QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Title of each class |
Trading Symbol |
Name of each exchange on which registered | ||
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
Non-accelerated filer |
☒ |
Smaller reporting company |
| |||
Emerging growth company |
|
TABLE OF CONTENTS |
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Page |
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5 | ||||
6 | ||||
7 | ||||
8 | ||||
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32 | ||||
40 | ||||
41 | ||||
41 | ||||
41 | ||||
41 | ||||
41 | ||||
42 | ||||
43 |
• | our limited operating history and ability to become profitable; |
• | our reliance on third parties for raw materials and production of some of our products; |
• | our ability to manage our growth and scale our manufacturing and processing capabilities effectively, including our human resource requirements; |
• | our future capital needs; |
• | our ability to retain and grow our customer base; |
• | our reliance on independent distributors for a substantial portion of our sales; |
• | our ability to evaluate and measure our business, prospects and performance metrics; |
• | our ability to compete and succeed in a highly competitive and evolving industry; |
• | the health of the premium organic and natural food industry as a whole; |
• | risks related to our intellectual property rights and developing a strong brand; |
• | our reliance on key personnel, including Laird Hamilton and Gabrielle Reece; |
• | regulatory risks; |
• | risks associated with the COVID-19 pandemic; |
• | risks related to our international operations; |
• | the risk of substantial dilution from future issuances of our equity securities; and |
• | the other risks described herein and in our Annual Report on Form 10-K for the year ended December 31, 2020. |
As of |
||||||||
June 30, 2021 |
December 31, 2020 |
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Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable, net |
||||||||
Investment securities available-for-sale |
||||||||
Inventory |
||||||||
Prepaid expenses and other current assets , net |
||||||||
Deposits |
||||||||
Total current assets |
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Noncurrent assets |
||||||||
Property and equipment, net |
||||||||
Intangible assets, net |
||||||||
Goodwill |
||||||||
Deferred rent |
||||||||
Total noncurrent assets |
||||||||
Total assets |
$ | $ | ||||||
Liabilities and Stockholders’ Equity |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | $ | ||||||
Payroll liabilities |
||||||||
Accrued expenses |
||||||||
Total current liabilities |
||||||||
Long-term liabilities |
||||||||
Deferred tax liability, net |
— |
|||||||
Note payable |
||||||||
Total long-term liabilities |
||||||||
Total liabilities |
||||||||
Stockholders’ equity |
||||||||
Common 2020; |
$ | $ | ||||||
Additional paid-in capital |
||||||||
Accumulated other comprehensive income (loss) |
( |
) | ||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Total liabilities and stockholders’ equity |
$ | $ | ||||||
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Sales, net |
$ | $ | $ | $ | ||||||||||||
Cost of goods sold |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Gross profit | ||||||||||||||||
General and administrative |
||||||||||||||||
Salaries, wages and benefits |
||||||||||||||||
Stock-based compensation |
||||||||||||||||
Professional fees |
||||||||||||||||
Insurance expense |
||||||||||||||||
Office expense |
||||||||||||||||
Occupancy |
||||||||||||||||
Merchant service fees |
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Netsuite subscription expense |
||||||||||||||||
Impairment on asset held for sale |
— | — | ||||||||||||||
Other expense |
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Total general and administrative expenses |
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Research and product development |
||||||||||||||||
Salaries, wages and benefits |
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Stock-based compensation |
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Product development expense |
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Other expense |
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Total research and product development expenses |
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Sales and marketing |
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Salaries, wages and benefits |
