UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(MARK ONE)

[X]

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarter ended March 31, 2019June 30, 2022

 

[  ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to

 

Commission file number:001-38785

STRYVE FOODS, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

ANDINA ACQUISITION CORP. III
(Exact Name of Registrant as Specified in Its Charter)

Cayman IslandsN/A

Delaware

87-1760117

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

Calle 113 # 7-45 Torre B5801 Tennyson Parkway, Suite 275

Oficina 1012Plano, TX75024

Bogotá, Colombia

(Address of principal executive offices)

 

(646) 565-3861(972) 987-5130

(Issuer’s telephone number)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A common stock

SNAX

The NASDAQ Stock Market LLC

Warrants, each exercisable for one share of Class A common stock at an exercise price of $11.50 per share

SNAXW

The NASDAQ Stock Market LLC

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

[  ]

Accelerated filer

[  ]

Non-accelerated filer

[X]

Smaller reporting company

[  ]

Emerging growth company

[X]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [  ]

 

Securities registered pursuant to Section 12(b)At August 12, 2022, 21,799,556 shares of the Act:

Title of each classTrading Symbol(s)

Name of each exchange on

which registered

Units, each consisting of one ordinary share, one right, and one redeemable warrantANDAUThe NASDAQ Stock Market LLC
Ordinary Shares,registrant’s Class A common stock, $0.0001 par value, and 7,488,343 shares of the registrant’s Class V common stock, $0.0001 par value, $0.0001 per shareANDAThe NASDAQ Stock Market LLC
Rights, each to receive one-tenth (1/10) of one ordinary shareANDARThe NASDAQ Stock Market LLC
Redeemable warrants, exercisable for ordinary shares at a price of $11.50 per shareANDAWThe NASDAQ Stock Market LLC

As of May 14, 2019, 13,895,000 ordinary shares, par value $0.0001 per share, were issued and outstanding.

 


 

ANDINA ACQUISITION CORP. IIISTRYVE FOODS, INC.

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2019JUNE 30, 2022

TABLE OF CONTENTS

 

Page

Page

Part I. Financial Information

1

Item 1. Unaudited Condensed Consolidated Financial Statements

1

Condensed Consolidated Balance Sheets

3

1

Condensed Consolidated Statements of Operations

4

2

Condensed Consolidated Statements of Changes in Shareholders’Stockholders’ Equity (Deficit)

5

3

Condensed Consolidated Statements of Cash Flows

6

5

Notes to Unaudited Condensed Consolidated Financial Statements

7

6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

15

20

Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk

17

33

Item 4. Controls and Procedures

17

34

Part II. Other Information

35

Item 1. Legal Proceedings

35

Item 1A. Risk Factors

35

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities

18

35

Item 3. Defaults Upon Senior Securities

35

Item 4. Mine Safety Disclosures

35

Item 5. Other Information

35

Item 6. Exhibits

18

36

Part III. Signatures

19

37

ANDINA ACQUISITION CORP. III

i


PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

STRYVE FOODS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

  March 31,  December 31, 
  2019  2018 
  (unaudited)  (audited) 
ASSETS        
Current Assets        
Cash $526,236  $ 
Prepaid expenses  140,141    
Total Current Assets  666,377    
         
Deferred offering costs     156,276 
Marketable securities held in Trust Account  108,413,905    
Total Assets $109,080,282  $156,276 
         
LIABILITIES AND SHAREHOLDERS’ EQUITY        
Current liabilities        
Account payable and accrued expenses $29,963  $10,075 
Accrued offering costs     43,700 
Advance from related party     72,239 
Promissory note – related party     34,259 
Total Current Liabilities  29,963   160,273 
         
Commitments        
         
Ordinary shares subject to possible redemption, 10,365,307 shares at redemption value at March 31, 2019  104,050,316    
         
Shareholders’ Equity        
Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding      
Ordinary shares, $0.0001 par value; 100,000,000 shares authorized; 3,529,693 and 2,875,000 shares issued and outstanding (excluding 10,365,307 and -0- shares subject to possible redemption) at March 31, 2019 and December 31, 2018, respectively(1)  353   287 
Additional paid-in capital  4,719,880   24,713 
Retained earnings (Accumulated deficit)  279,770   (28,997)
Total Shareholders’ Equity  5,000,003   (3,997)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $109,080,282  $156,276 

 

(1)As of December 31, 2018, this amount included an aggregate of 375,000 shares that were subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full. As a result of the underwriters’ election to partially exercise their over-allotment option in January 2019, an aggregate of 200,000 shares were no longer subject to forfeiture and 175,000 shares were subject to forfeiture to the extent that the underwriters’ over-allotment was not exercised in full. The remaining over-allotment option expired unexercised on March 17, 2019 (see Note 7).

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

ASSETS

 

(Unaudited)

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalent

 

$

5,011,077

 

 

$

2,217,191

 

Accounts receivable, net

 

 

4,255,802

 

 

 

2,900,281

 

Inventory, net

 

 

6,652,527

 

 

 

7,215,981

 

Prepaid media spend, net of reserve

 

 

 

 

 

450,000

 

Prepaid expenses and other current assets

 

 

1,689,297

 

 

 

2,255,539

 

Total current assets

 

 

17,608,703

 

 

 

15,038,992

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

8,015,522

 

 

 

6,825,895

 

Right of use asset, net

 

 

669,043

 

 

 

767,382

 

Goodwill

 

 

8,450,000

 

 

 

8,450,000

 

Intangible asset, net

 

 

4,483,191

 

 

 

4,604,359

 

Prepaid media spend, net of reserve and net of current portion

 

 

 

 

 

1,084,548

 

Other assets

 

 

 

 

 

4,192

 

TOTAL ASSETS

 

$

39,226,459

 

 

$

36,775,368

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Accounts payable

 

 

2,557,320

 

 

$

3,097,516

 

Accrued expenses

 

 

2,568,054

 

 

 

1,634,978

 

Current portion of lease liability

 

 

210,901

 

 

 

168,482

 

Line of credit

 

 

-

 

 

 

3,500,000

 

Current portion of long-term debt

 

 

122,023

 

 

 

3,447,056

 

Total current liabilities

 

 

5,458,298

 

 

 

11,848,032

 

 

 

 

 

 

 

 

Long-term debt, net of current portion

 

 

35,829

 

 

 

119,542

 

Lease liability, net of current portion

 

 

491,399

 

 

 

598,900

 

Financing obligation - related party operating lease

 

 

7,500,000

 

 

 

7,500,000

 

Deferred tax liability, net

 

 

67,223

 

 

 

67,223

 

Deferred stock compensation liability

 

 

504,810

 

 

 

71,197

 

Warrant liability

 

 

43,065

 

 

 

128,375

 

TOTAL LIABILITIES

 

 

14,100,624

 

 

 

20,333,269

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Preferred stock - $0.0001 par value, 10,000,000 shares authorized, 0 shares issued and outstanding

 

 

 

 

 

 

Class A common stock - $0.0001 par value, 400,000,000 shares authorized, 16,750,794 and 8,633,755 shares issued and outstanding, respectively

 

 

1,675

 

 

 

863

 

Class V common stock - $0.0001 par value, 200,000,000 shares authorized, 11,502,355 shares issued and outstanding

 

 

1,150

 

 

 

1,150

 

Additional paid-in-capital

 

 

132,902,242

 

 

 

100,551,257

 

Accumulated deficit

 

 

(107,779,232

)

 

 

(84,111,171

)

TOTAL STOCKHOLDERS' EQUITY

 

 

25,125,835

 

 

 

16,442,099

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

 

$

39,226,459

 

 

$

36,775,368

 

 

The accompanying notes are an integral part of this condensed financial statements.

ANDINA ACQUISITION CORP. III

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

  

Three Months Ended

March 31,

 
  2019  2018 
       
Operating costs $105,138  $1,797 
Loss from operations  (105,138)  (1,797)
         
Other income:        
Interest income  413,855    
Unrealized gain on marketable securities held in Trust Account  50    
Other income  413,905    
         
Net income (loss) $308,767  $(1,797)
         
Weighted average shares outstanding, basic and diluted(1)  3,169,234   2,500,000 
         
Basic and diluted net loss per ordinary share(2) $(0.03) $(0.00)

(1)Excludes an aggregate of up to 10,365,307 shares subject to possible redemption at March 31, 2019. As of March 31, 2018, this amount excluded an aggregate of 375,000 shares that were subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full. As a result of the underwriters’ election to partially exercise their over-allotment option in January 2019, an aggregate of 200,000 shares were no longer subject to forfeiture and 175,000 shares were subject to forfeiture to the extent that the underwriters’ over-allotment was not exercised in full. The remaining over-allotment option expired unexercised on March 17, 2019 (see Note 7).
(2)Net income (loss) per ordinary share – basic and diluted excludes income attributable to ordinary shares subject to possible redemption of $397,266 for the three months ended March 31, 2019 (see Note 2).

The accompanying notes are an integral part of these condensed consolidated financial statements.

ANDINA ACQUISITION CORP. III1


STRYVE FOODS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITYOPERATIONS

(Unaudited)

 

  Ordinary Shares  Additional Paid  Accumulated  Total Shareholders’ 
  Shares  Amount  in Capital  Deficit  Equity 
Balance – January 1, 2018  2,875,000  $287  $24,713  $(14,225) $10,775 
                     
Net loss           (1,797)  (1,797)
                     
Balance – March 31, 2018 (unaudited)  2,875,000  $287  $24,713  $(16,022) $8,978 

 

 

For The Three Months
Ended June 30,

 

 

For The Six Months
Ended June 30,

 

 

 

 

 

 

 

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

SALES, net

 

$

10,946,158

 

 

$

7,351,323

 

 

$

18,366,712

 

 

$

14,185,798

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COST OF GOODS SOLD (exclusive of depreciation shown separately below)

 

 

15,371,112

 

 

 

3,770,271

 

 

 

21,667,739

 

 

 

7,926,921

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS (LOSS) MARGIN

 

 

(4,424,954

)

 

 

3,581,052

 

 

 

(3,301,027

)

 

 

6,258,877

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Selling expenses

 

 

4,717,178

 

 

 

5,593,122

 

 

 

8,743,233

 

 

 

12,046,413

 

Operations expense

 

 

1,349,157

 

 

 

970,302

 

 

 

2,579,540

 

 

 

2,030,086

 

Salaries and wages

 

 

3,510,076

 

 

 

1,601,664

 

 

 

6,095,976

 

 

 

3,003,310

 

Depreciation and amortization expense

 

 

503,360

 

 

 

396,708

 

 

 

947,725

 

 

 

791,556

 

Prepaid media reserve

 

 

1,489,028

 

 

 

 

 

 

1,489,028

 

 

 

 

Gain on disposal of fixed assets

 

 

(24,012

)

 

 

(9,654

)

 

 

(24,012

)

 

 

(8,578

)

Total operating expenses

 

 

11,544,787

 

 

 

8,552,142

 

 

 

19,831,490

 

 

 

17,862,787

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING LOSS

 

 

(15,969,741

)

 

 

(4,971,090

)

 

 

(23,132,517

)

 

 

(11,603,910

)

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER (EXPENSE) INCOME

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(180,536

)

 

 

(1,147,168

)

 

 

(369,031

)

 

 

(1,957,257

)

PPP loan forgiveness

 

 

-

 

 

 

 

 

 

-

 

 

 

1,669,552

 

Change in fair value of Private Warrants

 

 

39,996

 

 

 

 

 

 

85,310

 

 

 

-

 

Gain on debt extinguishment

 

 

-

 

 

 

545,200

 

 

 

-

 

 

 

545,200

 

Other (expense) income

 

 

(215,383

)

 

 

12,341

 

 

 

(215,382

)

 

 

24,548

 

Total other (expense) income

 

 

(355,923

)

 

 

(589,627

)

 

 

(499,103

)

 

 

282,043

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS BEFORE INCOME TAXES

 

 

(16,325,664

)

 

 

(5,560,717

)

 

 

(23,631,620

)

 

 

(11,321,867

)

Income taxes

 

 

28,655

 

 

 

 

 

 

36,441

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

 

(16,354,319

)

 

$

(5,560,717

)

 

 

(23,668,061

)

 

$

(11,321,867

)

Loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.53

)

 

$

(0.55

)

 

$

(0.78

)

 

$

(1.12

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

30,946,486

 

 

 

10,139,422

 

 

 

30,355,697

 

 

 

10,141,928

 

(1)As of March 31, 2018, this amount included an aggregate of 375,000 shares that were subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full. As a result of the underwriters’ election to partially exercise their over-allotment option in January 2019, an aggregate of 200,000 shares were no longer subject to forfeiture and 175,000 shares were subject to forfeiture to the extent that the underwriters’ over-allotment was not exercised in full. The remaining over-allotment option expired unexercised on March 17, 2019 (see Note 7).

  Ordinary Shares  Additional Paid  (Accumulated Deficit)/ Retained  Total
Shareholders’ Equity
 
  Shares  Amount  in Capital  Earnings  (Deficit) 
Balance – January 1, 2019  2,875,000  $287  $24,713  $(28,997) $(3,997)
                     
Sale of 10,800,000 Units, net of underwriting discounts  10,800,000   1,080   104,794,469      104,795,549 
                     
Sale of 395,000 Private Units  395,000   40   3,949,960      3,950,000 
                     
Forfeiture of Founder Shares  (175,000)  (17)  17       
                     
Ordinary shares subject to possible redemption  (10,365,307)  (1,037)  (104,049,279)     (104,050,316)
                     
Net income           308,767   308,767 
                     
Balance – March 31, 2019 (unaudited)  3,529,693  $353  $4,719,880  $279,770  $5,000,003 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

ANDINA ACQUISITION CORP. III2


STRYVE FOODS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSCHANGES IN STOCKHOLDERS' EQUITY

(Unaudited)SIX MONTHS ENDED JUNE 30, 2022

  Three Months Ended March 31, 
  2019  2018 
       
Cash Flows from Operating Activities:        
Net income (loss) $308,767  $(1,797)
Adjustments to reconcile net income (loss) to net cash used in operating activities:        
Interest earned on marketable securities held in Trust Account  (413,855)   
Unrealized gain on marketable securities held in Trust Account  (50)   
Changes in operating assets and liabilities:        
Prepaid expenses  (140,141)   
Accounts payable and accrued expenses  19,888   1,797 
Net cash used in operating activities  (225,391)   
         
Cash Flows from Investing Activities:        
Investment of cash in Trust Account  (108,000,000)   
Net cash used in investing activities  (108,000,000)   
         
Cash Flows from Financing Activities:        
Proceeds from sale of Units, net of underwriting discounts paid  105,300,000     
Proceeds from sale of Private Units  3,950,000     
Advances from related party  9,041     
Repayment of advances from related party  (81,280)    
Repayment of promissory note – related party  (34,259)    
Payments of offering costs  (391,875)   
Net cash provided by financing activities  108,751,627    
         
Net Change in Cash  526,236    
Cash – Beginning      
Cash – Ending $526,236  $ 
         
Non-Cash Investing and Financing Activities:        
Initial classification of ordinary shares subject to possible redemption $103,741,340  $ 
Change in value of ordinary shares subject to possible redemption $308,976  $ 

(Unaudited)

 

 

 

 

 

 

 

 

Common Stock Class A

 

 

Common Stock Class B/V

 

