v3.26.3
ACQUISITIONS
 9 Months Ended
Sep. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
ACQUISITIONS ACQUISITIONS
Rockstar Acquisition
On August 28, 2025, the Closing Date of the Pepsi Transactions, the Company entered into a series of transactions with Pepsi, pursuant to which the Company acquired Rockstar in the U.S. and Canada, as well as certain related property, plant and equipment, inventory, customer relationships and marketing functions. The total consideration related to the Pepsi Transactions consisted of (i) non-cash consideration associated with the issuance of the Series B Preferred Stock and the amendment to the terms of the Series A Preferred Stock less (ii) cash consideration received from Pepsi related to net working capital adjustments, which compensated the Company for certain working capital requirements of Rockstar. The Rockstar Acquisition was accounted for as a business combination under ASC 805.
Under the Series B Purchase Agreement, the Company issued 390,000 shares of newly designated Series B Preferred Stock, with a par value of $0.001 per share. Concurrently and in connection with the Pepsi Transactions, the Company amended the redemption and conversion rights of the 1,466,666 outstanding shares of Series A Preferred Stock previously issued to Pepsi on August 1, 2022. This amendment aligned the terms of the Series A Preferred Stock, including the redemption period, with those of the newly issued Series B Preferred Stock.
The estimated fair value of the Series B Preferred Stock, along with the estimated incremental fair value of Series A Preferred Stock resulting directly from the amendment, was treated as noncash consideration, partially accounted for under ASC 805 as consideration transferred for the Rockstar Acquisition and partially accounted for under ASC 606 as an implicit upfront payment to Pepsi in its capacity as a customer of the Company.
The consideration attributable to the Rockstar Acquisition was estimated based on both the income and market approaches. Given Rockstar's distinct size, scale and recent performance relative to its industry peers, the Company primarily relied on the discounted cash flow method, a form of the income approach. The resulting valuation was then corroborated by analyzing implied market multiples of comparable publicly traded companies, with adjustments made to reflect differences in growth prospects, profitability and risk profile.
During the quarter ended September 30, 2026, the Company finalized the fair values of the assets acquired and liabilities assumed in connection with the Rockstar Acquisition. The finalization occurred within the one-year measurement period. Accordingly, the amounts presented herein are final. No measurement period adjustments were recorded in 2026.
The purchase consideration consisted of the following:

At August 28, 2025
Total estimated fair value of Series B Preferred Stock$907,920 
Total incremental estimated fair value of Series A Preferred Stock 27,867 
Total fair value of Series B Preferred Stock and incremental fair value of Series A Preferred Stock$935,787 
Fair value of non-cash amount attributable to ASC 606 implicit upfront payment to customer$598,787 
Fair value of non-cash amount attributable to ASC 805 business acquisition$337,000 
Less: Net working capital cash received from Pepsi [1]
(29,397)
Total purchase consideration$307,603 
[1]     This amount includes net working capital adjustments received from Pepsi pursuant to the Transaction Agreement. Of this amount, $29.2 million was received during the year ended December 31, 2025, with the remaining $0.2 million received during the nine months ended September 30, 2026. The amounts are classified within investing activities in the Condensed Consolidated Statements of Cash Flows.
The following table summarizes the final fair values of the assets acquired and liabilities assumed, inclusive of measurement period adjustments:

At August 28, 2025
ASSETS
Inventories$10,288 
Property, plant and equipment4,917 
Brands176,000 
Customer relationships5,500 
Prepaid expenses and other current assets1,461 
LIABILITIES
Accrued expenses390 
Net identifiable assets acquired$197,776 
Goodwill109,827 
Total purchase consideration$307,603 

