RYM 10-Q/A

RYTHM, Inc. (RYM)

10-Q/A 2023-10-02 For: 2022-03-31

View Original

Added on April 11, 2026

Nevada		30-0943453
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		AGFY		NASDAQ Capital Market

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

Class		Outstanding as of May 12, 2022
Common Stock, $0.001 par value		132,957

		Page
PART I	FINANCIAL INFORMATION	1

ITEM 1.	FINANCIAL STATEMENTS	1

	Condensed Consolidated Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021	1

	Condensed Consolidated Statements of Operations for the three months ended March 31, 2022 (unaudited) and 2021 (unaudited)	2

	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2022 (unaudited) and 2021 (unaudited)	3

	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2022 (unaudited) and 2021 (unaudited)	4

	Notes to Condensed Consolidated Financial Statements	5

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	56

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	73

ITEM 4.	CONTROLS AND PROCEDURES	73

PART II	OTHER INFORMATION	74

ITEM 1.	LEGAL PROCEEDINGS	74

ITEM 1A.	RISK FACTORS	74

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	74

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	74

ITEM 4.	MINE SAFETY DISCLOSURES	74

ITEM 5.	OTHER INFORMATION	74

ITEM 6.	EXHIBITS	75

SIGNATURES		76

	March 31, 2022 (As Restated)			December 31, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	25,205		$	12,014
Restricted cash		30,000			—
Marketable securities		38,211			44,550
Accounts receivable, net of allowance for doubtful accounts of $1,415 and $1,415 at March 31, 2022 and December 31, 2021, respectively		8,571			7,222
Inventory, net of reserves of $942 and $942 at March 31, 2022 and December 31, 2021, respectively		38,989			20,498
Prepaid and refundable taxes		194			—
Prepaid expenses and other current assets		6,448			2,452
Total current assets		147,618			86,736
Loan receivable		34,738			22,255
Property and equipment, net		7,055			6,232
Right-of-use assets, net		1,554			1,479
Goodwill		54,544			50,090
Intangible assets, net		15,861			14,072
Other non-current assets		3,105			1,184
Total assets	$	264,475		$	182,048

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	3,683		$	9,151
Accrued expenses and other current liabilities		30,112			28,764
Operating lease liabilities, current		911			814
Long-term debt, current		2,281			1,089
Deferred revenue		4,182			3,772
Total current liabilities		41,169			43,590
Warrant liabilities		29,711			—
Other non-current liabilities		275			318
Operating lease liabilities, non-current		689			704
Deferred tax liabilities, net		62			—
Long-term debt		35,697			12
Total liabilities		107,603			44,624

Commitments and contingencies (Note 22)

Stockholders’ equity:
Common Stock, $0.001 par value per share, 250,000 shares authorized, 132,714 and 111,035 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively ⁽¹⁾		—			—
Preferred Stock, $0.001 par value per share, 2,895,000 shares authorized, no shares issued or outstanding		—			—
Preferred A Stock, $0.001 par value per share, 105,000 shares authorized, no shares issued or outstanding		—			—
Additional paid-in capital ⁽¹⁾		213,701			196,034
Accumulated deficit		(57,195	)		(58,975	)
Total stockholders’ equity attributable to Agrify		156,506			137,059
Non-controlling interests		366			365
Total liabilities and stockholders’ equity	$	264,475		$	182,048

	Three Months ended March 31,
	2022 (As Restated)			2021
Revenue (including $1,271 and $5,518 from related parties, respectively)	$	26,021		$	7,008
Cost of goods sold		21,851			7,548
Gross profit (loss)		4,170			(540	)

