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.....................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................wf
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(MARK ONE)
For the quarter ended
For the transition period from to
Commission file number:
(Exact Name of Registrant as Specified in Its Charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(
(Issuer’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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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.
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).
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 |
☐ |
☒ |
Smaller reporting company |
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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
As of November 13, 2024,
STRYVE FOODS, INC.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2024
TABLE OF CONTENTS
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Page |
1 |
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Item 1. Unaudited Condensed Consolidated Financial Statements |
1 |
1 |
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2 |
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Condensed Consolidated Statements of Changes in Stockholders’ (Deficit) Equity |
3 |
5 |
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6 |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
21 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk |
32 |
34 |
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35 |
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35 |
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35 |
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
35 |
35 |
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36 |
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36 |
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37 |
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38 |
i
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
STRYVE FOODS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
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September 30, |
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December 31, |
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2024 |
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2023 |
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net |
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Inventory |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Right of use assets, net |
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Goodwill |
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Intangible assets, net |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY |
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CURRENT LIABILITIES |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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Current portion of lease liability |
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Line of credit, net of debt issuance costs |
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Promissory notes payable, net of debt discount and debt issuance costs |
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Promissory notes payable due to related parties, net of debt discount and debt issuance costs |
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Current portion of long-term debt and other short-term borrowings |
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Total current liabilities |
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Long-term debt, net of current portion, net of debt issuance costs |
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Lease liability, net of current portion |
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Financing obligation - related party operating lease |
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Deferred tax liability, net |
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TOTAL LIABILITIES |
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STOCKHOLDERS' (DEFICIT) EQUITY |
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Preferred stock - $ |
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Class A common stock - $ |
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Class V common stock - $ |
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Additional paid-in-capital |
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Accumulated deficit |
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( |
) |
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( |
) |
TOTAL STOCKHOLDERS' (DEFICIT) EQUITY |
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( |
) |
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TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY |
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$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
1
STRYVE FOODS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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SALES, net |
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$ |
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$ |
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$ |
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$ |
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COST OF GOODS SOLD (exclusive of depreciation shown separately below) |
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GROSS PROFIT |
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OPERATING EXPENSES |
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Selling expenses |
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Operations expense |
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Salaries and wages |
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Depreciation and amortization expense |
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Gain on disposal of fixed assets |
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( |
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( |
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Total operating expenses |
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OPERATING LOSS |
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( |
) |
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( |
) |
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( |
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( |
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OTHER (EXPENSE) INCOME |
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Interest expense |
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( |
) |
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( |
) |
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( |
) |
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( |
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Loss on extinguishment of debt |
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( |
) |
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Change in fair value of Private Warrants |
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Other income (expense) |
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( |
) |
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Total other (expense) income |
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( |
) |
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( |
) |
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( |
) |
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( |
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NET LOSS BEFORE INCOME TAXES |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
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Income tax expense (benefit) |
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( |
) |
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NET LOSS |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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Loss per common share: |
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Basic and diluted |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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Weighted average shares outstanding: |
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Basic and diluted |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
2
STRYVE FOODS, INC.
NINE MONTHS ENDED SEPTEMBER 30, 2024
(Unaudited)
|
|
Class A Common Stock |
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Class V Common Stock |
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Additional |
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Accumulated |
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Shares |
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Amount |
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Shares |
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Amount |
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Paid-in-Capital |
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Deficit |
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Total |
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|||||||
BALANCE, JANUARY 1, 2024 |
|
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$ |
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$ |
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$ |
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$ |
( |
) |
|
$ |
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||||||
Cancellation of Restricted Stock Awards |
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( |
) |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of Restricted Stock Units |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation expense |
|
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— |
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— |
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— |
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— |
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— |
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Issuance of Class A Shares in connection with At-The-Market Offerings, net |
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— |
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— |
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— |
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Change in Fair Value of Warrants on Extinguishment of Debt |
|
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— |
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— |
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— |
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— |
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— |
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Common Stock Issued for Accrued Expenses |
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— |
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— |
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— |
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Common Stock Issued for Accrued Expenses - Related Party |
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— |
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— |
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— |
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||||
Net loss |
|
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— |
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— |
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— |
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— |
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— |