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Stock-based compensation |
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Advertising |
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General marketing |
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Amazon selling fee |
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Travel expense |
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Other expense |
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Total sales and marketing expenses |
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Total expenses |
||||||||||||||||
Operating loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other income (expense) |
||||||||||||||||
Interest and dividend income |
||||||||||||||||
Loss on sale of fixed assets |
— | — | ( |
) | — | |||||||||||
Gain on sale of available-for-sale |
— | — | ||||||||||||||
Total other income (expense) |
||||||||||||||||
Loss before income taxes |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Income tax expense |
( |
) | ( |
) | ||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ |
( |
) | ||||
Less deemed dividend of beneficial conversion feature |
— | ( |
) | — | ( |
) | ||||||||||
Less deemed dividend on warrant discount |
— | ( |
) | — | ( |
) | ||||||||||
Net loss attributable to Laird Superfood, Inc. common stockholders |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Net loss per share attributable to Laird Superfood, Inc common stockholders: |
||||||||||||||||
Basic |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Weighted-average shares of common stock outstanding used in computing net loss per share of common stock, basic and diluted |
||||||||||||||||
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Other comprehensive income (loss), net of tax Change in unrealized gains (losses) on investment securities available-for-sale, (1) |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other comprehensive income (loss) |
( |
) | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
(1) |
The Company maintains a full valuation allowance related to our net deferred tax assets, primarily due to our historical net loss position. See note 11 for the estimated tax benefit deferred. |
Convertible Preferred Stock |
Stockholders’ Equity |
|||||||||||||||||||||||||||||||
Preferred Stock |
Common Stock |
Additional |
Accumulated Other |
Accumulated |
||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Paid-in Capital |
Comprehensive Income (Loss) |
Deficit |
Total |
|||||||||||||||||||||||||
Balances, January 1, 2021 |
$ | $ | $ | $ | $ | ( |
) | $ | ||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Less: Withholding tax payments for share-based compensation |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
Stock option exercises |
— | — | — | — | ||||||||||||||||||||||||||||
Common stock issuance costs |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
Other comprehensive income, net of tax |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balances, March 31, 2021 |
$ |
$ |
$ |
( |
) | $ |
( |
) | $ |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Less: Withholding tax payments for share-based compensation |
— | — | ( |
) | ( |
) | ( |
) | — | — | ( |
) | ||||||||||||||||||||
Restricted stock units issued |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Stock option exercises |
— | — | — | — | ||||||||||||||||||||||||||||
Common stock issued for business acquisition costs |
— | — | — | — | ||||||||||||||||||||||||||||
Other comprehensive |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balances, June 30, 2021 |
— | — | $ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible Preferred Stock |
Stockholders’ Equity |
|||||||||||||||||||||||||||||||
Preferred Stock |
Common Stock |
Additional |
Accumulated Other |
Accumulated |
||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Paid-in Capital |
Comprehensive Income (Loss) |
Deficit |
Total |
|||||||||||||||||||||||||
Balances, January 1, |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||||||||||
Stock-based |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Stock option exercises |
— | — | — | — | — | |||||||||||||||||||||||||||
Less: repurchased |
— | — | ( |
) | ( |
) | ( |
) | — | — | ( |
) | ||||||||||||||||||||
Common stock issuances |
— | — | — | — | ||||||||||||||||||||||||||||
Other net tax |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balances, March 31, |
$ |
$ |
$ |
$ |
( |
) | $ |
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Restricted stock awards |
— | — | — | — | ||||||||||||||||||||||||||||
Preferred stock issuances |
— | — | — | — | ||||||||||||||||||||||||||||
Beneficial conversion Preferred B-1 |
— | ( |
) | — | — | — | — | |||||||||||||||||||||||||
Deemed conversion |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||
Allocation of preferred B-1 proceeds to |
— | ( |
) | — | — | — | — | |||||||||||||||||||||||||
Deemed dividend on |
— | — | — | ( |
) | — | — | ( |
) | |||||||||||||||||||||||
Preferred stock issuance |
— | ( |
) | — | — | — | — | — | ||||||||||||||||||||||||
Other tax |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balances, June 30, 2020 |
$ | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Cash flows used in operating activities |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash from operating activities: |
||||||||
Depreciation |
||||||||
Amortization |
||||||||
Loss on disposal of equipment |
— | |||||||
Stock-based compensation |
||||||||
Provision for inventory obsolescenc e |
|
|
|
|
|
|
— |
|
Reserve for prepaid assets |
|
|
|
|
|
|
— |
|
Restricted stock awards |
— | |||||||
Impairment on asset held for sale |
— | |||||||
Gain on sale of investment securities available-for-sale |
— | |||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
( |
) | ||||||
Accrued investment income receivable |
— | |||||||
Inventory |
( |
) | ( |
) | ||||
Prepaid expenses and other current assets |
( |
) | ||||||
Deferred rent |
||||||||
Deposits |
||||||||
Accounts payable |
||||||||
Payroll liabilities |
||||||||
Accrued expenses |
||||||||
Deferred taxe s |
|
|
|
|
|
|
— |
|
|
|
|
|
|||||
Net cash from operating activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Cash flows used in (provided by) investing activities |
||||||||
Purchase of property, plant, and equipment |
( |
) | ( |
) | ||||
Proceeds from sale of property, equipment, and software |
|
|
|
|
|
|
— |
|
Deposits on equipment to be acquired |
( |
) | ( |
) | ||||
Purchase of software |
( |
) | — | |||||
Acquisiton of a business, net of cash acquired (note 2 ) |
( |
) | — | |||||
Sale of investment securities available-for-sale |
— | |||||||
Proceeds from maturities of investment securities available-for-sale |
— | |||||||
|
|
|
|
|||||
Net cash from investing activities |
( |
) | ||||||
|
|
|
|
|||||
Cash flows from financing activities |
||||||||
Issuance of common stock |
— | |||||||
Issuance of preferred stock |
— | |||||||
Common stock issuance costs |
( |
) | — | |||||
Preferred stock issuance costs |
— | ( |
) | |||||
Withholding tax payments for share based compensation |
( |
) | — | |||||
Restricted stock units issue d |
|
|
|
|
|
|
— |
|
Repurchased common stock |
— | ( |
) | |||||
Stock options exercised |
||||||||
|
|
|
|
|||||
Net cash from financing activities |
||||||||
|
|
|
|
|||||
Net change in cash and cash equivalents |
( |
) | ||||||
Cash and cash equivalents beginning of period | ||||||||
|
|
|
|
|||||
Cash and cash equivalents end of period | $ | $ | ||||||
|
|
|
|
|||||
Supplemental disclosures of non-cash information |
||||||||
Unrealized gain (loss) on available-for-sale |
$ | ( |
) | $ | ||||
|
|
|
|
June 30, |
December 31, |
|||||||
2021 |
2020 |
|||||||
Cash and cash equivalents |
$ |
$ |
||||||
Restricted cash |
||||||||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows |
$ | $ | ||||||
June 30, |
December 31, |
|||||||
2021 |
2020 |
|||||||
Raw materials and packaging |
$ |
$ | ||||||
Finished goods |
||||||||
|
|
|
|
|||||
Total gross inventory |
||||||||
Provision for inventory obsolescence |
( |
) | — | |||||
|
|
|
|
|||||
Total inventory, net of reserve |
$ | $ | ||||||
|
|
|
|
Consideration |
||||
Cash |
$ | |||
Equity instruments |
||||
|
|
|||
Far value of total consideration transferred |
$ | |||
|
|
|||
Recognized amounts of identifiable assets acquired and liabilities assumed |
||||
Cas h |
|
$ |
|
|
Accounts receivable |
||||
Prepaid expenses and other current assets |
||||
Inventory |
||||
Property, Plant, & Equipment |
||||
Intangible assets |
||||
|
|
|||
Total assets acquired |
||||
|
|
|||
Accounts payable |
||||
Accrued expenses |
||||
Payroll liabilities |
||||
Contract liabilities |
||||
|
|
|||
Total liabilities assumed |
||||
|
|
|||
Total identifiable net assets |
||||
|
|
|||
Goodwill |
$ | |||
|
|
Estimated Useful Life |
Fair Value |
|||||||
Trade names |
$ | |||||||
