Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 05, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | PURPLE INNOVATION, INC. | |
Trading Symbol | PRPL | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Central Index Key | 0001643953 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-37523 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-4078206 | |
Entity Address, Address Line One | 4100 NORTH CHAPEL RIDGE ROAD | |
Entity Address, Address Line Two | SUITE 200 | |
Entity Address, City or Town | LEHI | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84043 | |
City Area Code | (801) | |
Local Phone Number | 756-2600 | |
Title of 12(b) Security | Class A Common Stock, par value $0.0001 per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Class A Common Stock | ||
Document Information Line Items | ||
Entity Common Stock, Shares Outstanding | 66,479,872 | |
Class B Common Stock | ||
Document Information Line Items | ||
Entity Common Stock, Shares Outstanding | 448,279 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 83,616 | $ 122,955 |
Accounts receivable, net | 27,570 | 29,111 |
Inventories, net | 84,045 | 65,726 |
Prepaid inventory | 1,316 | 826 |
Other current assets | 11,739 | 10,453 |
Total current assets | 208,286 | 229,071 |
Property and equipment, net | 101,049 | 61,486 |
Operating lease right-of-use assets | 61,798 | 41,408 |
Intangible assets, net | 11,466 | 9,945 |
Deferred income taxes | 213,951 | 211,244 |
Other long-term assets | 1,390 | 1,578 |
Total assets | 597,940 | 554,732 |
Current liabilities: | ||
Accounts payable | 70,407 | 69,594 |
Accrued sales returns | 6,903 | 8,428 |
Accrued compensation | 13,392 | 14,209 |
Customer prepayments | 9,283 | 6,253 |
Accrued sales tax | 4,512 | 6,015 |
Accrued rebates and allowances | 8,071 | 10,891 |
Operating lease obligations – current portion | 5,776 | 3,235 |
Other current liabilities | 15,031 | 13,583 |
Total current liabilities | 133,375 | 132,208 |
Debt, net of current portion | 39,899 | 41,410 |
Operating lease obligations, net of current portion | 75,340 | 48,936 |
Warrant liabilities | 9,018 | 92,708 |
Tax receivable agreement liability, net of current portion | 165,632 | 165,426 |
Other long-term liabilities, net of current portion | 9,826 | 6,503 |
Total liabilities | 433,090 | 487,191 |
Commitments and contingencies (Note 11) | ||
Stockholders’ equity: | ||
Class A common stock; $0.0001 par value, 210,000 shares authorized; 66,449 issued and outstanding at September 30, 2021 and 63,914 issued and outstanding at December 31, 2020 | 7 | 6 |
Class B common stock; $0.0001 par value, 90,000 shares authorized; 448 issued and outstanding at September 30, 2021 and 536 issued and outstanding at December 31, 2020 | ||
Additional paid-in capital | 404,214 | 333,047 |
Accumulated deficit | (240,283) | (265,856) |
Total stockholders’ equity | 163,938 | 67,197 |
Noncontrolling interest | 912 | 344 |
Total stockholders’ equity | 164,850 | 67,541 |
Total liabilities and stockholders’ equity | $ 597,940 | $ 554,732 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Class A Common Stock | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 210,000,000 | 210,000,000 |
Common stock, shares issued | 66,449,000 | 63,914,000 |
Common stock, shares outstanding | 66,449,000 | 63,914,000 |
Class B Common Stock | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 448,000 | 536,000 |
Common stock, shares outstanding | 448,000 | 536,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenues, net | $ 170,781 | $ 187,111 | $ 539,796 | $ 474,582 |
Cost of revenues | 109,701 | 98,857 | 309,505 | 251,515 |
Gross profit | 61,080 | 88,254 | 230,291 | 223,067 |
Operating expenses: | ||||
Marketing and sales | 48,841 | 51,206 | 163,053 | 127,313 |
General and administrative | 17,037 | 11,087 | 54,024 | 27,312 |
Research and development | 1,784 | 1,687 | 5,430 | 4,712 |
Total operating expenses | 67,662 | 63,980 | 222,507 | 159,337 |
Operating income (loss) | (6,582) | 24,274 | 7,784 | 63,730 |
Other income (expense): | ||||
Interest income (expense), net | 10 | (1,232) | (1,129) | (4,045) |
Other income (expense), net | 12 | 3 | (30) | 109 |
Change in fair value – warrant liabilities | 5,362 | (103,962) | 19,369 | (212,593) |
Loss on extinguishment of debt | (5,782) | (5,782) | ||
Tax receivable agreement income (expense) | 846 | (567) | 639 | (33,512) |
Total other income (expense), net | 6,230 | (111,540) | 18,849 | (255,823) |
Net income (loss) before income taxes | (352) | (87,266) | 26,633 | (192,093) |
Income tax benefit (expense) | 2,479 | 106 | (1,005) | 35,818 |
Net income (loss) | 2,127 | (87,160) | 25,628 | (156,275) |
Net income (loss) attributable to noncontrolling interest | (44) | (147) | 55 | 7,178 |
Net income (loss) attributable to Purple Innovation, Inc. | $ 2,171 | $ (87,013) | $ 25,573 | $ (163,453) |
Net income (loss) per share: | ||||
Basic (in Dollars per share) | $ 0.03 | $ (1.97) | $ 0.39 | $ (5.09) |
Diluted (in Dollars per share) | $ (0.05) | $ (1.97) | $ 0.09 | $ (5.09) |
Weighted average common shares outstanding: | ||||
Basic (in Shares) | 66,335 | 44,266 | 65,741 | 32,117 |
Diluted (in Shares) | 67,287 | 44,266 | 68,319 | 32,117 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Class ACommon Stock | Class BCommon Stock | Additional Paid-in Capital | Accumulated Equity (Deficit) | Total Stockholders’ Equity | Noncontrolling Interest | Total |
Balance at Dec. 31, 2019 | $ 2 | $ 3 | $ 2,822 | $ (28,989) | $ (26,162) | $ (2,378) | $ (28,540) |
Balance (in Shares) at Dec. 31, 2019 | 22,494 | 31,394 | |||||
Net income (loss) | 16,835 | 16,835 | 11,166 | 28,001 | |||
Stock-based compensation | 250 | 250 | 250 | ||||
Exchange of stock | |||||||
Exchange of stock (in Shares) | 1,124 | (1,124) | |||||
Exercise of warrants | 17 | 17 | 17 | ||||
Exercise of warrants (in Shares) | 1 | ||||||
Tax Receivable Agreement liability | (221) | (221) | (221) | ||||
Accrued distributions | (196) | (196) | (196) | ||||
Issuance of common stock | |||||||
Issuance of common stock (in Shares) | 3 | ||||||
Impact of transactions affecting NCI | 120 | 120 | (120) | ||||
Balance at Mar. 31, 2020 | $ 2 | $ 3 | 2,792 | (12,154) | (9,357) | 8,668 | (689) |
Balance (in Shares) at Mar. 31, 2020 | 23,622 | 30,270 | |||||
Net income (loss) | (93,275) | (93,275) | (3,841) | (97,116) | |||
Stock-based compensation | 962 | 962 | 962 | ||||
Exchange of stock | $ 1 | $ (1) | |||||
Exchange of stock (in Shares) | 12,760 | (12,760) | |||||
Exercise of warrants | 19 | 19 | 19 | ||||
Exercise of warrants (in Shares) | 1 | ||||||
Exercise of stock options | (61) | (61) | (61) | ||||
Exercise of stock options (in Shares) | 5 | ||||||
Tax Receivable Agreement liability | (45,045) | (45,045) | (45,045) | ||||
Deferred income taxes | 56,636 | 56,636 | 56,636 | ||||
Accrued distributions | (4,327) | (4,327) | (4,327) | ||||
Issuance of common stock | $ 1 | 1 | 1 | ||||
Issuance of common stock (in Shares) | 80 | ||||||
Impact of transactions affecting NCI | 6,453 | 6,453 | (6,453) | ||||
Balance at Jun. 30, 2020 | $ 4 | $ 2 | 17,429 | (105,429) | (87,994) | (1,626) | (89,620) |
Balance (in Shares) at Jun. 30, 2020 | 36,468 | 17,510 | |||||
Net income (loss) | (87,013) | (87,013) | (147) | (87,160) | |||
Stock-based compensation | 347 | 347 | 347 | ||||
Exchange of stock | $ 2 | $ (2) | |||||
Exchange of stock (in Shares) | 16,905 | (16,905) | |||||
Exercise of warrants | 5,240 | 5,240 | 5,240 | ||||
Exercise of warrants (in Shares) | 266 | ||||||
Exercise of stock options | 1,394 | 1,394 | 1,394 | ||||
Exercise of stock options (in Shares) | 184 | ||||||
Tax Receivable Agreement liability | (89,677) | (89,677) | (89,677) | ||||
Deferred income taxes | 112,670 | 112,670 | 112,670 | ||||
Accrued distributions | (176) | (176) | (176) | ||||
Forfeiture of unvested common stock | $ (1) | 1 | |||||
Forfeiture of unvested common stock (in Shares) | (36) | ||||||
Impact of transactions affecting NCI | (1,817) | (1,817) | 1,817 | ||||
Balance at Sep. 30, 2020 | $ 5 | 45,411 | (192,442) | (147,026) | 44 | (146,982) | |
Balance (in Shares) at Sep. 30, 2020 | 53,787 | 605 | |||||
Balance at Dec. 31, 2020 | $ 6 | 333,047 | (265,856) | 67,197 | 344 | 67,541 | |
Balance (in Shares) at Dec. 31, 2020 | 63,914 | 536 | |||||
Net income (loss) | 20,824 | 20,824 | 115 | 20,939 | |||
Stock-based compensation | 479 | 479 | 479 | ||||
Exchange of stock | |||||||
Exchange of stock (in Shares) | 88 | (88) | |||||
Exercise of warrants | $ 1 | 64,261 | 64,262 | 64,262 | |||
Exercise of warrants (in Shares) | 2,291 | ||||||
Exercise of stock options | 83 | 83 | 83 | ||||
Exercise of stock options (in Shares) | 10 | ||||||
Tax Receivable Agreement liability | (777) | (777) | (777) | ||||
Deferred income taxes | 971 | 971 | 971 | ||||
Accrued distributions | (99) | (99) | (99) | ||||
InnoHold indemnification payment | 4,142 | 4,142 | 4,142 | ||||
Impact of transactions affecting NCI | (265) | (265) | 265 | ||||
Balance at Mar. 31, 2021 | $ 7 | 401,842 | (245,032) | 156,817 | 724 | 157,541 | |
Balance (in Shares) at Mar. 31, 2021 | 66,303 | 448 | |||||
Net income (loss) | 2,578 | 2,578 | (16) | 2,562 | |||
Stock-based compensation | 1,113 | 1,113 | 1,113 | ||||
Exercise of warrants | 26 | 26 | 26 | ||||
Exercise of warrants (in Shares) | 1 | ||||||
Exercise of stock options | 369 | 369 | 369 | ||||
Exercise of stock options (in Shares) | 45 | ||||||
Tax Receivable Agreement liability | (3) | (3) | (3) | ||||
Deferred income taxes | 3 | 3 | 3 | ||||
Accrued distributions | (87) | (87) | (87) | ||||
Issuance of common stock | |||||||
Issuance of common stock (in Shares) | 22 | ||||||
Impact of transactions affecting NCI | (192) | (192) | 192 | ||||
Balance at Jun. 30, 2021 | $ 7 | 403,071 | (242,454) | 160,624 | 900 | 161,524 | |
Balance (in Shares) at Jun. 30, 2021 | 66,371 | 448 | |||||
Net income (loss) | 2,171 | 2,171 | (44) | 2,127 | |||
Stock-based compensation | 765 | 765 | 765 | ||||
Exercise of warrants | 149 | 149 | 149 | ||||
Exercise of warrants (in Shares) | 6 | ||||||
Exercise of stock options | 590 | 590 | 590 | ||||
Exercise of stock options (in Shares) | 72 | ||||||
Tax Receivable Agreement liability | 4 | 4 | 4 | ||||
Deferred income taxes | (5) | (5) | (5) | ||||
Accrued distributions | (304) | (304) | (304) | ||||
Impact of transactions affecting NCI | (56) | (56) | 56 | ||||
Balance at Sep. 30, 2021 | $ 7 | $ 404,214 | $ (240,283) | $ 163,938 | $ 912 | $ 164,850 | |
Balance (in Shares) at Sep. 30, 2021 | 66,449 | 448 | 1,900 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 25,628 | $ (156,275) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 6,355 | 6,366 |
Non-cash interest | 388 | 2,973 |
Paid-in-kind interest | (6,616) | |
Loss on extinguishment of debt | 5,782 | |
Change in fair value – warrant liabilities | (19,369) | 212,593 |
Tax receivable agreement (income) expense | (639) | 33,512 |
Stock-based compensation | 2,357 | 1,559 |
Non-cash lease expense | 3,361 | 2,210 |
Deferred income taxes | (1,737) | (35,818) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,541 | 6,798 |
Inventories | (18,319) | (3,147) |
Prepaid inventory and other assets | 2,169 | (5,740) |
Accounts payable | (2,199) | 9,678 |
Accrued sales returns | (1,525) | 3,014 |
Accrued compensation | (817) | 4,561 |
Customer prepayments | 3,030 | (51) |
Accrued rebates and allowances | (2,820) | 1,921 |
Operating lease obligations | (1,824) | (1,274) |
Other accrued liabilities | 4,552 | 5,354 |
Net cash provided by operating activities | 132 | 87,400 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (40,146) | (14,194) |
Investment in intangible assets | (1,352) | (10,890) |
Net cash used in investing activities | (41,498) | (25,084) |
Cash flows from financing activities: | ||
Proceeds from term loan | 45,000 | |
Payments on term loan | (1,688) | |
Payments on related party loan | (37,497) | |
Payments for debt issuance costs | (2,460) | |
Proceeds from InnoHold indemnification payment | 4,142 | |
Tax receivable agreement payments | (628) | |
Distributions to members | (957) | (5,006) |
Proceeds from exercise of warrants | 116 | 706 |
Proceeds from exercise of stock options | 1,042 | 1,418 |
Net cash provided by financing activities | 2,027 | 2,161 |
Net (decrease) increase in cash | (39,339) | 64,477 |
Cash and cash equivalents, beginning of the year | 122,955 | 33,478 |
Cash and cash equivalents, end of the period | 83,616 | 97,955 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the period for interest, net of amounts capitalized | 389 | 954 |
Cash paid during the period for income taxes | 4,495 | 2,422 |
Supplemental schedule of non-cash investing and financing activities: | ||
Property and equipment included in accounts payable | 5,707 | 2,786 |
Non-cash leasehold improvements | 3,238 | 615 |
Accrued distributions | 304 | 4,523 |
Tax receivable agreement liability | 776 | 134,943 |
Deferred income taxes | 969 | 169,306 |
Exercise of liability warrants | $ 64,321 | $ 4,570 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization The Company’s mission is to help people feel and live better through innovative comfort solutions. Purple Innovation, Inc. collectively with its subsidiary (the “Company” or “Purple Inc.”) is a digitally-native vertical brand founded on comfort product innovation with premium offerings. The Company designs and manufactures a variety of innovative, branded and premium comfort products, including mattresses, pillows, cushions, bases, sheets, and other products. The Company markets and sells its products through its direct-to-consumer (“DTC”) online channels, retail brick-and-mortar wholesale partners, Company showrooms, and third-party online retailers. The Company was incorporated in Delaware on May 19, 2015 as a special purpose acquisition company under the name of Global Partnership Acquisition Corp (“GPAC”). On February 2, 2018, the Company consummated a transaction structured similar to a reverse recapitalization (the “Business Combination”) pursuant to which the Company acquired a portion of the equity of Purple Innovation, LLC (“Purple LLC”). At the closing of the Business Combination (the “Closing”), the Company became the sole managing member of Purple LLC, and GPAC was renamed Purple Innovation, Inc. As the sole managing member of Purple LLC, Purple Inc. through its officers and directors is responsible for all operational and administrative decision making and control of the day-to-day business affairs of Purple LLC without the approval of any other member. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The Company consists of Purple Inc. and its consolidated subsidiary, Purple LLC. As of September 30, 2021, Purple Inc. held approximately 99% of the common units of Purple LLC and Purple LLC Class B Unit holders held approximately 1% of the common units in Purple LLC. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and reflect the financial position, results of operations and cash flows of the Company. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the 2020 audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K/A filed May 10, 2021. The unaudited condensed consolidated financial statements were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments (all of which were considered of normal recurring nature) considered necessary to present fairly the Company’s financial results. The results of the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2021 or for any other interim period or other future year. On December 31, 2020, the Company ceased to be an emerging growth company (“EGC”) and was no longer exempt from certain reporting requirements that apply to public companies. As an EGC prior to this date, Purple Inc. had elected to use extended transition periods available to private companies for complying with new or revised accounting standards. Variable Interest Entities Purple LLC is a variable interest entity (“VIE”). The Company determined that it is the primary beneficiary of Purple LLC as it is the sole managing member and has the power to direct the activities most significant to Purple LLC’s economic performance as well as the obligation to absorb losses and receive benefits that are potentially significant. At September 30, 2021, Purple Inc. had approximately a 99% economic interest in Purple LLC and consolidated 100% of Purple LLC’s assets, liabilities and results of operations in the Company’s unaudited condensed consolidated financial statements contained herein. The holders of Purple LLC Class B Units (the “Class B Units”) held approximately 1% of the economic interest in Purple LLC. For further discussion see Note 13 — Stockholders’ Equity. Reclassification Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. These reclassifications had no effect on net income (loss), cash flows or stockholders’ equity previously reported. Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires the Company to establish accounting policies and to make estimates and judgments that affect the reported amounts of assets and liabilities and disclose contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. The Company regularly makes significant estimates and assumptions including, but not limited to, estimates that affect revenue recognition, accounts receivable and allowance for doubtful accounts, valuation of inventories, cost of revenues, sales returns, warranty returns, warrant liability, stock based compensation, the recognition and measurement of loss contingencies, estimates of current and deferred income taxes, deferred income tax valuation allowances and amounts associated with the Company’s tax receivable agreement with InnoHold, LLC (“InnoHold”). Predicting future events is inherently an imprecise activity and, as such, requires the use of judgment. Actual results could differ materially from those estimates. Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (“ ”) The Company determines if an agreement contains a lease at the inception of a contract. For leases with an initial term greater than 12 months, a related lease liability is recorded on the balance sheet at the present value of future payments discounted at the estimated fully collateralized incremental borrowing rate (discount rate) corresponding with the lease term. In addition, a ROU asset is recorded as the initial amount of the lease liability, plus any lease payments made to the lessor before or at the lease commencement date and any initial direct costs incurred, less any tenant improvement allowance incentives received. The Company calculates the present value of future payments using its incremental borrowing rate when the discount rate implicit in the lease is not known. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. The Company determines the applicable incremental borrowing rate at the lease commencement date based on the rates of its secured borrowings, which is then adjusted for the appropriate lease term and risk premium. In determining the Company’s ROU assets and operating lease liabilities, the Company applies these incremental borrowing rates to the minimum lease payments within each lease agreement. Operating lease expense is recognized on a straight-line basis over the lease term. Tenant incentive allowances received from the lessor are amortized through the ROU asset as a reduction of rent expense over the lease term. Any variable lease costs are expensed as incurred. Leases with an initial term of 12 months or less (short-term leases) are not recorded as ROU assets and corresponding lease liabilities. Short-term lease expense is recognized on a straight-line basis over the lease term. ROU assets are assessed for impairment as part of the impairment of long-lived assets, which is performed whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Revenue Recognition The Company markets and sells its products through DTC online channels, retail brick-and-mortar wholesale partners, Company showrooms, and third-party online retailers. Revenue is recognized when the Company satisfies its performance obligations under the contract which is transferring the promised products to the customer. This principle is achieved in the following steps: Identify the contract with the customer. Identify the performance obligations in the contract Determine the transaction price Allocate the transaction price to performance obligations in the contract. Recognize revenue when or as we satisfy a performance obligation. Warrant Liabilities The Company accounted for its incremental loan warrants as liability warrants under the provisions of ASC 480 - Distinguishing Liabilities from Equity The Company accounted for its public warrants in accordance with ASC 815 – Derivatives and Hedging—Contracts in Entity’s Own Equity The Company accounts for its sponsor warrants in accordance with ASC 815, under which these warrants do not meet the criteria for equity classification and must be recorded as liabilities. Since the sponsor warrants meet the definition of a derivative as contemplated in ASC 815, these warrants are measured at fair value at inception and at each reporting date in accordance with ASC 820 with changes in fair value recognized in earnings in the period of change. The Company uses the Black Scholes model to determine the fair value of the liability associated with the sponsor warrants. The model uses key assumptions and inputs such as exercise price, fair market value of common stock, risk free interest rate, warrant life and expected volatility. At September 30, 2021, there were 1.9 million sponsor warrants outstanding. Fair Value Measurements The Company uses the fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are: Level 1—Quoted market prices in active markets for identical assets or liabilities; Level 2—Significant other observable inputs (e.g. quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable, such as interest rate and yield curves, and market-corroborated inputs); and Level 3—Unobservable inputs in which there is little or no market data, which require the reporting unit to develop its own assumptions. The classification of fair value measurements within the established three-level hierarchy is based upon the lowest level of input that is significant to the measurements. Financial instruments, although not recorded at fair value on a recurring basis include cash and cash equivalents, receivables, accounts payable and the Company’s debt obligations. The carrying amounts of cash and cash equivalents, receivables, accounts payable and accrued expenses approximate fair value because of the short-term nature of these accounts. The fair value of the Company’s debt instruments is estimated to be face value based on the contractual terms of the debt arrangements and market-based expectations. The public warrant liabilities are Level 1 instruments as they have quoted market prices in an active