Annual report pursuant to Section 13 and 15(d)

Acquisitions

v3.21.1
Acquisitions
 12 Months Ended
Dec. 31, 2020
Business Combinations [Abstract]  
Acquisitions Acquisitions
Acquisition of Halo
On October 15, 2019, the Company entered into a Stock Purchase Agreement to acquire Halo and the acquisition (the "Halo Acquisition") was completed on December 19, 2019 (the “Halo Acquisition Date”), for $38.2 million. The consideration was subject to customary adjustments for Halo’s net working capital, cash, and indebtedness, and consisted of a combination of cash consideration ($20.5 million), shares of the Company’s common stock ($3.9 million), Seller Notes ($15 million), and Seller Warrants ($0.3 million). The Company incurred $0.9 million in transaction costs, which are included in general and administrative expenses.
The Halo Acquisition was accounted for under the purchase method of accounting, and accordingly, the purchase price was allocated to the identifiable assets and liabilities based on their estimated fair values at the Halo Acquisition Date. The purchase price allocation is summarized as follows (in thousands):
Halo
Total purchase price $ 38,244 
Assets and Liabilities Acquired:
Assets
Property and equipment 260 
Accounts receivable 5,540 
Inventories 5,160 
Intangible assets 14,690 
Other assets 329 
Total assets 25,979 
Liabilities
Accounts payable 4,628 
Accrued liabilities 1,553 
Long term liability 168 
Total liabilities 6,349 
Net assets acquired 19,630 
Goodwill $ 18,614 
The excess of purchase price over the fair value amounts assigned to the identifiable assets acquired and liabilities assumed represents goodwill from the acquisition. The Company believes the factors that contributed to goodwill include the acquisition of a talented workforce and administrative cost synergies. The Company does not expect any portion of this goodwill to be deductible for tax purposes. See "Note 9 - Intangible assets, royalties, and goodwill" for more information.
Reverse Acquisitions of Better Choice and Bona Vida by TruPet
On May 6, 2019, Better Choice Company completed the reverse acquisitions of TruPet and Bona Vida whereby TruPet is considered the acquirer for accounting and financial reporting purposes.  The acquisitions were accounted for as asset acquisitions.
The purchase price for Better Choice Company was $37.9 million and has been allocated based on an estimate of the fair value of Better Choice Company’s assets acquired and liabilities assumed with the remainder recorded as an expense.  The loss on acquisition of Better Choice Company’s net liabilities is $39.6 million.
The purchase price for Bona Vida was $108.6 million and the estimated purchase price has been allocated based on an estimate of the fair value of assets acquired and liabilities assumed.  The excess of the purchase price over the net assets acquired has been recorded as an expense.  The loss on acquisition of Bona Vida’s net assets is $107.8 million.
On May 6, 2019, the fair values of the assets and liabilities acquired were (in thousands):
Better Choice
Company		 Bona Vida Total
Total Purchase Price $ 37,949  $ 108,620  $ 146,569 
Net Assets (Liabilities) Acquired:
Assets
Cash and cash equivalents 7  384  391 
Restricted cash —  25  25 
Accounts receivable —  69  69 
Inventories —  95  95 
Prepaid expenses and other current assets 32  348  380 
Intangible assets 986  —  986 
Other assets —  74  74 
Total Assets 1,025  995  2,020 
Liabilities
Warrant derivative liability 2,130  —  2,130 
Accounts payable & accrued liabilities 544  153  697 
Total Liabilities 2,674  153  2,827 
Net Assets (Liabilities) Acquired (1,649) 842  (807)
Loss on Acquisitions $ (39,598) $ (107,778) $ (147,376)