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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

Current Report

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 11, 2022

 

STRYVE FOODS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   001-38785   87-1760117

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification Number)

 

5801 Tennyson Parkway, Suite 275

Plano, TX

  75024
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (972) 987-5130

 

Not Applicable

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

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.

 

 

 

 
 

 

Item 2.02. Results of Operations and Financial Condition.

 

On May 12, 2022, Stryve Foods, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2022.

 

The earnings press release is furnished as Exhibit 99.1 under Item 9.01 of this Current Report on Form 8-K and is incorporated herein by reference. The information in this Item 2.02, including the Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On May 11, 2022, the Company appointed Christopher J. Boever as its Chief Executive Officer effective May 23, 2022. In addition, on May 11, 2022, the Board of Directors of the Company increased the size of the Board from eight to nine directors and appointed Mr. Boever to fill the vacancy created by the expansion of the Board as a Class III Director effective May 23, 2022. In connection with the appointment of Mr. Boever, Joe Oblas will transition to the position of Chief Growth Officer.

 

Prior to his appointment as the Company’s Chief Executive Officer, Mr. Boever, age 54, served as the Executive Vice President and Chief Commercial Officer of The Hain Celestial Group, Inc. from February 2020 until May 6, 2022, and previously served as its Executive Vice President and Chief Customer Officer from January 2019 to February 2020. At The Hain Celestial Group, Mr. Boever oversaw the company’s commercial operations and sales and customer agenda in North America and was also responsible for helping ensure the company transformed its innovation capabilities. Mr. Boever has more than 20 years of consumer packaged foods industry experience. From 2011 to January 2018, Mr. Boever was Executive Vice President, Chief Customer Officer and President of Foodservice of Pinnacle Foods Inc., where he was responsible for overseeing its multi-billion dollar businesses to reshape and reinvigorate growth. Prior to Pinnacle, Mr. Boever served in roles of increasing responsibility in strategic planning, operations management and sales at ConAgra Brands, Inc. from 2007 to 2011 and at Hormel Foods Corporation from 1991 to 2007. Mr. Boever received a bachelor’s degree in Marketing from the University of Wisconsin – Whitewater along with continuing education programs at University of Southern California, Stanford University and the University of Minnesota. He currently sits on the Board of Directors for Snack it Forward and the Food Marketing Institute.

 

The Company entered into an employment agreement with Mr. Boever effective as of May 23, 2022 providing the following: (i) an annual base salary of $425,000; (ii) a one-time performance based restricted stock grant of 950,000 shares of Class A common stock subject to vesting upon reaching certain stock price hurdles ranging from $2.50 to $20.00; (iii) a one-time restricted stock grant of 500,000 shares of Class A common stock subject to time vesting annually over four years; (iv) a target bonus equal to 100% of his base salary; (v) participation in the Company’s employee benefit plans; and (vi) four (4) weeks of vacation. The employment agreement contains severance provisions which provide that upon the termination of his employment without Cause (as described in the employment agreement) or his voluntary resignation for a Good Reason (as described in the employment agreement), he will receive severance compensation payable over a twelve-month period equal to twelve months of base salary and 100% of the target bonus amount. Any severance payments are conditioned on the execution of a general release in favor of the Company. In addition, Mr. Boever agreed to relocate to Dallas, Texas no later than July 5, 2022 and was provided with a relocation bonus of $23,000. Mr. Boever will not receive any additional compensation for his service as a director.

 

There are no family relationships between Mr. Boever and any director, executive officer or person nominated or chosen by the Company to become a director or executive officer. Additionally, there have been no transactions involving Mr. Boever that would require disclosure under Item 404(a) of Regulation S-K. There are no arrangements or understandings between Mr. Boever and any other person, in each case, pursuant to which Mr. Boever was appointed to serve on the Board.

 

A copy of the employment agreement with Mr. Boever is filed herewith as Exhibit 10.1 and the foregoing description is qualified by reference to the full text thereof.

 

Item 9.01 Financial Statements and Exhibits.