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( |
) |
|
|
( |
) |
BALANCE, MARCH 31, 2024 |
|
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( |
) |
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( |
) |
|||||
Exchanged BV for Class A shares |
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— |
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( |
) |
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— |
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— |
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— |
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— |
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|
Issuance of Restricted Stock Awards |
|
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— |
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— |
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( |
) |
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— |
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— |
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Issuance of Restricted Stock Units |
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— |
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— |
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( |
) |
|
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— |
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— |
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||
Stock-based compensation expense |
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— |
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— |
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— |
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— |
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|
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— |
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||
Net loss |
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— |
|
|
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— |
|
|
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— |
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|
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— |
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|
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— |
|
|
|
( |
) |
|
|
( |
) |
BALANCE, JUNE 30, 2024 |
|
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( |
) |
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( |
) |
|||||
Exchanged BV for Class A shares |
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( |
) |
|
|
( |
) |
|
|
— |
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|
|
— |
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|
|
— |
|
||
Issuance of Restricted Stock Awards |
|
|
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|
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— |
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|
— |
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( |
) |
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|
— |
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— |
|
||
Issuance of Restricted Stock Units |
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— |
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— |
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— |
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— |
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|
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— |
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|
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— |
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|
Stock-based compensation expense |
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— |
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— |
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— |
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|
— |
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|
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— |
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||
Net loss |
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— |
|
|
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— |
|
|
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— |
|
|
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— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
BALANCE, SEPTEMBER 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
STRYVE FOODS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 2023
(Unaudited)
|
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|
Class A Common Stock |
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Class V Common Stock |
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Additional |
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Accumulated |
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|||||||||||||
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Shares |
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Amount |
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Shares |
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Amount |
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Paid-in-Capital |
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Deficit |
|
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Total |
|
|||||||
BALANCE, JANUARY 1, 2023 |
|
|
|
|
|
|
$ |
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|
$ |
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|
$ |
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|
$ |
( |
) |
|
$ |
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||||||
Exchanged BV for Class A shares |
|
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( |
) |
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( |
) |
|
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— |
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|
|
— |
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— |
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||
Net loss |
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— |
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— |
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— |
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— |
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— |
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|
( |
) |
|
|
( |
) |
BALANCE, MARCH 31, 2023 |
|
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( |
) |
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|
||||||
Exchanged BV for Class A shares |
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Issuance of Restricted Stock Awards |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
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|
|
— |
|
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|
||||
Issuance of Restricted Stock Units |
|
|
|
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|
|
— |
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— |
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— |
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— |
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|||
Issuance of Warrants in connection with debt Instrument |
|
|
|
|
— |
|
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— |
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— |
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— |
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|
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|
|||
Net loss |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
BALANCE, JUNE 30, 2023 |
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Issuance of Restricted Stock Awards |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Issuance of Restricted Stock Units |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Payments in Lieu of Fractional Shares in connection with the Reverse Stock Split |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Issuance of Class A Shares in connection with At-The-Market Offerings, net |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||||
Net loss |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
BALANCE, SEPTEMBER 30, 2023 |
|
|
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
STRYVE FOODS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
|
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||
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation expense |
|
|
|
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|
||
Amortization of intangible assets |
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|
||
Amortization of debt issuance costs |
|
|
|
|
|
|
||
Amortization of debt discount |
|
|
— |
|
|
|
|
|
Amortization of debt premium |
|
|
|
|
|
— |
|
|
Amortization of right-of-use asset |
|
|
|
|
|
|
||
Loss on extinguishment of debt |
|
|
|
|
|
— |
|
|
Gain on disposal of fixed assets |
|
|
— |
|
|
|
( |
) |
Reserve for credit losses |
|
|
|
|
|
|
||
Stock based compensation expense |
|
|
|
|
|
|
||
Change in fair value of Private Warrants |
|
|
— |
|
|
|
( |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
( |
) |
Inventory |
|
|
|
|
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|
||
Prepaid expenses and other current assets |
|
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|
||
Accounts payable |
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|
||
Accrued liabilities |
|
|
|
|
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|
||
Operating lease obligations |
|
|
( |
) |
|
|
( |
) |
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
||
Cash paid for purchase of equipment |
|
|
( |
) |
|
|
( |
) |
Cash received for sale of equipment |
|
|
— |
|
|
|
|
|
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
||
Proceeds from the issuance of common stock, net |
|
|
|
|
|
|
||
Repayments on long-term debt |
|
|
( |
) |
|
|
( |
) |
Borrowings on related party debt |
|
|
|
|
|
|
||
Borrowings on short-term debt |
|
|
|
|
|
|
||
Repayments on short-term debt |
|
|
( |
) |
|
|
( |
) |
Debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Deferred offering costs |
|
|
( |
) |
|
|
( |
) |
Payments in lieu of fractional shares in connection with the reverse stock split |
|
|
— |
|
|
|
( |
) |
Net cash provided by financing activities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Net change in cash and cash equivalents |
|
|
( |
) |
|
|
( |
) |
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents at end of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
SUPPLEMENTAL INFORMATION: |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
NON-CASH INVESTING AND FINANCING ACTIVITY: |
|
|
|
|
|
|
||
Non-cash commercial premium finance borrowing |
|
$ |
|
|
$ |
|
||
Issuance of warrants in connection with debt instrument |
|
$ |
— |
|
|
$ |
|
|
Common stock issued for accrued expenses |
|
$ |
|
|
$ |
— |
|
|
Common stock issued for accrued expenses - related party |
|
$ |
|
|
$ |
— |
|
|
Accrued fixed assets |
|
$ |
|
|
$ |
— |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
STRYVE FOODS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
(Unaudited)
Note 1 - Organization and Description of Business
Stryve Foods, Inc. (“Stryve” or the “Company”) is an emerging healthy snacking company which manufactures, markets and sells highly differentiated healthy snacking products. The Company offers convenient snacks that are lower in sugar and carbohydrates and higher in protein than other snacks. The Company is headquartered in Plano, TX. The Company has manufacturing operations in Madill, Oklahoma and fulfillment operations in Frisco, Texas.
