|
Delaware
|
| |
5699
|
| |
46-1942864
|
|
|
(State or other jurisdiction of
incorporation or organization) |
| |
(Primary Standard Industrial
Classification Code Number) |
| |
(I.R.S. Employer
Identification Number) |
|
|
Thomas J. Poletti, Esq
Veronica Lah, Esq Manatt, Phelps & Phillips, LLP 695 Town Center Drive, 14th Floor Costa Mesa, CA 92646 (714) 312-7500 |
| |
Steven M. Skolnick, Esq.
Lowenstein Sandler, LLP 1251 Avenue of the Americas New York, New York 10020 (212) 262-6700 |
|
|
Large accelerated filer ☐
|
| |
Accelerated filer ☐
|
| |
Non-accelerated filer ☒
|
| |
Smaller reporting company ☒
|
|
| | | | | | | | | |
Emerging growth company ☒
|
|
| | ||||||||||||||||||||||
Title of Each Class of Securities to be Registered
|
| | |
Amount to be
Registered |
| | |
Proposed Maximum
Offering Price Per Share |
| | |
Proposed Maximum
Aggregate Offering Price(1) |
| | |
Amount of
Registration Fee(2)(8) |
| ||||||
Common Stock $0.0001 par value(2)(3)(4)
|
| | | | | | | | | | | | $ | 25,000,000 | | | | | | $ | | | |
Warrants to purchase shares of common stock, par value $0.0001 per share(3)(4)(5)
|
| | | | | | | | | | | | | | | | | | | | | | |
Shares of common stock, par value $0.0001 per share underlying warrants(2) .
|
| | | | | | | | | | | | | | | | | | | | | | |
Total Registration Fee
|
| | | | | | | | | | | | | | | | | | | $ | | |
| | | | | 1 | | | |
| | | | | 11 | | | |
| | | | | 12 | | | |
| | | | | 33 | | | |
| | | | | 35 | | | |
| | | | | 36 | | | |
| | | | | 37 | | | |
| | | | | 38 | | | |
| | | | | 40 | | | |
| | | | | 42 | | | |
| | | | | 43 | | | |
| | | | | 52 | | | |
| | | | | 87 | | | |
| | | | | 102 | | | |
| | | | | 105 | | | |
| | | | | 109 | | | |
| | | | | 115 | | | |
| | | | | 117 | | | |
| | | | | 123 | | | |
| | | | | 137 | | | |
| | | | | 137 | | | |
| | | | | 137 | | | |
| | | | | 137 | | | |
| | | | | F-1 | | |
| | |
Nine Months Ended September 30,
|
| |||||||||||||||
| | |
2021
Pro Forma |
| |
2021
Actual |
| |
2020
Actual |
| |||||||||
| | |
(unaudited)
|
| |
(unaudited)
|
| |
(unaudited)
|
| |||||||||
Net revenues
|
| | | $ | | | | | $ | 3,575,214 | | | | | $ | 4,475,507 | | | |
Cost of net revenues
|
| | | | | | | | | | 2,179,023 | | | | | | 3,884,864 | | |
Gross profit
|
| | | | | | | | | | 1,396,191 | | | | | | 590,643 | | |
Operating expenses
|
| | | | | | | | | | 22,500,331 | | | | | | 7,458,722 | | |
Operating loss
|
| | | | | | | | | | (21,104,140) | | | | | | (6,868,079) | | |
Other expenses
|
| | | | | | | | | | (2,655,460) | | | | | | (1,207,244) | | |
Loss before provision for income taxes
|
| | | | | | | | | | (23,759,600) | | | | | | (8,075,323) | | |
Benefit (provision) for income taxes
|
| | | | | | | | | | 1,100,120 | | | | | | (13,657) | | |
Net loss
|
| | | $ | | | | | $ | (22,659,480) | | | | | | (8,088,980) | | |
| | |
Year Ended December 31,
|
| |||||||||||||||
| | |
2020
Pro Forma |
| |
2020
Actual |
| |
2019
Actual |
| |||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||
Net revenues
|
| | | $ | | | | | $ | 5,239,437 | | | | | $ | 3,034,216 | | | |
Cost of net revenues
|
| | | | | | | | | | 4,685,755 | | | | | | 1,626,505 | | |
Gross profit
|
| | | | | | | | | | 553,682 | | | | | | 1,407,711 | | |
Operating expenses
|
| | | | | | | | | | 9,701,572 | | | | | | 6,255,180 | | |
Operating loss
|
| | | | | | | | | | (9,147,890) | | | | | | (4,847,469) | | |
Other expenses
|
| | | | | | | | | | (1,566,764) | | | | | | (805,704) | | |
Loss before provision for income taxes
|
| | | | | | | | | | (10,714,654) | | | | | | (5,653,173) | | |
Benefit (provision) for income taxes
|
| | | | | | | | | | (13,641) | | | | | | (800) | | |
Net loss
|
| | | $ | | | | | $ | (10,728,295) | | | | | $ | (5,653,973) | | |
| | |
As of September 30, 2021
|
| |||||||||||||||
| | |
Actual
|
| |
Pro Forma
|
| |
Pro Forma as
Adjusted |
| |||||||||
| | |
(unaudited)
|
| |||||||||||||||
Total cash
|
| | | $ | 254,527 | | | | | $ | 3,929,527 | | | | | $ | — | | |
| | |
As of September 30, 2021
|
| |||||||||||||||
| | |
Actual
|
| |
Pro Forma
|
| |
Pro Forma as
Adjusted |
| |||||||||
| | |
(unaudited)
|
| |||||||||||||||
Total current assets
|
| | | | 5,474,460 | | | | | | 9,149,460 | | | | |||||
Total assets
|
| | | | 40,664,284 | | | | | | 44,339,284 | | | | |||||
Total current liabilities including current portion of long-term debt
|
| | | | 23,669,092 | | | | | | 24,068,692 | | | | |||||
Total long-term obligations
|
| | | | 15,532,391 | | | | | | 19,207,391 | | | | |||||
Total liabilities
|
| | | | 39,201,483 | | | | | | 43,276,083 | | | | |||||
Total stockholders’ equity
|
| | | | 1,462,801 | | | | | | 1,063,201 | | | | |||||
Total liabilities and stockholders’ equity
|
| | | $ | 40,664,284 | | | | | $ | 44,339,284 | | | | | $ | — | | |
| | |
as of September 30, 2021
|
| |||||||||||||||||||||||||||
| | |
DBG
|
| |
Sundry
|
| |
Total
|
| |
Pro Forma(1)
|
| |
Pro Forma
as Adjusted(2) |
| |||||||||||||||
Cash and cash equivalents
|
| | | $ | 254,527 | | | | | $ | 421,802 | | | | | $ | 676,329 | | | | | $ | 10,551,329 | | | | | | | | |
Indebtedness, including current portion
|
| | | $ | 39,201,483 | | | | | $ | 2,063,357 | | | | | $ | 41,264,840 | | | | | | 63,147,440 | | | | | | | | |
Debt
|
| | | $ | 16,167,842 | | | | | $ | 776,982 | | | | | | 16,944,824 | | | | | $ | 37,419,824 | | | | | | | | |
DBG preferred stock, $0.0001
par value, 10,000,000 shares authorized and no shares issued outstanding, actual and pro forma |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | |
DBG common stock, $0.0001 par
value: 200,000,000 shares authorized, 12,627,488 shares issued and outstanding (actual); issued and outstanding (pro forma); issued and outstanding (pro forma as adjusted) |
| | | | 1,263 | | | | | | — | | | | | | 1,263 | | | | | | 1,263 | | | | | | | | |
Additional paid-in capital
|
| | | | 57,467,015 | | | | | | — | | | | | | 57,467,015 | | | | | | 87,967,015 | | | | | | | | |
Accumulated deficit
|
| | | | (56,005,477) | | | | | | — | | | | | | (56,005,477) | | | | | | (61,025,417) | | | | | | | | |
Total stockholders’ equity (deficit)
|
| | | $ | 1,462,801 | | | | | $ | — | | | | | $ | 1,462,801 | | | | | $ | 26,942,861 | | | | | | | | |
Total capitalization
|
| | | $ | 17,630,643 | | | | | $ | 776,982 | | | | | $ | 18,407,625 | | | | | $ | 64,362,685 | | | | | | | | |
|
Assumed public offering price per share
|
| | | | | | | | | $ | | | |
|
Pro forma net tangible book value per share as of September 30, 2021
|
| | | $ | | | | | | | | | |
|
Increase in pro forma net tangible book value in this offering
|
| | | $ | | | | | | | | | |
|
Pro forma net tangible book value per share after this offering
|
| | | | | | | | | $ | | | |
|
Dilution in pro forma net tangible book value per share to new investors in this offering
|
| | | | | | | | | $ | | | |
| | |
Nine Months Ended September 30,
|
| |||||||||||||||
| | |
2021
Pro Forma |
| |
2021
Actual |
| |
2020
Actual |
| |||||||||
| | |
(unaudited)
|
| |
(unaudited)
|
| |
(unaudited)
|
| |||||||||
Net revenues
|
| | | $ | | | | | $ | 3,575,214 | | | | | $ | 4,475,507 | | | |
Cost of net revenues
|
| | | | | | | | | | 2,179,023 | | | | | | 3,884,864 | | |
Gross profit
|
| | | | | | | | | | 1,396,191 | | | | | | 590,643 | | |
Operating expenses
|
| | | | | | | | | | 22,500,331 | | | | | | 7,458,722 | | |
Operating loss
|
| | | | | | | | | | (21,104,140) | | | | | | (6,868,079) | | |
Other expenses
|
| | | | | | | | | | (2,655,460) | | | | | | (1,207,244) | | |
Loss before provision for income taxes
|
| | | | | | | | | | (23,759,600) | | | | | | (8,075,323) | | |
Benefit (provision) for income taxes
|
| | | | | | | | | | 1,100,120 | | | | | | (13,657) | | |
Net loss
|
| | | $ | | | | | $ | (22,659,480) | | | | | | (8,088,980) | | |
| | |
Year Ended December 31,
|
| |||||||||||||||
| | |
2020
Pro Forma |
| |
2020
Actual |
| |
2019
Actual |
| |||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||
Net revenues
|
| | | $ | | | | | $ | 5,239,437 | | | | | $ | 3,034,216 | | | |
Cost of net revenues
|
| | | | | | | | | | 4,685,755 | | | | | | 1,626,505 | | |
Gross profit
|
| | | | | | | | | | 553,682 | | | | | | 1,407,711 | | |
Operating expenses
|
| | | | | | | | | | 9,701,572 | | | | | | 6,255,180 | | |
Operating loss
|
| | | | | | | | | | (9,147,890) | | | | | | (4,847,469) | | |
Other expenses
|
| | | | | | | | | | (1,566,764) | | | | | | (805,704) | | |
| | |
Year Ended December 31,
|
| |||||||||||||||
| | |
2020
Pro Forma |
| |
2020
Actual |
| |
2019
Actual |
| |||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||
Loss before provision for income taxes
|
| | | | | | | | | | (10,714,654) | | | | | | (5,653,173) | | |
Benefit (provision) for income taxes
|
| | | | | | | | | | (13,641) | | | | | | (800) | | |
Net loss
|
| | | $ | | | | | $ | (10,728,295) | | | | | $ | (5,653,973) | | |
| | |
As of September 30, 2021
|
| |||||||||
| | |
Actual
|
| |
Pro Forma
|
| ||||||
| | |
(unaudited)
|
| | | | | | | |||
Total cash
|
| | | $ | 254,527 | | | | | $ | | | |
Total current assets
|
| | | | 5,474,460 | | | | | | | | |
Total assets
|
| | | | 40,664,284 | | | | | | | | |
Total current liabilities including current portion of long-term debt
|
| | | | 23,669,092 | | | | | | | | |
Total long-term obligations
|
| | | | 15,532,391 | | | | | | | | |
Total liabilities
|
| | | | 39,201,483 | | | | | | | | |
Total stockholders’ equity
|
| | | | 1,462,801 | | | | | | | | |
Total liabilities and stockholders’ equity
|
| | | $ | 40,664,284 | | | | | $ | | | |
| | |
DBG
|
| |
H&J
|
| |
Stateside
|
| |
Sundry
|
| |
Total
|
| |
Pro Forma
Adjustments |
| | | | |
Pro Forma
Combined |
| |||||||||||||||||||||
Net revenues
|
| | | $ | 3,575,214 | | | | | $ | 980,261 | | | | | $ | 3,269,481 | | | | | $ | 18,152,631 | | | | | $ | 25,977,588 | | | | | $ | — | | | | | | | | $ | 25,977,588 | | |
Cost of net revenues
|
| | | | 2,179,023 | | | | | | 350,004 | | | | | | 1,194,693 | | | | | | 9,805,068 | | | | | | 13,528,788 | | | | | | — | | | | | | | | | 13,528,788 | | |
Gross profit
|
| | | | 1,396,191 | | | | | | 630,257 | | | | | | 2,074,788 | | | | | | 8,347,563 | | | | | | 12,448,800 | | | | | | — | | | | | | | | | 12,448,800 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
General and administrative
|
| | | | 12,820,841 | | | | | | 410,891 | | | | | | 1,147,168 | | | | | | 2,334,602 | | | | | | 16,713,501 | | | | | | 4,635,067 | | | |
(a)
|
| | | | 21,348,568 | | |
Sales and marketing
|
| | | | 2,401,322 | | | | | | 349,338 | | | | | | 514,742 | | | | | | 3,171,802 | | | | | | 6,437,204 | | | | | | — | | | | | | | | | 6,437,204 | | |
Distribution
|
| | | | 238,774 | | | | | | — | | | | | | 115,286 | | | | | | 861,044 | | | | | | 1,215,104 | | | | | | — | | | | | | | | | 1,215,104 | | |
Change in fair value of contingent consideration
|
| | | | 7,039,394 | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,039,394 | | | | | | — | | | | | | | | | 7,039,394 | | |
Total operating expenses
|
| | | | 22,500,331 | | | | | | 760,229 | | | | | | 1,777,195 | | | | | | 6,367,448 | | | | | | 31,405,204 | | | | | | 4,635,067 | | | | | | | | | 36,040,270 | | |
Loss from operations
|
| | | | (21,104,140) | | | | | | (129,972) | | | | | | 297,593 | | | | | | 1,980,115 | | | | | | (18,956,404) | | | | | | (4,635,067) | | | | | | | | | (23,591,470) | | |
Other income (expense): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense
|
| | | | (2,020,806) | | | | | | (33,668) | | | | | | — | | | | | | — | | | | | | (2,054,474) | | | | | | (1,802,600) | | | |
(b)
|
| | | | (3,857,074) | | |
Other non-operating income (expenses)
|
| | | | (634,654) | | | | | | — | | | | | | (12,494) | | | | | | 689,189 | | | | | | 42,041 | | | | | | (689,189) | | | |
(e)
|
| | | | (647,148) | | |
Total other income (expense), net
|
| | | | (2,655,460) | | | | | | (33,668) | | | | | | (12,494) | | | | | | 689,189 | | | | | | (2,012,432) | | | | | | (2,491,789) | | | | | | | | | (4,504,221) | | |
Income tax benefit (provision)
|
| | | | 1,100,120 | | | | | | — | | | | | | — | | | | | | (800) | | | | | | 1,099,320 | | | | | | — | | | | | | | | | 1,099,320 | | |
Net income (loss)
|
| | | $ | (22,659,480) | | | | | $ | (163,640) | | | | | $ | 285,099 | | | | | $ | 2,668,504 | | | | | $ | (19,869,516) | | | | | $ | (7,126,856) | | | | | | | | $ | (26,996,372) | | |
| | |
DBG
|
| |
Bailey
|
| |
H&J
|
| |
Stateside
|
| |
Sundry
|
| |
Total
|
| |
Pro Forma
Adjustments |
| | | | |
Pro Forma
Combined |
| ||||||||||||||||||||||||
Net revenues
|
| | | $ | 5,239,437 | | | | | $ | 2,019,823 | | | | | $ | 2,542,721 | | | | | $ | 3,187,512 | | | | | $ | 19,897,696 | | | | | $ | 32,887,189 | | | | | $ | — | | | | | | | | $ | 32,887,189 | | |
Cost of net revenues
|
| | | | 4,685,755 | | | | | | 1,020,237 | | | | | | 897,873 | | | | | | 1,485,726 | | | | | | 8,525,612 | | | | | | 16,615,204 | | | | | | — | | | | | | | | | 16,615,204 | | |
Gross profit
|
| | | | 553,682 | | | | | | 999,586 | | | | | | 1,644,848 | | | | | | 1,701,786 | | | | | | 11,372,084 | | | | | | 16,271,986 | | | | | | — | | | | | | | | | 16,271,986 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
General and administrative
|
| | | | 7,149,210 | | | | | | 1,439,879 | | | | | | 1,044,397 | | | | | | 1,192,241 | | | | | | 2,823,334 | | | | | | 13,649,062 | | | | | | 7,283,720 | | | |
(a)
|
| | | | 20,932,782 | | |
Sales and marketing
|
| | | | 576,469 | | | | | | 483,657 | | | | | | 1,163,124 | | | | | | 838,638 | | | | | | 3,790,570 | | | | | | 6,852,459 | | | | | | — | | | | | | | | | 6,852,459 | | |
Distribution
|
| | | | 342,466 | | | | | | — | | | | | | — | | | | | | 155,483 | | | | | | 1,011,431 | | | | | | 1,509,380 | | | | | | — | | | | | | | | | 1,509,380 | | |
Loss on disposal of property and equipment
|
| | | | 848,927 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 848,927 | | | | | | — | | | | | | | | | 848,927 | | |
Impairment of intangible assets
|
| | | | 784,500 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 784,500 | | | | | | — | | | | | | | | | 784,500 | | |
Total operating expenses
|
| | | | 9,701,572 | | | | | | 1,923,536 | | | | | | 2,207,521 | | | | | | 2,186,362 | | | | | | 7,625,335 | | | | | | 23,644,327 | | | | | | 7,283,720 | | | | | | | | | 30,928,047 | | |
Loss from operations
|
| | | | (9,147,890) | | | | | | (923,950) | | | | | | (562,673) | | | | | | (484,577) | | | | | | 3,746,749 | | | | | | (7,372,341) | | | | | | (7,283,720) | | | | | | | | | (14,656,061) | | |
Other income (expense): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense
|
| | | | (1,599,518) | | | | | | (25,396) | | | | | | (92,270) | | | | | | — | | | | | | (55,537) | | | | | | (1,772,721) | | | | | | (2,978,567) | | | |
(b)
|
| | | | (4,751,288) | | |
Gain on forgiveness of
debt |
| | | | — | | | | | | — | | | | | | 225,388 | | | | | | 261,035 | | | | | | — | | | | | | 486,423 | | | | | | (486,423) | | | |
(d)
|
| | | | — | | |
Other non-operating income (expenses)
|
| | | | 32,754 | | | | | | — | | | | | | 10,110 | | | | | | — | | | | | | 10,010 | | | | | | 52,874 | | | | | | — | | | | | | | | | 52,874 | | |
Total other income (expense), net
|
| | | | (1,566,764) | | | | | | (25,396) | | | | | | 143,228 | | | | | | 261,035 | | | | | | (45,527) | | | | | | (1,233,424) | | | | | | (3,464,990) | | | | | | | | | (4,698,414) | | |
Provision for income
taxes |
| | | | 13,641 | | | | | | — | | | | | | — | | | | | | 800 | | | | | | 800 | | | | | | 15,241 | | | | | | — | | | | | | | | | 15,241 | | |
Net income (loss)
|
| | | $ | (10,728,295) | | | | | $ | (949,346) | | | | | $ | (419,446) | | | | | $ | (224,341) | | | | | $ | 3,700,422 | | | | | $ | (8,621,006) | | | | | $ | (10,748,710) | | | | | | | | $ | (19,369,716) | | |
| | |
DBG
|
| |
Sundry
|
| |
Total
|
| |
Pro Forma
Adjustments |
| | | | |
Pro Forma
Combined |
| |||||||||||||||
ASSETS | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 254,527 | | | | | $ | 421,802 | | | | | $ | 676,329 | | | | | $ | 9,875,000 | | | |
(d)
|
| | | $ | 10,551,329 | | |
Accounts receivable, net
|
| | | | 272,264 | | | | | | 211,809 | | | | | | 484,073 | | | | | | — | | | | | | | | | 484,073 | | |
Due from factor, net
|
| | | | 1,094,309 | | | | | | 639,260 | | | | | | 1,733,569 | | | | | | — | | | | | | | | | 1,733,569 | | |
Inventory
|
| | | | 2,327,542 | | | | | | 5,890,454 | | | | | | 8,217,996 | | | | | | — | | | | | | | | | 8,217,996 | | |
Prepaid expenses and other current assets
|
| | | | 1,525,818 | | | | | | 221,657 | | | | | | 1,747,475 | | | | | | — | | | | | | | | | 1,747,475 | | |
Total current assets
|
| | | | 5,474,460 | | | | | | 7,384,983 | | | | | | 12,859,443 | | | | | | 9,875,000 | | | | | | | | | 22,734,443 | | |
Deferred offering costs
|
| | | | 367,696 | | | | | | — | | | | | | 367,696 | | | | | | — | | | | | | | | | 367,696 | | |
Property, equipment and software, net