 

Additional

 

 

Accumulated

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Paid-in-Capital

 

 

Deficit

 

 

Total

 

BALANCE, JANUARY 1, 2022

 

 

 

 

8,633,755

 

 

$

863

 

 

 

11,502,355

 

 

$

1,150

 

 

$

100,551,257

 

 

$

(84,111,171

)

 

$

16,442,099

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PIPE Investment

 

 

 

 

2,496,934

 

 

 

250

 

 

 

 

 

 

 

 

 

32,310,937

 

 

 

 

 

 

32,311,187

 

Prefunded Warrants converted into Common Stock Class A

 

 

 

 

1,443,557

 

 

 

144

 

 

 

 

 

 

 

 

 

(69

)

 

 

 

 

 

75

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Post closing adjustment of BCA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(238,089

)

 

 

 

 

 

(238,089

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of Restricted Stock Awards

 

 

 

 

108,500

 

 

 

11

 

 

 

 

 

 

 

 

 

36,698

 

 

 

 

 

 

36,709

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,313,742

)

 

 

(7,313,742

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, MARCH 31, 2022

 

 

 

 

12,682,746

 

 

 

1,268

 

 

 

11,502,355

 

 

 

1,150

 

 

 

132,660,734

 

 

 

(91,424,913

)

 

 

41,238,239

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prefunded Warrant converted into Common Stock Class A

 

 

 

 

3,553,589

 

 

 

356

 

 

 

 

 

 

 

 

 

(96

)

 

 

 

 

 

259

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of Restricted Stock Awards

 

 

 

 

501,125

 

 

 

50

 

 

 

 

 

 

 

 

 

172,802

 

 

 

 

 

 

172,852

 

Issuance of Restricted Stock Units

 

 

 

 

13,334

 

 

 

1

 

 

 

 

 

 

 

 

 

68,802

 

 

 

 

 

 

68,803

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

(16,354,319

)

 

 

(16,354,319

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, JUNE 30, 2022

 

 

 

 

16,750,794

 

 

 

1,675

 

 

 

11,502,355

 

 

 

1,150

 

 

 

132,902,242

 

 

 

(107,779,232

)

 

 

25,125,835

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3


Condensed Statement of Changes in Stockholders' Deficit

 

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021

 

 

 

 

 

 

 

 

Common Stock Class B/V

 

 

Additional

 

 

Accumulated

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Paid-in-Capital

 

 

Deficit

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, JANUARY 1, 2021

 

 

10,152,020

 

 

$

1,015

 

 

$

42,783,367

 

 

$

(52,121,249

)

 

$

(9,336,867

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Repurchase of member shares

 

 

(12,598

)

 

 

(1

)

 

$

(99,949

)

 

 

 

 

 

(99,950

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(5,761,151

)

 

$

(5,761,151

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, MARCH 31, 2021

 

 

10,139,422

 

 

$

1,014

 

 

$

42,683,418

 

 

$

(57,882,400

)

 

$

(15,197,968

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(5,560,717

)

 

$

(5,560,717

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE, JUNE 30, 2021

 

 

10,139,422

 

 

$

1,014

 

 

$

42,683,418

 

 

$

(63,443,117

)

 

$

(20,758,685

)

The accompanying notes are an integral part of these condensed consolidated financial statements.

ANDINA ACQUISITION CORP. III 4


STRYVE FOODS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

For The Six Months Ended June 30,

 

 

For The Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

 

$

(23,668,061

)

 

$

(11,321,867

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation expense

 

 

826,558

 

 

 

667,485

 

Amortization of intangible assets

 

 

121,167

 

 

 

124,071

 

Amortization of debt issuance costs

 

 

 

 

 

280,798

 

Amortization of right-of-use asset

 

 

98,340

 

 

 

 

Gain on disposal of fixed assets

 

 

(24,012

)

 

 

(8,578

)

Gain on debt extinguishment

 

 

 

 

 

(545,200

)

Prepaid media reserve

 

 

1,489,028

 

 

 

 

Obsolete inventory reserve

 

 

821,782

 

 

 

 

Interest income on members loan receivable

 

 

 

 

 

(24,547

)

Bad debt expense

 

 

288,623

 

 

 

262,888

 

Forgiveness on paycheck protection program loan

 

 

 

 

 

(1,669,552

)

Stock based compensation expense

 

 

711,978

 

 

 

 

Change in fair value of Private Warrants

 

 

(85,310

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(1,644,144

)

 

 

(2,727,652

)

Inventory

 

 

(258,328

)

 

 

(1,433,481

)

Vendor deposits

 

 

4,193

 

 

 

 

Prepaid media spend

 

 

45,520

 

 

 

(170,632

)

Prepaid expenses and other current assets

 

 

566,241

 

 

 

(800,209

)

Accounts payable

 

 

(540,196

)

 

 

1,645,302

 

Accrued liabilities

 

 

933,077

 

 

 

278,621

 

Operating lease payments

 

 

(65,083

)

 

 

-

 

Net cash used in operating activities

 

 

(20,378,627

)

 

 

(15,442,553

)

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

Cash paid for purchase of equipment

 

 

(2,033,174

)

 

 

(249,048

)

Cash received for sale of equipment

 

 

41,000

 

 

 

73,681

 

Net cash used in investing activities

 

 

(1,992,174

)

 

 

(175,367

)

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

PIPE capital raise

 

 

32,311,187

 

 

 

 

Exercise of Prefunded Warrants

 

 

334

 

 

 

 

Repurchase of member shares

 

 

 

 

 

(99,950

)

Post closing adjustment of BCA

 

 

(238,089

)

 

 

 

Repayments on long-term debt

 

 

(4,908,745

)

 

 

(4,360,359

)

Borrowings on related party debt

 

 

 

 

 

9,294,000

 

Repayments on related party debt

 

 

 

 

 

(7,793,604

)

Borrowings on short-term debt

 

 

 

 

 

19,694,550

 

Repayments on short-term debt

 

 

(2,000,000

)

 

 

 

Debt issuance costs

 

 

 

 

 

(507,166

)

Net cash provided by financing activities

 

 

25,164,687

 

 

 

16,227,471

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

2,793,886

 

 

 

609,551

 

Cash and cash equivalents at beginning of period

 

 

2,217,191

 

 

 

591,634

 

Cash and cash equivalents at end of period

 

$

5,011,077

 

 

 

1,201,185

 

 

 

 

 

 

 

 

SUPPLEMENTAL INFORMATION:

 

 

 

 

 

 

Cash paid for interest

 

 

403,121

 

 

 

1,506,847

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


STRYVE FOODS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2019JUNE 30, 2022

(Unaudited)

Note 1 - Organization and PlanDescription of Business Operations

 

Stryve Foods, Inc. (f/k/a Andina Acquisition Corp. III (theIII) (“Stryve” or the “Company”) was incorporatedis an emerging healthy snacking company which manufactures, markets and sells highly differentiated healthy snacking products. The Company offers convenient snacks that are lower in the Cayman Islands on July 29, 2016 as a blank check company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization orsugar and carbohydrates and higher in protein than other similar business combination with one or more businesses or entities (a “Business Combination”). The Company’s efforts to identify a prospective target business will not be limited to a particular industry or geographic region, although the Company initially intends to focus on target businesses in the Americas.

All activity through March 31, 2019 relates to the Company’s formation and its initial public offering (the “Initial Public Offering”), which is described below. snacks. The Company is subjectheadquartered in Plano, Texas, with manufacturing operations in Madill, Oklahoma.

On July 20, 2021 (the “Closing Date”), the Company completed a business combination (the “Business Combination”) pursuant to allthat certain Business Combination Agreement (the “BCA”) by and among the Company, Andina Holdings LLC, a Delaware limited liability company and a wholly-owned subsidiary of the risks associated with early stage and emerging growth companies.

Initial Public Offering

The registration statement for the Initial Public Offering was declared effective on January 24, 2019 pursuant to Section 8(a) of the Securities Act of 1933, as amended. On January 31, 2019, the Company consummated the Initial Public Offering of 10,800,000 units (the “Units” and, with respect to the ordinary shares included(“Holdings”), B. Luke Weil, in the Units offered, the “Public Shares”), which includes a partial exercise by the underwriters of their over-allotment option in the amount of 800,000 Units, at $10.00 per Unit, generating gross proceeds of $108,000,000, which is described in Note 3.

Simultaneously withcapacity from and after the closing of the Initial Public Offering,transactions contemplated by the Business Combination Agreement (the “Closing”) as the representative for the shareholders of the Company consummated(other than the saleSeller), Stryve Foods, LLC, a Texas limited liability company, Stryve Foods Holdings, LLC, a Texas limited liability company (the “Seller”), and R. Alex Hawkins, in the capacity from and after the Closing as the representative for the members of 395,000 unitsthe Seller. Notwithstanding the legal form of the Business Combination, pursuant to the Business Combination Agreement, the Business Combination has been accounted for as a reverse recapitalization in accordance with generally accepted accounting principles in the United States ("GAAP"). Under this method of accounting, Stryve Foods, LLC is treated as the acquirer and the Company is treated as the acquired company for financial statement reporting purposes.

In connection with the completion of the Business Combination and as contemplated by the Business Combination Agreement, the Company: (i) issued 4,250,000 shares of Class A common stock to private placement investors for aggregate consideration of $42.5 million; (ii) issued 1,357,372 shares of Class A common stock, satisfied by the offset of $10.9 million of principal and accrued interest under outstanding unsecured promissory notes (the “Private Units”"Bridge Notes") at a price of $10.00 per Unitissued by Stryve Foods, LLC to certain investors in a private placement on the closing date of the Business Combination, and (iii) 11,502,355 newly issued non-voting Class B common units of Holdings (the “Private Placement”) to certain shareholders, or their affiliates (collectively, the “Initial Shareholders”“Seller Consideration Units”) and voting (but non-economic) Class V common stock of the underwriters, generating gross proceeds of $3,950,000, which is described in Note 4.

Transaction costs amounted to $3,204,451, consisting of $2,700,000 of underwriting fees and $504,451 of offering costs.Company. In addition, asthe Company's ordinary shares outstanding prior to the Closing were converted into 3,409,949 shares of March 31, 2019, $526,236 of cash was held outsideClass A common stock of the Trust Account (defined below) and is available for working capital purposes.

Following the closingCompany without any action of the Initial Public Offering on January 31, 2019,holders. The Seller distributed the Seller Consideration Units to its members in accordance with its limited liability company agreement. On March 25, 2022, the Company finalized the post-closing adjustments under the Business Combination Agreement (the "Post-Closing Adjustment), which resulted in the release of all 115,023 escrowed shares of Class V common stock, an amountequal number of $108,000,000 ($10.00 per Unit) fromHoldings Class B common units, and the net proceedspayment of the sale of the Units in the Initial Public Offering and the sale of the Private Units was placed in a trust account (the “Trust Account”), which has been invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determinedapproximately $238,000 by the Company untilto the earlier of: (i) the consummation ofSeller.

Prior to July 20, 2021, Stryve Foods, LLC was a Business Combination or (ii) the distribution of the Trust Account“pass-through” (limited liability company) entity for income tax purposes and had no material income tax accounting reflected in its financial statements for financial reporting purposes since taxable income and deductions were “passed through” to its shareholders, as described below. The Company’s management has broad discretion with respect tomembers. Following the specific application of the net proceeds of the Initial Public Offering and sale of the Private Units, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. Placing funds in the Trust Account may not protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, service providers, prospective target businesses or other entities it engages, execute agreements with the Company waiving any claim of any kind in or to any monies held in the Trust Account, there is no guarantee that such persons will execute such agreements. One of the Company’s directors has agreed to be personally liable if the Company liquidates the Trust Account prior to the consummation of a Business Combination to ensure that the proceeds held in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by the Company for services rendered or contracted for or products sold to the Company. However, such director may not be able to satisfy those obligations should they arise. The remaining net proceeds (not held in the Trust Account) may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. Additionally, the interest earned on the Trust Account balance may be released to the Company to pay the Company’s tax obligations and up to $100,000 may be released to pay for the Company’s working capital obligations, including any necessary liquidation or dissolution expenses.

In order to meet its working capital needs following the consummation of the Initial Public Offering, the Company’s Initial Shareholders, officers and directors or their affiliates may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of the Company’s initial Business Combination, without interest, or, at the lender’s discretion, up to $500,000 of the notes may be converted upon consummation of the Company’s initial Business Combination into additional Private Units at a price of $10.00 per unit. In the event that the initial Business Combination does not close, the Company may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from the Trust Account would be used for such repayment.

7

ANDINA ACQUISITION CORP. III 

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2019

(Unaudited)

Initial Business Combination

Pursuant to the Nasdaq Capital Markets listing rules, the Company’s initial Business Combination must be with a target business or businesses whose collective fair market value is at least equal to 80% of the balance in the Trust Account at the time of the execution of a definitive agreement for such Business Combination, although this may entail simultaneous acquisitions of several target businesses. The fair market value of the target will be determined by the Company’s board of directors based upon one or more standards generally accepted by the financial community (such as actual and potential sales, earnings, cash flow and/or book value). The target business or businesses that the Company acquires may have a collective fair market value substantially in excess of 80% of the Trust Account balance. In order to consummate such a Business Combination, the Company may issue a significant amount of its debt or equity securities to the sellers of such business and/or seek to raise additional funds through a private offering of debt or equity securities. There are no limitations on the Company’s ability to incur debt or issue securities in order to consummate a Business Combination. Since the Company has no specific Business Combination under consideration, the Company has not entered into any arrangement to issue debt or equity securities. If the net proceeds of Initial Public Offering prove to be insufficient, either because of the size of the Business Combination, the depletioncombined company is organized in an “Up-C” structure and is now a taxable C corporation in which the business of Stryve Foods, LLC and its subsidiaries is held by Holdings, which is a subsidiary of the availableCompany. By virtue of the Up-C structure, the Company's only direct assets consist of its equity interests in Holdings, an entity of which the Company maintains 100% voting control. As the member of Holdings with voting control, the Company has full, exclusive and complete discretion to manage and control the business of Stryve Foods, LLC and to take all actions it deems necessary, appropriate, advisable, incidental, or convenient to accomplish the purposes of Stryve Foods, LLC and, accordingly, the financial statements are prepared on a consolidated basis. The financial statements of the Company now account for income taxes in accordance with Accounting Standards Codification (“ASC”) 740, Income taxes. Stryve Foods, LLC has four wholly owned subsidiaries, Biltong Acquisition Company LLC, Braaitime LLC, Protein Brothers, LLC, and Kalahari Snacks, LLC.

The consolidated financial statements are under the name of the Company, the legal parent, but represent Stryve Foods, LLC, the legal subsidiary (accounting acquirer) with an adjustment to retrospectively adjust the legal capital to reflect the legal capital as earnings per share (“EPS”). EPS is calculated using the equity structure of the Company, including the equity interests issued to the Seller in the Business Combination. Prior to the Business Combination, EPS is based on Stryve Foods, LLC’s net proceedsincome and weighted average common shares outstanding on an as exchanged basis that were received in search of a target business, or the obligationBusiness Combination. Subsequent to convert a significantthe Business Combination, EPS is based on the actual number of common shares on an as exchanged basis of the Company outstanding during that period. For any periods prior to the Closing, basic and diluted net income/loss per share have been retroactively adjusted to reflect the reverse recapitalization of the Company utilizing the number of Seller Consideration Units (adjusted as necessary to reflect the capital activity of Stryve Foods, LLC prior to the Closing) as the weighted average shares outstanding for those periods and the actual shares outstanding for any periods after the Closing, all on an as exchanged basis.