 

10.1 Employment Agreement dated May 23, 2022
99.1 Earnings press release dated May 12, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 
 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: May 12, 2022

 

  STRYVE FOODS, INC.
     
  By: /s/ Joe Oblas
  Name: Joe Oblas
  Title: CEO

 

 

 

 

Exhibit 10.1

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 
 

 

 

 

 

 

Exhibit 99.1

 

 

Stryve Foods, Inc. Reports Fiscal 2022 First Quarter Results

Significantly Improved Operating Results and Lower Cash Burn on a Sequential Basis

Reaffirms FY 2022 Net Sales Guidance Range of $43 Million to $48 Million

Company Well-Positioned for Sustainable Growth

 

PLANO, Texas, May 12, 2022 — Stryve Foods, Inc. (“Stryve” or “the Company”) (NASDAQ: SNAX), an emerging healthy snack and eating platform disrupting traditional consumer packaged goods (CPG) categories, and a leader in the air-dried meat snack industry in the United States, today reports financial and operating results for the fiscal quarter ended March 31, 2022.

 

Joe Oblas, Chief Executive Officer and Co-Founder, commented, “We’re excited to share our first quarter results with you. Not only have we grown net sales and materially reduced our losses from last quarter, we’ve also made tremendous progress at the retail level. During the first quarter of 2022, sales and product velocities continued to be strong. Stryve brand velocity in the recent MULO channel (multi-outlet and convenience channel) was up 103.2% for the 12 weeks ended March 20, 2022, versus the year ago period. In addition, the Vacadillos brand velocity in the Convenience channel was up 191.1% in the 12 weeks ended March 20, 2022, versus the year ago period. We believe our retail strategy is working, and we’re thrilled with our prospects for the future.”

 

Financial Highlights for First Quarter 2022 versus Prior Year Period

 

  Net sales of $7.4 million, increased 8.6% from $6.8 million versus the year ago quarter. Wholesale sales of $4.9 million, grew 85% compared to the prior year period of $2.7 million, Private label sales of $1.0 million decreased 15%, compared to the prior year period of $1.2 million, and e-Commerce sales of $1.4 million decreased 51% compared to the prior year period of $2.9 million.
     
  Gross margin of $1.1 million, or 15.1% of net sales, compared to gross margin of $2.7 million or 39.2% of net sales in the 2021 first quarter. Significant margin declines were primarily due to increased direct labor and commodity input costs in beef and packaging, and somewhat based on mix shift changes.
     
  Total operating expenses of $8.3 million decreased by 11%, compared to total operating expenses of $9.3 million in the 2021 first quarter, primarily due to lower digital media advertising, partially offset by increased administrative and public company costs.
     
  Operating loss of $7.2 million, compared to operating loss of $6.6 million in the 2021 first quarter.
     
  Net loss of $7.3 million, or $0.25 per basic/diluted share, compared to a net loss of $5.8 million, or $0.57 per basic/diluted share, in the 2021 first quarter.
     
  Adjusted EBITDA loss1 of $6.3 million, compared to a $5.9 million Adjusted EBITDA loss in the prior year quarter.

 

1 Adjusted EBITDA is a non-GAAP financial measure as defined and reconciled to GAAP below.

 

Alex Hawkins, Chief Financial Officer, said “We believe our first quarter results are strong in light of the current macroeconomic environment. We feel that our results are a testament to our business model and operating plan. We ended the quarter showing balance sheet strength, with $28 million of positive net working capital, including approximately $13 million of cash, and virtually no debt. And, while the year-over-year comparisons convey a vastly improved financial position, it’s really exciting to see the $4.6 million improvement in net loss we have achieved since the fourth quarter of last year. We have made great strides in our path to profitability that we will look to build upon this year. We feel good about our progress and our previously shared net sales guidance range for 2022.”

 

 

 

 

 

Financial Highlights for First Quarter 2022 versus the Prior Quarter

 

  Net sales of $7.4 million, increased 8.6% from $6.8 million in the 2021 fourth quarter. Wholesale sales of $4.9 million, grew by 33% from the prior year fourth quarter, Private label sales of $1.0 million increased 25% over fourth quarter, and e-Commerce sales declined by 37% to $1.5 million, as expected due to the reduced marketing spend from the iOS changes last quarter.
     