General and administrative		9,759			4,458
Research and development		2,084			882
Selling and marketing		2,090			616
Total operating expenses		13,933			5,956
Loss from operations		(9,763	)		(6,496	)
Interest income (expense), net		559			(32	)
Change in fair value of warrant liabilities		10,785			—
Gain on extinguishment of notes payable		—			2,685
Other income, net		11,344			2,653
Net income (loss) before income taxes		1,581			(3,843	)
Income tax benefit		(200	)		—
Net income (loss)		1,781			(3,843	)
Income (loss) attributable to non-controlling interest		1			(33	)
Net income (loss) attributable to Agrify Corporation	$	1,780		$	(3,810	)
Net income (loss) per share attributable to Common Stockholders – basic ⁽¹⁾	$	14.48		$	(65.87	)
Net income (loss) per share attributable to Common Stockholders – diluted ⁽¹⁾	$	13.79		$	(65.87	)
Weighted-average common shares outstanding – basic ⁽¹⁾		122,946			57,841
Weighted-average common shares outstanding – diluted ⁽¹⁾		129,045			57,841

	Common Stock				Preferred A Stock					Additional Paid-In		Accumulated			Total Stockholders’ Equity attributable			Non- Controlling			Total Stockholders’
	Shares⁽¹⁾		Amount⁽¹⁾		Shares			Amount		Capital⁽¹⁾		Deficit			to Agrify			Interests			Equity
Balance at January 1, 2021		21,058	$	—		100,000		$	—	$	19,831	$	(26,510	)	$	(6,679	)	$	225		$	(6,454	)
Stock-based compensation		—		—		—			—		2,135		—			2,135			—			2,135
Beneficial conversion feature associated with amended Convertible Promissory Notes		—		—		—			—		3,869		—			3,869			—			3,869
Conversion of Convertible Notes		8,485		—		—			—		13,100		—			13,100			—			13,100
Issuance of Common Stock – Initial Public Offering (“IPO”), net of fees		31,050		—		—			—		56,961		—			56,961			—			56,961
Issuance of Common Stock – Secondary public offering, net of fees		31,945		—		—			—		79,839		—			79,839						79,839
Conversion of Preferred A Stock		6,865		—		(100,000	)		—		—		—			—			—			—
Exercise of options		872		—		—			—		439		—			439			—			439
Exercise of warrants		1,201		—		—			—		5		—			5			—			5
Net loss		—		—		—			—		—		(3,810	)		(3,810	)		(33	)		(3,843	)
Balance at March 31, 2021		101,476	$	—		—		$	—	$	176,179	$	(30,320	)	$	145,859		$	192		$	146,051

	Common Stock (As Restated)				Preferred A Stock (As Restated)				Additional Paid-In- Capital ⁽¹⁾		Accumulated Deficit			Total Stockholders’ Equity attributable to Agrify		Non- Controlling Interests		Total Stockholders’ Equity
	Shares⁽¹⁾		Amount⁽¹⁾		Shares		Amount		(As Restated)		(As Restated)			(As Restated)		(As Restated)		(As Restated)
Balance at January 1, 2022		111,035	$	—		—	$	—	$	196,034	$	(58,975	)	$	137,059	$	365	$	137,424
Stock-based compensation		—		—		—		—		953		—			953		—		953
Issuance of Common Stock and warrants in private placement		12,252		—		—		—		14,800		—			14,800		—		14,800
Acquisition of Lab Society		1,490		—		—		—		1,903		—			1,903		—		1,903
Exercise of options		21		—		—		—		10		—			10		—		10
Exercise of warrants		7,916		—		—		—		1		—			1		—		1
Net income		—		—		—		—		—		1,780			1,780		1		1,781
Balance at March 31, 2022, as restated		132,714	$	—		—	$	—	$	213,701	$	(57,195	)	$	156,506	$	366	$	156,872

	Three Months ended March 31,
	2022 (Restated)			2021
Cash flows from operating activities
Net income (loss) attributable to Agrify Corporation	$	1,780		$	(3,810	)
Adjustments to reconcile net income (loss) attributable to Agrify Corporation to net cash used in operating activities:
Depreciation and amortization		1,052			147
Amortization of premium on investment securities		224			—
Amortization of debt discount		223			—
Amortization of issuance costs		143			—
Interest on investment securities		(248	)		—
Deferred income taxes		(200	)		—
Compensation in connection with the issuance of stock options		953			2,135
Non-cash interest (income) expense		(406	)		33
Change in fair value of warrant liabilities		(10,785	)		—
Gain on extinguishment of notes payable, net		—			(2,685	)
Early termination of lease		26			—
Income (loss) attributable to non-controlling interests		1			(33	)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		(838	)		(5,218	)
Inventory		(16,361	)		(3,330	)
Prepaid expenses and other current assets		(890	)		(2,155	)
Right of use assets, net		(20	)		—
Accounts payable		(2,838	)		181
Accrued expenses and other current liabilities		(2,120	)		7,360
Deferred revenue, net		(571	)		96
Net cash used in operating activities		(30,875	)		(7,279	)

