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 June 30, 2022

☐ 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 August 12, 2022, 21,799,556 shares of the registrant’s Class A common stock, $0.0001 par value, and 7,488,343 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 JUNE 30, 2022

TABLE OF CONTENTS


	Page
Part I. Financial Information	1
Item 1. Unaudited Condensed Consolidated 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	20
Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk	33
Item 4. Controls and Procedures	34
Part II. Other Information	35
Item 1. Legal Proceedings	35
Item 1A. Risk Factors	35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3. Defaults Upon Senior Securities	35
Item 4. Mine Safety Disclosures	35
Item 5. Other Information	35
Item 6. Exhibits	36
Part III. Signatures	37

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

STRYVE FOODS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30,			December 31,
	2022			2021
ASSETS	(Unaudited)
CURRENT ASSETS
Cash and cash equivalent	$	5,011,077		$	2,217,191
Accounts receivable, net		4,255,802			2,900,281
Inventory, net		6,652,527			7,215,981
Prepaid media spend, net of reserve		—			450,000
Prepaid expenses and other current assets		1,689,297			2,255,539
Total current assets		17,608,703			15,038,992

Property and equipment, net		8,015,522			6,825,895
Right of use asset, net		669,043			767,382
Goodwill		8,450,000			8,450,000
Intangible asset, net		4,483,191			4,604,359
Prepaid media spend, net of reserve and net of current portion		—			1,084,548
Other assets		—			4,192
TOTAL ASSETS	$	39,226,459		$	36,775,368

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable		2,557,320		$	3,097,516
Accrued expenses		2,568,054			1,634,978
Current portion of lease liability		210,901			168,482
Line of credit		-			3,500,000
Current portion of long-term debt		122,023			3,447,056
Total current liabilities		5,458,298			11,848,032

Long-term debt, net of current portion		35,829			119,542
Lease liability, net of current portion		491,399			598,900
Financing obligation - related party operating lease		7,500,000			7,500,000
Deferred tax liability, net		67,223			67,223
Deferred stock compensation liability		504,810			71,197
Warrant liability		43,065			128,375
TOTAL LIABILITIES		14,100,624			20,333,269

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
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, 16,750,794 and 8,633,755 shares issued and outstanding, respectively		1,675			863
Class V common stock - $0.0001 par value, 200,000,000 shares authorized, 11,502,355 shares issued and outstanding		1,150			1,150
Additional paid-in-capital		132,902,242			100,551,257
Accumulated deficit		(107,779,232	)		(84,111,171	)
TOTAL STOCKHOLDERS' EQUITY		25,125,835			16,442,099

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	39,226,459		$	36,775,368

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 Ended June 30,						For The Six Months Ended June 30,

	2022			2021			2022			2021
SALES, net	$	10,946,158		$	7,351,323		$	18,366,712		$	14,185,798

COST OF GOODS SOLD (exclusive of depreciation shown separately below)		15,371,112			3,770,271			21,667,739			7,926,921

GROSS (LOSS) MARGIN		(4,424,954	)		3,581,052			(3,301,027	)		6,258,877

OPERATING EXPENSES
Selling expenses		4,717,178			5,593,122			8,743,233			12,046,413
Operations expense		1,349,157			970,302			2,579,540			2,030,086
Salaries and wages		3,510,076			1,601,664			6,095,976			3,003,310
Depreciation and amortization expense		503,360			396,708			947,725			791,556
Prepaid media reserve		1,489,028			—			1,489,028			—
Gain on disposal of fixed assets		(24,012	)		(9,654	)		(24,012	)		(8,578	)
Total operating expenses		11,544,787			8,552,142			19,831,490			17,862,787

OPERATING LOSS		(15,969,741	)		(4,971,090	)		(23,132,517	)		(11,603,910	)

OTHER (EXPENSE) INCOME
Interest expense		(180,536	)		(1,147,168	)		(369,031	)		(1,957,257	)
PPP loan forgiveness		-			—			-			1,669,552
Change in fair value of Private Warrants		39,996			—			85,310			-
Gain on debt extinguishment		-			545,200			-			545,200
Other (expense) income		(215,383	)		12,341			(215,382	)		24,548
Total other (expense) income		(355,923	)		(589,627	)		(499,103	)		282,043

NET LOSS BEFORE INCOME TAXES		(16,325,664	)		(5,560,717	)		(23,631,620	)		(11,321,867	)
Income taxes		28,655			—			36,441			—

NET LOSS		(16,354,319	)	$	(5,560,717	)		(23,668,061	)	$	(11,321,867	)
Loss per common share:
Basic and diluted	$	(0.53	)	$	(0.55	)	$	(0.78	)	$	(1.12	)

Weighted average shares outstanding:
Basic and diluted		30,946,486			10,139,422			30,355,697			10,141,928

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

STRYVE FOODS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

SIX MONTHS ENDED JUNE 30, 2022

(Unaudited)



	Common Stock Class A				Common Stock Class B/V				Additional			Accumulated
	Shares		Amount		Shares		Amount		Paid-in-Capital			Deficit			Total
BALANCE, JANUARY 1, 2022		8,633,755	$	863		11,502,355	$	1,150	$	100,551,257		$	(84,111,171	)	$	16,442,099

PIPE Investment		2,496,934		250		—		—		32,310,937			—			32,311,187
Prefunded Warrants converted into Common Stock Class A		1,443,557		144		—		—		(69	)		—			75

Post closing adjustment of BCA		—		—		—		—		(238,089	)		—			(238,089	)

Issuance of Restricted Stock Awards		108,500		11		—		—		36,698			—			36,709

Net loss		—		—		—		—		—			(7,313,742	)		(7,313,742	)

BALANCE, MARCH 31, 2022		12,682,746		1,268		11,502,355		1,150		132,660,734			(91,424,913	)		41,238,239

Prefunded Warrant converted into Common Stock Class A		3,553,589		356		—		—		(96	)		—			259

Issuance of Restricted Stock Awards		501,125		50		—		—		172,802			—			172,852
Issuance of Restricted Stock Units		13,334		1		—		—		68,802			—			68,803

Net Loss		—		-		—		—		—			(16,354,319	)		(16,354,319	)

BALANCE, JUNE 30, 2022		16,750,794		1,675		11,502,355		1,150		132,902,242			(107,779,232	)		25,125,835


Condensed Statement of Changes in Stockholders' Deficit
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021


	Common Stock Class B/V						Additional			Accumulated
	Shares			Amount			Paid-in-Capital			Deficit			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		—			—			—			(5,761,151	)	$	(5,761,151	)

BALANCE, MARCH 31, 2021		10,139,422		$	1,014		$	42,683,418		$	(57,882,400	)	$	(15,197,968	)

Net loss		—			—			—			(5,560,717	)	$	(5,560,717	)

BALANCE, JUNE 30, 2021		10,139,422		$	1,014		$	42,683,418		$	(63,443,117	)	$	(20,758,685	)

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

STRYVE FOODS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For The Six Months Ended June 30,			For The Six Months Ended June 30,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(23,668,061	)	$	(11,321,867	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		826,558			667,485
Amortization of intangible assets		121,167			124,071
Amortization of debt issuance costs		—			280,798
Amortization of right-of-use asset		98,340
Gain on disposal of fixed assets		(24,012	)		(8,578