RYM 10-Q/A

RYTHM, Inc. (RYM)

10-Q/A 2023-10-02 For: 2022-06-30

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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 August 10, 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 June 30, 2022 (unaudited) and December 31, 2021	1

	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 (unaudited) and 2021 (unaudited)	2

	Condensed Consolidated Statements of Stockholders’ Equity for the three and six months ended June 30, 2022 (unaudited) and 2021 (unaudited)	3

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 (unaudited) and 2021 (unaudited)	5

	Notes to Condensed Consolidated Financial Statements	6

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	61

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	83

ITEM 4.	Controls and Procedures	83

PART II	OTHER INFORMATION	84

ITEM 1.	Legal Proceedings	84

ITEM 1A.	Risk Factors	84

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	84

ITEM 3.	Defaults Upon Senior Securities	84

ITEM 4.	Mine Safety Disclosures	84

ITEM 5.	Other Information	84

ITEM 6.	Exhibits	85

SIGNATURES		86

	June 30, 2022 (As Restated)			December 31, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	18,608		$	12,014
Restricted cash and restricted marketable securities		30,000			—
Marketable securities		11,323			44,550
Accounts receivable, net of allowance for doubtful accounts of $2,740 and $1,415 at June 30, 2022 and December 31, 2021, respectively		10,468			7,222
Inventory, net of reserves of $1,871 and $942 at June 30, 2022 and December 31, 2021, respectively		41,871			20,498
Prepaid and refundable taxes		210			—
Prepaid expenses and other current assets		5,925			2,452
Total current assets		118,405			86,736
Loan receivable, net of allowance for doubtful accounts of $7,079 and $0 at June 30, 2022 and December 31, 2021, respectively		35,090			22,255
Property and equipment, net		11,932			6,232
Right-of-use assets, net		2,866			1,479
Goodwill		—			50,090
Intangible assets, net		—			14,072
Other non-current assets		2,920			1,184
Total assets	$	171,213		$	182,048
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	4,157		$	9,151
Accrued expenses and other current liabilities		27,456			28,764
Operating lease liabilities, current		1,084			814
Long-term debt, current		4,079			1,089
Deferred revenue		3,753			3,772
Total current liabilities		40,529			43,590
Warrant liabilities		9,530			—
Other non-current liabilities		236			318
Operating lease liabilities, non-current		1,908			704
Long-term debt		35,788			12
Total liabilities		87,991			44,624
Commitments and contingencies (Note 18)
Stockholders’ equity:
Common Stock, $0.001 par value per share, 250,000 shares authorized, 132,957 and 111,035 shares issued and outstanding at June 30, 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⁾		214,652			196,034
Accumulated deficit		(131,799	)		(58,975	)
Total stockholders’ equity attributable to Agrify		82,853			137,059
Non-controlling interests		369			365
Total liabilities and stockholders’ equity	$	171,213		$	182,048

	Three Months ended June 30,						Six Months ended June 30,
	2022 (As Restated)			2021			2022 (As Restated)			2021
Revenue (including $1,140, $10,895, $2,411 and $16,413 from related parties, respectively)	$	19,329		$	11,825		$	45,350		$	18,833
Cost of goods sold		17,717			11,298			39,568			18,846
Gross profit (loss)		1,612			527			5,782			(13	)

General and administrative		19,378			4,399			29,137			8,857
Selling and marketing		2,332			782			4,422			1,398
Research and development		2,438			774			4,522			1,656
Change in contingent consideration		(907	)		—			(907	)		—
Impairment of goodwill and intangible assets		69,904			—			69,904			—
Total operating expenses		93,145			5,955			107,078			11,911
Loss from operations		(91,533	)		(5,428	)		(101,296	)		(11,924	)
Interest (expense) income, net		(3,311	)		55			(2,752	)		23
Other expenses		—			(63	)		—			(63	)
Change in fair value of warranty liabilities		20,181			—			30,966			—
Gain on extinguishment of notes payable		—			—			—			2,685
Other income (expense), net		16,870			(8	)		28,214			2,645
Net loss before income taxes		(74,663	)		(5,436	)		(73,082	)		(9,279	)
Income tax benefit		(62	)		—			(262	)		—
Net loss		(74,601	)		(5,436	)		(72,820	)		(9,279	)
Income attributable to non-controlling interests		3			200			4			167
Net loss attributable to Agrify Corporation	$	(74,604	)	$	(5,636	)	$	(72,824	)	$	(9,446	)
Net loss per share attributable to Common Stockholders – basic and diluted ⁽¹⁾	$	(561.31	)	$	(55.41	)	$	(569.13	)	$	(114.12	)
Weighted-average common shares outstanding – basic and diluted ⁽¹⁾		132,911			101,721			127,956			83,310