Cash flows from investing activities
Purchases of property and equipment		(3,728	)		(142	)
Purchase of securities		(76,097	)		—
Proceeds from the sale of securities		82,460			—
Issuance of loan receivable		(12,487	)		—
Cash paid for business combination, net of cash acquired		(3,513	)		—
Net cash used in investing activities		(13,365	)		(142	)

Cash flows from financing activities
Proceeds from issuance of debt and warrants in private placement, net		62,405			—
Proceeds from issuance of Common Stock and warrants in private placement, net of fees		25,797			—
Proceeds from IPO, net of fees		—			56,961
Proceeds from Secondary public offering, net of fees		—			79,839
Proceeds from exercise of options		10			439
Proceeds from exercise of warrants		1			5
Payments on other financing loans		(273	)		—
Payments on insurance financing loan		(428	)		—
Payments of financing leases		(81	)		(47	)
Net cash provided by financing activities		87,431			137,197
Net increase in cash, cash equivalents, and restricted cash		43,191			129,776
Cash, cash equivalents, and restricted cash at the beginning of period		12,014			8,111
Cash, cash equivalents, and restricted cash at the end of period	$	55,205		$	137,887
Cash, cash equivalents, and restricted cash at end of period
Cash and cash equivalents	$	25,205		$	137,887
Restricted cash		30,000			—
Total cash, cash equivalents, and restricted cash at the end of period	$	55,205		$	137,887
Supplemental disclosures of cash flow information
Conversion of Convertible Note to Common Stock		—		$	13,100
Supplemental disclosures of non-cash flow information
Initial fair value of warrants	$	40,496			—
Financing of prepaid insurance	$	1,928			—

	ο	The change in fair value of warrant liabilities was understated by $10.8 million because the Company did not appropriately remeasure the fair value of the warrant liabilities as of March 31, 2022 through earnings;

	ο	Interest income, net was overstated by $123 thousand due to incorrect debt discount amortization in connection with the issuance of debt and SPA Warrants, as a result of the improper classification of the SPA Warrants as equity rather than liabilities.

	●	Prepaid expenses and other current assets were understated by $0.8 million as of March 31, 2022;

	●	Other non-current assets were overstated by $0.8 million as of March 31, 2022;

	March 31, 2022
				Adjustments
	Previously Reported			Warrants			Reverse Stock Split			Debt Issuance Costs			Restated
Assets
Current assets
Cash and cash equivalents	$	25,205			—			—			—		$	25,205
Restricted cash		30,000			—			—			—			30,000
Marketable securities		38,211			—			—			—			38,211
Accounts receivable, net of allowance for doubtful accounts of $1,415		8,571			—			—			—			8,571
Inventory, net of reserves of $942		38,989			—			—			—			38,989
Prepaid and refundable taxes		194			—			—			—			194
Prepaid expenses and other current assets		6,373			—			—			75			6,448
Total current assets		147,543												147,618

Non-Current Assets
Loan receivable		34,738			—			—			—			34,738
Property and equipment, net		7,055			—			—			—			7,055
Right-of-use assets, net		1,554			—			—			—			1,554
Goodwill		54,544			—			—			—			54,544
Intangible assets, net		15,861			—			—			—			15,861
Other non-current assets		3,180			—			—			(75	)		3,105
Total Assets	$	264,475											$	264,475

Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	3,683			—			—			—		$	3,683
Accrued expenses and other current liabilities		30,112			—			—			—			30,112
Operating lease liabilities, current		911			—			—			—			911
Long-term debt, current		2,970			(689	)		—			—			2,281
Deferred revenue		4,182			—			—			—			4,182
Total current liabilities		41,858												41,169

