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 |
Exhibit 31.1
CERTIFICATION
I, Paul W. Hodge, Jr., certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of Laird Superfood, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | [omitted]; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: August 11, 2021 | By: | /s/ Paul W. Hodge Jr. | ||||
Paul W. Hodge Jr. | ||||||
Chief Executive Officer (principal executive officer) |
Exhibit 31.2
CERTIFICATION
I, Valerie Ells, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q of Laird Superfood, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | [omitted]; |
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
Date: August 11, 2021 | By: | /s/ Valerie Ells | ||||
Valerie Ells | ||||||
Chief Financial Officer (principal financial officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Laird Superfood, Inc. (the Company) for the period ending June 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the Report), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: August 11, 2021 | By: | /s/ Paul W. Hodge, Jr. | ||||
Paul W. Hodge, Jr. | ||||||
Chief Executive Officer (principal executive officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Laird Superfood, Inc. (the Company) for the period ending June 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the Report), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: August 11, 2021 | By: | /s/ Valerie Ells | ||||
Valerie Ells | ||||||
Chief Financial Officer (principal financial officer) |
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BALANCE SHEET (Parenthetical) - $ / shares |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Common stock par or stated value per share | $ 0.001 | $ 0.001 |
Common stock shares authorized | 100,000,000 | 100,000,000 |
Common stock shares issued | 9,365,085 | 9,247,758 |
Common stock shares outstanding | 8,999,381 | 8,892,886 |
STATEMENTS OF OPERATIONS - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Net Income (Loss) Available to Common Stockholders, Basic [Abstract] | ||||
Sales, net | $ 9,195,786 | $ 5,608,830 | $ 16,622,039 | $ 11,092,055 |
Cost of goods sold | (6,998,695) | (4,285,128) | (12,558,194) | (7,650,736) |
Gross profit | 2,197,091 | 1,323,702 | 4,063,845 | 3,441,319 |
General and administrative | ||||
Salaries, wages and benefits | 1,019,845 | 804,903 | 2,225,698 | 1,621,075 |
Stock-based compensation | 955,369 | 116,249 | 1,854,604 | 299,452 |
Professional fees | 609,448 | 191,130 | 953,070 | 373,177 |
Insurance expense | 500,821 | 25,866 | 1,023,221 | 57,061 |
Office expense | 206,448 | 108,883 | 393,279 | 222,248 |
Occupancy | 62,957 | 56,343 | 119,478 | 109,774 |
Merchant service fees | 151,882 | 89,014 | 258,257 | 145,049 |
Netsuite subscription expense | 74,117 | 30,923 | 129,138 | 57,318 |
Impairment on asset held for sale | 239,734 | 239,734 | ||
Other expense | 582,024 | 169,397 | 847,235 | 307,124 |
Total general and administrative expenses | 4,162,911 | 1,832,442 | 7,803,980 | 3,432,012 |
Research and product development | ||||
Salaries, wages and benefits | 116,187 | 72,931 | 186,548 | 147,833 |
Stock-based compensation | 5,385 | 2,192 | 8,952 | 4,384 |
Product development expense | 249,948 | 40,175 | 412,792 | 97,917 |
Other expense | 3,332 | 2,499 | 7,247 | 10,977 |
Total research and product development expenses | 374,852 | 117,797 | 615,539 | 261,111 |
Sales and marketing | ||||
Salaries, wages and benefits | 630,328 | 697,547 | 1,264,079 | 1,443,556 |
Stock-based compensation | 55,706 | 35,938 | 97,095 | 110,434 |
Advertising | 1,699,865 | 1,154,060 | 3,381,209 | 2,090,423 |
General marketing | 1,260,489 | 261,662 | 1,971,012 | 570,884 |
Amazon selling fee | 210,842 | 208,317 | 413,118 | 395,889 |
Travel expense | 11,604 | 3,950 | 20,360 | 73,964 |
Other expense | 67,658 | 34,227 | 116,698 | 103,368 |
Total sales and marketing expenses | 3,936,492 | 2,395,701 | 7,263,571 | 4,788,518 |
Total expenses | 8,474,255 | 4,345,940 | 15,683,090 | 8,481,641 |
Operating loss | (6,277,164) | (3,022,238) | (11,619,245) | (5,040,322) |
Other income (expense) | ||||
Interest and dividend income | 11,623 | 8,171 | 25,525 | 31,025 |
Loss on sale of fixed assets | (2,325) | |||
Gain on sale of available-for-sale securities | 7,677 | 7,677 | ||
Total other income (expense) | 11,623 | 15,848 | 23,200 | 38,702 |
Loss before income taxes | (6,265,541) | (3,006,390) | (11,596,045) | (5,001,620) |
Income tax expense | (36,718) | (36,718) | ||
Net loss attributable to Laird Superfood, Inc. common stockholders | (6,302,259) | (3,006,390) | (11,632,763) | (5,001,620) |
Less deemed dividend of beneficial conversion feature | (825,366) | (825,366) | ||
Less deemed dividend on warrant discount | (179,427) | (179,427) | ||
Net loss attributable to Laird Superfood, Inc. common stockholders | $ (6,302,259) | $ (4,011,183) | $ (11,632,763) | $ (6,006,413) |
Net loss per share attributable to Laird Superfood, Inc common stockholders: | ||||
Basic | $ (0.70) | $ (0.93) | $ (1.30) | $ (1.40) |
Diluted | $ (0.70) | $ (0.93) | $ (1.30) | $ (1.40) |
Weighted-average shares of common stock outstanding used in computing net loss per share of common stock, basic and diluted | 8,967,797 | 4,325,265 | 8,931,736 | 4,303,305 |
STATEMENTS OF COMPREHENSIVE LOSS - USD ($) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|||
Statement of Comprehensive Income [Abstract] | ||||||
Net loss | $ (6,302,259) | $ (3,006,390) | $ (11,632,763) | $ (5,001,620) | ||
Other comprehensive income (loss), net of tax | ||||||
Other comprehensive income (loss), net of tax Change in unrealized gains (losses) on investment securities available-for-sale, net of tax | [1] | (3,711) | (13,745) | (24,001) | 17,345 | |
Total other comprehensive income (loss) | (3,711) | (13,745) | (24,001) | 17,345 | ||
Comprehensive loss | $ (6,305,970) | $ (3,020,135) | $ (11,656,764) | $ (4,984,275) | ||
|
Nature of Operations and Summary of Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature of Operations and Summary of Significant Accounting Policies | 1. Nature of Operations and Summary of Significant Accounting Policies The accompanying unaudited interim financial statements include the accounts of Laird Superfood, Inc. (the “Company” or “Laird Superfood” or “we”), a Delaware corporation. On July 3, 2018, the Company entered into a plan of conversion and was converted from a corporation under the laws of the State of Oregon to a corporation under the laws of the State of Delaware with an updated par value of $0.001 per share of common stock. Nature of Operations Laird Superfood is an emerging consumer products platform focused on manufacturing and marketing highly differentiated, plant-based and functional foods from its headquarters in Sisters, Oregon. The core pillars of the Laird Superfood platform are currently Superfood Creamer coffee creamers, Hydrate hydration products and beverage enhancing supplements, harvest snacks and other food items, and roasted and instant coffees, teas and hot chocolate. The Company was founded in 2015. Initial Public Offering On September 25, 2020, the Company completed its initial public offering (“IPO”), in which the Company issued and sold 3,047,500 shares of its common stock at a public offering price of $22 per share, including 397,500 shares of common stock upon the exercise of the underwriter’s option to purchase additional shares. After underwriting discounts and commissions and other offering costs, net proceeds from the IPO were approximately $61,966,237. Offering costs of approximately $1,350,815 were recognized as a reduction of additional-paid-in capital. Upon the closing of the IPO, all outstanding shares of the Company’s preferred stock converted into shares of common stock, consisting of (i) outstanding shares of Series A-1 convertible preferred stock converting into 324,680 aggregate shares of common stock, (ii) 152,253 outstanding shares of Series A-2 convertible preferred stock converting into 304,506 aggregate shares of common stock, and (iii) 383,142 outstanding shares of Series B-1 convertible preferred stock converting into 766,284 aggregate shares of common stock. Concurrent Private Placement Danone Manifesto Ventures, PBC (“DMV”) purchased 90,910 shares of our common stock in a private placement immediately subsequent to the consummation of the IPO for a total purchase price of $2,000,020, at a price per share of $22. Basis of Accounting The financial statements include the accounts of the Company. The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States of America (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and rules and regulations of the Securities and Exchange Commission (“SEC”). Operating results include the three and six months ended June 30, 2021 and 2020. Certain information in footnote disclosures normally included in financial statements prepared in accordance with GAAP has been condensed or omitted pursuant to the rules and regulations of the SEC and the accounting standards for interim financial statements. Unaudited Interim Financial Information In the opinion of the Company, the accompanying unaudited interim financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of its financial position and its results of operations, changes in stockholders’ equity and cash flows. The balance sheet as of December 31, 2020 was derived from audited annual financial statements. Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results expected for the fiscal year ending December 31, 2021. The accompanying unaudited interim financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the fiscal year ended December 31, 2020. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses during the reporting period. The Company bases its estimates and assumptions on historical experience, known trends and events and various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Although management believes its estimates and assumptions are reasonable when made, they are based upon information available at the time they are made. Management evaluates the estimates and assumptions on an ongoing basis and, if necessary, makes adjustments. Due to the risks and uncertainties involved in the Company’s business and evolving market conditions and given the subjective element of the estimates and assumptions made, actual results may differ from estimated results. The most significant estimates and judgments impact allowances for doubtful accounts and returns, inventory obsolescence, the fair value of and/or potential impairment of goodwill and intangible assets, the fair value of assets acquired and liabilities assumed in business combinations, valuation allowance for deferred taxes, reserves on prepaid expenses, and fair value of stock-based compensation. Business Combinations Business combinations are accounted for under the acquisition method which requires identifiable assets acquired and liabilities assumed in the business acquired be recognized and measured at fair value on the acquisition date, which is the date that the acquirer obtains control of the acquired business. The amount by which the fair value of consideration transferred as the purchase price exceeds the net fair value of assets acquired and liabilities assumed is recorded as goodwill. The amount by which the net fair value of assets acquired, and liabilities assumed exceeds the fair value of consideration transferred as the purchase price is recorded as a bargain purchase gain. Acquisition-related transaction costs are expensed as incurred. These estimates are inherently uncertain and unpredictable. In addition, unanticipated events and circumstances may occur which may affect the accuracy or validity of such estimates. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill or bargain purchase gain. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s Statements of Operations. Segment reporting The Company currently has one operating segment. In accordance with ASC 280, Segment Reporting Substantially all product sales for the periods provided were derived from domestic sales. See Note 17 for additional information regarding sales by platform within the Company’s single segment. Cash, Cash Equivalents, and Restricted Cash Cash, cash equivalents, and restricted cash are highly liquid instruments with an original maturity of three months or less when purchased. For the purposes of the statements of cash flows, the Company includes cash on hand, cash in clearing accounts, cash on deposit with financial institutions, investments with an original maturity of three months or less, and restricted cash in determining the total balance. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows.
