balance, the remaining balance was approximately $7.0 million which was reported within business acquisition liabilities in the accompanying balance sheet at December 31, 2021. This estimated fair value of the contingent consideration payments, was determined using a probability-weighted scenario method based on the timing of achievement and probability of occurrence. The estimated value of the contingent consideration was based upon available information and certain assumptions, known at the time of the acquisition, which management believed to be reasonable. During 2022, the remaining balance of the contingent consideration of approximately $7.0 million was paid in full, resulting in no impact to operations. The table below details the components of the contingent consideration: (In thousands) TWELVE MONTHS ENDED DECEMBER 31, 2021 Openingbalance...................... $ 9,795 Change in fair value of estimated contingent consideration ...................... 180 Lesspayments ....................... (3,000) Closing balance 12-31-2021 . . . . . . . . $ 6,975 NOTE 5. INVENTORIES Inventories as of December 31, 2022 and 2021, consisted of the following: As of December, (in thousands) 2022 2021 Ingredientsandsupplies ............................ $16,753 $ 6,646 FinishedGoods ................................... 22,726 9,977 Totalinventories .............................. $39,479 $16,622 NOTE 6. PROPERTY AND EQUIPMENT Property and equipment as of December 31, 2022 and 2021 consisted of the following: As of (In thousands) December 31, 2022 December 31, 2021 Computerequipment ......................... $ 122 $ 106 Vehicles ................................... 164 69 Machineryandequipment ..................... 43,193 8,826 Leasehold improvements and office equipment . . . . 751 519 Totalpropertyandequipment .................. $44,230 $ 9,520 Less: accumulated depreciation . . . . . . . . . . . . . . . . . (5,793) (2,571) Subtotal ................................... 38,437 6,949 Constructioninprogress ...................... 60 3,340 Property and equipment, net $38,497 $10,289 Depreciation and amortization expense was $3.2 million and $1.1 million for the twelve months ended December 31, 2022 and 2021, respectively. NOTE 7. LEASES The Company has various finance leases for equipment and operating leases for office and warehouse space, as well as equipment. The Company’s lease agreements do not contain any material residual value guarantees, bargain purchase options, or restrictive covenants. Variable lease costs were not significant for the periods presented. 66
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