Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 12, 2022 | |
Affiliate, Collateralized Security [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-38785 | |
Entity Registrant Name | STRYVE FOODS, INC. | |
Entity Central Index Key | 0001691936 | |
Entity Tax Identification Number | 87-1760117 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 5801 Tennyson Parkway | |
Entity Address, Address Line Two | Suite 275 | |
Entity Address, City or Town | Plano | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75024 | |
City Area Code | 972 | |
Local Phone Number | 987-5130 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Class A Common Stock [Member] | ||
Affiliate, Collateralized Security [Line Items] | ||
Title of 12(b) Security | Class A common stock | |
Trading Symbol | SNAX | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 21,799,556 | |
Warrants, each exercisable for one share of Class A common stock at an exercise price of $11.50 per share [Member] | ||
Affiliate, Collateralized Security [Line Items] | ||
Title of 12(b) Security | Warrants, each exercisable for one share of Class A common stock at an exercise price of $11.50 per share | |
Trading Symbol | SNAXW | |
Security Exchange Name | NASDAQ | |
Class V Common Stock [Member] | ||
Affiliate, Collateralized Security [Line Items] | ||
Entity Common Stock, Shares Outstanding | 7,488,343 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | |||
Cash and cash equivalents | $ 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 | |
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 (DEFICIT) | |||
Preferred stock - $0.0001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding | |||
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 | $ (9,336,867) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 39,226,459 | 36,775,368 | |
Class A Common Stock [Member] | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Common stock | 1,675 | 863 | |
Class V Common Stock [Member] | |||
STOCKHOLDERS' EQUITY (DEFICIT) | |||
Common stock | $ 1,150 | $ 1,150 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Preferred Stock, par value | $ 0.0001 | $ 0.0001 |
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Class A Common Stock [Member] | ||
Common Stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized | 400,000,000 | 400,000,000 |
Common Stock, shares issued | 16,750,794 | 8,633,755 |
Common Stock, shares outstanding | 16,750,794 | 8,633,755 |
Class V Common Stock [Member] | ||
Common Stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, shares authorized | 200,000,000 | 200,000,000 |
Common Stock, shares issued | 11,502,355 | 11,502,355 |
Common Stock, shares outstanding | 11,502,355 | 11,502,355 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Statement [Abstract] | ||||
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 |
Operating 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 | 0 | 36,441 | 0 |
NET LOSS | $ (16,354,319) | $ (5,560,717) | $ (23,668,061) | $ (11,321,867) |
Loss per common share: | ||||
Basic | $ (0.53) | $ (0.55) | $ (0.78) | $ (1.12) |
Diluted | $ (0.53) | $ (0.55) | $ (0.78) | $ (1.12) |
Weighted average shares outstanding: | ||||
Basic | 30,946,486 | 10,139,422 | 30,355,697 | 10,141,928 |
Diluted | 30,946,486 | 10,139,422 | 30,355,697 | 10,141,928 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Total | Common Stock [Member] Common Stock Class A [Member] | Common Stock [Member] Common Stock Class B/V [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2020 | $ (9,336,867) | $ 1,015 | $ 42,783,367 | $ (52,121,249) | |
Balance, shares at Dec. 31, 2020 | 10,152,020 | ||||
Repurchase of member shares | (99,950) | $ (1) | (99,949) | ||
Repurchase of member shares, shares | (12,598) | ||||
Net Loss | (5,761,151) | (5,761,151) | |||
Balance at Mar. 31, 2021 | (15,197,968) | $ 1,014 | 42,683,418 | (57,882,400) | |
Balance, shares at Mar. 31, 2021 | 10,139,422 | ||||
Balance at Dec. 31, 2020 | (9,336,867) | $ 1,015 | 42,783,367 | (52,121,249) | |
Balance, shares at Dec. 31, 2020 | 10,152,020 | ||||
Net Loss | (11,321,867) | ||||
Balance at Jun. 30, 2021 | (20,758,685) | $ 1,014 | 42,683,418 | (63,443,117) | |
Balance, shares at Jun. 30, 2021 | 10,139,422 | ||||
Balance at Mar. 31, 2021 | (15,197,968) | $ 1,014 | 42,683,418 | (57,882,400) | |
Balance, shares at Mar. 31, 2021 | 10,139,422 | ||||
Net Loss | (5,560,717) | (5,560,717) | |||
Balance at Jun. 30, 2021 | (20,758,685) | $ 1,014 | 42,683,418 | (63,443,117) | |
Balance, shares at Jun. 30, 2021 | 10,139,422 | ||||
Balance at Dec. 31, 2021 | 16,442,099 | $ 863 | $ 1,150 | 100,551,257 | (84,111,171) |
Balance, shares at Dec. 31, 2021 | 8,633,755 | 11,502,355 | |||
PIPE raise | 32,311,187 | $ 250 | 32,310,937 | ||
PIPE raise, shares | 2,496,934 | ||||
Prefunded Warrants converted into Common Stock Class A | 75 | $ 144 | (69) | ||
Prefunded Warrants converted into Common Stock Class A, shares | 1,443,557 | ||||
Post closing adjustment of BCA | (238,089) | (238,089) | |||
Issuance of Restricted Stock Awards | 36,709 | $ 11 | 36,698 | ||
Issuance of Restricted Stock Awards, Shares | 108,500 | ||||
Net Loss | (7,313,742) | (7,313,742) | |||
Balance at Mar. 31, 2022 | 41,238,239 | $ 1,268 | $ 1,150 | 132,660,734 | (91,424,913) |
Balance, shares at Mar. 31, 2022 | 12,682,746 | 11,502,355 | |||
Balance at Dec. 31, 2021 | 16,442,099 | $ 863 | $ 1,150 | 100,551,257 | (84,111,171) |
Balance, shares at Dec. 31, 2021 | 8,633,755 | 11,502,355 | |||
Net Loss | (23,668,061) | ||||
Balance at Jun. 30, 2022 | 25,125,835 | $ 1,675 | $ 1,150 | 132,902,242 | (107,779,232) |
Balance, shares at Jun. 30, 2022 | 16,750,794 | 11,502,355 | |||
Balance at Mar. 31, 2022 | 41,238,239 | $ 1,268 | $ 1,150 | 132,660,734 | (91,424,913) |
Balance, shares at Mar. 31, 2022 | 12,682,746 | 11,502,355 | |||
Prefunded Warrants converted into Common Stock Class A | 259 | $ 356 | (96) | ||
Prefunded Warrants converted into Common Stock Class A, shares | 3,553,589 | ||||
Issuance of Restricted Stock Awards | 172,852 | $ 50 | 172,802 | ||
Issuance of Restricted Stock Awards, Shares | 501,125 | ||||
Issuance of Restricted Stock Units | 68,803 | $ 1 | 68,802 | ||
Issuance of Restricted Stock Units, Shares | 13,334 | ||||
Net Loss | (16,354,319) | (16,354,319) | |||
Balance at Jun. 30, 2022 | $ 25,125,835 | $ 1,675 | $ 1,150 | $ 132,902,242 | $ (107,779,232) |
Balance, shares at Jun. 30, 2022 | 16,750,794 | 11,502,355 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 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) |
Gain on debt extinguishment | (545,200) | |
Prepaid media reserve | 1,489,028 | |
Obsolete inventory reserve | 821,782 | |
Interest income on members loan receivable | (24,547) | |
Bad debt expense | 288,623 | 262,888 |
Forgiveness on paycheck protection program loan | (1,669,552) | |
Stock based compensation expense | 711,978 | |
Change in fair value of Private Warrants | (85,310) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,644,144) | (2,727,652) |
Inventory | (258,328) | (1,433,481) |
Vendor deposits | 4,193 | |
Prepaid media spend | 45,520 | (170,632) |
Prepaid expenses and other current assets | 566,241 | (800,209) |
Accounts payable | (540,196) | 1,645,302 |
Accrued liabilities | 933,077 | 278,621 |
Operating lease payments | (65,083) | |
Net cash used in operating activities | (20,378,627) | (15,442,553) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Cash paid for purchase of equipment | (2,033,174) | (249,048) |
Cash received for sale of equipment | 41,000 | 73,681 |
Net cash used in investing activities | (1,992,174) | (175,367) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
PIPE capital raise | 32,311,187 | |
Exercise of Prefunded Warrants | 334 | |
Repurchase of member shares | (99,950) | |
Post closing adjustment of BCA | (238,089) | |
Repayments on long-term debt | (4,908,745) | (4,360,359) |
Borrowings on related party debt | 9,294,000 | |
Repayments on related party debt | (7,793,604) | |
Borrowings on short-term debt | 19,694,550 | |
Repayments on short-term debt | (2,000,000) | |
Debt issuance costs | (507,166) | |
Net cash provided by financing activities | 25,164,687 | 16,227,471 |
Net change in cash and cash equivalents | 2,793,886 | 609,551 |
Cash and cash equivalents at beginning of period | 2,217,191 | 591,634 |
Cash and cash equivalents at end of period | 5,011,077 | 1,201,185 |
SUPPLEMENTAL INFORMATION: | ||
Cash paid for interest | $ 403,121 | $ 1,506,847 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Note 1 - Organization and Description of Business Stryve Foods, Inc. (f/k/a Andina Acquisition Corp. III) (“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, Texas, with manufacturing operations in Madill, Oklahoma. On July 20, 2021 (the “Closing Date”), the Company completed a business combination (the “Business Combination”) pursuant to that certain Business Combination Agreement (the “BCA”) by and among the Company, Andina Holdings LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company (“Holdings”), B. Luke Weil, in the capacity from and after the closing of the transactions contemplated by the Business Combination Agreement (the “Closing”) as the representative for the shareholders of the Company (other than the Seller), Stryve Foods, LLC, a Texas limited liability company, Stryve Foods Holdings, LLC, a Texas limited liability company (the “Seller”), and R. Alex Hawkins, in the capacity from and after the Closing as the representative for the members of the Seller. Notwithstanding the legal form of the Business Combination, pursuant to the Business Combination Agreement, the Business Combination has been accounted for as a reverse recapitalization in accordance with generally accepted accounting principles in the United States ("GAAP"). Under this method of accounting, Stryve Foods, LLC is treated as the acquirer and the Company is treated as the acquired company for financial statement reporting purposes. In connection with the completion of the Business Combination and as contemplated by the Business Combination Agreement, the Company: (i) issued 4,250,000 shares of Class A common stock to private placement investors for aggregate consideration of $ 42.5 million; (ii) issued 1,357,372 shares of Class A common stock, satisfied by the offset of $ 10.9 million of principal and accrued interest under outstanding unsecured promissory notes (the "Bridge Notes") issued by Stryve Foods, LLC to certain investors in a private placement on the closing date of the Business Combination, and (iii) 11,502,355 newly issued non-voting Class B common units of Holdings (the “Seller Consideration Units”) and voting (but non-economic) Class V common stock of the Company. In addition, the Company's ordinary shares outstanding prior to the Closing were converted into 3,409,949 shares of Class A common stock of the Company without any action of the holders. The Seller distributed the Seller Consideration Units to its members in accordance