Amounts in restricted cash represent those that are required to be set aside by contractual agreement. On December 3, 2020, the Company entered into an agreement with DMV, which provided the Company $298,103 in funds for the purpose of supporting three COVID-19 relief projects. During the three and six months ended June 30, 2021, we contributed $25,059 and $80,963, respectively, to these projects. The restriction will be released upon the completion of the projects. Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash on deposit and cash equivalents. At times, cash and cash equivalents balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurable limits. The Company’s investment account (recognized as cash and cash equivalents) is with what the Company believes to be a high-quality issuer. The Company has never experienced any losses related to these balances. Non-interest-bearing amounts on deposit in excess of FDIC insurable limits as of June 30, 2021 and December 31, 2020 approximated $6,441,487 and $6,639,821, respectively. Accounts Receivable, net Accounts receivable, net consists principally of trade receivables, which are recorded at the invoiced amount, net of allowances for doubtful accounts. Trade receivables do not bear interest. Receivables are considered past due or delinquent according to contract terms. Management closely monitors outstanding balances and writes off accounts receivable as they are determined uncollectible. The Company provides for estimated losses on accounts receivable based on prior bad debt experience and a review of existing receivables. Based on these factors, management determined no allowance for doubtful accounts was required as of June 30, 2021 and December 31, 2020. Investments Investment securities that are not classified as either held-to-maturity available-for-sale available-for-sale Inventory Inventory is stated at the lower of cost (first-in, first-out) or net realizable value and consists primarily of raw materials and packaging and finished goods. The following table presents the components of inventory, net, as of:
The Company periodically reviews the value of items in inventory and provides write-offs of inventory based on current market assessment, which are charged to cost of goods sold. For the three and six months ended June 30, 2021, the Company recorded $25,952 and $128,556, respectively, in inventory obsolescence primarily related to the Company’s liquid creamer product line. For the three and six months ended June 30, 2020, the Company recorded $189,040 in inventory obsolescence related to the Company’s liquid creamer product line. As of June 30, 2021 and December 31, 2020, the Company had a total of $1,039,248 and $958,166, respectively, of prepayments for future raw materials inventory, net of reserve for prepaid assets of $179,000, which is included in prepaid expenses and other current assets, net on the balance sheets. Property and Equipment, net Property and equipment are valued at cost, net of accumulated depreciation. Expenditures for maintenance and repairs that do not extend the useful life or increase the value of the assets are charged to expense in the period incurred. Additions and betterments are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives for depreciation purposes for furniture and factory equipment range from 3 to 10 years. The useful life for leasehold improvements is the lesser of the lease term or the useful life. Construction in progress is not depreciated until such a time that the assets are completed and placed into service. Depreciation expense is allocated to general and administrative expenses and cost of goods sold upon the sale of inventory. For the three and six months ended June 30, 2021, depreciation expense was $170,928 and $302,261, respectively. For the three and six months ended June 30, 2020, depreciation expense was $114,383 and $229,284, respectively. As of June 30, 2021 and December 31, 2020, the Company had a total of $407,412 and $0, respectively, of deposits for future equipment purchases, which is included in deposits on the balance sheets. Deferred Rent Deferred rent includes tenant improvement costs that were incurred by the landlord, RII Lundgren Mill, LLC, in the build-out of the Company’s leased space and were reimbursed by the Company. These amounts are treated as additional rents and are expensed straight-line over the life of the lease. Revenue Recognition The Company recognizes revenue in accordance with the five-step model as prescribed by ASC Topic 606 , Revenue from Contracts with a Customer, Cost of Goods Sold Cost of goods sold includes material, labor, and overhead costs incurred in the storage and distribution of products sold in the period. Material costs include the cost of products purchased. Labor and overhead costs consist of indirect product costs, including wages and benefits for manufacturing, planning, and logistics personnel, depreciation, facility costs and freight. Shipping and Handling Costs of shipping and handling related to sales revenue are included in cost of goods sold. Shipping and handling costs totaled $1,591,952 and $2,830,948 for the three and six months ended June 30, 2021, respectively. Shipping and handling costs totaled $954,295 and $1,588,937 for the three and six months ended June 30, 2020, respectively. Income generated from shipping costs billed through to customers was included in Sales, net in the statements of operations. Shipping income totaled $40,750 and $66,410 for the three and six months ended June 30, 2021, respectively. Shipping income totaled $43,793 and $195,345 for the three and six months ended June 30, 2020, respectively. Research and Product Development Amounts spent on research and development activities are expensed as incurred as research and product development expense on the statements of operations. Research and product development expense was $374,852 and $615,539 for the three and six months ended June 30, 2021, respectively. Research and product development expense was $117,797 and $261,111 for the three and six months ended June 30, 2020, respectively. Advertising Advertising costs are expensed when incurred. Advertising expenses for the three and six months ended June 30, 2021 was $1,699,865 and $3,381,209, respectively. Advertising expenses for the three and six months ended June 30, 2020 was $1,154,060 and $2,090,423, respectively. Marketing Marketing costs are expensed when incurred. Marketing expenses for the three and six months ended June 30, 2021 were $1,260,489 and $1,971,012, respectively. Marketing expenses for the three and six months ended June 30, 2020 were $261,662 and $570,884, respectively. Income Taxes Income taxes provide for the tax effects of transactions reported in the financial statements and consist of income taxes currently due and deferred tax assets and liabilities. The Company may also be subject to interest and penalties from taxing authorities on underpayment of income taxes. In such an event, interest and penalties are included in income tax expense. Deferred tax assets and liabilities are recognized for differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences relate primarily to depreciable assets (use of different depreciation methods and lives for financial statement and income tax purposes) and net operating losses. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Due to the historical net loss position of the Company, the Company recorded a full deferred tax valuation allowance of $11,238,942 and $7,563,110 as of June 30 , 2021 and December 31 , 2020 , respectively. Repurchased Stock Management presents repurchased stock (at cost) as a reduction in stockholders’ equity to reflect the historical stock repurchase transactions more clearly. There were no stock repurchase transactions for the three and six months ended June 30, 2021. There were stock repurchases of $20,532 in the three and six months ended June 30, 2020. Stock Incentive Plan The compensation cost relating to share-based payment transactions is recognized in the financial statements. The cost is measured based on the grant date fair value of the equity or liability instruments issued. Compensation cost for all employee stock awards is calculated and recognized over the employees’ service period, generally defined as the vesting period. For awards with graded-vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Compensation cost for all consultant stock awards is calculated and recognized over the consultant’s service period based on the grant date fair value of the equity or liability instruments issued. Upon exercise of stock option awards or vesting of restricted stock units, recipients are issued shares of common stock. Pre-vesting forfeitures result in the reversal of all compensation cost as of the date of termination; post-vesting cancellation does not. Earnings per Share Basic earnings per share is computed on the basis of the weighted average number of shares of common stock that were outstanding during the period. Diluted earnings per share is similarly determined, except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if all dilutive potential common stock and preferred stock had been issued and is calculated under the treasury stock method. Due to the Company’s net loss, all stock options and convertible preferred stock are anti-dilutive and excluded. Stock Split The Company’s board of directors and stockholders approved a 2-for-1 2-for-1 Warrants Issued and detachable stock warrants are classified as equity or liability instruments based on the specific terms of the underlying warrant agreement. In circumstances where debt or equity is issued with detachable warrants, the proceeds from issuance are allocated to each instrument based on an acceptable method, which generally involves determining the fair value of one or more of the instruments. In conjunction with the Company’s initial public offering, the warrant outstanding was cancelled. See additional information in Note 13. License Agreement – Indefinite Lived Intangible Asset On August 3, 2015, the Company entered into a license agreement with the Company’s co-founder Laird Hamilton (the “LH License”). The LH License stated Laird Hamilton’s contribution to the Company was in the form of intellectual property, granting the Company the right to use Laird Hamilton’s name and likeness. This contribution, which was reported on the balance sheets as of June 30, 2021 and December 31, 2020, was valued at $132,000 and satisfied with the issuance of 660,000 shares of common stock. The Company has determined that the intangible asset associated with the LH License has an indefinite life, as there is no foreseeable limit on the period of time over which it is expected to contribute to the cash flows of the Company. Please see Note 16 for more information on the Company’s related party transaction with Mr. Hamilton. On May 2, 2018, the Company entered into a license agreement with Gabrielle Reece, who is married to Mr. Hamilton (the “GR License”). Pursuant to the GR License, Ms. Reece granted the Company rights to her name, signature, voice, picture, image, likeness and biographical information commencing on July 1, 2015. This contribution, which is reported on the balance sheets as of June 30, 2021 and December 31, 2020, was valued at $100 based on the consideration exchanged. The Company has determined that the intangible asset associated with the GR License has an indefinite life, as there is no foreseeable limit on the period of time over which it is expected to contribute to the cash flows of the Company. Please see Note 16 for more information on the Company’s related party transaction with Ms. Reece. On November 19, 2018, the Company executed a License and Preservation Agreement with Mr. Hamilton and Ms. Reece which superseded the predecessor license agreements with both individuals. The agreement added specific terms related to noncompetition and allowable usage of the property under the license. No additional consideration was exchanged in connection with the agreement and the life of the agreement was set at 100 years. On May 26, 2020, the Company executed a License and Preservation Agreement with Mr. Hamilton, and Ms. Reece (the “2020 License”), which superseded the predecessor license and preservation agreement with both individuals. Among other modifications, the agreement (i) modified certain approval rights of Mr. Hamilton and Ms. Reece for use of their respective images, signatures, voices, and names (other than those owned by the Company), rights of publicity and common law and statutory rights to the foregoing in the Company’s products, (ii) modified certain assignment, change of control and indemnification provisions, and (iii) granted the Company the right to extend the term of the agreement for additional r terms upon the expiration of the initial one-hundred year term. No additional consideration was exchanged in connection with the agreement. As indefinite-lived intangibles, the Company assesses qualitative factors each reporting period to determine whether events and circumstances exist that indicate that the fair values of the licensing agreements were less than the carrying amounts. Upon considering these factors, the Company determined it was more likely than not that the fair values of the 2020 License were not less than the carrying amounts; therefore, the Company recognized no impairment for the three and six months ended June 30, 2021 and 2020. Definite Lived Intangible Assets, net Definite lived intangible assets are valued at cost, net of accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives for amortization purposes range between 3 and 10 years. Amortization expense is allocated to general and administrative expense. For the three and six months ended June 30, 2021, amortization expense was $98,533 and $103,803, respectively. For the three and six months ended June 30, 2020, amortization expense was $2,524 and $5,048, respectively. Goodwill Goodwill represents the excess of purchase price over the assigned fair values of the assets acquired and liabilities assumed in conjunction with a business combination. Goodwill is reviewed for impairment annually as of December 31, or whenever events occur or circumstances change that indicate goodwill may be impaired. In testing goodwill for impairment, the Company has the option to perform a qualitative assessment to determine whether the existence of events or circumstances indicate that it is more-likely-than-not (more than 50%) that the fair value of goodwill is less than its carrying amount. When performing a qualitative assessment, the Company evaluates factors such as industry and market conditions, cost factors, overall financial performance, and other relevant entity specific events and changes. If the qualitative assessment indicates that it is more-likely-than-not that the fair value of goodwill is less than its carrying amount, or if the Company chooses not to perform the qualitative assessment, then a quantitative assessment is performed to determine the reporting unit’s fair value. If the carrying value exceeds its fair value, then an impairment loss is recognized for the amount of the excess of the carrying amount over the fair value, not to exceed the total amount of goodwill. Employee Benefit Plan The Company sponsors a defined contribution 401(k) plan (the “401(k) plan”) for all employees 18 years or older. The 401(k) plan was initiated on July 1, 2018. Employee contributions may be made