market. The sponsor and incremental loan warrant liabilities are Level 3 instruments and use internal models to estimate fair value using certain significant unobservable inputs which requires determination of relevant inputs and assumptions. Accordingly, changes in these unobservable inputs may have a significant impact on fair value. Such inputs include risk free interest rate, expected average life, expected dividend yield, and expected volatility. These Level 3 liabilities generally decrease (increase) in value based upon an increase (decrease) in risk free interest rate and expected dividend yield. Conversely, the fair value of these Level 3 liabilities generally increase (decrease) in value if the expected average life or expected volatility were to increase (decrease). The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: (In thousands) Level September 30, December 31, Sponsor warrants 3 $ 9,018 $ 92,708 All of the public warrants (a Level 1 fair value liability) and all of the incremental loan warrants (a Level 3 fair value liability) were exercised during 2020. The following table summarizes the Company’s total Level 3 liability activity for the nine months ended September 30, 2021 and 2020: (In thousands) Sponsor Incremental Total Level 3 Fair value as of December 31, 2020 $ 92,708 $ — $ 92,708 Fair value transfer to Level 1 measurement (64,321 ) — (64,321 ) Change in valuation inputs (1) (19,369 ) — (19,369 ) Fair value as of September 30, 2021 $ 9,018 $ — $ 9,018 Fair value as of December 31, 2019 $ 7,689 $ 21,622 $ 29,311 Fair value of warrants exercised (4,965 ) — (4,965 ) Change in valuation inputs (1) 57,434 43,308 100,742 Fair value as of September 30, 2020 $ 60,158 $ 64,930 $ 125,088 (1) Changes in valuation inputs are recognized in the change in fair value – warrant liabilities in the condensed consolidated statements of operations. Income Taxes In calculating the provision for interim income taxes, in accordance with ASC Topic 740, an estimated annual effective tax rate is applied to year-to-date ordinary income. At the end of each interim period, the Company estimates the effective tax rate expected to be applicable for the full fiscal year. This differs from the method utilized at the end of an annual period. For annual periods, the Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that the deferred tax assets will be realized. Deferred tax assets and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the year of the enacted rate change. Our effective tax rate is primarily impacted by the allocation of income taxes to the noncontrolling interest and the non-taxable nature of the change in fair value of the warrant liability. The Company accounts for uncertainty in income taxes using a recognition and measurement threshold for tax positions taken or expected to be taken in a tax return, which are subject to examination by federal and state taxing authorities. The tax benefit from an uncertain tax position is recognized when it is more likely than not that the position will be sustained upon examination by taxing authorities based on technical merits of the position. The amount of the tax benefit recognized is the largest amount of the benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The effective tax rate and the tax basis of assets and liabilities reflect management’s estimates of the ultimate outcome of various tax uncertainties. The Company recognizes penalties and interest related to uncertain tax positions within the income tax benefit (expense) line in the accompanying condensed consolidated statements of operations. The Company files U.S. federal and certain state income tax returns. The income tax returns of the Company are subject to examination by U.S. federal and state taxing authorities for various time periods, depending on those jurisdictions’ rules, generally after the income tax returns are filed. Net Income (Loss) Per Share Basic net income (loss) per common share is calculated by dividing net income (loss) attributable to common shareholders by the weighted average number of shares of Class A Common Stock, par value $0.0001 per share (the “Class A Stock”), outstanding each period. Diluted net income (loss) per share adds to those shares the incremental shares that would have been outstanding and potentially dilutive assuming exchanges of the Company’s outstanding warrants, stock options and shares of Class B Common Stock, par value $0.0001 per share (the “Class B Stock”), for Class A Stock, and the vesting of unvested and restricted Class A Stock. An anti-dilutive impact represents an increase in net income per share or a reduction in net loss per share resulting from the conversion, exercise or contingent issuance of certain securities. The Company uses the “if-converted” method to determine the potential dilutive effect of conversions of its outstanding Class B Stock, and the treasury stock method to determine the potential dilutive effect of its outstanding warrants and stock options exercisable for shares of Class A Stock and the vesting of unvested Class A Stock. Recent Accounting Pronouncements Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides guidance to alleviate the burden in accounting for reference rate reform by allowing certain expedients and exceptions in applying generally accepted accounting principles to contracts, hedging relationships, and other transactions impacted by reference rate reform. The provisions of ASU 2020-04 apply only to those transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. This standard is currently effective and upon adoption may be applied prospectively to contract modifications made on or before December 31, 2022, when the reference rate replacement activity is expected to be completed. The interest rate on the Company’s term loan is based on LIBOR. The Company plans to apply the amendments in this update to account for any contract modifications that result from changes in the reference rate used. The Company does not expect these amendments to have a material impact on its condensed consolidated financial statements and related disclosures. Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The new guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance is effective for fiscal years beginning after December 15, 2020 and for interim periods within those fiscal years. The adoption of this standard by the Company on January 1, 2021 did not have a material impact on the Company’s financial position, results of operations, or cash flows. Internal-Use Software In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350) (“ASU 2018-15”). The objective of ASU 2018-15 is to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with those incurred to develop or obtain internal-use software. The guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The amendments can be applied either retrospectively or prospectively. Because the Company lost its EGC status on December 31, 2020, the standard became effective for the Company for its annual period beginning January 1, 2020, and interim periods within the annual period beginning January 1, 2021. The Company elected to apply the amendments on a prospective basis. Adoption of this standard did not have a material impact on the Company’s financial position, results of operations, or cash flows. Measurement of Credit Losses In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which was further updated and clarified by the FASB through issuance of additional related ASUs. This guidance replaces the existing incurred loss impairment guidance and establishes a single allowance framework for financial assets carried at amortized cost based on expected credit losses. The estimate of expected credit losses requires the incorporation of historical information, current conditions, and reasonable and supportable forecasts. These updates are effective for public companies, excluding Smaller Reporting Companies (“SRC”), for annual periods beginning after December 15, 2019, including interim periods therein. The standard is effective for all other entities for annual periods beginning after December 15, 2022, including interim periods therein. Since the Company was considered an SRC on the deferral date of this standard, the guidance is effective for the Company’s interim and annual financial periods beginning January 1, 2023. ASU 2016-13 is to be applied utilizing a modified retrospective approach. The Company is currently evaluating the impact of this standard on its accounts receivable, cash and cash equivalents, and any other financial assets measured at amortized cost and do not expect that adoption will have a material impact on its consolidated financial statements or related disclosures. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | 3. Revenue from Contracts with Customers The Company markets and sells its products through DTC online channels, retail brick-and-mortar wholesale partners, Company showrooms, and third-party online retailers. Revenue is recognized when the Company satisfies its performance obligations under the contract which is transferring the promised products to the customer as described in Note 2 – Summary of Significant Accounting Policies Disaggregated Revenue The Company sells products through two channels: Direct-to-Consumer and Wholesale. The Direct-to-Consumer channel includes product sales through various DTC channels including Company showrooms and contact center. The Wholesale channel includes all product sales to traditional third-party retailers for both in store and online channels. The Company classifies products into two major categories: Bedding and Other. Bedding products include mattresses, platforms, adjustable bases, mattress protectors, pillows and sheets. Other products include cushions and various other products. The following tables present the Company’s revenue disaggregated by sales channel and product category (in thousands): Three Months Ended Nine Months Ended Channel 2021 2020 2021 2020 Direct-to-consumer $ 112,863 $ 134,252 $ 353,985 $ 360,119 Wholesale partner 57,918 52,859 185,811 114,463 Revenues, net $ 170,781 $ 187,111 $ 539,796 $ 474,582 Three Months Ended Nine Months Ended Product 2021 2020 2021 2020 Bedding $ 156,077 $ 172,806 $ 494,628 $ 437,809 Other 14,704 14,305 45,168 36,773 Revenues, net $ 170,781 $ 187,111 $ 539,796 $ 474,582 Contract Balances Payment for sale of products through the DTC online channels, third-party online retailers, Company showrooms and contact center is collected at point of sale in advance of shipping the products. Amounts received for unshipped products are recorded as customer prepayments. Customer prepayments totaled $9.3 million and $6.3 million at September 30, 2021 and December 31, 2020, respectively. During the three months ended September 30, 2021 and 2020, the Company recognized all revenue that was deferred in customer prepayments at June 30, 2021 and 2020, respectively. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Net [Abstract] | |
Inventories | 4. Inventories Inventories consisted of the following (in thousands): September 30, December 31, 2021 2020 Raw materials $ 28,788 $ 26,372 Work-in-process 4,203 3,593 Finished goods 52,481 36,280 Inventory obsolescence reserve (1,427 ) (519 ) Inventories, net $ 84,045 $ 65,726 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 5. Property and Equipment Property and equipment consisted of the following (in thousands): September 30, December 31, 2021 2020 Equipment $ 54,008 $ 30,508 Equipment in progress 19,099 18,648 Leasehold improvements 30,676 15,758 Furniture and fixtures 10,759 5,160 Office equipment 4,465 3,185 Total property and equipment 119,007 73,259 Accumulated depreciation (17,958 ) (11,773 ) Property and equipment, net $ 101,049 $ 61,486 Equipment in progress reflects equipment, primarily related to mattress manufacturing, which is being constructed and was not in service at September 30, 2021 or December 31, 2020. Depreciation expense was $2.8 million and $6.2 million during the three and nine months ended September 30, 2021, respectively, and totaled $1.4 million and $4.0 million during the three and nine months ended September 30, 2020, respectively. The Company capitalizes interest on borrowings during the active construction period of major capital projects. Capitalized interest is added to the cost of the underlying assets and is amortized over the useful lives of the assets. Capitalized interest as of September 30, 2021 totaled $0.8 million of which $0.6 million related to an error affecting periods prior to the third quarter of 2021 relating to unrecorded capitalized interest. Such amount was determined to not be material to prior or current financial statements |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Leases | 6. Leases The Company leases its manufacturing and distribution facilities, corporate offices, showrooms and certain equipment under non-cancelable operating leases with various expiration dates through 2036. The Company’s office and manufacturing leases provide for initial lease terms up to 16 years, while retail showrooms have initial lease terms of up to ten years. Certain leases may contain options to extend the term of the original lease. The exercise of lease renewal options is at the Company’s discretion. Any lease renewal options are included in the lease term if exercise is reasonably certain at lease commencement. The Company also leases vehicles and other equipment under both operating and finance leases with initial lease terms of three to five years. The ROU asset for finance leases was $0.7 million and $0.6 million as of September 30, 2021 and December 31, 2020, respectively. The following table presents the Company’s lease costs (in thousands): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Operating lease costs $ 2,329 $ 1,530 $ 6,200 $ 4,005 Variable lease costs 819 6 1,396 32 Short-term lease costs 67 59 191 178 Total lease costs $ 3,215 $ 1,595 $ 7,787 $ 4,215 The table below reconciles the undiscounted cash flows for each of the first five years and total remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet at September 30, 2021 (in thousands): 2021 (excluding the nine months ended September 30, 2021) (1) $ (123 ) 2022 10,496 2023 10,211 2024 10,222 2025 10,186 Thereafter 70,391 Total operating lease payments 111,383 Less – lease payments representing interest (30,267 ) Present value of operating lease payments $ 81,116 (1) – Amount consists of $2.2 million of undiscounted cash flows offset by $2.3 million of tenant improvement allowances which are expected to be fully utilized in fiscal 2021. As of September 30, 2021 and December 31, 2020, the weighted-average remaining term of operating leases was 11.2 years and 11.8 years, respectively, and the weighted-average discount rate of operating leases was 5.38% and 6.18%, respectively. The following table provides supplemental information related to the Company’s condensed consolidated statement of cash flows for the nine months ended September 30, 2021 and 2020: Nine Months Ended 2021 2020 Cash paid for amounts included in present value of operating lease liabilities $ 1,824 $ 1,274 Right-of-use assets obtained in exchange for operating lease liabilities 23,751 15,821 |
Other Current Liabilities
Other Current Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract] | |
Other Current Liabilities | 7. Other Current Liabilities Other current liabilities consisted of the following (in thousands): September 30, December 31, 2021 2020 Warranty accrual – current portion $ 4,259 $ 2,806 Long-term debt – current portion 2,012 $ 2,004 Tax receivable agreement liability – current portion 5,847 6,545 Insurance financing 2,133 910 Other 780 1,318 Total other current liabilities $ 15,031 $ 13,583 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt Debt consisted of the following (in thousands): September 30, December 31, 2021 2020 Term loan $ 42,750 $ 44,438 Less: unamortized debt issuance costs (839 ) (1,024 ) Total debt 41,911 43,414 Less: current portion of debt (2,012 ) (2,004 ) Long-term debt, net $ 39,899 $ 41,410 Term Loan and Revolving Line of Credit On September 3, 2020, Purple LLC entered into a financing arrangement with KeyBank National Association and a group of financial institutions (the “2020 Credit Agreement”). The 2020 Credit Agreement provides for a $45.0 million term loan and a $55.0 million revolving line of credit. The borrowing rates for the term loan are based on Purple LLC’s leverage ratio, as defined in the 2020 Credit Agreement, and can range from LIBOR plus a 3.00% to 3.75% margin with a LIBOR minimum of 0.50%. The initial borrowing rate of 3.50% is based on LIBOR plus 3.00%. The term loan will be repaid in accordance with a five-year amortization schedule and may be prepaid in whole or in part at any time without premium or penalty, subject to reimbursement of certain costs. There may be mandatory prepayment obligations based on excess cash flow. Pursuant to a Pledge and Security Agreement between Purple LLC, KeyBank and the Company (the “Security Agreement”), the 2020 Credit Agreement is secured by a perfected first-priority security interest in the assets of Purple LLC and the Company, including a security interest in all intellectual property. Also, the Company agreed to an unconditional guaranty of the payment of all obligations and liabilities of Purple LLC under the 2020 Credit Agreement. The Security Agreement contains a pledge, as security for the Company’s guaranty, of all its ownership interest in Purple LLC. The 2020 Credit Agreement also provides for standard events of default, such as for non-payment and failure to perform or observe covenants, and contains standard indemnifications benefitting the lenders. The 2020 Credit Agreement includes representations, warranties and certain covenants of Purple LLC and the Company. While any amounts are outstanding under the 2020 Credit Agreement, Purple LLC is subject to several affirmative and negative covenants, including covenants regarding dispositions of property, investments, forming or acquiring subsidiaries, business combinations or acquisitions, incurrence of additional indebtedness, and transactions with affiliates, among other customary covenants, subject to certain exceptions. In particular, Purple LLC is (i) subject to annual capital expenditure limits that can be adjusted based on the Company achieving certain net leverage ratio thresholds as provided in the 2020 Credit Agreement, (ii) restricted from incurring additional debt up to certain amounts, subject to limited exceptions, as set forth in the 2020 Credit Agreement, and (iii) maintain minimum consolidated net leverage and fixed charge coverage ratio thresholds at certain measurement dates (as defined in the 2020 Credit Agreement). Purple LLC is also restricted from paying dividends or making other distributions or payments on its capital stock, subject to limited exceptions. If the Company or Purple LLC fail to perform their obligations under these and other covenants, or should any event of default occur, the revolving loan commitments under the 2020 Credit Agreement may be terminated and any outstanding borrowings, together with accrued interest, could be declared immediately due and payable. As of September 30, 2021, the Company was in compliance with all of the covenants related to the 2020 Credit Agreement. The $55.0 million revolving credit facility established under the 2020 Credit Agreement has a term of five years and carries the same interest provisions as the term debt. A commitment fee is due quarterly based on the applicable margin applied to the unused total revolving commitment. The agreement for this revolving credit facility contains customary covenants and events of default. As of September 30, 2021, there was no balance outstanding on the revolving credit facility. The Company incurred $2.5 million in debt issuance costs for the 2020 Credit Agreement. These costs relate to the entire credit arrangement and therefore were allocated between the term loan and the revolving line of credit. The Company determined $1.1 million of the debt issuance costs related to the term debt and are presented in the condensed consolidated balance sheet as a direct reduction from the carrying amount of the debt liability. This amount is being amortized into interest expense using an effective interest rate over the duration of the debt. The remaining $1.4 million of debt issuance costs were allocated to the revolving line of credit facility. This amount is classified as other assets and is being amortized to interest expense on a straight-line basis over the term of the revolving credit facility. Interest expense under the 2020 Credit Agreement totaled $0.5 million and $1.6 million for the three and nine months ended September 30, 2021, respectively, and totaled $0.2 million and $0.2 million during the three and nine months ended September 30, 2020, respectively. Related Party Loan On March 27, 2020, the Company entered into an amendment to Purple LLC’s Credit Agreement dated February 3, 2018 and all subsequent amendments and agreements (collectively referred to as the “Related Party Loan”) that provided for the deferral of the full amount of the interest payment due on March 31, 2020 and June 30, 2020 to reduce cash disbursements during the COVID-19 pandemic. The Company accounted for this amendment as a modification of existing debt in accordance with ASC 470 - Debt On September 3, 2020, the Company paid $45.0 million to retire, in full, all indebtedness related to the Related Party Loan. The payment included $25.0 million for the original loan under the agreement, $10.0 million for a subsequent incremental loan, $6.6 million for paid-in-kind interest, $2.5 million for a prepayment fee and $0.9 million for accrued interest. As a result of paying off the Related Party Loan during the third quarter of fiscal 2020, the Company recognized a $5.8 million loss on extinguishment of debt. |
Warrant Liabilities
Warrant Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Warrant Liabilities [Abstract] | |