with its limited liability company agreement. On March 25, 2022, the Company finalized the post-closing adjustments under the Business Combination Agreement (the "Post-Closing Adjustment), which resulted in the release of all 115,023 escrowed shares of Class V common stock, an equal number of Holdings Class B common units, and the net payment of approximately $ 238,000 by the Company to the Seller. Prior to July 20, 2021, Stryve Foods, LLC was a “pass-through” (limited liability company) entity for income tax purposes and had no material income tax accounting reflected in its financial statements for financial reporting purposes since taxable income and deductions were “passed through” to its members. Following the consummation of the Business Combination, the combined company is organized in an “Up-C” structure and is now a taxable C corporation in which the business of Stryve Foods, LLC and its subsidiaries is held by Holdings, which is a subsidiary of the Company. By virtue of the Up-C structure, the Company's only direct assets consist of its equity interests in Holdings, an entity of which the Company maintains 100 % voting control. As the member of Holdings with voting control, the Company has full, exclusive and complete discretion to manage and control the business of Stryve Foods, LLC and to take all actions it deems necessary, appropriate, advisable, incidental, or convenient to accomplish the purposes of Stryve Foods, LLC and, accordingly, the financial statements are prepared on a consolidated basis. The financial statements of the Company now account for income taxes in accordance with Accounting Standards Codification (“ASC”) 740, Income taxes. Stryve Foods, LLC has four wholly owned subsidiaries, Biltong Acquisition Company LLC, Braaitime LLC, Protein Brothers, LLC, and Kalahari Snacks, LLC. The consolidated financial statements are under the name of the Company, the legal parent, but represent Stryve Foods, LLC, the legal subsidiary (accounting acquirer) with an adjustment to retrospectively adjust the legal capital to reflect the legal capital as earnings per share (“EPS”). EPS is calculated using the equity structure of the Company, including the equity interests issued to the Seller in the Business Combination. Prior to the Business Combination, EPS is based on Stryve Foods, LLC’s net income and weighted average common shares outstanding on an as exchanged basis that were received in the Business Combination. Subsequent to the Business Combination, EPS is based on the actual number of common shares on an as exchanged basis of the Company outstanding during that period. For any periods prior to the Closing, basic and diluted net income/loss per share have been retroactively adjusted to reflect the reverse recapitalization of the Company utilizing the number of Seller Consideration Units (adjusted as necessary to reflect the capital activity of Stryve Foods, LLC prior to the Closing) as the weighted average shares outstanding for those periods and the actual shares outstanding for any periods after the Closing, all on an as exchanged basis. |
Liquidity
Liquidity | 6 Months Ended |
Jun. 30, 2022 | |
Liquidity [Abstract] | |
Liquidity | Note 2 - Liquidity The Company incurred net losses of approximately $ 23.6 million during the six months ended June 30, 2022. Cash used in operating activities was approximately $ 20.4 million for the six months ended June 30, 2022. 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 bank loans. Its principal uses of cash have been debt service, capital expenditures, and investment in working capital to fund operations. At June 30, 2022, the Company had total current assets of $ 17.6 million and current liabilities of $ 5.5 million resulting in working capital of $ 12.2 million. The Company's operating plans are primarily focused on expanding its distribution base and increasing awareness of its products and brands while improving and expanding its manufacturing and distribution capabilities. Debt financing may require the Company to pledge assets and enter into covenants that could restrict certain business activities or its ability to incur further indebtedness; and may contain other terms that are not favorable to the Company or its stockholders. On January 6, 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with select accredited investors (the “2022 PIPE Investors”), relating to the issuance and sale of 2,496,934 shares of the Company’s Class A common stock and, in lieu of Class A Common Stock, pre-funded warrants to purchase 7,797,184 shares of Class A common stock (the “PIPE Pre-Funded Warrants”), and accompanying warrants (the “PIPE Warrants”) to purchase up to 10,294,118 shares of Class A common stock with an exercise price equal to $ 3.60 and a term of five years (the “Offering”). The Offering closed on January 11, 2022. The Class A common stock and PIPE Warrants were sold at a combined purchase price of $ 3.40 per share (less $ 0.0001 per share for PIPE Pre-Funded Warrants). The Company received net proceeds from the Offering of approximately $ 32.3 million. On January 28, 2022, the Company repaid approximately $ 6,841,000 of principal and interest to Origin Bank (the "Origin") under the Line of Credit and the outstanding notes, which represented all of the outstanding indebtedness to Origin. While Stryve has materially improved its liquidity position through the Business Combination and the Offering, the unpredictable nature of the current COVID-19 pandemic negatively impact the Company's manufacturing, as it may relate to the supply chain and the welfare of the Company’s labor. Additionally, the uncertainty of current market conditions could also adversely impact capital markets, with the risk of significant contraction occurring. This risk still is apparent and constantly considered by management, as it relates to external capital availability. Based on the Company's cash balance of approximately $ 5.0 million as of June 30, 2022 , and its expected cash flows, the Company believes that its available cash, working capital, and management's belief that it can secure non-dilutive debt capital based on the unleveraged nature of the Company's balance sheet should be sufficient to fund its operations for at least the next 12 months from the issuance date of these financial statements as management has greater latitude over expenses. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 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, 2021. 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 judgements and uncertainties. Estimates are used for, but not limited to revenue recognition, allowance for doubtful accounts and customer allowances, useful lives for depreciation and amortization, standard costs of inventory, provisions for inventory obsolescence, impairments of goodwill and long-lived assets, warrant liabilities 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 judgements and estimates could change, which may result in future impairments of assets among other effects. Accounts Receivable and Allowance for Doubtful Accounts, Returns, and Deductions Accounts receivable are customer obligations due under normal trade terms. The Company records accounts receivable at their net realizable value, which requires management to estimate the collectability of the Company’s receivables. Judgment is required in assessing the realization of these receivables, including the credit worthiness of each counterparty and the related aging of past due balances. Management provides for an allowance for doubtful accounts equal to the estimated uncollectable amounts, in addition to a general provision based on historical experience. As of June 30, 2022 and December 31, 2021, the allowance for doubtful accounts and returns and deductions totaled $ 1,350,080 and $ 1,236,497 , respectively. Total bad debt expense for the six months ended June 30, 2022 and 2021 was $ 288,623 and $ 262,888 respectively . Concentration of Credit Risk The balance sheet items that potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable. The Company continuously evaluates the credit worthiness of its customers’ financial condition and generally does not require collateral. The Company maintains cash balances in bank accounts that may, at times, exceed Federal Deposit Insurance Corporation (“FDIC”) limits of $ 250,000 per institution. The Company incurred no losses from such accounts and management considers the risk of loss to be minimal. For the six months ended June 30, 2022 and 2021, customer concentrations in excess of 10% consolidated sales are as follows: Six Months Ended June 30, Period Ended June 30, 2022 2021 2022 2021 Sales Accounts Customer A 46 % — 22 % — Customer B — — 29 % — Customer C — 15 % — 23 % Customer D — — 13 % Customer E — 12 % — — Revenue Recognition Policy The Company manufactures and markets a broad range of protein snack products through multiple distribution channels. The products are offered through branded and private label items. Generally, the Company considers all revenues as arising from contracts with customers. Revenue is recognized based on the five-step process outlined in the Accounting Standards Codification (“ASC”) 606: (1) Identification of the contract with a customer (2) Identification of the performance obligations in the contract (3) Determination of the transaction price (4) Allocation of the transaction price to the performance obligations in the contract (5) Recognition of revenue when, or as, the Company satisfies a performance obligation The Company’s revenue derived from the sale of branded and private label products is considered variable consideration as the contract includes discounts, rebates, incentives and other similar items. Generally, revenue is recognized at the point in time when the customer obtains control of the product, which may occur upon either shipment or delivery of the product. The payment terms of the Company’s contracts are generally net thirty to sixty days , although early pay discounts are offered to customers. The Company regularly experiences customer deductions from amounts invoiced due to product returns, product shortages, and delivery nonperformance penalty fees. This variable consideration is estimated using the expected value approach based on the Company’s historical experience, and it is recognized as a reduction to the transaction price in the same period that the related product sale is recognized. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products to customers. Revenue is recognized when the Company satisfies its performance obligations under the contract by transferring the promised product to its customer. The Company’s contracts generally do not include any material significant financing components. Performance Obligations The Company has elected the following practical expedients provided for in Topic 606, Revenue from Contracts with Customers: (1) The Company has excluded from its transaction price all sales and similar taxes collected from its customers. (2) The Company has elected to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. (3) The Company has elected to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations. (4) The portfolio approach has been elected by the Company as it expects any effects would not be materially different in application at the portfolio level compared with the application at an individual contract level. (5) The Company has elected not to disclose information about its remaining performance obligations for any contract that has an original expected duration of one year or less. Neither the type of good sold nor the location of sale significantly impacts the nature, amount, timing, or uncertainty of revenue and cash flows. Inventory Inventories consist of raw materials, work in process, and finished goods, are stated at lower of cost or net realizable value determined using the standard cost method. The Company reviews the value of items in inventory and provides write-downs and write-offs of inventory for obsolete, damaged, or expired inventory. Write-downs and write-offs are included in cost of goods sold. Stock Based Compensation Stock-based compensation awards are accounted for in accordance with ASC Topic 718, Compensation –Stock Compensation (ASC 718). The Company expenses the fair value of stock awards granted to employees and members of the board of directors over the requisite service period, which is typically the vesting period. Compensation cost for stock-based awards issued to employees is measured using the estimated fair value at the grant date and is adjusted to reflect actual forfeitures. Stock-based awards issued to non-employees, including directors for non-board-related services, are accounted for based on the fair value of such services received or the fair value of the awards granted on the grant date, whichever is more reliably measured. Stock-based awards subject to service-based vesting conditions are expensed on a straight-line basis over the vesting period. Warrant Liability The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Accordingly, the Company classifies the private warrants issued to Andina's original stockholders (the "Private Warrants") as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations. Net Income (Loss) per Share The Company reports both basic and diluted earnings per share. Basic earnings per share is calculated based on the weighted average number of shares of common stock outstanding and excludes the dilutive effect of warrants, stock options, and other types of convertible securities. However, certain pre-funded warrants are included in the calculation of basic earnings per share as the pre-funded warrants can be exercised for nominal value. Diluted earnings per share is calculated based on the weighted average number of shares of common stock outstanding and the dilutive effect of stock options, warrants and other types of convertible securities are included in the calculation. Dilutive securities are excluded from the diluted earnings per share calculation if their effect is anti-dilutive, such as in periods where the Company would report a net loss. For any periods prior to the closing of the Business Combination (the "Closing"), basic and diluted net income/loss per share have been retroactively adjusted to reflect the reverse recapitalization of the Company utilizing the Seller Consideration Units (adjusted as necessary to reflect the capital activity of the Company prior to the Closing) as the weighted average shares outstanding for those periods and the actual shares outstanding for any periods after the Closing all on an as exchanged basis. As of June 30, 2022 there were 21,291,618 dilutive common stock equivalents, consisting of warrants, which were anti-dilutive. Income Taxes The Company accounts for income taxes pursuant to the asset and liability method of ASC 740, Income Taxes, which requires the Company to recognize current tax liabilities or receivables for the amount of taxes as estimated are payable or refundable for the current year, and deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts and their respective tax bases of assets and liabilities and the expected benefits of net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period enacted. A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible. Under the terms of a Tax Receivable Agreement (the “TRA”) as part of the Business Combination Agreement, the Company generally will be required to pay to the Seller 85 % of the applicable cash savings, if any, in U.S. federal and state income tax based on its ownership in Andina Holdings, LLC that the Company is deemed to realize in certain circumstances as a result of the increases in tax basis and certain tax attributes resulting from the Business Combination as described below. This is accounted for in conjunction with the methods used to record income tax described above. The Company follows the provisions of ASC 740-10 related to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740-10 prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The benefit of tax positions taken or expected to be taken in the Company income tax returns is recognized in the financial statements if such positions are more likely than not of being sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits”. A liability is recognized (or amount of net operating loss carryover or amount of tax refundable is reduced) for an unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740-10. Interest costs and related penalties related to unrecognized tax benefits are required to be calculated, if applicable. The Company's policy is to classify assessments, if any, for tax related interest and penalties as a component of income tax expense. As of June 30, 2022, no liability for unrecognized tax benefits was required to be reported. We do not expect any significant changes in our unrecognized tax benefits in the next year. Tax Receivable Agreement In conjunction with the Business Combination, the Company entered into the TRA with Seller and Holdings. Pursuant to the TRA, the Company is required to pay Seller 85 % of the amount of savings, if any, in U.S. federal, state, local and foreign income tax that the Company actually realizes as a result of (A) tax basis adjustments resulting from taxable exchanges of Class B common units of Holdings and Class V common stock of the Company acquired by the Company in exchange for Class A common stock of the Company and (B) tax deductions in respect of portions of certain payments made under the TRA. All such payments to the Seller are the obligations of the Company. As of June 30, 2022 , there had been no exchanges of Class B common units of Holdings and Class V common stock of the Company for Class A common stock of the Company and, accordingly, no TRA liabilities existed as of such date. Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash, accounts receivable, accounts payable, and vehicle notes payable. The carrying amounts of cash, accounts receivable, and accounts payable approximate their respective fair values because of the short-term maturities or expected settlement date of these instruments. The vehicle notes payable have fixed interest rates the Company believes reflect current market rates for notes of this nature. The Company believes the current carrying value of long-term debt approximates its fair value because the terms are comparable to similar lending arrangements in the marketplace. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 4 - Inventory As of June 30, 2022 and December 31, 2021, inventory consisted of the following: As of As of June 30, December 31, Raw materials $ 2,471,495 $ 2,188,284 Work in process 1,918,469 2,128,894 Finished goods 2,262,563 2,898,803 Total Inventory, net $ 6,652,527 $ 7,215,981 The charge to Cost of goods sold for obsolete inventory was $ 214,315 and $ 821,782 for the three and six months ended June 30, 2022, respectively. |
Prior Line of Credit
Prior Line of Credit | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Prior Line of Credit | Note 5 - Prior Line of Credit The Company's prior line of credit (the "Line of Credit") of $ 3,500,000 was paid off and terminated in January 2022 . |
Debt
Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Note 6 - Debt As of June 30, 2022 and December 31, 2021, debt consisted of the following: As of As of June 30, December 31 2022 2021 Long-term debt $ 157,852 $ 1,566,598 Short-term debt — 2,000,000 Line of credit — 3,500,000 Total notes payable 157,852 7,066,598 Less: current portion ( 122,023 ) ( 3,447,056 ) Less: line of credit — ( 3,500,000 ) Total notes payable, net of current portion $ 35,829 $ 119,542 Outstanding as of June 30, 2022 On March 12, 2021, the Company entered into a note payable agreement (“Broken Stone Agreement”) with Broken Stone Investments, LLC. for the principal amount of $ 200,000 , bearing interest at 5 % per annum, with all principal and accrued interest thereon due and payable at maturity of June 1, 2023 . The Broken Stone Agreement calls for monthly principal and interest payments of $ 8,774 to commence on July 1, 2021 through maturity on June 1, 2023 . As of June 30, 2022, the balance on this loan was $ 102,515 . The Company holds various vehicle financing and lease agreements with original principal balances ranging from $ 20,000 through $ 50,000 for the six months ended June 30, 2022 . The vehicle financing agreements call for monthly principal and interest payments ranging from $ 368 through $ 585 and bear interest at fixed rates ranging from 3.89 % through 6.81 % per annum. Outstanding principal and accrued interest are due at maturity, ranging from October 12, 2022 through September 13, 2024 . The principal amount due on the agreements wa s $ 55,338 as of June 30, 2022. The financing agreements are secured by vehicles with a net book value of $ 59,852 a s of June 30, 2022. Future minimum principal payments on the notes payable are, as of June 30, 2022: 2022 (for the remainder of) $ 60,180 2023 72,118 2024 18,255 2025 7,299 2026 — $ 157,852 Retired debt during the six months ended June 30, 2022 The company repaid approximately $ 6,842,000 debt with Origin bank on January 28, 2022 and $ 40,000 debt with First United Bank on May 6, 2022. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7 - Income Taxes The Company’s sole material asset is Stryve Foods Holdings, LLC, which is treated as a partnership for U.S. federal income tax purposes and for purposes of certain state and local income taxes. Stryve Foods Holdings, LLC owns 100 % of Stryve Foods, LLC which is treated as a disregarded entity for the U.S. federal income tax purposes. Stryve Foods Holdings, LLC's net taxable income and any related tax credits are passed through to its members and are included in the members’ tax returns, even though such net taxable income or tax credits may not have actually been distributed. The income tax burden on the earnings taxed to the non- controlling interests is not reported by the Company in its condensed consolidated financial statements under GAAP. As a result, the Company’s effective tax rate is expected to differ materially from the statutory rate. ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of June 30, 2022 and December 31, 2021, no liability for unrecognized tax benefits was required to be report and no amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position over the next twelve months. The Company currently estimates its annual effective income tax rate to be - 0.0687 %, which differs from the federal rate of 21 % primarily due to tax benefit related to income passed through to non-controlling interest, increase in valuation allowances, and state and local income taxes. The company has reported income tax expense of $ 28,655 and $ 36,441 for the three and six months ending June 30, 2022 and no income tax expense in the three and six months ending June 30, 2021. Tax Receivable Agreement Liability In conjunction with the BCA, the Company also entered into a TRA with Seller and Holdings. Pursuant to the TRA, the Company is required to pay the Seller 85 % of the amount of savings, if any, in United States federal, state, local and foreign income tax that the Company actually realizes as a result of (A) tax basis adjustments resulting from taxable exchanges of Class B common units of Holdings and Class V common stock of the Company acquired by the Company in exchange for Class A common stock of the Company and (B) tax deductions in respect of portions of certain payments made under the TRA. All such payments to the Seller are the obligations of the Company. As of June 30, 2022, there had been no exchanges of Class B common units of Holdings and Class V common stock of the Company for Class A common stock of the Company. The estimation of liability under the TRA is by its nature imprecise and subject to significant assumptions regarding the amount and timing of future taxable income. As of June 30, 2022, the Company has recorded a full valuation allowance against its net deferred tax assets as the realizability of the tax benefit is not at the more likely than not threshold. Since the benefit has not been recorded, the Company has determined that the TRA liability is no t probable and therefore no TRA liability existed as of June 30, 2022. |
Shareholders_ Equity
Shareholders’ Equity | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
Shareholders' Equity | Note 8 - Shareholders’ Equity The Company’s Amended and Restated Certificate of Incorporation (“Charter”) authorizes the issuance of 610,000,000 shares, of which 400,000,000 shares are Class A common stock, par value $ 0.0001 per share, 200,000,000 shares of Class V common stock, par value $ 0.0001 per share, and 10,000,000 shares of preferred stock, par value $ 0.0001 per share. Warrants Public Warrants The Company has outstanding 10,997,500 warrants that were issued prior to the Business Combination, of which 10,800,000 are referred to as public warrants and 197,500 are Private Warrants. Each warrant represents the right to purchase an equal number of shares of the Company’s Class A common stock. Each warrant entitles the registered holder to purchase one share of Class A common stock at a price of $ 11.50 . The warrants expire on July 20, 2026 . The Company may call the public warrants for redemption (but not the Private Warrants), in whole and not in part, at a price of $ .01 per Public Warrant: ● at any time while the public warrants are exercisable, ● upon not less than 30 days’ prior written notice of redemption to each public warrant holder, ● if, and only if, the reported last sale price of shares of Class A common stock equals or exceeds $ 18.00 per share, for any 20 trading days within a 30-trading day period ending on the third business day prior to the notice of redemption to public warrant holders, and ● if, and only if, there is a current registration statement in effect with respect to shares of Class A common stock underlying such public warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption. The right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption. Private Warrants The Company has agreed that so long as the Private Warrants are still held by our initial shareholders or their affiliates, it will not redeem such Private Warrants and will allow the holders to exercise such Private Warrants on a cashless basis (even if a registration statement covering shares of Class A common stock issuable upon exercise of such warrants is not effective). As of June 30, 2022, there were 197,500 Private Warrants outstanding. September 2021 Pre-Funded Warrants On September 15, 2021, the Company entered into a Share Repurchase Agreement with various entities (collectively, the “Investors”) whereby the Company repurchased an aggregate of 800,000 shares of Class A common stock (the “Repurchase Shares”) from the Investors. The purchase price for the Repurchase Shares was the issuance of an aggregate of 800,000 pre-funded warrants to acquire an equal number of shares of Class A common stock (the “Pre-Funded Warrants”). During May 2022, the Pre-Funded Warrants were exercised in full. January 2022 Warrants On January 6, 2022, the Company sold 2,496,934 shares of the Company’s Class A common stock, and, in lieu of common stock, pre-funded warrants to purchase 7,797,184 shares of common stock and accompanying warrants to purchase up to 10,294,118 shares of common stock (the “January Offering”). The common stock and warrants were sold at a combined purchase price of $ 3.40 per share (less $ 0.0001 per share for pre-funded warrants). Each warrant has an exercise price per share of common stock equal to $ 3.60 and will expire five years from the date of issuance and may be exercised on a cashless basis if a registration statement registering the shares issuable upon exercise is not effective. The Company received gross proceeds from the offering of approximately $ 35 million before deducting estimated offering expenses. During the six months ended June 30, 2022, 4,997,157 pre-funded warrants issued in the January Offering were exercised for an aggregate of 4,997,146 shares of Class A common stock by virtue of a portion of the pre-funded warrants being exercised on a cashless basis. The exercised pre-funded warrants do not affect the weighted average share calculation as pre-funded warrants are already included in the weighted average share calculation as if they have been exercised. Stryve Foods, Inc. 2021 Omnibus Incentive Plan (the “Incentive Plan”) The Incentive Plan allows the Company to grant stock options, restricted stock unit awards and other awards at levels determined appropriate by its board of directors and/or compensation committee. The Incentive Plan also allows the Company to use a broad array of equity incentives and performance cash incentives in order to secure and retain the services of its employees, directors and consultants, and to provide long-term incentives that align the interests of its employees, directors and consultants with the interests of its stockholders. The Incentive Plan is administered by the Company’s board of directors or its compensation committee, or any other committee or subcommittee or one or more of its officers to whom authority has been delegated (collectively, the “Administrator”). The Administrator has the authority to interpret the Incentive Plan and award agreements entered into with respect to the Incentive Plan; to make, change and rescind rules and regulations relating to the Incentive Plan; to make changes to, or reconcile any inconsistency in, the Incentive Plan or any award agreement covering an award; and to take any other actions needed to administer the Incentive Plan. The Incentive Plan permits the Administrator to grant stock options, stock appreciation rights (“SARs”), performance shares, performance units, shares of Class A common stock, restricted stock, restricted stock units (“RSUs”), cash incentive awards, dividend equivalent units, or any other type of award permitted under the Incentive Plan. The Administrator may grant any type of award to any participant it selects, but only employees of the Company or its subsidiaries may receive grants of incentive stock options within the meaning of Section 422 of the Internal Revenue Code. Awards may be granted alone or in addition to, in tandem with, or (subject to the repricing prohibition described below) in substitution for any other award (or any other award granted under another plan of the Company or any affiliate, including the plan of an acquired entity). The Company has reserved a total of 2,564,960 shares of Class A common stock for issuance pursuant to the Incentive Plan. The number of shares reserved for issuance under the Incentive Plan will be reduced on the date of the grant of any award by the maximum number of shares, if any, with respect to which such award is granted. However, an award that may be settled solely in cash will not deplete the Incentive Plan’s share reserve at the time the award is granted. If (a) an award expires, is canceled, or terminates without issuance of shares or is settled in cash, (b) the Administrator determines that the shares granted under an award will not be issuable because the conditions for issuance will not be satisfied, (c) shares are forfeited under an award, (d) shares are issued under any award and the Company reacquires them pursuant to its reserved rights upon the issuance of the shares, (e) shares are tendered or withheld in payment of the exercise price of an option or as a result of the net settlement of outstanding stock appreciation rights or (f) shares are tendered or withheld to satisfy federal, state or local tax withholding obligations, then those shares are added back to the reserve and may again be used for new awards under the Incentive Plan. However, shares added back to the reserve pursuant to clauses (d), (e) or (f) in the preceding sentence may not be issued pursuant to incentive stock options. |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Based Compensation | Note 9 - Stock Based Compensation The Company's stock-based awards that result in compensation expense consist of restricted stock units (RSUs) and restricted stock awards (RSAs). As of June 30, 2022, the Company had 1,175,067 shares available for grant under its stock plans. As of June 30, 2022, the total unrecognized compensation cost related to all unvested stock-based compensation awards was $ 4.1 million is expected to be recognized over the next four years . RSUs generally vest over three years and RSAs generally vest from one to four years . Restricted Stock Units (RSUs) The following table summarizes the Company's RSU activity: Nonvested Restricted Stock Units Weighted Average Restricted Stock Award Date Fair Value Units Per Share Restricted Stock at January 1, 2022 399,000 $ 5.20 Added - — Forfeiture ( 35,166 ) 5.16 Vested - — Restricted Stock at June 30, 2022 363,834 $ 5.21 The fair value of RSUs is determined based on the closing market price of the Company's stock on the grant date. Restricted Stock Awards (RSAs) The following table summarizes the Company's RSA activity: Nonvested Restricted Stock Awards Weighted Average Weighted Average Restricted Stock Award Date Fair Value Director Award Date Fair Value Awards Per Share Stock Awards Per Share Restricted Stock at January 1, 2022 328,500 $ 5.31 - $ — Added 550,000 $ 1.29 59,625 $ 2.48 Forfeiture — — — $ — Vested ( 43,750 ) $ 5.43 ( 33,875 ) $ 2.46 Restricted Stock at June 30, 2022 834,750 $ 2.90 25,750 $ 2.51 The fair value of RSAs is determined based on the closing market price of the Company's stock on the grant date. Stock Based Compensation Expense Share based compensation costs associated with RSUs and RSAs grants are recorded as a separate component of Selling Expenses on the consolidated statements of income. Share-based compensation expense for service-based awards that contain a graded vesting schedule is recognized net of estimated forfeitures for plan participants on a straight-line basis. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 10 - Fair Value Measurements The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Observable inputs such as quoted prices (unadjusted), for identical instruments in active markets. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. The following table presents information about the Company’s liability measured at fair value on a recurring basis at June 30, 2022 and December 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Description Level June 30, 2022 December 31, 2021 Liabilities: Warrant liability - Private Warrants 3 $ 43,065 $ 128,375 Private Warrants The Private Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the Company’s consolidated balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the consolidated statement of operations. The Private Warrants were valued using a binomial lattice model incorporating the Cox-Ross-Rubenstein methodology, which is considered to be a Level 3 fair value measurement. The Private Warrants were classified as Level 3 at the initial measurement date due to the use of unobservable inputs. The key inputs into the binomial lattice model incorporating the Cox-Ross-Rubenstein methodology for the Private Warrants were as follows as at June 30, 2022: Input June 30, Risk-free interest rate 3.0 % Dividend yield 0.0 % Selected volatility 79.6 % Exercise price $ 11.50 Market stock price $ 0.88 On June 30, 2022 , the Private Warrants were determined to have a fair value of $ 0.10 per warrant for an aggregate fair value of $ 43,065 . The following table presents the change in the fair value of warrant liabilities for the period: Warrant Fair Values Private Fair value as of December 31, 2021 $ 128,375 Change in fair value ( 85,310 ) Fair value as of June 30, 2022 $ 43,065 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 11 - Related Party Transactions Sale and Leaseback . On May 26, 2021 , the Company entered into a Purchase and Sale Agreement with OK Biltong Facility, LLC (“Buyer”), an entity controlled by a member of the Company’s board of directors, pursuant to which the parties consummated a sale and leaseback transaction (the “Sale and Leaseback Transaction”) of the Company’s manufacturing facility and the surrounding property in Madill, Oklahoma (the “Real Property”) for a total purchase price of $ 7,500 thousand. In connection with the consummation of the Sale and Leaseback Transaction, the Company entered into a lease agreement (the “Lease Agreement”) with Buyer pursuant to which the Company leased back the Real Property from Buyer for an initial term of twelve ( 12 ) years unless earlier terminated or extended in accordance with the terms of the Lease Agreement. Under the Lease Agreement, the Company’s financial obligations include base rent of approximately $ 60,000 per month, which rent will increase on an annual basis at two percent ( 2 %) over the initial term and two-and-a-half percent ( 2.5 %) during any extension term. The Company is also responsible for all monthly expenses related to the leased facility, including insurance premiums, taxes and other expenses, such as utilities. Under the Lease Agreement, the Company has three (3) options to extend the term of the lease by five ( 5 ) years for each such option and a one-time right and option to purchase the Real Property at a price that escalates over time and, if Buyer decides to sell the Real Property, the Company has a right of first refusal to purchase the Real Property on the same terms offered to any third party. Management determined that the sale and leaseback transaction contained continuing involvement and thus used the financing method consistent with ASC 842. The transfer did not qualify as a sale, hence it is considered a "failed" sale and both parties account for it as a financing transaction. Accordingly, a financing obligation related to the operating lease in the amount of the sale price ($ 7,500 thousand) has been booked and the corresponding assets on the balance sheet are maintained. Under the finance method, rental payments are applied as amortization and/or interest expense on the financing obligation as appropriate using an assumed interest rate. The Company is accounting for these as interest only payments because the Company's incremental cost to borrow when applied to the financing obligation is greater than the rental payments under the Lease Agreement. The Company recognized interest expense of $ 359,986 during the six months ended June 30, 2022. Other . During the three months ended June 30, 2022, the Company purchased $ 135,813 i n goods from an entity controlled by a member of the Company’s Board of Directors (the "Related Party Manufacturer"). There was no balance due to the Related Party Manufacturer at June 30, 2022 . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 12 - Commitments and Contingencies Litigation On March 29, 2022, one of the investors in Stryve’s January 2022 private offering sent the Company a letter alleging that the Company has breached “the representations and warranties the Company” made to investors in the definitive agreement. Although Stryve intends to vigorously defend itself against these allegations, Stryve cannot at this time predict whether any litigation will be filed, predict the likely outcome of any future litigation, reasonably determine either the probability of a material adverse result or any estimated range of potential exposure, or reasonably determine how this matter or any future matters might impact our business, our financial condition, or our results of operations, although such impact, including the costs of defense, as well as any judgements or indemnification obligations, among other things, could be materially adverse to us. Stryve has received a letter from a person purporting to be counsel to certain investors in Stryve LLC and the Seller, which letter alleges claims against Stryve, Stryve LLC, and the Seller concerning the distribution of Stryve’s equity by the Seller in connection with the Business Combination Agreement by which Stryve acquired Stryve LLC. Stryve believes that such allegations are without merit and intends to defend against any claims that may be filed on account of such allegations. Stryve is not able at this time to quantify its exposure for any possible damages arising out of any such claims that may arise from these allegations. The Company may be a party to routine claims brought against it in the ordinary course of business. After consulting with legal counsel, the Company does not believe that the outcome of any such pending or threatened litigation will have a material adverse effect on its financial condition or results of operations. However, as is inherent in legal proceedings, there is a risk that an unpredictable decision adverse to the Company could be reached. The Company records legal costs associated with loss contingencies as incurred. Settlements are accrued when, and if, they become probable and estimable. Registration Rights Agreements The Company is a party to various registration rights agreements with certain stockholders where it may be required to register securities for such stockholders in certain circumstances. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13 - Subsequent Events The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements. Share Exchange. On July 20, 2022, the Company issued an aggregate of 4,014,012 shares of its Class A common stock and cancelled an equal number of shares of Class V common stock pursuant to the terms of the Company’s existing Exchange Agreement dated as of July 20, 2021 that permits holders of the Company’s Class V common stock and Class B Units to tender a set of one share of Class V common stock and one Holdings Class B Unit and for redemption for one share of Class A common stock. The securities were issued in reliance on the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, and/or Regulation D promulgated thereunder. Nasdaq Deficiency Letter. On August 4, 2022, the Company received a deficiency letter from the Nasdaq Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, for the last 30 consecutive business days, the closing bid price for the Company’s Class A common stock has been below the minimum $ 1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (“Rule 5550(a)(2)”). The Nasdaq deficiency letter has no immediate effect on the listing of the Company’s Class A common stock, and its Class A common stock will continue to trade on The Nasdaq Capital Market under the symbol “SNAX” at this time. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been given 180 calendar days, or until January 31, 2023, to regain compliance with Rule 5550(a)(2). If at any time before January 31, 2023, the bid price of the Company’s Class A common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, the Staff will provide written confirmation that the Company has achieved compliance . If the Company does not regain compliance with Rule 5550(a)(2) by January 31, 2023, the Company may be afforded a second 180 calendar day period to regain compliance. The Company intends to actively monitor the closing bid price for its Class A common stock and will consider available options to resolve the deficiency and regain compliance with Rule 5550(a)(2). |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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, 2021. 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 | 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 judgements and uncertainties. Estimates are used for, but not limited to revenue recognition, allowance for doubtful accounts and customer allowances, useful lives for depreciation and amortization, standard costs of inventory, provisions for inventory obsolescence, impairments of goodwill and long-lived assets, warrant liabilities 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 judgements and estimates could change, which may result in future impairments of assets among other effects. |