6


Note 2 - Liquidity

The Company incurred net losses of approximately $23.6 million during the six months ended June 30, 2022. Cash used in operating activities was approximately $20.4 million for the six months ended June 30, 2022. The Company has historically funded its operations with cash flow from operations, equity capital raises, and note payable agreements from shareholders intoand private investors, in addition to bank loans. Its principal uses of cash have been debt service, capital expenditures, and investment in working capital to fund operations.

At June 30, 2022, the Company will be required to seek additionalhad total current assets of $17.6 million and current liabilities of $5.5 million resulting in working capital of $12.2 million.

The Company's operating plans are primarily focused on expanding its distribution base and increasing awareness of its products and brands while improving and expanding its manufacturing and distribution capabilities. Debt financing in order to complete its initial Business Combination. In addition, ifmay require the Company consummatesto pledge assets and enter into covenants that could restrict certain business activities or its ability to incur further indebtedness; and may contain other terms that are not favorable to the Company or its stockholders.

On January 6, 2022, the Company entered into a Business Combination, it may require additional financingSecurities Purchase Agreement (the “Purchase Agreement”) with select accredited investors (the “2022 PIPE Investors”), relating to fund the operations or growthissuance and sale of the target business. The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business. None2,496,934 shares of the Company’s officers, directors or shareholders is requiredClass A common stock and, in lieu of Class A Common Stock, pre-funded warrants to provide any financingpurchase 7,797,184 shares of Class A common stock (the “PIPE Pre-Funded Warrants”), and accompanying warrants (the “PIPE Warrants”) to purchase up to 10,294,118 shares of Class A common stock with an exercise price equal to $3.60 and a term of five years (the “Offering”). The Offering closed on January 11, 2022. The Class A common stock and PIPE Warrants were sold at a combined purchase price of $3.40 per share (less $0.0001 per share for PIPE Pre-Funded Warrants). The Company received net proceeds from the Offering of approximately $32.3 million.

On January 28, 2022, the Company in connection with or after a Business Combination.

In connection with any proposed initial Business Combination,repaid approximately $6,841,000 of principal and interest to Origin Bank (the "Origin") under the Company will either (1) seek shareholder approvalLine of such initial Business Combination at a meeting called for such purpose atCredit and the outstanding notes, which public shareholders may seek to convert their Public Shares, regardless of whether they vote for or against the proposed Business Combination, into their pro rata sharerepresented all of the aggregate amount then on deposit inoutstanding indebtedness to Origin.

While Stryve has materially improved its liquidity position through the Trust Account (net of taxes payable) or (2) provide public shareholders with the opportunity to sell their Public Shares to the Company by means of a tender offer (and thereby avoid the need for a shareholder vote) for an amount equal to their pro rata share of the aggregate amount then on deposit in the Trust Account (net of taxes payable), in each case subject to the limitations described herein. Notwithstanding the foregoing, the Initial Shareholders have agreed, pursuant to written letter agreements with the Company, not to convert any Public Shares held by them into their pro rata share of the aggregate amount then on deposit in the Trust Account. If the Company determines to engage in a tender offer, such tender offer will be structured so that each public shareholder may tender any or all of his, her or its Public Shares rather than some pro rata portion of his, her or its shares. The decision as to whether the Company will seek shareholder approval of a proposed Business Combination or will allow shareholders to sell their Public Shares to it in a tender offer will be made by the Company based on a variety of factors such as the timing of the transaction, whether the terms of the transaction would otherwise require it to seek shareholder approval or whether the Company is deemed to be a foreign private issuer (which would require us to conduct a tender offer rather than seeking shareholder approval under the U.S. Securities and Exchange Commission (the “SEC”) rules). If the Company engages in a tender offer in connection with an initial Business Combination, the Company will file tender offer documents with the SEC, which will contain substantially the same financial and other information about the initial Business Combination as is required under the SEC’s proxy rules. The Company will consummate an initial Business Combination only if it has net tangible assets of at least $5,000,001 upon such consummation of a Business Combination and solely if it seeks shareholder approval, a majoritythe Offering, the unpredictable nature of the issued and outstanding ordinary shares voted are voted in favor ofcurrent COVID-19 pandemic negatively impact the Business Combination. The $5,000,001 net tangible asset value would be determined once a target business is locatedCompany's manufacturing, as it may relate to the supply chain and the Company can assess all of the assets and liabilities of the combined company.

The Initial Shareholders have agreed (i) to vote their insider shares, Private Shares (as defined in Note 4) and any Public Shares purchased in or after the Initial Public Offering in favor of any proposed Business Combination and (ii) not to convert any shares (including the insider shares) in connection with a shareholder vote to approve, or sell their shares to the Company in any tender offer in connection with, a proposed initial Business Combination.

Failure to Consummate a Business Combination

Pursuant to the termswelfare of the Company’s amendedlabor. Additionally, the uncertainty of current market conditions could also adversely impact capital markets, with the risk of significant contraction occurring. This risk still is apparent and restated memorandumconstantly considered by management, as it relates to external capital availability.

Based on the Company's cash balance of approximately $5.0 million as of June 30, 2022, and articles of association, failure to consummate a Business Combination by July 31, 2020 will triggerits expected cash flows, the automatic winding up, dissolutionCompany believes that its available cash, working capital, and liquidationmanagement's belief that it can secure non-dilutive debt capital based on the unleveraged nature of the Company. As a result, this hasCompany's balance sheet should be sufficient to fund its operations for at least the same effect as if the Company had formally gone through a voluntary liquidation procedure under the Cayman Islands Companies Law. Accordingly, no vote would be required from shareholders to commence such a voluntary winding up, dissolution and liquidation. The holders of the insider shares will not participate in any liquidation distributionnext 12 months from the Trust Account with respect to their insider shares.issuance date of these financial statements as management has greater latitude over expenses.

8

ANDINA ACQUISITION CORP. III 

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2019

(Unaudited)

Note 2 —3 - Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements are presented in U.S. dollars and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”("GAAP") for interim financial information and in accordance with the instructions to Form 10-Qrules and Article 10 of Regulation S-Xregulations of the Securities and Exchange Commission (“SEC”("SEC"). Accordingly, these interim financial statements do not include all information and footnotes required under GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of results of operations, balance sheet, cash flows, and shareholders' equity for the periods presented. The unaudited condensed consolidated results of operations for the interim periods presented are not necessarily indicative of results for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2021. The Company’s condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain information orand footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.omitted.

7


The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the SEC on March 27, 2019, which contains the audited financial statements and notes thereto. The financial information as of December 31, 2018 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. The interim results for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any future interim periods.

Use of Estimates

 

The preparation of the condensed consolidated financial statements in conformityaccordance with accounting principles generally accepted in the United States of AmericaGAAP requires management to make estimates and assumptions that affect the amounts reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date ofin the condensed consolidated financial statements and the reportedaccompanying notes. Accounting estimates and assumptions discussed herein are those that management considers to be the most critical to an understanding of the condensed consolidated financial statements because they inherently involve significant judgements and uncertainties. Estimates are used for, but not limited to revenue recognition, allowance for doubtful accounts and customer allowances, useful lives for depreciation and amortization, standard costs of inventory, provisions for inventory obsolescence, impairments of goodwill and long-lived assets, warrant liabilities and valuation allowances for deferred tax assets. All of these estimates reflect management’s judgment about current economic and market conditions and their effects based on information available as of the date of these consolidated financial statements. If such conditions persist longer or deteriorate further than expected, it is reasonably possible that the judgements and estimates could change, which may result in future impairments of assets among other effects.

Accounts Receivable and Allowance for Doubtful Accounts, Returns, and Deductions

Accounts receivable are customer obligations due under normal trade terms. The Company records accounts receivable at their net realizable value, which requires management to estimate the collectability of the Company’s receivables. Judgment is required in assessing the realization of these receivables, including the credit worthiness of each counterparty and the related aging of past due balances. Management provides for an allowance for doubtful accounts equal to the estimated uncollectable amounts, in addition to a general provision based on historical experience. As of expenses duringJune 30, 2022 and December 31, 2021, the reporting period. Actual results could differallowance for doubtful accounts and returns and deductions totaled $1,350,080 and $1,236,497, respectively. Total bad debt expense for the six months ended June 30, 2022 and 2021 was $288,623 and $262,888 respectively.

Concentration of Credit Risk

The balance sheet items that potentially subject the Company to concentrations of credit risk are primarily cash and accounts receivable. The Company continuously evaluates the credit worthiness of its customers’ financial condition and generally does not require collateral. The Company maintains cash balances in bank accounts that may, at times, exceed Federal Deposit Insurance Corporation (“FDIC”) limits of $250,000 per institution. The Company incurred no losses from those estimates.such accounts and management considers the risk of loss to be minimal.

For the six months ended June 30, 2022 and 2021, customer concentrations in excess of 10% consolidated sales are as follows:

 

 

 

Six Months Ended June 30,

 

Period Ended June 30,

 

 

2022

 

2021

 

2022

 

2021

 

 

Sales

 

Accounts
Receivable

Customer A

 

46%

 

 

22%

 

Customer B

 

 

 

29%

 

Customer C

 

 

15%

 

 

23%

Customer D

 

 

 

 

 

13%

Customer E

 

 

12%

 

 

Cash

Revenue Recognition Policy

The Company manufactures and Cash Equivalents

markets a broad range of protein snack products through multiple distribution channels. The products are offered through branded and private label items. Generally, the Company considers all short-term investmentsrevenues as arising from contracts with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of March 31, 2019 and December 31, 2018.

Cash and Marketable Securities Heldcustomers. Revenue is recognized based on the five-step process outlined in Trust Account

At March 31, 2019 the assets held in the Trust Account were substantially held in U.S. Treasury Bills.

Ordinary Shares Subject to Possible Redemption

The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities606:

(1)
Identification of the contract with a customer
(2)
Identification of the performance obligations in the contract
(3)
Determination of the transaction price
(4)
Allocation of the transaction price to the performance obligations in the contract
(5)
Recognition of revenue when, or as, the Company satisfies a performance obligation

The Company’s revenue derived from Equity.” Ordinary shares subject to mandatory redemption are classifiedthe sale of branded and private label products is considered variable consideration as a liability instrumentthe contract includes discounts, rebates, incentives and are measuredother similar items. Generally, revenue is recognized at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the point in time when the customer

8


obtains control of the holderproduct, which may occur upon either shipment or delivery of the product. The payment terms of the Company’s contracts are generally net thirty to sixty days, although early pay discounts are offered to customers.

The Company regularly experiences customer deductions from amounts invoiced due to product returns, product shortages, and delivery nonperformance penalty fees. This variable consideration is estimated using the expected value approach based on the Company’s historical experience, and it is recognized as a reduction to the transaction price in the same period that the related product sale is recognized.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products to customers. Revenue is recognized when the Company satisfies its performance obligations under the contract by transferring the promised product to its customer.

The Company’s contracts generally do not include any material significant financing components.

Performance Obligations

The Company has elected the following practical expedients provided for in Topic 606, Revenue from Contracts with Customers:

(1)
The Company has excluded from its transaction price all sales and similar taxes collected from its customers.
(2)
The Company has elected to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.
(3)
The Company has elected to account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations.
(4)
The portfolio approach has been elected by the Company as it expects any effects would not be materially different in application at the portfolio level compared with the application at an individual contract level.
(5)
The Company has elected not to disclose information about its remaining performance obligations for any contract that has an original expected duration of one year or less.

Neither the type of good sold nor the location of sale significantly impacts the nature, amount, timing, or uncertainty of revenue and cash flows.

Inventory

Inventories consist of raw materials, work in process, and finished goods, are stated at lower of cost or net realizable value determined using the standard cost method. The Company reviews the value of items in inventory and provides write-downs and write-offs of inventory for obsolete, damaged, or expired inventory. Write-downs and write-offs are included in cost of goods sold.

Stock Based Compensation

Stock-based compensation awards are accounted for in accordance with ASC Topic 718, Compensation –Stock Compensation (ASC 718). The Company expenses the fair value of stock awards granted to employees and members of the board of directors over the requisite service period, which is typically the vesting period. Compensation cost for stock-based awards issued to employees is measured using the estimated fair value at the grant date and is adjusted to reflect actual forfeitures.

Stock-based awards issued to non-employees, including directors for non-board-related services, are accounted for based on the fair value of such services received or the fair value of the awards granted on the grant date, whichever is more reliably measured. Stock-based awards subject to redemption uponservice-based vesting conditions are expensed on a straight-line basis over the occurrencevesting period.

Warrant Liability

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of uncertain events not solely withinthe warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain redemption rights that are considered to beown common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment,

9


which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.

Accordingly, the Company classifies the private warrants issued to Andina's original stockholders (the "Private Warrants") as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption are presentedre-measurement at redemptioneach balance sheet date until exercised, and any change in fair value as temporary equity, outside of the shareholders’ equity section ofis recognized in the Company’s condensed balance sheet.statement of operations.

 

Net LossIncome (Loss) per Ordinary Share

 

Net lossThe Company reports both basic and diluted earnings per ordinaryshare. Basic earnings per share is computed by dividing net loss bycalculated based on the weighted average number of ordinary shares of common stock outstanding forand excludes the period. The Company applies the two-class methoddilutive effect of warrants, stock options, and other types of convertible securities. However, certain pre-funded warrants are included in calculating earnings per share. Ordinary shares subject to possible redemption at March 31, 2019, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic earnings per share as the pre-funded warrants can be exercised for nominal value. Diluted earnings per share is calculated based on the weighted average number of shares of common stock outstanding and the dilutive effect of stock options, warrants and other types of convertible securities are included in the calculation. Dilutive securities are excluded from the diluted earnings per share calculation if their effect is anti-dilutive, such as in periods where the Company would report a net loss per ordinary share since such shares, if redeemed, only participate in their pro rata shareloss. For any periods prior to the closing of the Trust Account earnings. The Company has not considered the effect of (1) warrants sold in the Initial Public OfferingBusiness Combination (the "Closing"), basic and the private placement to purchase 11,195,000 ordinary shares, and (2) rights sold in the Initial Public Offering and the private placement that convert into 1,119,500 ordinary shares, in the calculation of diluted net income/loss per share sincehave been retroactively adjusted to reflect the exercisereverse recapitalization of the warrantsCompany utilizing the Seller Consideration Units (adjusted as necessary to reflect the capital activity of the Company prior to the Closing) as the weighted average shares outstanding for those periods and the conversionactual shares outstanding for any periods after the Closing all on an as exchanged basis. As of the rights into ordinary shares are contingent upon the occurrenceJune 30, 2022 there were 21,291,618 dilutive common stock equivalents, consisting of future events. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share for the periods presented.warrants, which were anti-dilutive.