Customer relationships |
||||||||
Recipes |
||||||||
Social media agreements |
||||||||
|
|
|||||||
Total intangible assets acquired |
$ | |||||||
|
|
For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Net Sales |
$ |
$ |
$ |
$ |
||||||||||||
Net Loss |
( |
) |
( |
) |
( |
) |
( |
) |
June 30, |
December 31, |
|||||||
2021 |
2020 |
|||||||
Prepaid insurance |
$ | $ | ||||||
Prepaid inventory |
||||||||
Prepaid subscriptions and license fees |
||||||||
Prepaid, other |
||||||||
Prepaid consulting |
||||||||
Prepaid advertising |
||||||||
Other current assets |
||||||||
|
|
|
|
|||||
Total prepaid and other assets |
||||||||
Reserve for prepaid inventory |
( |
) |
— |
|||||
|
|
|
|
|||||
Prepaid and other assets, net |
$ |
$ |
||||||
|
|
|
|
|
|
|
|
|
Gross unrealized |
Gross unrealized |
Estimated fair |
||||||||||||||
Amortized cost |
gains |
losses |
value |
|||||||||||||
June 30, 2021 |
||||||||||||||||
Federal agency bonds – mortgage-backed |
$ | $ | $ | ( |
) | $ | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total investment securities available-for-sale |
$ | $ | $ | ( |
) | $ | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
December 31, 2020 |
||||||||||||||||
Federal agency bonds – mortgage-backed |
$ | $ | $ | — | $ | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total investment securities available-for-sale |
$ | $ | $ | — | $ | |||||||||||
|
|
|
|
|
|
|
|
Available-for-sale |
||||||||
Amortized cost |
Estimated fair value |
|||||||
June 30, 2021 |
||||||||
Due after one year through five years |
$ | $ | ||||||
|
|
|
|
|||||
Total investment securities available-for-sale |
$ | $ | ||||||
|
|
|
|
Available-for-sale |
||||||||
Amortized cost |
Estimated fair value |
|||||||
December 31, 2020 |
||||||||
Due after one year through five years |
$ |
$ |
||||||
|
|
|
|
|||||
Total investment securities available-for-sale |
$ |
$ |
||||||
|
|
|
|
5. |
Fair Value Measurements |
• | Level 1 – quoted prices in active markets for identical securities as of the reporting date; |
• | Level 2 – other significant directly or indirectly observable inputs, including quoted prices for similar securities, interest rates, prepayment speeds and credit risk; and |
• | Level 3 – significant inputs that are generally less observable than objective sources, including our own assumptions in determining fair value. |
Fair Value as of June 30, 2021 |
Level 1 |
Level 2 |
Level 3 |
|||||||||
Federal agency bonds—mortgage-backed |
$ | $ | $ |
Fair Value as of December 31, 2020 |
Level 1 |
Level 2 |
Level 3 |
|||||||||
Federal agency bonds—mortgage-backed |
$ | — | $ | $ |
7. |
Long-term Debt |
June 30, |
December 31, |
|||||||
2021 |
2020 |
|||||||
Forgivable loan, City of Sisters |
$ | $ | ||||||
|
|
|
|
|||||
Long-term debt |
$ | $ | ||||||
|
|
|
|
8. |
Property and Equipment, Net |
June 30, |
December 31, |
|||||||
2021 |
2020 |
|||||||
Factory equipment |
$ | $ | ||||||
Land |
||||||||
Furniture and office equipment |
||||||||
Leasehold improvements |
||||||||
Construction in progress |
— | |||||||
|
|
|
|
|||||
Accumulated depreciation |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Property and equipment, net |
$ |
$ |
||||||
|
|
|
|
9. |
Goodwill and Intangible Assets, Net |
June 30, |
December 31, |
|||||||
2021 |
2020 |
|||||||
Trade names ( |
$ | $ | — | |||||
Customer relationships ( |
— | |||||||
Recipes ( |
— | |||||||
Social media agreements ( |
— | |||||||
Software ( |
|
|
|
|
|
|
|
|
Amortizable intangible assets |
||||||||
Accumulated amortization |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Amortizable intangible assets, net |
||||||||
Licensing agreements (indefinite) |
||||||||
|
|
|
|
|||||
Total Intangible assets, net |
$ | $ | ||||||
|
|
|
|
2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
|
|
|||
$ | ||||
|
|
10. |
Commitments and Contingencies |
Payments Due by Period |
Operating Leases (1) |
Note Payable |
Total |
|||||||||
2021 |
$ | $ | $ | |||||||||
2022 |
||||||||||||
2023 |
||||||||||||
2024 |
||||||||||||
2025 |
||||||||||||
Thereafter |
||||||||||||
|
|
|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
(1) |
Operating lease obligations related to our manufacturing facility leases dated March 1, 2018 and December 17, 2018. |
11. |
Deferred Tax Assets and Liabilities |
June 30, |
December 31, |
|||||||
2020 |
2020 |
|||||||
Noncurrent deferred tax assets : |
|
|
|
|
|
|
|
|
Net operating loss carryforwards |
$ | $ | ||||||
Property and equipment |
