Quarterly report pursuant to Section 13 or 15(d)

Supplemental Financial Statement Information

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Supplemental Financial Statement Information
 9 Months Ended
Sep. 30, 2022
Property, Plant and Equipment [Abstract]  
Supplemental Financial Statement Information SUPPLEMENTAL FINANCIAL STATEMENT INFORMATION
Accrued Expenses and Other Current Liabilities
The following table summarizes the composition of accrued expenses and other current liabilities as of the dates indicated:
(in thousands) September 30, 2022 December 31, 2021
VAT payable (including amounts related to VAT matter described in Note 2) $ 2,745  $ 4,393 
Contingent consideration 1,300  5,641 
Accrued employee compensation 5,094  6,055 
Accrued professional fees 906  1,700 
Refund liability (including accounts receivable credit balances) 782  1,481 
Accrued construction in progress (ERP) 290  1,061 
Sales tax payable 647  1,034 
VIBES - assets pending distribution (Note 3) 2,432  — 
Other 6,483  3,932 
$ 20,679  $ 25,297 
Customer Deposits
For certain product offerings such as child-resistant packaging, closed-system vaporization solutions and custom-branded retail products, we may receive a deposit from the customer (generally 25% - 50% of the total order cost, but the amount can vary by customer contract), when an order is placed by a customer. We typically complete orders related to customer deposits within one to six months from the date of order, depending on the complexity of the customization and the size of the order, but the order completion timeline can vary by product type and terms of sale with each customer. Changes in our customer deposits liability balance during the nine months ended September 30, 2022 were as follows:
(in thousands) Customer Deposits
Balance as of December 31, 2021 $ 7,924 
Increases due to deposits received, net of other adjustments 10,238 
Revenue recognized (13,639)
Balance as of September 30, 2022 $ 4,523 

Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss) for the periods presented were as follows:
(in thousands) Foreign Currency Translation Unrealized Gain or (Loss) on Derivative Instrument Total
Balance at December 31, 2021 $ 282  $ 42  $ 324 
Other comprehensive income (loss) (212) 358  146 
Less: Reclassification adjustment for (gain) loss included in net loss (Note 4) —  (332) (332)
Less: Other comprehensive (income) loss attributable to non-controlling interest (17) (68) (85)
Balance at September 30, 2022 $ 53  $ —  $ 53 
(in thousands) Foreign Currency Translation Unrealized Gain or (Loss) on Derivative Instrument Total
Balance at December 31, 2020 $ 183  $ (154) $ 29 
Other comprehensive income (loss) (59) 256  197 
Less: Other comprehensive (income) loss attributable to non-controlling interest 20  (154) (134)
Balance at September 30, 2021 $ 144  $ (52) $ 92 
Supplier Concentration
Our four largest vendors accounted for an aggregate of approximately 51.9% and 53.2% of our total net sales and 66.9% and 72.6% of our total purchases for the three and nine months ended September 30, 2022, respectively, and an aggregate of approximately 29.2% and 22.8% of our total net sales and 53.2% and 84.0%. of our total purchases for the three and nine months ended September 30, 2021, respectively. We expect to maintain our relationships with these vendors.
Related Party Transactions
Nicholas Kovacevich, our Chief Executive Officer, and Dallas Imbimbo, who served on our Board prior to his resignation on April 8, 2022, own capital stock of Unrivaled Brands Inc. (“Unrivaled”) and serve on the Unrivaled board of directors. Net sales to Unrivaled totaled approximately $0 and $0.4 million for the three and nine months ended September 30, 2022, respectively, and $0 both for the three and nine months ended September 30, 2021. Total gross accounts receivable due from Unrivaled were approximately $0.4 million and $0.4 million as of September 30, 2022 and December 31, 2021, respectively.
Adam Schoenfeld, co-founder and a current director of the Company, has a significant ownership interest in one of our customers, Universal Growing. Net sales to Universal Growing totaled approximately $0.0 million and $0.2 million for the three and nine months ended September 30, 2022, respectively, and $0.1 million and $0.3 million for the three and nine months ended September 30, 2021, respectively. Total gross accounts receivable due from Universal Growing as of September 30, 2022 and December 31, 2021 were de minimis.
In December 2021, we entered into a Secured Promissory Note with Aaron LoCascio, our co-founder, former Chief Executive Officer and President, and a current director of the Company, with respect to the $8.0 million Bridge Loan described under Note 6 above. On June 30, 2022, we entered into the First Amendment to the Secured Promissory Note, which provided for the extension of the maturity date of the Secured Promissory Note from June 30, 2022 to July 14, 2022. On July 19, 2022, we fully repaid the Bridge Loan and as a result, all obligations under the Bridge Loan have been satisfied.
On July 19, 2022, Warehouse Goods entered into the Sale Agreement with Portofino to sell the Company’s 50% stake in VIBES Holdings LLC for total consideration of $4.6 million in cash. The transactions contemplated by the Sale Agreement were completed on July 19, 2022, immediately following the signing of the Sale Agreement. Portofino is an entity partially controlled by Adam Schoenfeld. The Sale Agreement was approved by the affirmative vote of a majority of the disinterested members of the Board and the audit committee of the Board in accordance with the Company’s related party transactions policy.