	Common Stock				Preferred A Stock					Additional Paid-In		Accumulated			Total Stockholders’ Equity attributable to			Non- Controlling			Total Stockholders’
	Shares⁽¹⁾		Amount⁽¹⁾		Shares			Amount		Capital⁽¹⁾		Deficit			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
Stock-based compensation		—		—		—			—		931		—			931			—			931
Exercise of options		393		—		—			—		282		—			282			—			282
Net loss		—		—		—			—		—		(5,636	)		(5,636	)		200			(5,436	)
Balance at June 30, 2021		101,869	$	—		—		$	—	$	177,392	$	(35,956	)	$	141,436		$	392		$	141,828

	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
Issuance of debt and warrants in private placement		—		—		—		—		—		—			—			—		—
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 loss		—		—		—		—		—		1,780			1,780			1		1,781
Balance at March 31, 2022		132,714	$	—		—	$	—	$	213,701	$	(57,195	)	$	156,506		$	366	$	156,872
Stock-based compensation		—		—		—		—		940		—			940			—		940
Exercise of options		21		—		—		—		10		—			10			—		10
Exercise of warrants		222		—		—		—		1		—			1			—		1
Net loss		—		—		—		—		—		(74,604	)		(74,604	)		3		(74,601	)
Balance at June 30, 2022, as restated		132,957	$	—		—	$	—	$	214,652	$	(131,799	)	$	82,853		$	369	$	83,222

	Six Months ended June 30,
	2022			2021
	(As Restated)
Cash flows from operating activities
Net loss attributable to Agrify Corporation	$	(72,824	)	$	(9,446	)
Adjustments to reconcile net loss attributable to Agrify Corporation to net cash used in operating activities:
Depreciation and amortization		2,193			313
Impairment on goodwill and intangible assets		69,904			—
Amortization of premium on investment securities		1,055			63
Amortization of debt discount		2,735			—
Amortization of issuance costs		370			—
Interest on investment securities		(1,247	)		(73	)
Early termination of lease		26			—
Provision for doubtful accounts		8,630			—
Provision for slow-moving inventory		929			—
Deferred income taxes		(262	)		—
Prepaid and refundable taxes		(16	)		—
Compensation in connection with the issuance of stock options		1,893			3,066
Non-cash interest (income) expense		(1,010	)		46
Gain on extinguishment of notes payable, net		—			(2,685	)
Loss from disposal of fixed assets		8			25
Change in fair value of contingent consideration		(907	)		—
Change in fair value of warrant liabilities		(30,966	)		—
Income attributable to non-controlling interests		4			167
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		(4,305	)		(11,122	)
Inventory		(20,171	)		(4,477	)
Prepaid expenses and other current assets		785			(2,723	)
Right-of-use assets, net		60			25
Accounts payable		(2,324	)		86
Accrued expenses and other current liabilities		(4,049	)		12,841
Deferred (expense) revenue, net		(1,002	)		57
Net cash used in operating activities		(50,491	)		(13,837	)

Cash flows from investing activities
Purchases of property and equipment		(9,100	)		(1,102	)
Purchase of securities		(211,030	)		(50,280	)
Proceeds from the sale of securities		214,449			—
Issuance of loan receivables		(20,443	)		(483	)
Cash paid for business combination, net of cash acquired		(3,513	)		—
Net cash used in investing activities		(29,637	)		(51,865	)

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		19			721
Proceeds from exercise of warrants		2			5
Payments on other financing loans		(243	)		—
Payments on insurance financing loans		(1,071	)		—
Payments of financing leases		(187	)		(94	)
Net cash provided by financing activities		86,722			137,432
Net increase in cash and cash equivalents		6,594			71,730
Cash and cash equivalents at the beginning of period		12,014			8,111
Cash and cash equivalents at the end of period	$	18,608		$	79,841
Cash, cash equivalents, and restricted cash and restricted marketable securities at end of period
Cash and cash equivalents		18,608			79,841
Restricted cash and restricted marketable securities		30,000			—
Total cash, cash equivalents, and restricted cash and restricted marketable securities at the end of period	$	48,608		$	79,841
Supplemental disclosures of non-cash investing activities
Equipment sold for loan receivable to customer	$	—		$	289
Supplemental disclosures of non-cash flow information
Initial fair value of warrants	$	40,496		$	—
Financing of prepaid insurance	$	1,928		$	—