Accounts Receivable and Allowance for Doubtful Accounts, Returns, and Deductions | Accounts Receivable and Allowance for Doubtful Accounts, Returns, and Deductions Accounts receivable are customer obligations due under normal trade terms. The Company records accounts receivable at their net realizable value, which requires management to estimate the collectability of the Company’s receivables. Judgment is required in assessing the realization of these receivables, including the credit worthiness of each counterparty and the related aging of past due balances. Management provides for an allowance for doubtful accounts equal to the estimated uncollectable amounts, in addition to a general provision based on historical experience. As of June 30, 2022 and December 31, 2021, the allowance for doubtful accounts and returns and deductions totaled $ 1,350,080 and $ 1,236,497 , respectively. Total bad debt expense for the six months ended June 30, 2022 and 2021 was $ 288,623 and $ 262,888 respectively . |
Concentration of Credit Risk | Concentration of Credit Risk The balance sheet items that potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable. The Company continuously evaluates the credit worthiness of its customers’ financial condition and generally does not require collateral. The Company maintains cash balances in bank accounts that may, at times, exceed Federal Deposit Insurance Corporation (“FDIC”) limits of $ 250,000 per institution. The Company incurred no losses from such accounts and management considers the risk of loss to be minimal. For the six months ended June 30, 2022 and 2021, customer concentrations in excess of 10% consolidated sales are as follows: Six Months Ended June 30, Period Ended June 30, 2022 2021 2022 2021 Sales Accounts Customer A 46 % — 22 % — Customer B — — 29 % — Customer C — 15 % — 23 % Customer D — — 13 % Customer E — 12 % — — |
Revenue Recognition Policy | Revenue Recognition Policy The Company manufactures and markets a broad range of protein snack products through multiple distribution channels. The products are offered through branded and private label items. Generally, the Company considers all revenues as arising from contracts with customers. Revenue is recognized based on the five-step process outlined in the Accounting Standards Codification (“ASC”) 606: (1) Identification of the contract with a customer (2) Identification of the performance obligations in the contract (3) Determination of the transaction price (4) Allocation of the transaction price to the performance obligations in the contract (5) Recognition of revenue when, or as, the Company satisfies a performance obligation The Company’s revenue derived from the sale of branded and private label products is considered variable consideration as the contract includes discounts, rebates, incentives and other similar items. Generally, revenue is recognized at the point in time when the customer obtains control of the product, which may occur upon either shipment or delivery of the product. The payment terms of the Company’s contracts are generally net thirty to sixty days , although early pay discounts are offered to customers. The Company regularly experiences customer deductions from amounts invoiced due to product returns, product shortages, and delivery nonperformance penalty fees. This variable consideration is estimated using the expected value approach based on the Company’s historical experience, and it is recognized as a reduction to the transaction price in the same period that the related product sale is recognized. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products to customers. Revenue is recognized when the Company satisfies its performance obligations under the contract by transferring the promised product to its customer. The Company’s contracts generally do not include any material significant financing components. Performance Obligations The Company has elected the following practical expedients provided for in Topic 606, Revenue from Contracts with Customers: (1) The Company has excluded from its transaction price all sales and similar taxes collected from its customers. (2) The Company has elected to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. (3) The Company has elected to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations. (4) The portfolio approach has been elected by the Company as it expects any effects would not be materially different in application at the portfolio level compared with the application at an individual contract level. (5) The Company has elected not to disclose information about its remaining performance obligations for any contract that has an original expected duration of one year or less. Neither the type of good sold nor the location of sale significantly impacts the nature, amount, timing, or uncertainty of revenue and cash flows. |
Inventory | Inventory Inventories consist of raw materials, work in process, and finished goods, are stated at lower of cost or net realizable value determined using the standard cost method. The Company reviews the value of items in inventory and provides write-downs and write-offs of inventory for obsolete, damaged, or expired inventory. Write-downs and write-offs are included in cost of goods sold. |
Stock Based Compensation | Stock Based Compensation Stock-based compensation awards are accounted for in accordance with ASC Topic 718, Compensation –Stock Compensation (ASC 718). The Company expenses the fair value of stock awards granted to employees and members of the board of directors over the requisite service period, which is typically the vesting period. Compensation cost for stock-based awards issued to employees is measured using the estimated fair value at the grant date and is adjusted to reflect actual forfeitures. Stock-based awards issued to non-employees, including directors for non-board-related services, are accounted for based on the fair value of such services received or the fair value of the awards granted on the grant date, whichever is more reliably measured. Stock-based awards subject to service-based vesting conditions are expensed on a straight-line basis over the vesting period. |
Warrant Liability | Warrant Liability The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Accordingly, the Company classifies the private warrants issued to Andina's original stockholders (the "Private Warrants") as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations. |
Net Income (Loss) per Share | Net Income (Loss) per Share The Company reports both basic and diluted earnings per share. Basic earnings per share is calculated based on the weighted average number of shares of common stock outstanding and excludes the dilutive effect of warrants, stock options, and other types of convertible securities. However, certain pre-funded warrants are included in the calculation of basic earnings per share as the pre-funded warrants can be exercised for nominal value. Diluted earnings per share is calculated based on the weighted average number of shares of common stock outstanding and the dilutive effect of stock options, warrants and other types of convertible securities are included in the calculation. Dilutive securities are excluded from the diluted earnings per share calculation if their effect is anti-dilutive, such as in periods where the Company would report a net loss. For any periods prior to the closing of the Business Combination (the "Closing"), basic and diluted net income/loss per share have been retroactively adjusted to reflect the reverse recapitalization of the Company utilizing the Seller Consideration Units (adjusted as necessary to reflect the capital activity of the Company prior to the Closing) as the weighted average shares outstanding for those periods and the actual shares outstanding for any periods after the Closing all on an as exchanged basis. As of June 30, 2022 there were 21,291,618 dilutive common stock equivalents, consisting of warrants, which were anti-dilutive. |
Income Taxes | Income Taxes The Company accounts for income taxes pursuant to the asset and liability method of ASC 740, Income Taxes, which requires the Company to recognize current tax liabilities or receivables for the amount of taxes as estimated are payable or refundable for the current year, and deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts and their respective tax bases of assets and liabilities and the expected benefits of net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period enacted. A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible. Under the terms of a Tax Receivable Agreement (the “TRA”) as part of the Business Combination Agreement, the Company generally will be required to pay to the Seller 85 % of the applicable cash savings, if any, in U.S. federal and state income tax based on its ownership in Andina Holdings, LLC that the Company is deemed to realize in certain circumstances as a result of the increases in tax basis and certain tax attributes resulting from the Business Combination as described below. This is accounted for in conjunction with the methods used to record income tax described above. The Company follows the provisions of ASC 740-10 related to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740-10 prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The benefit of tax positions taken or expected to be taken in the Company income tax returns is recognized in the financial statements if such positions are more likely than not of being sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits”. A liability is recognized (or amount of net operating loss carryover or amount of tax refundable is reduced) for an unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740-10. Interest costs and related penalties related to unrecognized tax benefits are required to be calculated, if applicable. The Company's policy is to classify assessments, if any, for tax related interest and penalties as a component of income tax expense. As of June 30, 2022, no liability for unrecognized tax benefits was required to be reported. We do not expect any significant changes in our unrecognized tax benefits in the next year. |
