment	3-5 years
Leasehold improvements and capital leases	Shorter of remaining lease term or estimated useful life

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. The Company adopted ASC Topic 606 as of January 1, 2017 using the full retrospective method. The standard did not affect the Company’s consolidated net loss, financial position, or cash flows. There were no changes to the timing of revenue recognition as a result of the adoption.

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 $0.2 million and $0.3 million at December 31, 2017 and 2018, respectively, 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 expense 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 and similarly with other 3rd party logistics providers (“Logistics Providers”), to return the Company’s inventory to any location specified by the Company. Any returns made by customers directly to Logistic Providers is the responsibility of the Company to make customers whole 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 year-end December 31, 2017 and 2018 were less than $0.1 million and $0.0 million, respectively.

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.

All of the Company’s revenues as reflected on the consolidated statements of operations for the years ended December 31, 2017 and 2018 are recognized at a point in time.

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:

	Direct		Year-Ended December 31, 2017
			Wholesale		Managed SaaS		Total
North America	$	35,356	$	491	$	—	$	35,847
Other		612		—		—		612
Total net revenue	$	35,968	$	491	$	—	$	36,459

	Direct		Year-Ended December 31, 2018
			Wholesale		Managed SaaS		Total
North America	$	68,884	$	3,666	$	496	$	73,046
Other		171		62		—		233
Total net revenue	$	69,055	$	3,728	$	496	$	73,279

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

	Year-ended December 31,
	2017		2018
Cookware, kitchen tools and gadgets	$	12,057	$	11,463
Environmental appliances (i.e., dehumidifiers and air conditioners)		7,815		34,017
Hair appliances and accessories		6,196		6,510
Small home appliances		4,242		14,800
Portable projectors, speakers and headphones		2,327		438
Batteries, chargers and other related accessories		1,208		1,760
Cosmetics, skincare, and heath supplements		—		2,464
All others		2,614		1,331
Total net product revenue		36,459		72,783
Managed SaaS		—		496
Total net revenue	$	36,459	$	73,279

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 (“FIFO”) 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 “Cost of goods sold” line item in the consolidated statements of operations is comprised of the book value of inventory sold to customers during the reporting period. 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 platform commissions, fulfillment, including shipping and handling, warehouse costs and employee compensation and benefits. 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, 2017 and 2018, the Company recognized $2.9 million and $4.5 million, respectively, for advertising costs, which consists primarily of online advertising expense. Shipping and handling expense 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 $8.2 million and $11.4 million during fiscal 2017 and 2018, 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.

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 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:

• Fair Value of Common Stock. Because the Company’s common stock is not publicly traded, it must estimate the fair value of common stock, as discussed in the section “Common Stock Valuation” below.

• 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, use 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.

Common Stock Valuation The fair value of the Company’s common stock underlying stock options has historically been determined by its board of directors, with assistance from management and contemporaneous third-party valuations. Given the absence of a public trading market for its common stock and in accordance with the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately Held Company Equity Securities Issued as Compensation, or the Practice Aid, the Company’s board of directors has exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of its common stock at each grant date. These factors include:

• contemporaneous third-party valuations of the Company’s common stock;

• the Company’s operating and financial performance;

• current business conditions and projections;

• the likelihood of achieving a liquidity event for the shares of common stock underlying these stock options, such as an initial public offering or sale of the company, given prevailing market conditions;

• the lack of marketability of the Company’s common stock;

• the market performance of comparable publicly-traded e-commerce and technology companies; and

• the U.S. and global economic and capital market conditions and outlook.

In determining the fair value of the Company’s common stock, it estimated the enterprise value of its business using the market approach and the income approach. Under the income approach, forecast cash flows are discounted to the present value at a risk-adjusted discount rate. The valuation analyses determine discrete free cash flows over several years based on forecast financial information provided by the Company’s management and a terminal value for the residual period beyond the discrete forecast, which are discounted at its estimated weighted-average cost of capital to estimate its enterprise value. Under the market approach, a group of guideline publicly-traded companies with similar financial and operating characteristics as the Company is selected, and valuation multiples based on the guideline public companies’ financial information and market data are calculated. Based on the observed valuation multiples, an appropriate multiple was selected to apply to the Company’s historical and forecasted revenue results. The estimated enterprise value is then allocated to the common stock using the Option Pricing Method (OPM), and the Probability Weighted Expected Return Method (PWERM), or the hybrid method. The hybrid method applied the PWERM utilizing the probability of an exit scenario, and the OPM was used in the remaining private scenario.