Non-current liabilities
Warrant liabilities		—			29,711			—			—			29,711
Other non-current liabilities		275			—			—			—			275
Operating lease liabilities, non-current		689			—			—			—			689
Deferred tax liabilities, net		62			—			—			—			62
Long-term debt		51,154			(15,457	)		—			—			35,697
Total liabilities		94,038												107,603

Commitments and contingencies (Note 22)

Stockholders’ equity
Common Stock, $0.001 par value per share, 250,000 shares authorized, 132,714 shares issued and outstanding		25			—			(25	)		—			0
Preferred Stock, $0.001 par value per share, 2,895,000 shares authorized, no shares issued or outstanding		—			—			—			—			—
Preferred A Stock, $0.001 par value per share, 105,000 shares authorized, no shares issued or outstanding		—			—			—			—			—
Additional paid-in capital		237,903			(24,227	)		25			—			213,701
Accumulated deficit		(67,857	)		10,662			—			—			(57,195	)
Total stockholders’ equity attributable to Agrify		170,071												156,506
Non-controlling interests		366			—			—			—			366
Total liabilities and stockholders’ equity	$	264,475											$	264,475

	Three Months ended March 31, 2022
				Adjustment
	Previously Reported			Warrants			Reverse Stock Split			Restated
Revenue (including $1,271 from related parties)	$	26,021			—			—		$	26,021
Cost of goods sold		21,851			—			—			21,851
Gross profit		4,170									4,170

General and administrative		9,759			—			—			9,759
Research and development		2,084									2,084
Selling and marketing		2,090			—			—			2,090
Total operating expenses		13,933									13,933
Loss from operations		(9,763	)								(9,763	)
Interest income, net		682			(123	)		—			559
Change in fair value of warrant liabilities		—			10,785			—			10,785
Gain on extinguishment of notes payable		—			—			—			—
Other income, net		682			10,662			—			11,344
Net (loss) income before income taxes		(9,081	)		10,662			—			1,581
Income tax benefit		(200	)		—			—			(200	)
Net (loss) income		(8,881	)		10,662			—			1,781
Income attributable to non-controlling interest		1			—			—			1
Net (loss) income attributable to Agrify Corporation	$	(8,882	)	$	10,662					$	1,780
Net (loss) income per share attributable to Common Stockholders – basic	$	(0.36	)	$	0.43		$	14.41		$	14.48
Net (loss) income per share attributable to Common Stockholders -- diluted	$	(0.36	)	$	0.43		$	13.72		$	13.79
Weighted-average common shares outstanding – basic		24,589,113			—			(24,466,167	)		122,946
Weighted-average common shares outstanding – diluted		24,589,113			—			(24,460,068	)		129,045

	Three Months ended March 31, 2022
	Previously			Adjustment
Cash flows from operating activities	Reported			Warrants			Restated
Net income (loss) attributable to Agrify Corporation	$	(8,882	)		10,662		$	1,780
Adjustments to reconcile net loss (income) attributable to Agrify Corporation to net cash used in operating activities:
Depreciation and amortization		1,052			—			1,052
Amortization of premium on investment securities		224			—			224
Amortization of debt discount		20			203			223
Amortization of issuance costs		—			143			143
Interest on investment securities		(248	)		—			(248	)
Debt issuance costs		2,700			(2,700	)		—
Deferred income taxes		(200	)		—			(200	)
Compensation in connection with the issuance of stock options		953			—			953
Non-cash interest (income)		(406	)		—			(406	)
Change in fair value of warrant liabilities		—			(10,785	)		(10,785	)
Gain on extinguishment of notes payable, net		—			—			—
Early termination of lease		26			—			26
Income attributable to non-controlling interests		1			—			1
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		(838	)		—			(838	)
Inventory		(16,361	)		—			(16,361	)
Prepaid expenses and other current assets		(3,033	)		2,143			(890	)
Right of use assets, net		(20	)		—			(20	)
Other non-current assets		(1,867	)		1,867			—
Accounts payable		(2,765	)		(73	)		(2,838	)
Accrued expenses and other current liabilities		(2,120	)		—			(2,120	)
Deferred (expense), net		(2,407	)		1,836			(571	)
Net cash used in operating activities		(34,171	)		3,296			(30,875	)

