2019 Acquisition

12 Months Ended

Dec. 31, 2019

2019 Acquisition

16.	2019 ACQUISITION

On September 10, 2019, the Company completed the acquisition of the assets of a personal wellness company (the “Aussie Health Assets”), whose products sell primarily on the Amazon US marketplace, for total consideration of $1.3 million, which was comprised of cash of $1.1 million and a promissory note for $0.2 million that accrues interest at a rate of 8% per annum and matures on June 10, 2020. The Company also paid $0.1 million in the form of a working capital payment related to the inventory purchased within sixty days of closing.

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

	Total
	(in thousands)
Inventory	$	297
Goodwill		745
Intangible assets		333
Net assets acquired	$	1,375

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

	Amount allocated		Useful life (in years)
	(in thousands)
Goodwill	$	745	n.a.
Trademarks		310		5
Transition services agreement		11	< 1
Non-competition agreement		12		3
Total	$	1,078

Unaudited Pro Forma Information

The following unaudited pro forma information illustrates the impact of the Aussie Health Assets acquisition on the Company’s net revenue for the years-ended December 31, 2018 and 2019. The acquisition of the Aussie Health Assets is reflected in the following unaudited pro forma information as if the acquisition had been effective on January 1, 2018. The unaudited pro forma impact for the year-end December 31, 2019 is from January 1, 2019 through the acquisition date of September 10, 2019.

	December 31,			December 31,
	2018			2019
	(in thousands)
Net revenue as reported	$	73,279		$	114,451
Aussie Health net revenue	$	1,819		$	1,759
Net revenue pro forma	$	75,098		$	116,210
Operating loss as reported	$	(29,429	)	$	(54,333	)
Aussie Health operating income	$	332		$	310
Operating loss pro forma	$	(29,097	)	$	(54,023	)