Note 2 - Liquidity and Going Concern
The accompanying condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In accordance with ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued.
The Company has historically funded its operations with cash flow from operations, equity capital raises, and note payable agreements from shareholders and private investors, in addition to institutional loans. The Company's principal uses of cash have been debt service, capital expenditures, working capital, and funding operations. The Company incurred net losses of approximately $
Late in the third quarter of 2022, the Company secured a term loan in the amount of $
During the nine months ended September 30, 2024, the Company issued an aggregate of $
The Company is currently evaluating several different strategies to enhance our liquidity position. These strategies may include, but are not limited to, pursuing additional actions under our business transformation plan, seeking additional financing from both the public and private markets through the issuance of equity securities and seeking to extend the term of outstanding debt. The outcome of these matters cannot be predicted with any certainty at this time. There can be no assurance that the Company will be able to raise the capital it needs to continue its operations on satisfactory terms or at all. In November 2024, the Company closed on a public offering receiving gross proceeds of approximately $
The Company has prepared cash flow forecasts which indicate that based on its expected operating losses and cash consumption in order to fund working capital growth, the Company believes that absent an infusion of sufficient capital there is substantial doubt about its ability to continue as a going concern for twelve months after the date the condensed consolidated financial statements for the quarter ended September 30, 2024 are issued. The Company's plan includes the items noted above as well as securing external financing which may include raising debt or equity capital. These plans are not entirely within the Company's control including our ability to raise sufficient capital on favorable terms, if at all.
6
Note 3 - Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, these interim financial statements do not include all information and footnotes required under GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of results of operations, balance sheet, cash flows, and shareholders' equity for the periods presented. The unaudited condensed consolidated results of operations for the interim periods presented are not necessarily indicative of results for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2023. The Company’s condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted.
Use of Estimates
The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Accounting estimates and assumptions discussed herein are those that management considers to be the most critical to an understanding of the condensed consolidated financial statements because they inherently involve significant judgments and uncertainties. Estimates are used for, but not limited to revenue recognition, allowance for credit losses and customer allowances, inventory valuation, impairments of goodwill and long-lived assets, incremental borrowing rate for leases, and valuation allowances for deferred tax assets. All of these estimates reflect management’s judgment about current economic and market conditions and their effects based on information available as of the date of these consolidated financial statements. If such conditions persist longer or deteriorate further than expected, it is reasonably possible that the judgments and estimates could change, which may result in future impairments of assets among other effects.
Going Concern
In accordance with ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued.
Determining the extent to which conditions or events raise substantial doubt about the Company's ability to continue as a going concern and the extent to which mitigating plans sufficiently alleviate any such substantial doubt requires significant judgment and estimation by us. The Company's significant estimates related to this analysis may include identifying business factors such as size, growth and profitability used in the forecasted financial results and liquidity. Further, the Company makes assumptions about the probability that management's plans will be effectively implemented and alleviate substantial doubt and its ability to continue as a going concern. The Company believes that the estimated values used in its going concern analysis are based on reasonable assumptions. However, such assumptions are inherently uncertain and actual results could differ materially from those estimates. See Note 2, Liquidity and Going Concern, for more information about the Company's going concern assessment.
Accounts Receivable and Allowance for Credit Losses, Returns, and Deductions
Accounts receivable are customer obligations due under normal trade terms. Accounts receivables, less credit losses, reflects the net realizable value of receivables and approximates fair value. The Company accounts for accounts receivable, less credit losses, under ASU 2016-13, Financial Instruments – Credit Losses. The Company evaluated our accounts receivable and establish an allowance for credit loss based on a combination of factors. When aware that a specific customer has been impacted by circumstances such as bankruptcy filings or deterioration in the customer’s operating results or financial position, potentially making it unable to meet its financial obligations, the Company records a specific allowance for credit losses to reduce the related receivable to the amount the Company reasonably believes is collectible. The Company also records allowances for credit loss for all other customers based on a variety of factors, including the length of time the receivables are past due, historical collection experience, and an evaluation of current and projected economic conditions at the balance sheet date. Accounts receivables are charged off against the allowance for credit losses after we determine that the potential for recovery is remote. As of September 30, 2024, and December 31, 2023, the allowance for credit losses, returns and deductions totaled $
For the three months ended September 30, 2024, the allowance for credit losses, returns, and deductions consisted of the following:
7
|
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|
|
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|
|
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|
|
|
|
|
|
|
|
|
||||||
|
|
2024 |
|
|
2023 |
|
||||||||||||||||||
|
|
Credit Losses Allowance |
|
|
Returns & Deductions Allowance |
|
|
Total |
|
|
Credit Losses Allowance |
|
|
Returns & Deductions Allowance |
|
|
Total |
|
||||||
Beginning balance, July 1 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |