Annual report [Section 13 and 15(d), not S-K Item 405]

Accrued Liabilities

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Accrued Liabilities
 12 Months Ended
Dec. 31, 2024
Accrued Liabilities, Current [Abstract]  
Accrued Liabilities Accrued Liabilities
Accrued liabilities consist of the following (dollars in thousands):
December 31,
2024 2023
Accrued compensation and benefits $ 5,873  $ 6,881 
Accrued marketing 4,180  1,457 
Accrued professional fees 3,014  2,240 
Deferred purchase incentive 2,264  — 
Accrued inventory purchases 2,175  8,859 
Accrued sales and other taxes 1,164  1,329 
Credit card liabilities 780  186 
Accrued freight 478  4,616 
Accrued interest 61  1,842 
Other accrued expenses 7,911  7,501 
Total accrued liabilities $ 27,900  $ 34,911 
Deferred purchase incentive
During the second quarter of 2024, we entered into an agreement with a co-manufacturing partner for the manufacture and distribution of rounds. As part of this agreement we received a purchase incentive of $9,500 to compensate for incremental transition costs. An amendment to this agreement was entered into during the third quarter of 2024 whereby an additional purchase incentive of $4,000 was received. This purchase incentive will be recognized as a reduction of cost of sales based on units sold over five years. Recognition of this fee commenced during the third quarter of 2024 based upon the terms of the related agreement (as amended). $2,264 of the deferred purchase incentive is classified as current at December 31, 2024 based upon the amount expected to be recognized in the next twelve months, while $10,172 is classified as long-term and is recorded in other non-current liabilities on our consolidated balance sheet at December 31, 2024.
Restructuring Costs
During fiscal year 2023, management implemented a plan to reduce costs and improve efficiency of certain company-wide functions. The Company accounts for all exit or disposal activities in accordance with ASC 420, Exit or Disposal Cost Obligations (“ASC 420”). Costs are recorded when management has committed to a plan and incurred a liability related to the plan. These costs primarily pertained to workforce reduction and other restructuring costs (to include advisory fees, terminated leases, and our Salt Lake City production shutdown).
Approximately 180 employees across the Company were terminated as part of management’s plan. The Company recorded $3,548 in 2023 for severance expenses in accordance with ASC 420. As of December 31, 2023, the Company had accrued severance costs of $1,037, which were fully paid out during the first half of fiscal year 2024. We incurred an additional $266 of severance costs in the first quarter of 2024. Severance costs are included in the consolidated statement of operations in the line “Salaries, wages and benefits”.
In addition to costs paid out for terminated employees, the Company recognized a total of $3,264 in costs related to advisory fees, fees for terminated leases, and costs related to our Salt Lake City production shutdown, all of which were paid out during fiscal 2023. The Company recognized $2,397 related to advisory fees and $358 related to terminated leases during 2023, which were included in the line “General and administrative” expenses in the consolidated statement of operations. The Company also recognized $508 of costs related to our Salt Lake City production shutdown, which were included in the line “Cost of goods sold” in the consolidated statement of operations.
As of December 31, 2024, accrued restructuring costs related to management’s 2023 plan, consisted of the following (dollars in thousands):
Reduction in Workforce Other Costs Total Restructuring Costs
Balance as of January 1, 2023 $ —  $ —  $ — 
Costs incurred 3,548  3,264  6,812 
Costs paid or settled (2,511) (3,264) (5,775)
Balance as of December 31, 2023 $ 1,037  $ —  $ 1,037 
Costs incurred 266  —  266 
Costs paid or settled (1,303) —  (1,303)
Balance as of December 31, 2024 $ —  $ —  $ —