  Gross margin of $1.1 million, or 15.1% of net sales, improved 410 basis points, compared to gross margin of $0.8 million or 11.0% of net sales in the 2021 fourth quarter.
     
  Total operating expenses of $8.3 million, decreased by 33%, compared to total operating expenses of $12.3 million in the 2021 fourth quarter.
     
  Operating loss of $7.2 million, improved by 38%, compared to operating loss of $11.5 million in the 2021 fourth quarter.
     
  Net loss of $7.3 million, or $0.25 per basic/diluted share, improved from net loss of $11.9 million, or $0.58 per basic/diluted share, in the 2021 fourth quarter.
     
  Adjusted EBITDA loss1 of $6.3 million, improved by 40%, versus $10.6 million of Adjusted EBITDA loss in the 2021 fourth quarter.

 

1 Adjusted EBITDA is a non-GAAP financial measure as defined and reconciled to GAAP below.

 

Conference Call

 

The Company will conduct a conference call today at 4:30 p.m. Eastern Time to discuss financial and operating results for the quarter ended March 31, 2022. To access the call live by phone, dial (800) 785-6502 and ask for the Stryve Foods call at least 10 minutes prior to the start time. A telephonic replay will be available through May 19, 2022, by calling (844) 512-2921 and using passcode ID: 22018551#. A webcast of the call will also be available live and for later replay on the Company’s Investor Relations website at https://ir.stryve.com/news-events.

 

About Stryve Foods, Inc.

 

Stryve is an emerging healthy snacking and food company that manufactures, markets and sells highly differentiated healthy snacking and food products that Stryve believes can disrupt traditional snacking and CPG categories. Stryve’s mission is “to help Americans eat better and live happier, better lives.” Stryve offers convenient products that are lower in sugar and carbohydrates and higher in protein than other snacks and foods. Stryve’s current product portfolio consists primarily of air-dried meat snack products marketed under the Stryve®, Kalahari®, Braaitime®, and Vacadillos® brand names. Unlike beef jerky, Stryve’s all-natural air-dried meat snack products are made of beef and spices, are never cooked, contain zero grams of sugar*, and are free of monosodium glutamate (MSG), gluten, nitrates, nitrites, and preservatives. As a result, Stryve’s products are Keto and Paleo diet friendly. Further, based on protein density and sugar content, Stryve believes that its air-dried meat snack products are some of the healthiest shelf-stable snacks available today.

 

Stryve distributes its products in major retail channels, primarily in North America, including grocery, club stores and other retail outlets, as well as directly to consumers through its ecommerce websites and through the Amazon platform.

 

For more information about Stryve, visit www.stryve.com or follow us on social media at @stryvebiltong.

 

* All Stryve Biltong and Vacadillos products contain zero grams of added sugar, with the exception of the Chipotle Honey flavor of Vacadillos, which contains one gram of sugar per serving.

 

 

 

 

 

Cautionary Note Regarding Forward-Looking Statements

 

Certain statements made herein are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “anticipate”, “may”, “will”, “would”, “could”, “intend”, “aim”, “believe”, “anticipate”, “continue”, “target”, “milestone”, “expect”, “estimate”, “plan”, “outlook”, “objective”, “guidance” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters, including, but not limited to, statements regarding Stryve’s plans, strategies, objectives, targets and expected financial performance. These forward-looking statements reflect Stryve’s current views and analysis of information currently available. This information is, where applicable, based on estimates, assumptions and analysis that Stryve believes, as of the date hereof, provide a reasonable basis for the information and statements contained herein. These forward-looking statements involve various known and unknown risks, uncertainties and other factors, many of which are outside the control of Stryve and its officers, employees, agents and associates. These risks, uncertainties, assumptions and other important factors, which could cause actual results to differ materially from those described in these forward-looking statements, include: (i) the inability to achieve profitability due to commodity prices, inflation, supply chain interruption, transportation costs and/or labor shortages; (ii) the ability to recognize the anticipated benefits of the Business Combination or meet financial and strategic goals, which may be affected by, among other things, competition, supply chain interruptions, the ability to pursue a growth strategy and manage growth profitability, maintain relationships with customers, suppliers and retailers and retain its management and key employees; (iii) the risk that retailers will choose to limit or decrease the number of retail locations in which Stryve’s products are carried or will choose not to carry or not to continue to carry Stryve’s products; (iv) the possibility that Stryve may be adversely affected by other economic, business, and/or competitive factors; (v) the effect of the COVID-19 pandemic on Stryve; (vi) the possibility that Stryve may not achieve its financial outlook and (vii) other risks and uncertainties described in the Company’s public filings with the SEC. Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those projections and forward-looking statements are based.