	Six Months ended June 30, 2022					Six Months ended June 30, 2021
(In thousands)	Amount		% of Total Revenue			Amount		% of Total Revenue
New England Innovation Academy (“NEIA”) – Related Party		*		*		$	16,355		86.8	%
Company Customer Number – 139	$	8,628		19.0	%		*		*
Company Customer Number – 136	$	6,146		13.6	%		*		*

	As of June 30, 2022					As of December 31, 2021
(In thousands)	Amount		% of Total Accounts Receivable			Amount		% of Total Accounts Receivable
NEIA – Related Party	$	2,414		23.1	%	$	3,498		48.4	%
Company Customer Number – 126	$	1,541		14.7	%	$	1,541		21.3	%

		Estimated Useful Life (Years)
Computer and office equipment		2 to 3
Furniture and fixtures		2
Software		3
Vehicles		5
Research and development of 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

	June 30, 2022
				Adjustments
	Previously Reported			Warrants			Reverse Stock Split			Restated
Assets
Current assets:
Cash and cash equivalents	$	18,608			—					$	18,608
Restricted cash and restricted marketable securities		30,000			—						30,000
Marketable securities		11,323			—						11,323
Accounts receivable, net of allowance for doubtful accounts of $2,740		10,468			—						10,468
Inventory, net of reserves of $1,871		41,871			—						41,871
Prepaid and refundable taxes		210			—						210
Prepaid expenses and other current assets		5,925			—						5,925
Total current assets		118,405									118,405
Loan receivable, net of allowance for doubtful accounts of $7,079		35,090			—						35,090
Property and equipment, net		11,932			—						11,932
Right-of-use assets, net		2,866			—						2,866
Goodwill		—			—						—
Intangible assets, net		—			—						—
Other non-current assets		2,920			—						2,920
Total assets	$	171,213								$	171,213
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	4,157			—					$	4,157
Accrued expenses and other current liabilities		27,456			—						27,456
Operating lease liabilities, current		1,084			—						1,084
Long-term debt, current		9,615			(5,536	)					4,079
Deferred revenue		3,753			—						3,753
Total current liabilities		46,065									40,529
Warrant liabilities		—			9,530						9,530
Other non-current liabilities		236			—						236
Operating lease liabilities, non-current		1,908			—						1,908
Long-term debt		45,014			(9,226	)					35,788
Total liabilities		93,223									87,991

Commitments and Contingencies (Note 18)

Stockholders’ equity:
Common Stock, $0.001 par value per share, 250,000 shares authorized, 132,957 shares issued and outstanding		25			—			(25	)		—
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		238,854			(24,227	)		25			214,652
Accumulated deficit		(161,258	)		29,459						(131,799	)
Total stockholders’ equity attributable to Agrify		77,621									82,853
Non-controlling interests		369			—						369
Total liabilities and stockholders’ equity	$	171,213								$	171,213

	Three Months ended June 30, 2022												Six Months ended June 30, 2022
				Adjustment												Adjustment
	Previously Reported			Warrants			Reverse Stock Split			Restated			Previously Reported			Warrants			Reverse Stock Split			Restated
Revenue including $1,140 and $2,411from related parties, respectively)	$	19,329			—			—		$	19,329		$	45,350			—			—		$	45,350
Cost of goods sold		17,717			—			—			17,717			39,568			—			—			39,568
Gross profit (loss)		1,612									1,612			5,782						—			5,782

General and administrative		19,378			—			—			19,378			29,137			—			—			29,137
Selling and marketing		2,332			—			—			2,332			4,422			—			—			4,422
Research and development		2,438			—			—			2,438			4,522			—			—			4,522
Change in contingent consideration		(907	)		—			—			(907	)		(907	)		—			—			(907	)
Impairment of goodwill and intangible assets		69,904			—			—			69,904			69,904			—			—			69,904
Total operating expenses		93,145									93,145			107,078									107,078
Loss from operations		(91,533	)								(91,533	)		(101,296	)								(101,296	)
Interest (expense) income, net		(1,927	)		(1,384	)		—			(3,311	)		(1,245	)		(1,507	)					(2,752	)
Other expenses		—			—			—			—			—			—			—			—
Change in fair value of warrant liabilities		—			20,181			—			20,181			—			30,966			—			30,966
Gain on extinguishment of notes payable		—			—			—			—			—			—			—			—
Other (expense) income, net		(1,927	)		18,797						16,870			(1,245	)		29,459						28,214
Net loss before income taxes		(93,460	)		18,797						(74,663	)		(102,541	)		29,459						(73,082	)
Income tax benefit		(62	)		—			—			(62	)		(262	)		—			—			(262	)
Net loss		(93,398	)		18,797						(74,601	)		(102,279	)		29,459						(72,820	)
Income (loss) attributable to non-controlling interest		3			—			—			3			4			—			—			4
Net loss attributable to Agrify Corporation	$	(93,401	)	$	18,797					$	(74,604	)	$	(102,283	)	$	29,459					$	(72,824	)
Net loss per share attributable to Common Stockholders – basic and diluted	$	(3.51	)	$	0.71		$	(558.50	)	$	(561.31	)	$	(4.00	)	$	1.15		$	(566.28	)	$	(569.13	)
Weighted-average common shares outstanding – basic and diluted		26,582,104			—			(26,449,193	)		132,911			25,591,114			—			(25,463,158	)		127,956

