☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
New York
|
14-1541629
|
|
State or Other Jurisdiction of Incorporation or Organization
|
I.R.S. Employer Identification No.
|
|
2818 N. Sullivan Rd. Ste 130
Spokane Valley, WA
|
99216
|
|
Address of Principal Executive Offices
|
Zip Code
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $.01 par value per share
|
KSPN
|
NASDAQ Stock Market |
Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☒
|
Smaller reporting company ☒
|
Emerging growth company ☐
|
Form 10-Q
Page No.
|
|
PART I. FINANCIAL INFORMATION
|
|
Item 1 – Interim Condensed Consolidated Financial Statements (Unaudited)
|
|
4
|
|
5
|
|
|
|
6
|
|
|
|
7
|
|
|
|
8
|
|
9
|
|
22 | |
28 | |
28 | |
PART II. OTHER INFORMATION
|
|
29 | |
29 | |
29 | |
29 | |
29 | |
29 | |
29 | |
31 |
Thirteen Weeks Ended
|
||||||||
April 30,
2022
|
May 1,
2021
|
|||||||
Net revenue
|
$
|
31,791
|
$
|
40,617
|
||||
Cost of sales
|
24,940
|
30,821
|
||||||
Gross profit
|
6,851
|
9,796
|
||||||
Selling, general and administrative expenses
|
10,517
|
10,657
|
||||||
Loss from operations
|
(3,666
|
)
|
(861
|
)
|
||||
Interest expense
|
762
|
555
|
||||||
Loss from operations before income tax expense |
(4,428 | ) | (1,416 | ) | ||||
Income tax expense
|
-
|
-
|
||||||
Net loss
|
$
|
(4,428
|
)
|
$
|
(1,416
|
)
|
||
BASIC AND DILUTED INCOME PER SHARE:
|
||||||||
Basic and diluted loss per common share
|
$
|
(1.78
|
)
|
$
|
(0.61
|
)
|
||
Weighted average number of common shares outstanding – basic and diluted
|
2,493
|
2,317
|
Thirteen Weeks Ended
|
||||||||
April 30,
2022
|
May 1,
2021
|
|||||||
Net loss
|
$
|
(4,428
|
)
|
$
|
(1,416
|
)
|
||
Amortization of pension gain
|
-
|
-
|
||||||
Comprehensive loss
|
$
|
(4,428
|
)
|
$
|
(1,416
|
)
|
Thirteen Weeks Ended April 30, 2022
|
||||||||||||||||||||||||||||||||
Number of shares outstanding
|
Accumulated
Other
Comprehensive
Loss
|
Retained
Earnings
(Accumulated
Deficit)
|
Shareholders’
Equity
|
|||||||||||||||||||||||||||||
Common
Shares
|
Treasury
Shares
|
Common
Stock
|
Additional
Paid-in
Capital
|
Treasury
Stock
At Cost
|
||||||||||||||||||||||||||||
Balance as of January 29, 2022
|
3,903
|
(1,410
|
)
|
$
|
39
|
$
|
359,220
|
$
|
(230,170
|
)
|
$
|
(910
|
)
|
$
|
(120,894
|
)
|
$
|
7,285
|
||||||||||||||
Net Loss
|
-
|
-
|
-
|
-
|
-
|
-
|
(4,428
|
)
|
(4,428
|
)
|
||||||||||||||||||||||
Issuance of warrants
|
-
|
-
|
-
|
1,518
|
-
|
-
|
-
|
1,518
|
||||||||||||||||||||||||
Balance as of April 30, 2022
|
3,903
|
$
|
(1,410
|
)
|
$
|
39
|
$
|
360,738
|
$
|
(230,170
|
)
|
$
|
(910
|
)
|
$
|
(125,322
|
)
|
$
|
4,375
|
Thirteen Weeks Ended May 1, 2021
|
||||||||||||||||||||||||||||||||
Number of shares outstanding
|
Accumulated
Other
Comprehensive
Loss
|
Retained
Earnings
(Accumulated
Deficit)
|
Shareholders’
Equity
|
|||||||||||||||||||||||||||||
Common
Shares
|
Treasury
Shares
|
Common
Stock
|
Additional
Paid-in
Capital
|
Treasury
Stock
At Cost
|
||||||||||||||||||||||||||||
Balance as of January 30, 2021
|
3,337
|
(1,410
|
)
|
$
|
33
|
$
|
346,495
|
$
|
(230,169
|
)
|
$
|
(2,007
|
)
|
$
|
(112,863
|
)
|
$
|
1,489
|
||||||||||||||
Net Loss
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,416
|
)
|
(1,416
|
)
|
||||||||||||||||||||||
Exercise of warrants | 136 | - | 2 | - | (1 | ) | - | - | 1 | |||||||||||||||||||||||
Sale of shares, net of expenses
|
416
|
-
|
4
|
12,227
|
-
|
-
|
-
|
12,231
|
||||||||||||||||||||||||
Amortization of unearned compensation/restricted stock amortization
|
-
|
-
|
-
|
27
|
-
|
-
|
-
|
27 | ||||||||||||||||||||||||
Balance as of May 1, 2021
|
3,889
|
$ |
(1,410
|
)
|
$
|
39
|
$
|
358,749
|
$
|
(230,170
|
)
|
$
|
(2,007
|
)
|
$
|
(114,279
|
)
|
$ | 12,332 |
Thirteen Weeks Ended
|
||||||||
April 30,
2022
|
May 1,
2021
|
|||||||
OPERATING ACTIVITIES:
|
||||||||
Net income loss
|
$
|
(4,428
|
)
|
$
|
(1,416
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation of fixed assets
|
293
|
346
|
||||||
Amortization of intangible assets
|
-
|
257
|
||||||
Stock-based compensation
|
-
|
27
|
||||||
Interest on long-term debt
|
106
|
242
|
||||||
Amortization of ROU asset
|
154
|
147
|
||||||
Change in cash surrender value
|
354
|
(312
|
)
|
|||||
Changes in operating assets and liabilities that provide (use) cash:
|
||||||||
Accounts receivable
|
(392
|
)
|
(396
|
)
|
||||
Merchandise inventory
|
(2,977
|
)
|
1,949
|
|||||
Prepaid expenses and other current assets
|
92
|
(28
|
)
|
|||||
Other long-term assets
|
93
|
113
|
||||||
Accounts payable
|
1,393
|
(3,211
|
)
|
|||||
Accrued expenses and other current liabilities
|
(140
|
)
|
147
|
|||||
Other long-term liabilities
|
(368
|
)
|
(378
|
)
|
||||
Net cash used in operating activities
|
(5,820
|
)
|
(2,513
|
)
|
||||
INVESTING ACTIVITIES:
|
||||||||
Purchases of fixed assets
|
(399 | ) | (444 | ) | ||||
Net cash provided by (used in) investing activities
|
(399 | ) | (444 | ) | ||||
FINANCING ACTIVITIES:
|
||||||||
Proceeds from short term borrowings
|
542
|
-
|
||||||
Proceeds from long term borrowings
|
5,000
|
-
|
||||||
Proceeds from stock offering
|
-
|
12,231
|
||||||
Exercise of warrants
|
-
|
1
|
||||||
Payment of short term borrowings
|
-
|
(6,339
|
)
|
|||||
Net cash provided by financing activities
|
5,542
|
5,893
|
||||||
Net decrease in cash, cash equivalents, and restricted cash
|
(677
|
)
|
2,936
|
|||||
Cash, cash equivalents, and restricted cash, beginning of period
|
4,823
|
6,555
|
||||||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
4,146
|
$
|
9,491
|
||||
Supplemental disclosures and non-cash investing and financing activities: |
||||||||
Interest paid |
$ |
202 | $ |
153 | ||||
Warrants issued with debt |
$ |
1,633 | $ |
- |
•
|
We are partner obsessed. Our customers are our partners. Every decision is focused on building mutually beneficial relationships that deliver results.
|
•
|
We are insights driven. We make data actionable. Our curiosity drives us to discover opportunities early and often.
|
•
|
We create simplicity. We challenge the status quo. We take the complicated and simplify it.
|
•
|
We take ownership. We make things happen. We hold ourselves accountable and have a bias for action.