 

Investor Relations Contact:
Three Part Advisors, LLC
Sandy Martin or Phillip Kupper
smartin@threepa.com or pkupper@threepa.com
214-616-2207

 

-Financial Statements Follow-

 

 

 

 

 

Stryve Foods, Inc.

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except share and per share data)

 

   For the Three Months  

For the Three Months

Ended

 
   Ended March 31,  

December 31,

 
   2022   2021   2021 
(in thousands)  (unaudited)   (unaudited)   (unaudited) 
             
SALES, net  $7,421   $6,835   $6,834 
                
COST OF GOODS SOLD (exclusive of depreciation shown separately below)   6,297    4,157    6,079 
                
GROSS MARGIN  $1,124   $2,678   $755 
                
OPERATING EXPENSES               
Selling expenses  $4,026   $6,453   $8,252 
Operations expense   1,231    1,060    1,258 
Salaries and wages   2,586    1,402    2,299 
Depreciation and amortization expense   444    395    428 
Loss on disposal of fixed assets   -    1    33 
Total operating expenses   8,287    9,311    12,270 
                
OPERATING LOSS   (7,163)   (6,633)   (11,515)
                
OTHER (EXPENSES) INCOME               
Interest expense   (188)   (810)   (313)
PPP loan forgiveness   -    1,670    - 
Change in fair value of Private Warrants   45    -    40 
Other income (expense)   -    12    (139)
Total other (expense) expense   (143)   872    (412)
                
NET LOSS BEFORE INCOME TAXES  $(7,306)  $(5,761)  $(11,927)
                
Income taxes   8    -    30 
                
NET LOSS  $(7,314)  $(5,761)  $(11,957)
                
Loss per common share:               
Basic and diluted  $(0.25)  $(0.57)  $(0.58)
                
Weighted average shares outstanding:               
Basic and diluted   29,758,343    10,144,461    20,585,732 

 

 

 

 

 

Stryve Foods, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

   March 31,   December 31, 
   2022   2021 
(in thousands)  (Unaudited)   (audited) 
ASSETS          
CURRENT ASSETS          
Cash and cash equivalent  $12,626   $2,217 
Accounts receivable, net   3,603    2,900 
Inventory, net   13,247    7,216 
Prepaid media spend   450    450 
Prepaid expenses and other current assets   2,187    2,256 
Total current assets   32,113    15,039 
           
Property and equipment, net   7,135    6,826 
Right of use asset, net   719    767 
Goodwill   8,450    8,450 
Intangible asset, net   4,543    4,604 
Prepaid media spend, net of current portion   1,085    1,085 
Other assets   -    4 
TOTAL ASSETS  $54,045   $36,775 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
CURRENT LIABILITIES          
Accounts payable  $2,763   $3,098 
Accrued expenses   1,089    1,635 
Current portion of lease liability   152    168 
Line of credit   -    3,500 
Current portion of long-term debt   140    3,447 
Total current liabilities   4,144    11,848 
           
Long-term debt, net of current portion   84    120 
Lease liability, net of current portion   567    599 
Financing obligation - related party operating lease   7,500    7,500 
Deferred tax liability, net   67    67 
Deferred stock compensation liability   362    71 
Warrant Liability   83    128 
TOTAL LIABILITIES  $12,807   $20,333 
           
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, 12,682,746 and 8,633,755 shares issued and outstanding, respectively   1    1 
Class V common stock - $0.0001 par value, 200,000,000 shares authorized, 11,502,355 shares issued and outstanding   1    1 
Additional paid-in-capital   132,661    100,551 
Accumulated deficit   (91,425)   (84,111)
TOTAL STOCKHOLDERS’ EQUITY  $41,238   $16,442 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $54,045   $36,775 

 

 

 

 

 

Stryve Foods, Inc.