 

9

ANDINA ACQUISITION CORP. III 

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2019

(Unaudited)

Reconciliation of Net Loss per Ordinary Share

The Company’s net income is adjusted for the portion of income that is attributable to ordinary shares subject to possible redemption, as these shares only participate in the earnings of the Trust Account and not the income or losses of the Company. Accordingly, basic and diluted loss per ordinary share is calculated as follows:

  

Three Months Ended

March 31,

 
  2019  2018 
Net income (loss) $308,767  $(1,797)
Less: Income attributable to ordinary shares subject to possible redemption  (397,266)   
Adjusted net loss $(88,499) $(1,797)
         
Weighted average shares outstanding, basic and diluted  3,169,234   2,500,000 
         
Basic and diluted net loss per ordinary share $(0.03) $(0.00)

Income Taxes

The Company complies withaccounts for income taxes pursuant to the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approachmethod of ASC 740, Income Taxes, which requires the Company to financial accountingrecognize current tax liabilities or receivables for the amount of taxes as estimated are payable or refundable for the current year, and reporting for income taxes. Deferred incomedeferred tax assets and liabilities are computed for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts and their respective tax bases of assets and liabilities that will result in future taxable or deductible amounts, based onand the expected benefits of net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax laws and rates applicableexpected to apply to taxable income in the periodsyears in which thethose temporary differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reducebe recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period enacted. A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible.

Under the terms of a Tax Receivable Agreement (the “TRA”) as part of the Business Combination Agreement, the Company generally will be required to pay to the amountSeller 85% of the applicable cash savings, if any, in U.S. federal and state income tax based on its ownership in Andina Holdings, LLC that the Company is deemed to realize in certain circumstances as a result of the increases in tax basis and certain tax attributes resulting from the Business Combination as described below. This is accounted for in conjunction with the methods used to record income tax described above.

The Company follows the provisions of ASC 740-10 related to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740-10 prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be realized.taken in income tax returns.

The benefit of tax positions taken or expected to be taken in the Company income tax returns is recognized in the financial statements if such positions are more likely than not of being sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits”. A liability is recognized (or amount of net operating loss carryover or amount of tax refundable is reduced) for an unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740-10. Interest costs and related penalties related to unrecognized tax benefits are required to be calculated, if applicable. The Company's policy is to classify assessments, if any, for tax related interest and penalties as a component of income tax expense. As of June 30, 2022, 0 liability for unrecognized tax benefits was required to be reported. We do not expect any significant changes in our unrecognized tax benefits in the next year.

 

10


Tax Receivable Agreement

In conjunction with the Business Combination, the Company entered into the TRA with Seller and Holdings. Pursuant to the TRA, the Company is required to pay Seller 85% of the amount of savings, if any, in U.S. federal, state, local and foreign income tax that the Company actually realizes as a result of (A) tax basis adjustments resulting from taxable exchanges of Class B common units of Holdings and Class V common stock of the Company acquired by the Company in exchange for Class A common stock of the Company and (B) tax deductions in respect of portions of certain payments made under the TRA. All such payments to the Seller are the obligations of the Company. As of June 30, 2022, there had been no exchanges of Class B common units of Holdings and Class V common stock of the Company for Class A common stock of the Company and, accordingly, 0 TRA liabilities existed as of such date.

Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash, accounts receivable, accounts payable, and vehicle notes payable. The carrying amounts of cash, accounts receivable, and accounts payable approximate their respective fair values because of the short-term maturities or expected settlement date of these instruments. The vehicle notes payable have fixed interest rates the Company believes reflect current market rates for notes of this nature. The Company believes the current carrying value of long-term debt approximates its fair value because the terms are comparable to similar lending arrangements in the marketplace.

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Note 4 - Inventory

As of June 30, 2022 and December 31, 2021, inventory consisted of the following:

 

 

As of

 

 

As of

 

 

 

June 30,
2022

 

 

December 31,
2021

 

Raw materials

 

$

2,471,495

 

 

$

2,188,284

 

Work in process

 

 

1,918,469

 

 

 

2,128,894

 

Finished goods

 

 

2,262,563

 

 

 

2,898,803

 

Total Inventory, net

 

$

6,652,527

 

 

$

7,215,981

 

The charge to Cost of goods sold for obsolete inventory was $214,315 and $821,782 for the three and six months ended June 30, 2022, respectively.

Note 5 - Prior Line of Credit

The Company's prior line of credit (the "Line of Credit") of $3,500,000 was paid off and terminated in January 2022.

11


Note 6 - Debt

As of June 30, 2022 and December 31, 2021, debt consisted of the following:

 

 

As of

 

 

As of

 

 

 

June 30,

 

 

December 31

 

 

 

2022

 

 

2021

 

Long-term debt

 

$

157,852

 

 

$

1,566,598

 

Short-term debt

 

 

 

 

 

2,000,000

 

Line of credit

 

 

 

 

 

3,500,000

 

Total notes payable

 

 

157,852

 

 

 

7,066,598

 

Less: current portion

 

 

(122,023

)

 

 

(3,447,056

)

Less: line of credit

 

 

 

 

 

(3,500,000

)

Total notes payable, net of current portion

 

$

35,829

 

 

$

119,542

 

Outstanding as of June 30, 2022

On March 12, 2021, the Company entered into a note payable agreement (“Broken Stone Agreement”) with Broken Stone Investments, LLC. for the principal amount of $200,000, bearing interest at 5% per annum, with all principal and accrued interest thereon due and payable at maturity of June 1, 2023. The Broken Stone Agreement calls for monthly principal and interest payments of $8,774 to commence on July 1, 2021 through maturity on June 1, 2023. As of June 30, 2022, the balance on this loan was $102,515.


The Company holds various vehicle financing and lease agreements with original principal balances ranging from $20,000 through $50,000 for the six months ended June 30, 2022. The vehicle financing agreements call for monthly principal and interest payments ranging from $368 through $585 and bear interest at fixed rates ranging from 3.89% through 6.81% per annum. Outstanding principal and accrued interest are due at maturity, ranging from October 12, 2022 through September 13, 2024. The principal amount due on the agreements was $55,338 as of June 30, 2022. The financing agreements are secured by vehicles with a net book value of $59,852 as of June 30, 2022.

Future minimum principal payments on the notes payable are, as of June 30, 2022:

2022 (for the remainder of)

 

$

60,180

 

2023

 

 

72,118

 

2024

 

 

18,255

 

2025

 

 

7,299

 

2026

 

 

 

 

 

$

157,852

 

Retired debt during the six months ended June 30, 2022

The company repaid approximately $6,842,000 debt with Origin bank on January 28, 2022 and $40,000 debt with First United Bank on May 6, 2022.

Note 7 - Income Taxes

The Company’s sole material asset is Stryve Foods Holdings, LLC, which is treated as a partnership for U.S. federal income tax purposes and for purposes of certain state and local income taxes. Stryve Foods Holdings, LLC owns 100% of Stryve Foods, LLC which is treated as a disregarded entity for the U.S. federal income tax purposes. Stryve Foods Holdings, LLC's net taxable income and any related tax credits are passed through to its members and are included in the members’ tax returns, even though such net taxable income or tax

12


credits may not have actually been distributed. The income tax burden on the earnings taxed to the non- controlling interests is not reported by the Company in its condensed consolidated financial statements under GAAP. As a result, the Company’s effective tax rate is expected to differ materially from the statutory rate.

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company’s management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31, 2019June 30, 2022 and December 31, 2018, there were no2021, 0 liability for unrecognized tax benefits was required to be report and no0 amounts accrued for interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position over the next twelve months.

The Company maycurrently estimates its annual effective income tax rate to be subject-0.0687%, which differs from the federal rate of 21% primarily due to potential examination by foreign taxing authoritiestax benefit related to income passed through to non-controlling interest, increase in valuation allowances, and state and local income taxes. The company has reported income tax expense of $28,655 and $36,441 for the three and six months ending June 30, 2022 and 0 income tax expense in the areas of income taxes. These potential examinations may include questioningthree and six months ending June 30, 2021.

Tax Receivable Agreement Liability

In conjunction with the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with foreign tax laws.

The Company is considered an exempted Cayman Islands company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States. As such, the Company’s tax provision is zero for all periods presented.

Concentration of Credit Risk

Financial instruments that potentially subjectBCA, the Company also entered into a TRA with Seller and Holdings. Pursuant to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. At March 31, 2019 and December 31, 2018, the Company had not experienced losses on this account and management believesTRA, the Company is not exposedrequired to pay the Seller 85% of the amount of savings, if any, in United States federal, state, local and foreign income tax that the Company actually realizes as a result of (A) tax basis adjustments resulting from taxable exchanges of Class B common units of Holdings and Class V common stock of the Company acquired by the Company in exchange for Class A common stock of the Company and (B) tax deductions in respect of portions of certain payments made under the TRA. All such payments to the Seller are the obligations of the Company. As of June 30, 2022, there had been no exchanges of Class B common units of Holdings and Class V common stock of

13


the Company for Class A common stock of the Company. The estimation of liability under the TRA is by its nature imprecise and subject to significant risks on such account.assumptions regarding the amount and timing of future taxable income.

 

Fair ValueAs of Financial InstrumentsJune 30, 2022, the Company has recorded a full valuation allowance against its net deferred tax assets as the realizability of the tax benefit is not at the more likely than not threshold. Since the benefit has not been recorded, the Company has determined that the TRA liability is 0t probable and therefore no TRA liability existed as of June 30, 2022.

Note 8 - Shareholders’ Equity

 

The fairCompany’s Amended and Restated Certificate of Incorporation (“Charter”) authorizes the issuance of 610,000,000 shares, of which 400,000,000 shares are Class A common stock, par value $0.0001 per share, 200,000,000 shares of Class V common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share.

Warrants

Public Warrants

The Company has outstanding 10,997,500 warrants that were issued prior to the Business Combination, of which 10,800,000 are referred to as public warrants and 197,500 are Private Warrants. Each warrant represents the right to purchase an equal number of shares of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying condensed financial statements, primarily due to their short-term nature.

10

ANDINA ACQUISITION CORP. III 

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2019

(Unaudited)

Recent Accounting Standards

Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying condensed financial statements.

Note 3 — Initial Public Offering

Pursuant to the Initial Public Offering, the Company sold 10,800,000 Units at a purchase price of $10.00 per Unit, which includes a partial exercise by the underwriters of their over-allotment option in the amount of 800,000 Units at $10.00 per Unit.Class A common stock. Each Unit consists of one ordinary share of the Company, one right (the “Public Right”) and one redeemable warrant (the “Public Warrant”). Each Public Right entitles the holder to receive one-tenth (1/10) of an ordinary share upon consummation of a Business Combination. Each Public Warrant entitles theregistered holder to purchase one ordinary share at an exercise price of $11.50 per share (see Note 7).

If the Company is unable to complete an initial Business Combination by July 31, 2020 and the Company redeems the public shares for the funds held in the Trust Account, holders of the rights and warrants will not receive any of such funds for their rights and warrants and the rights and warrants will expire worthless.

Note 4 — Private Units

Simultaneously with the closing of the Initial Public Offering, certain of the Initial Shareholders, including the underwriters in the Initial Public Offering (and their respective designees), purchased an aggregate of 395,000 Private UnitsClass A common stock at a price of $10.00 per Private Unit, for an aggregate purchase price of $3,950,000. Each Private Unit consists of one ordinary share (“Private Share”), one right (the “Private Right”) and one redeemable warrant (each, a “Private Warrant”)$11.50. The proceeds from the Private Units have been added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination by warrants expire on July 31, 2020, the proceeds of the sale of the Private Units will be used to fund the redemption of the public shares (subject to the requirements of applicable law), and the Private Units and all underlying securities will expire worthless.20, 2026.

 

The Private Units are identical to the Units sold in the Initial Public Offering except that the Private Warrants are non-redeemable and exercisable on a cashless basis so long as they are held by the initial purchasers or their permitted transferees. Additionally, the purchasers of the Private Units have agreed (A) to vote the Private Shares in favor of any proposed Business Combination, (B) not to propose, or vote in favor of, an amendment to the Company’s amended and restated memorandum and articles of association with respect to its pre-Business Combination activities prior to the consummation of such a Business Combination unless the Company provides public shareholders with the opportunity to convert their Public Shares in connection with any such vote, (C) not to convert any Private Shares into the right to receive cash from the Trust Account in connection with a shareholder vote to approve a proposed initial Business Combination or a vote to amend the provisions of the Company’s amended and restated memorandum and articles of association relating to shareholders’ rights or pre-Business Combination activity and (D) that the Private Shares shall not participate in any liquidating distribution from the Trust Account upon winding up if a Business Combination is not consummated. The purchasers of the Private Units have also agreed not to transfer, assign or sell any of the Private Units or underlying securities (except to permitted transferees) until the completion of an initial Business Combination.

Note 5 — Related Party Transactions

Promissory Note – Related Party

On November 7, 2016, the Company issued a promissory note to a director of the Company, pursuant to which the Company borrowed an aggregate of $34,259. The promissory note was payable without interest on the earlier of (i) July 1, 2019, (ii) the date on which the Company consummated the Initial Public Offering or (iii) the date on which the Company determined to not proceed with such Initial Public Offering. The promissory note was repaid upon the consummation of the Initial Public Offering on January 31, 2019.

Advance from Related Party

A director of the Company advanced the Company an aggregate of $81,280 to cover expenses related to the Initial Public Offering. The advances were non-interest bearing and due on demand. The advances were repaid upon the consummation of the Initial Public Offering.

11

ANDINA ACQUISITION CORP. III 

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2019

(Unaudited)

Note 6 — Commitments

Business Combination Marketing Agreement

The Company engaged the joint book-running managers in the Initial Public Offering as advisors in connection with a Business Combination to assist the Company in holding meetings with its shareholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining shareholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay the joint book-running managers aggregate cash fees for such services upon the consummation of a Business Combination in an amount equal to $3,240,000 (exclusive of any applicable finders’ fees which might become payable).

Fee Arrangements

Following the Initial Public Offering, the Company entered into a letter agreement with a member of the Company’s board of directors that provides for a success fee to be paid to such director upon consummation of a Business Combination with a target business introduced to the Company by such director in an amount equal to 0.6% of the total consideration paid by the Company in the transaction, subject to certain minimum and maximum amounts set forth in the agreement.

In addition, the Company entered into several letter agreements with unaffiliated third parties that provide for a success fee to be paid to each such third party upon consummation of a Business Combination with a target business introduced to the Company by such third party in amounts ranging from 0.75% to 1.0% of the total consideration paid by the Company in the transaction, subject to certain minimum and maximum amounts set forth in the various agreements.

Registration Rights

Pursuant to a registration rights agreement entered into on January 28, 2019, the holders of the insider shares, as well as the holders of the Private Units (and underlying securities) and any securities issued in payment of working capital loans made to the Company, are entitled to registration rights. The holders of a majority of these securities are entitled to make up to three demands that the Company register such securities. Notwithstanding anything to the contrary, the underwriters (and their designees) may only make a demand registration (i) on one occasion and (ii) during the five year period beginning on January 28, 2019. The holders of the majority of the insider shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these ordinary shares are to be released from escrow. The holders of a majority of the Private Units (and underlying securities) and securities issued in payment of working capital loans (or underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. Notwithstanding anything to the contrary, the underwriters (and their designees) may participate in a “piggy-back” registration only during the seven year period beginning January 28, 2019. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

12

ANDINA ACQUISITION CORP. III 

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2019

(Unaudited)

Note 7 — Shareholders’ Equity

Preferred Shares

The Company is authorized to issue 1,000,000 preferred shares with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors. As of March 31, 2019 and December 31, 2018, no preferred shares were issued or outstanding.