Tax Receivable Agreement | Tax Receivable Agreement In conjunction with the Business Combination, the Company entered into the TRA with Seller and Holdings. Pursuant to the TRA, the Company is required to pay Seller 85 % of the amount of savings, if any, in U.S. federal, state, local and foreign income tax that the Company actually realizes as a result of (A) tax basis adjustments resulting from taxable exchanges of Class B common units of Holdings and Class V common stock of the Company acquired by the Company in exchange for Class A common stock of the Company and (B) tax deductions in respect of portions of certain payments made under the TRA. All such payments to the Seller are the obligations of the Company. As of June 30, 2022 , there had been no exchanges of Class B common units of Holdings and Class V common stock of the Company for Class A common stock of the Company and, accordingly, no TRA liabilities existed as of such date. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash, accounts receivable, accounts payable, and vehicle notes payable. The carrying amounts of cash, accounts receivable, and accounts payable approximate their respective fair values because of the short-term maturities or expected settlement date of these instruments. The vehicle notes payable have fixed interest rates the Company believes reflect current market rates for notes of this nature. The Company believes the current carrying value of long-term debt approximates its fair value because the terms are comparable to similar lending arrangements in the marketplace. |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Customers Concentrations | For the six months ended June 30, 2022 and 2021, customer concentrations in excess of 10% consolidated sales are as follows: Six Months Ended June 30, Period Ended June 30, 2022 2021 2022 2021 Sales Accounts Customer A 46 % — 22 % — Customer B — — 29 % — Customer C — 15 % — 23 % Customer D — — 13 % Customer E — 12 % — — |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | As of June 30, 2022 and December 31, 2021, inventory consisted of the following: As of As of June 30, December 31, Raw materials $ 2,471,495 $ 2,188,284 Work in process 1,918,469 2,128,894 Finished goods 2,262,563 2,898,803 Total Inventory, net $ 6,652,527 $ 7,215,981 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | As of June 30, 2022 and December 31, 2021, debt consisted of the following: As of As of June 30, December 31 2022 2021 Long-term debt $ 157,852 $ 1,566,598 Short-term debt — 2,000,000 Line of credit — 3,500,000 Total notes payable 157,852 7,066,598 Less: current portion ( 122,023 ) ( 3,447,056 ) Less: line of credit — ( 3,500,000 ) Total notes payable, net of current portion $ 35,829 $ 119,542 |
Future Minimum Principal Payments of Debt | Future minimum principal payments on the notes payable are, as of June 30, 2022: 2022 (for the remainder of) $ 60,180 2023 72,118 2024 18,255 2025 7,299 2026 — $ 157,852 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Restricted Stock Unit and Restricted Stock Awards Activity | The following table summarizes the Company's RSU activity: Nonvested Restricted Stock Units Weighted Average Restricted Stock Award Date Fair Value Units Per Share Restricted Stock at January 1, 2022 399,000 $ 5.20 Added - — Forfeiture ( 35,166 ) 5.16 Vested - — Restricted Stock at June 30, 2022 363,834 $ 5.21 The following table summarizes the Company's RSA activity: Nonvested Restricted Stock Awards Weighted Average Weighted Average Restricted Stock Award Date Fair Value Director Award Date Fair Value Awards Per Share Stock Awards Per Share Restricted Stock at January 1, 2022 328,500 $ 5.31 - $ — Added 550,000 $ 1.29 59,625 $ 2.48 Forfeiture — — — $ — Vested ( 43,750 ) $ 5.43 ( 33,875 ) $ 2.46 Restricted Stock at June 30, 2022 834,750 $ 2.90 25,750 $ 2.51 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Assets Measured on Recurring Basis | The following table presents information about the Company’s liability measured at fair value on a recurring basis at June 30, 2022 and December 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Description Level June 30, 2022 December 31, 2021 Liabilities: Warrant liability - Private Warrants 3 $ 43,065 $ 128,375 |
Schedule of Binomial Lattice Model for Private Warrants | The key inputs into the binomial lattice model incorporating the Cox-Ross-Rubenstein methodology for the Private Warrants were as follows as at June 30, 2022: Input June 30, Risk-free interest rate 3.0 % Dividend yield 0.0 % Selected volatility 79.6 % Exercise price $ 11.50 Market stock price $ 0.88 |
Schedule of Changes in Fair Value of Warrant Liabilities | The following table presents the change in the fair value of warrant liabilities for the period: Warrant Fair Values Private Fair value as of December 31, 2021 $ 128,375 Change in fair value ( 85,310 ) Fair value as of June 30, 2022 $ 43,065 |
Organization and Description _2
Organization and Description of Business - Additional Information (Details) - USD ($) | 6 Months Ended | ||
Mar. 25, 2022 | Jul. 20, 2021 | Jun. 30, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Percentage of voting control | 100% | ||
Payments for release of escrow shares | $ 238,000 | ||
Class V Common Stock [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Release of escrow shares | 115,023 | ||
Business Combination Agreement [Member] | Bridge Notes [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Payment of principal and accrued interest | $ 10,900,000 | ||
Business Combination Agreement [Member] | Non-Voting Class B Common Units [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Stock issued during period, shares, new issues | 11,502,355 | ||
Business Combination Agreement [Member] | Class A Common Stock [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Conversion of ordinary shares, shares issued | 3,409,949 | ||
Business Combination Agreement [Member] | Class A Common Stock [Member] | Bridge Notes [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Stock issued during period, shares, new issues | 1,357,372 | ||
Business Combination Agreement [Member] | Class A Common Stock [Member] | Private Placement Investors [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Stock issued during period, shares, new issues | 4,250,000 | ||
Aggregate consideration | $ 42,500,000 |
Liquidity - Additional Informat
Liquidity - Additional Information (Details) - USD ($) | 6 Months Ended | ||||
Jan. 28, 2022 | Jan. 06, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Net operating losses | $ 23,600,000 | ||||
Cash used in operating activities | (20,378,627) | $ (15,442,553) | |||
Total current assets | 17,608,703 | $ 15,038,992 | |||
Current liabilities | 5,458,298 | 11,848,032 | |||
Working capital | 12,200,000 | ||||
Gross proceeds from the offering | $ 32,300,000 | ||||
Repayment of line of credit and outstanding | $ 6,841,000 | ||||
Cash and cash equivalents | $ 5,011,077 | $ 2,217,191 | |||
Class A Common Stock [Member] | |||||
Issuance and sale of shares | 2,496,934 | ||||
Sale of unit price per share | $ 3.60 | ||||
Warrant offering term | 5 years | ||||
Class A Common Stock [Member] | PIPE Pre-Funded Warrants [Member] | |||||
Issuance and sale of shares | 7,797,184 | ||||
Warrant price per share | $ 0.0001 | ||||
Class A Common Stock [Member] | PIPE Warrants [Member] | |||||
Sale of unit price per share | $ 3.40 | ||||
Class A Common Stock [Member] | PIPE Warrants [Member] | Maximum [Member] | |||||
Issuance and sale of shares | 10,294,118 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Allowance for doubtful accounts and returns and deductions | $ 1,350,080 | $ 1,236,497 | |
Bad debt expense | $ 288,623 | $ 262,888 | |
Revenue practical expedient, incremental cost of obtaining contract [true/false] | true | ||
Unrecognized tax benefits | $ 0 | $ 0 | |
Percentage of savings required to be paid to the seller | 85% | ||
TRA liabilities | $ 0 | ||
Anti-dilutive securities | 21,291,618 | ||
Cash, FDIC insured amount | $ 250,000 | ||
Minimum [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Contract with customers payment terms | 30 days | ||
Maximum [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Contract with customers payment terms | 60 days | ||
Tax Receivable Agreement [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Percentage of savings required to be paid to the seller | 85% |
Significant Accounting Polici_5
Significant Accounting Policies - Additional Information (Details 1) | Jun. 30, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation expected to be recognized period | 1 year |
Significant Accounting Polici_6
Significant Accounting Policies - Summary of Customers Concentrations (Details) - Customer Concentration Risk [Member] | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Customer A [Member] | Sales [Member] | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 46% | |
Customer A [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 22% | |
Customer B [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 29% | |
Customer C [Member] | Sales [Member] | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 15% | |
Customer C [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 23% | |
Customer D [Member] | Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 13% | |
Customer E [Member] | Sales [Member] | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 12% |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 2,471,495 | $ 2,188,284 |
Work in process | 1,918,469 | 2,128,894 |
Finished goods | 2,262,563 | 2,898,803 |
Total Inventory, net | $ 6,652,527 | $ 7,215,981 |
Inventory - Additional Informat
Inventory - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 | Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | ||
Charge to Cost of goods sold for obsolete inventory | $ 214,315 | $ 821,782 |
Prior Line of Credit - Addition
Prior Line of Credit - Additional Information (Details) | Jan. 31, 2022 USD ($) |
Debt Disclosure [Abstract] | |
Prior line of credit paid off | $ 3,500,000 |
Prior line of credit terminated year and month | 2022-01 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Long term debt | $ 157,852 | $ 1,566,598 |
Short term debt | 2,000,000 | |
Line of credit | 3,500,000 | |
Total notes payable | 157,852 | 7,066,598 |
Less: current portion | (122,023) | (3,447,056) |
Less: line of credit | (3,500,000) | |
Total notes payable, net of current portion | $ 35,829 | $ 119,542 |
Debt - Outstanding - Additional
Debt - Outstanding - Additional Information (Details) - USD ($) | 6 Months Ended | |||
May 06, 2022 | Jan. 28, 2022 | Mar. 12, 2021 | Jun. 30, 2022 | |
Debt Instrument [Line Items] | ||||
Repayment of debt | $ 6,841,000 | |||
Financing And Lease Agreements [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, frequency of periodic payment | monthly | |||
Maturity date start | Oct. 12, 2022 | |||
Maturity date end | Sep. 13, 2024 | |||
Carrying amount of debt | $ 55,338 | |||
Collateralized loans secured by net book value | 59,852 | |||
Financing And Lease Agreements [Member] | Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, principal amount | $ 20,000 | |||
Debt instrument, interest rate | 3.89% | |||
Debt instrument, periodic payment | $ 368 | |||
Financing And Lease Agreements [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, principal amount | $ 50,000 | |||
Debt instrument, interest rate | 6.81% | |||