|
| | | | 97,862 | | | | | | 177,605 | | | | | | 275,467 | | | | | | — | | | | | | | | | 275,467 | | |
Goodwill
|
| | | | 17,771,031 | | | | | | — | | | | | | 17,771,031 | | | | | | 11,718,737 | | | |
(c)
|
| | | | 29,489,768 | | |
Intangible assets, net
|
| | | | 16,779,126 | | | | | | — | | | | | | 16,779,126 | | | | | | 20,249,950 | | | |
(a), (c)
|
| | | | 37,029,076 | | |
Deposits
|
| | | | 174,109 | | | | | | 19,742 | | | | | | 193,851 | | | | | | — | | | | | | | | | 193,851 | | |
Total assets
|
| | | $ | 40,664,284 | | | | | $ | 7,582,330 | | | | | $ | 48,246,614 | | | | | $ | 41,843,687 | | | | | | | | $ | 90,090,301 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 6,855,352 | | | | | $ | 701,569 | | | | | $ | 7,556,921 | | | | | $ | — | | | | | | | | $ | 7,556,921 | | |
Accrued expenses and other liabilities
|
| | | | 1,853,954 | | | | | | 584,806 | | | | | | 2,438,760 | | | | | | — | | | | | | | | | 2,438,760 | | |
Deferred revenue
|
| | | | 193,023 | | | | | | — | | | | | | 193,023 | | | | | | — | | | | | | | | | 193,023 | | |
Due to related parties
|
| | | | 232,635 | | | | | | — | | | | | | 232,635 | | | | | | — | | | | | | | | | 232,635 | | |
Contingent consideration liability
|
| | | | 10,527,910 | | | | | | — | | | | | | 10,527,910 | | | | | | — | | | | | | | | | 10,527,910 | | |
Convertible notes, current
|
| | | | 100,000 | | | | | | — | | | | | | 100,000 | | | | | | — | | | | | | | | | 100,000 | | |
Accrued interest payable
|
| | | | 855,729 | | | | | | — | | | | | | 855,729 | | | | | | 1,407,600 | | | |
(b)
|
| | | | 2,263,329 | | |
Note payable – related party
|
| | | | 299,489 | | | | | | — | | | | | | 299,489 | | | | | | — | | | | | | | | | 299,489 | | |
Venture debt, current
|
| | | | 300,000 | | | | | | — | | | | | | 300,000 | | | | | | — | | | | | | | | | 300,000 | | |
Loan payable, current
|
| | | | 1,796,000 | | | | | | 776,982 | | | | | | 2,572,982 | | | | | | — | | | | | | | | | 2,572,982 | | |
Promissory note payable, current
|
| | | | 655,000 | | | | | | — | | | | | | 655,000 | | | | | | — | | | | | | | | | 655,000 | | |
Total current liabilities
|
| | | | 23,669,092 | | | | | | 2,063,357 | | | | | | 25,732,449 | | | | | | 1,407,600 | | | | | | | | | 27,140,049 | | |
Convertible notes
|
| | | | 2,793,385 | | | | | | — | | | | | | 2,793,385 | | | | | | 3,675,000 | | | |
(d)
|
| | | | 6,468,385 | | |
Loan payable
|
| | | | 1,677,213 | | | | | | — | | | | | | 1,677,213 | | | | | | — | | | | | | | | | 1,677,213 | | |
Promissory note payable
|
| | | | 2,845,000 | | | | | | — | | | | | | 2,845,000 | | | | | | 16,800,000 | | | |
(d)
|
| | | | 19,645,000 | | |
Venture debt, net of discount
|
| | | | 5,701,755 | | | | | | — | | | | | | 5,701,755 | | | | | | — | | | | | | | | | 5,701,755 | | |
Derivative liability
|
| | | | 2,486,843 | | | | | | — | | | | | | 2,486,843 | | | | | | — | | | | | | | | | 2,486,843 | | |
Warrant liability
|
| | | | 28,195 | | | | | | — | | | | | | 28,195 | | | | | | — | | | | | | | | | 28,195 | | |
Total liabilities
|
| | | | 39,201,483 | | | | | | 2,063,357 | | | | | | 41,264,840 | | | | | | 21,882,600 | | | | | | | | | 63,147,440 | | |
Stockholders’ equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock
|
| | | | 1,263 | | | | | | — | | | | | | 1,263 | | | | | | — | | | | | | | | | 1,263 | | |
Additional paid-in capital
|
| | | | 57,467,015 | | | | | | — | | | | | | 57,467,015 | | | | | | 30,500,000 | | | |
(c), (d)
|
| | | | 87,967,015 | | |
Members’ equity
|
| | | | — | | | | | | 5,518,973 | | | | | | 5,518,973 | | | | | | (5,518,973) | | | |
(c)
|
| | | | — | | |
Accumulated deficit
|
| | | | (56,005,477) | | | | | | — | | | | | | (56,005,477) | | | | | | (5,019,940) | | | | | | | | | (61,025,417) | | |
Total stockholders’ equity
|
| | | | 1,462,801 | | | | | | 5,518,973 | | | | | | 6,981,774 | | | | | | 19,961,087 | | | | | | | | | 26,942,861 | | |
Total liabilities and stockholders’ equity
|
| | | $ | 40,664,284 | | | | | $ | 7,582,330 | | | | | $ | 48,246,614 | | | | | $ | 41,843,687 | | | | | | | | $ | 90,090,301 | | |
|
Series B preferred stock
|
| | | $ | 11,000,000 | | |
|
Promissory note payable
|
| | | | 4,500,000 | | |
|
Purchase price consideration
|
| | | $ | 15,500,000 | | |
| | |
Preliminary
Purchase Price Allocation |
| |||
Assets acquired
|
| | | $ | 4,705,086 | | |
Goodwill
|
| | | | 6,479,218 | | |
Intangible assets
|
| | | | 8,600,000 | | |
Liabilities assumed
|
| | | | (4,284,304) | | |
Purchase price consideration
|
| | | $ | 15,500,000 | | |
|
Common stock
|
| | | $ | 9,100,000 | | |
|
Purchase price consideration
|
| | | $ | 9,100,000 | | |
| | |
Preliminary
Purchase Price Allocation |
| |||
Assets acquired
|
| | | $ | 362,607 | | |
Goodwill
|
| | | | 2,995,407 | | |
Intangible assets
|
| | | | 6,888,620 | | |
Liabilities assumed
|
| | | | (1,146,634) | | |
Purchase price consideration
|
| | | $ | 9,100,000 | | |
|
Cash
|
| | | $ | 5,000,000 | | |
|
Common stock
|
| | | | 3,403,196 | | |
|
Purchase price consideration
|
| | | $ | 8,403,196 | | |
|
Assets acquired
|
| | | $ | 1,277,286 | | |
|
Goodwill
|
| | | | 1,610,265 | | |
|
Intangible assets
|
| | | | 5,939,140 | | |
|
Liabilities assumed
|
| | | | (423,495) | | |
|
Purchase price consideration
|
| | | $ | 8,403,196 | | |
|
Cash
|
| | | $ | 16,800,000 | | |
|
Promissory note payable
|
| | | | 16,800,000 | | |
|
Common stock
|
| | | | 7,500,000 | | |
|
Purchase price consideration
|
| | | $ | 41,100,000 | | |
|
Assets acquired
|
| | | $ | 7,582,330 | | |
|
Goodwill
|
| | | | 11,718,737 | | |
|
Intangible assets
|
| | | | 23,862,290 | | |
|
Liabilities assumed
|
| | | | (2,063,357) | | |
|
Purchase price consideration
|
| | | $ | 41,100,000 | | |
| | |
Nine Months Ended
September 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net revenues
|
| | | $ | 3,575,214 | | | | | $ | 4,475,507 | | |
Cost of net revenues
|
| | | | 2,179,023 | | | | | | 3,884,864 | | |
Gross profit
|
| | | | 1,396,191 | | | | | | 590,643 | | |
Operating expenses
|
| | | | 22,500,331 | | | | | | 7,458,722 | | |
Operating loss
|
| | | | (21,104,140) | | | | | | (6,868,079) | | |
Other expenses
|
| | | | (2,655,460) | | | | | | (1,207,244) | | |
Loss before provision for income taxes
|
| | | | (23,759,600) | | | | | | (8,075,323) | | |
Provision for income taxes
|
| | | | 1,100,120 | | | | | | (13,657) | | |
Net loss
|
| | | $ | (22,659,480) | | | | | $ | (8,088,980) | | |
| | |
Nine Months
Ended September 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net cash provided by operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (22,659,480) | | | | | $ | (8,088,980) | | |
Non-cash adjustments
|
| | | $ | 12,279,846 | | | | | $ | 2,160,584 | | |
Change in operating assets and liabilities
|
| | | $ | (1,096,380) | | | | | $ | 4,778,788 | | |
Net cash used in operating activities
|
| | | $ | (11,476,014) | | | | | $ | (1,149,609) | | |
Net cash used in investing activities
|
| | | $ | (5,523,982) | | | | | $ | (70,642) | | |
Net cash provided by financing activities
|
| | | $ | 16,678,537 | | | | | $ | 1,461,841 | | |
Net change in cash
|
| | | $ | (321,459) | | | | | $ | 241,590 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net revenues
|
| | | $ | 5,239,437 | | | | | $ | 3,034,216 | | |
Cost of net revenues
|
| | | | 4,685,755 | | | | | | 1,626,505 | | |
Gross profit
|
| | | | 553,682 | | | | | | 1,407,711 | | |
Operating expenses
|
| | | | 9,701,572 | | | | | | 6,255,180 | | |
Operating loss
|
| | | | (9,147,890) | | | | | | (4,847,469) | | |
Other expenses
|
| | | | (1,566,764) | | | | | | (805,704) | | |
Loss before provision for income taxes
|
| | | | (10,714,654) | | | | | | (5,653,173) | | |
Provision for income taxes
|
| | | | 13,641 | | | | | | 800 | | |
Net loss
|
| | | $ | (10,728,295) | | | | | $ | (5,653,973) | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net cash provided by operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (10,728,295) | | | | | $ | (5,653,973) | | |
Non-cash adjustments
|
| | | $ | 2,413,918 | | | | | $ | 371,324 | | |
Change in operating assets and liabilities
|
| | | $ | 6,252,790 | | | | | $ | 1,413,284 | | |
Net cash used in operating activities
|
| | | $ | (2,061,587) | | | | | $ | (3,869,365) | | |
Net cash used in investing activities
|
| | | $ | 204,884 | | | | | $ | 6,642 | | |
Net cash provided by financing activities
|
| | | $ | 2,392,220 | | | | | $ | 3,318,711 | | |
Net change in cash
|
| | | $ | 535,517 | | | | | $ | (544,012) | | |
| | |
December 31,
|
| |||||||||
Statement of Operations
|
| |
2019
|
| |
2018
|
| ||||||
Net revenue
|
| | | $ | 27,099,718 | | | | | $ | 29,037,497 | | |
Cost of net revenue
|
| | | $ | 12,663,514 | | | | | $ | 13,451,654 | | |
Gross profit
|
| | | $ | 14,436,204 | | | | | $ | 15,585,843 | | |
Operating expenses
|
| | | $ | 19,060,108 | | | | | $ | 17,756,807 | | |
Operating income
|
| | | $ | (4,623,904) | | | | | $ | (2,170,964) | | |
Other expense
|
| | | $ | (153,078) | | | | | $ | (531,599) | | |
Loss before provision for income taxes
|
| | | $ | (4,776,982) | | | | | $ | (2,702,563) | | |
Provision for income taxes
|
| | | $ | (14,890) | | | | | $ | (13,390) | | |
Net loss
|
| | | $ | (4,791,872) | | | | | $ | (2,715,953) | | |
| | |
December 31,
|
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Net cash used in operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (4,791,872) | | | | | $ | (2,715,953) | | |
Non-cash adjustments
|
| | | $ | 636,401 | | | | | $ | 469,318 | | |
Change in operating assets and liabilities
|
| | | $ | 2,269,173 | | | | | $ | 1,622,885 | | |
Net cash used in operating activities
|
| | | $ | (1,886,298) | | | | | $ | (623,750) | | |
Net cash used in investing activities
|
| | | $ | (557,328) | | | | | $ | (185,970) | | |
Net cash provided by financing activities
|
| | | $ | 1,840,039 | | | | | $ | 349,514 | | |
Net change in cash
|
| | | $ | (603,587) | | | | | $ | (460,206) | | |
| | |
Nine Months Ended
September 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net revenues
|
| | | $ | 2,033,387 | | | | | $ | 1,936,967 | | |
Cost of net revenues
|
| | | | 798,942 | | | | | | 659,566 | | |
Gross profit
|
| | | | 1,234,445 | | | | | | 1,277,401 | | |
Operating expenses
|
| | | | 1,640,849 | | | | | | 1,420,297 | | |
Operating loss
|
| | | | (406,404) | | | | | | (142,896) | | |
Other income (expense)
|
| | | | 189,903 | | | | | | (64,565) | | |
Loss before provision for income taxes
|
| | | | (216,501) | | | | | | (207,461) | | |
Provision for income taxes
|
| | | | — | | | | | | — | | |
Net loss
|
| | | $ | (216,501) | | | | | $ | (207,461) | | |
| | |
Nine Months Ended
September 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net cash provided by operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (216,501) | | | | | $ | (207,461) | | |
Non-cash adjustments
|
| | | $ | 112,047 | | | | | $ | 30,917 | | |
Change in operating assets and liabilities
|
| | | $ | (221,332) | | | | | $ | (204,156) | | |
Net cash used in operating activities
|
| | | $ | (325,786) | | | | | $ | (380,700) | | |
Net cash used in investing activities
|
| | | $ | — | | | | | $ | (60,671) | | |
Net cash provided by financing activities
|
| | | $ | 290,593 | | | | | $ | 401,946 | | |
Net change in cash
|
| | | $ | (35,193) | | | | | $ | (39,425) | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net revenues
|
| | | $ | 2,542,721 | | | | | $ | 3,325,761 | | |
Cost of net revenues
|
| | | | 897,873 | | | | | | 1,202,819 | | |
Gross profit
|
| | | | 1,644,848 | | | | | | 2,122,943 | | |
Operating expenses
|
| | | | 2,207,521 | | | | | | 2,295,379 | | |
Operating loss
|
| | | | (562,673) | | | | | | (172,437) | | |
Other expenses
|
| | | | 143,228 | | | | | | (3,955) | | |
Loss before provision for income taxes
|
| | | | (419,446) | | | | | | (176,391) | | |
Provision for income taxes
|
| | | | — | | | | | | — | | |
Net loss
|
| | | $ | (419,446) | | | | | $ | (176,391) | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net cash provided by operating activities: | | | | | | | | | | | | | |
Net Loss
|
| | | $ | (419,446) | | | | | $ | (176,391) | | |
Non-cash adjustments
|
| | | $ | (33,742) | | | | | $ | 82,422 | | |
Change in operating assets and liabilities
|
| | | $ | 61,146 | | | | | $ | 115,377 | | |
Net cash used in operating activities
|
| | | $ | (392,042) | | | | | $ | 21,407 | | |
Net cash used in investing activities
|
| | | $ | (65,750) | | | | | $ | (254,437) | | |
Net cash provided by financing activities
|
| | | $ | 490,598 | | | | | $ | 237,002 | | |
Net change in cash
|
| | | $ | 32,806 | | | | | $ | 3,972 | | |
| | |
Nine Months Ended
September 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net revenues
|
| | | $ | 3,797,529 | | | | | $ | 2,525,845 | | |
Cost of net revenues
|
| | | | 1,278,388 | | | | | | 1,326,287 | | |
Gross profit
|
| | | | 2,519,141 | | | | | | 1,199,558 | | |
Operating expenses
|
| | | | 2,147,674 | | | | | | 1,552,490 | | |
Operating income (loss)
|
| | | | 371,467 | | | | | | (352,932) | | |
Other income (expense)
|
| | | | (12,494) | | | | | | 261,035 | | |
Income (loss) before provision for income taxes
|
| | | | 358,973 | | | | | | (91,897) | | |
Net income (loss)
|
| | | $ | 358,973 | | | | | $ | (91,897) | | |
| | |
Nine Months Ended
September 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net cash provided by operating activities: | | | | | | | | | | | | | |
Net income (loss)
|
| | | $ | 358,973 | | | | | $ | (91,896) | | |
Non-cash adjustments
|
| | | $ | 17,839 | | | | | $ | 41,406 | | |
Change in operating assets and liabilities
|
| | | $ | (232,929) | | | | | $ | (471,933) | | |
Net cash provided by (used in) operating activities
|
| | | $ | 143,883 | | | | | $ | (522,423) | | |
Net cash used in investing activities
|
| | | $ | — | | | | | $ | (6,200) | | |
Net cash used in financing activities
|
| | | $ | (327,905) | | | | | $ | 919,128 | | |
Net change in cash
|
| | | $ | (184,022) | | | | | $ | 390,505 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net revenues
|
| | | $ | 3,187,512 | | | | | $ | 5,913,987 | | |
Cost of net revenues
|
| | | | 1,485,726 | | | | | | 2,687,902 | | |
Gross profit
|
| | | | 1,701,786 | | | | | | 3,226,085 | | |
Operating expenses
|
| | | | 2,186,362 | | | | | | 3,244,856 | | |
Operating loss
|
| | | | (484,576) | | | | | | (18,771) | | |
Other income
|
| | | | 261,035 | | | | | | — | | |
Loss before provision for income taxes
|
| | | | (223,541) | | | | | | (18,771) | | |
Provision for income taxes
|
| | | | 800 | | | | | | — | | |
Net loss
|
| | | $ | (224,341) | | | | | $ | (18,771) | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net cash provided by operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (224,341) | | | | | $ | (18,771) | | |
Non-cash adjustments
|
| | | $ | (196,014) | | | | | $ | 75,449 | | |
Change in operating assets and liabilities
|
| | | $ | (32,141) | | | | | $ | (603,288) | | |
Net cash used in operating activities
|
| | | $ | (452,496) | | | | | $ | (546,610) | | |
Net cash used in investing activities
|
| | | $ | (9,594) | | | | | $ | (97,472) | | |
Net cash provided by financing activities
|
| | | $ | 615,803 | | | | | $ | 691,966 | | |
Net change in cash
|
| | | $ | 153,713 | | | | | $ | 47,884 | | |
| | |
Nine Months Ended
September 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net revenues
|
| | | $ | 18,152,631 | | | | | $ | 13,167,231 | | |
Cost of net revenues
|
| | | | 9,805,068 | | | | | | 5,475,768 | | |
Gross profit
|
| | | | 8,347,563 | | | | | | 7,691,463 | | |
Operating expenses
|
| | | | 6,367,448 | | | | | | 5,310,662 | | |
Operating income
|
| | | | 1,980,115 | | | | | | 2,380,801 | | |
Other income (expense)
|
| | | | 689,189 | | | | | | 10,000 | | |
Income before provision for income taxes
|
| | | | 2,669,304 | | | | | | 2,390,801 | | |
Provision for income taxes
|
| | | | 800 | | | | | | 800 | | |
Net income
|
| | | $ | 2,668,504 | | | | | $ | 2,390,001 | | |
| | |
Nine Months Ended
September 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net cash provided by operating activities: | | | | | | | | | | | | | |
Net income
|
| | | $ | 2,668,504 | | | | | $ | 2,390,001 | | |
Non-cash adjustments
|
| | | $ | 50,268 | | | | | $ | 108,868 | | |
Change in operating assets and liabilities
|
| | | $ | (1,183,223) | | | | | $ | (1,669,929) | | |
Net cash used in operating activities
|
| | | $ | 1,535,550 | | | | | $ | 828,940 | | |
Net cash used in investing activities
|
| | | $ | (5,000) | | | | | $ | (11,795) | | |
Net cash provided by financing activities
|
| | | $ | (1,842,189) | | | | | $ | (310,829) | | |
Net change in cash
|
| | | $ | (311,638) | | | | | $ | 506,316 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net revenues
|
| | | $ | 19,897,696 | | | | | $ | 22,421,703 | | |
Cost of net revenues