Ordinary Shares

The Company is authorized to issue 100,000,000 ordinary shares with a par value of $0.0001 per share. As of March 31, 2019 and December 31, 2018, there were 3,529,693 and 2,875,000 ordinary shares issued and outstanding, excluding 10,365,307 and -0- ordinary shares subject to possible redemption, respectively.

In connection with the organization of the Company, a total of 2,875,000 ordinary shares were sold to the Initial Shareholders for an aggregate purchase price of $25,000. The 2,875,000 shares included an aggregate of up to 375,000 shares subject to forfeiture to the extent that the underwriters’ over-allotment option was not exercised in full or in part so that the Company’s Initial Shareholders would own 20% of the issued and outstanding shares after the Initial Public Offering. As a result of the underwriters’ election to partially exercise their over-allotment option to purchase an additional 800,000 Units, 200,000 shares are no longer subject to forfeiture and 175,000 shares were forfeited, resulting in an aggregate of 2,700,000 shares issued and outstanding at the Initial Public Offering date.

The Initial Shareholders have agreed not to transfer, assign or sell any of the insider shares (except to certain permitted transferees) until (1) with respect to 50% of the insider shares, the earlier of one year after the date of the consummation of an initial Business Combination and the date on which the closing price of the Company’s ordinary shares equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after an initial Business Combination and (2) with respect to the remaining 50% of the insider shares, one year after the date of the consummation of an initial Business Combination, or earlier, in either case, if, subsequent to an initial Business Combination, the Company consummates a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s shareholders having the right to exchange their ordinary shares for cash, securities or other property.

Rights

Each holder of a right will receive one-tenth (1/10) of one ordinary share upon consummation of a Business Combination, even if a holder of such right converted all ordinary shares held by it in connection with a Business Combination. No fractional shares will be issued upon exchange of the rights. No additional consideration will be required to be paid by a holder of rights in order to receive its additional shares upon consummation of a Business Combination as the consideration related thereto has been included in the Unit purchase price paid for by investors in the Initial Public Offering. If the Company enters into a definitive agreement for a Business Combination in which the Company will not be the surviving entity, the definitive agreement will provide for the holders of rights to receive the same per share consideration the holders of the ordinary shares will receive in the transaction on an as-converted into ordinary shares basis and each holder of rights will be required to affirmatively covert its rights in order to receive 1/10 of an ordinary share underlying each right (without paying additional consideration). The ordinary shares issuable upon exchange of the rights will be freely tradable (except to the extent held by affiliates of the Company).

If the Company is unable to complete a Business Combination by July 31, 2020 and the Company liquidates the funds held in the Trust Account, holders of rights will not receive any of such funds with respect to their rights, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such rights, and the rights will expire worthless. Further, there are no contractual penalties for failure to deliver securities to the holders of the rights upon consummation of a Business Combination. Additionally, in no event will the Company be required to net cash settle the rights. Accordingly, the rights may expire worthless.

Warrants

The Public Warrants will become exercisable on the later of the completion of an initial Business Combination or January 28, 2020. However, except as set forth below, no Public Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to such ordinary shares. Notwithstanding the foregoing, if a registration statement covering the ordinary shares issuable upon exercise of the Public Warrants is not effective within 90 days from the consummation of an initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption from registration provided by Section 3(a)(9) of the Securities Act provided that such exemption is available. If an exemption from registration is not available, holders will not be able to exercise their Public Warrants on a cashless basis. The warrants will expire five years from the consummation of an initial Business Combination.

ANDINA ACQUISITION CORP. III 

NOTES TO CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2019

(Unaudited)

The Company may call the Public Warrantspublic warrants for redemption (excluding(but not the Private Warrants), in whole and not in part, at a price of $.01$.01 per warrant:Public Warrant:

 

at any time while the public warrants are exercisable,

upon not less than 30 days’ prior written notice of redemption to each public warrant holder,

if, and only if, the reported last sale price of the ordinary shares of Class A common stock equals or exceeds $18.00$18.00 per share, for any 20 trading days within a 30 trading30-trading day period ending on the third business day prior to the notice of redemption to public warrant holders, and

if, and only if, there is a current registration statement in effect with respect to the ordinary shares of Class A common stock underlying such public warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

 

The right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption.

Private Warrants

The Company has agreed that so long as the Private Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that thestill held by our initial shareholders or their affiliates, it will not redeem such Private Warrants and will allow the ordinary shares issuable upon theholders to exercise of thesuch Private Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable on a cashless basis and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the(even if a registration statement covering shares of Class A common stock issuable upon exercise of such warrants is not effective). As of June 30, 2022, there were 197,500 Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Privateoutstanding.

September 2021 Pre-Funded Warrants will be redeemable by

On September 15, 2021, the Company and exercisable by such holders onentered into a Share Repurchase Agreement with various entities (collectively, the same basis as the Public Warrants

If“Investors”) whereby the Company callsrepurchased an aggregate of 800,000 shares of Class A common stock (the “Repurchase Shares”) from the PublicInvestors. The purchase price for the Repurchase Shares was the issuance of an aggregate of 800,000 pre-funded warrants to acquire an equal number of shares of Class A common stock (the “Pre-Funded Warrants”).

During May 2022, the Pre-Funded Warrants were exercised in full.

14


January 2022 Warrants

On January 6, 2022, the Company sold 2,496,934 shares of the Company’s Class A common stock, and, in lieu of common stock, pre-funded warrants to purchase 7,797,184 shares of common stock and accompanying warrants to purchase up to 10,294,118 shares of common stock (the “January Offering”). The common stock and warrants were sold at a combined purchase price of $3.40 per share (less $0.0001 per share for redemption, managementpre-funded warrants). Each warrant has an exercise price per share of common stock equal to $3.60 and will haveexpire five years from the option to require all holders that wish to exercise the Public Warrants to do sodate of issuance and may be exercised on a “cashlesscashless basis” as described in if a registration statement registering the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise is not effective. The Company received gross proceeds from the offering of approximately $35 million before deducting estimated offering expenses.

During the six months ended June 30, 2022, 4,997,157 pre-funded warrants issued in the January Offering were exercised for an aggregate of 4,997,146 shares of Class A common stock by virtue of a portion of the pre-funded warrants may be adjusted in certain circumstances includingbeing exercised on a cashless basis. The exercised pre-funded warrants do not affect the weighted average share calculation as pre-funded warrants are already included in the event of aweighted average share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. In addition,calculation as if (x)they have been exercised.

Stryve Foods, Inc. 2021 Omnibus Incentive Plan (the “Incentive Plan”)

The Incentive Plan allows the Company issues additional ordinary shares to grant stock options, restricted stock unit awards and other awards at levels determined appropriate by its board of directors and/or equity-linked securities for capital raising purposescompensation committee. The Incentive Plan also allows the Company to use a broad array of equity incentives and performance cash incentives in connectionorder to secure and retain the services of its employees, directors and consultants, and to provide long-term incentives that align the interests of its employees, directors and consultants with the closinginterests of its initial business combination at an issue price or effective issue price of less than $8.50 per ordinary share (with such issue price or effective issue price to be determined in good faithstockholders. The Incentive Plan is administered by the Company’s board of directors or its compensation committee, or any other committee or subcommittee or one or more of its officers to whom authority has been delegated (collectively, the “Administrator”). The Administrator has the authority to interpret the Incentive Plan and award agreements entered into with respect to the Incentive Plan; to make, change and rescind rules and regulations relating to the Incentive Plan; to make changes to, or reconcile any inconsistency in, the caseIncentive Plan or any award agreement covering an award; and to take any other actions needed to administer the Incentive Plan.

The Incentive Plan permits the Administrator to grant stock options, stock appreciation rights (“SARs”), performance shares, performance units, shares of Class A common stock, restricted stock, restricted stock units (“RSUs”), cash incentive awards, dividend equivalent units, or any such issuanceother type of award permitted under the Incentive Plan. The Administrator may grant any type of award to any participant it selects, but only employees of the Company affiliates, without taking into account any insider shares held by such affiliates prioror its subsidiaries may receive grants of incentive stock options within the meaning of Section 422 of the Internal Revenue Code. Awards may be granted alone or in addition to, such issuance) (where “insider shares” refersin tandem with, or (subject to the 2,875,000 ordinaryrepricing prohibition described below) in substitution for any other award (or any other award granted under another plan of the Company or any affiliate, including the plan of an acquired entity).

The Company has reserved a total of 2,564,960 shares held by the Company’s Initial Shareholders priorof Class A common stock for issuance pursuant to the Company’s initial public offering), (y)Incentive Plan. The number of shares reserved for issuance under the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial business combinationIncentive Plan will be reduced on the date of the consummationgrant of any award by the maximum number of shares, if any, with respect to which such award is granted. However, an award that may be settled solely in cash will not deplete the Incentive Plan’s share reserve at the time the award is granted. If (a) an award expires, is canceled, or terminates without issuance of shares or is settled in cash, (b) the Administrator determines that the shares granted under an award will not be issuable because the conditions for issuance will not be satisfied, (c) shares are forfeited under an award, (d) shares are issued under any award and the Company reacquires them pursuant to its initial business combination (net of redemptions) and (z)reserved rights upon the volume weighted average trading priceissuance of the Company’s ordinary shares, during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial business combination (such price, the “Market Value”) is below $8.50 per share,(e) shares are tendered or withheld in payment of the exercise price of an option or as a result of the warrants willnet settlement of outstanding stock appreciation rights or (f) shares are tendered or withheld to satisfy federal, state or local tax withholding obligations, then those shares are added back to the reserve and may again be adjusted (toused for new awards under the nearest cent)Incentive Plan. However, shares added back to the reserve pursuant to clauses (d), (e) or (f) in the preceding sentence may not be issued pursuant to incentive stock options.

15


Note 9 - Stock Based Compensation

The Company's stock-based awards that result in compensation expense consist of restricted stock units (RSUs) and restricted stock awards (RSAs). As of June 30, 2022, the Company had 1,175,067 shares available for grant under its stock plans. As of June 30, 2022, the total unrecognized compensation cost related to all unvested stock-based compensation awards was $4.1 million is expected to be equalrecognized over the next four years. RSUs generally vest over three years and RSAs generally vest from one to 115%four years.

Restricted Stock Units (RSUs)

The following table summarizes the Company's RSU activity:

Nonvested Restricted Stock Units

 

 

 

 

 

 

 

 

 

 

 

Weighted Average

 

 

 

Restricted Stock

 

 

Award Date Fair Value

 

 

 

Units

 

 

Per Share

 

Restricted Stock at January 1, 2022

 

 

399,000

 

 

$

5.20

 

Added

 

 

-

 

 

 

 

Forfeiture

 

 

(35,166

)

 

 

5.16

 

Vested

 

 

-

 

 

 

 

Restricted Stock at June 30, 2022

 

 

363,834

 

 

$

5.21

 

The fair value of RSUs is determined based on the closing market price of the greaterCompany's stock on the grant date.

Restricted Stock Awards (RSAs)

The following table summarizes the Company's RSA activity:

Nonvested Restricted Stock Awards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average

 

 

 

 

 

Weighted Average

 

 

 

Restricted Stock

 

 

Award Date Fair Value

 

 

Director

 

 

Award Date Fair Value

 

 

 

Awards

 

 

Per Share

 

 

Stock Awards

 

 

Per Share

 

Restricted Stock at January 1, 2022

 

 

328,500

 

 

$

5.31

 

 

 

-

 

 

$

 

Added

 

 

550,000

 

 

$

1.29

 

 

 

59,625

 

 

$

2.48

 

Forfeiture

 

 

 

 

 

 

 

 

 

 

$

 

Vested

 

 

(43,750

)

 

$

5.43

 

 

 

(33,875

)

 

$

2.46

 

Restricted Stock at June 30, 2022

 

 

834,750

 

 

$

2.90

 

 

 

25,750

 

 

$

2.51

 

The fair value of (i)RSAs is determined based on the Market Value or (ii) theclosing market price at which the Company issues the additional ordinary shares or equity-linked securities. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the required time period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust AccountCompany's stock on the grant date.

Stock Based Compensation Expense

Share based compensation costs associated with respect to such warrants. Accordingly,RSUs and RSAs grants are recorded as a separate component of Selling Expenses on the warrants may expire worthless.consolidated statements of income. Share-based compensation expense for service-based awards that contain a graded vesting schedule is recognized net of estimated forfeitures for plan participants on a straight-line basis.

16


Note 8 —10 - Fair Value Measurements

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

 

Level 1:

Quoted

Observable inputs such as quoted prices (unadjusted), for identical instruments in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.markets.

Level 2:

Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3:

Unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on our assessment of the assumptionslowest level input that market participants would use in pricingis significant to the asset or liability.fair value measurement.

 

The following table presents information about the Company’s assets that areliability measured at fair value on a recurring basis at MarchJune 30, 2022 and December 31, 20192021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

 

Description Level  March 31, 2019 
Assets:        
Marketable securities held in Trust Account  1  $108,413,905 

Description

 

Level

 

 

June 30, 2022

 

 

December 31, 2021

 

Liabilities:

 

 

 

 

 

 

 

 

 

Warrant liability - Private Warrants

 

 

3

 

 

$

43,065

 

 

$

128,375

 

Private Warrants

The Private Warrants were accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the Company’s consolidated balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the consolidated statement of operations.

The Private Warrants were valued using a binomial lattice model incorporating the Cox-Ross-Rubenstein methodology, which is considered to be a Level 3 fair value measurement. The Private Warrants were classified as Level 3 at the initial measurement date due to the use of unobservable inputs.

The key inputs into the binomial lattice model incorporating the Cox-Ross-Rubenstein methodology for the Private Warrants were as follows as at June 30, 2022:

Input

 

June 30,
2022

 

Risk-free interest rate

 

 

3.0

%

Dividend yield

 

 

0.0

%

Selected volatility

 

 

79.6

%

Exercise price

 

$

11.50

 

Market stock price

 

$

0.88

 

On June 30, 2022, the Private Warrants were determined to have a fair value of $0.10 per warrant for an aggregate fair value of $43,065.

The following table presents the change in the fair value of warrant liabilities for the period:

Warrant Fair Values

 

Private

 

Fair value as of December 31, 2021

 

$

128,375

 

Change in fair value

 

 

(85,310

)

Fair value as of June 30, 2022

 

$

43,065

 

17


Note 9 —11 - Related Party Transactions

Sale and Leaseback. On May 26, 2021, the Company entered into a Purchase and Sale Agreement with OK Biltong Facility, LLC (“Buyer”), an entity controlled by a member of the Company’s board of directors, pursuant to which the parties consummated a sale and leaseback transaction (the “Sale and Leaseback Transaction”) of the Company’s manufacturing facility and the surrounding property in Madill, Oklahoma (the “Real Property”) for a total purchase price of $7,500 thousand.