	Common Stock (Previously Reported)				Common Stock (Restated)				Additional Paid-In Capital (Previously			Additional Paid-In Capital		Accumulated Deficit (Previously			Accumulated Deficit			Total Stockholders’ Equity attributable to Agrify (Previously			Total Stockholders’ Equity attributable to Agrify			Non-Controlling Interests (Previously		Non-Controlling Interests		Total Stockholders’ Equity (Previously			Total Stockholders’ Equity
	Shares		Amount		Shares		Amount		Reported)			Restated)		Reported)			(Restated)			Reported)			(Restated)			Reported)		(Restated)		Reported)			(Restated)
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 loss		—		—		—		—		—			0		(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
Stock-based compensation		—		—		—		—		940			940		—			—			940			940			—		—		940			940
Exercise of options		4,286		—		21		—		10			10		—			—			10			10			—		—		10			10
Exercise of warrants		44,254		—		222		—		1			1		—			—			1			1			—		—		1			1
Net loss		—		—		—		—		—			—		(93,401	)		(74,604	)		(93,401	)		(74,604	)		3		3		(93,398	)		(74,601	)
Balance at June 30, 2022		26,591,430	$	25		132,957	$	—	$	238,854		$	214,652	$	(161,258	)	$	(131,799	)	$	77,621		$	82,853		$	369	$	369	$	77,990		$	83,222

(In thousands)	Six Months ended June 30, 2022			Year ended December 31, 2021
Deferred revenue – beginning of period	$	3,772		$	152
Additions		7,493			3,758
Interest income on deferred revenue		—			4
Recognized		(7,512	)		(142	)
Deferred revenue – end of period	$	3,753		$	3,772

(In thousands)	June 30, 2022			December 31, 2021
Accounts receivable, gross	$	13,208		$	8,637
Less allowance for doubtful accounts		(2,740	)		(1,415	)
Accounts receivable, net	$	10,468		$	7,222

(In thousands)	Six Months ended June 30, 2022			Year ended December 31, 2021
Allowance for doubtful accounts – beginning of period	$	1,415		$	54
Provision for doubtful accounts		1,553			1,187
Other adjustments		(228	)		174
Allowance for doubtful accounts – end of period	$	2,740		$	1,415

(In thousands)	June 30, 2022 (As Restated)		December 31, 2021
Prepaid insurance	$	1,645	$	492
Prepaid materials		208		—
Prepaid software		210		173
Prepaid expenses, other		1,680		541
Deferred costs		—		353
Other note receivables (1)		1,612		807
Other receivables, other		570		86
Total prepaid expenses and other current assets	$	5,925	$	2,452

	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.

	June 30, 2022 (As Restated)								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)	$	—	$	—	$	—	$	—	$	178	$	—	$	—	$	178
Municipal bonds		4,683		—		—		4,683		9,961		—		—		9,961
Corporate bonds		6,640		—		—		6,640		34,589		—		—		34,589
Total assets	$	11,323	$	—	$	—	$	11,323	$	44,728	$	—	$	—	$	44,728
Liabilities
Contingent consideration	$	—	$	—	$	6,766	$	6,766	$	—	$	—	$	6,137	$	6,137
Warrant liabilities		—		—		9,530		9,530		—		—		—		—
Total liabilities	$	—	$	—	$	16,296	$	16,296	$	—	$	—	$	6,137	$	6,137

	●	The Company’s deferred consideration was recorded in connection with acquisitions during the first quarter of 2022 and fiscal 2021 using an estimated fair value discount at the time of the transaction. As of June 30, 2022 and December 31, 2021, the carrying value of the deferred consideration approximated fair value, respectively.