|
•
|
We empower each other. We welcome and learn from diverse experiences. Our empathy ignites innovation and empowers meaningful change.
|
Thirteen Weeks Ended
|
||||||||
(amounts in thousands)
|
April 30,
2022
|
May 1,
2021
|
||||||
Amortized intangible assets:
|
||||||||
Technology
|
$ |
-
|
$ |
97
|
||||
Trade names and trademarks
|
-
|
160
|
||||||
Total amortization expense
|
$
|
-
|
$
|
257
|
April 30,
2022
|
January 29,
2022
|
May 1,
2021
|
||||||||||
Cash and cash equivalents
|
$
|
828
|
$
|
1,218
|
$
|
5,030
|
||||||
Restricted cash
|
3,318
|
3,605
|
4,461
|
|||||||||
Total cash, cash equivalents and restricted cash
|
$
|
4,146
|
$
|
4,823
|
$
|
9,491
|
Employee Stock Award Plans
|
||||||||||||||||||||
Number of
Shares
Subject To
Option
|
Weighted Average Exercise
Price
|
Weighted Average Remaining Contractual Term
|
Other
Share
Awards (1)
|
Weighted
Average
Grant Fair
Value
|
||||||||||||||||
Balance January 29, 2022
|
85,965
|
$
|
13.41
|
7.5
|
90,000 |
$ | 15.39 | |||||||||||||
Granted
|
15,000
|
6.55
|
9.9
|
- | - | |||||||||||||||
Forfeited
|
(17,880
|
)
|
6.50
|
9.1
|
(55,000 | ) | 13.63 | |||||||||||||
Canceled
|
(6,806
|
)
|
28.58
|
-
|
- | - | ||||||||||||||
Exercised
|
-
|
-
|
-
|
- | - | |||||||||||||||
Balance April 30, 2022
|
76,279
|
$
|
11.04
|
7.1
|
35,000 | $ | 18.14 | |||||||||||||
Exercisable April 30, 2022
|
28,163
|
$
|
17.07
|
4.4
|
- | $ | - |
Thirteen Weeks Ended
|
||||||||
(amounts in thousands)
|
April 30,
2022
|
May 1,
2021
|
||||||
|
$
|
89
|
$
|
63
|
||||
Net periodic pension cost
|
$
|
89
|
$
|
63
|
• |
We are partner obsessed. Our customers are our partners. Every decision is focused on building mutually beneficial relationships that deliver results.
|
• |
We are insights driven. We make data actionable. Our curiosity drives us to discover opportunities early and often.
|
• |
We create simplicity. We challenge the status quo. We take the complicated and simplify it.
|
• |
We take ownership. We make things happen. We hold ourselves accountable and have a bias for action.
|
• |
We empower each other. We welcome and learn from diverse experiences. Our empathy ignites innovation and empowers meaningful change.
|
Thirteen weeks ended
|
Change
|
|||||||||||||||||||||||
April 30, 2022
|
May 1, 2021
|
$ |
|
%
|
||||||||||||||||||||
Amazon US
|
$
|
29,620
|
93.2
|
%
|
$
|
37,516
|
92.4
|
%
|
$
|
(7,896
|
)
|
-21.0
|
%
|
|||||||||||
Amazon International
|
1,287
|
4.0
|
%
|
2,268
|
5.6
|
%
|
(981
|
)
|
-43.3
|
%
|
||||||||||||||
Walmart, Target & other marketplaces
|
430
|
1.4
|
%
|
378
|
0.9
|
%
|
52
|
13.8
|
%
|
|||||||||||||||
Subtotal Retail as a Service
|
31,337
|
98.6
|
%
|
40,162
|
98.9
|
%
|
(8,825
|
)
|
-22.0
|
%
|
||||||||||||||
Subscriptions
|
454
|
1.4
|
%
|
455
|
1.1
|
%
|
(1
|
)
|
-0.2
|
%
|
||||||||||||||
Net revenue
|
$
|
31,791
|
100.0
|
%
|
$
|
40,617
|
100.0
|
%
|
$
|
(8,826
|
)
|
-21.7
|
%
|
Thirteen Weeks Ended
|
Change
|
|||||||||||||||
(amounts in thousands)
|
April 30,
2022
|
May 1,
2021
|
$ |
|
%
|
|||||||||||
Merchandise margin
|
$
|
14,046
|
$
|
18,982
|
$
|
(4,936
|
)
|
(26.0
|
)%
|
|||||||
% of net revenue
|
44.2
|
%
|
46.7
|
%
|
(2.5
|
)%
|
||||||||||
Fulfillment fees
|
(4,568
|
)
|
(6,449
|
)
|
(1,881
|
)
|
(29.2
|
)%
|
||||||||
Warehousing and freight
|
(2,627
|
)
|
(2,737
|
)
|
(110
|
)
|
(4.0
|
)%
|
||||||||
Gross profit
|
$
|
6,851
|
$
|
9,796
|
$
|
(2,945
|
)
|
(30.1
|
)%
|
|||||||
% of net revenue
|
21.6
|
%
|
24.1
|
%
|
Thirteen weeks ended
|
Change
|
|||||||||||||||
April 30,
2022
|
May 1,
2021
|
$ |
%
|
