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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(MARK ONE)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarter ended September 30, 2021

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to

 

Commission file number: 001-38785

 

STRYVE FOODS, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Delaware

 

87-1760117

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

5801 Tennyson Parkway, Suite 275

Plano, TX 75024

(Address of principal executive offices)

 

(972) 987-5130

(Issuer’s telephone number)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Class A common stock

 

SNAX

 

The NASDAQ Stock Market LLC

Warrants, each exercisable for one share of Class A common stock at an exercise price of $11.50 per share

 

SNAXW

 

The NASDAQ Stock Market LLC

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

 

At November 15, 2021, 8,741,255 shares of the registrant’s Class A common stock, $0.0001 par value, and 11,502,355 shares of the registrant’s Class V common stock, $0.0001 par value, were issued and outstanding.

 


 

STRYVE FOODS, INC.

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2021

TABLE OF CONTENTS

 

 

Page

Part I. Financial Information

1

Item 1. Financial Statements

1

Condensed Consolidated Balance Sheets

1

Condensed Consolidated Statements of Operations

2

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

3

Condensed Consolidated Statements of Cash Flows

5

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk

36

Item 4. Controls and Procedures

37

Part II. Other Information

38

Item 1. Legal Proceedings

38

Item 1A. Risk Factors

38

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

57

Item 3. Defaults Upon Senior Securities

57

Item 4. Mine Safety Disclosures

57

Item 5. Other Information

58

Item 6. Exhibits

59

Part III. Signatures

61

 

i


 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

STRYVE FOODS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

September 30

 

 

December 31

 

 

 

2021

 

 

2020

 

ASSETS

 

(Unaudited)

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalent

 

$

13,389,570

 

 

$

591,634

 

Accounts receivable, net

 

 

4,496,715

 

 

 

679,061

 

Inventory, net

 

 

5,514,530

 

 

 

3,373,033

 

Prepaid media spend

 

 

650,000

 

 

 

249,000

 

Prepaid expenses and other current assets

 

 

2,788,263

 

 

 

529,230

 

Total current assets

 

 

26,839,078

 

 

 

5,421,958

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

6,668,675

 

 

 

6,845,132

 

Goodwill

 

 

8,450,000

 

 

 

8,450,000

 

Intangible asset, net

 

 

4,664,942

 

 

 

4,962,834

 

Prepaid media spend, net of current portion

 

 

268,295

 

 

 

498,662

 

Other assets

 

 

34,800

 

 

 

58,545

 

TOTAL ASSETS

 

$

46,925,790

 

 

$

26,237,131

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Accounts payable

 

$

3,482,170

 

 

$

3,839,384

 

Accrued expenses

 

 

687,934

 

 

 

1,710,384

 

Line of credit

 

 

3,500,000

 

 

 

3,500,000

 

Current portion of long-term debt

 

 

3,445,495

 

 

 

22,649,995

 

Total current liabilities

 

 

11,115,599

 

 

 

31,699,763

 

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

 

154,335

 

 

 

3,874,235

 

Financing obligation - related party operating lease

 

 

7,500,000

 

 

 

 

Warrant liability

 

 

167,875

 

 

 

 

TOTAL LIABILITIES

 

 

18,937,809

 

 

 

35,573,998

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

STOCKHOLDERS' EQUITY (DEFICIT)

 

 

 

 

 

 

Preferred stock - $0.0001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding

 

 

 

 

 

 

Class A common stock - $0.0001 par value, 400,000,000 shares authorized, 8,217,321 shares issued and outstanding

 

 

822

 

 

 

 

Class V common stock - $0.0001 par value, 200,000,000 shares authorized, 11,502,355 shares issued and outstanding

 

 

1,150

 

 

 

1,015

 

Additional paid-in-capital

 

 

100,140,208

 

 

 

42,783,367

 

Accumulated deficit

 

 

(72,154,199

)

 

 

(52,121,249

)

TOTAL STOCKHOLDERS' EQUITY (DEFICIT)

 

 

27,987,981

 

 

 

(9,336,867

)

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 

$

46,925,790

 

 

$

26,237,131

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

1


 

STRYVE FOODS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

For the Three Months

 

 

For the Nine Months

 

 

 

Ended September 30

 

 

Ended September 30

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

SALES, net

 

$

9,061,770

 

 

$

4,428,231

 

 

$

23,247,568

 

 

$

13,013,199

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF GOODS SOLD

 

 

5,807,925

 

 

 

2,832,857

 

 

 

13,734,845

 

 

 

8,352,871

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS MARGIN

 

 

3,253,845

 

 

 

1,595,374

 

 

 

9,512,723

 

 

 

4,660,328

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Selling expenses

 

 

5,826,748

 

 

 

2,789,791

 

 

 

17,873,162

 

 

 

8,018,023

 

Operations expense

 

 

1,234,001

 

 

 

735,491

 

 

 

3,264,087

 

 

 

1,709,070

 

Salaries and wages

 

 

2,272,336

 

 

 

1,220,975

 

 

 

5,275,646

 

 

 

4,617,458

 

Non-cash compensation expense (Note 11)

 

 

1,700,869

 

 

 

 

 

 

1,700,869

 

 

 

 

Depreciation and amortization expense

 

 

402,290

 

 

 

315,000

 

 

 

1,193,846

 

 

 

962,296

 

(Gain) Loss on disposal of fixed assets

 

 

(13,250

)

 

 

12,723

 

 

 

(21,828

)

 

 

13,047

 

Total operating expenses

 

 

11,422,994

 

 

 

5,073,980

 

 

 

29,285,782

 

 

 

15,319,894

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING LOSS

 

 

(8,169,149

)

 

 

(3,478,606

)

 

 

(19,773,059

)

 

 

(10,659,566

)

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER (EXPENSE) INCOME

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(757,811

)

 

 

(882,258

)

 

 

(2,715,068

)

 

 

(2,384,375

)

PPP loan forgiveness

 

 

 

 

 

 

 

 

1,669,552

 

 

 

 

Change in fair value of Private Warrants

 

 

213,300

 

 

 

 

 

 

213,300

 

 

 

 

Other income

 

 

2,577

 

 

 

 

 

 

572,325

 

 

 

 

Total other (expense) income

 

 

(541,934

)

 

 

(882,258

)

 

 

(259,891

)

 

 

(2,384,375

)

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS BEFORE INCOME TAXES

 

 

(8,711,083

)

 

 

(4,360,864

)

 

 

(20,032,950

)

 

 

(13,043,941

)

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$

(8,711,083

)

 

$

(4,360,864

)

 

$

(20,032,950

)

 

$

(13,043,941

)

Loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.47

)

 

$

(0.54

)

 

$

(1.59

)

 

$

(1.63

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

18,559,390

 

 

 

8,089,907

 

 

 

12,580,569

 

 

 

8,006,433

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

2


 

STRYVE FOODS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021

(Unaudited)

 

 

 

 

 

 

 

 

 

Common Stock Class A

 

 

Common Stock Class B/V

 

 

Additional

 

 

Retained

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Paid-in-Capital

 

 

Earnings

 

 

Total

 

BALANCE, JANUARY 1, 2021

 

 

 

 

 

 

 

 

 

 

10,152,020

 

 

$

1,015

 

 

$

42,783,367

 

 

$

(52,121,249

)

 

$

(9,336,867

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repurchase of member shares

 

 

 

 

 

 

 

 

 

 

(12,598

)

 

 

(1

)

 

 

(99,949

)

 

 

 

 

 

(99,950

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,761,150

)

 

 

(5,761,150

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, MARCH 31, 2021

 

 

 

 

-

 

 

 

-

 

 

 

10,139,422

 

 

 

1,014

 

 

 

42,683,419

 

 

 

(57,882,399

)

 

 

(15,197,967

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,560,717

)

 

 

(5,560,717

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, JUNE 30, 2021

 

 

 

 

-

 

 

 

-

 

 

 

10,139,422

 

 

 

1,014

 

 

 

42,683,419

 

 

 

(63,443,116

)

 

 

(20,758,684

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of Convertible Notes & interest to Class V common stock

 

 

 

 

 

 

 

 

 

 

1,362,933

 

 

 

136

 

 

 

10,822,138

 

 

 

 

 

 

10,822,274

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recapitalization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Recapitalization with Andina

 

 

 

 

3,409,949

 

 

 

341

 

 

 

 

 

 

 

 

 

11,571,705

 

 

 

 

 

 

11,572,046

 

PIPE raise

 

 

 

 

5,607,372

 

 

 

561

 

 

 

 

 

 

 

 

 

35,062,867

 

 

 

 

 

 

35,063,428

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-Funded Warrant

 

 

 

 

(800,000

)

 

 

(80

)

 

 

 

 

 

 

 

 

80

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,711,083

)

 

 

(8,711,083

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, SEPTEMBER 30, 2021

 

 

 

 

8,217,321

 

 

$

822

 

 

 

11,502,355

 

 

$

1,150

 

 

$

100,140,208

 

 

$

(72,154,199

)

 

$

27,987,981

 

 

 

 

3


 

Condensed Statement of Changes in Stockholders' Equity (Deficit)

 

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2020

 

(Unaudited)

 

 

 

 

 

 

Common Stock Class B/V

 

 

Additional

 

 

Retained

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Paid-in-Capital

 

 

Earnings

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, JANUARY 1, 2020

 

 

8,370,647

 

 

$

837

 

 

$

28,759,163

 

 

$

(34,574,478

)

 

$

(5,814,478

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(4,227,745

)

 

$

(4,227,745

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, MARCH 31, 2020

 

 

8,370,647

 

 

 

837

 

 

 

28,759,163

 

 

 

(38,802,223

)

 

 

(10,042,223

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(4,455,333

)

 

$

(4,455,333

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, JUNE 30, 2020

 

 

8,370,647

 

 

 

837

 

 

 

28,759,163

 

 

 

(43,257,556

)

 

 

(14,497,556

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Members' contributions

 

 

271,167

 

 

 

27

 

 

 

1,876,300

 

 

 

 

 

$

1,876,327

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(4,360,864

)

 

 

(4,360,864

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, SEPTEMBER 30, 2020

 

 

8,641,814

 

 

$

864

 

 

$

30,635,463

 

 

$

(47,618,420

)

 

$

(16,982,093

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


 

STRYVE FOODS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30

 

 

September 30

 

 

 

2021

 

 

2020

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

 

$

(20,032,950

)

 

$

(13,043,941

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation & amortization expense

 

 

1,009,192

 

 

 

962,296

 

(Gain) Loss on disposal of fixed assets

 

 

-

 

 

 

13,047

 

Amortization of intangible assets

 

 

184,655

 

 

 

 

Amortization of debt issuance costs

 

 

546,262

 

 

 

146,077

 

Interest income on members loan receivable

 

 

(27,124

)

 

 

 

Bad debt expense

 

 

513,661

 

 

 

 

Gain on debt extinguishment

 

 

(545,200

)

 

 

 

Forgiveness on paycheck protection program loan

 

 

(1,669,552

)

 

 

 

Change in fair value of Private Warrants

 

 

(213,300

)

 

 

 

Forgiveness of Notes Receivable

 

 

1,700,869

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(4,331,314

)

 

 

219,683

 

Inventory

 

 

(2,141,497

)

 

 

(1,622,495

)

Prepaid media spend

 

 

(170,633

)

 

 

(501,693

)

Prepaid expenses and other current assets