In connection with the consummation of the Sale and Leaseback Transaction, the Company entered into a lease agreement (the “Lease Agreement”) with Buyer pursuant to which the Company leased back the Real Property from Buyer for an initial term of twelve (12) years unless earlier terminated or extended in accordance with the terms of the Lease Agreement. Under the Lease Agreement, the Company’s financial obligations include base rent of approximately $60,000 per month, which rent will increase on an annual basis at two percent (2%) over the initial term and two-and-a-half percent (2.5%) during any extension term. The Company is also responsible for all monthly expenses related to the leased facility, including insurance premiums, taxes and other expenses, such as utilities. Under the Lease Agreement, the Company has three (3) options to extend the term of the lease by five (5) years for each such option and a one-time right and option to purchase the Real Property at a price that escalates over time and, if Buyer decides to sell the Real Property, the Company has a right of first refusal to purchase the Real Property on the same terms offered to any third party.

Management determined that the sale and leaseback transaction contained continuing involvement and thus used the financing method consistent with ASC 842. The transfer did not qualify as a sale, hence it is considered a "failed" sale and both parties account for it as a financing transaction. Accordingly, a financing obligation related to the operating lease in the amount of the sale price ($7,500 thousand) has been booked and the corresponding assets on the balance sheet are maintained. Under the finance method, rental payments are applied as amortization and/or interest expense on the financing obligation as appropriate using an assumed interest rate. The Company is accounting for these as interest only payments because the Company's incremental cost to borrow when applied to the financing obligation is greater than the rental payments under the Lease Agreement. The Company recognized interest expense of $359,986 during the six months ended June 30, 2022.

Other. During the three months ended June 30, 2022, the Company purchased $135,813 in goods from an entity controlled by a member of the Company’s Board of Directors (the "Related Party Manufacturer"). There was 0 balance due to the Related Party Manufacturer at June 30, 2022.

Note 12 - Commitments and Contingencies

Litigation

On March 29, 2022, one of the investors in Stryve’s January 2022 private offering sent the Company a letter alleging that the Company has breached “the representations and warranties the Company” made to investors in the definitive agreement. Although Stryve intends to vigorously defend itself against these allegations, Stryve cannot at this time predict whether any litigation will be filed, predict the likely outcome of any future litigation, reasonably determine either the probability of a material adverse result or any estimated range of potential exposure, or reasonably determine how this matter or any future matters might impact our business, our financial condition, or our results of operations, although such impact, including the costs of defense, as well as any judgements or indemnification obligations, among other things, could be materially adverse to us.

Stryve has received a letter from a person purporting to be counsel to certain investors in Stryve LLC and the Seller, which letter alleges claims against Stryve, Stryve LLC, and the Seller concerning the distribution of Stryve’s equity by the Seller in connection with the Business Combination Agreement by which Stryve acquired Stryve LLC. Stryve believes that such allegations are without merit and intends to defend against any claims that may be filed on account of such allegations. Stryve is not able at this time to quantify its exposure for any possible damages arising out of any such claims that may arise from these allegations.

The Company may be a party to routine claims brought against it in the ordinary course of business. After consulting with legal counsel, the Company does not believe that the outcome of any such pending or threatened litigation will have a material adverse effect on its financial condition or results of operations. However, as is inherent in legal proceedings, there is a risk that an unpredictable decision adverse to the Company could be reached. The Company records legal costs associated with loss contingencies as incurred. Settlements are accrued when, and if, they become probable and estimable.

Registration Rights Agreements

The Company is a party to various registration rights agreements with certain stockholders where it may be required to register securities for such stockholders in certain circumstances.

18


Note 13 - Subsequent Events

 

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the condensed financial statements were issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the condensed financial statements.

Share Exchange. On July 20, 2022, the Company issued an aggregate of 4,014,012 shares of its Class A common stock and cancelled an equal number of shares of Class V common stock pursuant to the terms of the Company’s existing Exchange Agreement dated as of July 20, 2021 that permits holders of the Company’s Class V common stock and Class B Units to tender a set of one share of Class V common stock and one Holdings Class B Unit and for redemption for one share of Class A common stock. The securities were issued in reliance on the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, and/or Regulation D promulgated thereunder.

Nasdaq Deficiency Letter. On August 4, 2022, the Company received a deficiency letter from the Nasdaq Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, for the last 30 consecutive business days, the closing bid price for the Company’s Class A common stock has been below the minimum $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (“Rule 5550(a)(2)”). The Nasdaq deficiency letter has no immediate effect on the listing of the Company’s Class A common stock, and its Class A common stock will continue to trade on The Nasdaq Capital Market under the symbol “SNAX” at this time. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been given 180 calendar days, or until January 31, 2023, to regain compliance with Rule 5550(a)(2). If at any time before January 31, 2023, the bid price of the Company’s Class A common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, the Staff will provide written confirmation that the Company has achieved compliance. If the Company does not regain compliance with Rule 5550(a)(2) by January 31, 2023, the Company may be afforded a second 180 calendar day period to regain compliance. The Company intends to actively monitor the closing bid price for its Class A common stock and will consider available options to resolve the deficiency and regain compliance with Rule 5550(a)(2).

19


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We haveThe Company has based these forward-looking statements on ourthe Company’s current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that mightThese risks, uncertainties, assumptions and other important factors, which could cause or contributeactual results to such a discrepancy include, but are not limited to,differ materially from those described in ourthese forward-looking statements, include: (i) the inability to achieve profitability due to commodity prices, inflation, supply chain interruption, transportation costs and/or labor shortages; (ii) the ability to recognize the anticipated benefits of the Business Combination or meet financial and strategic goals, which may be affected by, among other things, competition, supply chain interruptions, the ability to pursue a growth strategy and manage growth profitability, maintain relationships with customers, suppliers and retailers and retain its management and key employees; (iii) the risk that retailers will choose to limit or decrease the number of retail locations in which Stryve’s products are carried or will choose not to carry or not to continue to carry Stryve’s products; (iv) the possibility that Stryve may be adversely affected by other economic, business, and/or competitive factors; (v) the effect of the COVID-19 pandemic on Stryve; (vi) the possibility that Stryve may not achieve its financial outlook (vii) Strye's ability to maintain its listing on the Nasdaq Capital market; (viii) Stryve's ability to secure debt financing, maintain its liquidity position and implement cost savings measures; and (ix) other risks and uncertainties described herein and in other filings with the Securities and Exchange Commission (“SEC”) filings. References


Unless the context otherwise requires, all references in this report
to “we”“Stryve,” the “Company,” “we,” “us” and “our” herein refer to the parent entity formerly named Andina Acquisition Corp. III, after giving effect to the Business Combination, and as renamed Stryve Foods, Inc., “us”, “our” or the “Company” areand where appropriate, our consolidated subsidiaries, and references in this report to “Andina” refer to Andina Acquisition Corp. III except wherebefore giving effect to the context requires otherwise. Business Combination.

The following discussion should be read in conjunction with our condensed consolidated financial statements and related notes thereto included elsewhere in this report. Due to rounding, certain totals and subtotals may not foot and certain percentages may not reconcile.

Overview

OverviewStryve is an emerging healthy snacking company which manufactures, markets and sells highly differentiated healthy snacking products that Stryve believes can disrupt traditional snacking categories. Stryve’s mission is “to help Americans snack better and live happier, better lives.” Stryve offers convenient snacks that are lower in sugar and carbohydrates and higher in protein than other snacks. Stryve offers all-natural, delicious snacks which it believes are nutritious and offer consumers a convenient healthy snacking option for their on-the-go lives.

 

WeStryve’s current product portfolio consists primarily of air-dried meat snack products marketed under the Stryve®, Kalahari®, Braaitime®, and Vacadillos® brand names. Biltong is a process for preserving meat through air drying that originated centuries ago in South Africa. Unlike beef jerky, Stryve’s all-natural air-dried meat snack products are made of beef and spices, are never cooked, most contain zero grams of sugar, and are free of monosodium glutamate (MSG), gluten, nitrates, nitrites, and preservatives. As a blank checkresult, Stryve’s products are Keto and Paleo diet friendly. Further, based on protein density and sugar content, Stryve believes that its air-dried meat snack products are some of the healthiest shelf-stable snacks available today.

Stryve distributes its products in major retail channels, primarily in North America, including grocery, club stores, e-retailers, and other retail outlets, as well as directly to consumers through its e-commerce websites.

Stryve believes increased consumer focus in the U.S. on health and wellness will continue to drive growth of the healthy snacking category and increase demand for Stryve’s products. Stryve has shown strong sales growth since its inception in 2017. Stryve has made substantial investments since its inception in product development, establishing its manufacturing facility, and building its marketing, sales and operations infrastructure to grow its business. As a result, Stryve has reported net losses since its inception. Stryve intends to continue to invest in product innovation, improving its supply chain, enhancing and expanding its manufacturing capabilities, and expanding its marketing and sales initiatives to drive continued growth. Additionally, moving forward management anticipates additional expenses not previously experienced related to internal controls, regulatory compliance, and other expenses relating to its go-forward operations as a public company.

20


Comparability of Financial Information

The Company's results of operations and statements of assets and liabilities may not be comparable between periods as a result of the Business Combination and becoming a public company.

January 2022 PIPE Transaction

On January 6, 2022, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with select accredited investors (the “2022 PIPE Investors”), relating to the issuance and sale of 2,496,934 shares of the Company’s Class A common stock and, in lieu of Class A Common Stock, pre-funded warrants to purchase 7,797,184 shares of Class A common stock (the “PIPE Pre-Funded Warrants”), and accompanying warrants (the “PIPE Warrants”) to purchase up to 10,294,118 shares of Class A common stock with an exercise price equal to $3.60 and a term of five years (the “Offering”). The Offering closed on January 11, 2022. The Class A common stock and PIPE Warrants were sold at a combined purchase price of $3.40 per share (less $0.0001 per share for PIPE Pre-Funded Warrants). The Company received net proceeds from the Offering of $32.3 million. The securities were issued in reliance on the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, and/or Regulation D promulgated thereunder.

Business Combination

On July 20, 2021 (the “Closing Date”), Andina completed the business combination (the "Business Combination") pursuant to that certain Business Combination Agreement (the "Business Combination Agreement") by and among the Company, Andina Holdings LLC, a Delaware limited liability company formed on July 29, 2016and a wholly-owned subsidiary of the Company (“Holdings”), B. Luke Weil, in the capacity from and after the closing of the transactions contemplated by the Business Combination Agreement (the “Closing”) as the representative for the purposeshareholders of entering intothe Company (other than the Seller), Stryve Foods, LLC, a Texas limited liability company, Stryve Foods Holdings, LLC, a Texas limited liability company (the “Seller”), and R. Alex Hawkins, in the capacity from and after the Closing as the representative for the members of the Seller.

As contemplated by the Business Combination Agreement, on or before the Closing Date, the following occurred: (i) the Seller and Stryve Foods, LLC (“Stryve LLC”) conducted a reorganization via a merger pursuant to which the Seller became a holding company for Stryve LLC, the former owners of Stryve LLC became the owners of the Seller, and the former holders of convertible notes of Stryve LLC became holders of convertible notes of the Seller, and pursuant to which Stryve LLC retained all of its subsidiaries, business, assets and liabilities, and became a wholly-owned subsidiary of the Seller (the “Merger”), (ii) the Company was transferred by way of continuation out of the Cayman Islands and domesticated as a corporation in the State of Delaware, (iii) the Seller contributed to Holdings all of the issued and outstanding equity interests of Stryve LLC in exchange for 11,502,355 newly issued non-voting Class B common units of Holdings (the "Seller Consideration Units") and voting (but non-economic) Class V common stock of the Company (that was previously subject to a post-Closing working capital true-up), (iv) the Company contributed all of its cash and cash equivalents to Holdings, approximately $37.9 million, after the payment of approximately $7.8 million to the Company’s shareholders that elected to have their shares redeemed in connection with the Closing (the “Redemption”) and the payment of approximately $10.4 million of the Company’s expenses and other liabilities due at the Closing, in exchange for newly issued voting Class A common units of Holdings and (v) the Company issued $10.9 million of Class A common stock, satisfied by the offset of principal and accrued interest under $10.6 million of outstanding unsecured promissory notes (the "Bridge Notes") issued by Stryve LLC to certain investors in a private placement on the Closing Date (the "Bridge Investors"); and (vi) the Company changed its name to “Stryve Foods, Inc.” In addition, the Company’s ordinary shares converted into shares of Class A common stock, par value of $0.0001 per share, exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similarwithout any action of the holder. On March 25, 2022, the Company finalized the post-closing adjustments under the Business Combination with one or more target businesses. We intendAgreement (the "Post-Closing Adjustment"), which resulted in the release of all 115,023 escrowed shares of Class V common stock, an equal number of Holdings Class B common units, and the net payment of approximately $238,000 by the Company to effectuate our initialthe Seller. As a result, no additional Post-Closing Adjustment remains outstanding.

Following the consummation of the Business Combination, using cash from the proceedscombined company is organized in an “Up-C” structure in which the business of Stryve LLC and its subsidiaries is held by Holdings, which is a subsidiary of the Initial Public Offering and the saleCompany. By virtue of the Private Units, our capital“Up-C” structure, the Company’s only direct assets consist of its equity interests in Holdings, an entity of which the Company maintains 100% voting control. As the sole voting member of Holdings, the Company has full, exclusive and complete discretion to manage and control the business of Stryve LLC and to take all action it deems necessary, appropriate, advisable, incidental, or convenient to accomplish the purposes of Stryve LLC and, accordingly, the financial statements are prepared on a consolidated basis.

On July 20, 2021, in connection with the completion of the Business Combination and as contemplated by the Business Combination Agreement, the Company: (i) issued 4,250,000 shares of Class A common stock debt orto private placement investors for aggregate consideration of $42.5 million; and (ii) the Company issued 1,357,372 shares of Class A common stock to the Bridge Investors satisfied by the offset of $10.9 million of principal and accrued interest under outstanding Bridge Notes issued by Stryve LLC, as part of the Business Combination.

21


The Business Combination is accounted for as a combinationreverse capitalization in accordance with generally accepted accounting principles in the United States ("GAAP"). Under this method of cash, stockaccounting, Stryve LLC is treated as the acquirer and debt.

The issuance of additional ordinary shares or preferred shares:

may significantly reduce the equity interest of our shareholders;
may subordinate the rights of holders of ordinary shares if we issue preferred shares with rights senior to those afforded to our ordinary shares;
will likely cause a change in control if a substantial number of our ordinary shares are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and most likely will also result in the resignation or removal of our present officers and directors; and
may adversely affect prevailing market prices for our securities.

Similarly, if we issue debt securities, it could result in:

default and foreclosure on our assets if our operating revenues after a Business Combination are insufficient to pay our debt obligations;
acceleration of our obligations to repay the indebtedness even if we have made all principal and interest payments when due if the debt security contains covenants that required the maintenance of certain financial ratios or reserves and we breach any such covenant without a waiver or renegotiation of that covenant;
our immediate payment of all principal and accrued interest, if any, if the debt security is payable on demand; and
our inability to obtain additional financing, if necessary, if the debt security contains covenants restricting our ability to obtain additional financing while such security is outstanding.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities through March 31, 2019 were organizational activities and those necessary to prepare forAndina is treated as the Initial Public Offering, described below, and, after our Initial Public Offering, identifying a targetacquired company for afinancial statement reporting purposes. Because Stryve LLC was deemed the accounting acquirer, the historical financial statements of Stryve LLC became the historical financial statements of the combined company, upon the consummation of the Business Combination.