For options granted prior to October 2018, the Company has used a hybrid method to determine the fair value of its common stock. Under the hybrid method, multiple valuation approaches were used and then combined into a single probability weighted valuation using a PWERM. The Company’s approach for options granted starting in October 1, 2018 included the use of an initial public offering scenario and a scenario assuming continued operation as a private entity. Following the closing of the Company’s initial public offering, the fair value per share of its common stock for purposes of determining stock-based compensation will be the closing price of its common stock as reported on the applicable grant date.

Deferred offering costs—Deferred offering costs, which consist of direct incremental legal, consulting, banking and accounting fees relating to anticipated equity offerings, are capitalized and will be offset against proceeds upon the consummation of the offerings within stockholders’ equity. In the event an anticipated offering is terminated, deferred offering costs will be expensed. As of December 31, 2017, there were no capitalized deferred offering costs in the consolidated balance sheets. As of December 31, 2018, there were $1.2 million of deferred offering costs categorized in prepaids and other current assets in the consolidated balance sheets.

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 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 less than $0.1 million for the years ended December 31, 2017 and 2018.

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.

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. The Company has elected to use this extended transition period until it is no longer an emerging growth company or until it affirmatively and irrevocably opts out of the extended transition period. As a result, the Company’s financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Adopted Accounting Standards

In March 2016, the FASB issued ASU No. 2016-09, “Compensation—Stock Compensation (Topic 718)”, which simplifies several aspects of the accounting for share-based payment transactions. This standard requires companies to record excess tax benefits and tax deficiencies as income tax benefit or expense in the statement of operations when the awards vest, or are settled, and eliminates the requirement to reclassify cash flows related to excess tax benefits from operating activities to financing activities on the statement of cash flows. This standard also allows an entity to make an accounting policy election to either estimate expected forfeitures or to account for them as they occur. For public business entities, this standard is effective for annual and interim reporting periods beginning after December 15, 2016. For all other entities, this standard is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted for all entities in any interim or annual period for which financial statements have not been issued or made available for issuance. The Company adopted this ASU beginning January 1, 2018 with no material impact on the consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230), or ASU 2016-18. ASU 2016-18 requires that the statement of cash flows explains the change during the period in the total cash and restricted cash. Therefore, amounts generally described as restricted cash should be included with cash when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. ASU 2016-18 requires retrospective application for all periods presented and as a result the Company has recasted its statement of cash flows for the years-ended December 31, 2017 and 2018 to reflect the adoption of ASU 2016-18, which was implemented on January 1, 2019.

Pending Accounting Standards

In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718) Scope of Modification Accounting,” which provides guidance on the various types of changes which would trigger modification accounting for share-based payment awards. In summary, an entity would not apply modification accounting if the fair value, vesting conditions, and classification of the awards are the same immediately before and after the modification. The guidance is effective for annual periods beginning after December 15, 2018, and interim periods within those annual periods. The amendments are applied prospectively to awards modified on or after the adoption date. The new guidance will be adopted on January 1, 2019 and the Company does not expect this standard to have a material impact on the consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), or ASU 2016-02, which requires lessees to record most leases on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. ASU 2016-02 states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. This ASU is effective for all annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements.

In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220) (“ASU 2018-02”). ASU 2018-02 addresses the effect of the change in the U.S. federal corporate tax rate due to the enactment of the December 22, 2017 Tax Act on items within accumulated other comprehensive income (loss). The guidance will be effective for all annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements.

On August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which changes the fair value measurement disclosure requirements of ASC 820. The amendments in this ASU are the result of a broader disclosure project called FASB Concepts Statement, Conceptual Framework for Financial Reporting—Chapter 8: Notes to Financial Statements. This ASU is effective for all annual reporting periods beginning after December 15, 2019, including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of this ASU. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting, which expands the scope of Topic 718, Compensation—Stock Compensation, which currently only includes share-based payments issued to employees, to also include share-based payments issued to nonemployees for goods and services. This ASU is effective for all annual reporting periods beginning after December 15, 2019, including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of this ASU. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements.

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FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

6. FAIR VALUE MEASUREMENTS

The Company’s financial instruments consist of Level 1 assets at December 31, 2017 and 2018. The Company’s cash and restricted cash was $5.8 million and $20.7 million and included savings deposits and overnight investments at December 31, 2017 and 2018.