|
| | | | 8,525,612 | | | | | | 12,047,221 | | |
Gross profit
|
| | | | 11,372,084 | | | | | | 10,374,482 | | |
Operating expenses
|
| | | | 7,625,335 | | | | | | 8,470,662 | | |
Operating income
|
| | | | 3,746,749 | | | | | | 1,903,820 | | |
Other income (expense)
|
| | | | (45,527) | | | | | | (231,187) | | |
Income before provision for income taxes
|
| | | | 3,701,222 | | | | | | 1,672,633 | | |
Provision for income taxes
|
| | | | 800 | | | | | | 800 | | |
Net income
|
| | | $ | 3,700,422 | | | | | $ | 1,671,833 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net cash provided by operating activities: | | | | | | | | | | | | | |
Net income
|
| | | $ | 3,700,422 | | | | | $ | 1,671,833 | | |
Non-cash adjustments
|
| | | $ | 149,618 | | | | | $ | 51,201 | | |
Change in operating assets and liabilities
|
| | | $ | (1,880,989) | | | | | $ | (372,686) | | |
Net cash used in operating activities
|
| | | $ | 1,969,051 | | | | | $ | 1,350,348 | | |
Net cash used in investing activities
|
| | | $ | (11,430) | | | | | $ | (217,514) | | |
Net cash provided by financing activities
|
| | | $ | (1,429,829) | | | | | $ | (994,502) | | |
Net change in cash
|
| | | $ | 527,792 | | | | | $ | 138,332 | | |
| | |
Nine Months Ended
September 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net revenues
|
| | | $ | 25,977,588 | | | | | $ | 24,125,373 | | |
Cost of net revenues
|
| | | | 13,528,788 | | | | | | 12,366,722 | | |
Gross profit
|
| | | | 12,448,800 | | | | | | 11,758,651 | | |
Operating expenses
|
| | | | 36,040,270 | | | | | | 23,129,297 | | |
Operating loss
|
| | | | (23,591,470) | | | | | | (11,370,646) | | |
Other expenses
|
| | | | (4,504,221) | | | | | | (3,260,095) | | |
Loss before provision for income taxes
|
| | | | (28,095,692) | | | | | | (14,630,740) | | |
Benefit (provision) for income taxes
|
| | | | 1,099,320 | | | | | | (13,657) | | |
Net loss
|
| | | $ | (26,996,372) | | | | | $ | (14,644,397) | | |
| | |
Nine Months Ended
September 30, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net cash provided by operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (26,996,372) | | | | | $ | (14,644,397) | | |
Non-cash adjustments
|
| | | $ | 19,712,323 | | | | | $ | 10,264,437 | | |
Change in operating assets and liabilities
|
| | | $ | (2,512,532) | | | | | $ | 2,735,652 | | |
Net cash used in operating activities
|
| | | $ | (9,796,581) | | | | | $ | (1,644,308) | | |
Net cash used in investing activities
|
| | | $ | (22,328,981) | | | | | $ | (21,888,637) | | |
Net cash provided by financing activities
|
| | | $ | 41,183,443 | | | | | $ | 34,245,140 | | |
Net change in cash
|
| | | $ | 9,057,881 | | | | | $ | 10,712,195 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net revenues
|
| | | $ | 32,887,189 | | | | | $ | 61,795,386 | | |
Cost of net revenues
|
| | | | 16,615,204 | | | | | | 30,227,961 | | |
Gross profit
|
| | | | 16,271,986 | | | | | | 31,567,425 | | |
Operating expenses
|
| | | | 30,928,047 | | | | | | 47,321,283 | | |
Operating loss
|
| | | | (14,656,061) | | | | | | (15,753,859) | | |
Other expenses
|
| | | | (4,698,414) | | | | | | (4,172,491) | | |
Loss before provision for income taxes
|
| | | | (19,354,475) | | | | | | (19,926,349) | | |
Provision for income taxes
|
| | | | 15,241 | | | | | | 16,490 | | |
Net loss
|
| | | $ | (19,369,716) | | | | | $ | (19,942,839) | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net cash provided by operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (19,369,716) | | | | | $ | (19,942,839) | | |
Non-cash adjustments
|
| | | $ | 8,691,505 | | | | | $ | 5,040,411 | | |
Change in operating assets and liabilities
|
| | | $ | 5,039,533 | | | | | $ | 5,084,895 | | |
Net cash used in operating activities
|
| | | $ | (5,638,679) | | | | | $ | (9,817,534) | | |
Net cash used in investing activities
|
| | | $ | (21,681,889) | | | | | $ | (22,702,595) | | |
Net cash provided by financing activities
|
| | | $ | 37,918,792 | | | | | $ | 41,437,717 | | |
Net change in cash
|
| | | $ | 10,598,224 | | | | | $ | 8,917,589 | | |
Location
|
| |
Type
|
| |
Square
Footage (approximate) |
| |
Lease
Expiration |
| ||||||
Vernon, California
|
| |
Corporate Warehouse and Distribution Center
|
| | | | 42,206 | | | | | | 2023 | | |
Los Angeles, California
|
| | Showroom | | | | | 2,000 | | | | |
|
(1)
|
| |
Austin, Texas
|
| | Interim Corporate Headquarters | | | | | 500 | | | | |
|
(2)
|
| |
Dallas, Texas
|
| | Office Space and Showroom | | | | | 2,860 | | | | | | 2022 | | |
Houston, Texas
|
| | Showroom | | | | | 1,117 | | | | |
|
(3)
|
| |
New Orleans, Louisiana
|
| | Showroom | | | | | 1,015 | | | | |
|
(4)
|
| |
Name
|
| |
Age
|
| |
Position
|
|
Executive Officers and Directors | | | | | | | |
John “Hil” Davis
|
| | 49 | | | President, Chief Executive Officer and a Director | |
Laura Dowling
|
| | 42 | | | Chief Marketing Officer | |
Reid Yeoman
|
| | 39 | | | Chief Financial Officer | |
Mark T. Lynn
|
| | 37 | | | Director | |
Trevor Pettennude
|
| | 54 | | | Director | |
Jameeka Aaron
|
| | 41 | | | Director | |
Huong “Lucy” Doan
|
| | 53 | | | Director | |
Name and Principal Position
|
| |
Fiscal
Year |
| |
Salary
|
| |
Bonus
|
| |
Option
Awards |
| |
All Other
Compensation |
| |
Total
|
| ||||||||||||||||||
John “Hil” Davis
|
| | | | 2021 | | | | | $ | 350,000 | | | | | $ | — | | | | | | 2,958,441 | | | | | $ | — | | | | | $ | 3,308,441 | | |
President and Chief Executive
Officer |
| | | | 2020 | | | | | $ | 222,500 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 222,500 | | |
Laura Dowling
|
| | | | 2021 | | | | | $ | 300,000 | | | | | $ | — | | | | | $ | 551,948 | | | | | $ | — | | | | | $ | 851,948 | | |
Chief Marketing Officer
|
| | | | 2020 | | | | | $ | 258,231 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 258,231 | | |
Reid Yeoman
|
| | | | 2021 | | | | | $ | 250,000 | | | | | $ | — | | | | | $ | 176,623 | | | | | $ | — | | | | | $ | 426,623 | | |
Chief Financial Officer
|
| | | | 2020 | | | | | $ | 225,000 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 225,000 | | |
Name of Beneficial Owner
|
| |
Number of
Shares Beneficially Owned |
| |
Percentage of
Shares Outstanding |
| |
Number of
Shares Beneficially Owned |
| |
Percentage of
Shares Outstanding |
| ||||||||||||
Executive Officers and Directors | | | | | | | | | | | | | | | | | | | | | | | | | |
John “Hil” Davis(1)
|
| | | | 1,713,641 | | | | | | 18.8% | | | | | | 1,713,641 | | | | | | % | | |
Laura Dowling(2)
|
| | | | 334,667 | | | | | | 4.3% | | | | | | 334,667 | | | | | | % | | |
Reid Yeoman(3)
|
| | | | 114,000 | | | | | | 1.5% | | | | | | 114,000 | | | | | | % | | |
Mark Lynn(4)
|
| | | | 507,386 | | | | | | 6.5% | | | | | | 507,386 | | | | | | % | | |
Trevor Pettennude(5)
|
| | | | 328,625 | | | | | | 4.3% | | | | | | 328,625 | | | | | | % | | |
Jameeka Aaron(6)
|
| | | | 15,000 | | | | | | * | | | | | | 15,000 | | | | | | * | | |
Name of Beneficial Owner
|
| |
Number of
Shares Beneficially Owned |
| |
Percentage of
Shares Outstanding |
| |
Number of
Shares Beneficially Owned |
| |
Percentage of
Shares Outstanding |
| ||||||||||||
Huong “Lucy” Doan(7)
|
| | | | 20,000 | | | | | | * | | | | | | 20,000 | | | | | | * | | |
All executive officers, directors and director nominees as a group (7 persons)(8)
|
| | | | 3,013,319 | | | | | | 23.6% | | | | | | 3,013,319 | | | | | | % | | |
Additional 5% Stockholders | | | | | | | | | | | | | | | | | | | | | | | | | |
Drew Jones(9)
|
| | | | 1,820,000 | | | | | | 14.3% | | | | | | 1,820,000 | | | | | | % | | |
2736 Routh Street
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Dallas, Texas 75201
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Moise Emquies
|
| | | | 963,847 | | | | | | 7.6% | | | | | | 963,847 | | | | | | % | | |
Norwest Venture Partners XI, LP
|
| | | | 796,981 | | | | | | 6.2% | | | | | | 796,981 | | | | | | % | | |
Norwest Venture Partners XII, LP
|
| | | | 796,981 | | | | | | 6.2% | | | | | | 796,981 | | | | | | % | | |
Underwriter
|
| |
Number of
Shares of common stock and warrants |
|
Roth Capital Partners, LLC
|
| | | |
Total
|
| | | |
| | |
Per Share
and Warrant |
| |
Total
Without Exercise of Over- Allotment Option |
| |
Total With
Exercise of Over- Allotment Option |
| |||||||||
Public offering price
|
| | | $ | | | | | $ | | | | | $ | | | |||
Underwriting discount and commissions
|
| | | $ | | | | | $ | | | | | $ | | | |||
Proceeds, before expenses, to DBG
|
| | | $ | | | | | $ | | | | | $ | | | |
| | |
Page
|
| |||
| | | | F-2 | | | |
CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2020 AND 2019 AND FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019:
|
| | | | | | |
| | | | F-3 | | | |
| | | | F-5 | | | |
| | | | F-6 | | | |
| | | | F-7 | | | |
| | | | F-8 – F-31 | | |
| /s/ dbbmckennon | | | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 575,986 | | | | | $ | 40,469 | | |
Accounts receivable, net
|
| | | | 35,532 | | | | | | — | | |
Due from factor, net
|
| | | | 210,033 | | | | | | — | | |
Inventory
|
| | | | 1,163,279 | | | | | | 1,061,969 | | |
Prepaid expenses
|
| | | | 23,826 | | | | | | 63,516 | | |
Total current assets
|
| | | | 2,008,656 | | | | | | 1,165,954 | | |
Deferred offering costs
|
| | | | 214,647 | | | | | | | | |
Property, equipment and software, net
|
| | | | 62,313 | | | | | | 72,593 | | |
Goodwill
|
| | | | 6,479,218 | | | | | | — | | |
Intangible assets, net
|
| | | | 7,494,667 | | | | | | — | | |
Deposits
|
| | | | 92,668 | | | | | | 43,510 | | |
Total assets
|
| | | $ | 16,352,169 | | | | | $ | 1,282,057 | | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 5,668,703 | | | | | $ | 1,597,770 | | |
Accrued expenses and other liabilities
|
| | | | 1,245,646 | | | | | | 1,121,317 | | |
Deferred revenue
|
| | | | 1,667 | | | | | | 15,231 | | |
Due to related parties
|
| | | | 441,453 | | | | | | 263,427 | | |
Convertible notes, current
|
| | | | 700,000 | | | | | | — | | |
Accrued interest payable
|
| | | | 737,039 | | | | | | 129,982 | | |
Note payable – related party
|
| | | | 137,856 | | | | | | 115,000 | | |
Venture debt, net of discount
|
| | | | 5,854,326 | | | | | | 4,382,549 | | |
Loan payable, current
|
| | | | 992,000 | | | | | | — | | |
Promissory note payable
|
| | | | 4,500,000 | | | | | | — | | |
Total current liabilities
|
| | | | 20,278,690 | | | | | | 7,625,276 | | |
Convertible notes
|
| | | | 1,215,815 | | | | | | 799,280 | | |
Loan payable
|
| | | | 709,044 | | | | | | — | | |
Warrant liability
|
| | | | 6,265 | | | | | | 7,700 | | |
Total liabilities
|
| | | | 22,209,814 | | | | | | 8,432,256 | | |
Commitments and contingencies (Note 13) | | | | | | | | | | | | | |
Stockholders’ deficit: | | | | | | | | | | | | | |
Series Seed convertible preferred stock, $0.0001 par, 20,714,518 shares authorized, 20,714,518 shares issued and outstanding at both December 31, 2020 and 2019. Convertible into one share of common stock. Liquidation preference of $5,633,855 as of both December 31, 2020 and 2019(1)
|
| | | | 2,071 | | | | | | 2,071 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Series A convertible preferred stock, $0.0001 par, 14,481,413 shares authorized, 5,654,072 shares issued and outstanding at both December 31, 2020 and 2019. Convertible into one share of common stock. Liquidation preference of $2,713,955 as of both December 31, 2020 and 2019(1)
|
| | | | 565 | | | | | | 565 | | |
Series A-2 convertible preferred stock, $0.0001 par, 20,000,000 shares authorized, 5,932,742 shares issued and outstanding at both December 31, 2020 and 2019. Convertible into one share of common stock. Liquidation preference of $2,966,371 as of both December 31, 2020 and 2019(1)
|
| | | | 593 | | | | | | 593 | | |
Series A-3 convertible preferred stock, $0.0001 par, 18,867,925 shares
authorized, 9,032,330 and 8,223,036 shares issued and outstanding at December 31, 2020 and 2019, respectively. Convertible into one share of common stock. Liquidation preference of $4,787,135 and $4,358,209 as of December 31, 2020 and 2019, respectively(1) |
| | | | 904 | | | | | | 823 | | |
Series CF convertible preferred stock, $0.0001 par, 2,000,000 shares authorized, 836,331 and 126,641 shares issued and outstanding at December 31, 2020 and 2019, respectively.
|
| | | | | | | | | | | | |
Convertible into one share of common stock. Liquidation preference of
$434,890 and $65,863 as of December 31, 2020 and 2019, respectively(1) |
| | | | 83 | | | | | | 12 | | |
Series B convertible preferred stock, $0.0001 par, 20,754,717 shares authorized, 20,754,717 and no shares issued and outstanding at December 31, 2020 and 2019, respectively.
|
| | | | | | | | | | | | |
Convertible into one share of common stock. Liquidation preference of $11,000,000 and $0 as of December 31, 2020 and 2019, respectively(1)
|
| | | | 2,075 | | | | | | — | | |
Undesignated preferred stock, $0.0001 par, 936,144 shares authorized, 0
and 0 shares issued and outstanding as of December 31, 2020 and 2019, respectively |
| | | | | | | | | | | | |
Common stock, $0.0001 par, 200,000,000 shares authorized, 664,167 and 664,167 shares issued and outstanding as of both December 31, 2020 and 2019(1)
|
| | | | 66 | | | | | | 66 | | |
Additional paid-in capital
|
| | | | 27,481,995 | | | | | | 15,486,050 | | |
Subscription receivable
|
| | | | — | | | | | | (22,677) | | |
Accumulated deficit
|
| | | | (33,345,997) | | | | | | (22,617,702) | | |
Total stockholders’ deficit
|
| | | | (5,857,645) | | | | | | (7,150,199) | | |
Total liabilities and stockholders’ deficit
|
| | | $ | 16,352,169 | | | | | $ | 1,282,057 | | |
|
| | |
December 31,
Years Ended |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net revenues
|
| | | $ | 5,239,437 | | | | | $ | 3,034,216 | | |
Cost of net revenues
|
| | | | 4,685,755 | | | | | | 1,626,505 | | |
Gross profit
|
| | | | 553,682 | | | | | | 1,407,711 | | |
Operating expenses: | | | | | | | | | | | | | |
General and administrative
|
| | | | 7,149,210 | | | | | | 4,584,010 | | |
Sales and marketing
|
| | | | 576,469 | | | | | | 869,285 | | |
Distribution
|
| | | | 342,466 | | | | | | 801,885 | | |
Loss on disposal of property and equipment
|
| | | | 848,927 | | | | | | — | | |
Impairment of intangible assets
|
| | | | 784,500 | | | | | | — | | |
Total operating expenses
|
| | | | 9,701,572 | | | | | | 6,255,180 | | |
Loss from operations
|
| | | | (9,147,890) | | | | | | (4,847,469) | | |
Other income (expense): | | | | | | | | | | | | | |
Interest expense
|
| | | | (1,599,518) | | | | | | (772,592) | | |
Other non-operating income (expenses)
|
| | | | 32,754 | | | | | | (33,112) | | |
Total other income (expense), net
|
| | | | (1,566,764) | | | | | | (805,704) | | |
Provision for income taxes
|
| | | | 13,641 | | | | | | 800 | | |
Net loss
|
| | | $ | (10,728,295) | | | | | $ | (5,653,973) | | |
Weighted average vested common shares outstanding – basic and diluted(1)
|
| | | | 664,167 | | | | | | 664,167 | | |
Net loss per common share – basic and diluted
|
| | | $ | (16.15) | | | | | $ | (8.51) | | |
| | |
Series Seed
Preferred Stock |
| |
Series A
Preferred Stock |
| |
Series A-2
Preferred Stock |
| |
Series A-3
Preferred Stock |
| |
Series CF
Preferred Stock |
| |
Series B
Preferred Stock |
| |
Common
Stock |
| |
Additional
Paid-in Capital |
| |
Subscription
Receivable |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Deficit |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
Shares(1)
|
| |
Amount
|
| |
Shares(1)
|
| |
Amount
|
| |
Shares(1)
|
| |
Amount
|
| |
Shares(1)
|
| |
Amount
|
| |
Shares(1)
|
| |
Amount
|
| |
Shares(1)
|
| |
Amount
|
| |
Shares(1)
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31,
2018 |
| | | | 20,714,518 | | | | | $ | 2,071 | | | | | | 5,650,903 | | | | | $ | 565 | | | | | | 5,932,742 | | | | | $ | 593 | | | | | | 3,447,608 | | | | | $ | 345 | | | | | | 124,204 | | | | | $ | 12 | | | | | | — | | | | | $ | — | | | | | | 664,167 | | | | | $ | 66 | | | | | $ | 13,242,183 | | | | | $ | (8,283) | | | | | $ | (16,963,729) | | | | | $ | (3,726,177) | | |
Stock-based
compensation Issuance of Series CF preferred stock |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 172,491 | | | | | | — | | | | | | — | | | | | | 172,491 | | |
Shares issued to holders in prior offerings
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,437 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 8,283 | | | | | | — | | | | | | 8,283 | | |
Issuance of Series A-3 preferred stock
|
| | | | — | | | | | | — | | | | | | 3,169 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Offering costs
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,775,428 | | | | | | 478 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,530,499 | | | | | | (22,677) | | | | | | — | | | | | | 2,508,300 | | |
Fair value of warrant issuances – venture debt .