||||||||
Research and development credits |
||||||||
Accrued expenses |
||||||||
Charitable contributions |
— | |||||||
Inventory reserve |
— | |||||||
|
|
|
|
|||||
Total noncurrent deferred tax assets |
||||||||
Noncurrent deferred tax liabilities: |
||||||||
Deferred rent asset |
$ | $ | ||||||
Intangible assets |
— | |||||||
|
|
|
|
|||||
Total noncurrent deferred tax liabilities |
||||||||
Net noncurrent deferred tax assets |
$ | $ | ||||||
Valuation allowance |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total net noncurrent deferred tax liabilities |
$ | ( |
) | $ | — | |||
|
|
|
|
June 30, 2021 |
||||||||||||||||
Weighted Average |
||||||||||||||||
Weighted Average |
Remaining |
|||||||||||||||
Options |
Exercise Price |
Contractual Term |
Aggregate |
|||||||||||||
Activity |
(per share) |
(years) |
Intrinsic Value |
|||||||||||||
Balance at January 1, 2021 |
$ | $ |
||||||||||||||
Granted |
||||||||||||||||
Exercised/released |
( |
) | ||||||||||||||
Cancelled/forfeited |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at June 30, 2021 |
$ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable at June 30, 2021 |
$ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
June 30, 2020 |
||||||||||||||||
Weighted Average |
||||||||||||||||
Weighted Average |
Remaining |
|||||||||||||||
Options |
Exercise Price |
Contractual Term |
Aggregate |
|||||||||||||
Activity |
(per share) |
(years) |
Intrinsic Value |
|||||||||||||
Balance at January 1, 2020 |
$ | $ | ||||||||||||||
Granted |
||||||||||||||||
Exercised/released |
( |
) | ||||||||||||||
Cancelled/forfeited |
( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Balance at June 30, 2020 |
$ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Exercisable at June 30, 2020 |
$ | $ | ||||||||||||||
|
|
|
|
|
|
|
|
• |
Expected Term. |
• |
Risk-free Interest Rate. |
• |
Dividend Yield. |
• |
Expected Volatility |
For the Six Months Ended June 30, |
||||||||
2021 |
2020 |
|||||||
Weighted-average expected volatility |
% | % | ||||||
Weighted-average expected term (years) |
||||||||
Weighted-average expected risk-free interest rate |
% | % | ||||||
Dividend yield |
% | % | ||||||
|
|
|
|
|||||
Weighted-average fair value of options granted |
$ | $ |
13. |
Preferred Stock |
Three |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
|||||||||
Less deemed dividend of beneficial conversion feature |
( |
) | ( |
) | ||||||||||||
Less deemed dividend on warrant discount |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to Laird Superfood, Inc. common stockholders |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding- basic |
||||||||||||||||
Dilutive securities |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding- diluted |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Common stock options and restricted stock awards excluded due to anti-dilutive effect |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Basic and diluted: |
||||||||||||||||
Net loss per share (basic) |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
|||||||||
Net loss per share (diluted) |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
$ |
% of Total |
$ |
% of Total |
|||||||||||||
Coffee creamers |
$ | |
% | $ | % | |||||||||||
Hydration and beverage enhancing supplements |
% | % | ||||||||||||||
Coffee, tea, and hot chocolate products |
% | % | ||||||||||||||
Harvest snacks and other food items |
% | % | ||||||||||||||
Other |
% | % | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross sales |
% | % | ||||||||||||||
Shipping income |
% | % | ||||||||||||||
Returns and discounts |
( |
) | ( |
%) | ( |
) | ( |
%) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Sales, net |
$ |
% | $ |
% | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
| |||||||
Six Months Ended June 30, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
$ |
% of Total |
$ |
% of Total |
|||||||||||||
Coffee creamers |
$ | |
% | $ | % | |||||||||||
Hydration and beverage enhancing supplements |
% | % | ||||||||||||||
Coffee, tea, and hot chocolate products |
% | % | ||||||||||||||
Harvest snacks and other food items |
% | % | ||||||||||||||
Other |
% | % | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross sales |
% | % | ||||||||||||||
Shipping income |
% | % | ||||||||||||||
Returns and discounts |
( |
) | ( |
%) | ( |
) | ( |
%) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Sales, net |
$ |
% | $ |
% | ||||||||||||
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
$ |
% of Total |
$ |
% of Total |
|||||||||||||
Online |
$ | % | $ | % | ||||||||||||
Wholesale |
% | % | ||||||||||||||
Food service |
% | % | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Sales, net |
$ | % | $ | % | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
|
|
|
| |||||||||||||
Six Months Ended June 30, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
$ |
% of Total |
$ |
% of Total |
|||||||||||||
Online |
$ | |
% | $ | % | |||||||||||
Wholesale |
% | % | ||||||||||||||
Food service |
% | % | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Sales, net |
$ | % | $ | % | ||||||||||||
|
|
|
|
|
|
|
|
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
For the Three Months Ended |
||||||||||||||||
June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Sales, net |
$ | 9,195,786 | $ | 5,608,830 | $ | 3,586,956 | 64 | % | ||||||||
Cost of goods sold |
(6,998,695 | ) | (4,285,128 | ) | (2,713,567 | ) | 63 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
2,197,091 | 1,323,702 | 873,389 | 66 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross Margin |
23.9 | % | 23.6 | % | ||||||||||||
General and administrative |
4,162,911 | 1,832,442 | 2,330,469 | 127 | % | |||||||||||
Research and product development |
374,852 | 117,797 | 257,055 | 218 | % | |||||||||||
Sales and marketing |
3,936,492 | 2,395,701 | 1,540,791 | 64 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total expenses |
8,474,255 | 4,345,940 | 4,128,315 | 95 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating loss |
(6,277,164 | ) | (3,022,238 | ) | (3,254,926 | ) | 108 | % | ||||||||
Other income (expense) |
11,623 | 15,848 | (4,225 | ) | (27 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes |
(6,265,541 | ) | (3,006,390 | ) | (3,259,151 | ) | 108 | % | ||||||||
Income tax expense |
(36,718 | ) | — | (36,718 | ) | 0 | % | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ (6,302,259) | $ | (3,006,390 | ) | $ | (3,295,869 | ) | 110 | % | |||||||
|
|
|
|
|
|
|
|
For the Three Months Ended |
||||||||||||||||
June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Sales, net |
$ | 9,195,786 | $ | 5,608,830 | $ | 3,586,956 | 64 | % |
For the Three Months Ended |
||||||||||||||||
June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Cost of goods sold |
$ (6,998,695) | $ | (4,285,128 | ) | $ | (2,713,567 | ) | 63 | % |
For the Three Months Ended |
||||||||||||||||
June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Gross profit |
$ | 2,197,091 | $ | 1,323,702 | $ | 873,389 | 66 | % |
For the Three Months Ended |
||||||||||||||||
June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Operating expenses |
||||||||||||||||
General and administrative |
$ | 4,162,911 | $ | 1,832,442 | $ | 2,330,469 | 127 | % | ||||||||
Research and product development |
374,852 | 117,797 | 257,055 | 218 | % | |||||||||||
Sales and marketing |
3,936,492 | 2,395,701 | 1,540,791 | 64 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
8,474,255 | 4,345,940 | $ | 4,128,315 | 95 | % |
For the Three Months Ended |
||||||||||||||||
June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Other income (expense) |
$ | 11,623 | $ | 15,848 | $ | (4,225 | ) | (27 | %) |
For the Six Months Ended |
||||||||||||||||
June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Sales, net |
$ | 16,622,039 | $ | 11,092,055 | $ | 5,529,984 | 50 | % | ||||||||
Cost of goods sold |
(12,558,194 | ) | (7,650,736 | ) | (4,907,458 | ) | 64 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
4,063,845 | 3,441,319 | 622,526 | 18 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross Margin |
24.4 | % | 31.0 | % | ||||||||||||
General and administrative |
7,803,980 | 3,432,012 | 4,371,968 | 127 | % | |||||||||||
Research and product development |
615,539 | 261,111 | 354,428 | 136 | % | |||||||||||
Sales and marketing |
7,263,571 | 4,788,518 | 2,475,053 | 52 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total expenses |
15,683,090 | 8,481,641 | 7,201,449 | 85 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating loss |
(11,619,245 | ) | (5,040,322 | ) | (6,578,923 | ) | 131 | % | ||||||||
Other income (expense) |
23,200 | 38,702 | (15,502 | ) | (40 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes |
(11,596,045 | ) | (5,001,620 | ) | (6,594,425 | ) | 132 | % | ||||||||
Income tax expense |
(36,718 | ) | — | (36,718 | ) | 0 | % | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ (11,632,763) | $ | (5,001,620 | ) | $ | (6,631,143 | ) | 133 | % | |||||||