|||||||||||||
Selling expenses
|
$
|
4,601
|
$
|
6,230
|
$
|
(1,629
|
)
|
-26.1
|
%
|
|||||||
General and administrative expenses
|
5,916
|
4,427
|
1,489
|
33.6
|
%
|
|||||||||||
SG&A Expenses
|
$
|
10,517
|
$
|
10,657
|
$
|
(140
|
)
|
-1.3
|
%
|
|||||||
As a % of total revenue
|
33.1
|
%
|
26.2
|
%
|
As of or for the
|
||||||||||||
Thirteen Weeks Ended
|
Change
|
|||||||||||
(amounts in thousands)
|
April 30,
|
May 1,
|
||||||||||
2022
|
2021
|
$ | ||||||||||
Operating Cash Flows
|
$
|
(5,820
|
)
|
$
|
(2,513
|
)
|
$
|
(3,307
|
)
|
|||
Investing Cash Flows
|
(399
|
)
|
(444
|
)
|
45
|
|||||||
Financing Cash Flows
|
5,542
|
5,893
|
(351
|
)
|
||||||||
Capital Expenditures(1)
|
(399
|
)
|
(444
|
)
|
45
|
|||||||
Cash, Cash Equivalents, and Restricted Cash (2)
|
4,146
|
9,491
|
(5,345
|
)
|
||||||||
Merchandise Inventory
|
32,254
|
22,567
|
9,687
|
|||||||||
(1)Included in Investing Cash Flows
|
||||||||||||
(2)Cash and cash equivalents per condensed consolidated balance sheets
|
$
|
828
|
$
|
5,030
|
||||||||
Add: restricted cash
|
3,318
|
4,461
|
||||||||||
Cash, cash equivalents, and restricted cash
|
$
|
4,146
|
$
|
9,491
|
June 14, 2022
|
By: /s/ Brock Kowalchuk
|
|
Brock Kowalchuk
|
||
Principal Executive Officer
|
||
(Principal Executive Officer)
|
||
June 14, 2022
|
By: /s/ Edwin Sapienza
|
|
Edwin Sapienza
|
||
Chief Financial Officer
|
||
(Principal and Chief Accounting Officer)
|
(1) |
I have reviewed this report on Form 10–Q of the Registrant;
|
(2) |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
(3) |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
(4) |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c. |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
|
d. |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
(5) |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
|
a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and
report financial information; and
|
b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Brock Kowalchuk
|
||
Brock Kowalchuk
|
||
Principal Executive Officer
|
||
Kaspien Holdings Inc.
|
(1) |
I have reviewed this report on Form 10–Q of the Registrant;
|
(2) |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
(3) |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
(4) |
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a. |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c. |
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
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d. |
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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(5) |
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
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a. |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and
report financial information; and
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b. |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ Edwin Sapienza
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||
Edwin Sapienza
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||
Chief Financial Officer
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||
Kaspien Holdings Inc.
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(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Brock Kowalchuk
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/s/ Edwin Sapienza
|
|
Brock Kowalchuk |
Edwin Sapienza
|
|
Principal Executive Officer |
Chief Financial Officer
|
|
June 14, 2022
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June 14, 2022
|