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (509,051) | | | | | | — | | | | | | — | | | | | | (509,051) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 49,928 | | | | | | — | | | | | | — | | | | | | 49,928 | | |
Balances at December 31,
2019 |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (5,653,973) | | | | | | (5,653,973) | | |
| | | | | 20,714,518 | | | | | $ | 2,071 | | | | | | 5,654,072 | | | | | $ | 565 | | | | | | 5,932,742 | | | | | $ | 593 | | | | | | 8,223,036 | | | | | $ | 823 | | | | | | 126,641 | | | | | $ | 12 | | | | | | — | | | | | $ | — | | | | | | 664,167 | | | | | $ | 66 | | | | | $ | 15,486,050 | | | | | $ | (22,677) | | | | | $ | (22,617,702) | | | | | $ | (7,150,199) | | |
Stock-based
compensation Issuance of Series CF preferred stock |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 144,775 | | | | | | — | | | | | | — | | | | | | 144,775 | | |
Issuance of Series A-3 preferred stock.
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 709,690 | | | | | | 71 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 309,679 | | | | | | — | | | | | | — | | | | | | 309,750 | | |
Issuance of Series B preferred stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 809,294 | | | | | | 81 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 428,845 | | | | | | 22,677 | | | | | | — | | | | | | 451,603 | | |
Offering costs
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 20,754,717 | | | | | | 2,075 | | | | | | — | | | | | | — | | | | | | 10,997,925 | | | | | | — | | | | | | — | | | | | | 11,000,000 | | |
Fair value of warrant issuances – venture debt .
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (69,470) | | | | | | — | | | | | | — | | | | | | (69,470) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 184,191 | | | | | | — | | | | | | — | | | | | | 184,191 | | |
Balances at December 31,
2020 |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (10,728,295) | | | | | | (10,728,295) | | |
| | | | | 20,714,518 | | | | | $ | 2,071 | | | | | | 5,654,072 | | | | | $ | 565 | | | | | | 5,932,742 | | | | | $ | 593 | | | | | | 9,032,330 | | | | | $ | 904 | | | | | | 836,331 | | | | | $ | 83 | | | | | | 20,754,717 | | | | | $ | 2,075 | | | | | | 664,167 | | | | | $ | 66 | | | | | $ | 27,481,995 | | | | | $ | — | | | | | $ | (33,345,997) | | | | | $ | (5,857,645) | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (10,728,295) | | | | | $ | (5,653,973) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 603,857 | | | | | | 48,885 | | |
Amortization of loan discount and fees
|
| | | | 241,878 | | | | | | 149,948 | | |
Stock-based compensation
|
| | | | 144,775 | | | | | | 172,491 | | |
Change in fair value of warrant liability
|
| | | | (2,353) | | | | | | — | | |
Impairment of intangible assets
|
| | | | 784,500 | | | | | | — | | |
Loss on disposal of property and equipment
|
| | | | 848,927 | | | | | | — | | |
Change in credit reserve
|
| | | | (207,666) | | | | | | — | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable, net
|
| | | | 1,947 | | | | | | — | | |
Due from factor, net
|
| | | | 1,616,939 | | | | | | — | | |
Inventory
|
| | | | 3,202,350 | | | | | | 146,673 | | |
Other current assets
|
| | | | 168,589 | | | | | | 114,898 | | |
Accounts payable
|
| | | | 673,263 | | | | | | 610,216 | | |
Accrued expenses and other liabilities
|
| | | | (591,028) | | | | | | 602,384 | | |
Deferred revenue
|
| | | | (13,564) | | | | | | (259,728) | | |
Accrued compensation – related party
|
| | | | 178,026 | | | | | | 68,859 | | |
Accrued interest
|
| | | | 1,016,268 | | | | | | 129,982 | | |
Net cash used in operating activities
|
| | | | (2,061,587) | | | | | | (3,869,365) | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Cash acquired in business combination
|
| | | | 106,913 | | | | | | — | | |
Purchases of property and equipment
|
| | | | (864) | | | | | | (7,848) | | |
Deposits
|
| | | | 98,835 | | | | | | 14,490 | | |
Net cash provided by investing activities
|
| | | | 204,884 | | | | | | 6,642 | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Proceeds (repayment) – related party advances, net
|
| | | | 22,856 | | | | | | (105,812) | | |
Repayments to factor
|
| | | | (1,931,369) | | | | | | — | | |
Proceeds from venture debt
|
| | | | 1,050,000 | | | | | | 508,249 | | |
Proceeds from loans payable
|
| | | | 1,701,044 | | | | | | — | | |
Proceeds from convertible notes payable
|
| | | | 1,250,308 | | | | | | 799,280 | | |
Proceeds from sale of Series A-3 preferred stock
|
| | | | 428,926 | | | | | | 2,508,300 | | |
Subscription receivable from Series A-3 preferred stock
|
| | | | 22,677 | | | | | | — | | |
Proceeds from sale of Series CF preferred stock, net of fees
|
| | | | 309,750 | | | | | | 8,283 | | |
Offering costs
|
| | | | (461,972) | | | | | | (399,589) | | |
Net cash provided by financing activities
|
| | | | 2,392,220 | | | | | | 3,318,711 | | |
Net increase (decrease) in cash and cash equivalents
|
| | | | 535,517 | | | | | | (544,012) | | |
Cash and cash equivalents at beginning of year
|
| | | | 40,469 | | | | | | 584,481 | | |
Cash and cash equivalents at end of year
|
| | | $ | 575,986 | | | | | $ | 40,469 | | |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | |
Cash paid for income taxes
|
| | | $ | — | | | | | $ | — | | |
Cash paid for interest
|
| | | $ | 264,177 | | | | | $ | 90,000 | | |
Supplemental disclosure of non-cash investing and financing activities: | | | | | | | | | | | | | |
Warrants issued for offering costs
|
| | | $ | 918 | | | | | $ | 6,600 | | |
Warrants issued with venture debt
|
| | | $ | 184,191 | | | | | $ | 49,928 | | |
Venture debt issued in exchange of forgiveness of accrued interest
|
| | | $ | 409,211 | | | | | $ | — | | |
Issuance of promissory note payable in acquisition
|
| | | $ | 4,500,000 | | | | | $ | — | | |
Issuance of Series B preferred stock in acquisition
|
| | | $ | 11,000,000 | | | | | $ | — | | |
| | |
Warrant Liability
|
| |||
Oustanding as of December 31, 2018
|
| | | $ | — | | |
Warrants granted
|
| | | | 7,700 | | |
Oustanding as of December 31, 2019
|
| | | | 7,700 | | |
Warrants granted
|
| | | | 918 | | |
Change in fair value
|
| | | | (2,353) | | |
Oustanding as of December 31, 2020
|
| | | $ | 6,265 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Computer equipment
|
| | | $ | 57,810 | | | | | $ | 57,004 | | |
Furniture and fixtures
|
| | | | 207,140 | | | | | | 70,108 | | |
Leasehold improvements
|
| | | | 69,274 | | | | | | 40,351 | | |
| | | | | 334,224 | | | | | | 167,463 | | |
Accumulated depreciation
|
| | | | (334,224) | | | | | | (97,703) | | |
Property and equipment, net
|
| | | $ | — | | | | | $ | 69,760 | | |
Software
|
| | | $ | 278,405 | | | | | $ | 56,450 | | |
Accumulated amortization
|
| | | | (216,092) | | | | | | (53,617) | | |
Software, net
|
| | | $ | 62,313 | | | | | $ | 2,833 | | |
|
Customer relationships
|
| |
3 years
|
|
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Series Seed Preferred Stock (convertible to common stock)
|
| | | | 20,714,518 | | | | | | 20,714,518 | | |
Series A Preferred Stock (convertible to common stock)
|
| | | | 5,654,072 | | | | | | 5,654,072 | | |
Series A-2 Preferred Stock (convertible to common stock)
|
| | | | 5,932,742 | | | | | | 5,932,742 | | |
Series CF Preferred Stock (convertible to common stock)
|
| | | | 836,331 | | | | | | 126,641 | | |
Series A-3 Preferred Stock (convertible to common stock)
|
| | | | 9,032,330 | | | | | | 8,223,036 | | |
Series B Preferred Stock (convertible to common stock)
|
| | | | 20,754,717 | | | | | | — | | |
Common stock warrants
|
| | | | 914,539 | | | | | | 417,962 | | |
Preferred stock warrants
|
| | | | 806,903 | | | | | | 806,903 | | |
Stock options
|
| | | | 1,163,103 | | | | | | 1,084,215 | | |
Total potentially dilutive shares
|
| | | | 65,809,254 | | | | | | 42,960,089 | | |
|
Series B preferred stock
|
| | | $ | 11,000,000 | | |
|
Promissory note payable
|
| | | | 4,500,000 | | |
|
Purchase price consideration
|
| | | $ | 15,500,000 | | |
| | |
Purchase Price
Allocation |
| |||
Cash and cash equivalents
|
| | | $ | 106,913 | | |
Accounts receivable
|
| | | | 37,479 | | |
Due from/(to) factor
|
| | | | (312,063) | | |
Inventory
|
| | | | 3,303,660 | | |
Prepaid expenses
|
| | | | 165,856 | | |
Deposits
|
| | | | 187,493 | | |
Property, equipment and software
|
| | | | 1,215,748 | | |
| | |
Purchase Price
Allocation |
| |||
Goodwill
|
| | | | 6,479,218 | | |
Intangible assets (Note 6)
|
| | | | 8,600,000 | | |
Accounts payable
|
| | | | (3,397,547) | | |
Accrued expenses and other liabilities
|
| | | | (886,757) | | |
Purchase price consideration
|
| | | $ | 15,500,000 | | |
|
| | |
Year Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net revenues
|
| | | $ | 7,259,260 | | | | | $ | 30,133,934 | | |
Net loss
|
| | | $ | (12,786,695) | | | | | $ | (11,868,423) | | |
Net loss per common share
|
| | | $ | (19.25) | | | | | $ | (17.87) | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Outstanding receivables:
|
| | | | | | | | | | | | |
Without recourse
|
| | | $ | 151,158 | | | | | $ | — | | |
With recourse
|
| | | | 42,945 | | | | | | — | | |
Advances
|
| | | | 56,246 | | | | | | — | | |
Credits due customers
|
| | | | (40,316) | | | | | | — | | |
| | | | $ | 210,033 | | | | | $ | — | | |
| | |
Gross
Amount |
| |
Accumulated
Amortization |
| |
Carrying
Value |
| |||||||||
Amortized: | | | | | | | | | | | | | | | | | | | |
Customer relationships
|
| | | $ | 1,100,000 | | | | | $ | (320,833) | | | | | $ | 779,167 | | |
| | | | | 1,100,000 | | | | | | (320,833) | | | | | | 779,167 | | |
Indefinite-lived: | | | | | | | | | | | | | | | | | | | |
Brand name
|
| | | | 6,715,500 | | | | | | — | | | | | | 6,715,500 | | |
| | | | $ | 7,815,500 | | | | | $ | (320,833) | | | | | $ | 7,494,667 | | |
| Year Ending December 31, | | | | | | | |
|
2021
|
| | | | 366,667 | | |
|
2022
|
| | | | 366,667 | | |
|
2023
|
| | | | 45,833 | | |
| | | | | $ | 779,167 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Accrued expenses
|
| | | $ | 92,074 | | | | | $ | 188,341 | | |
Reserve for returns
|
| | | | 5,229 | | | | | | 100,000 | | |
Payroll related liabilities
|
| | | | 843,704 | | | | | | 412,155 | | |
Sales tax liability
|
| | | | 196,410 | | | | | | 156,707 | | |
Other liabilities
|
| | | | 108,230 | | | | | | 264,114 | | |
| | | | $ | 1,245,646 | | | | | $ | 1,121,317 | | |
| | |
Year Ended December 31,
|
| |||
| | |
2020
|
| |
2019
|
|
Risk Free Interest Rate
|
| |
0.59 – 1.59%
|
| |
1.47 – 2.49%
|
|
Expected Dividend Yield
|
| |
0.00%
|
| |
0.00%
|
|
Expected Volatility
|
| |
58.0 – 100%
|
| |
58.0 – 100%
|
|
Expected Life (years)
|
| |
10.00
|
| |
5.00
|
|
| | |
Common
Stock Warrants |
| |
Weighted
Average Exercise Price |
| ||||||
Outstanding – December 31, 2018
|
| | | | 268,656 | | | | | $ | 2.50 | | |
Granted
|
| | | | 149,946 | | | | | | 3.28 | | |
Exercised
|
| | | | — | | | | | | — | | |
Forfeited
|
| | | | (640) | | | | | | — | | |
Outstanding – December 31, 2019
|
| | | | 417,962 | | | | | $ | 2.81 | | |
Granted
|
| | | | 496,577 | | | | | | 2.53 | | |
Exercised
|
| | | | — | | | | | | — | | |
Forfeited
|
| | | | — | | | | | | — | | |
Outstanding – December 31, 2020
|
| | | | 914,539 | | | | | $ | 2.66 | | |
Exercisable at December 31, 2020
|
| | | | 914,539 | | | | | $ | 2.66 | | |
| | |
2019
|
| |||
Risk Free Interest Rate
|
| | | | 2.49% | | |
Expected Dividend Yield
|
| | | | 0.00% | | |
Expected Volatility
|
| | | | 58.00% | | |
Expected Life (years)
|
| | | | 5.00 | | |
| | |
Preferred
Stock Warrants |
| |
Weighted
Average Exercise Price |
| ||||||
Outstanding – December 31, 2018
|
| | | | 545,473 | | | | | $ | 0.47 | | |
Granted
|
| | | | 261,430 | | | | | | 0.53 | | |
Exercised
|
| | | | — | | | | | | — | | |
Forfeited
|
| | | | — | | | | | | — | | |
Outstanding – December 31, 2019
|
| | | | 806,903 | | | | | $ | 0.49 | | |
Exercised
|
| | | | — | | | | | | — | | |
Forfeited
|
| | | | — | | | | | | — | | |
Outstanding – December 31, 2020
|
| | | | 806,903 | | | | | $ | 0.49 | | |
Exercisable at December 31, 2020
|
| | | | 806,903 | | | | | $ | 0.49 | | |
| | |
Options
|
| |
Weighted
Average Exercise Price |
| ||||||
Outstanding – December 31, 2018
|
| | | | 1,136,091 | | | | | $ | 2.34 | | |
Granted
|
| | | | 168,525 | | | | | | 3.28 | | |
Exercised
|
| | | | — | | | | | | — | | |
Forfeited
|
| | | | (220,401) | | | | | | — | | |
Outstanding – December 31, 2019
|
| | | | 1,084,215 | | | | | $ | 2.50 | | |
Granted
|
| | | | 91,688 | | | | | | 0.94 | | |
Exercised
|
| | | | — | | | | | | — | | |
Forfeited
|
| | | | (12,800) | | | | | | 3.28 | | |
Outstanding – December 31, 2020
|
| | | | 1,163,103 | | | | | $ | 2.34 | | |
Exercisable at December 31, 2020
|
| | | | 880,955 | | | | | $ | 2.34 | | |
Weighted average grant date fair value of options granted during period
|
| | | | | | | | | $ | 0.500 | | |
Weighted average duration (years) to expiration of outstanding options
at December 31, 2020 |
| | | | | | | | | | 6.02 | | |
| | |
Year Ended December 31,
|
| |||
| | |
2020
|
| |
2019
|
|
Risk Free Interest Rate
|
| |
0.42% – 0.51%
|
| |
1.59% – 2.55%
|
|
Expected Dividend Yield
|
| |
0%
|
| |
0%
|
|
Expected Volatility
|
| |
58%
|
| |
58%
|
|
Expected Life (years)
|
| |
6.25
|
| |
6.25
|
|
Weighted Average fair value of stock options granted
|
| |
$0.50
|
| |
$0.26
|
|
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Deferred tax assets: | | | | | | | | | | | | | |
Net operating loss carryforwards
|
| | | $ | 9,134,447 | | | | | $ | 6,060,102 | | |
Stock-based compensation
|
| | | | 40,467 | | | | | | 36,829 | | |
Deferred tax liabilities: | | | | | | | | | | | | | |
Depreciation timing differences
|
| | | | (5,103) | | | | | | (5,103) | | |
Other
|
| | | | (41,198) | | | | | | (44,711) | | |
Valuation allowance
|
| | | | (9,128,614) | | | | | | (6,047,117) | | |
Net deferred tax assets
|
| | | $ | — | | | | | $ | — | | |
| | |
Pages
|
| |||
| | | | F-33 | | | |
| | | | F-36 | | | |
| | | | F-37 | | | |
| | | | F-38 | | | |
| | | | F-39 | | | |
| | | | F-40 | | |
| | |
2019
|
| |
2018
|
| ||||||
Assets | | | | | | | | | | | | | |
Current assets:
|
| | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 358,726 | | | | | $ | 962,313 | | |
Due from factor, net
|
| | | | — | | | | | | 1,312,743 | | |
Accounts receivable, net of allowance of $155,973 and $257,140
|
| | | | 261,190 | | | | | | 456,510 | | |
Inventory
|
| | | | 3,038,185 | | | | | | 3,643,298 | | |
Prepaid and other current assets
|
| | | | 178,888 | | | | | | 236,746 | | |
Total current assets
|
| | | | 3,836,989 | | | | | | 6,611,610 | | |
Property and equipment, net
|
| | | | 1,265,152 | | | | | | 1,242,158 | | |
Other assets
|
| | | | 151,049 | | | | | | 240,919 | | |
Total assets
|
| | | $ | 5,253,190 | | | | | $ | 8,094,687 | | |
Liabilities and members’ equity (deficit) | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 3,462,200 | | | | | $ | 2,593,733 | | |
Due to factor, net
|
| | | | 101,251 | | | | | | — | | |
Accrued liabilities
|
| | | | 595,611 | | | | | | 545,176 | | |
Total current liabilities
|
| | | | 4,159,062 | | | | | | 3,138,909 | | |
Deferred rent
|
| | | | 264,683 | | | | | | 184,461 | | |
Notes payable – related party member
|
| | | | 850,000 | | | | | | — | | |
Total liabilities
|
| | | | 5,273,745 | | | | | | 3,323,370 | | |
Members’ equity (deficit)
|
| | | | (20,555) | | | | | | 4,771,317 | | |
Total liabilities and members’ equity (deficit)
|
| | | $ | 5,253,190 | | | | | $ | 8,094,687 | | |
| | |
2019
|
| |
2018
|
| ||||||
Net sales
|
| | | $ | 27,099,718 | | | | | $ | 29,037,497 | | |
Cost of sales
|
| | | | 12,663,514 | | | | | | 13,451,654 | | |
Gross profit
|
| | | | 14,436,204 | | | | | | 15,585,843 | | |
Operating expenses: | | | | | | | | | | | | | |
Design, selling, and shipping
|
| | | | 4,535,276 | | | | | | 4,702,589 | | |
General and administrative
|
| | | | 14,524,832 | | | | | | 13,054,218 | | |
Total operating expenses
|
| | | | 19,060,108 | | | | | | 17,756,807 | | |
Loss from operations
|
| | | | (4,623,904) | | | | | | (2,170,964) | | |
Other expense: | | | | | | | | | | | | | |
Loss on disposal of property and equipment
|
| | | | 49,558 | | | | | | 506,280 | | |
Interest expense, net
|
| | | | 103,520 | | | | | | 25,319 | | |
Total other expense
|
| | | | 153,078 | | | | | | 531,599 | | |
Loss before provision for income taxes
|
| | | | (4,776,982) | | | | | | (2,702,563) | | |
Income tax expense
|
| | | | 14,890 | | | | | | 13,390 | | |
Net Loss
|
| | | $ | (4,791,872) | | | | | $ | (2,715,953) | | |
| | |
Members’
Equity (Deficit) |
| |||
December 31, 2017
|
| | | $ | 7,783,328 | | |
Distributions
|
| | | | (296,058) | | |
Net loss
|
| | | | (2,715,953) | | |
December 31, 2018
|
| | | | 4,771,317 | | |
Net loss
|
| | | | (4,791,872) | | |
December 31, 2019
|
| | | $ | (20,555) | | |
| | |
2019
|
| |
2018
|
| ||||||
| | |
(restated)
|
| | | | | | | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (4,791,872) | | | | | $ | (2,715,953) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | | | | | | | | | | |
Depreciation
|
| | | | 484,776 | | | | | | 358,526 | | |
Decrease in open credit reserve
|
| | | | 102,067 | | | | | | (395,488) | | |
Loss on sale of property and equipment
|
| | | | 49,558 | | | | | | 506,280 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Factor receivable
|
| | | | 321,888 | | | | | | 1,143,896 | | |
Accounts receivable
|
| | | | 195,320 | | | | | | (81,099) | | |
Inventory
|
| | | | 605,113 | | | | | | (171,393) | | |
Prepaid expenses and other current assets
|
| | | | 57,858 | | | | | | 212,700 | | |
Other assets
|
| | | | 89,870 | | | | | | (9,500) | | |
Accounts payable
|
| | | | 868,467 | | | | | | 685,642 | | |
Accrued liabilities
|
| | | | 50,435 | | | | | | (17,460) | | |
Deferred rent
|
| | | | 80,222 | | | | | | (139,901) | | |
Net cash used in operating activities
|
| | | | (1,886,298) | | | | | | (623,750) | | |
ASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | |
Purchase of property and equipment
|
| | | | (557,328) | | | | | | (185,970) | | |
Net cash used in operating activities
|
| | | | (557,328) | | | | | | (185,970) | | |
ASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | |
Distributions to members
|
| | | | — | | | | | | (296,058) | | |
Proceeds – notes payable – related party member
|
| | | | 850,000 | | | | | | — | | |
Advances from Factor
|
| | | | 990,039 | | | | | | 645,572 | | |
Net cash provided by financing activities
|
| | | | 1,840,039 | | | | | | 349,514 | | |
Decrease in cash and cash equivalents
|
| | | | (603,587) | | | | | | (460,206) | | |
Cash and cash equivalents, beginning of year
|
| | | | 962,313 | | | | | | 1,422,519 | | |
Cash and cash equivalents, end of year
|
| | | $ | 358,726 | | | | | $ | 962,313 | | |
Supplemental disclosures of cash flow information:
|
| | | | | | | | | | | | |
Cash paid for interest
|
| | | $ | 91,887 | | | | | $ | 35,127 | | |
Cash paid for income taxes
|
| | | $ | 14,890 | | | | | $ | 13,390 | | |
Due to/from factor consist of the following at December 31, :
|
| |
2019
|
| |
2018
|
| ||||||
Outstanding receivables: | | | | | | | | | | | | | |
Without recourse
|
| | | $ | 2,058,298 | | | | | $ | 2,339,588 | | |
With recourse
|
| | | | 5,001 | | | | | | 45,599 | | |
Advances
|
| | | | (1,891,348) | | | | | | (901,309) | | |
Credits due customers
|
| | | | (273,202) | | | | | | (171,135) | | |
| | | | $ | (101,251) | | | | | $ | 1,312,743 | | |
Inventories consist of the following at December 31,:
|
| |
2019
|
| |
2018
|
| ||||||
Finished goods
|
| | | $ | 2,327,882 | | | | | $ | 2,766,476 | | |
Work-in process
|
| | | | 193,873 | | | | | | 351,246 | | |
Raw materials
|
| | | | 516,430 | | | | | | 525,576 | | |
| | | | $ | 3,038,185 | | | | | $ | 3,643,298 | | |
Property and equipment consists of the following at December 31,:
|
| |
2019
|
| |
2018
|
| ||||||
Machinery and equipment
|
| | | $ | 265,618 | | | | | $ | 312,846 | | |
Furniture and fixtures
|
| | | | 1,064,698 | | | | | | 962,218 | | |
Leasehold improvements
|
| | | | 1,307,976 | | | | | | 986,392 | | |
| | | | | 2,638,292 | | | | | | 2,261,456 | | |
Less accumulated depreciation and amortization
|
| | | | (1,373,140) | | | | | | (1,019,298) | | |
| | | | $ | 1,265,152 | | | | | $ | 1,242,158 | | |
|
2020
|
| | | $ | 809,939 | | |
|
2021
|
| | | | 795,067 | | |
|
2022
|
| | | | 821,630 | | |
|
2023
|
| | | | 456,202 | | |
|
2024
|
| | | | 394,241 | | |
|
Thereafter
|
| | | | 1,238,998 | | |
| | | | | $ | 4,516,077 | | |
| | | | | F-48 | | | |
| | | | | F-49 | | | |
| | | | | F-50 | | | |
| | | | | F-51 | | | |
| | | | | F-52 | | | |
| | | | | F-53 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 51,315 | | | | | $ | 18,509 | | |
Accounts receivable, net
|
| | | | 38,689 | | | | | | 31,995 | | |
Inventory
|
| | | | 73,690 | | | | | | 42,643 | | |
Other current assets
|
| | | | 54,423 | | | | | | 129,162 | | |
Total current assets
|
| | | | 218,117 | | | | | | 222,309 | | |
Fixed assets, net
|
| | | | 138,040 | | | | | | 221,686 | | |
Intangible assets, net
|
| | | | 2,034 | | | | | | 2,206 | | |
Other assets
|
| | | | 4,416 | | | | | | 15,004 | | |
Total assets
|
| | | $ | 362,607 | | | | | $ | 461,205 | | |
LIABILITIES AND MEMBERS’ DEFICIT | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 187,516 | | | | | $ | 119,068 | | |
Accrued liabilities
|
| | | | 31,771 | | | | | | 21,297 | | |
Other current liabilities
|
| | | | 68,335 | | | | | | 66,437 | | |
Note payable, current portion
|
| | | | 60,941 | | | | | | 147,562 | | |
Related party notes payable, current portion
|
| | | | — | | | | | | 75,000 | | |
Deferred rent
|
| | | | 19,432 | | | | | | 23,161 | | |
Deferred revenue
|
| | | | 264,802 | | | | | | 286,255 | | |
Total current liabilities
|
| | | | 632,797 | | | | | | 738,780 | | |
Related party notes payable, net of current portion
|
| | | | 635,000 | | | | | | 425,000 | | |
Notes payable, net of current portion
|
| | | | 276,754 | | | | | | 49,441 | | |
Total liabilities
|
| | | | 1,544,551 | | | | | | 1,213,221 | | |
Commitments and contingencies (Note 8) | | | | | | | | | | | | | |
Members’ deficit: | | | | | | | | | | | | | |
Class A members units, $0.00001 par value, 100 authorized; 100 outstanding
at both December 31, 2020 and 2019 |
| | | | — | | | | | | — | | |
Class B members units, $0.00001 par value, 100 authorized; 87 and 100 outstanding at December 31, 2020 and 2019, respectively
|
| | | | — | | | | | | — | | |
Additional paid-in capital
|
| | | | 102,083 | | | | | | 112,565 | | |
Accumulated deficit
|
| | | | (1,284,027) | | | | | | (864,581) | | |
Total members’ deficit
|
| | | | (1,181,944) | | | | | | (752,016) | | |
Total liabilities and members’ deficit
|
| | | $ | 362,607 | | | | | $ | 461,205 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Revenues
|
| | | $ | 2,542,721 | | | | | $ | 3,325,762 | | |
Cost of goods sold
|
| | | | 897,873 | | | | | | 1,202,819 | | |
Gross profit
|
| | | | 1,644,848 | | | | | | 2,122,943 | | |
Operating expenses: | | | | | | | | | | | | | |
General and administrative
|
| | | | 1,044,397 | | | | | | 717,901 | | |
Sales and marketing
|
| | | | 1,163,124 | | | | | | 1,577,478 | | |
Total operating expenses
|
| | | | 2,207,521 | | | | | | 2,295,379 | | |
Loss from operations
|
| | | | (562,673) | | | | | | (172,436) | | |
Other income (expense): | | | | | | | | | | | | | |
Interest expense
|
| | | | (92,270) | | | | | | (53,955) | | |
Gain on forgiveness of debt
|
| | | | 225,388 | | | | | | — | | |
Other income
|
| | | | 10,109 | | | | | | 50,000 | | |
Total other income (expense), net
|
| | | | 143,227 | | | | | | (3,955) | | |
Provision for income taxes
|
| | | | — | | | | | | — | | |
Net loss
|
| | | $ | (419,446) | | | | | $ | (176,391) | | |
| | |
Class A
Members’ Units |
| |
Class B
Members’ Units |
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |
Total
Members’ Deficit |
| |||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||
Balances at December 31,
2018 |
| | | | 100 | | | | | $ | — | | | | | | 100 | | | | | $ | — | | | | | $ | 112,565 | | | | | $ | (688,190) | | | | | $ | (575,625) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (176,391) | | | | | | (176,391) | | |
Balances at December 31,
2019 |
| | | | 100 | | | | | $ | — | | | | | | 100 | | | | | $ | — | | | | | $ | 112,565 | | | | | $ | (864,581) | | | | | $ | (752,016) | | |
Contributions
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 771 | | | | | | — | | | | | | 771 | | |
Repurchase of members’
units |
| | | | — | | | | | | — | | | | | | (13) | | | | | | — | | | | | | (11,253) | | | | | | — | | | | | | (11,253) | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (419,446) | | | | | | (419,446) | | |
Balances at December 31,
2020 |
| | | | 100 | | | | | $ | — | | | | | | 87 | | | | | $ | — | | | | | $ | 102,083 | | | | | $ | (1,284,027) | | | | | $ | (1,181,944) | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (419,446) | | | | | $ | (176,391) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 149,568 | | | | | | 82,422 | | |
Gain on forgiveness of note payable
|
| | | | (225,388) | | | | | | — | | |
Bad debt expense
|
| | | | 42,078 | | | | | | — | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable, net
|
| | | | (48,772) | | | | | | 968 | | |
Inventory
|
| | | | (31,047) | | | | | | (17,577) | | |
Deposits
|
| | | | — | | | | | | (5,438) | | |
Other assets
|
| | | | 85,327 | | | | | | (66,659) | | |
Accounts payable
|
| | | | 68,448 | | | | | | 79,266 | | |
Accrued expenses and other current liabilities
|
| | | | 12,372 | | | | | | (12,130) | | |
Deferrent rent
|
| | | | (3,729) | | | | | | 12,784 | | |
Deferred revenue
|
| | | | (21,453) | | | | | | 124,162 | | |
Net cash provided by (used in) operating activities
|
| | | | (392,042) | | | | | | 21,407 | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Purchases of property and equipment and intangibles
|
| | | | (65,750) | | | | | | (254,437) | | |
Net cash used in investing activities
|
| | | | (65,750) | | | | | | (254,437) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Proceeds from related party notes payable
|
| | | | 210,000 | | | | | | 200,000 | | |
Proceeds from notes payable
|
| | | | 382,600 | | | | | | 200,000 | | |
Principal payments on line of credit
|
| | | | — | | | | | | (160,000) | | |
Proceeds from line of credit
|
| | | | 125,000 | | | | | | — | | |
Principal repayments of notes payable
|
| | | | (141,520) | | | | | | — | | |
Principal payments on related party notes payable
|
| | | | (75,000) | | | | | | (2,998) | | |
Member contributions
|
| | | | 771 | | | | | | — | | |
Repurchase of members’ units
|
| | | | (11,253) | | | | | | — | | |
Net cash provided by financing activities
|
| | | | 490,598 | | | | | | 237,002 | | |
Net increase in cash and cash equivalents
|
| | | | 32,806 | | | | | | 3,972 | | |
Cash and cash equivalents at beginning of year
|
| | | | 18,509 | | | | | | 14,537 | | |
Cash and cash equivalents at end of year
|
| | | $ | 51,315 | | | | | $ | 18,509 | | |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | |
Cash paid for income taxes
|
| | | $ | — | | | | | $ | — | | |
Cash paid for interest
|
| | | $ | 82,270 | | | | | $ | 53,955 | | |
Non cash investing and financing activities: | | | | | | | | | | | | | |
Conversion of line of credit to note payable
|
| | | $ | 125,000 | | | | | | — | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Leasehold improvements and showrooms
|
| | | $ | 375,677 | | | | | $ | 309,928 | | |
Accumulated amortization
|
| | | | (237,637) | | | | | | (88,242) | | |
Fixed Assets, net
|
| | | $ | 138,040 | | | | | $ | 221,686 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Note payable to bank, principal due November 27, 2020 bearing interest at 1.75% over prime (4.75% at December 31, 2019)
|
| | | $ | — | | | | | $ | 123,917 | | |
Note payable to bank, principal due December 2025, bearing interest at 5.526%
|
| | | | 125,000 | | | | | | — | | |
Note payable to majority owner, principal due on or before December 31, 2020, variable monthly payments, interest at 8.5% . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | — | | | | | | 75,000 | | |
Note payable to a bank, monthly installments of $2,279 through November 26, 2022, bearing interest at 5.85% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 55,483 | | | | | | 73,086 | | |
PPP and EIDL Loans (see below for terms) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 157,212 | | | | | | — | | |
Note payable to a company owned by the majority owner of the Company, due on or before July 10, 2022, bearing interest at 12% . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 635,000 | | | | | | 425,000 | | |
| | | | $ | 972,695 | | | | | $ | 697,003 | | |
Year Ending December 31,
|
| | | | | | |
2021
|
| | | $ | 60,941 | | |
2022
|
| | | | 686,007 | | |
2023
|
| | | | 28,119 | | |
2024
|
| | | | 29,654 | | |
2025
|
| | | | 31,171 | | |
Thereafter
|
| | | | 136,803 | | |
| | | | | 972,695 | | |
Less: current portion of note payable
|
| | | | (60,941) | | |
Notes payable, long-term
|
| | | $ | 911,754 | | |
|
2021
|
| | | $ | 95,617 | | |
|
2022
|
| | | | 42,996 | | |
| | | | | $ | 138,613 | | |
| Condensed Consolidated Financial Statements – Unaudited | | | | | | | |
| | | | | F-60 | | | |
| | | | | F-61 | | | |
| | | | | F-62 | | | |
| | | | | F-63 | | | |
| | | | | F-64 | | |
| | |
September 30,
2021 |
| |
December 31,
2020 |
| ||||||
ASSETS | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 254,527 | | | | | $ | 575,986 | | |
Accounts receivable, net
|
| | | | 272,264 | | | | | | 35,532 | | |
Due from factor, net
|
| | | | 1,094,309 | | | | | | 210,033 | | |
Inventory
|
| | | | 2,327,542 | | | | | | 1,163,279 | | |
Prepaid expenses and other current assets
|
| | | | 1,525,818 | | | | | | 23,826 | | |
Total current assets
|
| | | | 5,474,460 | | | | | | 2,008,656 | | |
Deferred offering costs
|
| | | | 367,696 | | | | | | 214,647 | | |
Property, equipment and software, net
|
| | | | 97,862 | | | | | | 62,313 | | |
Goodwill
|
| | | | 17,771,031 | | | | | | 6,479,218 | | |
Intangible assets, net
|
| | | | 16,779,126 | | | | | | 7,494,667 | | |
Deposits
|
| | | | 174,109 | | | | | | 92,668 | | |
Total assets
|
| | | $ | 40,664,284 | | | | | $ | 16,352,169 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 6,855,352 | | | | | $ | 5,668,703 | | |
Accrued expenses and other liabilities
|
| | | | 1,853,954 | | | | | | 1,245,646 | | |
Deferred revenue
|
| | | | 193,023 | | | | | | 1,667 | | |
Due to related parties
|
| | | | 232,635 | | | | | | 441,453 | | |
Contingent consideration liability
|
| | | | 10,527,910 | | | | | | — | | |
Convertible notes, current
|
| | | | 100,000 | | | | | | 700,000 | | |
Accrued interest payable
|
| | | | 855,729 | | | | | | 737,039 | | |
Note payable – related party
|
| | | | 299,489 | | | | | | 137,856 | | |
Venture debt, current
|
| | | | 300,000 | | | | | | 5,854,326 | | |
Loan payable, current
|
| | | | 1,796,000 | | | | | | 992,000 | | |
Promissory note payable, current
|
| | | | 655,000 | | | | | | 4,500,000 | | |
Total current liabilities
|
| | | | 23,669,092 | | | | | | 20,278,690 | | |
Convertible note payable, net
|
| | | | 2,793,385 | | | | | | 1,215,815 | | |
Loan payable
|
| | | | 1,677,213 | | | | | | 709,044 | | |
Promissory note payable
|
| | | | 2,845,000 | | | | | | — | | |
Venture debt, net of discount
|
| | | | 5,701,755 | | | | | | — | | |
Derivative liability
|
| | | | 2,486,843 | | | | | | — | | |
Warrant liability
|
| | | | 28,195 | | | | | | 6,265 | | |
Total liabilities
|
| | | | 39,201,483 | | | | | | 22,209,814 | | |
Commitments and contingencies (Note 12) Stockholders’ equity (deficit): | | | | | | | | | | | | | |
Series Seed convertible preferred stock, $0.0001 par, no shares and 20,714,518 shares, authorized, issued and outstanding at September 30, 2021 and December 31, 2020, respectively
|
| | | | — | | | | | | 2,071 | | |
Series A convertible preferred stock, $0.0001 par, no shares and 14,481,413 shares authorized, no shares and 5,654,072 shares issued and outstanding at September 30, 2021, and December 31, 2020, respectively
|
| | | | — | | | | | | 565 | | |
Series A-2 convertible preferred stock, $0.0001 par, no shares and 20,000,000 shares authorized, no shares and 5,932,742 shares issued and outstanding at September 30, 2021, and December 31,2020,respectively
|
| | | | — | | | | | | 593 | | |
Series A-3 convertible preferred stock, $0.0001 par, no shares and 18,867,925 shares authorized, no shares and 9,032,330 shares issued and outstanding at September 30, 2021, and December 31, 2020, respectively
|
| | | | — | | | | | | 904 | | |
Series CF convertible preferred stock, $0.0001 par, no shares and 2,000,000 shares authorized, no
shares and 836,331 shares issued and outstanding at September 30, 2021, and December 31, 2020, respectively |
| | | | — | | | | | | 83 | | |
Series B convertible preferred stock, $0.0001 par, no shares and 20,714,517 shares authorized, no shares and 20,714,517 shares issued and outstanding at September 30, 2021, and December 31, 2020, respectively
|
| | | | — | | | | | | 2,075 | | |
Undesignated preferred stock, $0.0001 par, 10,000,000 shares and 936,144 shares authorized, 0 shares
issued and outstanding as of both September 30,2021 and December 31, 2020 |
| | | | — | | | | | | — | | |
Common stock, $0.0001 par, 200,000,000 and 110,000,000 shares authorized, 12,627,488 and 664,167
shares issued and outstanding as of both September 30, 2021 and December 31, 2020, respectively |
| | | | 1,263 | | | | | | 66 | | |
Additional paid-in capital
|
| | | | 57,467,015 | | | | | | 27,481,995 | | |
Accumulated deficit
|
| | | | (56,005,477) | | | | | | (33,345,997) | | |
Total stockholders’ equity (deficit)
|
| | | | 1,462,801 | | | | | | (5,857,645) | | |
Total liabilities and stockholders’ equity (deficit)
|
| | | $ | 40,664,284 | | | | | $ | 16,352,169 | | |
| | |
Three Months Ended September 30,
|
| |
Nine Months Ended September 30,
|
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2021
|
| |
2020
|
| ||||||||||||
Net revenues
|
| | | $ | 2,163,280 | | | | | $ | 1,234,805 | | | | | $ | 3,575,214 | | | | | $ | 4,475,507 | | |
Cost of net revenues
|
| | | | 954,137 | | | | | | 1,729,709 | | | | | | 2,179,023 | | | | | | 3,884,864 | | |
Gross profit (loss)
|
| | | | 1,209,143 | | | | | | (494,904) | | | | | | 1,396,191 | | | | | | 590,643 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
General and administrative
|
| | | | 3,720,863 | | | | | | 1,356,653 | | | | | | 12,820,841 | | | | | | 5,258,084 | | |
Sales and marketing
|
| | | | 1,307,219 | | | | | | 101,081 | | | | | | 2,401,322 | | | | | | 543,327 | | |
Distribution
|
| | | | 105,332 | | | | | | 65,681 | | | | | | 238,774 | | | | | | 279,362 | | |
Loss on disposal of property and equipment
|
| | | | — | | | | | | 593,449 | | | | | | — | | | | | | 593,449 | | |
Impairment of intangible assets
|
| | | | — | | | | | | 784,500 | | | | | | — | | | | | | 784,500 | | |
Change in fair value of contingent consideration
|
| | | | 3,988,493 | | | | | | — | | | | | | 7,039,394 | | | | | | — | | |
Total operating expenses
|
| | | | 9,121,907 | | | | | | 2,901,364 | | | | | | 22,500,331 | | | | | | 7,458,722 | | |
Loss from operations
|
| | | | (7,912,764) | | | | | | (3,396,268) | | | | | | (21,104,140) | | | | | | (6,868,079) | | |
Other income (expense): | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest expense
|
| | | | (447,842) | | | | | | (550,505) | | | | | | (2,020,806) | | | | | | (1,239,437) | | |
Other non-operating income (expenses)
|
| | | | (577,441) | | | | | | 32,193 | | | | | | (634,654) | | | | | | 32,193 | | |
Total other income (expense), net
|
| | | | (1,025,283) | | | | | | (518,312) | | | | | | (2,655,460) | | | | | | (1,207,244) | | |
Income tax benefit (provision)
|
| | | | — | | | | | | (276) | | | | | | 1,100,120 | | | | | | (13,657) | | |
Net loss
|
| | | $ | (8,938,047) | | | | | $ | (3,914,856) | | | | | $ | (22,659,480) | | | | | $ | (8,088,980) | | |
Weighted average common shares outstanding – basic and diluted
|
| | | | 11,786,592 | | | | | | 664,167 | | | | | | 6,002,669 | | | | | | 664,167 | | |
Net loss per common share – basic and diluted .
|
| | | $ | (0.76) | | | | | $ | (5.89) | | | | | $ | (3.77) | | | | | $ | (12.18) | | |
| | |
Series Seed
Preferred Stock |
| |
Series A
Preferred Stock |
| |
Series A-2
Preferred Stock |
| |
Series A-3
Preferred Stock |
| |
Series CF
Preferred Stock |
| |
Series B
Preferred Stock |
| |
Common Stock
|
| |
Additional
Paid-in Capital |
| |
Stockholders’
Receivable |
| |
Subscription
Accumulated Deficit |
| |
Total
Equity (Deficit) |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances at December 31, 2019
|
| | | | 20,714,518 | | | | | $ | 2,071 | | | | | | 5,654,072 | | | | | $ | 565 | | | | | | 5,932,742 | | | | | $ | 593 | | | | | | 8,223,036 | | | | | $ | 823 | | | | | | 126,641 | | | | | $ | 12 | | | | | | — | | | | | $ | — | | | | | | 664,167 | | | | | $ | 66 | | | | | $ | 15,486,050 | | | | | $ | (22,677) | | | | | $ | (22,617,702) | | | | | $ | (7,150,199) | | |
Stock-based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 49,932 | | | | | | — | | | | | | — | | | | | | 49,932 | | |
Issuance of Series A-3 preferred stock for cash
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 809,294 | | | | | | 81 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 428,845 | | | | | | (117,614) | | | | | | — | | | | | | 311,312 | | |
Issuance of Series B preferred stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 20,754,717 | | | | | | 2,075 | | | | | | — | | | | | | — | | | | | | 10,997,925 | | | | | | — | | | | | | — | | | | | | 11,000,000 | | |
Offering costs
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (31,690) | | | | | | — | | | | | | — | | | | | | (31,690) | | |
Fair value of warrant issuances – venture debt
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 58,421 | | | | | | — | | | | | | — | | | | | | 58,421 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,906,527) | | | | | | (1,906,527) | | |
Balances at March 31, 2020
|
| | | | 20,714,518 | | | | | $ | 2,071 | | | | | | 5,654,072 | | | | | $ | 565 | | | | | | 5,932,742 | | | | | $ | 593 | | | | | | 9,032,330 | | | | | $ | 904 | | | | | | 126,641 | | | | | $ | 12 | | | | | | 20,754,717 | | | | | $ | 2,075 | | | | | | 664,167 | | | | | $ | 66 | | | | | $ | 26,989,483 | | | | | $ | (140,291) | | | | | $ | (24,524,229) | | | | | $ | 2,331,249 | | |
Stock-based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 49,932 | | | | | | — | | | | | | — | | | | | | 49,932 | | |
Issuance of Series CF preferred stock for cash .
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 709,690 | | | | | | 71 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 286,447 | | | | | | — | | | | | | — | | | | | | 286,518 | | |
Issuance of Series A-3 preferred stock for cash
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 126,837 | | | | | | — | | | | | | 126,837 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,267,597) | | | | | | (2,267,597) | | |
Balances at June 30, 2020
|
| | | | 20,714,518 | | | | | $ | 2,071 | | | | | | 5,654,072 | | | | | $ | 565 | | | | | | 5,932,742 | | | | | $ | 593 | | | | | | 9,032,330 | | | | | $ | 904 | | | | | | 836,331 | | | | | $ | 83 | | | | | | 20,754,717 | | | | | $ | 2,075 | | | | | | 664,167 | | | | | $ | 66 | | | | | $ | 27,325,862 | | | | | $ | (13,454) | | | | | $ | (26,791,826) | | | | | $ | 526,939 | | |
Stock-based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,779 | | | | | | — | | | | | | — | | | | | | 5,779 | | |
Fair value of warrant issuances – venture debt
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 81,151 | | | | | | — | | | | | | — | | | | | | 81,151 | | |
Offering costs
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (28,756) | | | | | | — | | | | | | — | | | | | | (28,756) | | |
Net loss.
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (3,914,856) | | | | | | (3,914,856) | | |
Balances at September 30, 2020
|
| | | | 20,714,518 | | | | | $ | 2,071 | | | | | | 5,654,072 | | | | | $ | 565 | | | | | | 5,932,742 | | | | | $ | 593 | | | | | | 9,032,330 | | | | | $ | 904 | | | | | | 836,331 | | | | | $ | 83 | | | | | | 20,754,717 | | | | | $ | 2,075 | | | | | | 664,167 | | | | | $ | 66 | | | | | $ | 27,384,036 | | | | | $ | (13,454) | | | | | $ | (30,706,682) | | | | | $ | (3,329,743) | | |
Balances at December 31, 2020
|
| | | | 20,714,518 | | | | | $ | 2,071 | | | | | | 5,654,072 | | | | | $ | 565 | | | | | | 5,932,742 | | | | | $ | 593 | | | | | | 9,032,330 | | | | | $ | 904 | | | | | | 836,331 | | | | | $ | 83 | | | | | | 20,754,717 | | | | | $ | 2,075 | | | | | | 664,167 | | | | | $ | 66 | | | | | $ | 27,481,995 | | | | | $ | — | | | | | $ | (33,345,997) | | | | | $ | (5,857,645) | | |
Stock-based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 36,976 | | | | | | — | | | | | | — | | | | | | 36,976 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (3,023,935) | | | | | | (3,023,935) | | |
Balances at March 31, 2021
|
| | | | 20,714,518 | | | | | $ | 2,071 | | | | | | 5,654,072 | | | | | $ | 565 | | | | | | 5,932,742 | | | | | $ | 593 | | | | | | 9,032,330 | | | | | $ | 904 | | | | | | 836,331 | | | | | $ | 83 | | | | | | 20,754,717 | | | | | $ | 2,075 | | | | | | 664,167 | | | | | $ | 66 | | | | | $ | 27,518,971 | | | | | $ | — | | | | | $ | (36,369,932) | | | | | $ | (8,844,604) | | |
Conversion of preferred stock into common stock
|
| | | | (20,714,518) | | | | | | (2,071) | | | | | | (5,654,072) | | | | | | (565) | | | | | | (5,932,742) | | | | | | (593) | | | | | | (9,032,330) | | | | | | (904) | | | | | | (836,331) | | | | | | (83) | | | | | | (20,754,717) | | | | | | (2,075) | | | | | | 4,027,181 | | | | | | 403 | | | | | | 5,888 | | | | | | — | | | | | | — | | | | | | — | | |
Issuance of common stock in public offering
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,409,639 | | | | | | 241 | | | | | | 9,999,761 | | | | | | — | | | | | | — | | | | | | 10,000,002 | | |
Offering costs
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,116,957) | | | | | | — | | | | | | — | | | | | | (2,116,957) | | |
Exercise of over-allotment option, net of offering costs
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 361,445 | | | | | | 36 | | | | | | 1,364,961 | | | | | | — | | | | | | — | | | | | | 1,364,997 | | |
Conversion of debt into common stock.
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,135,153 | | | | | | 114 | | | | | | 2,680,175 | | | | | | — | | | | | | — | | | | | | 2,680,289 | | |
Conversion of related party notes and payables into common stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 152,357 | | | | | | 15 | | | | | | 257,500 | | | | | | — | | | | | | — | | | | | | 257,515 | | |
Common stock and warrants issued in connection with
note |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 20,000 | | | | | | 2 | | | | | | 73,956 | | | | | | — | | | | | | — | | | | | | 73,958 | | |
Common stock issued in connection with business combination
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,192,771 | | | | | | 219 | | | | | | 8,025,323 | | | | | | — | | | | | | — | | | | | | 8,025,542 | | |
Exercise of warrants
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 31,881 | | | | | | 3 | | | | | | 145,693 | | | | | | — | | | | | | — | | | | | | 145,696 | | |
Common stock issued pursuant to consulting agreement
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 50,000 | | | | | | 5 | | | | | | 182,995 | | | | | | — | | | | | | — | | | | | | 183,000 | | |
Stock-based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,801,553 | | | | | | — | | | | | | — | | | | | | 3,801,553 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (10,697,498) | | | | | | (10,697,498) | | |
Balances at June 30, 2021
|
| | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | 11,044,594 | | | | | $ | 1,104 | | | | | $ | 51,939,819 | | | | | $ | — | | | | | $ | (47,067,430) | | | | | $ | 4,873,493 | | |
Issuance of common stock pursuant to equity line of
credit |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 126,356 | | | | | | 13 | | | | | | 367,683 | | | | | | — | | | | | | — | | | | | | 367,696 | | |
Common stock issued in connection with business combination
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,101,538 | | | | | | 110 | | | | | | 3,403,086 | | | | | | — | | | | | | — | | | | | | 3,403,196 | | |
Exercise of warrants
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 355,000 | | | | | | 36 | | | | | | 1,622,314 | | | | | | — | | | | | | — | | | | | | 1,622,350 | | |
Stock-based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 134,113 | | | | | | — | | | | | | — | | | | | | 134,113 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (8,938,047) | | | | | | (8,938,047) | | |
Balances at September 30, 2021
|
| | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | 12,627,488 | | | | | $ | 1,263 | | | | | $ | 57,467,015 | | | | | $ | — | | | | | $ | (56,005,477) | | | | | $ | 1,462,801 | | |
| | |
Nine Months Ended September 30,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Cash flows from operating activities: | | | | | | | | | | | | | |
Net loss
|
| | | $ | (22,659,480) | | | | | $ | (8,088,980) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 652,732 | | | | | | 716,568 | | |
Amortization of loan discount and fees .
|
| | | | 682,956 | | | | | | 144,974 | | |
Stock-based compensation
|
| | | | 4,155,641 | | | | | | 105,643 | | |
Fees incurred in connection with debt financings .
|
| | | | 132,609 | | | | | | — | | |
Change in fair value of warrant liability .
|
| | | | 21,930 | | | | | | (1,792) | | |
Change in fair value of derivative liability
|
| | | | 627,956 | | | | | | — | | |
Change in fair value of contingent consideration .
|
| | | | 7,039,394 | | | | | | — | | |
Deferred income tax benefit .
|
| | | | (1,100,120) | | | | | | — | | |
Impairment of intangible assets .
|
| | | | — | | | | | | 784,500 | | |
Loss on disposal of property and equipment .
|
| | | | — | | | | | | 593,449 | | |
Change in credit reserve
|
| | | | 66,748 | | | | | | (182,758) | | |
Changes in operating assets and liabilities: | | | | | | | | | | | | | |
Accounts receivable, net
|
| | | | (32,582) | | | | | | (74,256) | | |
Due from factor, net
|
| | | | (540,257) | | | | | | 1,334,263 | | |
Inventory
|
| | | | (483,477) | | | | | | 2,578,261 | | |
Prepaid expenses
|
| | | | (1,259,835) | | | | | | (113,566) | | |
Accounts payable
|
| | | | 749,352 | | | | | | 1,161,279 | | |
Accrued expenses and other liabilities .
|
| | | | 451,298 | | | | | | (721,062) | | |
Deferred revenue
|
| | | | (78,492) | | | | | | (13,564) | | |
Accrued compensation – related party .
|
| | | | (108,550) | | | | | | (29,302) | | |
Accrued interest
|
| | | | 206,163 | | | | | | 656,734 | | |
Net cash used in operating activities
|
| | | | (11,476,014) | | | | | | (1,149,609) | | |
Cash flows from investing activities: | | | | | | | | | | | | | |
Cash acquired (consideration) pursuant to business combination .
|
| | | | (5,442,966) | | | | | | 106,913 | | |
Issuance of related party receivable .
|
| | | | — | | | | | | (10,000) | | |
Purchase of property, equipment and software .
|
| | | | (13,585) | | | | | | (266,390) | | |
Deposits
|
| | | | (67,431) | | | | | | 98,835 | | |
Net cash provided by (used in) investing activities
|
| | | | (5,523,982) | | | | | | (70,642) | | |
Cash flows from financing activities: | | | | | | | | | | | | | |
Proceeds from related party advances
|
| | | | — | | | | | | 22,856 | | |
Repayments to factor
|
| | | | (39,520) | | | | | | (1,684,703) | | |
Proceeds from venture debt .
|
| | | | — | | | | | | 862,500 | | |
Issuance of loans payable
|
| | | | 2,626,050 | | | | | | 1,701,044 | | |
Repayments of promissory notes and loans payable
|
| | | | (2,002,731) | | | | | | — | | |
Issuance of convertible notes payable
|
| | | | 5,078,650 | | | | | | — | | |
Proceeds from initial public offering
|
| | | | 10,000,002 | | | | | | — | | |
Exercise of over-allotment option with public offering, net .
|
| | | | 1,364,997 | | | | | | — | | |
Exercise of warrants .
|
| | | | 1,768,046 | | | | | | — | | |
Proceeds from sale of Series A-3 preferred stock
|
| | | | — | | | | | | 355,945 | | |
Subscription receivable from Series A-3 preferred stock
|
| | | | — | | | | | | 22,677 | | |
Proceeds from sale of Series CF preferred stock
|
| | | | — | | | | | | 286,518 | | |
Offering costs
|
| | | | (2,116,957) | | | | | | (104,996) | | |
Net cash provided by financing activities
|
| | | | 16,678,537 | | | | | | 1,461,841 | | |
Net increase in cash and cash equivalents
|
| | | | (321,459) | | | | | | 241,590 | | |
Cash and cash equivalents at beginning of period
|
| | | | 575,986 | | | | | | 40,469 | | |
Cash and cash equivalents at end of period .
|
| | | $ | 254,527 | | | | | $ | 282,059 | | |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | |
Cash paid for income taxes .
|
| | | $ | — | | | | | $ | — | | |
Cash paid for interest
|
| | | $ | 460,179 | | | | | $ | — | | |
Supplemental disclosure of non-cash investing and financing activities: | | | | | | | | | | | | | |
Conversion of preferred stock into common stock .
|
| | | $ | 6,291 | | | | | $ | — | | |
Conversion of related party notes and payables into common stock
|
| | | $ | 257,515 | | | | | $ | — | | |
Conversion of debt into common stock .
|
| | | $ | 2,680,289 | | | | | $ | — | | |
Derivative liability in connection with convertible note .
|
| | | $ | 1,858,887 | | | | | $ | — | | |
Comon shares issued pursuant to equity line of credit .
|
| | | $ | 367,696 | | | | | $ | — | | |
Venture debt issued in exchange of forgiveness of accrued interest .
|
| | | $ | — | | | | | $ | 209,211 | | |
Warrants issued for offering costs
|
| | | $ | — | | | | | $ | 918 | | |
Warrants issued with venture debt .
|
| | | $ | — | | | | | $ | 139,572 | | |
Issuance of promissory note payable in acquisition .
|
| | | $ | — | | | | | $ | 4,500,000 | | |
Issuance of Series B preferred stock in acquisition .
|
| | | $ | — | | | | | $ | 11,000,000 | | |
Subscription receivable for Series A preferred stock
|
| | | $ | — | | | | | $ | 13,454 | | |
| | |
Fair Value Measurements as of September 30, 2021 Using:
|
| |||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Warrant liability
|
| | | $ | — | | | | | $ | 28,195 | | | | | $ | — | | | | | $ | 28,195 | | |
Contingent consideration
|
| | | | — | | | | | | — | | | | | | 10,527,910 | | | | | | 10,527,910 | | |
Derivative liability
|
| | | | — | | | | | | — | | | | | | 2,486,843 | | | | | | 2,486,843 | | |
| | | | $ | — | | | | | $ | 28,195 | | | | | $ | 13,014,753 | | | | | $ | 13,042,948 | | |
| | |
Fair Value Measurements as of December 31, 2020 Using:
|
| |||||||||||||||||||||
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |
Total
|
| ||||||||||||
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Warrant liability
|
| | | $ | — | | | | | $ | — | | | | | $ | 6,265 | | | | | $ | 6,265 | | |
| | | | $ | — | | | | | $ | — | | | | | $ | 6,265 | | | | | $ | 6,265 | | |
| | |
Warrant Liability
|
| |||
Outstanding as of December 31, 2020
|
| | | $ | 6,265 | | |
Change in fair value
|
| | | | 21,930 | | |
Outstanding as of September 30, 2021
|
| | | $ | 28,195 | | |
| | |
Contingent
Consideration Liability |
| |||
Balance as of December 31, 2020
|
| | | $ | — | | |
Initial recognition in connection with acquisition of Harper & Jones
|
| | | | 3,421,516 | | |
Stock price guarantee per consulting agreement
|
| | | | 67,000 | | |
Change in fair value
|
| | | | 7,039,394 | | |
Outstanding as of September 30, 2021
|
| | | $ | 10,527,910 | | |
| | |
Derivative Liability
|
| |||
Outstanding as of December 31, 2020
|
| | | $ | — | | |
Initial fair value on issuance of convertible note
|
| | | | 1,858,887 | | |
Change in fair value
|
| | | | 627,956 | | |
Outstanding as of September 30, 2021
|
| | | $ | 2,486,843 | | |
|
Customer relationships
|
| |
3years
|
|
| | |
September 30,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Convertible notes
|
| | | | 2,240,426 | | | | | | — | | |
Series Seed Preferred Stock (convertible to common stock)
|
| | | | — | | | | | | 20,714,518 | | |
Series A Preferred Stock (convertible to common stock)
|
| | | | — | | | | | | 5,654,072 | | |
Series A-2 Preferred Stock (convertible to common stock)
|
| | | | — | | | | | | 5,932,742 | | |
Series CF Preferred Stock (convertible to common stock)
|
| | | | — | | | | | | 836,331 | | |
Series A-3 Preferred Stock (convertible to common stock)
|
| | | | — | | | | | | 9,032,330 | | |
Series B Preferred Stock (convertible to common stock)
|
| | | | — | | | | | | 20,754,717 | | |
Common stock warrants
|
| | | | 3,591,348 | | | | | | 794,569 | | |
Preferred stock warrants
|
| | | | — | | | | | | 806,903 | | |
Stock options
|
| | | | 3,895,103 | | | | | | 1,129,503 | | |
Total potentially dilutive shares
|
| | | | 9,706,877 | | | | | | 65,655,685 | | |
|
Series B preferred stock
|
| | | $ | 11,000,000 | | |
|
Promissory note payable
|
| | | | 4,500,000 | | |
|
Purchase price consideration
|
| | | $ | 15,500,000 | | |
| | |
Purchase
Price Allocation |
| |||
Cash and cash equivalents
|
| | | $ | 106,913 | | |
Accounts receivable, net
|
| | | | 37,479 | | |
Due (to) from factor, net
|
| | | | (312,063) | | |
Inventory
|
| | | | 3,303,660 | | |
Prepaid expenses
|
| | | | 165,856 | | |
Deposits
|
| | | | 187,493 | | |
Property, equipment and software, net
|
| | | | 1,215,748 | | |
Goodwill
|
| | | | 6,479,218 | | |
Intangible assets
|
| | | | 8,600,000 | | |
Accounts payable
|
| | | | (3,397,547) | | |
Accrued expenses and other liabilities
|
| | | | (886,757) | | |
Purchase price consideration
|
| | | $ | 15,500,000 | | |
|
Cash
|
| | | $ | 500,000 | | |
|
Common stock
|
| | | | 8,025,542 | | |
|
Contingent consideration
|
| | | | 3,421,516 | | |
|
Purchase price consideration
|
| | | $ | 11,947,058 | | |
| | |
Purchase Price Allocation
|
| |||
Cash and cash equivalents
|
| | | $ | 24,335 | | |
Accounts receivable, net
|
| | | | 49,472 | | |
Inventory
|
| | | | 77,159 | | |
Prepaid expenses
|
| | | | 69,715 | | |
Deposits
|
| | | | 4,415 | | |
Property, equipment and software, net
|
| | | | 83,986 | | |
Goodwill
|
| | | | 9,681,548 | | |
Intangible assets
|
| | | | 3,936,030 | | |
Accounts payable
|
| | | | (51,927) | | |
Accrued expenses and other liabilities
|
| | | | (107,957) | | |
Deferred revenue
|
| | | | (269,848) | | |
Due to related parties
|
| | | | (1,361) | | |
Loan payable
|
| | | | (148,900) | | |
Note payable – related party
|
| | | | (299,489) | | |
Deferred tax liability
|
| | | | (1,100,120) | | |
Purchase price consideration
|
| | | $ | 11,947,058 | | |
|
Cash
|
| | | $ | 5,000,000 | | |
|
Common stock
|
| | | | 3,403,196 | | |
|
Purchase price consideration
|
| | | $ | 8,403,196 | | |
| | |
Purchase Price Allocation
|
| |||
Cash and cash equivalents
|
| | | $ | 32,700 | | |
Accounts receivable, net
|
| | | | 154,678 | | |
Due from factor, net
|
| | | | 371,247 | | |
Inventory
|
| | | | 603,626 | | |
Prepaid expenses
|
| | | | 105,442 | | |
Deposits
|
| | | | 9,595 | | |
Goodwill
|
| | | | 1,610,265 | | |
Intangible assets
|
| | | | 5,939,140 | | |
Accounts payable
|
| | | | (374,443) | | |
Accrued expenses and other liabilities
|
| | | | (49,053) | | |
Purchase price consideration
|
| | | $ | 8,403,196 | | |
| | |
Nine Months Ended September 30,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net revenues
|
| | | $ | 7,956,477 | | | | | $ | 11,287,932 | | |
Net loss
|
| | | $ | (22,853,732) | | | | | $ | (10,080,468) | | |
Net loss per common share
|
| | | $ | (3.81) | | | | | $ | (15.18) | | |
| | |
September 30,
2021 |
| |
December 31,
2020 |
| ||||||
Outstanding receivables: | | | | | | | | | | | | | |
Without recourse
|
| | | | 1,022,552 | | | | | $ | 151,158 | | |
With recourse
|
| | | | 58,884 | | | | | | 42,945 | | |
Advances
|
| | | | 119,937 | | | | | | 56,246 | | |
Credits due customers
|
| | | | (107,064) | | | | | | (40,316) | | |
| | | | $ | 1,094,309 | | | | | $ | 210,033 | | |
| | |
Gross
Amount |
| |
Accumulated
Amortization |
| |
Carrying
Value |
| |||||||||
Amortized: | | | | | | | | | | | | | | | | | | | |
Customer relationships
|
| | | $ | 6,453,750 | | | | | $ | (911,544) | | | | | $ | 5,542,206 | | |
| | | | | 6,453,750 | | | | | | (911,544) | | | | | | 5,542,206 | | |
Indefinite-lived: | | | | | | | | | | | | | | | | | | | |
Brand name
|
| | | $ | 11,236,920 | | | | | | — | | | | | | 11,236,920 | | |
| | | | $ | 17,690,670 | | | | | $ | (911,544) | | | | | $ | 16,779,126 | | |
| | |
September 30,
2021 |
| |
December 31,
2020 |
| ||||||
Accrued expenses
|
| | | $ | 266,646 | | | | | $ | 92,074 | | |
Reserve for returns
|
| | | | 20,041 | | | | | | 5,229 | | |
Payroll related liabilities
|
| | | | 1,253,639 | | | | | | 843,704 | | |
Sales tax liability
|
| | | | 242,021 | | | | | | 196,410 | | |
Other liabilities
|
| | | | 71,607 | | | | | | 108,229 | | |
| | | | $ | 1,853,954 | | | | | $ | 1,245,646 | | |
| | |
Nine Months Ended
September 30, 2020 |
|
Risk Free Interest Rate
|
| |
1.54 – 1.59%
|
|
Expected Dividend Yield
|
| |
0.00%
|
|
Expected Volatility
|
| |
58.0%
|
|
Expected Life (years)
|
| |
10.00
|
|
| | |
Common
Stock Warrants |
| |
Weighted
Average Exercise Price |
| ||||||
Outstanding – December 31, 2020
|
| | | | 914,539 | | | | | $ | 2.66 | | |
Granted
|
| | | | 3,012,048 | | | | | | 4.58 | | |
Conversion of preferred stock warrants upon IPO
|
| | | | 51,642 | | | | | | 7.66 | | |
Exercised
|
| | | | (386,881) | | | | | | 4.57 | | |
Forfeited
|
| | | | — | | | | | | — | | |
Outstanding – September 30, 2021
|
| | | | 3,591,348 | | | | | $ | 4.13 | | |
Exercisable at September 30, 2021
|
| | | | 3,470,866 | | | | | $ | 4.10 | | |
| | |
Preferred
Stock Warrants |
| |
Weighted
Average Exercise Price |
| ||||||
Outstanding – December 31, 2020
|
| | | | 806,903 | | | | | $ | 0.49 | | |
Converted to common stock warrants upon IPO
|
| | | | (806,903) | | | | | | 0.49 | | |
Exercised
|
| | | | — | | | | | | — | | |
Forfeited
|
| | | | — | | | | | | — | | |
Outstanding – September 30, 2021
|
| | | | — | | | | | $ | — | | |
Exercisable at September 30, 2021
|
| | | | — | | | | | $ | — | | |
| | |
Options
|
| |
Weighted
Average Exercise Price |
| ||||||
Outstanding – December 31, 2020
|
| | | | 1,163,103 | | | | | $ | 2.34 | | |
Granted
|
| | | | 2,712,000 | | | | | | 4.15 | | |
Exercised
|
| | | | — | | | | | | — | | |
Forfeited
|
| | | | — | | | | | | — | | |
Outstanding – September 30, 2021
|
| | | | 3,875,103 | | | | | $ | 3.62 | | |
Exercisable at September 30, 2021
|
| | | | 3,084,831 | | | | | $ | 3.61 | | |
Weighted average duration (years) to expiration of outstanding options at September 30, 2021
|
| | | | 8.27 | | | | | | | | |
| | | | | F-92 | | | |
| | | | | F-93 | | | |
| | | | | F-94 | | | |
| | | | | F-95 | | | |
| | | | | F-96 | | | |
| | | | | F-97 | | |
| | |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
| | |
(unaudited)
|
| | | | | | | |||
ASSETS | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | $ | 241,989 | | | | | $ | 251,381 | | |
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 127,346 | | | | | | 56,926 | | |
Due from factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 199,322 | | | | | | 378,880 | | |
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 517,926 | | | | | | 386,756 | | |
Due from related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 97,551 | | | | | | 97,472 | | |
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 12,556 | | | | | | 11,036 | | |
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 1,196,690 | | | | | | 1,182,451 | | |
Fixed assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | — | | | | | | 17,838 | | |
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 9,594 | | | | | | 9,594 | | |
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | $ | 1,206,284 | | | | | $ | 1,209,883 | | |
LIABILITIES AND MEMBER’S EQUITY | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | $ | 255,071 | | | | | $ | 289,613 | | |
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 60,051 | | | | | | 23,673 | | |
Loan payable, current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 34,838 | | | | | | — | | |
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 349,960 | | | | | | 313,286 | | |
Loan payable, net of current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 187,257 | | | | | | — | | |
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 537,217 | | | | | | 313,286 | | |
Commitments and contingencies (Note 8) | | | | | | | | | | | | | |
Member’s equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 669,067 | | | | | | 896,597 | | |
Total member’s equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | | 669,067 | | | | | | 896,597 | | |
Total liabilities and member’s equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .
|
| | | $ | 1,206,284 | | | | | $ | 1,209,883 | | |
| | |
Six Months Ended June 30,
|
| |
Year Ended
December 31, 2020 |
| ||||||||||||
| | |
2021
|
| |
2020
|
| ||||||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||
Net revenues
|
| | | $ | 2,350,362 | | | | | $ | 1,481,167 | | | | | $ | 3,187,512 | | |
Cost of goods sold
|
| | | | 712,320 | | | | | | 564,355 | | | | | | 1,485,726 | | |
Gross profit
|
| | | | 1,638,042 | | | | | | 916,812 | | | | | | 1,701,786 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | |
General and administrative
|
| | | | 605,427 | | | | | | 659,201 | | | | | | 1,192,241 | | |
Distribution
|
| | | | 86,965 | | | | | | 86,667 | | | | | | 155,483 | | |
Sales and marketing
|
| | | | 609,886 | | | | | | 428,791 | | | | | | 838,638 | | |
Total operating expenses
|
| | | | 1,302,278 | | | | | | 1,174,659 | | | | | | 2,186,362 | | |
Income (loss) from operations
|
| | | | 335,764 | | | | | | (257,847) | | | | | | (484,577) | | |
Other income (expenses), net | | | | | | | | | | | | | | | | | | | |
Other income
|
| | | | — | | | | | | 10,000 | | | | | | 261,035 | | |
Other expenses
|
| | | | (12,494) | | | | | | — | | | | | | — | | |
Total other income (expenses), net
|
| | | | (12,494) | | | | | | 10,000 | | | | | | 261,035 | | |
Provision for income taxes
|
| | | | 800 | | | | | | 800 | | | | | | 800 | | |
Net income (loss)
|
| | | $ | 322,470 | | | | | $ | (248,647) | | | | | $ | (224,341) | | |
| | |
Member’s Equity
|
| |||
Balances at December 31, 2019
|
| | | $ | 1,424,263 | | |
Distributions
|
| | | | (303,325) | | |
Net loss
|
| | | | (224,341) | | |
Balances at December 31, 2020
|
| | | | 896,597 | | |
Distributions
|
| | | | (550,000) | | |
Net income
|
| | | | 322,470 | | |
Balances at June 30, 2021 (unaudited)
|
| | | $ | 669,067 | | |
| | |
Six Months Ended June 30,
|
| |
Year Ended
December 31, 2020 |
| ||||||||||||
| | |
2021
|
| |
2020
|
| ||||||||||||
| | |
(unaudited)
|
| | | | | | | |||||||||
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | | |
Net income (loss)
|
| | | $ | 322,470 | | | | | $ | (248,647) | | | | | $ | (224,341) | | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
| | | | | | | | | | | | | | | | | | |
Gain on forgiveness of debt
|
| | | | — | | | | | | — | | | | | | (251,221) | | |
Depreciation and amortization
|
| | | | 17,838 | | | | | | 27,604 | | | | | | 55,207 | | |
Non-cash contributions
|
| | | | — | | | | | | — | | | | | | — | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | | | | | | | |
Accounts receivable
|
| | | | (70,420) | | | | | | 105,298 | | | | | | 221,173 | | |
Due from factor
|
| | | | 179,558 | | | | | | (126,392) | | | | | | (322,367) | | |
Inventory
|
| | | | (131,170) | | | | | | — | | | | | | 283,467 | | |
Prepaid expenses and other current assets
|
| | | | (1,520) | | | | | | 30,749 | | | | | | 26,663 | | |
Accounts payable
|
| | | | (34,542) | | | | | | (381,845) | | | | | | (143,680) | | |
Accrued liabilities
|
| | | | 36,378 | | | | | | 35,360 | | | | | | (97,397) | | |
Net cash provided by (used in) operating activities
|
| | | | 318,592 | | | | | | (557,873) | | | | | | (452,496) | | |
Cash flows from investing activities: | | | | | | | | | | | | | | | | | | | |
Advances to related parties
|
| | | | (79) | | | | | | — | | | | | | — | | |
Deposits
|
| | | | — | | | | | | (6,200) | | | | | | (9,594) | | |
Net cash used in investing activities
|
| | | | (79) | | | | | | (6,200) | | | | | | (9,594) | | |
Cash flows from financing activities: | | | | | | | | | | | | | | | | | | | |
Proceeds from loan payable
|
| | | | 222,095 | | | | | | 251,221 | | | | | | 251,221 | | |
Advances from factor
|
| | | | — | | | | | | 667,907 | | | | | | 667,907 | | |
Distributions
|
| | | | (550,000) | | | | | | — | | | | | | (303,325) | | |
Net cash provided by (used in) financing activities
|
| | | | (327,905) | | | | | | 919,128 | | | | | | 615,803 | | |
Net change in cash and cash equivalents
|
| | | | (9,392) | | | | | | 355,055 | | | | | | 153,713 | | |
Cash and cash equivalents at beginning of period
|
| | | | 251,381 | | | | | | 97,668 | | | | | | 97,668 | | |
Cash and cash equivalents at end of period
|
| | | $ | 241,989 | | | | | $ | 452,723 | | | | | $ | 251,381 | | |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | | | | | | | |
Cash paid for income taxes
|
| | | $ | 800 | | | | | $ | 800 | | | | | $ | 800 | | |
Cash paid for interest
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | |
| | |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
| | |
(unaudited)
|
| | | | | | | |||
Raw materials
|
| | | $ | 179,889 | | | | | $ | 85,966 | | |
Work in progress
|
| | | | 245,947 | | | | | | 205,253 | | |
Finished goods
|
| | | | 71,691 | | | | | | 89,131 | | |
Inventory on cosignment
|
| | | | 20,399 | | | | | | 6,407 | | |
Inventory
|
| | | $ | 517,926 | | | | | $ | 386,756 | | |
| | |
June 30,
2021 |
| |
December 31,
2020 |
| ||||||
| | |
(unaudited)
|
| | | | | | | |||
Leasehold improvements and showrooms
|
| | | $ | 196,129 | | | | | $ | 196,129 | | |
Furniture and equipment
|
| | | | 62,909 | | | | | | 62,909 | | |
Automobile
|
| | | | 17,000 | | | | | | 17,000 | | |
| | | | | 276,038 | | | | | | 276,038 | | |
Less: accumulated depreciation and amortization
|
| | | | (276,038) | | | | | | (258,200) | | |
Fixed assets, net
|
| | | $ | — | | | | | $ | 17,838 | | |
|
2021
|
| | | $ | 67,620 | | |
|
2022
|
| | | | — | | |
| | | | | $ | 67,620 | | |
| | | | | F-105 | | | |
| | | | | F-106 | | | |
| | | | | F-107 | | | |
| | | | | F-108 | | | |
| | | | | F-109 | | | |
| | | | | F-110 | | |
| | |
September 30,
2021 |
| |
December 31,
|
| ||||||||||||
| | |
2020
|
| |
2019
|
| ||||||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||
ASSETS | | | | | | | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | | | | | | | |
Cash
|
| | | $ | 421,802 | | | | | $ | 733,440 | | | | | $ | 205,648 | | |
Accounts receivable, net of allowance
|
| | | | 211,809 | | | | | | 179,057 | | | | | | 125,350 | | |
Due from factor
|
| | | | 639,260 | | | | | | 1,086,405 | | | | | | 656,268 | | |
Inventory
|
| | | | 5,890,454 | | | | | | 5,747,826 | | | | | | 3,647,218 | | |
Due from related parties
|
| | | | — | | | | | | — | | | | | | 92,318 | | |
Prepaid expenses and other current assets
|
| | | | 221,657 | | | | | | 102,125 | | | | | | 158,270 | | |
Total current assets
|
| | | | 7,384,983 | | | | | | 7,848,853 | | | | | | 4,885,072 | | |
Fixed assets, net
|
| | | | 177,605 | | | | | | 215,805 | | | | | | 262,798 | | |
Deposits
|
| | | | 19,742 | | | | | | 19,742 | | | | | | 19,742 | | |
Total assets
|
| | | $ | 7,582,330 | | | | | $ | 8,084,400 | | | | | $ | 5,167,612 | | |
LIABILITIES AND MEMBERS’ EQUITY | | | | | | | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 701,569 | | | | | $ | 1,400,793 | | | | | $ | 1,392,927 | | |
Accrued liabilities
|
| | | | 584,806 | | | | | | 1,213,968 | | | | | | 874,639 | | |
Loan payable, current
|
| | | | 349,642 | | | | | | 308,151 | | | | | | — | | |
Total current liabilities
|
| | | | 1,636,017 | | | | | | 2,922,912 | | | | | | 2,267,566 | | |
Loan payable, net of current portion
|
| | | | 427,340 | | | | | | 531,020 | | | | | | — | | |
Total liabilities
|
| | | | 2,063,357 | | | | | | 3,453,932 | | | | | | 2,267,566 | | |
Commitments and contingencies (Note 7) | | | | | | | | | | | | | | | | | | | |
Members’ equity
|
| | | | 5,518,973 | | | | | | 4,630,468 | | | | | | 2,900,046 | | |
Total members’ equity
|