Warrant Liabilities | 9. Warrant Liabilities On February 26, 2019, two of the lenders who originally financed the Related Party loan (the “Incremental Lenders”) funded a $10.0 million increase in the loan and received 2.6 million warrants (“Incremental Loan Warrants”) to purchase 2.6 million shares of the Company’s Class A Stock at a price of $5.74 per share, subject to certain adjustments. In May 2020, Tony Pearce or Terry Pearce individually or together ceased to beneficially own at least 50% of the voting securities of the Company. As a result, the exercise price of the warrants was reduced to zero based on the formula established in the agreement. The Company accounted for the Incremental Loan Warrants as liabilities in accordance with ASC 480 - Distinguishing Liabilities from Equity For the three and nine months ended September 30, 2020, the Company recognized losses of $18.0 million and $43.3 million, respectively, in its condensed consolidated statements of operations related to increases in the fair value of the Incremental Loan Warrants. The fair value of the Incremental Loan Warrants was calculated using a Monte Carlo Simulation of a Geometric Brownian Motion stock path model. The following are the assumptions used in calculating fair value on September 30, 2020: Trading price of common stock on measurement date $ 24.86 Exercise price $ — Risk free interest rate 0.16 % Warrant life in years 3.4 Expected volatility 51.30 % Expected dividend yield — Probability of warrant re-price 100.00 % The public and sponsor warrants that were issued in connection with the Company’s IPO and simultaneous private placement contain certain provisions that do not meet the criteria for equity classification and therefore must be recorded as liabilities. The liability for these warrants was recorded at fair value on the date of the Business Combination and subsequently re-measured to fair value at each reporting date or exercise date with changes in the fair value included in earnings. During the nine months ended September 30, 2021, 6.6 million sponsor warrants were exercised resulting in the issuance of 2.3 million shares of Class A common stock. The 1.9 million sponsor warrants outstanding at September 30, 2021 had a fair value of $9.0 million. All of the public warrants were exercised during fiscal 2020. The Company used public trading prices of the public warrants to determine their fair value. The Company determined the fair value of the sponsor warrants using the Black Scholes model with the following assumptions: September 30, 2021 2020 Trading price of common stock on measurement date $ 21.02 $ 24.86 Exercise price $ 5.75 $ 5.75 Risk free interest rate 0.09 % 0.13 % Warrant life in years 1.3 2.3 Expected volatility 34.99 % 46.90 % Expected dividend yield — — During the three and nine months ended September 30, 2021, the Company recognized gains of $5.4 million and $19.4 million, respectively, in its condensed consolidated statements of operations related to decreases in the fair value of the sponsor warrants exercised during the respective periods or that were outstanding at the end of the respective period. For the three and nine months ended September 30, 2020, the Company recognized losses of $86.0 million and $169.3 million, respectively, in its condensed consolidated statements of operations related to increases in the fair value of the public and sponsor warrants exercised during the respective periods or that were outstanding at the end of the respective period. |
Other Long-Term Liabilities
Other Long-Term Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Other Longterm Liabilities [Abstract] | |
Other Long-Term Liabilities | 10. Other Long-Term Liabilities Other long-term liabilities consist of the following (in thousands): September 30, December 31, 2021 2020 Warranty accrual $ 13,135 $ 8,397 Other 950 912 Total 14,085 9,309 Less: current portion of warranty accrual (4,259 ) (2,806 ) Other long-term liabilities, net of current portion $ 9,826 $ 6,503 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. Commitments and Contingencies Required Member Distributions Prior to the Business Combination and pursuant to the then applicable First Amended and Restated Limited Liability Company Agreement (the “First Purple LLC Agreement”), Purple LLC was required to distribute to its members an amount equal to 45 percent of Purple LLC’s net taxable income following the end of each fiscal year. The First Purple LLC Agreement was amended and replaced by the Second Amended and Restated Limited Liability Company Agreement (the “Second Purple LLC Agreement”) on February 2, 2018 as part of the Business Combination. The Second Purple LLC Agreement was amended and replaced by the Third Amended and Restated Limited Liability Company Agreement (the “Third Purple LLC Agreement”) on September 3, 2020. The Second Purple LLC Agreement and the Third Purple LLC Agreement do not include any mandatory distributions, other than tax distributions. During the nine months ended September 30, 2021, the Company paid $1.0 million in tax distributions under the Third Purple LLC Agreement. At September 30, 2021, the Company’s condensed consolidated balance sheet had a minimal amount of accrued tax distributions included in other current liabilities. Service Agreement In October 2017, the Company entered into an electric service agreement with the local power company in Grantsville, Utah. The agreement provided for the construction and installation of certain utility improvements to provide increased power capacity to the manufacturing and warehouse facility in Grantsville, Utah. The Company prepaid $0.5 million related to the improvements and agreed to a minimum contract billing amount over a 15-year period based on regulated rate schedules and changes in actual demand during the billing period. The agreement includes an early termination clause that requires the Company to pay a pro-rata termination charge if the Company terminates within the first 10 years of the service start date. The original early termination charge was $1.3 million and is reduced annually on a straight-line basis over the 10-year period. During 2018, the utility improvements construction was completed and were made available to the Company. As of September 30, 2021, the early termination penalty was $0.8 million and the Company expects to fulfill its commitments under the agreement in the normal course of business, and as such, no liability has been recorded. Indemnification Obligations From time to time, the Company enters into contracts that contingently require it to indemnify parties against claims. These contracts primarily relate to provisions in the Company’s services agreements with related parties that may require the Company to indemnify the related parties against services rendered; and certain agreements with the Company’s officers and directors under which the Company may be required to indemnify such persons for liabilities. Subscription Agreement and Preemptive Rights In February 2018, in connection with the Business Combination, the Company entered into a subscription agreement with Coliseum Capital Partners (“CCP”) and Blackwell Partners LLC – Series A (“Blackwell”), pursuant to which CCP and Blackwell agreed to purchase from the Company an aggregate of 4.0 million shares of Class A Stock at a purchase price of $10.00 per share (the “Coliseum Private Placement”). In connection with the Coliseum Private Placement, the Sponsor assigned (i) an aggregate of 1.3 million additional shares of Class A Stock to CCP and Blackwell and (ii) an aggregate of 3.3 million warrants to purchase 1.6 million shares of Class A Stock to CCP, Blackwell, and Coliseum Co-Invest Debt Fund, L.P. (“CDF”). The subscription agreement provides CCP and Blackwell with preemptive rights with respect to future sales of the Company’s securities. It also provides them with a right of first refusal with respect to certain debt and preferred equity financings by the Company. The Company also entered into a registration rights agreement with CCP, Blackwell, and CDF, providing for the registration of the shares of Class A Stock issued and assigned to CCP and Blackwell in the Coliseum Private Placement, as well as the shares of Class A Stock underlying the warrants received by CCP, Blackwell and CDF. The Company has filed a registration statement with respect to such securities. Rights of Securities Holders The holders of certain warrants exercisable into Class A Stock, including CCP, Blackwell and CDF, were entitled to registration rights pursuant to certain registration rights agreements of the Company as of the Business Combination date. In March 2018, the Company filed a registration statement registering these warrants (and any shares of Class A Stock issuable upon the exercise of the warrants), and certain unregistered shares of Class A Stock. The registration statement was declared effective on April 3, 2018. Under the Registration Rights Agreement dated February 2, 2018 between the Company and CCP, Blackwell, and CDF (the “Coliseum Investors”), the Coliseum Investors have the right to make written demands for up to three registrations of certain warrants and shares of Class A Stock held by them, including in underwritten offerings. In an underwritten offering of such warrants and shares of Class A Stock by the Coliseum Investors, the Company will pay underwriting discounts and commissions and certain expenses incurred by the Coliseum Investors. On May 21, 2021, 7.3 million shares of Class A common stock were sold in a secondary offering by the Coliseum Investors at a price of $30.00 per share. The Company did not receive any of the proceeds from the secondary offering. The underwriting discount, commission and other related costs incurred by the Company for the secondary offering totaled $7.9 million and was recorded in May 2021 as general and administrative expense. The holders of the Incremental Loan Warrants exercisable into Class A Stock were entitled to registration rights pursuant to the registration rights agreement of the Company in connection with the Amended and Restated Credit Agreement. In March 2019, the Company filed a registration statement registering these warrants (and any shares of Class A Stock issuable upon the exercise of the warrants). The registration statement was declared effective on May 17, 2019. On November 9, 2020, the Company issued 2.6 million shares of Class A common stock in exchange for the exercised Incremental Loan Warrants. On February 2, 2018, in connection with the closing of the Business Combination, the Company entered into a Registration Rights Agreement with InnoHold and the Parent Representative (the “InnoHold Registration Rights Agreement”). Under the InnoHold Registration Rights Agreement, InnoHold holds registration rights that obligate the Company to register for resale under the Securities Act, all or any portion of the Equity Consideration (including Class A Stock issued in exchange for the equity consideration received in the Business Combination) (the “Registrable Securities”). InnoHold is entitled to make a written demand for registration under the Securities Act of all or part of its Registrable Securities (up to a maximum of three demands in total). Pursuant to the InnoHold Registration Rights Agreement, the Company filed a registration statement on Form S-3 that was declared effective on November 8, 2019, pursuant to which InnoHold, Tony Pearce and Terry Pearce sold 11.5 million shares of Class A Stock. The Company filed a second registration statement on Form S-3 that was declared effective on May 14, 2020, pursuant to which InnoHold sold 12.4 million shares of Class A Stock. The Company filed a third and final registration statement on Form S-3 that was declared effective on September 9, 2020, pursuant to which InnoHold sold 16.8 million shares of Class A Stock. Purple LLC Class B Unit Exchange Right On February 2, 2018, in connection with the closing of the Business Combination, the Company entered into an exchange agreement with Purple LLC and InnoHold and Class B Unit holders who become a party thereto (the “Exchange Agreement”), which provides for the exchange of Purple LLC Class B Units (the “Class B Units”) and shares of Class B Stock (together with an equal number of Class B Units, the “Paired Securities”) for, at the Company’s option, either (A) shares of Class A Stock at an initial exchange ratio equal to one Paired Security for one share of Class A Stock or (B) a cash payment equal to the product of the average of the volume-weighted closing price of one share of Class A Stock for the ten trading days immediately prior to the date InnoHold or other Class B Unit holders deliver a notice of exchange multiplied by the number of Paired Securities being exchanged. In December 2018, InnoHold distributed Paired Securities to Terry Pearce and Tony Pearce who also agreed to become parties to the Exchange Agreement. In June 2019, InnoHold distributed Paired Securities to certain current and former employees who also agreed to become parties to the exchange agreement. Holders of Class B Units may elect to exchange all or any portion of their Paired Securities as described above by delivering a notice to Purple LLC. In certain cases, adjustments to the exchange ratio will occur in case of a split, reclassification, recapitalization, subdivision or similar transaction of or relating to the Class B Units or the shares of Class A Stock and Class B Stock or a transaction in which the Class A Stock is exchanged or converted into other securities or property. The exchange ratio will also adjust in certain circumstances when the Company acquires Class B Units other than through an exchange for its shares of Class A Stock. The right of a holder of Paired Securities to exchange may be limited by the Company if it reasonably determines in good faith that such restrictions are required by applicable law (including securities laws), such exchange would not be permitted under other agreements of such holder with the Company or its subsidiaries, including the Third Purple LLC Agreement, or if such exchange would cause Purple LLC to be treated as a “publicly traded partnership” under applicable tax laws. The Company and each holder of Paired Securities shall bear its own expense regarding the exchange except that the Company shall be responsible for transfer taxes, stamp taxes and similar duties. During the nine months ended September 30, 2021 and 2020, 0.1 million and 30.8 million, respectively, of Paired Securities were exchanged for shares of Class A Stock. Maintenance of One-to-One Ratios The Third Purple LLC Agreement includes provisions intended to ensure that the Company at all times maintains a one-to-one ratio between (a) (i) the number of outstanding shares of Class A Stock and (ii) the number of Class A Units owned by the Company (subject to certain exceptions for certain rights to purchase equity securities of the Company under a “poison pill” or similar stockholder rights plan, if any, certain convertible or exchangeable securities issued under the Company’s equity compensation plan and certain equity securities issued pursuant to the Company’s equity compensation plan (other than a stock option plan) that are restricted or have not vested thereunder) and (b) (i) the number of other outstanding equity securities of the Company (including the warrants exercisable for shares of Class A Stock) and (ii) the number of corresponding outstanding equity securities of Purple LLC. These provisions are intended to result in non-controlling interest holders having a voting interest in the Company that is identical to their economic interest in Purple LLC. Non-Income Related Taxes The U.S. Supreme Court ruling in South Dakota v. Wayfair, Inc. Legal Proceedings On September 9, 2019, Purple LLC filed a Statement of Claim against PerfectSense Home Inc. and PerfectSense Trading Co. Ltd. (collectively, “PerfectSense”) in the Federal Court of Canada. PerfectSense is a manufacturer and supplier of mattresses and related products. PerfectSense owns the domain name www.purplesleep.ca, which used to, but no longer, redirects to its website at www.perfectsense.ca. In addition to this, Purple LLC has alleged that PerfectSense has: designed their mattresses with the same look as the Purple mattresses (white mattress top, purple stripe, and grey bottom); used many of the marketing elements on Purple’s website (including a similar “exploded view” image of their mattress); and adopted the color purple as their dominant marketing color. Purple LLC is suing for a declaration that PerfectSense has infringed Purple LLC’s copyright and trademark rights and committed the tort of passing off. Purple LLC is asking for injunctive relief, damages, an accounting of profits, interest, costs, and delivery up or destruction of the infringing products (including delivery up of the www.purplesleep.ca domain). After filing the statement of claim, Purple LLC posted $15,000 CAD as security for PerfectSense’s costs. PerfectSense brought a motion to strike that was resolved on consent. Pleadings are now closed, and the action is proceeding under case management. Counsel for the defendant was removed from the record at their own request by Court Order. The Court further ordered the defendant to either appoint counsel or file a motion to permit an officer or director to represent the defendant in legal proceedings. On November 6, 2020, the defendant informally requested that the Court permit Mr. Henderson, the CEO and shareholder of the defendant, to represent the defendant in the action until such time as a lawyer could be appointed. Purple opposed this informal request, and it was denied by the Court. After granting PerfectSense a final extension of time to either appoint counsel or file a motion to permit Mr. Henderson to represent the defendant, PerfectSense appointed new counsel. The parties engaged in litigation discovery, exchanged affidavits of documents and scheduled examinations for discovery. Shortly thereafter, discovery adjourned and continues to be stayed while the parties negotiate formal terms of settlement. The Company believes settlement will be finalized soon and the action then dismissed, but if not, Purple LLC will resume vigorously pursuing its claims. On September 20, 2020, Purple LLC filed a complaint in the U.S. Court of International Trade seeking to recover approximately $7.0 million of Section 301 duties paid at the time of importation on certain Chinese-origin goods. More than 4,000 other complaints have been filed by other companies seeking similar refunds. On March 12, 2021 the United States filed a master answer that applies to all the Section 301 cases, including Purple LLC’s. On July 6, 2021, the court granted a preliminary injunction against liquidation of any unliquidated entries. If successful, this litigation could result in a refund of some or all of the Section 301 duties. On October 13, 2020, Purple LLC filed a lawsuit against Responsive Surface Technology, LLC and its parent company, PatienTech, LLC (collectively referred to as “ReST”) in the United States District Court for the District of Utah. The lawsuit arises from ReST’s multiple breaches of its obligations to Purple LLC, including infringing upon Purple LLC’s trademarks, patents, and trade dress, among other claims. Purple seeks monetary damages, injunctive relief, and declaratory judgment based on certain conduct by ReST (“Case I”). On October 21, 2020, shortly after the complaint was filed in Case I, ReST filed a retaliatory lawsuit against Purple LLC, Gary DiCamillo, Adam Gray, Joseph Megibow, Terry Pearce, and Tony Pearce, also in the United States District Court for the District of Utah (“Case II”). Subsequently, the two cases were consolidated into one. Case II (now combined with Case I) involves many of the same facts and transactions as Case I. On January 19, 2021, ReST filed a motion to compel arbitration of the claims in Case I. Purple LLC opposed the motion to compel arbitration, arguing that ReST waived any rights they may have had to arbitration and that all the claims in both cases should stay in the courts. However, the Court granted ReST’s motion to compel arbitration, and stayed the proceedings in the United States District Court for the District of Utah. Additionally, the Court ruled that ReST’s claims against the Purple board members were not subject to arbitration, and the Court stayed ReST’s claims against those individuals. Pursuant to the Court’s order, Purple filed a demand for arbitration with the American Arbitration Association (the “AAA”) on September 1, 2021. ReST filed its counterclaim with the AAA on September 21, 2021. The parties are currently working with the AAA to select an arbitrator for the arbitration hearing. No date for the arbitration hearing has been set. Purple LLC seeks over $4 million in damages from ReST, whereas ReST claims that Purple is liable to it for tens of millions of dollars. The outcome of this litigation cannot be predicted at this early stage. However, Purple intends to vigorously pursue its claims and defend against the claims made by ReST. On November 19, 2020, Purple LLC sued Advanced Comfort Technologies, Inc., dba Intellibed (“Intellibed”) in the U.S. District Court for the District of Utah for patent infringement, trademark infringement, trade secret misappropriation, and a number of related state law based claims. The principal allegations are that Intellibed has manufactured and sold unauthorized, infringing products under the Sleepy’s brand name owned by third-party Mattress Firm. Purple LLC also requested declaratory relief related to certain assignment terms of a license agreement in which Purple LLC is the licensor and Intellibed is the licensee. On December 14, 2020, Intellibed filed a motion to dismiss Counts I through XI of Purple LLC’s Complaint on the ground that these Counts fail to state a claim upon which relief can be granted. On December 15, 2020, Intellibed filed an Answer to Purple LLC’s complaint and also asserted against Purple LLC a total of eight counterclaims, including a number of declaratory judgment claims, breach of contract, and tortious interference claims. Intellibed’s main allegations are that its use of Purple LLC’s patents, trademark, and trade secrets in connection with Mattress Firm’s Sleepy’s products is authorized under the license agreement. On January 19, 2021, Purple LLC filed a motion to dismiss Intellibed’s fifth, sixth, seventh, and eighth counterclaims on the ground that these counterclaims fail to state a claim upon which relief can be granted. Briefing on Purple LLC’s partial motion to dismiss was completed on March 2, 2021. On January 19, 2021, Purple LLC also filed an Answer to Intellibed’s counterclaims, which were not subject to Purple LLC’s motion to dismiss. On January 27, 2021, Purple LLC filed a First Amended Complaint in response to Intellibed’s initial motion to dismiss. On February 10, 2021, Intellibed filed a motion to dismiss Counts I through XI of Purple LLC’s First Amended Complaint. Briefing on Intellibed’s partial motion to dismiss was completed on March 24, 2021. On September 28, 2021, the District Court dismissed Purple’s complaint without prejudice, and also dismissed ACTI’s counterclaim without prejudice, while the parties pursued dispute-resolution procedures set out in the license agreement. Because the Court found that the license agreement required the parties to follow the contractual dispute-resolution procedures prior to filing a lawsuit, Purple initiated those procedures in accordance with the license agreement and intends to continue to vigorously pursue its claims. On June 8, 2021, Serta Simmons Bedding, LLC (“SSB”) filed a Complaint against the Company in the Superior Court of Gwinnett County, Georgia, Case No. 21-A-04413-1 (the “Georgia Litigation”). SSB’s Complaint alleges that the Company intentionally interfered with SSB’s business and contractual relations and violated the Georgia Trade Secrets Act by hiring one of SSB’s former employees in the face of an allegedly valid 2015 noncompete agreement. SSB seeks compensatory damages, punitive damages, equitable relief, and attorneys’ fees as a result of the conduct alleged in the Complaint. SSB also initiated arbitration proceedings against its former employee who Purple LLC has agreed to indemnify, subject to certain conditions. On July 12, 2021, the Company filed an Answer to SSB’s Complaint in the Georgia Litigation, denying all allegations of unlawful conduct, and further moved to dismiss the Georgia Litigation on the grounds that Georgia is an inconvenient forum and the parties’ dispute should instead be litigated in Utah. The Company’s motion to dismiss is fully briefed and oral argument is scheduled to occur on October 26, 2021. The Court is expected to render a decision on the Company’s motion to dismiss in November 2021. On July 9, 2021, the Company filed its own Complaint in the Fourth Judicial District Court of Salt Lake County, Utah, Case No. 21040011 (the “Utah Litigation”), seeking: (1) a declaratory judgment that the arbitration clause in the former employee’s 2015 noncompete agreement is unenforceable, (2) a declaratory judgment that the restrictive covenants in the former employee’s 2015 noncompete agreement are unenforceable, and (3) an order enjoining arbitration proceedings initiated by SSB and currently pending against the former employee. The Company filed a motion for summary judgment on these claims on August 16, 2021. SSB filed an Answer on August 18, 2021. The Company and SSB attended a mediation on August 30, 2021 and the parties anticipate that all claims between the parties will be resolved and that the Georgia Litigation and the Utah Litigation will each be dismissed without prejudice. The Company is from time to time involved in various other claims, legal proceedings and complaints arising in the ordinary course of business. The Company does not believe that adverse decisions in any such pending or threatened proceedings, or any amount that the Company might be required to pay by reason thereof, would have a material adverse effect on the financial condition or future results of the Company. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 12. Related Party Transactions The Company had various transactions with entities or individuals which are considered related parties. Coliseum Capital Management, LLC Immediately following the Business Combination, Adam Gray was appointed to the Company’s Board of Directors (the “Board”). Mr. Gray is a manager of Coliseum Capital, LLC, which is the general partner of CCP and CDF, and he is also a managing partner of Coliseum Capital Management, LLC (“CCM”), which is the investment manager of Blackwell. Mr. Gray has voting and dispositive control over securities held by CCP, CDF and Blackwell which were also Lenders under the Amended and Restated Credit Agreement. In 2018, the Lenders agreed to make the Related Party Loan in an aggregate principal amount of $25.0 million pursuant to an agreement entered into as part of the Business Combination. In conjunction with this agreement, the Sponsor agreed to assign to the Lenders an aggregate of 2.5 million warrants to purchase 1.3 million shares of its Class A Stock. In 2019, the Incremental Lenders funded a $10.0 million increase in the Related Party Loan and were granted 2.6 million warrants to purchase 2.6 million shares of the Company’s Class A Stock at a price of $5.74 per share, subject to certain adjustments. In accordance with an amendment to the Related Party Loan dated March 27, 2020, the Company did not make any cash interest payments to the Lenders during the first and second quarters of 2020. On September 3, 2020, the Company paid $45.0 million to retire, in full, the Related Party Loan. The payment included the $25.0 million original loan under the agreement, $10.0 million for the subsequent incremental loan, $6.6 million of paid-in-kind interest, $2.5 million in a prepayment fee and $0.9 million in accrued interest. In connection with the Business Combination, the Company entered into a subscription agreement with CCP and Blackwell, pursuant to which CCP and Blackwell agreed to purchase from the Company an aggregate of 4.0 million shares of Class A Stock at a purchase price of $10.00 per share (the “Coliseum Private Placement”). In connection with the Coliseum Private Placement, the Sponsor assigned (i) an aggregate of 1.3 million additional shares of Class A Stock to CCP and Blackwell and (ii) an aggregate of 3.3 million warrants to purchase 1.6 million shares of Class A Stock to CCP, Blackwell, and CDF. The subscription agreement provides CCP and Blackwell with preemptive rights with respect to future sales of the Company’s securities. It also provides them with a right of first refusal with respect to certain debt and preferred equity financings by the Company. The Company also entered into a registration rights agreement with CCP, Blackwell, and CDF, providing for the registration of the shares of Class A Stock issued and assigned to CCP and Blackwell in the Coliseum Private Placement, as well as the shares of Class A Stock underlying the warrants received by CCP, Blackwell and CDF. The Company has filed a registration statement with respect to such securities. In May 2020, pursuant to the terms of the warrant agreement upon the condition that Tony Pearce or Terry Pearce individually or together ceased to beneficially own at least 50% of the voting securities of the Company, the exercise price of the Incremental Loan Warrants was adjusted to zero. On November 9, 2020, the Company issued 2.6 million shares of Class A common stock in exchange for the Incremental Loan Warrants held by the Incremental Lenders. Purple Founder Entities TNT Holdings, LLC (herein “TNT Holdings”), EdiZONE, LLC, (herein EdiZONE an entity wholly owned by TNT Holdings) and InnoHold (collectively the “Purple Founder Entities”) were entities under common control with Purple LLC prior to the Business Combination. TNT Holdings and InnoHold are majority owned and controlled by Terry Pearce and Tony Pearce (the “Purple Founders”), who were appointed to the Company’s Board following the Business Combination. InnoHold was a majority shareholder of the Company until it sold a portion of its interests in a secondary public offering in May 2020 and the remainder of its interests in a secondary public offering in September 2020. The Purple Founders also resigned as employees of Purple LLC and retired from the Company’s Board in August 2020. TNT Holdings owned the Alpine facility Purple LLC has been leasing since 2010, and the Purple Founders informed Purple LLC that TNT Holdings recently transferred ownership to 123E LLC, an entity controlled by the Purple Founders. Effective as of October 31, 2017, Purple LLC entered into an Amended and Restated Lease Agreement with TNT Holdings. The Company determined that neither TNT Holdings nor 123E LLC are a VIE as neither the Company nor Purple LLC hold any explicit or implicit variable interest in TNT Holdings or 123E LLC and do not have a controlling financial interest in TNT Holdings or 123E LLC. Purple LLC incurred $0.2 million and $0.2 million in rent expense to 123E LLC or TNT Holdings for the building lease of the Alpine facility for the three months ended September 30, 2021 and 2020, respectively and $0.7 million and $0.7 million for the nine months ended September 30, 2021 and 2020, respectively. Purple LLC continues to lease the Alpine facility that was formerly the Company headquarters, for use in production, research and development and video production. In accordance with the terms of that lease, on September 3, 2021, Purple LLC gave notice to 123E LLC that it intended to exercise its right to an early termination of the lease to occur on September 30, 2022. During the nine months ended September 30, 2021, certain current and former employees of Purple LLC who received distributions of Paired Securities from InnoHold exchanged 0.1 million of Paired Securities for Class A Stock. On November 9, 2018, Purple LLC and EdiZONE executed the Second Amended and Restated Confidential Assignment and License Back Agreement (the “Revised License Agreement”), pursuant to which EdiZONE assigned all of its comfort and cushioning intellectual property to Purple LLC and further limited the subset of such intellectual property licensed back to EdiZONE to only those uses that enabled EdiZONE to comply with its obligations under previously existing contracts, agreements and licenses. On August 14, 2020, Purple LLC entered into a separate agreement whereby EdiZONE, for consideration of $8.5 million, assigned a license agreement with Advanced Comfort Technologies, Inc., dba Intellibed (“Intellibed”), and related royalties payable thereunder, to Purple LLC, along with the trademarks GEL MATRIX and INTELLIPILLOW. In connection with such assignment, the Company agreed to indemnify EdiZONE against claims by Intellibed relating to EdiZONE’s breach under the agreement. In connection with the Business Combination, to secure payment of a certain portion of specified post-closing indemnification rights of the Company under the Merger Agreement, 0.5 million shares of Class B Stock and 0.5 million Class B Units otherwise issuable to InnoHold as equity consideration were deposited in an escrow account for up to three years from the date of the Business Combination pursuant to a contingency escrow agreement. In September 2020, an amendment to the escrow agreement was signed whereby the 0.5 million shares of Class B Stock and 0.5 million Class B Units held in escrow were exchanged for $5.0 million. On February 3, 2021, the Company received $4.1 million from InnoHold as reimbursement for amounts that qualified for indemnification from the $5.0 million being held in escrow. The remaining $0.9 million in escrow was returned to InnoHold. The amount received from InnoHold was recorded as additional paid-in capital in the condensed consolidated balance sheet. During the nine months ended September 30, 2021, Purple LLC paid InnoHold through withholding payments directly to various states, an aggregate of $0.4 million in required tax distributions pursuant to the Third Purple LLC Agreement. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 13. Stockholders’ Equity Prior to the Business Combination, GPAC was a shell company with no operations, formed as a vehicle to effect a business combination with one or more operating businesses. After the Closing, the Company became a holding company whose sole material asset consists of its interest in Purple LLC. Class A Common Stock The Company has 210.0 million shares of Class A Stock authorized at a par value of $0.0001 per share. Holders of the Company’s Class A Stock are entitled to one vote for each share held on all matters to be voted on by the stockholders and participate in dividends, if declared by the Board, or receive any portion of any such assets in respect of their shares upon liquidation, dissolution, distribution of assets or winding-up of the Company in excess of the par value of such stock. Holders of the Class A Stock and holders of the Class B Stock voting together as a single class, have the exclusive right to vote for the election of directors and on all other matters properly submitted to a vote of the stockholders. Holders of Class A Stock and Class B Stock are entitled to one vote per share on matters to be voted on by stockholders. At September 30, 2021, 66.4 million shares of Class A Stock were outstanding. In accordance with the terms of the Business Combination, approximately 1.3 million shares of Class A Stock were subject to vesting and forfeiture. The shares of Class A Stock subject to vesting will be forfeited eight years from the Closing, unless any of the following events (each a “Triggering Event”) occurs prior to that time:(i) the closing price of the Class A Stock on the principal exchange on which it is listed is at or above $12.50 for 20 trading days over a thirty trading day period (subject to certain adjustments), (ii) a change of control of the Company, (iii) a “going private” transaction by the Company pursuant to Rule 13e-3 under the Exchange Act or such other time as the Company ceases to be subject to the reporting obligations under Section 13 or 15(d) of the Exchange Act, or (iv) the time that the Company’s Class A Stock ceases to be listed on a national securities exchange. During fiscal 2020, a Triggering Event occurred as the closing price of the Class A Stock on the principal exchange on which it is listed was at or above $12.50 for 20 trading days over a thirty-trading day period. Accordingly, these shares of Class A Stock are no longer subject to vesting or forfeiture. Class B Common Stock The Company has 90.0 million shares of Class B Stock authorized at a par value of $0.0001 per share. Holders of the Company’s Class B Stock will vote together as a single class with holders of the Company’s Class A Stock on all matters properly submitted to a vote of the stockholders. Shares of Class B Stock may be issued only to InnoHold, their respective successors and assigns, as well as any permitted transferees of InnoHold. A holder of Class B Stock may transfer shares of Class B Stock to any transferee (other than the Company) only if such holder also simultaneously transfers an equal number of such holder’s Purple LLC Class B Units to such transferee in compliance with the Third Purple LLC Agreement. The Class B Stock is not entitled to receive dividends, if declared by the Board, or to receive any portion of any such assets in respect of their shares upon liquidation, dissolution, distribution of assets or winding-up of the Company in excess of the par value of such stock. In connection with the Business Combination, approximately 44.1 million shares of Class B Stock were issued to InnoHold as part of the equity consideration. InnoHold subsequently transferred a portion of its shares to permitted transfers and exchanged its remaining shares for Class A Stock that it sold. All of the 0.4 million shares of Class B Stock outstanding at September 30, 2021 were held by other parties. Preferred Stock The Company has 5.0 million shares of preferred stock authorized at a par value of $0.0001 per share. The preferred stock may be issued from time to time in one or more series. The directors are expressly authorized to provide for the issuance of shares of the preferred stock in one or more series and to establish from time to time the number of shares to be included in each such series and to fix the voting rights, designations and other special rights or restrictions. At September 30, 2021, there were no shares of preferred stock outstanding. Public and Sponsor Warrants There were 15.5 million public warrants issued in connection with GPAC’s formation and IPO and 12.8 million sponsor warrants issued pursuant to a private placement simultaneously with the IPO. Each of the Company’s warrants entitles the registered holder to purchase one-half of one share of the Company’s Class A Stock at a price of $5.75 per half share ($11.50 per full share), subject to adjustment pursuant to the terms of the warrant agreement. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares of the Class A Stock. For example, if a warrant holder holds one warrant to purchase one-half of one share of Class A Stock, such warrant will not be exercisable. If a warrant holder holds two warrants, such warrants will be exercisable for one share of the Class A Stock. In no event will the Company be required to net cash settle any warrant. The warrants have a five-year term which commenced on March 2, 2018, 30 days after the completion of the Business Combination, and will expire on February 2, 2023, or earlier upon redemption or liquidation. The Company may call the warrants for redemption if the reported last sale price of the Class A Stock equals or exceeds $24.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends the notice of redemption to the warrant holders; provided, however, that the sponsor warrants are not redeemable by the Company so long as they are held by the Sponsor or its permitted transferees. In addition, with respect to the sponsor warrants, so long as such sponsor warrants are held by the Sponsor or its permitted transferee, the holder may elect to exercise the sponsor warrants on a cashless basis, by surrendering their sponsor warrants for that number of shares of Class A Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A Stock underlying the sponsor warrants, multiplied by the difference between the exercise price of the Sponsor Warrants and the “fair market value” (defined below), by (y) the fair market value. The “fair market value” means the average reported last sale price of the Class A Stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent. All other terms, rights and obligations of the sponsor warrants remain the same as the public warrants. On October 27, 2020, the Company provided notice to the holders of the public warrants that the Company was exercising its right under the terms of the Public Warrants to redeem such warrants by paying to the warrant holders the redemption price of $0.01 per warrant on November 30, 2020. Any exercise of the warrants prior to that date was to be done on a cashless basis, in accordance with the terms of the warrants. All of the public warrants were exercised or redeemed by November 30, 2020. During the nine months ended September 30, 2021, 6.6 million sponsor warrants were exercised resulting in the issuance of 2.3 million shares of Class A common stock. At September 30, 2021, there were 1.9 million warrants outstanding all of which were sponsor warrants. Incremental Loan Warrants In connection with the Amended and Restated Credit Agreement, the Company issued to the Incremental Lenders 2.6 million Incremental Loan Warrants to purchase 2.6 million shares of the Company’s Class A Stock. Each Incremental Loan Warrant entitled the registered holder to purchase one share of the Company’s Class A Stock at a price of $5.74 per share, subject to adjustment pursuant to the terms of the warrant agreement. In May 2020, Tony Pearce and Terry Pearce individually or together ceased to beneficially own at least 50% of the voting securities of the Company. As a result, the exercise price of the warrants was reduced to zero based on the formula established in the agreement. On October 27, 2020, the Company provided notice to the holders of the Incremental Loan Warrants that the Company was exercising its right to redeem such warrants by paying to the warrant holders the redemption price of $0.01 per warrant on November 30, 2020. Any exercise of the warrants prior to that date was to be done on a cashless basis, in accordance with the terms of the warrants. On November 9, 2020, upon the exercise of all the Incremental Loan Warrants, the Company issued 2.6 million shares of Class A common stock in exchange for the Incremental Loan Warrants held by the Incremental Lenders. Noncontrolling Interest Noncontrolling interest (“NCI”) is the membership interest in Purple LLC held by holders other than the Company. Upon the close of the Business Combination, and at December 31, 2018, InnoHold’s and other Class B Unit holders’ combined NCI percentage in Purple LLC was approximately 82%. At September 30, 2021, the combined NCI percentage in Purple LLC was approximately 1%. The Company has consolidated the financial position and results of operations of Purple LLC and reflected the proportionate interest held by all such Purple LLC Class B Unit holders as NCI. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. Income Taxes The Company’s sole material asset is Purple LLC, which is treated as a partnership for U.S. federal income tax purposes and for purposes of certain state and local income taxes. Purple LLC’s net taxable income and any related tax credits are passed through to its members and are included in the members’ tax returns, even though such net taxable income or tax credits may not have actually been distributed. While the Company consolidates Purple LLC for financial reporting purposes, the Company will be taxed on its share of earnings of Purple LLC not attributed to the noncontrolling interest holders, which will continue to bear their share of income tax on its allocable earnings of Purple LLC. The income tax burden on the earnings taxed to the noncontrolling interest holders is not reported by the Company in its consolidated financial statements under GAAP. As a result, the Company’s effective tax rate differs from the statutory rate. The primary factors impacting the expected tax are the allocation of tax benefit to noncontrolling interest and the non-taxable nature of the change in fair value of the warrant liability. Prior to the second quarter of 2020, the Company maintained a full valuation allowance on its net deferred tax assets which are comprised primarily of basis differences in Purple LLC. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income sufficient to utilize the deferred tax assets on income tax returns. In periods prior to the second quarter of 2020, management made the determination that its net deferred tax assets were not more likely than not going to be realized because the Company was in a three-year cumulative loss position and the generation of future taxable income was uncertain. Considering this and other factors, the Company maintained a full valuation allowance of $44.3 million through the period ending March 31, 2020. During fiscal 2020, the Company achieved three-year cumulative income for the first time and determined that it would likely generate sufficient taxable income to utilize some of its deferred tax assets. Based on this and other positive evidence, the Company concluded it was more likely than not that some of its deferred tax assets would be realized and that a full valuation allowance for its deferred tax assets was no longer appropriate. As a result, $35.5 million of the valuation allowance associated with the Company’s federal and state deferred tax assets was released during 2020 and recorded as an income tax benefit. The deferred tax assets at September 30, 2021 totaled $214.0 million, which is net of a $70.8 million valuation allowance that has been recorded against the residual outside partnership basis for the amount the Company believes is not more likely than not realizable. As a result, there was an overall increase of $18.8 million in the valuation allowance from December 31, 2020 to September 30, 2021, primarily as a result of an increase in the residual outside partnership basis. The Company currently estimates its annual effective income tax rate to be 7.53%. The annualized effective tax rate for the Company differs from the federal rate of 21% primarily due to the non-taxable nature of the change in fair value of the warrant liability and state and local income taxes. For the nine months ended September 30, 2021, the Company has recorded income tax expense of $1.0 million. The effective tax rate for the nine months ended September 30, 2021 was 3.77%, which is less than the federal statutory rate because the gain related to the change in fair value of the warrant liability is excluded from taxable income for income tax purposes. In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (CARES Act) was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (2017 Tax Act). Corporate taxpayers may carryback net operating losses (NOLs) originating during 2018 through 2020 for up to five years, which was not previously allowed under the 2017 Tax Act. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for tax years beginning January 1, 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act. On March 11, 2021, Congress passed, and the President signed into law, the American Rescue Plan Act, 2021 (the “ARP”), which includes certain business tax provisions. At this point the Company does not believe that these changes will have a material impact on its income tax provision for 2021. The Company will continue to evaluate the impact of new legislation on its financial position, results of operations, and cash flows. In connection with the Business Combination, the Company entered into a tax receivable agreement with InnoHold, which provides for the payment by the Company to InnoHold of 80% of the net cash savings, if any, in U.S. federal, state and local income tax that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the Closing as a result of (i) any tax basis increases in the assets of Purple LLC resulting from the distribution to InnoHold of the cash consideration, (ii) the tax basis increases in the assets of Purple LLC resulting from the redemption by Purple LLC or the exchange by the Company, as applicable, of Class B Paired Securities or cash, as applicable, and (iii) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, payments it makes under the tax receivable agreement. As noncontrolling interest holders exercise their right to exchange or cause Purple LLC to redeem all or a portion of their Class B Units, a tax receivable agreement liability may be recorded based on 80% of the estimated future cash tax savings that the Company may realize as a result of increases in the basis of the assets of Purple LLC attributed to the Company as a result of such exchange or redemption. The amount of the increase in asset basis, the related estimated cash tax savings and the attendant tax receivable agreement liability to be recorded will depend on the price of the Company’s Class A Stock at the time of the relevant redemption or exchange. The estimation of liability under the tax receivable agreement is by its nature imprecise and subject to significant assumptions regarding the amount and timing of future taxable income. As a result of the initial merger transaction and the subsequent exchanges of Class B Units for Class A Stock, the potential future tax receivable agreement liability is $171.5 million. Of the tax receivable agreement liability recorded during the nine months ended September 30, 2021, $0.8 million relates to current year exchanges and was recorded as an adjustment to stockholders’ equity and $0.6 million was recorded as income in the condensed consolidated statement of operations to reflect the impact of recording the 2020 provision to return adjustments. The Company has no federal net operating loss (“NOL”) carryforwards after utilization of the remaining carryforwards in 2020. The effects of uncertain tax positions are recognized in the consolidated financial statements if these positions meet a “more-likely-than-not” threshold. For those uncertain tax positions that are recognized in the consolidated financial statements, liabilities are established to reflect the portion of those positions it cannot conclude “more-likely-than-not” to be realized upon ultimate settlement. The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of income. Accrued interest and penalties would be included on the related tax liability line in the consolidated balance sheet. As of September 30, 2021, no uncertain tax positions were recognized as liabilities in the condensed consolidated financial statements. |
Net Income (Loss) Per Common Sh
Net Income (Loss) Per Common Share | 9 Months Ended |
Sep. 30, 2021 | |
Net Income (Loss) Per Common Share [Abstract] | |
Net Income (Loss) Per Common Share | 15. Net Income (Loss) Per Common Share The following table sets forth the calculation of basic and diluted weighted average shares outstanding and earnings (loss) per share for the periods presented (in thousands, except per share amounts): Three Months Ended Nine Months Ended 2021 2020 2021 2020 Numerator: Net income (loss) attributable to Purple Innovation, Inc.-basic $ 2,171 $ (87,013 ) $ 25,573 $ (163,453 ) Less: Dilutive effect of change in fair value – warrant liabilities (5,362 ) — (19,369 ) — Less: Net loss attributed to noncontrolling interest (44 ) — — — Net income (loss) attributable to Purple Innovation, Inc.-diluted $ (3,235 ) $ (87,013 ) $ 6,204 $ (163,453 ) Denominator Weighted average shares—basic 66,335 44,266 65,741 32,117 Add: Dilutive effect of equity awards 504 — 2,578 — Add: Dilutive effect of Class B shares 448 — — — Weighted average shares—diluted 67,287 44,266 68,319 32,117 Net income (loss) per common share: Basic $ 0.03 $ (1.97 ) $ 0.39 $ (5.09 ) Diluted $ (0.05 ) $ (1.97 ) $ 0.09 $ (5.09 ) For the three months ended September 30, 2021, the Company excluded 1.3 million shares of Class A Stock issuable upon conversion of certain stock options, restricted stock and Class A shares subject to vesting as the effect was anti-dilutive. For the nine months ended September 30, 2021, the Company excluded 0.5 million of Paired Securities convertible into an equal number of Class A shares as the effect was anti-dilutive. For the three months ended September 30, 2020, the Company excluded 10.0 million of Paired Securities convertible into shares of Class A Stock and 10.4 million shares of Class A Stock issuable upon conversion of certain Company warrants, stock options and Class A shares subject to vesting as the effect was anti-dilutive. For the nine months ended September 30, 2020, the Company excluded 21.6 million of Paired Securities convertible into shares of Class A Stock and 7.1 million shares of Class A Stock issuable upon conversion of certain Company warrants, stock options and Class A shares subject to vesting as the effect was anti-dilutive. |
Equity Compensation Plans
Equity Compensation Plans | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity Compensation Plans | 16. Equity Compensation Plans 2017 Equity Incentive Plan The Purple Innovation, Inc. 2017 Equity Incentive Plan (the “2017 Incentive Plan”) provides for grants of stock options, stock appreciation rights, restricted stock and other stock-based awards. Directors, officers and other employees and subsidiaries and affiliates, as well as others performing consulting or advisory services for the Company and its subsidiaries, will be eligible for grants under the 2017 Incentive Plan. As of September 30, 2021, an aggregate of 1.8 million shares remain available for issuance or use under the 2017 Incentive Plan. Class A Stock Awards In May 2021, the Company granted stock awards under the Company’s 2017 Equity Incentive Plan to independent directors on the Board. The stock awards vested immediately and the Company recognized $0.6 million in expense during the nine months ended September 30, 2021 which represented the fair value of the stock award on the grant date. Employee Stock Options In March 2021, the Company granted 0.1 million stock options under the Company’s 2017 Equity Incentive Plan to certain management of the Company. The stock options have an exercise price of $32.28 per option. The stock options expire in five years and vest over a four-year Fair market value $ 11.71 Exercise price $ 32.28 Risk free interest rate 0.45 % Expected term in years 3.46 Expected volatility 52.46 % Expected dividend yield — The following table summarizes the Company’s total stock option activity for the nine months ended September 30, 2021: Options (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Intrinsic Value Options outstanding as of January 1, 2021 2,234 $ 8.71 3.5 $ 54,133 Granted 55 32.28 — — Exercised (128 ) 8.14 — — Forfeited/cancelled (154 ) 8.56 — — Options outstanding as of September 30, 2021 2,007 $ 9.40 2.7 $ 24,056 Outstanding and exercisable stock options as of September 30, 2021 are as follows: Options Outstanding Options Exercisable Exercise Prices Number of Options Outstanding Weighted Number of Options Exercisable Weighted Intrinsic $ 5.75 210 2.4 121 2.4 $ 1,855 5.95 538 2.0 392 2.0 5,912 6.51 241 2.6 130 2.6 1,885 6.65 173 2.6 90 2.6 1,289 7.99 19 3. 2 8 3.2 106 8.17 24 0.2 24 0.2 310 8.32 187 2.8 72 2.8 912 8.55 179 3.0 86 3.0 1,072 12.76 25 3.5 9 3.5 77 13.12 174 3.5 68 3.3 540 15.12 3 3.6 1 3.6 7 21.70 179 4.0 — — — 32.28 55 4.5 — — — The following table summarizes the Company’s unvested stock option activity for the nine months ended September 30, 2021: Options Weighted Average Nonvested options as of January 1, 2021 1,568 $ 3.20 Granted 55 11.71 Vested (464 ) 2.18 Forfeited (154 ) 1.86 Nonvested options as of September 30, 2021 1,005 $ 4.33 The estimated fair value of Company stock options, less expected forfeitures, is amortized over the options vesting period on a straight-line basis. For the three and nine months ended September 30, 2021, the Company recognized stock option expense of $0.4 million and $1.3 million, respectively. The Company recorded stock option expense of $0.3 million and $0.9 million during the three and nine months ended September 30, 2020, respectively. As of September 30, 2021, outstanding stock options had $3.7 million of unrecognized stock compensation cost with a remaining recognition period of 2.0 years. Employee Restricted Stock Units During the first nine months of 2021, the Company granted 0.1 million of restricted stock units under the Company’s 2017 Equity Incentive Plan to certain management of the Company. Approximately half of the restricted stock units granted included a market vesting condition. The restricted stock awards that do not have the market vesting condition had a weighted average grant date fair value of $27.80 per share. The estimated fair value of these awards is recognized on a straight-line basis over the four-year vesting period. For those awards that include a market vesting condition, the estimated fair value of the restricted stock was measured on the grant date and incorporated the probability of vesting occurring. The estimated fair value is recognized over the derived service period (as determined by the valuation model), with such recognition occurring regardless of whether the market condition is met. The Company determined the weighted average grant date fair value of the awards with the market vesting condition to be $18.29 per share using a Monte Carlo Simulation of a Geometric Brownian Motion stock path model with the following weighted average assumptions: Trading price of common stock on measurement date $ 27.59 Risk free interest rate 0.34 % Expected life in years 2.6 Expected volatility 77.2 % Expected dividend yield — The following table summarizes the Company’s restricted stock unit activity for the nine months ended September 30, 2021: Number Weighted Average Nonvested restricted stock units as of January 1, 2021 — $ — Granted 111 23.39 Vested — — Forfeited — — Nonvested restricted stock units as of September 30, 2021 111 $ 23.39 The Company recorded restricted stock unit expense of $0.3 million and $0.3 million during the three and nine months ended September 30, 2021, respectively. There was no restricted stock unit expense recorded in 2020. InnoHold Incentive Units In January 2017, pursuant to the 2016 Equity Incentive Plan approved by InnoHold and Purple LLC that authorized the issuance of 12.0 million incentive units, Purple LLC granted 11.3 million incentive units to Purple Team LLC, an entity for the benefit of certain employees who were participants in that plan. In conjunction with the Business Combination, Purple Team LLC was merged into InnoHold with InnoHold being the surviving entity and the Purple Team LLC incentive units were cancelled and new incentive units were issued by InnoHold under its own limited liability company agreement (the “InnoHold Agreement”). On February 8, 2019, InnoHold initiated a tender offer to each of these incentive unit holders, some of which are current employees of Purple LLC, to distribute to each a pro rata number of 2.5 million Paired Securities held by InnoHold in exchange for the cancellation of their ownership interests in InnoHold. All InnoHold incentive unit holders accepted the offer, and the terms and distribution of each transaction were finalized and closed on June 25, 2019. At the closing of the tender offer, those incentive unit holders received, based on their pro rata holdings of InnoHold Class B Units, a portion of 2.5 million Paired Securities held by InnoHold. As of September 30, 2021, 0.4 million of the Paired Securities remain to be exchanged for Class A Stock by the incentive unit holders. Aggregate Non-Cash Stock-Based Compensation The Company has accounted for all stock-based compensation under the provisions of ASC 718 Compensation—Stock Compensation. This standard requires the Company to record a non-cash expense associated with the fair value of stock-based compensation over the requisite service period. The table below summarizes the aggregate non-cash stock-based compensation recognized in the statement of operations for stock awards, employee stock options and employee restricted stock units. (in thousands) Three Months Ended Nine Months Ended Non-Cash Stock-Based Compensation 2021 2020 2021 2020 Cost of revenues $ 119 $ 44 $ 208 $ 124 Marketing and sales 209 76 427 224 General and administrative 414 181 1,689 840 Research and development 23 46 33 371 Total non-cash stock-based compensation $ 765 $ 347 $ 2,357 $ 1,559 |
Employee Retirement Plan
Employee Retirement Plan | 9 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
Employee Retirement Plan | 17. Employee Retirement Plan In July 2018 the Company established a 401(k) plan that qualifies as a deferred compensation arrangement under Section 401 of the IRS Code. All eligible employees over the age of 18 and with 4 months’ service are eligible to participate in the plan. The plan provides for Company matching of employee contributions up to 5% of eligible earnings. Company contributions immediately vest. The Company’s matching contribution expense was $0.8 million and $0.5 million for the three months ended September 30, 2021 and 2020, respectively, and $2.3 million and $1.7 million for the nine months ended September 30, 2021 and 2020, respectively. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. Subsequent Events On October 11, 2021, Purple LLC sued The Sleep Company, an Indian private limited company, in Delhi High court case CS(COMM) 517/2021, for among other things infringement of Purple LLC’s intellectual property. On October 12, 2021, the Delhi High Court awarded Purple LLC a limited injunction against The Sleep Company for its infringement. Further legal proceedings are pending, and the Company intends to vigorously pursue its claims against The Sleep Company. On November 8, 2021, Purple LLC and Mattress Firm agreed to terminate the Master Retailer Agreement (the “Agreement”) dated September 18, 2018 between Purple and Mattress Firm. The Agreement was replaced by a new Master Retailer Agreement with terms consistent with the Company’s standard retailer agreement. The replacement agreement eliminates all of the prior exclusivity arrangements. On November 8, 2021, pursuant to the 2020 Credit Agreement, the Company provided notice to KeyBank National Association requesting a $55.0 million draw on the revolving line of credit, which represents the full amount available under the revolving line of credit. The initial borrowing rate will be 3.50%, based on the LIBOR floor of 0.5% plus 3.00%. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The Company consists of Purple Inc. and its consolidated subsidiary, Purple LLC. As of September 30, 2021, Purple Inc. held approximately 99% of the common units of Purple LLC and Purple LLC Class B Unit holders held approximately 1% of the common units in Purple LLC. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and reflect the financial position, results of operations and cash flows of the Company. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, these unaudited condensed consolidated financial statements should be read in conjunction with the 2020 audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K/A filed May 10, 2021. The unaudited condensed consolidated financial statements were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments (all of which were considered of normal recurring nature) considered necessary to present fairly the Company’s financial results. The results of the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2021 or for any other interim period or other future year. On December 31, 2020, the Company ceased to be an emerging growth company (“EGC”) and was no longer exempt from certain reporting requirements that apply to public companies. As an EGC prior to this date, Purple Inc. had elected to use extended transition periods available to private companies for complying with new or revised accounting standards. |
Variable Interest Entities | Variable Interest Entities Purple LLC is a variable interest entity (“VIE”). The Company determined that it is the primary beneficiary of Purple LLC as it is the sole managing member and has the power to direct the activities most significant to Purple LLC’s economic performance as well as the obligation to absorb losses and receive benefits that are potentially significant. At September 30, 2021, Purple Inc. had approximately a 99% economic interest in Purple LLC and consolidated 100% of Purple LLC’s assets, liabilities and results of operations in the Company’s unaudited condensed consolidated financial statements contained herein. The holders of Purple LLC Class B Units (the “Class B Units”) held approximately 1% of the economic interest in Purple LLC. For further discussion see Note 13 — Stockholders’ Equity. |
Reclassification | Reclassification Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. These reclassifications had no effect on net income (loss), cash flows or stockholders’ equity previously reported. |
Use of Estimates | Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires the Company to establish accounting policies and to make estimates and judgments that affect the reported amounts of assets and liabilities and disclose contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. The Company regularly makes significant estimates and assumptions including, but not limited to, estimates that affect revenue recognition, accounts receivable and allowance for doubtful accounts, valuation of inventories, cost of revenues, sales returns, warranty returns, warrant liability, stock based compensation, the recognition and measurement of loss contingencies, estimates of current and deferred income taxes, deferred income tax valuation allowances and amounts associated with the Company’s tax receivable agreement with InnoHold, LLC (“InnoHold”). Predicting future events is inherently an imprecise activity and, as such, requires the use of judgment. Actual results could differ materially from those estimates. |
Leases | Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (“ ”) The Company determines if an agreement contains a lease at the inception of a contract. For leases with an initial term greater than 12 months, a related lease liability is recorded on the balance sheet at the present value of future payments discounted at the estimated fully collateralized incremental borrowing rate (discount rate) corresponding with the lease term. In addition, a ROU asset is recorded as the initial amount of the lease liability, plus any lease payments made to the lessor before or at the lease commencement date and any initial direct costs incurred, less any tenant improvement allowance incentives received. The Company calculates the present value of future payments using its incremental borrowing rate when the discount rate implicit in the lease is not known. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. The Company determines the applicable incremental borrowing rate at the lease commencement date based on the rates of its secured borrowings, which is then adjusted for the appropriate lease term and risk premium. In determining the Company’s ROU assets and operating lease liabilities, the Company applies these incremental borrowing rates to the minimum lease payments within each lease agreement. Operating lease expense is recognized on a straight-line basis over the lease term. Tenant incentive allowances received from the lessor are amortized through the ROU asset as a reduction of rent expense over the lease term. Any variable lease costs are expensed as incurred. Leases with an initial term of 12 months or less (short-term leases) are not recorded as ROU assets and corresponding lease liabilities. Short-term lease expense is recognized on a straight-line basis over the lease term. ROU assets are assessed for impairment as part of the impairment of long-lived assets, which is performed whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. |
Revenue Recognition | Revenue Recognition The Company markets and sells its products through DTC online channels, retail brick-and-mortar wholesale partners, Company showrooms, and third-party online retailers. Revenue is recognized when the Company satisfies its performance obligations under the contract which is transferring the promised products to the customer. This principle is achieved in the following steps: Identify the contract with the customer. Identify the performance obligations in the contract Determine the transaction price Allocate the transaction price to performance obligations in the contract. Recognize revenue when or as we satisfy a performance obligation. |
Warrant Liabilities | Warrant Liabilities The Company accounted for its incremental loan warrants as liability warrants under the provisions of ASC 480 - Distinguishing Liabilities from Equity The Company accounted for its public warrants in accordance with ASC 815 – Derivatives and Hedging—Contracts in Entity’s Own Equity The Company accounts for its sponsor warrants in accordance with ASC 815, under which these warrants do not meet the criteria for equity classification and must be recorded as liabilities. Since the sponsor warrants meet the definition of a derivative as contemplated in ASC 815, these warrants are measured at fair value at inception and at each reporting date in accordance with ASC 820 with changes in fair value recognized in earnings in the period of change. The Company uses the Black Scholes model to determine the fair value of the liability associated with the sponsor warrants. The model uses key assumptions and inputs such as exercise price, fair market value of common stock, risk free interest rate, warrant life and expected volatility. At September 30, 2021, there were 1.9 million sponsor warrants outstanding. |
Fair Value Measurements | Fair Value Measurements The Company uses the fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are: Level 1—Quoted market prices in active markets for identical assets or liabilities; Level 2—Significant other observable inputs (e.g. quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable, such as interest rate and yield curves, and market-corroborated inputs); and Level 3—Unobservable inputs in which there is little or no market data, which require the reporting unit to develop its own assumptions. The classification of fair value measurements within the established three-level hierarchy is based upon the lowest level of input that is significant to the measurements. Financial instruments, although not recorded at fair value on a recurring basis include cash and cash equivalents, receivables, accounts payable and the Company’s debt obligations. The carrying amounts of cash and cash equivalents, receivables, accounts payable and accrued expenses approximate fair value because of the short-term nature of these accounts. The fair value of the Company’s debt instruments is estimated to be face value based on the contractual terms of the debt arrangements and market-based expectations. The public warrant liabilities are Level 1 instruments as they have quoted market prices in an active market. The sponsor and incremental loan warrant liabilities are Level 3 instruments and use internal models to estimate fair value using certain significant unobservable inputs which requires determination of relevant inputs and assumptions. Accordingly, changes in these unobservable inputs may have a significant impact on fair value. Such inputs include risk free interest rate, expected average life, expected dividend yield, and expected volatility. These Level 3 liabilities generally decrease (increase) in value based upon an increase (decrease) in risk free interest rate and expected dividend yield. Conversely, the fair value of these Level 3 liabilities generally increase (decrease) in value if the expected average life or expected volatility were to increase (decrease). The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: (In thousands) Level September 30, December 31, Sponsor warrants 3 $ 9,018 $ 92,708 All of the public warrants (a Level 1 fair value liability) and all of the incremental loan warrants (a Level 3 fair value liability) were exercised during 2020. The following table summarizes the Company’s total Level 3 liability activity for the nine months ended September 30, 2021 and 2020: (In thousands) Sponsor Incremental Total Level 3 Fair value as of December 31, 2020 $ 92,708 $ — $ 92,708 Fair value transfer to Level 1 measurement (64,321 ) — (64,321 ) Change in valuation inputs (1) (19,369 ) — (19,369 ) Fair value as of September 30, 2021 $ 9,018 $ — $ 9,018 Fair value as of December 31, 2019 $ 7,689 $ 21,622 $ 29,311 Fair value of warrants exercised (4,965 ) — (4,965 ) Change in valuation inputs (1) 57,434 43,308 100,742 Fair value as of September 30, 2020 $ 60,158 $ 64,930 $ 125,088 (1) Changes in valuation inputs are recognized in the change in fair value – warrant liabilities in the condensed consolidated statements of operations. |
Income Taxes | Income Taxes In calculating the provision for interim income taxes, in accordance with ASC Topic 740, an estimated annual effective tax rate is applied to year-to-date ordinary income. At the end of each interim period, the Company estimates the effective tax rate expected to be applicable for the full fiscal year. This differs from the method utilized at the end of an annual period. For annual periods, the Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that the deferred tax assets will be realized. Deferred tax assets and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the year of the enacted rate change. Our effective tax rate is primarily impacted by the allocation of income taxes to the noncontrolling interest and the non-taxable nature of the change in fair value of the warrant liability. The Company accounts for uncertainty in income taxes using a recognition and measurement threshold for tax positions taken or expected to be taken in a tax return, which are subject to examination by federal and state taxing authorities. The tax benefit from an uncertain tax position is recognized when it is more likely than not that the position will be sustained upon examination by taxing authorities based on technical merits of the position. The amount of the tax benefit recognized is the largest amount of the benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The effective tax rate and the tax basis of assets and liabilities reflect management’s estimates of the ultimate outcome of various tax uncertainties. The Company recognizes penalties and interest related to uncertain tax positions within the income tax benefit (expense) line in the accompanying condensed consolidated statements of operations. The Company files U.S. federal and certain state income tax returns. The income tax returns of the Company are subject to examination by U.S. federal and state taxing authorities for various time periods, depending on those jurisdictions’ rules, generally after the income tax returns are filed. |
Net Income (Loss) Per Share | Net Income (Loss) Per Share Basic net income (loss) per common share is calculated by dividing net income (loss) attributable to common shareholders by the weighted average number of shares of Class A Common Stock, par value $0.0001 per share (the “Class A Stock”), outstanding each period. Diluted net income (loss) per share adds to those shares the incremental shares that would have been outstanding and potentially dilutive assuming exchanges of the Company’s outstanding warrants, stock options and shares of Class B Common Stock, par value $0.0001 per share (the “Class B Stock”), for Class A Stock, and the vesting of unvested and restricted Class A Stock. An anti-dilutive impact represents an increase in net income per share or a reduction in net loss per share resulting from the conversion, exercise or contingent issuance of certain securities. The Company uses the “if-converted” method to determine the potential dilutive effect of conversions of its outstanding Class B Stock, and the treasury stock method to determine the potential dilutive effect of its outstanding warrants and stock options exercisable for shares of Class A Stock and the vesting of unvested Class A Stock. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Reference Rate Reform In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides guidance to alleviate the burden in accounting for reference rate reform by allowing certain expedients and exceptions in applying generally accepted accounting principles to contracts, hedging relationships, and other transactions impacted by reference rate reform. The provisions of ASU 2020-04 apply only to those transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. This standard is currently effective and upon adoption may be applied prospectively to contract modifications made on or before December 31, 2022, when the reference rate replacement activity is expected to be completed. The interest rate on the Company’s term loan is based on LIBOR. The Company plans to apply the amendments in this update to account for any contract modifications that result from changes in the reference rate used. The Company does not expect these amendments to have a material impact on its condensed consolidated financial statements and related disclosures. Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The new guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance is effective for fiscal years beginning after December 15, 2020 and for interim periods within those fiscal years. The adoption of this standard by the Company on January 1, 2021 did not have a material impact on the Company’s financial position, results of operations, or cash flows. Internal-Use Software In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350) (“ASU 2018-15”). The objective of ASU 2018-15 is to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with those incurred to develop or obtain internal-use software. The guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The amendments can be applied either retrospectively or prospectively. Because the Company lost its EGC status on December 31, 2020, the standard became effective for the Company for its annual period beginning January 1, 2020, and interim periods within the annual period beginning January 1, 2021. The Company elected to apply the amendments on a prospective basis. Adoption of this standard did not have a material impact on the Company’s financial position, results of operations, or cash flows. Measurement of Credit Losses In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which was further updated and clarified by the FASB through issuance of additional related ASUs. This guidance replaces the existing incurred loss impairment guidance and establishes a single allowance framework for financial assets carried at amortized cost based on expected credit losses. The estimate of expected credit losses requires the incorporation of historical information, current conditions, and reasonable and supportable forecasts. These updates are effective for public companies, excluding Smaller Reporting Companies (“SRC”), for annual periods beginning after December 15, 2019, including interim periods therein. The standard is effective for all other entities for annual periods beginning after December 15, 2022, including interim periods therein. Since the Company was considered an SRC on the deferral date of this standard, the guidance is effective for the Company’s interim and annual financial periods beginning January 1, 2023. ASU 2016-13 is to be applied utilizing a modified retrospective approach. The Company is currently evaluating the impact of this standard on its accounts receivable, cash and cash equivalents, and any other financial assets measured at amortized cost and do not expect that adoption will have a material impact on its consolidated financial statements or related disclosures. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of the fair value hierarchy of the valuation inputs the company utilized to determine such fair value | (In thousands) Level September 30, December 31, Sponsor warrants 3 $ 9,018 $ 92,708 |
Schedule of company’s total level 3 liability activity | (In thousands) Sponsor Incremental Total Level 3 Fair value as of December 31, 2020 $ 92,708 $ — $ 92,708 Fair value transfer to Level 1 measurement (64,321 ) — (64,321 ) Change in valuation inputs (1) (19,369 ) — (19,369 ) Fair value as of September 30, 2021 $ 9,018 $ — $ 9,018 Fair value as of December 31, 2019 $ 7,689 $ 21,622 $ 29,311 Fair value of warrants exercised (4,965 ) — (4,965 ) Change in valuation inputs (1) 57,434 43,308 100,742 Fair value as of September 30, 2020 $ 60,158 $ 64,930 $ 125,088 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenue disaggregated by sales channel and product | Three Months Ended Nine Months Ended Channel 2021 2020 2021 2020 Direct-to-consumer $ 112,863 $ 134,252 $ 353,985 $ 360,119 Wholesale partner 57,918 52,859 185,811 114,463 Revenues, net $ 170,781 $ 187,111 $ 539,796 $ 474,582 Three Months Ended Nine Months Ended Product 2021 2020 2021 2020 Bedding $ 156,077 $ 172,806 $ 494,628 $ 437,809 Other 14,704 14,305 45,168 36,773 Revenues, net $ 170,781 $ 187,111 $ 539,796 $ 474,582 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | September 30, December 31, 2021 2020 Raw materials $ 28,788 $ 26,372 Work-in-process 4,203 3,593 Finished goods 52,481 36,280 Inventory obsolescence reserve (1,427 ) (519 ) Inventories, net $ 84,045 $ 65,726 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | September 30, December 31, 2021 2020 Equipment $ 54,008 $ 30,508 Equipment in progress 19,099 18,648 Leasehold improvements 30,676 15,758 Furniture and fixtures 10,759 5,160 Office equipment 4,465 3,185 Total property and equipment 119,007 73,259 Accumulated depreciation (17,958 ) (11,773 ) Property and equipment, net $ 101,049 $ 61,486 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Schedule of lease costs | Three Months Ended Nine Months Ended 2021 2020 2021 2020 Operating lease costs $ 2,329 $ 1,530 $ 6,200 $ 4,005 Variable lease costs 819 6 1,396 32 Short-term lease costs 67 59 191 178 Total lease costs $ 3,215 $ 1,595 $ 7,787 $ 4,215 |
Schedule of undiscounted cash flows for each of the first five years and total remaining years to the operating lease liabilities | 2021 (excluding the nine months ended September 30, 2021) (1) $ (123 ) 2022 10,496 2023 10,211 2024 10,222 2025 10,186 Thereafter 70,391 Total operating lease payments 111,383 Less – lease payments representing interest (30,267 ) Present value of operating lease payments $ 81,116 |
Schedule of supplemental information related to the company’s consolidated statement of cash flows | Nine Months Ended 2021 2020 Cash paid for amounts included in present value of operating lease liabilities $ 1,824 $ 1,274 Right-of-use assets obtained in exchange for operating lease liabilities 23,751 15,821 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract] | |
Schedule of other current liabilities | September 30, December 31, 2021 2020 Warranty accrual – current portion $ 4,259 $ 2,806 Long-term debt – current portion 2,012 $ 2,004 Tax receivable agreement liability – current portion 5,847 6,545 Insurance financing 2,133 910 Other 780 1,318 Total other current liabilities $ 15,031 $ 13,583 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | September 30, December 31, 2021 2020 Term loan $ 42,750 $ 44,438 Less: unamortized debt issuance costs (839 ) (1,024 ) Total debt 41,911 43,414 Less: current portion of debt (2,012 ) (2,004 ) Long-term debt, net $ 39,899 $ 41,410 |
Warrant Liabilities (Tables)
Warrant Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Warrant Liabilities Table [Abstract] | |
Schedule of fair value of the incremental loan warrants | Trading price of common stock on measurement date $ 24.86 Exercise price $ — Risk free interest rate 0.16 % Warrant life in years 3.4 Expected volatility 51.30 % Expected dividend yield — Probability of warrant re-price 100.00 % |
Black Scholes Model [Member] | |
Warrant Liabilities Table [Abstract] | |
Schedule of fair value of the incremental loan warrants | September 30, 2021 2020 Trading price of common stock on measurement date $ 21.02 $ 24.86 Exercise price $ 5.75 $ 5.75 Risk free interest rate 0.09 % 0.13 % Warrant life in years 1.3 2.3 Expected volatility 34.99 % 46.90 % Expected dividend yield — — |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Other Longterm Liabilities [Abstract] | |
Schedule of other long-term liabilities | September 30, December 31, 2021 2020 Warranty accrual $ 13,135 $ 8,397 Other 950 912 Total 14,085 9,309 Less: current portion of warranty accrual (4,259 ) (2,806 ) Other long-term liabilities, net of current portion $ 9,826 $ 6,503 |
Net Income (Loss) Per Common _2
Net Income (Loss) Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Net Income (Loss) Per Common Share [Abstract] | |
Schedule of basic and diluted weighted average shares outstanding and earnings (loss) per share | Three Months Ended Nine Months Ended 2021 2020 2021 2020 Numerator: Net income (loss) attributable to Purple Innovation, Inc.-basic $ 2,171 $ (87,013 ) $ 25,573 $ (163,453 ) Less: Dilutive effect of change in fair value – warrant liabilities (5,362 ) — (19,369 ) — Less: Net loss attributed to noncontrolling interest (44 ) — — — Net income (loss) attributable to Purple Innovation, Inc.-diluted $ (3,235 ) $ (87,013 ) $ 6,204 $ (163,453 ) Denominator Weighted average shares—basic 66,335 44,266 65,741 32,117 Add: Dilutive effect of equity awards 504 — 2,578 — Add: Dilutive effect of Class B shares 448 — — — Weighted average shares—diluted 67,287 44,266 68,319 32,117 Net income (loss) per common share: Basic $ 0.03 $ (1.97 ) $ 0.39 $ (5.09 ) Diluted $ (0.05 ) $ (1.97 ) $ 0.09 $ (5.09 ) |
Equity Compensation Plans (Tabl
Equity Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of fair market value using Black-Scholes method | Fair market value $ 11.71 Exercise price $ 32.28 Risk free interest rate 0.45 % Expected term in years 3.46 Expected volatility 52.46 % Expected dividend yield — |
Schedule of total stock option activity | Options (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Years Intrinsic Value Options outstanding as of January 1, 2021 2,234 $ 8.71 3.5 $ 54,133 Granted 55 32.28 — — Exercised (128 ) 8.14 — — Forfeited/cancelled (154 ) 8.56 — — Options outstanding as of September 30, 2021 2,007 $ 9.40 2.7 $ 24,056 |
Schedule of outstanding and exercisable stock options | Options Outstanding Options Exercisable Exercise Prices Number of Options Outstanding Weighted Number of Options Exercisable Weighted Intrinsic $ 5.75 210 2.4 121 2.4 $ 1,855 5.95 538 2.0 392 2.0 5,912 6.51 241 2.6 130 2.6 1,885 6.65 173 2.6 90 2.6 1,289 7.99 19 3. 2 8 3.2 106 8.17 24 0.2 24 0.2 310 8.32 187 2.8 72 2.8 912 8.55 179 3.0 86 3.0 1,072 12.76 25 3.5 9 3.5 77 13.12 174 3.5 68 3.3 540 15.12 3 3.6 1 3.6 7 21.70 179 4.0 — — — 32.28 55 4.5 — — — |
Schedule of unvested stock option activity | Options Weighted Average Nonvested options as of January 1, 2021 1,568 $ 3.20 Granted 55 11.71 Vested (464 ) 2.18 Forfeited (154 ) 1.86 Nonvested options as of September 30, 2021 1,005 $ 4.33 |
Schedule of weighted average assumptions | Trading price of common stock on measurement date $ 27.59 Risk free interest rate 0.34 % Expected life in years 2.6 Expected volatility 77.2 % Expected dividend yield — |
Schedule restricted stock unit activity | Number Weighted Average Nonvested restricted stock units as of January 1, 2021 — $ — Granted 111 23.39 Vested — — Forfeited — — Nonvested restricted stock units as of September 30, 2021 111 $ 23.39 |
Schedule of total non-cash stock compensation | (in thousands) Three Months Ended Nine Months Ended Non-Cash Stock-Based Compensation 2021 2020 2021 2020 Cost of revenues $ 119 $ 44 $ 208 $ 124 Marketing and sales 209 76 427 224 General and administrative 414 181 1,689 840 Research and development 23 46 33 371 Total non-cash stock-based compensation $ 765 $ 347 $ 2,357 $ 1,559 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Economic interest | 99.00% | |
Interest rate | 1.00% | |
Liabilities percentage | 100.00% | |
Operating lease right of use assets (in Dollars) | $ 27.9 | |
Operating lease liabilities (in Dollars) | 33 | |
Pre-existing liabilities (in Dollars) | $ 5.1 | |
Sponsor warrants outstanding (in Shares) | 1.9 | |
Ultimate settlement | 50.00% | |
Purple Innovation Inc [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Economic interest | 99.00% | |
Interest rate | 1.00% | |
Class A Common Stock [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Class B Common Stock [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of the fair value hierarchy of the valuation inputs the company utilized to determine such fair value - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Level 3 [Member] | Sponsor Warrants [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of the fair value hierarchy of the valuation inputs the company utilized to determine such fair value [Line Items] | ||
Sponsor warrants | $ 9,018 | $ 92,708 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of company’s total level 3 liability activity - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | ||
Sponsor Warrants [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of company’s total level 3 liability activity [Line Items] | |||
Fair value as of beginning | $ 92,708 | $ 7,689 | |
Fair value of warrants exercised | (4,965) | ||
Change in valuation inputs | [1] | (19,369) | 57,434 |
Fair value as of ending | 9,018 | 60,158 | |
Incremental Loan Warrants [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of company’s total level 3 liability activity [Line Items] | |||
Fair value as of beginning | 21,622 | ||
Fair value of warrants exercised | |||
Change in valuation inputs | [1] | 43,308 | |
Fair value as of ending | 64,930 | ||
Total Level 3 Liabilities [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of company’s total level 3 liability activity [Line Items] | |||
Fair value as of beginning | 92,708 | 29,311 | |
Fair value of warrants exercised | (4,965) | ||
Fair value transfer to Level 1 measurement | (64,321) | ||
Change in valuation inputs | [1] | (19,369) | 100,742 |
Fair value as of ending | 9,018 | $ 125,088 | |
Level 1 [Member] | Sponsor Warrants [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of company’s total level 3 liability activity [Line Items] | |||
Fair value transfer to Level 1 measurement | (64,321) | ||
Level 1 [Member] | Incremental Loan Warrants [Member] | |||
Summary of Significant Accounting Policies (Details) - Schedule of company’s total level 3 liability activity [Line Items] | |||
Fair value transfer to Level 1 measurement | |||
[1] | Changes in valuation inputs are recognized in the change in fair value – warrant liabilities in the condensed consolidated statements of operations. |
Revenue from Contracts with C_3
Revenue from Contracts with Customers (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Customer prepayments | $ 9.3 | $ 6.3 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers (Details) - Schedule of revenue disaggregated by sales channel and product - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Channel [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues, net | $ 170,781 | $ 187,111 | $ 539,796 | $ 474,582 |
Product [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues, net | 170,781 | 187,111 | 539,796 | 474,582 |
Direct-to-consumer [Member] | Channel [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues, net | 112,863 | 134,252 | 353,985 | 360,119 |
Wholesale partner [Member] | Channel [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues, net | 57,918 | 52,859 | 185,811 | 114,463 |
Bedding [Member] | Product [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues, net | 156,077 | 172,806 | 494,628 | 437,809 |
Other [Member] | Product [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues, net | $ 14,704 | $ 14,305 | $ 45,168 | $ 36,773 |
Inventories (Details) - Schedul
Inventories (Details) - Schedule of inventories - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of inventories [Abstract] | ||
Raw materials | $ 28,788 | $ 26,372 |
Work-in-process | 4,203 | 3,593 |
Finished goods | 52,481 | 36,280 |
Inventory obsolescence reserve | (1,427) | (519) |
Inventories, net | $ 84,045 | $ 65,726 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 2.8 | $ 1.4 | $ 6.2 | $ 4 |
Capitalized interest | $ 0.6 | $ 0.8 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of property and equipment - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of property and equipment [Abstract] | ||
Equipment | $ 54,008 | $ 30,508 |
Equipment in progress | 19,099 | 18,648 |
Leasehold improvements | 30,676 | 15,758 |
Furniture and fixtures | 10,759 | 5,160 |
Office equipment | 4,465 | 3,185 |
Total property and equipment | 119,007 | 73,259 |
Accumulated depreciation | (17,958) | (11,773) |
Property and equipment, net | $ 101,049 | $ 61,486 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Leases (Details) [Line Items] | ||
Initial lease terms | 16 years | |
Lease term | 10 years | |
Finance lease right of use asset (in Dollars) | $ 0.7 | $ 0.6 |
Undiscounted cash flows (in Dollars) | 2.2 | |
Tenant improvement allowances (in Dollars) | $ 2.3 | |
Weighted-average remaining term of operating leases | 11 years 2 months 12 days | 11 years 9 months 18 days |
Weighted-average discount rate | 5.38% | 6.18% |
Minimum [Member] | Vehicles and Other Equipment [Member] | ||
Leases (Details) [Line Items] | ||
Lease term | 3 years | |
Maximum [Member] | Vehicles and Other Equipment [Member] | ||
Leases (Details) [Line Items] | ||
Lease term | 5 years |
Leases (Details) - Schedule of
Leases (Details) - Schedule of lease costs - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of lease costs [Abstract] | ||||
Operating lease costs | $ 2,329 | $ 1,530 | $ 6,200 | $ 4,005 |
Variable lease costs | 819 | 6 | 1,396 | 32 |
Short-term lease costs | 67 | 59 | 191 | 178 |
Total lease costs | $ 3,215 | $ 1,595 | $ 7,787 | $ 4,215 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of undiscounted cash flows for each of the first five years and total remaining years to the operating lease liabilities $ in Thousands | Sep. 30, 2021USD ($) | |
Schedule of undiscounted cash flows for each of the first five years and total remaining years to the operating lease liabilities [Abstract] | ||
2021 (excluding the nine months ended September 30, 2021) | $ (123) | [1] |
2022 | 10,496 | |
2023 | 10,211 | |
2024 | 10,222 | |
2025 | 10,186 | |
Thereafter | 70,391 | |
Total operating lease payments | 111,383 | |
Less – lease payments representing interest | (30,267) | |
Present value of operating lease payments | $ 81,116 | |
[1] | Amount consists of $2.2 million of undiscounted cash flows offset by $2.3 million of tenant improvement allowances which are expected to be fully utilized in fiscal 2021. |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of supplemental information related to the company’s consolidated statement of cash flows - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Schedule of supplemental information related to the company’s consolidated statement of cash flows [Abstract] | ||
Cash paid for amounts included in present value of operating lease liabilities | $ 1,824 | $ 1,274 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 23,751 | $ 15,821 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - Schedule of other current liabilities - Other Current Liabilities [Member] - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Other Current Liabilities (Details) - Schedule of other current liabilities [Line Items] | ||
Warranty accrual – current portion | $ 4,259 | $ 2,806 |
Long-term debt – current portion | 2,012 | 2,004 |
Tax receivable agreement liability – current portion | 5,847 | 6,545 |
Insurance financing | 2,133 | 910 |
Other | 780 | 1,318 |
Total other current liabilities | $ 15,031 | $ 13,583 |
Debt (Details)
Debt (Details) - USD ($) $ in Millions | Sep. 03, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 |
Debt (Details) [Line Items] | ||||
Principal amount | $ 45 | |||
Amount of revolving line of credit | 55 | |||
Line of credit interest rate, description | The borrowing rates for the term loan are based on Purple LLC’s leverage ratio, as defined in the 2020 Credit Agreement, and can range from LIBOR plus a 3.00% to 3.75% margin with a LIBOR minimum of 0.50%. The initial borrowing rate of 3.50% is based on LIBOR plus 3.00%. The term loan will be repaid in accordance with a five-year amortization schedule and may be prepaid in whole or in part at any time without premium or penalty, subject to reimbursement of certain costs. | |||
Interest expense | $ 0.2 | $ 0.2 | ||
Related Party Loan [Member] | ||||
Debt (Details) [Line Items] | ||||
Interest expense | $ 1 | $ 3.8 | ||
Total amount paid for the retirement | 45 | |||
Original principal payment | 25 | |||
Fair value of the incremental loan | 10 | |||
Paid-in-kind interest | 6.6 | |||
Prepayment fee | 2.5 | |||
Accrued interest | 0.9 | |||
Loss on extinguishment of debt | $ 5.8 | |||
2020 Credit Agreement [Member] | Minimum [Member] | ||||
Debt (Details) [Line Items] | ||||
Interest rates, percentage | 3.00% | 3.00% | ||
2020 Credit Agreement [Member] | Maximum [Member] | ||||
Debt (Details) [Line Items] | ||||
Interest rates, percentage | 3.75% | 3.75% | ||
2020 Credit Agreement [Member] | ||||
Debt (Details) [Line Items] | ||||
Amount of revolving line of credit | $ 55 | $ 55 | ||
Long term debt term | 5 years | 5 years | ||
Debt issuance costs | $ 2.5 | |||
Issuance cost related to debt | 1.1 | |||
Interest expense | $ 0.5 | 1.6 | ||
2020 Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||
Debt (Details) [Line Items] | ||||
Debt issuance costs | $ 1.4 |
Debt (Details) - Schedule of lo
Debt (Details) - Schedule of long-term debt - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of long-term debt [Abstract] | ||
Term loan | $ 42,750 | $ 44,438 |
Less: unamortized debt issuance costs | (839) | (1,024) |
Total debt | 41,911 | 43,414 |
Less: current portion of debt | (2,012) | (2,004) |
Long-term debt, net | $ 39,899 | $ 41,410 |
Warrant Liabilities (Details)
Warrant Liabilities (Details) - USD ($) shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Feb. 26, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Nov. 09, 2020 | |
Warrant Liabilities (Details) [Line Items] | ||||||
Recognized losses | $ 18 | $ 43.3 | ||||
Warrants exercised (in Shares) | 6.6 | 6.6 | ||||
Issuance of shares (in Shares) | 2.3 | 2.3 | ||||
Warrants outstanding (in Shares) | 1.9 | 1.9 | ||||
Fair value | $ 9 | $ 9 | ||||
Change in fair value – warrant liabilities | $ 5.4 | $ 19.4 | ||||
Warrants [Member] | ||||||
Warrant Liabilities (Details) [Line Items] | ||||||
Amended and restated credit agreement, description | two of the lenders who originally financed the Related Party loan (the “Incremental Lenders”) funded a $10.0 million increase in the loan and received 2.6 million warrants (“Incremental Loan Warrants”) to purchase 2.6 million shares of the Company’s Class A Stock at a price of $5.74 per share, subject to certain adjustments. In May 2020, Tony Pearce or Terry Pearce individually or together ceased to beneficially own at least 50% of the voting securities of the Company. As a result, the exercise price of the warrants was reduced to zero based on the formula established in the agreement. The Company accounted for the Incremental Loan Warrants as liabilities in accordance with ASC 480 - Distinguishing Liabilities from Equity and recorded them at fair value on the date of the transaction and subsequently re-measured to fair value at each reporting date with changes in the fair value included in earnings. | |||||
Sponsor [Member] | ||||||
Warrant Liabilities (Details) [Line Items] | ||||||
Recognized losses | $ 86 | $ 169.3 | ||||
Class A Common Stock [Member] | ||||||
Warrant Liabilities (Details) [Line Items] | ||||||
Shares issued (in Shares) | 2.6 |
Warrant Liabilities (Details) -
Warrant Liabilities (Details) - Schedule of fair value of the incremental loan warrants | 9 Months Ended |
Sep. 30, 2021$ / shares | |
Schedule of fair value of the incremental loan warrants [Abstract] | |
Trading price of common stock on measurement date (in Dollars per share) | $ 24.86 |
Exercise price (in Dollars per share) | |
Risk free interest rate | 0.16% |
Warrant life in years | 3 years 4 months 24 days |
Expected volatility | 51.30% |
Expected dividend yield | |
Probability of warrant re-price | 100.00% |
Warrant Liabilities (Details)_2
Warrant Liabilities (Details) - Schedule of fair value of the incremental loan warrants - Black Scholes Model [Member] - $ / shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Warrant Liabilities (Details) - Schedule of fair value of the incremental loan warrants [Line Items] | ||
Trading price of common stock on measurement date (in Dollars per share) | $ 21.02 | $ 24.86 |
Exercise price (in Dollars per share) | $ 5.75 | $ 5.75 |
Risk free interest rate | 0.09% | 0.13% |
Warrant life in years | 1 year 3 months 18 days | 2 years 3 months 18 days |
Expected volatility | 34.99% | 46.90% |
Expected dividend yield |
Other Long-Term Liabilities (De
Other Long-Term Liabilities (Details) - Schedule of other long-term liabilities - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of other long-term liabilities [Abstract] | ||
Warranty accrual | $ 13,135 | $ 8,397 |
Other | 950 | 912 |
Total | 14,085 | 9,309 |
Less: current portion of warranty accrual | (4,259) | (2,806) |
Other long-term liabilities, net of current portion | $ 9,826 | $ 6,503 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ / shares in Units, shares in Millions, $ in Millions | Oct. 13, 2020 | Sep. 09, 2019CAD ($) | Sep. 20, 2019USD ($) | Feb. 28, 2018 | Oct. 31, 2017 | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020shares | May 21, 2021USD ($)$ / sharesshares | Nov. 09, 2020shares | Sep. 09, 2020shares | May 14, 2020shares | Nov. 08, 2019shares |
Commitments and Contingencies (Details) [Line Items] | ||||||||||||
Required member distributions, percentage | 45.00% | |||||||||||
Tax liability (in Dollars) | $ 1 | |||||||||||
Service agreement, description | the Company entered into an electric service agreement with the local power company in Grantsville, Utah. The agreement provided for the construction and installation of certain utility improvements to provide increased power capacity to the manufacturing and warehouse facility in Grantsville, Utah. The Company prepaid $0.5 million related to the improvements and agreed to a minimum contract billing amount over a 15-year period based on regulated rate schedules and changes in actual demand during the billing period. The agreement includes an early termination clause that requires the Company to pay a pro-rata termination charge if the Company terminates within the first 10 years of the service start date. The original early termination charge was $1.3 million and is reduced annually on a straight-line basis over the 10-year period. | |||||||||||
Termination penalty (in Dollars) | $ 0.8 | |||||||||||
Subscription agreement and preemptive rights, description | in connection with the Business Combination, the Company entered into a subscription agreement with Coliseum Capital Partners (“CCP”) and Blackwell Partners LLC – Series A (“Blackwell”), pursuant to which CCP and Blackwell agreed to purchase from the Company an aggregate of 4.0 million shares of Class A Stock at a purchase price of $10.00 per share (the “Coliseum Private Placement”). In connection with the Coliseum Private Placement, the Sponsor assigned (i) an aggregate of 1.3 million additional shares of Class A Stock to CCP and Blackwell and (ii) an aggregate of 3.3 million warrants to purchase 1.6 million shares of Class A Stock to CCP, Blackwell, and Coliseum Co-Invest Debt Fund, L.P. (“CDF”). The subscription agreement provides CCP and Blackwell with preemptive rights with respect to future sales of the Company’s securities. It also provides them with a right of first refusal with respect to certain debt and preferred equity financings by the Company. The Company also entered into a registration rights agreement with CCP, Blackwell, and CDF, providing for the registration of the shares of Class A Stock issued and assigned to CCP and Blackwell in the Coliseum Private Placement, as well as the shares of Class A Stock underlying the warrants received by CCP, Blackwell and CDF. The Company has filed a registration statement with respect to such securities. | |||||||||||
Share price (in Dollars per share) | $ / shares | $ 27.59 | |||||||||||
Security for perfect sense’s costs (in Dollars) | $ 15,000 | |||||||||||
Paid for duties (in Dollars) | $ 7 | |||||||||||
Damages, description | Purple seeks monetary damages, injunctive relief, and declaratory judgment based on certain conduct by ReST (“Case I”). On October 21, 2020, shortly after the complaint was filed in Case I, ReST filed a retaliatory lawsuit against Purple LLC, Gary DiCamillo, Adam Gray, Joseph Megibow, Terry Pearce, and Tony Pearce, also in the United States District Court for the District of Utah (“Case II”). Subsequently, the two cases were consolidated into one. Case II (now combined with Case I) involves many of the same facts and transactions as Case I. On January 19, 2021, ReST filed a motion to compel arbitration of the claims in Case I. Purple LLC opposed the motion to compel arbitration, arguing that ReST waived any rights they may have had to arbitration and that all the claims in both cases should stay in the courts. However, the Court granted ReST’s motion to compel arbitration, and stayed the proceedings in the United States District Court for the District of Utah. Additionally, the Court ruled that ReST’s claims against the Purple board members were not subject to arbitration, and the Court stayed ReST’s claims against those individuals. Pursuant to the Court’s order, Purple filed a demand for arbitration with the American Arbitration Association (the “AAA”) on September 1, 2021. ReST filed its counterclaim with the AAA on September 21, 2021. The parties are currently working with the AAA to select an arbitrator for the arbitration hearing. No date for the arbitration hearing has been set. Purple LLC seeks over $4 million in damages from ReST, whereas ReST claims that Purple is liable to it for tens of millions of dollars. The outcome of this litigation cannot be predicted at this early stage. However, Purple intends to vigorously pursue its claims and defend against the claims made by ReST.On November 19, 2020, Purple LLC sued Advanced Comfort Technologies, Inc., dba Intellibed (“Intellibed”) in the U.S. District Court for the District of Utah for patent infringement, trademark infringement, trade secret misappropriation, and a number of related state law based claims. The principal allegations are that Intellibed has manufactured and sold unauthorized, infringing products under the Sleepy’s brand name owned by third-party Mattress Firm. Purple LLC also requested declaratory relief related to certain assignment terms of a license agreement in which Purple LLC is the licensor and Intellibed is the licensee. On December 14, 2020, Intellibed filed a motion to dismiss Counts I through XI of Purple LLC’s Complaint on the ground that these Counts fail to state a claim upon which relief can be granted. On December 15, 2020, Intellibed filed an Answer to Purple LLC’s complaint and also asserted against Purple LLC a total of eight counterclaims, including a number of declaratory judgment claims, breach of contract, and tortious interference claims. Intellibed’s main allegations are that its use of Purple LLC’s patents, trademark, and trade secrets in connection with Mattress Firm’s Sleepy’s products is authorized under the license agreement. On January 19, 2021, Purple LLC filed a motion to dismiss Intellibed’s fifth, sixth, seventh, and eighth counterclaims on the ground that these counterclaims fail to state a claim upon which relief can be granted. | |||||||||||
Class A Common Stock [Member] | ||||||||||||
Commitments and Contingencies (Details) [Line Items] | ||||||||||||
Shares issued | shares | 7.3 | 2.6 | 16.8 | 12.4 | 11.5 | |||||||
Share price (in Dollars per share) | $ / shares | $ 30 | |||||||||||
Underwriting discount and commission (in Dollars) | $ 7.9 | |||||||||||
Securities exchanged for shares | shares | 0.1 | 30.8 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Sep. 03, 2020 | Aug. 14, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2018 | May 21, 2021 | Nov. 09, 2020 | Sep. 09, 2020 | May 31, 2020 | May 14, 2020 | Nov. 08, 2019 |
Related Party Transactions (Details) [Line Items] | |||||||||||||
Principal amount | $ 25 | ||||||||||||
Amended and restated credit agreement, description | the Sponsor agreed to assign to the Lenders an aggregate of 2.5 million warrants to purchase 1.3 million shares of its Class A Stock. In 2019, the Incremental Lenders funded a $10.0 million increase in the Related Party Loan and were granted 2.6 million warrants to purchase 2.6 million shares of the Company’s Class A Stock at a price of $5.74 per share, subject to certain adjustments. In accordance with an amendment to the Related Party Loan dated March 27, 2020, the Company did not make any cash interest payments to the Lenders during the first and second quarters of 2020. On September 3, 2020, the Company paid $45.0 million to retire, in full, the Related Party Loan. The payment included the $25.0 million original loan under the agreement, $10.0 million for the subsequent incremental loan, $6.6 million of paid-in-kind interest, $2.5 million in a prepayment fee and $0.9 million in accrued interest. | ||||||||||||
Business combination purchase share (in Shares) | 4 | ||||||||||||
Subscription agreement, description | (i) an aggregate of 1.3 million additional shares of Class A Stock to CCP and Blackwell and (ii) an aggregate of 3.3 million warrants to purchase 1.6 million shares of Class A Stock to CCP, Blackwell, and CDF. The subscription agreement provides CCP and Blackwell with preemptive rights with respect to future sales of the Company’s securities. It also provides them with a right of first refusal with respect to certain debt and preferred equity financings by the Company. | ||||||||||||
Consideration of license agreement amount | $ 8.5 | ||||||||||||
Merger agreement description | In connection with the Business Combination, to secure payment of a certain portion of specified post-closing indemnification rights of the Company under the Merger Agreement, 0.5 million shares of Class B Stock and 0.5 million Class B Units otherwise issuable to InnoHold as equity consideration were deposited in an escrow account for up to three years from the date of the Business Combination pursuant to a contingency escrow agreement. In September 2020, an amendment to the escrow agreement was signed whereby the 0.5 million shares of Class B Stock and 0.5 million Class B Units held in escrow were exchanged for $5.0 million. On February 3, 2021, the Company received $4.1 million from InnoHold as reimbursement for amounts that qualified for indemnification from the $5.0 million being held in escrow. The remaining $0.9 million in escrow was returned to InnoHold. The amount received from InnoHold was recorded as additional paid-in capital in the condensed consolidated balance sheet. | ||||||||||||
TNT [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Rent Expanse | $ 0.2 | $ 0.2 | $ 0.7 | $ 0.7 | |||||||||
InnoHold [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Number of paired securities exchanged (in Shares) | 0.1 | ||||||||||||
Third Purple LLC Agreement [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Tax distribution | $ 0.4 | ||||||||||||
Coliseum Private Placement [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Purchase price per share (in Dollars per share) | $ 10 | ||||||||||||
Warrant Agreement [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Voting securities percentage | 50.00% | ||||||||||||
Class A Common Stock [Member] | |||||||||||||
Related Party Transactions (Details) [Line Items] | |||||||||||||
Shares issued (in Shares) | 7.3 | 2.6 | 16.8 | 12.4 | 11.5 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 09, 2020 | Nov. 30, 2020 | May 31, 2020 | Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2018 |
Stockholders' Equity (Details) [Line Items] | |||||||
Preferred stock shares authorized | 5,000,000 | 5,000,000 | |||||
Preferred stock par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | |||||
Warranty, description | a warrant holder may exercise its warrants only for a whole number of shares of the Class A Stock. For example, if a warrant holder holds one warrant to purchase one-half of one share of Class A Stock, such warrant will not be exercisable. If a warrant holder holds two warrants, such warrants will be exercisable for one share of the Class A Stock. In no event will the Company be required to net cash settle any warrant. The warrants have a five-year term which commenced on March 2, 2018, 30 days after the completion of the Business Combination, and will expire on February 2, 2023, or earlier upon redemption or liquidation. | ||||||
Redemption price per warrant (in Dollars per share) | $ 0.01 | ||||||
Purple LLC [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Percentage of noncontrolling interest | 1.00% | 1.00% | 82.00% | ||||
Public warrants [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Redemption price per warrant (in Dollars per share) | $ 0.01 | ||||||
Sponsor Warrants [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Warrants, description | Each of the Company’s warrants entitles the registered holder to purchase one-half of one share of the Company’s Class A Stock at a price of $5.75 per half share ($11.50 per full share), subject to adjustment pursuant to the terms of the warrant agreement. | ||||||
Warrants were exercised | 6,600,000 | ||||||
Warrants outstanding | 1,900,000 | ||||||
