Acquisition (Tables)

6 Months Ended

Jun. 30, 2022

Business Acquisition [Line Items]

Pro Forma Information

The following unaudited pro forma information illustrates the impact of the acquisitions on the Company’s net revenue for the three and six months ended June 30, 2021. The acquisitions are reflected in the following pro forma information as if the acquisitions had occurred on January 1, 2021.

	Three Months Ended June 30, 2021		Six Months Ended June 30, 2021
	(in thousands)
Net revenue as reported	$	68,188	$	116,324
Healing Solutions net revenue (1)		—		4,600
Squatty Potty net revenue (2)		1,466		6,024
Photo Paper Direct net revenue (3)		1,904		6,807
Net revenue pro forma	$	71,558	$	133,755
Operating income (loss) as reported	$	4,468	$	(23,286	)
Healing Solutions income (1)		—		382
Squatty Potty income (2)		301		1,772
Photo Paper Direct income (3)		281		2,114
Operating loss pro forma	$	5,050	$	(19,018	)

(1) In the accompanying condensed consolidated financial statements for the three and six months-ended June 30, 2021, net revenue, as reported, includes $11.7 million and $20.2 million of net revenue, respectively, from this acquisition. For the three and six months-ended June 30, 2021, operating income, as reported, includes $5.1 million and $6.4 million of operating income, respectively, from this acquisition.

(2) In the accompanying condensed consolidated financial statements for each of the three and six months-ended June 30, 2021, net revenue, as reported, includes $2.2 million of net revenue from this acquisition. For each of the three and six months-ended June 30, 2021, operating income, as reported, includes $0.7 million of operating income from this acquisition.

(3) In the accompanying condensed consolidated financial statements for each of the three and six months-ended June 30, 2021, net revenue, as reported, includes $3.1 million of net revenue from this acquisition. For each of the three and six months-ended June 30, 2021, operating income, as reported, includes $0.6 million of operating income from this acquisition.

Summary of Changes in Carrying Value of Estimated Contingent Earn-Out Liabilities

The following table summarizes the changes in the carrying value of estimated contingent earn-out liabilities (in thousands) as of December 31, 2021 (in thousands):

	December 31, 2021
	Smash Assets			Healing Solutions			Squatty Potty		Photo Paper Direct			Total
Balance—January 1, 2021	$	22,531		$	—		$	—	$	—		$	22,531
Acquisition date fair value of contingent earn-out liabilities and inventory to be settled in shares		—			16,558			3,502		911			20,971
Change in fair value of contingent earn-out liabilities		(17,291	)		(12,808	)		481		(911	)		(30,529	)
Payment of contingent earn-out liability (1)		—			(3,750	)		—		—			(3,750	)
Balance—December 31, 2021	$	5,240		$	—		$	3,983	$	—		$	9,223

(1) The $3.8 million payment relating to Healing Solutions earn-out was made with 1.4 million of the Company's common stock in November 2021. This resulted in a settlement charge of $4.2 million due to the difference of fair value of the shares issued on the settlement date versus the fair value of the earn-out on the date of the settlement.

The following table summarizes the changes in the carrying value of estimated contingent earn-out liabilities (in thousands) as of June 30, 2022 (in thousands):

	June 30, 2022
	Smash Assets			Healing Solutions		Squatty Potty			Photo Paper Direct		Total
Balance—December 31, 2021	$	5,240		$	—	$	3,983		$	—	$	9,223
Change in fair value of contingent earn-out liabilities		(4,466	)		—		—			—		(4,466	)
Payment of contingent earn-out liability		—			—		(3,983	)		—		(3,983	)
Balance—June 30, 2022	$	774		$	—	$	—		$	—	$	774

Healing Solutions LLC

Business Acquisition [Line Items]

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

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

	Amount allocated
	(in thousands)
Cash purchase price	$	15,280
1,387,759 shares of Common Stock issued at the Closing		39,454
Seller note for inventory		5,285
Estimated earnout liability		11,273
Total consideration to be paid	$	71,292

Amounts Assigned to Goodwill and Major Intangibles Asset Classifications

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

	Total
	(in thousands)
Inventory	$	8,215
Working Capital		202
Trademarks (10 year useful life)		22,900
Goodwill		39,975
Net assets acquired	$	71,292

Squatty Potty, LLC

Business Acquisition [Line Items]

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

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

	Amount
	allocated
	(in thousands)
Cash purchase price	$	19,040
Transition services payments		8,231
Estimated earnout liability		3,502
Total consideration	$	30,773

Amounts Assigned to Goodwill and Major Intangibles Asset Classifications

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

	Total
	(in thousands)
Inventory	$	1,471
Working Capital		230
Trademarks (10 year useful life)		6,500
Customer relationships		5,700
Goodwill (1)		16,872
Net assets acquired	$	30,773

(1) Goodwill is expected to be deductible for tax purposes. The goodwill is attributable to expected synergies resulting from integrating the Squatty Potty products into the Company’s existing sales channel.

Photo Paper Direct Ltd.

Business Acquisition [Line Items]

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

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

		Amount
		allocated
		(in thousands)
Cash purchase price	$		8,293
704,548 shares of common stock issued			11,075
Working capital adjustment			5,338
Estimated earnout liability			911
Total consideration	$		25,617

Amounts Assigned to Goodwill and Major Intangibles Asset Classifications

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

		Total
		(in thousands)
Inventory	$		2,846
PP&E			86
Real Property			848
Working Capital			2,144
Trademarks (10 year useful life)			5,400
Goodwill (1)			15,774
Deferred tax liability (2)			(1,481	)
Net assets acquired	$		25,617

(1) Estimate based on preliminary purchase price and most recent book values of tangible assets and prior to any deferred tax assets/liabilities. Subject to change based on the actual closing balance sheet and any purchase accounting adjustments. Goodwill is expected to be deductible for tax purposes. The goodwill is attributable to expected synergies resulting from integrating the Photo Paper Direct products into the Company’s existing sales channels.

(2) A measurement period adjustment was recorded that resulted in a deferred tax liability of $1.5 million, and corresponding increase in goodwill.