Cash flows from investing activities
Purchases of property and equipment		(3,728	)		—			(3,728	)
Purchase of securities		(76,097	)		—			(76,097	)
Proceeds from the sale of securities		82,460			—			82,460
Issuance of loan receivable		(12,487	)		—			(12,487	)
Cash paid for business combinations, net of cash acquired		(3,513	)		—			(3,513	)
Net cash used in investing activities		(13,365	)		—			(13,365	)

Cash flows from financing activities
Proceeds from issuance of debt and warrants in private placement, net		65,000			(2,595	)		62,405
Proceeds from issuance of Common Stock and warrants in private placement, net of fees		25,797			—			25,797
Proceeds from IPO, net of fees		—			—			—
Proceeds from Secondary public offering, net of fees		—			—			—
Proceeds from exercise of options		10			—			10
Proceeds from exercise of warrants		1			—			1
Payments on other financing loans		—			(273	)		(273	)
Payments on insurance financing loan		—			(428	)		(428	)
Payments of financing leases		(81	)		—			(81	)
Net cash provided by financing activities		90,727			(3,296	)		87,431
Net increase in cash, cash equivalents, and restricted cash		43,191			—			43,191
Cash, cash equivalents, and restricted cash at the beginning of period		12,014			—			12,014
Cash, cash equivalents, and restricted cash at the end of period	$	55,205					$	55,205
Cash, cash equivalents, and restricted cash at end of period
Cash and cash equivalents	$	25,205			—		$	25,205
Restricted cash		30,000			—			30,000
Total cash, cash equivalents, and restricted cash at the end of period	$	55,205					$	55,205
Supplemental disclosures of non-cash flow information
Initial fair value of warrants		—			40,496		$	40,496
Financing of prepaid insurance		—			1,928		$	1,928

	Common Stock (Previously Reported)				Common Stock (Restated)				Additional Paid-In Capital (Previously Reported)			Additional Paid-In Capital (Restated)		Accumulated Deficit (Previously Reported)			Accumulated Deficit (Restated)			Total Stockholders’ Equity attributable to Agrify (Previously Reported)			Total Stockholders’ Equity attributable to Agrify (Restated)		Non-Controlling Interests (Previously Reported)		Non-Controlling Interests (Restated)		Total Stockholders’ Equity (Previously Reported)			Total Stockholders’ Equity (Restated)
	Shares		Amount		Shares		Amount
Balance at January 1, 2022		22,207,103	$	21		111,035		—	$	196,013		$	196,034	$	(58,975	)	$	(58,975	)	$	137,059		$	137,059	$	365	$	365	$	137,424		$	137,424
Stock-based compensation		—		—		—		—		953			953		—			—			953			953		—		—		953			953
Issuance of Common Stock and warrants in private placement		2,450,350		2		12,252		—		25,795			14,800		—			—			25,797			14,800		—		—		25,797			14,800
Issuance of debt and warrants in private placement		—		—		—		—		13,230			—		—			—			13,230			—		—		—		13,230			—
Acquisition of Lab Society		297,929		—		1,490		—		1,903			1,903		—			—			1,903			1,903		—		—		1,903			1,903
Exercise of options		4,220		—		21		—		10			10		—			—			10			10		—		—		10			10
Exercise of warrants		1,583,288		2		7,916		—		(1	)		1		—			—			1			1		—		—		1			1
Net income		—		—		—		—		—			—		(8,882	)		1,780			(8,882	)		1,780		1		1		(8,881	)		1,781
Balance at March 31, 2022		26,542,890	$	25		132,714		—	$	237,903		$	213,701	$	(67,857	)	$	(57,195	)	$	170,071		$	156,506	$	366	$	366	$	170,437		$	156,872