Public and Sponsor Warrants [Member] | Public warrants [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Warrants issued | 15,500,000 | ||||||
Public and Sponsor Warrants [Member] | Sponsor Warrants [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Warrants issued | 12,800,000 | ||||||
Tony Pearce [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Warrants, description | beneficially own at least 50% of the voting securities of the Company. As a result, the exercise price of the warrants was reduced to zero based on the formula established in the agreement. | ||||||
Class A common stock [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Common stock authorized | 210,000,000 | 210,000,000 | 210,000,000 | ||||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Common stock, shares outstanding | 66,449,000 | 66,449,000 | 63,914,000 | ||||
Shares issued to Subject to vesting and forfeiture | 1,300,000 | 1,300,000 | |||||
Common stocks, description | The shares of Class A Stock subject to vesting will be forfeited eight years from the Closing, unless any of the following events (each a “Triggering Event”) occurs prior to that time:(i) the closing price of the Class A Stock on the principal exchange on which it is listed is at or above $12.50 for 20 trading days over a thirty trading day period (subject to certain adjustments), (ii) a change of control of the Company, (iii) a “going private” transaction by the Company pursuant to Rule 13e-3 under the Exchange Act or such other time as the Company ceases to be subject to the reporting obligations under Section 13 or 15(d) of the Exchange Act, or (iv) the time that the Company’s Class A Stock ceases to be listed on a national securities exchange. During fiscal 2020, a Triggering Event occurred as the closing price of the Class A Stock on the principal exchange on which it is listed was at or above $12.50 for 20 trading days over a thirty-trading day period. Accordingly, these shares of Class A Stock are no longer subject to vesting or forfeiture. | ||||||
Common stock shares issued | 66,449,000 | 66,449,000 | 63,914,000 | ||||
Warrants, description | In addition, with respect to the sponsor warrants, so long as such sponsor warrants are held by the Sponsor or its permitted transferee, the holder may elect to exercise the sponsor warrants on a cashless basis, by surrendering their sponsor warrants for that number of shares of Class A Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A Stock underlying the sponsor warrants, multiplied by the difference between the exercise price of the Sponsor Warrants and the “fair market value” (defined below), by (y) the fair market value. The “fair market value” means the average reported last sale price of the Class A Stock for the 10 trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent. | ||||||
Warrants expiration date, description | The Company may call the warrants for redemption if the reported last sale price of the Class A Stock equals or exceeds $24.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sends the notice of redemption to the warrant holders; provided, however, that the sponsor warrants are not redeemable by the Company so long as they are held by the Sponsor or its permitted transferees. | ||||||
Incremental loan amount (in Dollars) | $ 2.6 | $ 2.6 | |||||
Purchase warrants, shares | 2,600,000 | ||||||
Warrants to purchase of common stock price per share (in Dollars per share) | $ 5.74 | ||||||
Class A common stock [Member] | Sponsor Warrants [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Shares issued | 2,300,000 | ||||||
Class A common stock [Member] | Incremental Loan Warrants [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Shares issued | 2,600,000 | ||||||
Class B Common Stock [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Common stock authorized | 90,000,000 | 90,000,000 | 90,000,000 | ||||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Common stock, shares outstanding | 448,000 | 448,000 | 536,000 | ||||
Common stock shares issued | 448,000 | 448,000 | 536,000 | ||||
Class B Common Stock [Member] | InnoHold [Member] | |||||||
Stockholders' Equity (Details) [Line Items] | |||||||
Common stock shares issued | 44,100,000 | 44,100,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | |
Income Taxes (Details) [Line Items] | |||
Additional valuation allowance | $ 18.8 | $ 44.3 | |
Income tax, description | As a result, $35.5 million of the valuation allowance associated with the Company’s federal and state deferred tax assets was released during 2020 and recorded as an income tax benefit. The deferred tax assets at September 30, 2021 totaled $214.0 million, which is net of a $70.8 million valuation allowance that has been recorded against the residual outside partnership basis for the amount the Company believes is not more likely than not realizable. | ||
Deferred tax asset, valuation allowance | $ 35.5 | ||
Annual effective income tax rate | 7.53% | ||
Federal rate percentage | 21.00% | ||
Income tax expense | $ 1 | ||
Effective tax rate percentage | 3.77% | ||
Estimated future cash tax savings percent, description | As noncontrolling interest holders exercise their right to exchange or cause Purple LLC to redeem all or a portion of their Class B Units, a tax receivable agreement liability may be recorded based on 80% of the estimated future cash tax savings that the Company may realize as a result of increases in the basis of the assets of Purple LLC attributed to the Company as a result of such exchange or redemption. | ||
InnoHold [Member] | |||
Income Taxes (Details) [Line Items] | |||
Tax receivable agreement, percentage | 80.00% | ||
Corporate Taxpayers [Member] | |||
Income Taxes (Details) [Line Items] | |||
Income tax, description | Corporate taxpayers may carryback net operating losses (NOLs) originating during 2018 through 2020 for up to five years, which was not previously allowed under the 2017 Tax Act. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for tax years beginning January 1, 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act. | ||
Tax Receivable Agreement [Member] | |||
Income Taxes (Details) [Line Items] | |||
Tax receivable agreement, description | As a result of the initial merger transaction and the subsequent exchanges of Class B Units for Class A Stock, the potential future tax receivable agreement liability is $171.5 million. Of the tax receivable agreement liability recorded during the nine months ended September 30, 2021, $0.8 million relates to current year exchanges and was recorded as an adjustment to stockholders’ equity and $0.6 million was recorded as income in the condensed consolidated statement of operations to reflect the impact of recording the 2020 provision to return adjustments. |
Net Income (Loss) Per Common _3
Net Income (Loss) Per Common Share (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net Income (Loss) Per Common Share (Details) [Line Items] | ||||
Excluded shares of paired securities convertible into shares | 1.3 | |||
Class A common stock [Member] | ||||
Net Income (Loss) Per Common Share (Details) [Line Items] | ||||
Excluded shares of paired securities convertible into shares | 10 | 0.5 | 21.6 | |
Shares issuable upon conversion of warrants and stock options | 10.4 | 7.1 |
Net Income (Loss) Per Common _4
Net Income (Loss) Per Common Share (Details) - Schedule of basic and diluted weighted average shares outstanding and earnings (loss) per share - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator: | ||||
Net income (loss) attributable to Purple Innovation, Inc.-basic | $ 2,171 | $ (87,013) | $ 25,573 | $ (163,453) |
Less: Dilutive effect of change in fair value – warrant liabilities | (5,362) | (19,369) | ||
Less: Net loss attributed to noncontrolling interest | (44) | |||
Net income (loss) attributable to Purple Innovation, Inc.-diluted | $ (3,235) | $ (87,013) | $ 6,204 | $ (163,453) |
Denominator | ||||
Weighted average shares—basic | 66,335 | 44,266 | 65,741 | 32,117 |
Add: Dilutive effect of equity awards | 504 | 2,578 | ||
Add: Dilutive effect of Class B shares | 448 | |||
Weighted average shares—diluted | 67,287 | 44,266 | 68,319 | 32,117 |
Net income (loss) per common share: | ||||
Basic | $ 0.03 | $ (1.97) | $ 0.39 | $ (5.09) |
Diluted | $ (0.05) | $ (1.97) | $ 0.09 | $ (5.09) |
Equity Compensation Plans (Deta
Equity Compensation Plans (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | Feb. 08, 2019 | May 31, 2021 | Jan. 31, 2017 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Mar. 31, 2021 |
Equity Compensation Plans (Details) [Line Items] | ||||||||
Expense | $ 0.6 | |||||||
Stock option expiration period | 5 years | |||||||
Options expiry period | 4 years | |||||||
Stock-based compensation expense | $ 0.4 | $ 0.3 | $ 1.3 | $ 0.9 | ||||
Restricted stock units | 100 | |||||||
Grant date fair value | $ 0 | |||||||
Weighted average grant | $ 18.29 | |||||||
Restricted stock unit expense | $ 0.3 | $ 0.3 | ||||||
Aggregate shares of common stock, granted | 111 | |||||||
InnoHold [Member] | ||||||||
Equity Compensation Plans (Details) [Line Items] | ||||||||
Paired securities held by InnoHold | 2,500 | |||||||
Employee Stock Option [Member] | ||||||||
Equity Compensation Plans (Details) [Line Items] | ||||||||
Aggregate of shares remain available for issuance | 1,800 | 1,800 | 100 | |||||
2016 Equity Incentive Plan [Member] | InnoHold [Member] | ||||||||
Equity Compensation Plans (Details) [Line Items] | ||||||||
Aggregate shares of common stock | 12,000 | |||||||
Aggregate shares of common stock, granted | 11,300 | |||||||
Employee Stock Option [Member] | ||||||||
Equity Compensation Plans (Details) [Line Items] | ||||||||
Exercise price per option | $ 32.28 | |||||||
Unrecognized compensation cost | $ 3.7 | |||||||
Remaining recognition period | 2 years | |||||||
Class B Common Stock [Member] | InnoHold [Member] | ||||||||
Equity Compensation Plans (Details) [Line Items] | ||||||||
Paired securities held by InnoHold | 2,500 | |||||||
Class A Common Stock [Member] | ||||||||
Equity Compensation Plans (Details) [Line Items] | ||||||||
Paired securities held by InnoHold | 400 |
Equity Compensation Plans (De_2
Equity Compensation Plans (Details) - Schedule of fair market value using Black-Scholes method - Employee Stock [Member] | 9 Months Ended |
Sep. 30, 2021USD ($)$ / shares | |
Equity Compensation Plans (Details) - Schedule of fair market value using Black-Scholes method [Line Items] | |
Fair market value | $ 11.71 |
Exercise price | $ 32.28 |
Risk free interest rate | 0.45% |
Expected term in years | 3 years 5 months 15 days |
Expected volatility | 52.46% |
Expected dividend yield | $ |
Equity Compensation Plans (De_3
Equity Compensation Plans (Details) - Schedule of total stock option activity $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Schedule of total stock option activity [Abstract] | |
Options outstanding as of beginning | shares | 2,234 |
Weighted Average Exercise Price, Options outstanding as of January 1, 2021 | $ / shares | $ 8.71 |
Weighted Average Remaining Contractual Term in Years, Options outstanding as of January 1, 2021 | 3 years 6 months |
Intrinsic Value, Options outstanding as of January 1, 2021 | $ | $ 54,133 |
Options, Granted | shares | 55 |
Weighted Average Exercise Price, Granted | $ / shares | $ 32.28 |
Intrinsic Value, Granted | $ | |
Options, Exercised | shares | (128) |
Weighted Average Exercise Price, Exercised | $ / shares | $ 8.14 |
Intrinsic Value, Exercised | $ | |
Options, Forfeited/cancelled | shares | (154) |
Weighted Average Exercise Price, Forfeited/cancelled | $ / shares | $ 8.56 |
Intrinsic Value, Forfeited/cancelled | $ | |
Options outstanding as of ending | shares | 2,007 |
Weighted Average Exercise Price, Options outstanding as of June 30, 2021 | $ / shares | $ 9.4 |
Weighted Average Remaining Contractual Term in Years, Options outstanding as of June 30, 2021 | 2 years 8 months 12 days |
Intrinsic Value, outstanding, Options outstanding as of June 30, 2021 | $ | $ 24,056 |
Equity Compensation Plans (De_4
Equity Compensation Plans (Details) - Schedule of outstanding and exercisable stock options $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
5.75 [Member] | |
Equity Compensation Plans (Details) - Schedule of outstanding and exercisable stock options [Line Items] | |
Options Outstanding, Exercise Prices | $ / shares | $ 5.75 |
Options Outstanding Number of Options Outstanding | 210 |
Options Outstanding Weighted Average Remaining Life (Years) | 2 years 4 months 24 days |
Options Exercisable, Number of Options Exercisable | 121 |
Options Exercisable, Weighted Average Remaining Life (Years) | 2 years 4 months 24 days |
Options Exercisable, Intrinsic Value | $ | $ 1,855 |
5.95 [Member] | |
Equity Compensation Plans (Details) - Schedule of outstanding and exercisable stock options [Line Items] | |
Options Outstanding, Exercise Prices | $ / shares | $ 5.95 |
Options Outstanding Number of Options Outstanding | 538 |
Options Outstanding Weighted Average Remaining Life (Years) | 2 years |
Options Exercisable, Number of Options Exercisable | 392 |
Options Exercisable, Weighted Average Remaining Life (Years) | 2 years |
Options Exercisable, Intrinsic Value | $ | $ 5,912 |
6.51 [Member] | |
Equity Compensation Plans (Details) - Schedule of outstanding and exercisable stock options [Line Items] | |
Options Outstanding, Exercise Prices | $ / shares | $ 6.51 |
Options Outstanding Number of Options Outstanding | 241 |
Options Outstanding Weighted Average Remaining Life (Years) | 2 years 7 months 6 days |
Options Exercisable, Number of Options Exercisable | 130 |
Options Exercisable, Weighted Average Remaining Life (Years) | 2 years 7 months 6 days |
Options Exercisable, Intrinsic Value | $ | $ 1,885 |
6.65 [Member] | |
Equity Compensation Plans (Details) - Schedule of outstanding and exercisable stock options [Line Items] | |
Options Outstanding, Exercise Prices | $ / shares | $ 6.65 |
Options Outstanding Number of Options Outstanding | 173 |
Options Outstanding Weighted Average Remaining Life (Years) | 2 years 7 months 6 days |
Options Exercisable, Number of Options Exercisable | 90 |
Options Exercisable, Weighted Average Remaining Life (Years) | 2 years 7 months 6 days |
Options Exercisable, Intrinsic Value | $ | $ 1,289 |
7.99 [Member] | |
Equity Compensation Plans (Details) - Schedule of outstanding and exercisable stock options [Line Items] | |
Options Outstanding, Exercise Prices | $ / shares | $ 7.99 |
Options Outstanding Number of Options Outstanding | 19 |
Options Outstanding Weighted Average Remaining Life (Years) | 3 years 73 days |
Options Exercisable, Number of Options Exercisable | 8 |
Options Exercisable, Weighted Average Remaining Life (Years) | 3 years 2 months 12 days |
Options Exercisable, Intrinsic Value | $ | $ 106 |
8.17 [Member] | |
Equity Compensation Plans (Details) - Schedule of outstanding and exercisable stock options [Line Items] | |
Options Outstanding, Exercise Prices | $ / shares | $ 8.17 |
Options Outstanding Number of Options Outstanding | 24 |
Options Outstanding Weighted Average Remaining Life (Years) | 2 months 12 days |
Options Exercisable, Number of Options Exercisable | 24 |
Options Exercisable, Weighted Average Remaining Life (Years) | 2 months 12 days |
Options Exercisable, Intrinsic Value | $ | $ 310 |
8.32 [Member] | |
Equity Compensation Plans (Details) - Schedule of outstanding and exercisable stock options [Line Items] | |
Options Outstanding, Exercise Prices | $ / shares | $ 8.32 |
Options Outstanding Number of Options Outstanding | 187 |
Options Outstanding Weighted Average Remaining Life (Years) | 2 years 9 months 18 days |
Options Exercisable, Number of Options Exercisable | 72 |
Options Exercisable, Weighted Average Remaining Life (Years) | 2 years 9 months 18 days |
Options Exercisable, Intrinsic Value | $ | $ 912 |
8.55 [Member] | |
Equity Compensation Plans (Details) - Schedule of outstanding and exercisable stock options [Line Items] | |
Options Outstanding, Exercise Prices | $ / shares | $ 8.55 |
Options Outstanding Number of Options Outstanding | 179 |
Options Outstanding Weighted Average Remaining Life (Years) | 3 years |
Options Exercisable, Number of Options Exercisable | 86 |
Options Exercisable, Weighted Average Remaining Life (Years) | 3 years |
Options Exercisable, Intrinsic Value | $ | $ 1,072 |
12.76 [Member] | |
Equity Compensation Plans (Details) - Schedule of outstanding and exercisable stock options [Line Items] | |
Options Outstanding, Exercise Prices | $ / shares | $ 12.76 |
Options Outstanding Number of Options Outstanding | 25 |
Options Outstanding Weighted Average Remaining Life (Years) | 3 years 6 months |
Options Exercisable, Number of Options Exercisable | 9 |
Options Exercisable, Weighted Average Remaining Life (Years) | 3 years 6 months |
Options Exercisable, Intrinsic Value | $ | $ 77 |
13.12 [Member] | |
Equity Compensation Plans (Details) - Schedule of outstanding and exercisable stock options [Line Items] | |
Options Outstanding, Exercise Prices | $ / shares | $ 13.12 |
Options Outstanding Number of Options Outstanding | 174 |
Options Outstanding Weighted Average Remaining Life (Years) | 3 years 6 months |
Options Exercisable, Number of Options Exercisable | 68 |
Options Exercisable, Weighted Average Remaining Life (Years) | 3 years 3 months 18 days |
Options Exercisable, Intrinsic Value | $ | $ 540 |
15.12 [Member] | |
Equity Compensation Plans (Details) - Schedule of outstanding and exercisable stock options [Line Items] | |
Options Outstanding, Exercise Prices | $ / shares | $ 15.12 |
Options Outstanding Number of Options Outstanding | 3 |
Options Outstanding Weighted Average Remaining Life (Years) | 3 years 7 months 6 days |
Options Exercisable, Number of Options Exercisable | 1 |
Options Exercisable, Weighted Average Remaining Life (Years) | 3 years 7 months 6 days |
Options Exercisable, Intrinsic Value | $ | $ 7 |
21.70 [Member] | |
Equity Compensation Plans (Details) - Schedule of outstanding and exercisable stock options [Line Items] | |
Options Outstanding, Exercise Prices | $ / shares | $ 21.7 |
Options Outstanding Number of Options Outstanding | 179 |
Options Outstanding Weighted Average Remaining Life (Years) | 4 years |
Options Exercisable, Number of Options Exercisable | |
Options Exercisable, Weighted Average Remaining Life (Years) | |
Options Exercisable, Intrinsic Value | $ | |
32.28 [Member] | |
Equity Compensation Plans (Details) - Schedule of outstanding and exercisable stock options [Line Items] | |
Options Outstanding, Exercise Prices | $ / shares | $ 32.28 |
Options Outstanding Number of Options Outstanding | 55 |
Options Outstanding Weighted Average Remaining Life (Years) | 4 years 6 months |
Options Exercisable, Number of Options Exercisable | |
Options Exercisable, Weighted Average Remaining Life (Years) | |
Options Exercisable, Intrinsic Value | $ |
Equity Compensation Plans (De_5
Equity Compensation Plans (Details) - Schedule of unvested stock option activity shares in Thousands | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Schedule of unvested stock option activity [Abstract] | |
Options, Beginning Balance | shares | 1,568 |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 3.2 |
Granted | shares | 55 |
Granted | $ / shares | $ 11.71 |
Vested | shares | (464) |
Vested | $ / shares | $ 2.18 |
Forfeited | shares | (154) |
Forfeited | $ / shares | $ 1.86 |
Options, Ending Balance | shares | 1,005 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 4.33 |
Equity Compensation Plans (De_6
Equity Compensation Plans (Details) - Schedule of weighted average assumptions | 9 Months Ended |
Sep. 30, 2021$ / shares | |
Schedule of weighted average assumptions [Abstract] | |
Trading price of common stock on measurement date (in Dollars per share) | $ 27.59 |
Risk free interest rate | 0.34% |
Expected life in years | 2 years 7 months 6 days |
Expected volatility | 77.20% |
Equity Compensation Plans (De_7
Equity Compensation Plans (Details) - Schedule restricted stock unit activity shares in Thousands | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Schedule restricted stock unit activity [Abstract] | |
Number of Nonvested restricted shares, Beginning balance | shares | |
Weighted Average Grant Date Fair Value, Beginning balance | $ / shares | |
Number of Nonvested restricted shares, Granted | shares | 111 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | $ 23.39 |
Number of Nonvested restricted shares, Vested | shares | |
Weighted Average Grant Date Fair Value, Vested | $ / shares | |
Number of Nonvested restricted shares, Forfeited | shares | |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | |
Number of Nonvested restricted shares, Ending balance | shares | 111 |
Weighted Average Grant Date Fair Value, Ending balance | $ / shares | $ 23.39 |
Equity Compensation Plans (De_8
Equity Compensation Plans (Details) - Schedule of total non-cash stock compensation - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Equity Compensation Plans (Details) - Schedule of total non-cash stock compensation [Line Items] | ||||
Total non-cash stock compensation | $ 765 | $ 347 | $ 2,357 | $ 1,559 |
Cost of revenues [Member] | ||||
Equity Compensation Plans (Details) - Schedule of total non-cash stock compensation [Line Items] | ||||
Total non-cash stock compensation | 119 | 44 | 208 | 124 |
Marketing and sales [Member] | ||||
Equity Compensation Plans (Details) - Schedule of total non-cash stock compensation [Line Items] | ||||
Total non-cash stock compensation | 209 | 76 | 427 | 224 |
General and administrative [Member] | ||||
Equity Compensation Plans (Details) - Schedule of total non-cash stock compensation [Line Items] | ||||
Total non-cash stock compensation | 414 | 181 | 1,689 | 840 |
Research and development [Member] | ||||
Equity Compensation Plans (Details) - Schedule of total non-cash stock compensation [Line Items] | ||||
Total non-cash stock compensation | $ 23 | $ 46 | $ 33 | $ 371 |
Employee Retirement Plan (Detai
Employee Retirement Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 7 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Jul. 31, 2018 | Sep. 30, 2021 | Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |||||
Employee retirement plan, description | The plan provides for Company matching of employee contributions up to 5% of eligible earnings. | ||||
Contribution expense | $ 0.8 | $ 0.5 | $ 2.3 | $ 1.7 |
Subsequent Events (Details)
Subsequent Events (Details) - Revolving Line Of Credit [Member] - Subsequent Event [Member] $ in Millions | Nov. 08, 2021USD ($) |
Subsequent Events (Details) [Line Items] | |
Revolving line of credit amount (in Dollars) | $ 55 |
Initial borrowing rate | 3.50% |
Minimum [Member] | |
Subsequent Events (Details) [Line Items] | |
LIBOR floor borrowing percentage | 0.50% |
Maximum [Member] | |
Subsequent Events (Details) [Line Items] | |
LIBOR floor borrowing percentage | 3.00% |