 Unaudited Condensed Consolidated Statement of Cash Flows

(in thousands)

 

   Three Months Ended 
   March 31,   March 31, 
   2022   2021 
(in thousands)  (unaudited)   (unaudited) 
         
CASH FLOWS FROM OPERATING ACTIVITIES          
Net loss  $(7,314)  $(5,761)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation expense   384    333 
Loss on disposal of fixed assets   -    1 
Amortization of intangible assets   61    62 
Amortization of debt issuance costs   -    5 
Net change in right-of-use assets and liabilities   1    - 
Interest income on members loan receivable   -    (12)
Bad debt expense   55    86 
Forgiveness on paycheck protection program loan   -    (1,670)
Stock based compensation expense   328    - 
Change in fair value of Private Warrants   (45)   - 
Changes in operating assets and liabilities:          
Accounts receivable   (758)   (1,370)
Inventory   (6,031)   (873)
Vendor deposits   4    - 
Prepaid expenses and other current assets   69    (650)
Accounts payable   (335)   823 
Accrued liabilities   (546)   726 
Net cash used in operating activities  $(14,127)  $(8,300)
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Cash paid for purchase of equipment   (693)   (193)
Cash received for sale of equipment   -    67 
Net cash used in investing activities  $(693)  $(126)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
PIPE capital raise   32,311    - 
Exercise of Prefunded Warrants   -    - 
Post closing adjustment of BCA   (238)   - 
Repurchase of member shares   -    (100)
Repayments on long-term debt   (4,843)   (528)
Borrowings on related party debt   -    1,794 
Repayments on related party debt   -    (3,001)
Borrowings on short-term debt   -    11,601 
Repayments on short-term debt   (2,000)   - 
Debt issuance costs   -    (50)
Net cash provided by financing activities  $25,230   $9,716 
           
Net change in cash and cash equivalents   10,410    1,290 
Cash and cash equivalents at beginning of period   2,217    592 
Cash and cash equivalents at end of period  $12,627   $1,882 
           
SUPPLEMENTAL INFORMATION:          
Cash paid for interest  $222   $347 

 

 

 

 

 

Reconciliation of GAAP to Non-GAAP Information

 

Stryve uses non-GAAP financial information and believes it is useful to investors as it provides additional information to facilitate comparisons of historical operating results, identify trends in operating results, and provide additional insight on how the management team evaluates the business. Stryve’s management team uses EBITDA and Adjusted EBITDA to make operating and strategic decisions, evaluate performance and comply with indebtedness related reporting requirements. Below are details on this non-GAAP measure and the non-GAAP adjustments that the management team makes in the definition of EBITDA and Adjusted EBITDA. Stryve believes this non-GAAP measure should be considered along with net income (loss), the most closely related GAAP financial measure. A reconciliation between EBITDA and net income (loss) is below:

 

   Three Months Ended 
   March 31,
2022
   March 31,
2021
   December 31,
2021
 
(in thousands)  (unaudited)   (unaudited)   (unaudited) 
             
Net loss  $(7,314)  $(5,761)  $(11,957)
Interest expense   188    810    313 
Income tax expense   8    -    30 
Depreciation and amortization   444    395    428 
EBITDA  $(6,674)  $(4,556)  $(11,186)
Additional Adjustments:               
PPP loan forgiveness   -    (1,670)   - 
Business combination expenses   -    884    - 
Stock based compensation expense   328    -    550 
Comparability adjustment - Public vs. Private   -    (522)   - 
Adjusted EBITDA  $(6,346)  $(5,864)  $(10,636)

 

* The Company was private during the 2021 first quarter and normalizing adjustments were included as Comparability Adjustment – Public vs. Private.