The Rockstar Acquisition resulted in the recognition of $109.8 million of goodwill, primarily composed of the expansion of Rockstar and the development of new intellectual property through innovation, the value of the assembled workforce, particularly key personnel in advertising and marketing and projected synergies resulting from the integration of distribution networks. Goodwill recognized is expected to be deductible for tax purposes and has been allocated to the Company’s single reporting unit.
Intangible assets acquired
The fair value of the intangible brand asset was estimated using the relief-from-royalty method, and the asset was determined to have an indefinite useful life. Key assumptions included forecasted revenues, royalty rates and a discount rate. The customer relationships intangible asset was estimated using the with-and-without method, which is an income approach. Key assumptions included forecasted revenue recovery rates, a discount rate and the cost and time required to reestablish customer relationships. The customer relationships asset was determined to have a definite useful life and is amortized on a straight-line basis. Both valuations relied on significant unobservable inputs and are therefore classified as Level 3 fair value measurements. Changes in these assumptions could result in materially different fair value measurements.
The following table summarizes the estimated fair value of identifiable intangible assets acquired and their respective amortization periods:

Estimated Useful Life in YearsAt August 28, 2025
BrandsIndefinite$176,000 
Customer relationships105,500
Total intangibles acquired$181,500 
Alani Nu Acquisition
On the Closing Date of Alani Nu, the Company completed the Alani Nu Acquisition pursuant to the terms of the membership interest purchase agreement dated February 20, 2025. The total purchase consideration was composed of (i) cash consideration as outlined in the table below, (ii) an aggregate of 22,451,224 unregistered shares of the Company's Common Stock subject to a registration rights agreement and a lock-up agreement that restricts the sale or transfer of the Company's Common Stock, with one-third of the Common Stock released from restrictions on each of April 1, 2026, October 1, 2026 and April 1, 2027 and (iii) contingent consideration. The Company funded the cash consideration using cash on hand and proceeds from the Term Loan Facility under the Credit Agreement, as described in Note 10. Debt. The Alani Nu Acquisition was accounted for as a business combination. During the quarter ended March 31, 2026, within the one year measurement period, the Company finalized the fair values of the assets acquired and liabilities assumed. Accordingly, the amounts presented herein are final.
The purchase consideration consisted of the following:

At April 1, 2025
Cash consideration$1,322,425 
Share consideration721,964 
Contingent consideration [1]
11,200 
Total purchase consideration$2,055,589 
[1] A probability-weighted expected return method was used to value the contingent consideration as of the Closing Date of Alani Nu, whereby the value was determined based on expected cash flows under various scenarios related to the achievement of the revenue target.
The following table summarizes the final fair values of the assets acquired and liabilities assumed, inclusive of measurement period adjustments:

At April 1, 2025
ASSETS
Cash and cash equivalents$43,655 
Accounts receivable [1]
83,655 
Inventories [1] [2]
95,425 
Prepaid expenses and other current assets1,699 
Property, plant and equipment [1]
103 
Brands1,104,000 
Customer relationships111,000 
LIABILITIES
Accounts payable49,117 
Accrued expenses [1] [3]
52,371 
Deferred revenue-current8,519 
Other current liabilities426 
Deferred revenue-non-current3,780 
Other long-term liabilities6,698 
Net identifiable assets acquired$1,318,626 
Goodwill736,963 
Total purchase consideration$2,055,589 
[1] Includes fair value adjustments recorded during the measurement period see Measurement Period Adjustments section below.
[2] Includes an inventory valuation step-up of $21.7 million which was recognized as an adjustment to the Company’s cost of revenue in the Condensed Consolidated Statements of Operations and Comprehensive Income during the year ended December 31, 2025.
[3] Includes $3.1 million the Company paid relating to the settlement of the net working capital adjustment during the year ended December 31, 2025. The settlement resulted in a decrease in accrued expenses and an increase in the total purchase consideration. The adjustment did not impact goodwill.
The Company initially recognized a contingent consideration of $11.2 million, representing the fair value of a potential payment of up to $25.0 million contingent upon the achievement of an agreed-upon revenue target by December 31, 2025. During the year ended December 31, 2025, the contingent consideration was remeasured to the maximum $25.0 million payout, driven by the outperformance of Alani Nu's revenue results relative to the financial projections as of the Closing Date of Alani Nu and ultimately by exceeding the agreed-upon revenue target. During the three months ended March 31, 2026, the Company paid the $25.0 million in cash.
The fair value of the 22,451,224 shares of Common Stock issued to the Sellers was $32.16 per share. This represents the closing share price of $35.73 on the Closing Date of Alani Nu, adjusted by a DLOM of 10.0%, given that the offer and sale of the shares were not registered under the Securities Act and are “restricted securities” as defined by Rule 144 promulgated under the Securities Act. The DLOM was calculated based on the Finnerty model, which incorporates Level 2 and 3 inputs and assumptions, including historical stock volatility, management’s estimated time to liquidity based on the Company’s expectations for the time to register the shares post-closing and a historical dividend yield.
The Alani Nu Acquisition resulted in the recognition of $737.0 million of goodwill, attributable to anticipated revenue synergies, combined distribution capabilities and operational and administrative cost efficiencies. The majority of goodwill recognized is expected to be deductible for tax purposes and has been allocated to the Company’s single reporting unit.
Intangible assets acquired
The fair value of the intangible brand asset was estimated using the relief-from-royalty method, and the asset was determined to have an indefinite useful life. Key assumptions included forecasted revenues, royalty rates and a discount rate. The customer relationships were estimated using a combination of the with-and-without method, an income approach and a cost approach. Key assumptions included forecasted revenue recovery rates, a discount rate and the cost and time required to reestablish customer relationships. The customer relationships asset was determined to have a definite useful life and is amortized on a straight-line basis. Both valuations relied on significant unobservable inputs and are therefore classified as Level 3 fair value measurements. Changes in these assumptions could result in materially different fair value measurements.
The following table summarizes the estimated fair value of identifiable intangible assets acquired and their respective amortization periods:
Estimated Useful Life in YearsAt April 1, 2025
BrandsIndefinite$1,104,000 
Customer relationships 5111,000
Total intangibles acquired$1,215,000 
Measurement Period Adjustments
Measurement period adjustments are recognized in the reporting period in which the adjustments are determined and calculated as if the accounting had been completed at the acquisition date. As a result of refining estimates and assumptions since the acquisition date, the Company recorded the following measurement period adjustments, with corresponding adjustments to goodwill:
•During the year ended December 31, 2025, $1.2 million increase to accounts receivable and $0.4 million decrease to inventory related to an in-transit inventory accrual;
•During the year ended December 31, 2025, $2.9 million decrease in property, plant and equipment-net, with a corresponding immaterial impact on depreciation expense, and decreases in prepaid expenses and other current assets;
•During the year ended December 31, 2025, $3.5 million increase to accrued expenses related to customer promotional allowances; and
•During the three months ended March 31, 2026, $2.6 million decrease in property, plant and equipment-net, with a corresponding immaterial impact on depreciation expense.
Pro forma Consolidated Financial Information
The following unaudited pro forma financial information summarizes the results of operations for the periods indicated as if the Alani Nu Acquisition and the Rockstar Acquisition had been completed on January 1, 2024. The unaudited pro forma information is not necessarily indicative of the results that the Company would have achieved had the acquisitions actually occurred on January 1, 2024, nor does such information purport to be indicative of future financial operating results.


Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Revenue$847,228 $778,218 $2,447,768 $2,208,397 
Net income (loss)126,956 (58,576)292,347 162,985 
Net income (loss) attributable to common stockholders$99,534 $(72,820)$221,013 $105,543 
The unaudited pro forma financial information includes, where applicable, adjustments for (i) the recognition in cost of revenue of the inventory step-up, (ii) amortization expense related to acquired customer relationship intangible assets, (iii) additional interest expense for borrowings related to funding the acquisitions and (iv) associated tax-related impacts of adjustments. The pro forma adjustments as of September 30, 2026 are based on information available as of the date hereof, together with updated assumptions that the Company believes are reasonable to present the impact of the acquisitions in combination with the Company’s historical financial information on a pro forma basis. Adjustments do not include costs related to integration activities, cost savings or synergies that have been or may be achieved by the combined business.