|
|
|
|
|
|
|
|
For the Six Months Ended |
||||||||||||||||
June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Sales, net |
$ | 16,622,039 | $ | 11,092,055 | $ | 5,529,984 | 50 | % |
For the Six Months Ended |
||||||||||||||||
June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Cost of goods sold |
$ (12,558,194) | $ | (7,650,736 | ) | $ | (4,907,458 | ) | 64 | % |
For the Six Months Ended June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Gross profit |
$ | 4,063,845 | $ | 3,441,319 | $ | 622,526 | 18 | % |
For the Six Months Ended June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Operating expenses |
||||||||||||||||
General and administrative |
$ | 7,803,980 | $ | 3,432,012 | $ | 4,371,968 | 127 | % | ||||||||
Research and product development |
615,539 | 261,111 | 354,428 | 136 | % | |||||||||||
Sales and marketing |
7,263,571 | 4,788,518 | 2,475,053 | 52 | % | |||||||||||
|
|
|
|
|
|
|||||||||||
Total operating expenses |
15,683,090 | 8,481,641 | $ | 7,201,449 | 85 | % | ||||||||||
|
|
|
|
|
|
For the Six Months Ended June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Other income (expense) |
$ | 23,200 | $ | 38,702 | $ | (15,502 | ) | (40 | %) |
For the Six Months Ended June 30, |
Change |
|||||||||||||||
2021 |
2020 |
$ |
% |
|||||||||||||
Cash flows from operating activities |
$ | (10,953,242 | ) | $ | (4,647,005 | ) | $ | (6,306,237 | ) | 136 | % | |||||
Cash flows from investing activities |
(11,488,658 | ) | 356,624 | (11,845,282 | ) | (3322 | %) | |||||||||
Cash flows from financing activities |
93,470 | 11,835,448 | (11,741,978 | ) | (99 | %) | ||||||||||
|
|
|
|
|
|
|||||||||||
Total operating expenses |
(22,348,430 | ) | 7,545,067 | $ | (29,893,497 | ) | (396 | %) | ||||||||
|
|
|
|
|
|
Payments Due by Period |
Operating Leases (1) |
Note Payable |
Total |
|||||||||
2021 |
$ | 119,423 | $ | 51,000 | $ | 170,423 | ||||||
2022 |
243,236 | — | 243,236 | |||||||||
2023 |
250,534 | — | 250,534 | |||||||||
2024 |
258,049 | — | 258,049 | |||||||||
2025 |
265,791 | — | 265,791 | |||||||||
Thereafter |
860,498 | — | 860,498 | |||||||||
|
|
|
|
|
|
|||||||
$ | 1,997,531 | $ | 51,000 | $ | 2,048,531 | |||||||
|
|
|
|
|
|
(1) |
Operating lease obligations related to our manufacturing facility leases dated March 1, 2018 and December 17, 2018. |
• | a requirement to have only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations; |
• | an exemption from the auditor attestation requirement on the effectiveness of our internal control over financial reporting; |
• | reduced disclosure about our executive compensation arrangements; and |
• | no non-binding advisory votes on executive compensation or golden parachute arrangements. |
Item 3. |
Quantitative and Qualitative Disclosures about Market Risk. |
Item 4. |
Controls and Procedures. |
Item 1. |
Legal Proceedings. |
Item 1A. |
Risk Factors. |
Incorporated by Reference |
||||||||||||
Exhibit Number |
Description |
Form |
File No. |
Exhibit |
Filing Date |
Filed / Furnished Herewith | ||||||
3.1 | Amended and Restated Certificate of Incorporation of Laird Superfood, Inc. | 8-K |
001-39537 |
3.1 | 9/25/2020 | |||||||
3.2 | Amended and Restated Bylaws of Laird Superfood, Inc. | 8-K |
001-39537 |
3.2 | 9/25/2020 | |||||||
31.1 | Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a). | * | ||||||||||
31.2 | Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a). | * | ||||||||||
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350. | ** | ||||||||||
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350. | ** | ||||||||||
101.INS | XBRL Instance Document | * | ||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | * | ||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | * | ||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | * | ||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | * | ||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | * | ||||||||||
104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) |
* | The certifications attached as Exhibit 32.1 and 32.2 are not deemed filed with the SEC and are not incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such. |
Laird Superfood, Inc | ||||
(Registrant) | ||||
Date: August 11, 2021 |
/s/ Paul W. Hodge, Jr. | |||
Paul W. Hodge, Jr. | ||||
President and Chief Executive Officer | ||||
Date: August 11, 2021 |
/s/ Valerie Ells | |||
Valerie Ells | ||||
Chief Financial Officer |