	Three Months ended March 31, 2022					Three Months ended March 31, 2021
(In thousands)	Amount		% of Total Revenue			Amount		% of Total Revenue
New England Innovation Academy (“NEIA”) – Related Party		*		*		$	5,460		77.9	%
Customer C	$	3,793		14.6	%		*		*
Customer D	$	4,697		18.1	%		*		*

	As of March 31, 2022					As of December 31, 2021
(In thousands)	Amount		% of Total Accounts Receivable			Amount		% of Total Accounts Receivable

NEIA – Related Party	$	1,344		15.7	%	$	3,498		48.4	%
Customer B	$	1,541		18.0	%	$	1,541		21.3	%
Customer E	$	1,217		14.2	%		*		*

	Estimated Useful Life (Years)
Computer and office equipment		2 to 3
Furniture and fixtures		2
Software		3
Vehicles		5
Research and development laboratory equipment		5
Machinery and equipment		3 to 5
Leased equipment at customer		5 to 13
Trade show assets		3 to 5
Leasehold improvements		Lower of estimated useful life or remaining lease term

Trade names		5 to 7 years
Acquired developed technology		5 to 8 years
Non-compete agreements		5 years
Customer relationships		5 to 8 years
Capitalized website costs		3 to 5 years

	Three Months ended March 31,
(In thousands)	2022		2021
Transferred at a point in time	$	12,774	$	6,828
Transferred over time		13,247		180
Total revenue	$	26,021	$	7,008

(In thousands)	Three Months ended March 31, 2022			Year ended December 31, 2021
Deferred revenue – beginning of period	$	3,772		$	152
Additions		5,089			3,758
Interest income on deferred revenue		—			4
Recognized		(4,679	)		(142	)
Deferred revenue – end of period	$	4,182		$	3,772

	Level 1:	Observable inputs such as quoted prices for identical assets or liabilities in active markets.

	Level 2:	Other inputs that are observable directly or indirectly, such as quoted prices for similar instruments in active markets or for similar markets that are not active.

	Level 3:	Unobservable inputs for which there is little or no market data which require the Company to develop its own assumptions about how market participants would price the asset or liability.

	March 31, 2022								December 31, 2021
	Fair Value Measurements Using Input Types								Fair Value Measurements Using Input Types
(In thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Mutual funds (included in cash and cash equivalents)	$	43,528	$	-	$	-	$	43,528	$	178	$	-	$	-	$	178
Municipal bonds		19,306		-		-		19,306		9,961		-		-		9,961
Corporate bonds		18,905		-		-		18,905		34,589		-		-		34,589
Total assets	$	81,739	$	-	$	-	$	81,739	$	44,728	$	-	$	-	$	44,728
Liabilities:
Contingent consideration	$	-	$	-	$	7,557	$	7,557	$	-	$	-	$	6,137	$	6,137
Warrant liabilities		-		-		29,711		29,711		-		-		-		-
Total liabilities	$	-	$	-	$	37,268	$	37,268	$	-	$	-	$	6,137	$	6,137

(In thousands)	March 31, 2022		December 31, 2021
Current marketable securities:
Municipal bonds	$	19,306	$	9,961
Corporate bonds		18,905		34,589
	$	38,211	$	44,550

(In thousands)	Amortized cost		Unrealized loss			Estimated fair value
Current marketable securities:
Municipal bonds	$	19,306	$	(26	)	$	19,280
Corporate bonds		18,905		(140	)		18,765
	$	38,211	$	(166	)	$	38,045

(In thousands)	Three Months ended March 31, 2022		Year ended December 31, 2021
Contingent consideration – beginning of period	$	6,137	$	—
Accrued contingent consideration		1,420		4,725
Change in estimated fair value		—		1,412
Contingent consideration – end of period	$	7,557	$	6,137

	PIPE			SPA
	Warrants			Warrants
Stock price	$	1,100.00		$	1,228.00
Exercise price	$	1,496.00		$	1,350.00
Expected term (in years)		5.5			5.5
Annualized volatility		87.53	%		87.57	%
Annual rate of quarterly dividends		0.0	%		0.0	%
Discount rate -bond equivalent yield		1.65	%		2.12	%