Supply Chain Challenges & Increased Cost Environment

Through the beginning of the COVID-19 pandemic, we had been successful at avoiding disruptions to our supply chain and operations through these measures and maintained continuity of supply for its customers. However, beginning in the second half of 2021, we experienced certain supply chain challenges that negatively affected our ability to supply the demands to all of our channels of trade and negatively impacted our gross margins. While our efforts to mitigate these challenges are beginning to show positive signs, these challenges nonetheless continued to have an impact on the first half of 2022. We dobelieve that many of the supply chain disruptions we experienced in our operations are temporary but may persist in the near term.

In the first half of 2022, we experienced a more expensive operating environment throughout the business, including higher prices for raw materials, packaging, beef, transportation, storage, services, labor, and advertising than we the comparable period in 2021. We expect these inflationary pressures to continue throughout at least 2022, which may continue to negatively impact our gross margins. We continue to track new developments affecting these inflationary pressures as we execute on our mitigating strategies to lessen the impact of these challenges and cost increases including but not expectlimited to, generate any operating revenues until afterprice increases, improving our manufacturing yields through capacity enhancements, investing in further automation, and rationalizing and optimizing marketing spend to drive greater returns and retail velocities.

Investments to Grow Asset Base and Strengthen Balance Sheet

Since the consummation of the Business Combination in July 2021, we have made considerable investments to strengthen our balance sheet in light of the uncertain macroeconomic environment. Meaningful investments made to reduce debt, grow working capital, acquire capital equipment, and expand facilities throughout the first and second quarter of 2022 were a continuation of this trend. In the first quarter, we retired approximately $6.84 million of debt and separately announced the completion of our Business Combination. We generate non-operating incomefirst major expansion to our manufacturing facility in Madill, Oklahoma. This expansion has allowed us to augment our capacities so that we can more efficiently flex our run rate production levels, if needed, to satisfy outsized new distribution lay-in orders and/or national programs without materially straining our ordinary course day-to-day production. Additionally, we have made considerable investments in our inventory and current assets to help service our expanded distribution base moving forward.

Significant Demand with Execution Challenges

From a tonnage perspective, the second quarter of 2022 was by far the largest in the formCompany's history. While the achievement of interest income on marketable securities held$10.9 million in net sales in the Trust Account. Wequarter shows nearly 51% sequential growth over Q1'22, it fails to illustrate that our tonnage output was nearly three times that of the prior quarter. These outsized production and fulfillment volumes in Q2 2022 were primarily attributable to a limited time retailer specific savings event which placed our products in chain-wide distribution for a limited period of time tied to the event. This nationwide sales event began and ended within the second quarter of 2022, which not only presented a price mix challenge to our gross sales and gross margins, but also resulted in over $3.0 million in coupon redemptions and other deductions which were tied to the event. While our price-mix-affected gross revenue was approximately $14.9 million for the quarter, our net revenue was $10.9 million. This dynamic had a compounding effect on our gross margins for the quarter as well.

Further, we faced several challenges in our execution of this brief, yet outsized, demand spike which negatively affected our manufacturing yields and in turn, our gross margins. Additionally, these production and fulfillment challenges led to short-term supply gaps in our wider distribution network which resulted in lower than target in-stock percentages at retail. While the deleterious effects of these execution challenges have been significant, we believe they are incurring expensestemporary in nature. With the non-normal demand spike behind us, we have been able to quickly return to a more normalized production cadence allowing for improved yields and quickly recovering in-stock percentages at retail.

Change in Management and Solidifying Strategy

In the second quarter of 2022, Stryve announced a leadership change with Chris Boever stepping in as a resultthe new Chief Executive Officer of being a public company (for legal, financial reporting, accountingthe Company. With this change in leadership, management has thoughtfully reviewed the business, strategy, near-term prospects, and auditing compliance),it's previously discussed path to profitability. From this, management has identified certain one-time write-downs for assets that are non-core to the go-forward plan as well as identified necessary accruals related to actions to be taken to reorganize the business and it's objectives in line with the strategic direction that Mr. Boever has for due diligence expenses.the enterprise. These charges have largely been incurred in these second quarter results. For comparability of the financial statements, we have identified many of these charges as non-GAAP pro-forma adjustments in calculating Adjusted EBITDA and Adjusted Earnings per Share, which are reconciled to the nearest GAAP figure below.

 

For22


Optimizing Spend and Reducing Losses

While we made material progress in reducing our net loss in the first quarter of 2022, the overall impact of the limited-time retailer specific savings event and the reorganization-related charges negatively affected our net loss for the period. While the price increases we took yielded improvements in our average selling price in Q2'22 (excluding sales related to the savings event), the impact to profitability was more than offset by the aggregate price mix (including sales related to the savings event), the aforementioned execution challenges, and one-time charges. That said, we firmly believe that certain key factors influencing our Q2'22 net loss were temporary in nature and will not recur in the future. Accordingly, despite this quarter's increased net loss, we are still making solid progress on our cost mitigation strategies. We have examined every area of spending throughout our business and believe we have identified ways to drive efficiencies, eliminate unnecessary expense, and focus on the highest and best use of each dollar. Moving forward, we believe our optimized spending plan will begin to materially benefit from portfolio-wide price increases that will be evident in our third-quarter financial reporting. While we intend to continue to invest to drive meaningful growth in net sales, we are doing so in a more disciplined manner that acknowledges the fundamental changes in direct-to-consumer advertising markets. By monitoring our unit economics closely, maintaining an optimized spending profile, and seeking to meaningfully grow net sales, we believe we will be able to drive further reductions in our net losses moving forward.

Results of Operations –Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021

The following table sets forth selected items in our consolidated financial data in dollar amounts and as a percentage of net sales for the three months ended March 31, 2019, we had net income of $308,767, which consists of interest income on marketable securities held in the Trust Account of $413,855 and an unrealized gain on marketable securities held in our Trust Account of $50, offset by operating costs of $105,138.

ForJune 30, 2022 compared to the three months ended March 31, 2018, we had net loss of $1,797, which consists of operating costs of $1,797.June 30, 2021.

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

June 30, 2022

 

 

June 30, 2021

 

 

 

(unaudited)

 

 

(unaudited)

 

(In thousands)

 

 

 

 

% of sales

 

 

 

 

 

% of sales

 

Net sales

 

$

10,946

 

 

 

100.0

%

 

 

7,351

 

 

 

100.0

%

Cost of goods sold (exclusive of depreciation shown separately below)

 

 

15,371

 

 

 

140.4

%

 

 

3,770

 

 

 

51.3

%

Gross profit (loss)

 

$

(4,425

)

 

 

(40.4

)%

 

$

3,581

 

 

 

48.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Selling and marketing expenses

 

$

4,717

 

 

 

43.1

%

 

$

5,593

 

 

 

76.1

%

Operations expense

 

 

1,350

 

 

 

12.3

%

 

 

970

 

 

 

13.2

%

Salaries and wages

 

 

3,510

 

 

 

32.1

%

 

 

1,602

 

 

 

21.8

%

Depreciation and amortization expense

 

 

503

 

 

 

4.6

%

 

 

397

 

 

 

5.4

%

Prepaid media reserve

 

 

1,489

 

 

 

13.6

%

 

 

 

 

 

 

Gain on disposal of fixed assets

 

 

(24

)

 

 

(0.2

)%

 

 

(10

)

 

 

(0.1

)%

Total operating expenses

 

 

11,545

 

 

 

105.5

%

 

 

8,552

 

 

 

116.3

%

Operating loss

 

 

(15,970

)

 

 

(145.9

)%

 

 

(4,971

)

 

 

(67.6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(181

)

 

 

(1.7

)%

 

 

(1,147

)

 

 

(15.6

)%

PPP loan forgiveness

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of Private Warrants

 

 

40

 

 

 

0.4

%

 

 

 

 

 

 

Gain on debt extinguishment

 

 

 

 

 

 

 

 

545

 

 

 

7.4

%

Other income

 

 

(215

)

 

 

(2.0

)%

 

 

12

 

 

 

0.2

%

Total other income (expense)

 

 

(356

)

 

 

(3.3

)%

 

 

(590

)

 

 

(8.0

)%

Net loss before income taxes

 

$

(16,326

)

 

 

(149.1

)%

 

$

(5,561

)

 

 

(75.6

)%

Liquidity and Capital Resources

On January 31, 2019, we consummated the Initial Public Offering of 10,800,000 Units, which includes a partial exerciseNet sales. Net sales increased by the underwriters of their over-allotment option in the amount of 800,000 Units, at a price of $10.00 per Unit, generating gross proceeds of $108,000,000. Simultaneously with the closing of the Initial Public Offering we consummated the sale of 395,000 Private Units to certain Initial Shareholders and the underwriters at a price of $10.00 per unit, generating gross proceeds of $3,950,000.

Following the Initial Public Offering and the sale of the Private Units, a total of $108,000,000 was placed in the Trust Account and, following the payment of certain transaction expenses, we had approximately $715,000 of cash held outside of the Trust Account and available for working capital purposes. We incurred $3,204,451 in Initial Public Offering related costs, including $2,700,000 of underwriting fees and $504,451 of other costs.

As of March 31, 2019, we had marketable securities held in the Trust Account of $108,413,905 (including approximately $414,000 of interest income, net of unrealized losses) consisting of U.S. Treasury Bills with a maturity of 180 days or less. Interest income on the balance in the Trust Account may be used by us to pay taxes. Through March 31, 2019, we did not withdraw any interest earned on the Trust Account.

For$3.5 million from $7.4 million during the three months ended MarchJune 30, 2021 to $10.9 million during the three months ended June 30, 2022 representing growth of 48.9% for the comparable periods. The primary driver of the increase in net sales was the nationwide limited-time savings event with the one of the nation's largest retailers. While this event presented several challenges for the business as described above, we believe the consumer response was positive with sell-through rates far in excess of our expectations. Given the long-term importance of driving consumer awareness and trial of our products, we believe that the household penetration afforded by this event will benefit the business in all of our channels of trade.

23


As we have previously discussed, during the latter part of 2021, the digital advertising behind our DTC business became significantly more expensive and less effective due to industry wide changes related to data privacy and app tracking that affected nearly all DTC advertisers. As a result, we elected to significantly scale back digital advertising midway through the fourth quarter of 2021 and throughout the first half of 2022. We anticipate that these trends in digital advertising will continue for the foreseeable future, and as such, plan to proceed with what we believe to be a more prudent approach to DTC digital advertising spending in 2022. Accordingly, we have seen softness in our DTC business relative to prior periods.

We added a significant number of new doors of distribution in the year ended December 31, 2019,2021 across most of our brands, which contributed to our growth year-over-year. Further, we garnered expanded distribution with a number of its existing retail relationships. Most significantly, however, the significant growth in our net sales stem from the limited-time savings event with one of the nation's largest retailers that occurred in the quarter and placed our products in full-chain distribution on an in-and-out basis. We acknowledge that the previously discussed execution challenges hindered our ability to fully service all of the retail orders that should have converted to net sales in the second quarter of 2022. With the driving force behind many of these execution related challenges now behind us, we are utilizing our excess capacity to quickly work through this backlog of orders to recover our in-stock percentages.

 

 

Three Month
Period Ended

 

 

Three Month
Period Ended

 

 

 

 

June 30, 2022

 

 

June 30, 2021

 

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(In thousands)

 

 

 

 

 

 

 

Gross Sales

 

$

14,890

 

 

$

8,068

 

 

Trade Promotions/Discounts & Credits

 

 

(3,944

)

 

 

(717

)

 

Net Sales

 

$

10,946

 

 

$

7,351

 

 

Cost of Goods Sold. Cost of goods sold increased by $11.6 million from $3.8 million in the three months ended June 30, 2021 to $15.4 million in the three months ended June 30, 2022, which was primarily driven by increased sales volume followed by significant increases in direct labor and input costs including packaging, and other ingredients. Overall commodity beef prices have trended favorably throughout the second quarter of 2022, compared to prior recent quarters, and are generally in line with what we experienced the prior year period. However, as previously discussed, certain execution issues gave rise to yield challenges which caused our effective meat cost to worsen year-over-year.

Gross Profit (Loss). Gross profit (loss) decreased $8.0 million from $3.6 million in the three months ended June 30, 2021 to $(4.4) million in the three months ended June 30, 2022. As a percent of net sales, gross profit was negative 40.4% in the second quarter of 2022, compared to 48.7% in the first quarter of 2021. A few primary factors contribute to this performance:

The pull back in DTC e-commerce paired with greater volume from the club channel than in the prior year has resulted in an unfavorable price mix shift. While we acknowledge the growth prospects of brick and mortar distribution, we recognize that any mix shift away from higher margin DTC e-commerce will likely negatively influence our gross margin profile.
As 2021 progressed, we experienced increasing pressure on direct labor wage rates. These inflationary pressures necessitated several increases to our direct labor rates throughout 2021 and again during six months ended June 30, 2022. We anticipate that our investments in automation and process improvements will help to offset some of these pressures moving forward.
Aside from the effects of mix, there were over $3.9 million in coupons, promotions, deductions, and credits incurred in the second quarter of 2022. This gross-to-net dilution of 26.5% far exceeds the prior year period's dilution of 8.9%. This increase is primarily attributable to the limited-time savings event which led to over $3.0 million in coupon redemptions and deductions alone.

24


Operating Expenses.

Selling and marketing expenses. Selling and marketing expenses decreased by $0.9 million from $5.6 million in the three months ended June 30, 2021 to $4.7 million in the three months ended June 30, 2022. Stryve decreased its spend with respect to its marketing efforts primarily digital media advertising and paid search in the second quarter of 2022 compared to the same period in 2021. We intend to temper this type of marketing spending for the foreseeable future in favor of increasing our focus on strategies to support retail velocities. Further, management anticipates experiencing operating leverage on its marketing expenses as the Company continues to add points of retail distribution, which has the potential to facilitate more efficient marketing spend. Other expenses contributing to the decrease relate to legal and consulting fees incurred in the three months ended June 30, 2021 related to the Business Combination which did not reoccur in the most recent period.
Operations expenses. Operations expenses increased by $0.4 million for the three months ended June 30, 2022 as compared to the three months ended June 30, 2021. These increases are primarily attributable to the increase in shipped volume as compared to the prior year. Increases in rates across most modes of transportation have also contributed to the increase. Additionally, expenses related to supplies, maintenance, training, and warehousing increased from the second quarter of 2021 compared to the second quarter of 2022.
Salaries and wages. Salaries and wages increased $1.9 million for the three months ended June 30, 2022 compared to the three months ended June 30, 2021, increasing from $1.6 million to $3.5 million. This increase is in part attributable to retention bonus compensation related to a prior acquisition as well as to key contributors within the organization. Further, the second quarter results include an accrual of approximately $1.0 million of non-recurring compensation expense that relate to the Company's Business Combination. Additionally, the Company incurred $384 thousand of non-cash, stock-based compensation expense in the second quarter of 2022 which was not present in the second quarter of 2021 when Stryve was still a private company. Despite these increases year-over-year, through our restructuring efforts under new leadership, we anticipate that these expenses will be further optimized to align with the Company's go forward strategy to maximize productivity.
Depreciation and amortization. Depreciation and amortization increased $0.1 million from $0.4 million in the three months ended June 30, 2021 to $0.5 million compared to the three months ended June 30, 2022.
One-time prepaid media reserve. As part of management's go-forward plan, certain non-core assets have been written down or reserved against. This includes fully reserving against approximately $1.5 million of prepaid media assets which had been held on the balance sheet.