| | | | 5,518,973 | | | | | | 4,630,468 | | | | | | 2,900,046 | | |
Total liabilities and members’ equity
|
| | | $ | 7,582,330 | | | | | $ | 8,084,400 | | | | | $ | 5,167,612 | | |
| | |
Nine Months Ended
September 30, |
| |
Year Ended
December 31, |
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2020
|
| |
2019
|
| ||||||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||||||||
Net revenues
|
| | | $ | 18,152,631 | | | | | $ | 13,167,231 | | | | | $ | 19,897,696 | | | | | $ | 22,421,703 | | |
Cost of goods sold
|
| | | | 9,805,068 | | | | | | 5,475,768 | | | | | | 8,525,612 | | | | | | 12,047,221 | | |
Gross profit
|
| | | | 8,347,563 | | | | | | 7,691,463 | | | | | | 11,372,084 | | | | | | 10,374,482 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
General and administrative
|
| | | | 2,284,091 | | | | | | 1,996,442 | | | | | | 2,823,334 | | | | | | 2,581,043 | | |
Distribution
|
| | | | 861,044 | | | | | | 735,450 | | | | | | 1,011,431 | | | | | | 856,966 | | |
Sales and marketing
|
| | | | 3,171,802 | | | | | | 2,542,155 | | | | | | 3,790,570 | | | | | | 5,032,653 | | |
Total operating expenses
|
| | | | 6,316,937 | | | | | | 5,274,047 | | | | | | 7,625,335 | | | | | | 8,470,662 | | |
Income from operations
|
| | | | 2,030,626 | | | | | | 2,417,416 | | | | | | 3,746,749 | | | | | | 1,903,820 | | |
Other income (expense), net | | | | | | | | | | | | | | | | | | | | | | | | | |
Other income
|
| | | | 689,189 | | | | | | 10,000 | | | | | | 10,010 | | | | | | — | | |
Interest expense
|
| | | | (50,510) | | | | | | (36,615) | | | | | | (55,537) | | | | | | (231,187) | | |
Total other income (expense), net
|
| | | | 638,679 | | | | | | (26,615) | | | | | | (45,527) | | | | | | (231,187) | | |
Provision for income taxes
|
| | | | 800 | | | | | | 800 | | | | | | 800 | | | | | | 800 | | |
Net income
|
| | | $ | 2,668,505 | | | | | $ | 2,390,001 | | | | | $ | 3,700,422 | | | | | $ | 1,671,833 | | |
| | |
Members’
Equity |
| |||
Balances at December 31, 2018
|
| | | $ | 2,558,213 | | |
Distributions
|
| | | | (1,330,000) | | |
Net income
|
| | | | 1,671,833 | | |
Balances at December 31, 2019
|
| | | | 2,900,046 | | |
Distributions
|
| | | | (1,970,000) | | |
Net income
|
| | | | 3,700,422 | | |
Balances at December 31, 2020
|
| | | $ | 4,630,468 | | |
Balances at December 31, 2019
|
| | | $ | 2,900,046 | | |
Distributions
|
| | | | (1,150,000) | | |
Net income
|
| | | | 2,390,001 | | |
Balances at September 30, 2020 (unaudited)
|
| | | $ | 4,140,047 | | |
Balances at December 31, 2020
|
| | | | 4,630,468 | | |
Distributions
|
| | | | (1,780,000) | | |
Net income
|
| | | | 2,668,505 | | |
Balances at September 30, 2021 (unaudited)
|
| | | $ | 5,518,973 | | |
| | |
Nine Months Ended
September 30, |
| |
Year Ended
December 31, |
| ||||||||||||||||||
| | |
2021
|
| |
2020
|
| |
2020
|
| |
2019
|
| ||||||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||||||||
Cash flows from operating activities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income
|
| | | $ | 2,668,505 | | | | | $ | 2,390,001 | | | | | $ | 3,700,422 | | | | | $ | 1,671,833 | | |
Adjustments to reconcile net income to net cash provided by operating activities:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 43,200 | | | | | | 32,003 | | | | | | 58,423 | | | | | | 42,671 | | |
Bad debt
|
| | | | 7,068 | | | | | | 76,865 | | | | | | 91,195 | | | | | | 8,529 | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Accounts receivable
|
| | | | (39,820) | | | | | | (468,061) | | | | | | (144,902) | | | | | | (176,870) | | |
Due from factor
|
| | | | 447,145 | | | | | | 179,131 | | | | | | (131,137) | | | | | | (359,818) | | |
Inventory
|
| | | | (142,628) | | | | | | (1,411,265) | | | | | | (2,100,608) | | | | | | (782,750) | | |
Due from related party
|
| | | | — | | | | | | 92,318 | | | | | | 92,318 | | | | | | (92,318) | | |
Prepaid expenses and other current assets
|
| | | | (119,532) | | | | | | 137,169 | | | | | | 56,145 | | | | | | 215,029 | | |
Accounts payable
|
| | | | (699,226) | | | | | | 140,249 | | | | | | 7,866 | | | | | | 391,829 | | |
Accrued liabilities
|
| | | | (629,162) | | | | | | (339,471) | | | | | | 339,329 | | | | | | 432,213 | | |
Net cash provided by operating activities
|
| | | | 1,535,550 | | | | | | 828,940 | | | | | | 1,969,051 | | | | | | 1,350,348 | | |
Cash flows from investing activities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Purchase of property and equipment
|
| | | | (5,000) | | | | | | (11,795) | | | | | | (11,430) | | | | | | (217,514) | | |
Net cash used in investing activities
|
| | | | (5,000) | | | | | | (11,795) | | | | | | (11,430) | | | | | | (217,514) | | |
Cash flows from financing activities: | | | | | | | | | | | | | | | | | | | | | | | | | |
Proceeds (repayments) of loan payable
|
| | | | (62,189) | | | | | | 839,171 | | | | | | 839,171 | | | | | | — | | |
Factor advances (repayments), net
|
| | | | — | | | | | | — | | | | | | (299,000) | | | | | | 335,498 | | |
Distributions
|
| | | | (1,780,000) | | | | | | (1,150,000) | | | | | | (1,970,000) | | | | | | (1,330,000) | | |
Net cash used in financing activities
|
| | | | (1,842,189) | | | | | | (310,829) | | | | | | (1,429,829) | | | | | | (994,502) | | |
Net change in cash and cash equivalents
|
| | | | (311,638) | | | | | | 506,316 | | | | | | 527,792 | | | | | | 138,332 | | |
Cash and cash equivalents at beginning of period
|
| | | | 733,440 | | | | | | 205,648 | | | | | | 205,648 | | | | | | 67,316 | | |
Cash and cash equivalents at end of period
|
| | | $ | 421,802 | | | | | $ | 711,964 | | | | | $ | 733,440 | | | | | $ | 205,648 | | |
Supplemental disclosure of cash flow information: | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash paid for income taxes
|
| | | $ | 800 | | | | | $ | 800 | | | | | $ | 800 | | | | | $ | 800 | | |
Cash paid for interest
|
| | | $ | 50,510 | | | | | $ | 36,615 | | | | | $ | 55,537 | | | | | $ | 231,187 | | |
| | |
September 30,
2021 |
| |
December 31,
|
| ||||||||||||
| | |
2020
|
| |
2019
|
| ||||||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||
Outstanding receivables | | | | | | | | | | | | | | | | | | | |
Without recourse
|
| | | $ | 2,126,588 | | | | | $ | 2,129,451 | | | | | $ | 2,123,724 | | |
With recourse
|
| | | | — | | | | | | 43,948 | | | | | | — | | |
| | | | | 2,126,588 | | | | | | 2,173,399 | | | | | | 2,123,724 | | |
Advances
|
| | | | (1,393,832) | | | | | | (1,076,000) | | | | | | (1,375,000) | | |
Credits due customers
|
| | | | (93,495) | | | | | | (10,994) | | | | | | (92,456) | | |
Due from factor
|
| | | $ | 639,260 | | | | | $ | 1,086,405 | | | | | $ | 656,268 | | |
| | |
September 30,
2021 |
| |
December 31,
|
| ||||||||||||
| | |
2020
|
| |
2019
|
| ||||||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||
Raw materials
|
| | | $ | 2,260,311 | | | | | $ | 2,273,060 | | | | | $ | 1,274,210 | | |
Work in progress
|
| | | | 1,174,276 | | | | | | 2,231,811 | | | | | | 1,075,068 | | |
Finished goods
|
| | | | 2,455,867 | | | | | | 1,242,955 | | | | | | 1,297,940 | | |
Inventory
|
| | | $ | 5,890,454 | | | | | $ | 5,747,826 | | | | | $ | 3,647,218 | | |
| | |
September 30,
2021 |
| |
December 31,
|
| ||||||||||||
| | |
2020
|
| |
2019
|
| ||||||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||
Leasehold improvements and showrooms
|
| | | $ | 198,658 | | | | | $ | 198,658 | | | | | $ | 192,758 | | |
Furniture and equipment
|
| | | | 183,005 | | | | | | 183,005 | | | | | | 177,475 | | |
Automobiles
|
| | | | 39,072 | | | | | | 34,072 | | | | | | 34,072 | | |
| | | | | 420,735 | | | | | | 415,735 | | | | | | 404,305 | | |
Less: accumulated depreciation and amortization
|
| | | | (243,130) | | | | | | (199,930) | | | | | | (141,507) | | |
Fixed assets, net
|
| | | $ | 177,605 | | | | | $ | 215,805 | | | | | $ | 262,798 | | |
|
2021
|
| | | $ | 336,272 | | |
|
2022
|
| | | | 15,516 | | |
| | | | | $ | 351,788 | | |
|
SEC registration fee
|
| | | $ | | | |
|
FINRA filing fee
|
| | | | | | |
|
NasdaqCM listing fee
|
| | | | | | |
|
Printing and engraving costs
|
| | | | | | |
|
Legal fees and expenses
|
| | | | | | |
|
Accounting fees and expenses
|
| | | | | | |
|
Transfer Agent and Registrar fees
|
| | | | | | |
|
Miscellaneous expenses
|
| | | | | | |
|
Total
|
| | | | | | |
|
Exhibit
Number |
| |
Description
|
|
|
1.1*
|
| | Form of Underwriting Agreement, including Form of Lock-Up Agreement | |
|
2.1*
|
| | Membership Interest Purchase Agreement dated October 14, 2020 among D. Jones Tailored Collection, LTD and Digital Brands Group (formerly known as Denim.LA, Inc.) | |
|
2.2*
|
| | First Amendment to Membership Interest Purchase Agreement dated December 31, 2020 among D. Jones Tailored Collection, LTD and Digital Brands Group (formerly known as Denim.LA, Inc) | |
|
2.3*
|
| | Agreement and Plan of Merger with Bailey 44, LLC dated February 11, 2020 among Bailey 44, LLC, Norwest Venture Partners XI, and Norwest Venture Partners XII, LP and Digital Brands Group (formerly known as Denim.LA, Inc) | |
|
Exhibit
Number |
| |
Description
|
|
|
2.4*
|
| | Second Amendment to Membership Interest Purchase Agreement Dated May 10, 2021 among D. Jones Tailored Collection, LTD and Digital Brands Group (formerly known as Denim. LA, Inc.) | |
|
2.5*
|
| | Membership Interest Purchase Agreement, dated August 30, 2021, by and between Moise Emquies and Digital Brands Group, Inc. | |
|
3.1*
|
| | Amended and Restated Certificate of Incorporation of the Registrant | |
|
3.2*
|
| | Amendment to Amended and Restated Certificate of Incorporation of the Registrant | |
|
3.3*
|
| | Sixth Amended and Restated Certificate of Incorporation of the Registrant | |
|
3.4*
|
| | Bylaws of the Registrant | |
|
3.5*
|
| | Amended and Restated Bylaws of Registrant | |
|
4.1*
|
| | Form of Common Stock Certificate | |
|
4.2*
|
| | Form of Warrant Agency Agreement, including Form of Warrant Certificate | |
|
4.3*
|
| | Form of Underwriter’s Warrants | |
|
4.4*
|
| | Form of Lender’s Warrants | |
|
4.5*
|
| | Form of Series Seed Preferred Stock Purchase Agreement | |
|
4.6*
|
| | Form of Series A Preferred Stock Subscription Agreement | |
|
4.7*
|
| | Form of Series A-2 Preferred Stock Subscription Agreement | |
|
4.8*
|
| | Form of Series A-3 Preferred Stock Subscription Agreement | |
|
4.9*
|
| | Form of Series CF Preferred Stock Purchase Agreement | |
|
4.10*
|
| | Form of 2019 Regulation D Convertible Note | |
|
4.11*
|
| | Form of 2020 Regulation D Convertible Note | |
|
4.12*
|
| | Form of Warrant | |
|
5.1*
|
| | Opinion of Manatt, Phelps & Phillips, LLP | |
|
10.1*
|
| | Form of Indemnification Agreement between the Registrant and each of its directors and officers | |
|
10.2*
|
| | Form of Option Agreement with each of John “Hil” Davis, Laura Dowling and Reid Yeoman | |
|
10.3*
|
| | Amendment No. 7 to Senior Credit Agreement, dated as of April 1, 2021 between bocm3- DSTLD-Senior Debt, LLC, bocm3-DSTLD-Senior Debt 2, LLC, Stockholders and Digital Brands Group (formerly known as Denim.LA, Inc) | |
|
10.4*
|
| | Form of Board of Directors Agreement, entered into by each of the Director Nominees | |
|
10.5*
|
| | Original Issue Discount Promissory Note by Digital Brands Group, Inc. in favor of Target Capital 2, LLC in the aggregate amount of $1,000,000 dated as of April 8, 2021 | |
|
10.6*
|
| | Consulting Agreement dated as of April 8, 2021 between Alchemy Advisory LLC and Digital Brands Group, Inc. | |
|
10.7*
|
| | 2013 Stock Plan | |
|
10.8*
|
| | Senior Credit Agreement dated March 10, 2017 among bocm3-DSTLD-Senior Debt, LLC, Stockholders and Digital Brands Group (formerly known as Denim.LA, Inc) | |
|
10.9*
|
| | Amendment No. 1 to Senior Credit Agreement, dated as of July 1, 2017 among bocm3-DSTLD- Senior Debt, LLC, Stockholders and Digital Brands Group (formerly known as Denim.LA, Inc) | |
|
10.10*
|
| | Amendment No. 2 to Credit Agreement, Security Agreement and Management, dated as of March 30, 2018 among bocm3-DSTLD-Senior Debt, LLC, Stockholders, bocm3-DSTLD- Senior Debt 2, LLC and Digital Brands Group (formerly known as Denim.LA, Inc) | |
|
10.11*
|
| | Limited Waiver and Amendment No. 3 to Senior Credit Agreement, dated as of April 30, 2018 among bocm3-DSTLD-Senior Debt, LLC, Stockholders, bocm3-DSTLD-Senior Debt 2, | |
|
Exhibit
Number |
| |
Description
|
|
| | | | LLC and Digital Brands Group (formerly known as Denim.LA, Inc) | |
|
10.12*
|
| | Amendment No. 4 to Senior Credit Agreement, dated as of February 28, 2019 among bocm3- DSTLD-Senior Debt, LLC, Stockholders, bocm3-DSTLD-Senior Debt 2, LLC and Digital Brands Group (formerly known as Denim.LA, Inc) | |
|
10.13*
|
| | Amendment No. 5 to Senior Credit Agreement and Security Agreement, dated as of February 7, 2020 among bocm3-DSTLD-Senior Debt, LLC, Stockholders, bocm3-DSTLD- Senior Debt 2, LLC and Digital Brands Group (formerly known as Denim.LA, Inc) | |
|
10.14*
|
| | Amendment No. 6 to Senior Credit Agreement, dated as of September 9, 2020 among bocm3- DSTLD-Senior Debt, LLC, Stockholders, bocm3-DSTLD-Senior Debt 2, LLC and Digital Brands Group (formerly known as Denim.LA, Inc) | |
|
10.15*
|
| | Amendment No. 7 to Senior Credit Agreement, dated as of April 1, 2021 between bocm3- DSTLD-Senior Debt, LLC, bocm3-DSTLD-Senior Debt 2, LLC, Stockholders and Digital Brands Group (formerly known as Denim.LA, Inc) | |
|
10.16*
|
| | Promissory Note, dated April 10, 2020, between Digital Brands Group (formally known as Denim.LA, Inc.) and JPMorgan Chase Bank, N.A. | |
|
10.17*
|
| | Loan dated June 25, 2020, between Digital Brands Group and The Small Business Administration, an Agency of the U.S. Government | |
|
10.18*
|
| | Promissory Note, dated April 5, 2020, between JPMorgan Chase Bank, N.A. and Bailey 44, LLC | |
|
10.19*
|
| | Lease Agreement between 3926 Magazine Street Properties, LLC and Harper & Jones LLC, dated June 22, 2018 | |
|
10.20*
|
| | Lease Agreement between Crosby 2100, LTD. and Harper & Jones LLC, dated April 4, 2018 | |
|
10.21*
|
| | Amendment to Lease Agreement between Crosby 2100, LTD. and Harper & Jones LLC, dated December 23, 2020 | |
|
10.22*
|
| | Lease Agreement between Pasha & Sina, Inc. and Harper & Jones LLC, dated February 27, 2019 | |
|
10.23*
|
| | Lease Agreement between 850-860 South Los Angeles Street LLC and Bailey 44, LLC, dated April 27, 2016 | |
|
10.24*
|
| | Lease Agreement between 850-860 South Los Angeles Street LLC and Bailey 44, LLC, dated April 16, 2018 | |
|
10.25*
|
| | Lease Agreement among 45th Street, LLC, Sister Sam, LLC and Bailey 44, LLC dated January 17, 2013 | |
|
10.26*
|
| | Amendment to Lease Agreement among 45th Street, LLC, Sister Sam, LLC and Bailey 44, LLC dated February 20, 2018 | |
|
10.27*
|
| | Form of Board of Directors Agreement, entered into by each of the Director Nominees | |
|
10.28*
|
| | Secured Promissory Note to Norwest Venture Partners XI, LP and Norwest Venture Partners XII, LP of Bailey 44, LLC | |
|
10.29*
|
| | Original Issue Discount Promissory Note by Digital Brands Group, Inc. in favor of Target Capital 2, LLC in the aggregate amount of $1,000,000 dated as of April 8, 2021 | |
|
10.30*
|
| | Consulting Agreement dated as of April 8, 2021 between Alchemy Advisory LLC and Digital Brands Group, Inc. | |
|
10.31*
|
| | Securities Purchase Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc. and Oasis Capital, LLC | |
|
10.32*
|
| | Senior Secured Convertible Promissory Note, dated August 27, 2021, by Digital Brands Group, Inc. in favor of Oasis Capital, LLC | |
|
10.33*
|
| | Equity Purchase Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc. and Oasis Capital, LLC | |
|
Exhibit
Number |
| |
Description
|
|
|
10.34*
|
| | Amended and Restated Securities Purchase Agreement, dated October 1, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and FirstFire Global Opportunities Fund, LLC | |
|
10.35*
|
| | Senior Secured Convertible Promissory Note, dated October 1, 2021, by Digital Brands Group, Inc. in favor of FirstFire Global Opportunities Fund, LLC | |
|
10.36*
|
| | Security Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc. and Oasis Capital, LLC | |
|
10.37*
|
| | Joinder and Amendment to Security Agreement, dated October 1, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and FirstFire Global Opportunities Fund, LLC | |
|
10.38*
|
| | Registration Rights Agreement, dated August 27, 2021, by and between Digital Brands Group, Inc. and Oasis Capital, LLC | |
|
10.39*
|
| | Amendment to Registration Rights Agreement, dated November 16, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and FirstFire Global Opportunities Fund, LLC | |
|
10.40*
|
| | Securities Purchase Agreement, dated November 16, 2021, by and among Digital Brands Group, Inc., Oasis Capital, LLC and FirstFire Global Opportunities Fund, LLC | |
|
10.41*
|
| | Senior Secured Convertible Promissory Note, dated November 16, 2021, by Digital Brands Group, Inc. in favor of FirstFire Global Opportunities Fund, LLC | |
|
10.42*
|
| | Waiver by FirstFire Global Opportunities Fund, LLC, dated November 16, 2021 | |
|
10.43*
|
| | Waiver by Oasis Capital, LLC, dated November 16, 2021 | |
|
21.1*
|
| | List of Subsidiaries of the Registrant | |
|
23.1*
|
| | Consent of dbbmckennon for Digital Brands Group, Inc. | |
|
23.2*
|
| | Consent of dbbmckennon for Harper & Jones LLC | |
|
23.3*
|
| | Consent of dbbmckennon for Bailey 44, LLC | |
|
23.4*
|
| | Consent of Moss Adams LLP for Bailey 44, LLC | |
|
23.5*
|
| | Consent of Armanino LLP for MOSBEST, LLC | |
|
23.6*
|
| | Consent of Armanino LLP for Sunnyside, LLC | |
|
23.7*
|
| | Consent of Manatt, Phelps & Phillips (contained in Exhibit 5.1) | |
|
24.1*
|
| | Power of Attorney | |
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ John Hilburn Davis IV
John Hilburn Davis IV
|
| | President, Chief Executive Officer and Director (Principal Executive Officer) | | |
January , 2022
|
|
|
/s/ Reid Yeoman
Reid Yeoman
|
| | Chief Financial Officer(Principal financial and accounting officer) | | |
January , 2022
|
|
|
/s/ Mark T. Lynn
Mark T. Lynn
|
| | Director | | |
January , 2022
|
|
|
/s/ Trevor Pettennude
Trevor Pettennude
|
| | Director | | |
January , 2022
|
|
|
/s/ Jameeka Aaron Green
Jameeka Aaron Green
|
| | Director | | |
January , 2022
|
|
|
/s/ Huong “Lucy” Doan
Huong “Lucy” Doan
|
| | Director | | |
January , 2022
|
|