Debt instrument, periodic payment | $ 585 | |||
Origin Bank [Member] | ||||
Debt Instrument [Line Items] | ||||
Repayment of debt | $ 6,842,000 | |||
First United Bank and Trust Co. [Member] | ||||
Debt Instrument [Line Items] | ||||
Repayment of debt | $ 40,000 | |||
Broken Stone Investments, LLC. [Member] | Promissory Note [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, maturity date | Jun. 01, 2023 | |||
Debt instrument, principal amount | $ 200,000 | |||
Debt instrument, frequency of periodic payment | monthly | |||
Debt instrument, periodic payment | $ 8,774 | |||
Debt instrument, periodic interest payment, start date | Jul. 01, 2021 | |||
Debt instrument, periodic interest payment, end date | Jun. 01, 2023 | |||
Short term debt interest rate | 5% | |||
Short term debt carrying amount | $ 102,515 |
Debt - Future Minimum Principal
Debt - Future Minimum Principal Payments of Debt (Details) | Jun. 30, 2022 USD ($) |
Maturities of Long-Term Debt [Abstract] | |
2022 (for the remainder of) | $ 60,180 |
2023 | 72,118 |
2024 | 18,255 |
2025 | 7,299 |
Long-term Debt, Total | $ 157,852 |
Debt - Retired Debt - Additiona
Debt - Retired Debt - Additional Information (Details) - USD ($) | May 06, 2022 | Jan. 28, 2022 |
Debt Instrument [Line Items] | ||
Repayment of debt | $ 6,841,000 | |
Origin Bank [Member] | ||
Debt Instrument [Line Items] | ||
Repayment of debt | $ 6,842,000 | |
First United Bank And Trust Company [Member] | ||
Debt Instrument [Line Items] | ||
Repayment of debt | $ 40,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||||
Ownership percentage | 100% | 100% | |||
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 | ||
Accrued for interest and penalties | 0 | $ 0 | $ 0 | ||
Percentage of savings required to be paid to the seller | 85% | ||||
Effective income tax rate | (0.0687%) | ||||
Federal rate | 21% | ||||
Tax receivable agreement liability | 0 | $ 0 | |||
Income tax expense | $ 28,655 | $ 0 | $ 36,441 | $ 0 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Details) - USD ($) | 6 Months Ended | |||
Jan. 06, 2022 | Sep. 15, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | |
Subsidiary, Sale of Stock [Line Items] | ||||
Shares authorized | 610,000,000 | |||
Preferred Stock, shares authorized | 10,000,000 | 10,000,000 | ||
Preferred Stock, par value | $ 0.0001 | $ 0.0001 | ||
Warrants redemption price per share | $ 0.01 | |||
Warrants outstanding | $ 10,997,500 | |||
Shares issued price per share | $ 11.50 | |||
Warrants expiration | Jul. 20, 2026 | |||
Gross proceeds from the offering | $ 32,300,000 | |||
January 2022 Warrants [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Price per share | $ 3.60 | |||
Warrant offering term | 5 years | |||
Gross proceeds from the offering | $ 35,000,000 | |||
Class A Common Stock [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Common stock, shares authorized | 400,000,000 | |||
Common stock, par value | $ 0.0001 | |||
Price per share | $ 18 | |||
Repurchase of aggregate common stock, shares | 800,000 | |||
Number of warrants exercised for shares of common stock | 4,997,146 | |||
Issuance and sale of shares | 2,496,934 | |||
Common stock reserved for future issuance | 2,564,960 | |||
Class A Common Stock [Member] | January 2022 Warrants [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Price per share | $ 3.40 | |||
Class A Common Stock [Member] | Maximum [Member] | January 2022 Warrants [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Issuance and sale of shares | 10,294,118 | |||
Class V Common Stock [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Common stock, shares authorized | 200,000,000 | |||
Common stock, par value | $ 0.0001 | |||
Private Warrants [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Warrants outstanding | $ 197,500 | |||
Pre-Funded Warrants [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Warrants to acquire common stock | 800,000 | 4,997,157 | ||
Issuance and sale of shares | 7,797,184 | |||
Warrant price per share | $ 0.0001 | |||
Public Warrants [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Warrants outstanding | $ 10,800,000 |
Stock Based Compensation - Addi
Stock Based Compensation - Additional Information (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2022 USD ($) shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Shares available for grant | shares | 1,175,067 |
Unrecognized compensation cost | $ | $ 4.1 |
Unrecognized compensation cost expected to be recognized | 4 years |
Restricted Stock Units (RSUs) [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Vesting period | 3 years |
Restricted Stock Award RSA [Member] | Minimum [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Vesting period | 1 year |
Restricted Stock Award RSA [Member] | Maximum [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Vesting period | 4 years |
Stock Based Compensation - Summ
Stock Based Compensation - Summary of Restricted Stock Unit and Restricted Stock Awards Activity (Details) | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Restricted Stock Units (RSUs) [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of shares, Beginning Balance | shares | 399,000 |
Number of shares, Forfeiture | shares | (35,166) |
Number of shares, Ending Balance | shares | 363,834 |
Weighted Average Award Date Fair Value, Beginning Balance | $ / shares | $ 5.20 |
Weighted Average Award Date Fair Value, Forfeiture | $ / shares | 5.16 |
Weighted Average Award Date Fair Value, Ending Balance | $ / shares | $ 5.21 |
Restricted Stock Award RSA [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of shares, Beginning Balance | shares | 328,500 |
Number of shares, Added | shares | 550,000 |
Number of shares, Vested | shares | (43,750) |
Number of shares, Ending Balance | shares | 834,750 |
Weighted Average Award Date Fair Value, Beginning Balance | $ / shares | $ 5.31 |
Weighted Average Award Date Fair Value, Added | $ / shares | 1.29 |
Weighted Average Award Date Fair Value, Vested | $ / shares | 5.43 |
Weighted Average Award Date Fair Value, Ending Balance | $ / shares | $ 2.90 |
Director Stock Awards [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of shares, Added | shares | 59,625 |
Number of shares, Vested | shares | (33,875) |
Number of shares, Ending Balance | shares | 25,750 |
Weighted Average Award Date Fair Value, Added | $ / shares | $ 2.48 |
Weighted Average Award Date Fair Value, Vested | $ / shares | 2.46 |
Weighted Average Award Date Fair Value, Ending Balance | $ / shares | $ 2.51 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Assets Measured on Recurring Basis (Details) - Private Warrants [Member] - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liability | $ 43,065 | |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Warrant liability | $ 43,065 | $ 128,375 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Binomial Lattice Model for Private Warrants (Details) | Jun. 30, 2022 $ / shares |
Measurement Input, Risk Free Interest Rate [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 3 |
Measurement Input, Expected Dividend Rate [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 0 |
Measurement Input, Price Volatility [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, measurement input | 79.6 |
Measurement Input, Exercise Price [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, per share | $ 11.50 |
Measurement Input, Share Price [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrants and rights outstanding, per share | $ 0.88 |
Fair Value Measurements - Sch_3
Fair Value Measurements - Schedule of Changes in Fair Value of Warrant Liabilities (Details) | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Fair Value Disclosures [Abstract] | |
Fair value as of December 31, 2021 | $ 128,375 |
Change in fair value | (85,310) |
Fair value as of June 30, 2022 | $ 43,065 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - Private Warrants [Member] | 6 Months Ended |
Jun. 30, 2022 USD ($) $ / shares | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Fair value of warrants price per shares | $ / shares | $ 0.10 |
Warrant liability | $ | $ 43,065 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 6 Months Ended | |
May 26, 2021 | Jun. 30, 2022 | |
Related Party Transaction [Line Items] | ||
Interest expense recognized | $ 359,986 | |
Related Party Manufacturer [Member] | ||
Related Party Transaction [Line Items] | ||
Purchase goods from related party | 135,813 | |
Balance owed to related party | $ 0 | |
Buyer [Member] | ||
Related Party Transaction [Line Items] | ||
Transaction date | May 26, 2021 | |
Total purchase price | $ 7,500,000 | |
Lease Agreement [Member] | ||
Related Party Transaction [Line Items] | ||
Lease terms | In connection with the consummation of the Sale and Leaseback Transaction, the Company entered into a lease agreement (the “Lease Agreement”) with Buyer pursuant to which the Company leased back the Real Property from Buyer for an initial term of twelve (12) years unless earlier terminated or extended in accordance with the terms of the Lease Agreement. Under the Lease Agreement, the Company’s financial obligations include base rent of approximately $60,000 per month, which rent will increase on an annual basis at two percent (2%) over the initial term and two-and-a-half percent (2.5%) during any extension term. The Company is also responsible for all monthly expenses related to the leased facility, including insurance premiums, taxes and other expenses, such as utilities. Under the Lease Agreement, the Company has three (3) options to extend the term of the lease by five (5) years for each such option and a one-time right and option to purchase the Real Property at a price that escalates over time and, if Buyer decides to sell the Real Property, the Company has a right of first refusal to purchase the Real Property on the same terms offered to any third party. | |
Initial term | 12 years | |
Base rent | $ 60,000 | |
Percentage of increase in base rent | 2% | |
Percentage of increase in base rent over initial term | 2.50% | |
Options to extend term | Under the Lease Agreement, the Company has three (3) options to extend the term of the lease by five (5) years for each such option | |
Extended term | 5 years |
Subsequent Events Additional In
Subsequent Events Additional Information (Details) - Class A Common Stock [Member] - Subsequent Event [Member] - $ / shares | Aug. 04, 2022 | Jul. 20, 2022 |
Subsequent Event [Line Items] | ||
Aggregate shares issued | 4,014,012 | |
Nasdaq Stock Market LLC, closing bid price requirement for 30 consecutive business days | $ 1 | |
Nasdaq listing rule description | the Company has been given 180 calendar days, or until January 31, 2023, to regain compliance with Rule 5550(a)(2). If at any time before January 31, 2023, the bid price of the Company’s Class A common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, the Staff will provide written confirmation that the Company has achieved compliance |