10-Q

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

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.

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.

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


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.

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