on a before-tax basis, limited by Internal Revenue Service regulations. For the three and six months ended June 30, 2021 and 2020, we did not match employee contributions. JOBS Act Accounting Election The Company qualifies as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. An emerging growth company can elect to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. Currently, the Company has elected to file as an emerging growth company defined under the JOBS Act, and as such, these financial statements may not be comparable to the financial statements of companies that comply with the new or revised accounting pronouncements as of public company effective dates. Recently Adopted Accounting Pronouncements There were no new accounting pronouncements adopted in the three and months ended June 30, 2021 and 2020, respectively. Recently Issued Accounting Pronouncements In February 2016, the FASB issued Leases (Topic 842) (“ASU 2016-02”), whereby a lessee will be required to recognize for all leases at the commencement date a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use 2016-02 is effective for the Company’s annual periods beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The adoption of the new standard is expected to result in the recognition of additional lease liabilities and right-of-use In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (“Topic 326”): Measurement of Credit Losses on Financial Instruments,” as modified by subsequently issued ASUs 2018-19 (issued November 2018), 2019-04 (issued April 2019), 2019-05 (issued May 2019), 2019-11 (issued November 2019), 2020-02 (issued February 2020) and 2020-03 (issued March 2020). Topic 326 modifies the measurement and recognition of credit losses for most financial assets and certain other instruments, requiring the use of forward-looking expected credit loss models based on historical experience, current economic conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount, which may result in earlier recognition of credit losses under the new standard. It also requires that credit losses related to available-for-sale 2016-13 is effective for the Company’s annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company has not yet evaluated the potential impact of this pronouncement. Reclassification of Prior Period Presentation Certain prior period amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations or cash flows. Subsequent Events Subsequent events are events or transactions that occur after the balance sheet date but before the financial statements are available to be issued. The Company has evaluated events and transactions subsequent to June 30, 2021 for potential recognition of disclosure in the financial statements. |
Business Combination |
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Business Combination | 2. Business Combination On May 3, 2021, the Company entered into a definitive agreement to purchase all of the outstanding membership interest units in Picky Bars, LLC (“Picky Bars”), innovators in the healthy snack industry focused on nutritionally balanced, real-food products to fuel performance, for a debt-free purchase price of $11,111,830 in cash, subject to customary working capital adjustments and 53,133 shares of Company common stock, subject to certain vesting conditions. The transaction closed simultaneously with execution of the agreement. Picky Bars results of operations were included in the Company’s results beginning May 2021. Acquisition costs of Picky Bars in the amounts of $179,390 and $278,140 are included in professional and legal fees the Company’s statement of operations for the three and six months ended June 30, 2021, respectively. The fair value of the shares of common stock issued as part of the consideration paid for Picky Bars was determined on the basis of the closing price of the Company’s common stock on the acquisition date. The following table summarizes the consideration paid for Picky Bars and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date:
Goodwill arising as a result of the acquisition of Picky Bars is primarily the result of synergies in business strategy, target market, and values, from expected cost savings from consolidating operations, and from the anticipated growth that the Company’s supply chain and resources will bring to Picky Bars’ operations. Operations have continued with Picky Bars’ previous management and workforce at the Oregon facilities. The Company continues to operate as one segment. Our estimates of fair value are based upon assumptions believed to be reasonable, yet are inherently uncertain and, as a result, may differ from actual performance. During the measurement period, not to exceed one year from the date of acquisition, we may record adjustments to the estimated fair values of the assets acquired and liabilities assumed with a corresponding adjustment to goodwill, as appropriate, in the period in which such revised estimates are identified. The following table summarizes the components of the intangible assets acquired and their estimated useful lives:
Picky Bar operations contributed net sales of $984,433 to the Company’s continuing operations for the three and six The following unaudited pro forma summary presents the results of the Company as if the acquisition of Picky Bars had occurred on January 1 of the year prior to the acquisition (in thousands):
This unaudited pro forma financial data is included only for the purpose of illustration and does not necessarily indicate what the operating results would have been if the acquisition had occurred on January 1 of the year prior to the acquisition. Moreover, this information is not indicative of what the Company’s future operating results will be. The information prior to the acquisition is included based on prior accounting records maintained by Picky Bars. The pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Picky Bars to reflect the accrual of payroll related costs and depreciation. The unaudited pro forma financial information includes non-recurring adjustments to remove transaction costs directly attributable to the acquisition. |
Prepaid Expenses and Other Current Assets, Net |
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Prepaid Expenses and Other Current Assets, Net | 3. Prepaid Expenses and Other Current Assets, Net The following table presents the components of prepaid expenses and other current assets, net, as of:
Reserve for prepaid assets The Company made prepaid deposits for inventory in the amount of $296,873 with one specific supplier. Based on recent information from this supplier, the Company considers it doubtful that full delivery of prepaid inventory will occur. The Company is currently negotiating a resolution and considers it likely that a portion of the inventory will be delivered. The Company’s reasonable estimate of undelivered inventory is a range between $ 0 and $ 179,000, with no amount within that range a better estimate than any other amount. Accordingly, the Company recorded a reserve for prepaid assets of $ 179,000 as of June 30, 2021. |
Investment securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment securities | 4. Investment securities Investment securities as of June 30, 2021 and December 31, 2020 consisted of the following:
The amortized cost and estimated fair value of investment securities as of June 30, 2021, by contractual maturity, are shown below:
Investment securities with an estimated fair value of $8,682,330 and $8,706,844 as of June 30, 2021 and December 31, 2020, respectively, were pledged to secure our revolving line of credit. See Note 6 for additional information. The Company recorded no sales or maturities of available for sale securities during the three and six months ended June 30, 2021. The Company recorded $513,544 and $475,000 of sales and maturities of available for sale securities, respectively, during the three and six months ended June 30, 2020. |
Fair Value Measurements |
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements |
Factors used in determining the fair value of our assets and liabilities are summarized into three broad categories:
The factors or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following tables summarize assets subject to fair value measurements:
The Company believes the carrying amounts of Cash and cash equivalents, Accounts receivable, Prepaid expenses and other current assets, Deposits, Other Assets, Accounts payable, Payroll liabilities and Accrued expenses are a reasonable approximation of the fair value of those financial instruments because of the nature of the underlying transactions and the short-term maturities involved. The Company believes that fair values of U.S. Agency Bonds issued by the Federal Home Loan Mortgage Corporation are determined using the spread above the risk-free yield curve. As the yields for the risk-free yield curve and the spreads for these securities are observable market inputs, the fair values of U.S. agency bonds are included in the Level 2 fair value hierarchy. As of December 31, 2020, the Company classified fixed assets as held for sale which was included in Level 3 fair value. |
Revolving Lines of Credit |
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Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Revolving Lines of Credit | 6. Revolving Lines of Credit On February 5, 2019, the Company entered into a revolving line of credit with First Interstate Bank (“FIB”) in a principal amount not exceeding $5,000,000. The line of credit is secured by the Company’s investment account held at FIB. The outstanding amounts under the line of credit have an interest rate calculated as LIBOR plus 2.0% per annum until paid in full. The loan agreement was renewed by the Company on March 1, 2021 and has a maturity date of February 5, 2023. The balance on the line of credit was $0 as of June 30, 2021 and December 31, 2020. Management was in compliance with all financial covenants as of June 30, 2021 and December 31, 2020. On August 10, 2017, the Company entered into a revolving line of credit with East Asset Management, LLC (“East”) in a principal amount not exceeding the lesser of the borrowing base or $3,000,000. Upon the mutual agreement of the Company and East, the primary revolving line of credit may be expanded to $10,000,000, subject to an increase in the borrowing base. The borrowing base is comprised of (a) up to 90% of eligible accounts receivable aged 90 days or less from due date utilizing the average of a trailing three months of actual book value, plus (b) up to 90% of inventory and prepaid inventory book values utilizing the average of a trailing three months of actual book value. The outstanding amounts under the line of credit have a fixed interest rate of 15% per annum until paid in full and the line of credit has a maturity date of August 10, 2022. In the event of default, the interest rate would increase to 20% while such default exists. The line of credit is secured by a security interest in accounts receivable and inventory. The balance on the line of credit was $0 as of both June 30, 2021 and December 31, 2020. Management was in compliance with all financial covenants as of June 30, 2021 and December 31, 2020. A secondary line of credit with East in an amount up to $200,000 is available to the Company, which is not subject to the requirements of the borrowing base. The secondary line of credit is secured by a security interest in the Company’s accounts receivable and inventory. The secondary line is available with the same draw and payback conditions as the primary line. The balance on the line of credit was $0 as of both June 30, 2021 and December 31, 2020. East was also granted a right of first refusal on any future equity offerings by the Company to purchase up to 20% of equity in any such offerings at a 20% price per share discount, excluding (a) shares representing, in the aggregate, not more than five percent of the Company’s issued and outstanding capital stock on a fully-diluted basis, issued to employees, consultants or directors pursuant to incentive plans; (b) shares issued for consideration other than cash pursuant to a merger, consolidation, strategic alliance, acquisition or similar business combination; (c) shares issued in connection with any distribution, dividend, conversion or recapitalization; (d) shares issued pursuant to any bona fide arms’ length equipment loan or leasing agreement, real property leasing agreement, or debt financing from a financial institution; (e) shares issued in connection with strategic transactions involving the Company and other entities, such as joint ventures, manufacturing, marketing or distribution agreements (provided that in the case of clauses (d) and (e), such issuance represents ten percent or more of the Company’s issued and outstanding capital stock on a fully-diluted basis); and (f) shares issued pursuant to a registration statement filed under the Securities Act of 1933, as amended, in connection with an initial public offering. |
Long-term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt |
The following table presents the components of long-term debt:
City of Sisters On May 30, 2017, the Company entered into a forgivable loan agreement with the City of Sisters in the amount of $51,000. This forgivable loan was issued to help the Company expand its business operations in the city of Sisters, Oregon through eligible jobs. The Company had until May 30, 2020 to create jobs for 30 full-time employees with an average annual salary of $40,000 per person, and, once created and filled, the Company must maintain those jobs for an additional period of three years for the loan to be converted to a grant. If the requirements are not met, the Company is required to pay the loan in full, including interest of 8 percent per annum on the unpaid principal amount. The Company created the eligible jobs as of April 1, 2018. |
Property and Equipment, Net |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net |
Property and equipment, net is comprised of the following as of:
Depreciation expense was $ 170,928 and $ 302,261 for the three and six months ended June 30, 2021, respectively. Depreciation expense was $ 114,383 and $ 229,284 for the three and six months ended June 30, 2020, respectively . |
Goodwill and Intangible Assets, Net |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets, Net |
Goodwill Goodwill represents the excess of purchase price over the assigned fair values of the assets acquired and liabilities assumed in connection with the acquisition of Picky Bars. The carrying amount of goodwill attributed to the acquisition of Picky Bars was $6,486,000 and $0 as of June 30, 2021 and December 31, 2020, respectively. Goodwill is reviewed for impairment annually at December 31. In testing goodwill for impairment, the Company has the option to perform a qualitative assessment to determine whether the existence of events or circumstances indicate that it is more likely than not (more than 50%) that the fair value of a reporting unit is less than its carrying amount. When performing a qualitative assessment, the Company evaluates factors such as industry and market conditions, cost factors, overall financial performance, and other relevant entity specific events and changes. If the qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, or if the Company chooses not to perform the qualitative assessment, then a quantitative assessment is performed to determine the reporting unit’s fair value. If the reporting unit’s carrying value exceeds its fair value, then an impairment loss is recognized for the amount of the excess of the carrying amount over the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to the reporting unit. In addition to the annual impairment test, the Company is required to regularly assess whether a triggering event has occurred which would require interim impairment testing. The Company considered the current and expected future economic and market conditions and their impact on the Company, as well as the current market capitalization forecasts. The Company determined that a triggering event has not occurred which would require an interim impairment test to be performed. Intangible Assets, Net Intangible Assets, net is comprised of the following:
The weighted-average useful life of all the Company’s intangible assets is 9.7 years. For the three and six months ended June 30, 2021, amortization expense was $ 98,533 and $ 103,803, respectively. For the three and six months ended June 30, 2020, amortization expense was $ 10,870 and $ 20,371, respectively. Intangible assets are amortized using the straight-line method over estimated useful lives ranging from to fifteenyears . The estimated amortization expense for each of the next five years and thereafter is as follows:
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies |
The Company currently leases its warehouse space under a commercial lease with RII Lundgren Mill, LLC, dated March 1, 2018. The lease commenced March 1, 2018 with monthly payments of $ 6,475, to escalate after 24 months by the lesser of 3% or the Consumer Price Index (“CPI”) adjustment. The initial lease term is ten years, and the Company has the option to renew the lease for two additional five-year periods. The landlord has paid for many tenant improvements and the Company has committed to reimbursing the landlord, in additional rents, for specific improvements. On November 20, 2018, the Company completed the reimbursement of $ 797,471. The Company also issued the landlord 2,000 stock options on April 15, 2018 with a strike price of $ 7.50 per share in conjunction with this lease agreement. On May 26, 2019, the Company executed and commenced an agricultural license agreement for the lease of agricultural land in Hanalei, Hawaii with PRW Princeville Development Company LLC (the “Hanalei Agricultural License”). Total monthly payments were the greater of $1,000 or eight percent of total monthly gross sales of the business done and/or generated on, in, into or from the premises. The initial lease term was five years, with one option to extend the term by five years. The agreement was subsequently amended on September 19, 2019 to include a termination clause if the storefront and property in the Hanalei, Hawaii Lease, discussed below, is not executed. The amendment also expanded the permitted access to include access through other property to the public roadway. On November 3, 2020, the Company and PRW Princeville Development Company LLC entered a termination and release agreement, terminating the Hanalei Agricultural License effective as of October 30, 2020. On May 26, 2019, the Company executed a license agreement with PRW Princeville Development Company LLC for storefront and property in Hanalei, Hawaii (the “Hanalei Retail License”). Initially, total monthly payments were the greater of $1,000 or eight percent of total monthly gross sales of the business done and/or generated on, in, into or from the property. The initial lease term was five years, with one option to extend the term by five years. The agreement commenced upon receipt of applicable permits. The agreement was subsequently amended on September 19, 2019 to extend the initial permitting period from January 1, 2020 to July 1, 2020, and the payment terms to include the monthly minimum lease payment due the first of the month, with a reconciliation to gross sales in the subsequent month. The agreement was subsequently amended on July 23, 2020 to extend the initial permitting period from July 1, 2020 to April 15, 2021. On November 3, 2020, the Company and PRW Princeville Development Company LLC entered a termination and release agreement, terminating the Hanalei Retail License effective as of October 30, 2020. On of January 1, 2021, the Company entered into a lease agreement with PX2, LLC (“PX2”) for warehousing, distribution, and related industrial purposes. Under this agreement, the cost of rent which the Company will pay to PX2 is solely the reimbursement of utilities relating to the Company’s use (i.e., electric, janitorial, insurance, and other bills, which are estimated to be de minimis and not greater than $1,000 per month). This lease expires on December 31, 2021 . The following table sets forth the amounts of our significant contractual obligations and commitments with definitive payment terms as of June 30, 2021:
Rent expense is allocated to general and administrative expenses and cost of goods sold upon the sale of inventory. Rent expense was $279,865 and $530,955 for the three and six months ended June 30, 2021, respectively. Rent expense was $203,485 and $375,664 for the three and six months ended June 30, 2020, respectively. |
Deferred Tax Assets and Liabilities |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Tax Assets and Liabilities |
The Company had a tax net loss for the three and six months ended June 30, 2021 and 2020, and therefore expects no assessment of income taxes for such periods. Additionally, the net deferred tax assets are fully allowed for as of June 30, 2021 and December 31, 2020. Due to the full valuation allowance during 2020 and as of June 30, 2021 there was no provision for, or benefit from, income taxes reported for the three and six months ended June 30, 2021 and 2020. The Company’s deferred tax assets and liabilities consisted of the following as of June 30, 2021 and December 31, 2020:
The Company assesses its deferred tax assets and liabilities to determine if it is more likely than not they will be realized; if not, a valuation allowance is required to be recorded. During the six months ended June 30, 2021, the Company recorded a deferred tax liability of $36,718 to account for the book vs. tax basis difference related to the goodwill intangible asset acquired in the Picky Bars acquisition, also known as a “naked credit.” The deferred tax liability must be excluded from sources of future taxable income, as the timing of its reversal cannot be predicted due to the indefinite life of the goodwill. As such, this deferred tax liability cannot be used to reduce the valuation allowance for U.S. federal income tax purposes. Apart from the $36,718 deferred tax expense mentioned above, as of June 30, 2021, the Company did not provide a current or deferred U.S. federal or state income tax provision or benefit for any of the periods presented because the Company has reported cumulative losses since inception. Management has determined that it was not more likely than not that the deferred tax assets would be realized, thus a full valuation allowance was recorded. The Company may reduce the valuation allowance against deferred tax assets at such time when it becomes more likely than not that the deferred tax assets will be realized. The change in the valuation allowance for deferred tax assets and liabilities for the three and six months ended June 30, 2021 was a net increase of $2,285,756 and $3,675,832, respectively. At June 30, 2021 and December 31, 2020, the Company had U.S. federal net operating losses (“NOLs”) totaling approximately $38,555,519 and $27,528,486, respectively. The Company had federal NOLs at June 30, 2021 totaling approximately $1,868,077 from 2017 and prior years that can be carried forward for 20 years, which begin to expire in 2036. At June 30, 2021 and December 31, 2020, the Company had federal NOLs totaling approximately $36,687,442 and $25,660,409, respectively from 2018 and future years that can be carried forward indefinitely. GAAP requires management to evaluate and report information regarding its exposure to various tax positions taken by the Company. The Company has determined whether there are any tax positions that have met the recognition threshold and has measured the Company’s exposure to those tax positions. Management believes that the Company has adequately addressed all relevant tax positions and that there are no unrecorded tax liabilities. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. U.S. and state jurisdictions have statutes of limitations that generally range from 3 to 5 years. |
Stock Incentive Plan |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Incentive Plan | 12. Stock Incentive Plan The Company adopted an incentive plan (the “2020 Omnibus Incentive Plan”) on September 22, 2020, to provide for the grant of stock options, stock appreciation rights, restricted stock, non-employee directors and certain consultants and advisors. The Company is authorized to award 1,355,715 shares under the 2020 Omnibus Incentive Plan. Previously, the Company had adopted its 2018 Equity Incentive Plan and 2016 Stock Incentive Plan (together with the 2020 Omnibus Incentive Plan, the “Stock Incentive Plans”), under which the Company had issued stock options and restricted stock units. Following the effective date of the 2020 Omnibus Incentive Plan, no additional awards may be made under the 2018 Equity Incentive Plan or 2016 Stock Incentive Plan. The Stock Incentive Plans were established to provide eligible individuals with an incentive to contribute to the Company’s success and to operate and manage the Company’s business in a manner that will provide for its long-term growth and profitability and that will benefit the Company’s shareholders and other stakeholders, including employees and customers. The Stock Incentive Plans are also intended to provide a means of recruiting, rewarding, and retaining key personnel. The Stock Incentive Plans prescribe various terms and conditions for the award of options and the total number of shares authorized for this purpose. For options, the strike price is equal to the fair market value of the Company’s stock price at the date of grant. Generally, options become exercisable based on years of service and vesting schedules, and expire after (i) a period of ten years from the date of grant, (ii) three months following the date of termination of employment from the Company, (iii) one year following the date of termination from the Company by reason of death or disability, (iv) the date of termination of employment for cause, or (v) the fifth anniversary of the date of the grant if it is held by a 10 percent or greater stockholder. The following tables summarize the Company’s stock option activity during the six months ended June 30, 2021 and 2020:
The stock-based compensation expense is recognized ratably over the requisite service period for all awards. As a result of applying the provisions of ASC 718, “Compensation- Stock Compensation” (“ASC 718”), the Company recognized stock compensation expense of $1,090,074 and $2,100,077 for the three and six months ended June 30, 2021, respectively. The Company recognized stock compensation expense of $212,834 and $471,320 for the three and six months ended June 30, 2020, respectively. In the three and six months ended June 30, 2021, there were $30,363 and $219,156, respectively, of payroll taxes withheld from stock-based compensation which were remitted directly to the tax authorities on the behalf of the recipients of the awards. There were no payroll taxes withheld from stock-based compensation for remittance directly to the tax authorities on the behalf of the recipients of the awards during the three and six months ended June 30, 2020. As of June 30, 2021 and December 31 , 2020, there was $ 2,222,830 and $ 1,990,834, respectively, of total unrecognized compensation cost related to non-vested stock option share-based compensation arrangements with a remaining weighted-average vesting period of 2.35 years. During the three and six months ended June 30, 2021, the Company granted 21,292 and 43,068 restricted stock units, respectively, to 146 employees . As a result of applying the provisions of ASC 718 to these issuances, the Company recorded stock-based compensation expense of $376,885 and $ 728,329 in the three and six months ended June 30, 2021, respectively. As of June 30, 2021 and December 31, 2020, there was $2,665,113 and $1,613,520, respectively, of total unrecognized compensation cost related to non-vested restricted stock units with a remaining weighted-average vesting period of 2.30 years. During the three and six months ended June 30, 2021, the Company granted 189,608 market-based stock units (“MSUs”) to eight employees based on the agreed upon amounts in the market-based restricted stock unit agreements. As a result of applying the provisions of ASC 718 to these issuances, the Company recorded stock-based compensation expense of $508,079 and $893,565 for the three and six months ended June 30, 2021, respectively. These MSUs vest upon the 30-day weighted average stock price reaching or exceeding established targets, after reaching certain time targets. As of June 30, 2021 and December 31, 2020, there was $3,376,435 and $0, respectively, of total unrecognized compensation cost related to non-vested MSUs with a remaining weighted-average vesting period of 2.59 years. We estimate the grant-date fair value of the MSUs using a Monte Carlo simulation which requires assumptions for expected volatility, risk-free rate of return and dividend yield. Expected volatilities within the index are derived using historical volatilities of a selected peer group over a period equal to the length of the performance period. We base the risk-free rate of return on the yield of a zero-coupon U.S. Treasury bond with a maturity equal to the performance period and assume a 0% dividend rate. Compensation expense for these MSUs is recognized over the requisite service period regardless of whether the market conditions are satisfied. On May 1, 2021, the Company enacted an enrollment period under its Employee Stock Purchase Plan (“ESPP”) which allows employees of the Company to purchase common stock of the Company through accumulated payroll deductions. Offerings under this plan have a duration of six months. On the exercise date, the participant may acquire shares at the lower of 85% of the market value of a share of our common stock on the enrollment date or the exercise date. Participants may terminate their interest in a given offering or a given exercise period by withdrawing all of their accumulated payroll deductions at any time prior to the end of the offering period. The fair value of the estimated number of shares to be issued under each offering is determined using a component valuation model. We estimate that 2,969 shares of common stock will be issued in accordance with the plan to those enrollees in the May 1, 2021 enrollment period. As a result of applying the provisions of ASC 718 to these issuances, the Company recorded stock-based compensation expense of $15,144 for the three and six months ended June 30, 2021, respectively. ASC 718 requires the use of the fair-value-based method for measuring the value of stock-based compensation. The Company estimates the fair value of each stock option award on the date of grant using a Black-Scholes option-pricing model, the MSUs on the grant date using a Monte Carlo simulation, and each restricted stock unit is estimated using the fair value of the Company’s stock on the date of grant. The estimated fair value of each grant of stock options awarded during the three and six months ended June 30, 2021 and 2020 was determined using the following assumptions:
The inputs and assumptions used to estimate the fair value of share-based payment awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different inputs and assumptions, the Company’s share-based compensation expense could be materially different for future awards. For the six months ended June 30, 2021 and 2020, the grant-date fair value of stock options was estimated at the time of grant using the following weighted-average inputs and assumptions in the Black-Scholes option pricing model:
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Preferred Stock |
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Jun. 30, 2021 | |||
Preferred Stock Disclosure [Abstract] | |||
Preferred Stock |
On September 25, 2020, the Company completed its IPO in which the Company issued and sold 3,047,500 shares of its common stock at a public offering price of $22 per share. Upon the closing of the IPO, all outstanding shares of the Company’s preferred stock converted into shares of common stock, consisting of (i) 162,340 outstanding shares of Series A-1 convertible preferred stock converting into 324,680 aggregate shares of common stock, (ii) 152,253 outstanding shares of Series A-2 convertible preferred stock converting into 304,506 aggregate shares of common stock, and (iii) 383,142 outstanding shares of Series B-1 convertible preferred stock converting into 766,284 aggregate shares of common stock. As of June 30, 2021 and December 31, 2020, the Company is authorized to issue 5,000,000 shares of preferred stock, par value $0.001 per share, and there were no shares of preferred stock issued or outstanding. Series A-1 and A-2 Preferred Stock Effective November 19, 2018, the Company executed a capital transaction of $ 25,000,000 with a private investor, with $ 15,000,000 funded at the closing date and an additional $ 10,000,000 to be funded one year following the execution. The additional tranche was determined to be embedded in the initial agreement and not subject to bifurcation accounting. The investing entity received Series A-1 preferred stock, carrying certain standard protective provisions. In conjunction with this equity infusion, in November and December 2018, the Company further sold to existing stockholders an additional $7,000,000 of shares of Series A-1 and A-2 preferred stock. All shares of Series A-1 and A-2 preferred stock issued were convertible into common stock at any time at the option of the holder, or mandatorily convertible into common stock upon the event of an initial public offering. The Series A-1 and A-2 preferred stock were redeemable upon the occurrence of a deemed liquidation event. The Company determined that this redemption feature requires classification of both Series A-1 and A-2 preferred stock as mezzanine equity in our balance sheet as of December 31, 2019. Shares of Series A-2 preferred stock were issued at a 20% discount, based on preexisting terms in a line of credit agreement with East. As a result, the $673,133 was recorded as a reduction to additional paid-in-capital On November 18, 2019, the Company negotiated the repurchase of 609,013 shares of Series A-1 preferred stock from a private investor for $7,500,000, or $12.32 per share, and the termination of the private investor’s commitment to fund an additional $10,000,000 in November 2019. At the time of repurchase, the carrying value of the shares of Series A-1 preferred stock outstanding on the balance sheet was $14,999,901, or a value of $24.63 per share. The favorable rate at which the shares were able to be negotiated resulted in a deemed contribution of $7,448,879 which was included in net loss available to common stockholders. Series B-1 and B-2 Preferred Stock Effective April 13, 2020, the Company completed a private placement to DMV for 383,142 shares of its Series B-1 Preferred Stock for total proceeds of $10,000,006, or $26.10 per share. The shares of Series B-1 Preferred Stock issued were convertible into common stock at any time at the option of the holder, or mandatorily convertible into common stock upon the event of an initial public offering. The Series B-1 Preferred Stock were redeemable upon the occurrence of a deemed liquidation event. The Company determined thatB-1 Preferred Stock as mezzanine equity in our balance sheet.In connection with the closing of the private placement of Series B-1 Preferred Stock on April 13, 2020, the Company entered into a Stockholder Agreement with DMV, under which the Company granted DMV (i) the right to purchase a specified percentage of the Company’s common stock in the event of an initial public offering of the Company’s common stock or in a concurrent private placement (the “Participation Right”), (ii) the right to designate one member to Laird Superfood’s board of directors, and (iii) the right to designate a representative as an observer to Laird Superfood’s board of directors, in each case for so long as DMV and its affiliates hold more than five percent of the shares of the Company’s outstanding common stock. The Participation Right terminated upon the IPO. On August 28, 2020, DMV waived its right to designate a member of the board of directors for election, contingent upon the IPO closing on or before December 31, 2020, but DMV’s right to designate an observer of the board of directors will continue for so long as DMV holds more than five percent of the outstanding common stock of the Company. The Company also issued a warrant to purchase common stock to DMV on April 13, 2020, which provided that if DMV exercised the Participation Right for $10,000,000 of shares of the Company’s common stock, DMV would have been entitled to purchase at the time of the closing of the offering, for $0.005 per share, a number of shares of the Company’s common stock equal to ten percent of the shares then held by DMV and its affiliates (including shares issuable upon conversion of the Series B-1 Preferred Stock), but excluding the amounts purchased by DMV or its affiliates in the offering or otherwise. In accordance with ASC 480, the Company recorded the Series B-1 Preferred Stock issued with detachable warrant by allocating the proceeds to the instruments based on their relative fair values. Utilizing the Black-Scholes option pricing model, the Company calculated the fair value of the warrant on April 13, 2020 to be approximately $899,617. The fair value of the warrant was computed assuming a risk-free interest rate of 0.17%, no dividends, expected volatility of approximately 65%, which was calculated based on a combination of historical volatility and the history of comparable peer companies, and an expected warrant life of approximately 0.75 years. As a result, the relative fair value for the warrant of $825,366 was recorded as an increase to additional paid-in-capital The discount was initially amortized as a deemed discount over approximately 11.5 months, which is estimated based on the expected timing of a warrant exercisability trigger and the customary
lock-up agreement of six months once exercised. DMV purchased $2,000,020 of our common stock in a private placement immediately subsequent to the consummation of the IPO, which did not meet the participation minimum to exercise the warrant, rendering the warrant null. |
Earnings per Share |
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Earnings per Share | 14. Earnings per Share Basic earnings (loss) per share is determined by dividing net loss attributable to Laird Superfood, Inc. common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is similarly determined, except that the denominator is increased to include the number of additional common and preferred shares that would have been outstanding if all dilutive potential common and preferred shares had been issued. Dilutive potential common and preferred shares consist of employee stock options and restricted stock units. The dilutive effect of employee stock options, restricted stock units, and convertible preferred stock issued by the Company and are calculated using the treasury stock method. Basic earnings per share is reconciled to diluted earnings per share in the following table:
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Concentrations |
6 Months Ended |
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Jun. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
Concentrations | 15. Concentrations The Company had 54% of trade accounts receivable from three customers as of June 30, 2021. The Company had 70% of trade accounts receivable from three customers as of December 31, 2020. The Company had 45% of accounts payable due to one vendor as of June 30, 2021. The Company had 43% of accounts payable due to four vendors as of December 31, 2020. The Company sold a substantial portion of products to two customers (22%) and three customers (34%) for the three and six months ended June 30, 2021, respectively. As of June 30, 2021, the amount due from these three customers included in accounts receivable was $464,127. The Company sold a substantial portion of products to two customers (23%) and one customer (22 % ) for the three and six months ended June 30, 2020, respectively. As of June 30, 2020, the amount due from these two customers included in accounts receivable was $538,204. The Company purchased a substantial portion of products from one supplier (48%) and one supplier (49%) for the three and six months ended June 30, 2021, respectively. The Company purchased a substantial portion of products from four suppliers (68%) and two suppliers (50%) for the three and six months ended June 30, 2020, respectively. In addition, our top suppliers are in a similar geographic area, which increases the risk of significant supply disruptions from local and regional events. Sri Lanka and Vietnam geographically accounted for approximately 56% of our total raw materials and packaging purchases for the three months ended June 30, 2021. Sri Lanka, Indonesia, and Vietnam geographically accounted for approximately 63% of our total raw materials and packaging purchases for the six months ended June 30, 2021. Indonesia, the Philippines, and Vietnam geographically accounted for approximately 60% of our total raw material and packaging purchases for the three months ended June 30, 2020. Indonesia, the Philippines, and Vietnam geographically accounted for approximately 65% of our total raw material and packaging purchases for the six months ended June 30, 2020. |
Related Party |
6 Months Ended |
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Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party | 16. Related Party FASB ASC Topic 850, Related Party Disclosures, requires that information about transactions with related parties that would make a difference in decision making shall be disclosed so that users of the financial statements can evaluate their significance. The Company conducts business with suppliers and service providers who are also stockholders of the Company. From time to time, service providers are offered shares of common stock as compensation for their services. Shares provided as compensation are calculated based on the fair value of the service provided and the most recent equity offering price (or market price post-IPO) per share. Additional material related party transactions are noted below. License Agreements On May 26, 2020, the Company executed a License and Preservation Agreement which superseded the predecessor license and preservation agreement with both Mr. Hamilton and Ms. Reece. Among other modifications, the agreement (i) modified certain approval rights, (ii) modified certain assignment, change of control and indemnification provisions, and (iii) granted the Company the right to extend the term of the agreement for additional terms upon the expiration of the initial -year term. No additional consideration was exchanged in connection with the agreement. See additional discussion related to the 2020 License in Note 1 of the financial statements. -hundred-year Concurrent Private Placement DMV purchased 90,910 shares of our common stock in a private placement immediately subsequent to the consummation of the IPO for a total purchase price of $2,000,020, at a price per share of $22. Additionally, DMV provided the Company $298,103 in funds for the purpose of supporting three COVID-19 relief projects. See Note 1 of the financial statements for additional discussion. No-Charge Storage Lease On January 1, 2021, the Company entered into a lease agreement with PX2, LLC (“PX2”) for warehousing, distribution, and related industrial purposes. Under this agreement, the cost of rent which the Company will pay to PX2 is solely the reimbursement of utilities relating to the Company’s use (i.e., electric, janitorial, insurance, and other bills, which are estimated to be de minimis). Paul Hodge, CEO, President, and Director of the Company is a member of PX2. This contract is expressly intended to provide no individual benefit to such individual, with the Company only responsible for incremental costs due to the Company’s use of the property, otherwise the property is utilized without obligation to the Company, as a gratis convenience by PX2. This lease expires on December 31, 2021. Social Media Marketing Agreements The Company entered into a social media marketing agreement with Lauren Thomas and Stephanie Bruce to provide certain marketing services on an annual basis, for $ 40,000 each per annum. |
Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | 17. Revenue Recognition The Company’s primary source of revenue is sales of coffee creamers, hydration and beverage enhancing supplements, harvest snacks and other food items, and coffee, tea and hot chocolate products. The Company recognizes revenue when control of the promised good or service is transferred to the customer and in amounts that the Company expects to collect. The timing of revenue recognition takes into consideration the various shipping terms applicable to the Company’s sales. Each delivery or shipment made to a third-party customer is considered to satisfy a performance obligation. Performance obligations generally occur at a point in time and are satisfied when control of the goods passes to the customer. The Company is entitled to collection of the sales price under normal credit terms. Additionally, the Company estimates the impact of certain common practices employed by us and other manufacturers of consumer products, such as scan-based trading, product rebate and other pricing allowances, product returns, trade promotions, sales broker commissions and slotting fees. These estimates are recorded at the end of each reporting period. In accordance with ASC Topic 606, the Company disaggregates net sales from contracts with customers based on the characteristics of the products sold:
The Company generates revenue through three channels: online, wholesale, and food service:
Contract assets (deferred costs of goods sold associated with deferred revenue), contract liabilities (deferred revenue, customer deposits, rewards programs), and refund liabilities (accrued returns) have been estimated and recorded as of June 30, 2021. Contract assets included in finished goods inventories were $5,283 and $0 as of June 30, 2021 and December 31, 2020, respectively. Contract liabilities and refund liabilities included in accrued expenses were $250,365 and $13,970 as of June 30, 2021, respectively. Contract liabilities and refund liabilities included in accrued expenses were $132,280 and $28,968 as of December 31, 2020, respectively. Receivables from contracts with customers are included in Accounts r eceivable, net on the Company’s balance sheets. As of June 30, 2021 and December 31, 2020, Accounts receivable, net included, $789,642 and $839,659, respectively, of receivables from contracts with customers. |
Impact of COVID-19 |
6 Months Ended |
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Jun. 30, 2021 | |
Impact Of COVID Nineteen [Abstract] | |
Impact of COVID-19 | 18. Impact of COVID-19 Since January of 2020, the coronavirus (COVID-19) outbreak, characterized as a pandemic by the World Health Organization on March 11, 2020, has caused significant disruptions in international and U.S. economies and markets. In 2020 and thereafter, demand for our shelf-stable powdered coffee creamers, hydration and beverage enhancing supplements, and coffee, tea and hot chocolate products has risen as consumers prepare more meals in their homes. As we work in a critical infrastructure industry as part of the nation’s food supply, we have implemented health and safety policies for all of our staff, including a transition to telework wherever reasonably possible; enacted strict sanitation protocols throughout our operations; and restricted access to visitors. Our top priority is the health and safety of our employees, and we are following published guidelines by the Centers for Disease Control and Prevention and other governmental health organizations in implementing procedures to protect our employees. The pandemic is an ever evolving and challenging situation and its impact on our business in the future is uncertain. |
Nature of Operations and Summary of Significant Accounting Policies (Policies) |
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Initial Public Offering | Initial Public Offering On September 25, 2020, the Company completed its initial public offering (“IPO”), in which the Company issued and sold 3,047,500 shares of its common stock at a public offering price of $22 per share, including 397,500 shares of common stock upon the exercise of the underwriter’s option to purchase additional shares. After underwriting discounts and commissions and other offering costs, net proceeds from the IPO were approximately $61,966,237. Offering costs of approximately $1,350,815 were recognized as a reduction of additional-paid-in capital. Upon the closing of the IPO, all outstanding shares of the Company’s preferred stock converted into shares of common stock, consisting of (i) outstanding shares of Series A-1 convertible preferred stock converting into 324,680 aggregate shares of common stock, (ii) 152,253 outstanding shares of Series A-2 convertible preferred stock converting into 304,506 aggregate shares of common stock, and (iii) 383,142 outstanding shares of Series B-1 convertible preferred stock converting into 766,284 aggregate shares of common stock. |
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Concurrent Private Placement | Concurrent Private Placement Danone Manifesto Ventures, PBC (“DMV”) purchased 90,910 shares of our common stock in a private placement immediately subsequent to the consummation of the IPO for a total purchase price of $2,000,020, at a price per share of $22. |
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Basis of Accounting | Basis of Accounting The financial statements include the accounts of the Company. The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States of America (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and rules and regulations of the Securities and Exchange Commission (“SEC”). Operating results include the three and six months ended June 30, 2021 and 2020. Certain information in footnote disclosures normally included in financial statements prepared in accordance with GAAP has been condensed or omitted pursuant to the rules and regulations of the SEC and the accounting standards for interim financial statements. |
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Unaudited interim financial information | Unaudited Interim Financial Information In the opinion of the Company, the accompanying unaudited interim financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of its financial position and its results of operations, changes in stockholders’ equity and cash flows. The balance sheet as of December 31, 2020 was derived from audited annual financial statements. Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results expected for the fiscal year ending December 31, 2021. The accompanying unaudited interim financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the fiscal year ended December 31, 2020. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses during the reporting period. The Company bases its estimates and assumptions on historical experience, known trends and events and various other factors that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Although management believes its estimates and assumptions are reasonable when made, they are based upon information available at the time they are made. Management evaluates the estimates and assumptions on an ongoing basis and, if necessary, makes adjustments. Due to the risks and uncertainties involved in the Company’s business and evolving market conditions and given the subjective element of the estimates and assumptions made, actual results may differ from estimated results. The most significant estimates and judgments impact allowances for doubtful accounts and returns, inventory obsolescence, the fair value of and/or potential impairment of goodwill and intangible assets, the fair value of assets acquired and liabilities assumed in business combinations, valuation allowance for deferred taxes, reserves on prepaid expenses, and fair value of stock-based compensation. |
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Business Combinations | Business Combinations Business combinations are accounted for under the acquisition method which requires identifiable assets acquired and liabilities assumed in the business acquired be recognized and measured at fair value on the acquisition date, which is the date that the acquirer obtains control of the acquired business. The amount by which the fair value of consideration transferred as the purchase price exceeds the net fair value of assets acquired and liabilities assumed is recorded as goodwill. The amount by which the net fair value of assets acquired, and liabilities assumed exceeds the fair value of consideration transferred as the purchase price is recorded as a bargain purchase gain. Acquisition-related transaction costs are expensed as incurred. These estimates are inherently uncertain and unpredictable. In addition, unanticipated events and circumstances may occur which may affect the accuracy or validity of such estimates. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill or bargain purchase gain. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s Statements of Operations. |
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Segment reporting | Segment reporting The Company currently has one operating segment. In accordance with ASC 280, Segment Reporting Substantially all product sales for the periods provided were derived from domestic sales. See Note 17 for additional information regarding sales by platform within the Company’s single segment. |
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Cash, Cash Equivalents, and Restricted Cash | Cash, Cash Equivalents, and Restricted Cash Cash, cash equivalents, and restricted cash are highly liquid instruments with an original maturity of three months or less when purchased. For the purposes of the statements of cash flows, the Company includes cash on hand, cash in clearing accounts, cash on deposit with financial institutions, investments with an original maturity of three months or less, and restricted cash in determining the total balance. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows.
Amounts in restricted cash represent those that are required to be set aside by contractual agreement. On December 3, 2020, the Company entered into an agreement with DMV, which provided the Company $298,103 in funds for the purpose of supporting three
COVID-19 relief projects. During the three and six months ended June 30, 2021, we contributed $25,059 and $80,963, respectively, to these projects. The restriction will be released upon the completion of the projects. |
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Concentration of Risk | Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash on deposit and cash equivalents. At times, cash and cash equivalents balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurable limits. The Company’s investment account (recognized as cash and cash equivalents) is with what the Company believes to be a high-quality issuer. The Company has never experienced any losses related to these balances.
Non-interest-bearing amounts on deposit in excess of FDIC insurable limits as of June 30, 2021 and December 31, 2020 approximated $6,441,487 and $6,639,821, respectively. |
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Accounts Receivable, net | Accounts Receivable, net Accounts receivable, net consists principally of trade receivables, which are recorded at the invoiced amount, net of allowances for doubtful accounts. Trade receivables do not bear interest. Receivables are considered past due or delinquent according to contract terms. Management closely monitors outstanding balances and writes off accounts receivable as they are determined uncollectible. The Company provides for estimated losses on accounts receivable based on prior bad debt experience and a review of existing receivables. Based on these factors, management determined no allowance for doubtful accounts was required as of June 30, 2021 and December 31, 2020. |
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Investments | Investments Investment securities that are not classified as either held-to-maturity available-for-sale available-for-sale |
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Inventory | Inventory Inventory is stated at the lower of cost (first-in, first-out) or net realizable value and consists primarily of raw materials and packaging and finished goods. The following table presents the components of inventory, net, as of:
The Company periodically reviews the value of items in inventory and provides write-offs of inventory based on current market assessment, which are charged to cost of goods sold. For the three and six months ended June 30, 2021, the Company recorded $25,952 and $128,556, respectively, in inventory obsolescence primarily related to the Company’s liquid creamer product line. For the three and six months ended June 30, 2020, the Company recorded $189,040 in inventory obsolescence related to the Company’s liquid creamer product line. As of June 30, 2021 and December 31, 2020, the Company had a total of $1,039,248 and $958,166, respectively, of prepayments for future raw materials inventory, net of reserve for prepaid assets of $179,000, which is included in prepaid expenses and other current assets, net on the balance sheets. |
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Property and Equipment, net | Property and Equipment, net Property and equipment are valued at cost, net of accumulated depreciation. Expenditures for maintenance and repairs that do not extend the useful life or increase the value of the assets are charged to expense in the period incurred. Additions and betterments are capitalized. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives for depreciation purposes for furniture and factory equipment range from 3 to 10 years. The useful life for leasehold improvements is the lesser of the lease term or the useful life. Construction in progress is not depreciated until such a time that the assets are completed and placed into service. Depreciation expense is allocated to general and administrative expenses and cost of goods sold upon the sale of inventory. For the three and six months ended June 30, 2021, depreciation expense was $170,928 and $302,261, respectively. For the three and six months ended June 30, 2020, depreciation expense was $114,383 and $229,284, respectively. As of June 30, 2021 and December 31, 2020, the Company had a total of $407,412 and $0, respectively, of deposits for future equipment purchases, which is included in deposits on the balance sheets. |
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Deferred Rent | Deferred Rent Deferred rent includes tenant improvement costs that were incurred by the landlord, RII Lundgren Mill, LLC, in the build-out of the Company’s leased space and were reimbursed by the Company. These amounts are treated as additional rents and are expensed straight-line over the life of the lease. |
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Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with the five-step model as prescribed by ASC Topic 606 , Revenue from Contracts with a Customer, |
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Cost of Goods Sold | Cost of Goods Sold Cost of goods sold includes material, labor, and overhead costs incurred in the storage and distribution of products sold in the period. Material costs include the cost of products purchased. Labor and overhead costs consist of indirect product costs, including wages and benefits for manufacturing, planning, and logistics personnel, depreciation, facility costs and freight. |
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Shipping and Handling | Shipping and Handling Costs of shipping and handling related to sales revenue are included in cost of goods sold. Shipping and handling costs totaled $1,591,952 and $2,830,948 for the three and six months ended June 30, 2021, respectively. Shipping and handling costs totaled $954,295 and $1,588,937 for the three and six months ended June 30, 2020, respectively. Income generated from shipping costs billed through to customers was included in Sales, net in the statements of operations. Shipping income totaled $40,750 and $66,410 for the three and six months ended June 30, 2021, respectively. Shipping income totaled $43,793 and $195,345 for the three and six months ended June 30, 2020, respectively. |
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Research and Product Development | Research and Product Development Amounts spent on research and development activities are expensed as incurred as research and product development expense on the statements of operations. Research and product development expense was $374,852 and $615,539 for the three and six months ended June 30, 2021, respectively. Research and product development expense was $117,797 and $261,111 for the three and six months ended June 30, 2020, respectively. |
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Advertising | Advertising Advertising costs are expensed when incurred. Advertising expenses for the three and six months ended June 30, 2021 was $1,699,865 and $3,381,209, respectively. Advertising expenses for the three and six months ended June 30, 2020 was $1,154,060 and $2,090,423, respectively. |