	●	Warrant liabilities were recorded in connection with the issuance of warrants to purchase the Company’s common stock during the first quarter of 2022. As of June 30, 2022 the warrant liabilities were recorded at fair value.

(In thousands)	Amortized Cost		Unrealized Loss			Estimated Fair Value
Current marketable securities
Municipal bonds	$	4,683	$	(6	)	$	4,677
Corporate bonds		6,640		(3	)		6,637
	$	11,323	$	(9	)	$	11,314

	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	%		87.60	%
Annual rate of quarterly dividends		0.0	%		0.0	%
Discount rate -bond equivalent yield		1.65	%		2.12	%

(In thousands)	Six Months Ended June 30, 2022
Warrant liabilities – beginning of period	$	—
Initial fair value of warrant liabilities		40,496
Change in estimated fair value		(30,966	)
Warrant liabilities – end of period	$	9,530

(In thousands)	Six Months ended June 30, 2022			Year ended December 31, 2021
Goodwill – beginning of period	$	50,090		$	632
Goodwill acquired during period		4,368			49,458
Goodwill impairment loss		(54,747	)		—
Goodwill purchase accounting adjustment		289			—
Goodwill – end of period	$	—		$	50,090

	Intangible Assets, Gross						Accumulated Amortization and Impairment									Intangible Assets, Net
(In thousands)	January 1, 2022		Additions and Retirements, net		June 30, 2022		January 1, 2022			Expense and Retirements, net			June 30, 2022			January 1, 2022		June 30, 2022
Trade names	$	2,418	$	317	$	2,735	$	(227	)	$	(2,508	)	$	(2,735	)	$	2,191	$	—
Customer relationships		6,176		713		6,889		(302	)		(6,587	)		(6,889	)		5,874		—
Acquired developed technology		4,911		1,432		6,343		(191	)		(6,152	)		(6,343	)		4,720		—
Non-compete agreements		1,202		—		1,202		(60	)		(1,142	)		(1,202	)		1,142		—
Capitalized website costs		245		—		245		(100	)		(145	)		(245	)		145		—
Total intangible assets, net	$	14,952	$	2,462	$	17,414	$	(880	)	$	(16,534	)	$	(17,414	)	$	14,072	$	—

	Intangible Assets, Gross						Accumulated Amortization									Intangible Assets, Net
(In thousands)	January 1, 2021		Additions and Retirements, net		December 31, 2021		January 1, 2021			Expense and Retirements, net			December 31, 2021			January 1, 2021		December 31, 2021
Trade names	$	930	$	1,488	$	2,418	$	(88	)	$	(139	)	$	(227	)	$	842	$	2,191
Customer relationships		850		5,326		6,176		(89	)		(213	)		(302	)		761		5,874
Acquired developed technology		—		4,911		4,911		—			(191	)		(191	)		—		4,720
Non-compete agreements		—		1,202		1,202		—			(60	)		(60	)		—		1,142
Capitalized website costs		139		106		245		(48	)		(52	)		(100	)		91		145
Total intangible assets, net	$	1,919	$	13,033	$	14,952	$	(225	)	$	(655	)	$	(880	)	$	1,694	$	14,072

(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		(1,244	)
Deferred revenue		(963	)
Deferred tax liability		(237	)
Finance lease liabilities, current		(36	)
Finance lease liabilities, non-current		(35	)
Operating lease liabilities, current		(112	)
Operating lease liabilities, non-current		(192	)
Acquired intangible assets		2,462
Goodwill		4,388
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 the close	$	23,000
Cash contributed to escrow accounts at the close		7,000
Cash paid for excess net working capital		1,430
Stock issued at the 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, non-current		(362	)
Acquired intangible assets		9,889
Goodwill		45,002
Total purchase price	$	49,918

	June 30, 2022 (As Restated)			December 31, 2021
Note payable – SPA Note	$	65,000		$	—
PPP Loan		779			804
Navitas Loan		32			—
Other notes payable (1)		848			297
Total debt		66,659			1,101
Less: unamortized debt discount		(26,792	)		—
Total debt, net of debt discount		39,867			1,101
Less: current portion, net of current unamortized debt discount		(4,079	)		(1,089	)
Long-term debt	$	35,788		$	12

(In thousands)	Balance at January 1, 2022		Additions			Payments		Amortization of Debt Discount		Balance at June 30, 2022
Accrued interest expense	$	—		(1,195	)		829		—	$	(366	)

Principal	$	—	$	65,000		$	—	$	—	$	65,000
Notes payable, discount		—		(32,196	)		—		2,984		(29,212	)
Net carrying amount	$	—	$	32,804		$	—	$	2,984	$	35,788