(In thousands)	Three Months ended March 31, 2022
Warrant liabilities – beginning of period	$	—
Initial fair value of warrant liabilities		40,496
Change in estimated fair value		(10,785	)
Warrant liabilities – end of period	$	29,711

	March 31,		December 31,
(In thousands)	2022		2021
Prepaid insurance	$	2,353	$	492
Prepaid software		151		173
Prepaid expenses, other		1,828		541
Deferred costs		492		353
Other note receivables (1)		1,240		807
Other receivables, other		384		86
Total prepaid expenses and other current assets	$	6,448	$	2,452

	Intangible Assets, Gross						Accumulated Amortization									Intangible Assets, Net
(In thousands)	January 1, 2022		Additions and Retirements, net		March 31, 2022		January 1, 2022			Expense and Retirements, net			March 31, 2022			January 1, 2022		March 31, 2022
Trade names	$	2,418	$	317	$	2,735	$	(227	)	$	(91	)	$	(318	)	$	2,191	$	2,417
Customer Relationships		6,176		713		6,889		(302	)		(247	)		(549	)		5,874		6,340
Acquired developed Technology		4,911		1,432		6,343		(191	)		(255	)		(446	)		4,720		5,897
Non-compete		1,202		—		1,202		(60	)		(60	)		(120	)		1,142		1,082
Capitalized website costs		245		—		245		(100	)		(20	)		(120	)		145		125
Total	$	14,952	$	2,462	$	17,414	$	(880	)	$	(673	)	$	(1,553	)	$	14,072	$	15,861

Years ending December 31 (In thousands),	Amount
Remaining 2022	$	2,103
2023		2,772
2024		2,763
2025		2,737
2026		2,486
2027 and thereafter		3,000
Total	$	15,861

(In thousands)
Purchase price consideration:
Estimated closing proceeds	$	4,002
Transaction expenses		80
Closing buyer shares		1,904
Holdback buyer shares		816
Earn-out consideration		1,420
Estimated working capital adjustment		(255	)
Fair value of total consideration transferred		7,967
Total purchase price, net of cash acquired	$	7,402

Fair value allocation of purchase price:
Cash and cash equivalents	$	565
Accounts receivable		511
Inventory		2,130
Prepaid expenses and other current receivables		55
Right of use assets, net		304
Property and equipment, net		177
Prepaid and refundable taxes		194
Accounts payable, accrued expenses, and other current liabilities		(1,224	)
Deferred revenue		(963	)
Deferred tax liability		(237	)
Finance lease liabilities, current		(36	)
Finance lease liabilities, noncurrent		(35	)
Operating lease liabilities, current		(112	)
Operating lease liabilities, noncurrent		(192	)
Acquired intangible assets		2,462
Goodwill		4,368
Total purchase price	$	7,967

(In thousands)	Asset Value		Useful Life
Identified intangible assets:
Trade names	$	317	5 years
Acquired developed technology		1,432	8 years
Customer relationships		713	6 years
Total identified intangible assets	$	2,462

(In thousands)
Purchase price consideration:
Cash paid to Sinclair Members at close	$	23,000
Cash contributed to escrow accounts at close		7,000
Cash paid for excess net working capital		1,430
Stock issued at close		14,535
Fair value of contingent consideration to be achieved		3,953
Fair value of total consideration transferred		49,918
Total purchase price, net of cash acquired	$	48,630

Fair value allocation of purchase price:
Cash and cash equivalents	$	1,288
Accounts receivable		897
Inventory		6,761
Prepaid expenses and other current receivables		1,736
Property and equipment, net		970
Right of use assets, net		730
Capitalized web costs, net		2
Accounts payable and accrued expenses		(9,223	)
Deferred revenue		(5,419	)
Long-term debt		(1,961	)
Operating lease liabilities, current		(392	)
Operating lease liabilities, noncurrent		(362	)
Acquired intangible assets		9,889
Goodwill		45,002
Total purchase price	$	49,918