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Marketing | Marketing Marketing costs are expensed when incurred. Marketing expenses for the three and six months ended June 30, 2021 were $1,260,489 and $1,971,012, respectively. Marketing expenses for the three and six months ended June 30, 2020 were $261,662 and $570,884, respectively. |
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Income Taxes | Income Taxes Income taxes provide for the tax effects of transactions reported in the financial statements and consist of income taxes currently due and deferred tax assets and liabilities. The Company may also be subject to interest and penalties from taxing authorities on underpayment of income taxes. In such an event, interest and penalties are included in income tax expense. Deferred tax assets and liabilities are recognized for differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences relate primarily to depreciable assets (use of different depreciation methods and lives for financial statement and income tax purposes) and net operating losses. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Due to the historical net loss position of the Company, the Company recorded a full deferred tax valuation allowance of $11,238,942 and $7,563,110 as of June 30 , 2021 and December 31 , 2020 , respectively. |
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Repurchased Stock | Repurchased Stock Management presents repurchased stock (at cost) as a reduction in stockholders’ equity to reflect the historical stock repurchase transactions more clearly. There were no stock repurchase transactions for the three and six months ended June 30, 2021. There were stock repurchases of $20,532 in the three and six months ended June 30, 2020. |
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Stock Incentive Plan | Stock Incentive Plan The compensation cost relating to share-based payment transactions is recognized in the financial statements. The cost is measured based on the grant date fair value of the equity or liability instruments issued. Compensation cost for all employee stock awards is calculated and recognized over the employees’ service period, generally defined as the vesting period. For awards with graded-vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Compensation cost for all consultant stock awards is calculated and recognized over the consultant’s service period based on the grant date fair value of the equity or liability instruments issued. Upon exercise of stock option awards or vesting of restricted stock units, recipients are issued shares of common stock. Pre-vesting forfeitures result in the reversal of all compensation cost as of the date of termination; post-vesting cancellation does not. |
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Earnings per Share | Earnings per Share Basic earnings per share is computed on the basis of the weighted average number of shares of common stock that were outstanding during the period. Diluted earnings per share is similarly determined, except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if all dilutive potential common stock and preferred stock had been issued and is calculated under the treasury stock method. Due to the Company’s net loss, all stock options and convertible preferred stock are anti-dilutive and excluded. |
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Stock Split | Stock Split The Company’s board of directors and stockholders approved a
2-for-1 2-for-1 |
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Warrants | Warrants Issued and detachable stock warrants are classified as equity or liability instruments based on the specific terms of the underlying warrant agreement. In circumstances where debt or equity is issued with detachable warrants, the proceeds from issuance are allocated to each instrument based on an acceptable method, which generally involves determining the fair value of one or more of the instruments. In conjunction with the Company’s initial public offering, the warrant outstanding was cancelled. See additional information in Note 13. |
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License Agreement – Indefinite Lived Intangible Asset | License Agreement – Indefinite Lived Intangible Asset On August 3, 2015, the Company entered into a license agreement with the Company’s co-founder Laird Hamilton (the “LH License”). The LH License stated Laird Hamilton’s contribution to the Company was in the form of intellectual property, granting the Company the right to use Laird Hamilton’s name and likeness. This contribution, which was reported on the balance sheets as of June 30, 2021 and December 31, 2020, was valued at $132,000 and satisfied with the issuance of 660,000 shares of common stock. The Company has determined that the intangible asset associated with the LH License has an indefinite life, as there is no foreseeable limit on the period of time over which it is expected to contribute to the cash flows of the Company. Please see Note 16 for more information on the Company’s related party transaction with Mr. Hamilton. On May 2, 2018, the Company entered into a license agreement with Gabrielle Reece, who is married to Mr. Hamilton (the “GR License”). Pursuant to the GR License, Ms. Reece granted the Company rights to her name, signature, voice, picture, image, likeness and biographical information commencing on July 1, 2015. This contribution, which is reported on the balance sheets as of June 30, 2021 and December 31, 2020, was valued at $100 based on the consideration exchanged. The Company has determined that the intangible asset associated with the GR License has an indefinite life, as there is no foreseeable limit on the period of time over which it is expected to contribute to the cash flows of the Company. Please see Note 16 for more information on the Company’s related party transaction with Ms. Reece. On November 19, 2018, the Company executed a License and Preservation Agreement with Mr. Hamilton and Ms. Reece which superseded the predecessor license agreements with both individuals. The agreement added specific terms related to noncompetition and allowable usage of the property under the license. No additional consideration was exchanged in connection with the agreement and the life of the agreement was set at 100 years. On May 26, 2020, the Company executed a License and Preservation Agreement with Mr. Hamilton, and Ms. Reece (the “2020 License”), which superseded the predecessor license and preservation agreement with both individuals. Among other modifications, the agreement (i) modified certain approval rights of Mr. Hamilton and Ms. Reece for use of their respective images, signatures, voices, and names (other than those owned by the Company), rights of publicity and common law and statutory rights to the foregoing in the Company’s products, (ii) modified certain assignment, change of control and indemnification provisions, and (iii) granted the Company the right to extend the term of the agreement for additional r terms upon the expiration of the initial one-hundred year term. No additional consideration was exchanged in connection with the agreement. As indefinite-lived intangibles, the Company assesses qualitative factors each reporting period to determine whether events and circumstances exist that indicate that the fair values of the licensing agreements were less than the carrying amounts. Upon considering these factors, the Company determined it was more likely than not that the fair values of the 2020 License were not less than the carrying amounts; therefore, the Company recognized no impairment for the three and six months ended June 30, 2021 and 2020. |
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Definite Lived Intangible Assets, net | Definite Lived Intangible Assets, net Definite lived intangible assets are valued at cost, net of accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the assets. Estimated useful lives for amortization purposes range between 3 and 10 years. Amortization expense is allocated to general and administrative expense. For the three and six months ended June 30, 2021, amortization expense was $98,533 and $103,803, respectively. For the three and six months ended June 30, 2020, amortization expense was $2,524 and $5,048, respectively. |
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Goodwill | Goodwill Goodwill represents the excess of purchase price over the assigned fair values of the assets acquired and liabilities assumed in conjunction with a business combination. Goodwill is reviewed for impairment annually as of December 31, or whenever events occur or circumstances change that indicate goodwill may be impaired. In testing goodwill for impairment, the Company has the option to perform a qualitative assessment to determine whether the existence of events or circumstances indicate that it is more-likely-than-not (more than 50%) that the fair value of goodwill is less than its carrying amount. When performing a qualitative assessment, the Company evaluates factors such as industry and market conditions, cost factors, overall financial performance, and other relevant entity specific events and changes. If the qualitative assessment indicates that it is more-likely-than-not that the fair value of goodwill is less than its carrying amount, or if the Company chooses not to perform the qualitative assessment, then a quantitative assessment is performed to determine the reporting unit’s fair value. If the carrying value exceeds its fair value, then an impairment loss is recognized for the amount of the excess of the carrying amount over the fair value, not to exceed the total amount of goodwill. |
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Employee Benefit Plan | Employee Benefit Plan The Company sponsors a defined contribution 401(k) plan (the “401(k) plan”) for all employees 18 years or older. The 401(k) plan was initiated on July 1, 2018. Employee contributions may be made on a
before-tax basis, limited by Internal Revenue Service regulations. For the three and six months ended June 30, 2021 and 2020, we did not match employee contributions. |
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JOBS Act Accounting Election | JOBS Act Accounting Election The Company qualifies as an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. An emerging growth company can elect to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. Currently, the Company has elected to file as an emerging growth company defined under the JOBS Act, and as such, these financial statements may not be comparable to the financial statements of companies that comply with the new or revised accounting pronouncements as of public company effective dates. |
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Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements There were no new accounting pronouncements adopted in the three and months ended June 30, 2021 and 2020, respectively. |
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Recent Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued Leases (Topic 842) (“ASU 2016-02”), whereby a lessee will be required to recognize for all leases at the commencement date a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use 2016-02 is effective for the Company’s annual periods beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The adoption of the new standard is expected to result in the recognition of additional lease liabilities and right-of-use In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (“Topic 326”): Measurement of Credit Losses on Financial Instruments,” as modified by subsequently issued ASUs 2018-19 (issued November 2018), 2019-04 (issued April 2019), 2019-05 (issued May 2019), 2019-11 (issued November 2019), 2020-02 (issued February 2020) and 2020-03 (issued March 2020). Topic 326 modifies the measurement and recognition of credit losses for most financial assets and certain other instruments, requiring the use of forward-looking expected credit loss models based on historical experience, current economic conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount, which may result in earlier recognition of credit losses under the new standard. It also requires that credit losses related to available-for-sale 2016-13 is effective for the Company’s annual periods beginning after December 15, 2022, including interim periods within those fiscal years. The Company has not yet evaluated the potential impact of this pronouncement. |
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Reclassification of Prior Period Presentation | Reclassification of Prior Period Presentation Certain prior period amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations or cash flows. |
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Subsequent Events | Subsequent Events Subsequent events are events or transactions that occur after the balance sheet date but before the financial statements are available to be issued. The Company has evaluated events and transactions subsequent to June 30, 2021 for potential recognition of disclosure in the financial statements. |
Nature of Operations and Summary of Significant Accounting Policies (Tables) |
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheet that sum to the total of the same such amounts shown in the statement of cash flows.
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Schedule of Inventory, Current | Inventory is stated at the lower of cost (first-in, first-out) or net realizable value and consists primarily of raw materials and packaging and finished goods. The following table presents the components of inventory, net, as of:
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Business Combination (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Consideration Paid and Amounts of the Assets Acquired and Liabilities Assumed Recognized at the Acquisition | The following table summarizes the consideration paid for Picky Bars and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date:
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Summary of Components of the Intangible Assets Acquired and their Estimated Useful Lives | The following table summarizes the components of the intangible assets acquired and their estimated useful lives:
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Schedule of Proforma Information Related To Business Combination | The following unaudited pro forma summary presents the results of the Company as if the acquisition of Picky Bars had occurred on January 1 of the year prior to the acquisition (in thousands):
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Prepaid Expenses and Other Current Assets, Net (Tables) |
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Prepaid Expense and Other Assets, Current [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of prepaid expenses and other current assets | The following table presents the components of prepaid expenses and other current assets, net, as of:
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Investment securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investment securities | Investment securities as of June 30, 2021 and December 31, 2020 consisted of the following:
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Schedule of amortized cost and estimated fair value of investment securities | The amortized cost and estimated fair value of investment securities as of June 30, 2021, by contractual maturity, are shown below:
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Fair Value Measurements (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarize assets subject to fair value measurements | The following tables summarize assets subject to fair value measurements:
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Long-term Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of long-term debt components | The following table presents the components of long-term debt:
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Property and Equipment, Net (Tables) |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of property and equipment, net | Property and equipment, net is comprised of the following as of:
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Goodwill and Intangible Assets, Net (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Intangible Assets | Intangible Assets, net is comprised of the following:
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Summary of Future Amortization Expense of the Intangible Assets | The estimated amortization expense for each of the next five years and thereafter is as follows:
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Commitments and Contingencies (Tables) |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loss Contingencies by Contingency | The following table sets forth the amounts of our significant contractual obligations and commitments with definitive payment terms as of June 30, 2021:
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Deferred Tax Assets and Liabilities (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Tax Assets and Liabilities | The Company’s deferred tax assets and liabilities consisted of the following as of June 30, 2021 and December 31, 2020:
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Stock Incentive Plan (Tables) |
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share Based Compensation Stock Options and Restricted Stock Activity | The following tables summarize the Company’s stock option activity during the six months ended June 30, 2021 and 2020:
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Schedule of Share-Based Payment Award, Stock Options, Valuation Assumptions | For the six months ended June 30, 2021 and 2020, the grant-date fair value of stock options was estimated at the time of grant using the following weighted-average inputs and assumptions in the Black-Scholes option pricing model:
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Earnings per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share | Basic earnings per share is reconciled to diluted earnings per share in the following table:
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Revenue Recognition (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of disaggregation of revenue based on products sold | In accordance with ASC Topic 606, the Company disaggregates net sales from contracts with customers based on the characteristics of the products sold:
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Summary of disaggregation of revenue based on channels | The Company generates revenue through three channels: online, wholesale, and food service:
|
Nature of Operations and Summary of Significant Accounting Policies - Summary of Reconciliation of Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($) |
Jun. 30, 2021 |
Dec. 31, 2020 |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 34,706,429 | $ 56,973,896 | ||
Restricted cash | 153,221 | 234,184 | ||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 34,859,650 | $ 57,208,080 | $ 8,549,176 | $ 1,004,109 |
Nature of Operations and Summary of Significant Accounting Policies - Schedule of Inventory, Current (Detail) - USD ($) |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials and packaging | $ 5,556,668 | $ 4,109,706 |
Finished goods | 5,243,915 | 2,186,192 |
Total gross inventory | 10,800,603 | 6,295,898 |
Provision for inventory obsolescence | (18,266) | |
Total inventory, net of reserve | $ 10,782,337 | $ 6,295,898 |
Business Combination - Summary of Components of the Intangible Assets Acquired and their Estimated Useful Lives (Detail) - Picky Bars [Member] |
May 03, 2021
USD ($)
|
---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | |
Fair Value | $ 4,930,000 |
Trade Names [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 10 years |
Fair Value | $ 2,530,000 |
Customer Relationships [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 10 years |
Fair Value | $ 1,990,000 |
Recipes [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 10 years |
Fair Value | $ 330,000 |
Social Media Agreements [Member] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Life | 3 years |
Fair Value | $ 80,000 |
Business Combination - Additional Information (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
May 03, 2021 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Business Acquisition [Line Items] | |||||
Cash Consideration | $ 10,449,587 | ||||
Picky Bars [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash Consideration | $ 11,111,830 | ||||
Acquisition costs | $ 179,390 | 278,140 | |||
Business combination, revenue of acquiree | $ 984,433 | $ 64,978 | $ 984,433 | $ 64,978 | |
Picky Bars [Member] | Definitive Agreement [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash Consideration | $ 11,111,830 | ||||
Common Stock [Member] | Picky Bars [Member] | |||||
Business Acquisition [Line Items] | |||||
Volume weighted avarage price of a share on the date of acquisition period | May 03, 2021 | ||||
Common Stock [Member] | Picky Bars [Member] | Definitive Agreement [Member] | |||||
Business Acquisition [Line Items] | |||||
Number of shares issued | 53,133 |
Business Combinations - Schedule of Proforma Information Related To Business Combination (Details) - Picky Bars [Member] - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Business Acquisition [Line Items] | ||||
Net Sales | $ 9,633,998 | $ 6,673,166 | $ 18,219,521 | $ 12,975,718 |
Net Loss | $ (6,125,020) | $ (3,966,013) | $ (11,418,183) | $ (5,934,893) |
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Detail) - USD ($) |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid insurance | $ 432,784 | $ 1,446,189 |
Prepaid inventory | 1,218,248 | 958,166 |
Prepaid subscriptions and license fees | 325,252 | 225,567 |
Prepaid, other | 196,838 | 152,323 |
Prepaid consulting | 0 | 13,963 |
Prepaid advertising | 125,000 | 0 |
Other current assets | 56,482 | 51,111 |
Total prepaid and other assets | 2,354,604 | 2,847,319 |
Reserve for prepaid inventory | (179,000) | |
Prepaid and other assets, net | $ 2,175,604 | $ 2,847,319 |
Prepaid Expenses and Other Current Assets, Net - Additional Information (Details) |
6 Months Ended |
---|---|
Jun. 30, 2021
USD ($)
| |
Prepaid Expense And Other Assets Current [Line Items] | |
Prepaid deposits for inventory | $ 296,873 |
Reserve for prepaid assets | 179,000 |
Maximum [Member] | |
Prepaid Expense And Other Assets Current [Line Items] | |
Estimate of undelivered inventory | 179,000 |
Minimum [Member] | |
Prepaid Expense And Other Assets Current [Line Items] | |
Estimate of undelivered inventory | $ 0 |
Investment securities - Schedule of Investment Securities (Detail) - USD ($) |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | $ 8,692,124 | $ 8,692,637 |
Estimated fair value | 8,682,330 | 8,706,844 |
Investment Securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 8,692,124 | 8,692,637 |
Gross unrealized gains | 0 | 14,207 |
Gross unrealized losses | (9,794) | |
Estimated fair value | 8,682,330 | 8,706,844 |
Federal agency bonds — mortgage-backed | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized cost | 8,692,124 | 8,692,637 |
Gross unrealized gains | 0 | 14,207 |
Gross unrealized losses | (9,794) | |
Estimated fair value | $ 8,682,330 | $ 8,706,844 |
Investment securities - Schedule of Amortized Cost and Estimated Fair Value of Investment Securities (Detail) - USD ($) |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Investments, Debt and Equity Securities [Abstract] | ||
Debt Securities, Available-for-Sale, Amortized Cost, Maturity, Allocated and Single Maturity Date, after One Year Through Five Years | $ 8,692,124 | $ 8,692,637 |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after One Year Through Five Years, Fair Value | 8,682,330 | 8,706,844 |
Debt Securities, Available-for-sale, Amortized Cost | 8,692,124 | 8,692,637 |
Debt Securities, Available-for-sale | $ 8,682,330 | $ 8,706,844 |
Investment securities - Additional Information (Detail) - Available-for-sale Securities [Member] - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
|
Schedule of Investments [Line Items] | |||||
Fair value of investment securities pledged | $ 8,682,330 | $ 8,682,330 | $ 8,706,844 | ||
Proceeds from sale and maturity of debt securities, available-for-sale | $ 0 | $ 513,544 | $ 0 | $ 475,000 |
Fair Value Measurements - Summarize Assets Subject To Fair Value Measurements (Detail) - Federal agency bonds — mortgage-backed - USD ($) |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, Fair Value Disclosure | $ 0 | |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, Fair Value Disclosure | 8,682,330 | $ 8,706,844 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets, Fair Value Disclosure | $ 0 | $ 0 |
Long-term Debt - Summary of Long-term Debt Components (Detail) - USD ($) |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Long-term debt [Line items] | ||
Long-term debt | $ 51,000 | $ 51,000 |
Forgivable loan, City of Sisters [Member] | ||
Long-term debt [Line items] | ||
Long-term debt | $ 51,000 | $ 51,000 |
Long-term Debt - Additional Information (Detail) |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2021 |
May 30, 2020
Employees
|
May 30, 2017
USD ($)
|
|
Long-term debt [Line items] | |||
Debt instrument face amount | $ 51,000 | ||
Forgivable loan, City of Sisters [Member] | |||
Long-term debt [Line items] | |||
Number of employees | Employees | 30 | ||
Salary payable to each employee | $ 40,000 | ||
Period of moratorium | 3 years |
Property and Equipment, Net - Summary of Property and Equipment, Net (Detail) - USD ($) |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 5,004,902 | $ 4,407,854 |
Accumulated depreciation | (1,218,758) | (894,366) |
Property and equipment, net | 3,786,144 | 3,513,488 |
Factory equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,711,014 | 2,668,839 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 947,394 | 947,394 |
Furniture and office equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 563,488 | 532,116 |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 509,450 | $ 259,504 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 273,556 |
Property and Equipment, Net - Additional Information (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 170,928 | $ 114,383 | $ 302,261 | $ 229,284 |
Goodwill and Intangible Assets, Net - Summary of Future Amortization Expense of the Intangible Assets (Detail) |
Jun. 30, 2021
USD ($)
|
---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2021 | $ 275,671 |
2022 | 549,198 |
2023 | 547,882 |
2024 | 499,059 |
2025 | 485,118 |
Thereafter | 2,584,057 |
Intangible assets, net | $ 4,940,984 |
Goodwill and Intangible Assets, Net - Additional Information (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
|
Goodwill [Line Items] | |||||
Goodwill | $ 6,486,000 | $ 6,486,000 | $ 0 | ||
Percentage of fair value of reporting unit in excess of carrying amount. | 50.00% | 50.00% | |||
Amortization expense | $ 98,533 | $ 10,870 | $ 103,803 | $ 20,371 | |
Finite-Lived Intangible Assets, Amortization Method | straight-line method | ||||
Minimum [Member] | |||||
Goodwill [Line Items] | |||||
Useful Life | 3 years | ||||
Weighted Average [Member] | |||||
Goodwill [Line Items] | |||||
Useful Life | 9 years 8 months 12 days |
Commitments and Contingencies - Detailed About Contractual Obligations and Commitments with Definitive Payment Terms (Detail) |
Jun. 30, 2021
USD ($)
|
---|---|
Schedule of contractual obligations and commitments [Line Items] | |
Operating Leases, 2021 | $ 119,423 |
Operating Leases, 2022 | 243,236 |
Operating Leases, 2023 | 250,534 |
Operating Leases, 2024 | 258,049 |
Operating Leases, 2025 | 265,791 |
Operating Leases, Thereafter | 860,498 |
Operating Leases | 1,997,531 |
Note Payable, 2021 | 51,000 |
Note Payable, 2022 | 0 |
Note Payable, 2023 | 0 |
Note Payable, 2024 | 0 |
Note Payable, 2025 | 0 |
Note Payable, Thereafter | 0 |
Note Payable | 51,000 |
Total, 2021 | 170,423 |
Total, 2022 | 243,236 |
Total, 2023 | 250,534 |
Total, 2024 | 258,049 |
Total, 2025 | 265,791 |
Total, Therafter | 860,498 |
Total | $ 2,048,531 |
Deferred Tax Assets and Liabilities - Schedule of Deferred Tax Assets and Liabilities (Detail) - USD ($) |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Noncurrent deferred tax assets: | ||
Net operating loss carryforwards | $ 11,084,791 | $ 7,444,857 |
Property and equipment | 582,680 | 671,562 |
Research and development credits | 135,783 | 106,526 |
Accrued expenses | 86,601 | 75,702 |
Charitable contributions | 30,681 | |
Inventory reserve | 4,982 | |
Total noncurrent deferred tax assets | 11,925,518 | 8,298,647 |
Noncurrent deferred tax liabilities: | ||
Deferred rent asset | 686,576 | 735,537 |
Intangible assets | 36,718 | |
Total noncurrent deferred tax liabilities | 723,294 | 735,537 |
Net noncurrent deferred tax assets | 11,202,224 | 7,563,110 |
Valuation allowance | (11,238,942) | $ (7,563,110) |
Total net noncurrent deferred tax liabilities | $ 36,718 |
Stock Incentive Plan - Summary of Assumptions Used in Black-Scholes Option-Pricing Model to Determine Grant-Date Fair Value of Stock Option Granted (Detail) - USD ($) |
6 Months Ended | |
---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Share Based Compensation Arrangement By Share Based Payment Award [Abstract] | ||
Weighted-average expected volatility | 52.08% | 69.88% |
Weighted-average expected term (years) | 6 years 2 months 23 days | 6 years 2 months 23 days |
Weighted-average expected risk-free interest rate | 0.70% | 0.74% |
Dividend yield | 0.00% | 0.00% |
Weighted-average fair value of options granted | $ 20.95 | $ 8.42 |
Earnings per Share - Summary of Earnings Per Share (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Earnings Per Share [Abstract] | ||||||
Net loss | $ (6,302,259) | $ (5,330,504) | $ (3,006,390) | $ (1,995,230) | $ (11,632,763) | $ (5,001,620) |
Less deemed dividend of beneficial conversion feature | 0 | (825,366) | 0 | (825,366) | ||
Less deemed dividend on warrant discount | 0 | (179,427) | 0 | (179,427) | ||
Net loss attributable to Laird Superfood, Inc. common stockholders | $ (6,302,259) | $ (4,011,183) | $ (11,632,763) | $ (6,006,413) | ||
Weighted average shares outstanding- basic | 8,967,797 | 4,325,265 | 8,931,736 | 4,303,305 | ||
Dilutive securities | ||||||
Weighted average shares outstanding- diluted | 8,967,797 | 4,325,265 | 8,931,736 | 4,303,305 | ||
Common stock options and restricted stock awards excluded due to anti-dilutive effect | 950,611 | 2,209,061 | 950,611 | 1,880,653 | ||
Basic and diluted: | ||||||
Net loss per share (basic) | $ (0.70) | $ (0.93) | $ (1.30) | $ (1.40) | ||
Net loss per share (diluted) | $ (0.70) | $ (0.93) | $ (1.30) | $ (1.40) |
Revenue Recognition - Additional information (Detail) - USD ($) |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Accounts receivable, net | $ 789,642 | $ 839,659 |
Accrued Liabilities [Member] | ||
Contract liability | 250,365 | 132,280 |
Refund Liability | 13,970 | 28,968 |
Inventory Finished Goods [Member] | ||
Contract assets | $ 5,283 | $ 0 |
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