Operating Loss. Operating loss increased by $11.0 million from $5.0 million in the three months ended June 30, 2021 to $16.0 million in the three months ended June 30, 2022 and is primarily attributable to a material decrease in gross profit stemming from unprofitable sales relating to the limited-time savings event occurring in the second quarter of 2022 as well as significant one-time charges as described above.

Interest Expense. Interest expense decreased by $0.9 million from $1.1 million in the three months ended June 30, 2021 to $0.2 million in the three months ended June 30, 2022. While we relied, in part, on debt capital to support the business throughout 2021, we significantly deleveraged the business in the first half of 2022 as well as upon the consummation of the Business Combination in the third quarter of 2021 thus reducing the overall interest expense of the business year-over-year.

Net Loss. Net loss increased $10.7 million from $5.6 million in three months ended June 30, 2021 to $16.4 million in the three months ended June 30, 2022, with the increase primarily attributable to a decrease in gross profit as well as significant one-time charges occurring in the second quarter of 2022, as described above.

25


Results of Operations –six months ended June 30, 2022 Compared to six months ended June 30, 2021

The following table sets forth selected items in our consolidated financial data in dollar amounts and as a percentage of net sales for the six months ended June 30, 2022 compared to the six months ended June 30, 2021.

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2022

 

 

June 30, 2021

 

 

 

(unaudited)

 

 

(unaudited)

 

(In thousands)

 

 

 

 

% of sales

 

 

 

 

 

% of sales

 

Net sales

 

$

18,367

 

 

 

100.0

%

 

$

14,186

 

 

 

100.0

%

Cost of goods sold (exclusive of depreciation shown separately below)

 

 

21,668

 

 

 

118.0

%

 

 

7,927

 

 

 

55.9

%

Gross profit (loss)

 

$

(3,301

)

 

 

(18.0

)%

 

$

6,259

 

 

 

44.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Selling and marketing expenses

 

$

8,743

 

 

 

47.6

%

 

$

12,047

 

 

 

84.9

%

Operations expense

 

 

2,580

 

 

 

14.0

%

 

 

2,030

 

 

 

14.3

%

Salaries and wages

 

 

6,096

 

 

 

33.2

%

 

 

3,003

 

 

 

21.2

%

Depreciation and amortization expense

 

 

948

 

 

 

5.2

%

 

 

792

 

 

 

5.6

%

Prepaid media reserve

 

 

1,489

 

 

 

8.1

%

 

 

 

 

 

 

Gain on disposal of fixed assets

 

 

(24

)

 

 

(0.1

)%

 

 

(9

)

 

 

(0.1

)%

Total operating expenses

 

 

19,832

 

 

 

108.0

%

 

 

17,863

 

 

 

125.9

%

Operating loss

 

 

(23,133

)

 

 

(125.9

)%

 

 

(11,604

)

 

 

(81.8

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(369

)

 

 

(2.0

)%

 

 

(1,957

)

 

 

(13.8

)%

PPP loan forgiveness

 

 

 

 

 

 

 

 

1,670

 

 

 

11.8

%

Change in fair value of Private Warrants

 

 

85

 

 

 

0.5

%

 

 

 

 

 

 

Gain on debt extinguishment

 

 

 

 

 

 

 

 

545

 

 

 

3.8

%

Other income

 

 

(215

)

 

 

(1.2

)%

 

 

24

 

 

 

0.2

%

Other income (expense)

 

 

(499

)

 

 

(2.7

)%

 

 

282

 

 

 

2.0

%

Net loss before income taxes

 

$

(23,632

)

 

 

(128.7

)%

 

$

(11,322

)

 

 

(79.8

)%

Net sales.Net sales increased by $4.2 million from $14.1 million during the six months ended June 30, 2021 to $18.3 million during the six months ended June 30, 2022 representing growth of 29.5% for the comparable periods. The primary drivers of the increased sales of Stryve’s products to existing accounts, and net new sales related to additional distribution secured by Stryve in 2021 at a number of key retailers. Throughout the six months ended June 30, 2022 Stryve has secured new distribution with several marquee customers in the club, mass, grocery, and convenience channels. Further, Stryve garnered expanded distribution with a number of its existing retail relationships. Overall, the largest contributor of growth stems from the limited-time savings event which resulted in significant in-and-out sales volume in the second quarter of 2022. This growth has been partially offset by a pullback in our e-commerce sales stemming from our reduction in digital media spending. Further, supply chain and execution challenges in the first half of 2022 have hindered our ability to effectively service several retail and private label accounts leaving unmet demand in the period.

 

 

Six Month
Period Ended

 

 

Six Month
Period Ended

 

 

 

 

June 30, 2022

 

 

June 30, 2021

 

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(In thousands)

 

 

 

 

 

 

 

Gross Sales

 

$

23,617

 

 

$

15,562

 

 

Trade Promotions/Discounts & Credits

 

 

(5,250

)

 

 

(1,377

)

 

Net Sales

 

$

18,367

 

 

$

14,186

 

 

26


Cost of Goods Sold. Cost of goods sold increased by $13.7 million from $7.9 million in the six months ended June 30, 2021 ,to $21.7 million in the six months ended June 30, 2022, which was primarily driven by increased sales volume followed by increased direct labor and commodity input costs, primarily beef. On the whole, overall commodity beef prices have increased significantly year-over-year. However, throughout the six-month period ending June 2022, meat prices have consistently trended favorably relative to their peak in the second half of 2021. Notwithstanding this trend in beef pricing, the aforementioned execution related yield challenges largely muted the impact of this improvement.

Gross Profit (Loss). Gross profit (loss) fell $9.6 million from a $6.3 million profit in the first six months of 2021 to $3.3 million gross profit loss in the first six months of 2022. As a percent of net sales, gross profit (loss) for the first six months of 2022 was negative 18% which represents a significant decline from 44.1% in the first six months of 2021. A few primary factors contribute to this performance:

The pull back in DTC e-commerce paired with greater volume from other channels, particularly to club retailers, than in the prior year has resulted in an unfavorable mix shift. While we acknowledge the growth prospects of the brick-and-mortar distribution, we recognize that any mix shift away from DTC e-commerce will likely negatively influence our gross margin profile.
As 2021 progressed, we experienced increasing pressure on direct labor wage rates. These inflationary pressures necessitated several increases to our direct labor rates throughout 2021 and again during six months ended June 30, 2022. We are hopeful that our investments in automation and process improvements will help to offset some of these pressures moving forward.
Aside from the effects of mix, there were over $5.2 million in coupons, promotions, deductions, and credits incurred in the first half of 2022. This gross-to-net dilution of 22.2% exceeds the prior year period's dilution of 8.8%. This increase is primarily attributable to the limited-time event which led to over $3.0 million in coupons and deductions alone in the first half of 2022.

Operating Expenses.

Selling expenses. Selling and marketing expenses fell by $3.3 million from $12.0 million in the six months ended June 30, 2021, to $8.7 million in the six months ended June 30, 2022. Stryve decreased its spend with respect to its marketing efforts including digital media, advertising, and paid search in the first six months of 2022 compared to the same period in 2021. We intend to temper this type of marketing spending for the foreseeable future in favor of increasing our focus on strategies to support retail velocities. Further, management anticipates experiencing operating leverage on these expenses as the Company continues to add points of retail distribution, which has the potential to facilitate more efficient marketing spend.
Operations expenses. Operations expenses increased by $0.6 million from the six months ended June 30, 2021, as compared to the six months ended June 30, 2022. The primary driver of this was increased shipped sales volumes in the first half of 2022 as compared to the first half of 2021.
Salaries and wages. Salaries and wages increased $3.1 million from the six months ended June 30, 2021, compared to the six months ended June 30, 2022, increasing from $3.0 million to $6.1 million. This increase is in part attributable to certain non-recurring retention bonus compensation related to a prior acquisition as well as to key contributors within the organization incurred in the first half of 2022. Further, the second quarter results include an accrual of approximately $1.0 million of non-recurring compensation expense that relate to the Company's Business Combination. Additionally, the Company incurred $712 thousand of non-cash, stock based compensation expense in the first half of 2022 which wasn't present in the first half of 2021 when Stryve was still a private company. Despite these increases year-over-year, through our restructuring efforts under new leadership, we anticipate that these expenses will be further optimized to align with the Company's go forward strategy to maximize productivity.
Depreciation and amortization. Depreciation and amortization increased $0.2 million from the six months ended June 30, 2021, compared to the six months ended June 30, 2022 and is primarily attributable to the timing of capital expenditures and dispositions of assets.
Prepaid media reserve. As part of management's go-forward plan, certain non-core assets have been written down or reserved against. This includes fully reserving against approximately $1.5 million of prepaid media assets which had been held on the balance sheet.

Operating Loss. Operating loss increased by $11.5 million from ($11.6) million through the first six months of 2021 to ($23.1) million through the first six months of 2022 and is primarily attributable to decreased gross profit on sales.and certain significant one-time restructuring charges occurring in the first half of 2022, as described above.

27


Interest Expense. Interest expense decreased by $1.5 million from $(1.9) million through the first six months of 2021 to $(.4) million through the first six months of 2022. While we relied, in part, on debt capital to support the business throughout 2021, we significantly deleveraged the business in the first quarter of 2022 as well as upon the consummation of the Business Combination in the third quarter of 2021 thus reducing the overall interest expense of the business year-over-year for the comparable periods.

Net Loss. Net loss increased $12.3 million from $(11.3) million in six months ended June 30, 2021 to $(23.6) million six months ended June 30, 2022 and is primarily attributable to a decrease in gross profit on sales and certain significant one-time restructuring charges occurring in the first half of 2022, as described above.

Non-GAAP Financial Measures

We use non-GAAP financial measures and believe it is useful to investors as it provides additional information to facilitate comparisons of historical operating results, identify trends in operating results, and provide additional insight on how the management team evaluates the business. Our management team uses EBITDA, Adjusted EBITDA, and Adjusted Earnings per Share to make operating and strategic decisions, evaluate performance and comply with indebtedness related reporting requirements. Below are details on these non-GAAP measures and the non-GAAP adjustments that the management team makes in the definition of EBITDA, Adjusted EBITDA, and Adjusted Earnings per Share. We believe these non-GAAP measure should be considered along with net income (loss), the most closely related GAAP financial measure. Reconciliations between EBITDA, Adjusted EBITDA, Adjusted Earnings per Share, and net income (loss) are below, and discussion regarding underlying GAAP results throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

EBITDA. Stryve defines EBITDA as net income (loss) before interest expense, income tax expense (benefit), and depreciation and amortization.

Adjusted EBITDA. Stryve defines Adjusted EBITDA as EBITDA adjusted as necessary for certain items listed below in the table.

The table below provides a reconciliation of EBITDA and Adjusted EBITDA to their most directly comparable GAAP measure, which is net income (loss) before taxes, for the three and six months ended June 30, 2022 and 2021.

 

 

Three Month
Period Ended

 

 

Three Month
Period Ended

 

 

Six Month
Period Ended

 

 

Six Month
Period Ended

 

 

 

 

June 30, 2022

 

 

June 30, 2021

 

 

June 30, 2022

 

 

June 30, 2021

 

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss before income taxes

 

$

(16,326

)

 

$

(5,561

)

 

$

(23,632

)

 

$

(11,322

)

 

Interest expense

 

 

181

 

 

 

1,147

 

 

 

369

 

 

 

1,957

 

 

Depreciation and amortization

 

 

503

 

 

 

397

 

 

 

948

 

 

 

792

 

 

EBITDA

 

$

(15,642

)

 

$

(4,017

)

 

$

(22,315

)

 

$

(8,573

)

 

Additional Adjustments*:

 

 

 

 

 

 

 

 

 

 

 

 

 

PPP loan forgiveness

 

 

 

 

 

 

 

 

 

 

 

(1,670

)

 

Severances and One-Time Employee Related Costs

 

 

1,346

 

 

 

 

 

 

1,425

 

 

 

 

 

One-Time Reserves and Write Downs

 

 

2,562

 

 

 

 

 

 

2,562

 

 

 

 

 

Business combination expenses

 

 

 

 

 

193

 

 

 

 

 

 

1,077

 

 

Stock based compensation expense

 

 

384

 

 

 

 

 

 

712

 

 

 

 

 

Comparability adjustment - Public vs. Private

 

 

 

 

 

(527

)

 

 

 

 

 

(1,049

)

 

Adjusted EBITDA

 

$

(11,350

)

 

$

(4,351

)

 

$

(17,616

)

 

$

(10,215

)

 

Adjusted EBITDA. Stryve achieved negative Adjusted EBITDA of $(17.6) million during the six months ended June 30, 2022. compared to $(10.2) million in the six months ended June 30, 2021. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

*Additional Adjustments to EBITDA:

PPP Loan Forgiveness: The Company secured a Paycheck Protection Program loan in April of 2020 which was ultimately fully forgiven in the first quarter of 2021. The forgiveness of $1.6 million of principal and interest resulted in a gain during the three months ended June 30, 2021. This item is one-time and has been adjusted out of Other Income (Expense) to provide better comparability of results.

28


Business Combination Expenses: The Company signed the Business Combination Agreement on January 28, 2021. and prepared an S-4 and S-1 filing in furtherance of the Business Combination. In doing so, the Company incurred significant legal and professional services fees in the three months ended June 30, 2021. The Business Combination was ultimately consummated on July 20, 2021. These non-recurring expenses have been adjusted out of Selling and Marketing Expense to provide better comparability of results.

Comparability Adjustment - Public vs Private: For the duration of the three-month period ended June 31, 2021, Stryve was a private company. The Company consummated the Business Combination on July 20, 2021. As a public company, the Company incurs significant expenses by virtue of being public. These public company expenses affect the comparability of results between the comparable periods shown. Accordingly, these public company expenses have been added to the three months ended June 30, 2021, to adjust the comparative quarter for comparative purposes. These expenses include public filing fees and preparation services, the extra cost of directors & officers insurance for public companies, and board fees.

Severances and One-Time Employee Related Costs: The Company incurred significant one-time charges related to employees, including severances and future one-time payments, in the second quarter of 2022. These non-recurring expenses have been adjusted out of Salaries & Wages to provide better comparability of results.

One-Time Reserves and Write Downs: As part of management's go-forward plan, certain non-core assets have been written down or reserved against. This includes the write down of approximately $1.5M of pre-paid media, reserves for non-core SKUs, and other non-recurring items. These non-recurring expenses have been adjusted out to provide better comparability of results.

Adjusted Earnings per Share. Stryve defines Adjusted Earnings per Share as it's Basic/Diluted Net Income (Loss) per Share adjusted as necessary for certain items listed below in the table.

The table below provides a reconciliation of Adjusted Earnings per Share to its most directly comparable GAAP measure, which is Basic/Diluted Net Income (Loss) per Share, for the three and six months ended June 30, 2022 and 2021.

 

 

Three Month
Period Ended

 

 

Three Month
Period Ended

 

 

Six Month
Period Ended

 

 

Six Month
Period Ended

 

 

 

 

June 30, 2022

 

 

June 30, 2021

 

 

June 30, 2022

 

 

June 30, 2021

 

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(In thousands except share and per share information)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(16,354

)

 

$

(5,561

)

 

$

(23,668

)

 

$

(11,322

)

 

Weighted average shares outstanding

 

 

30,946,486

 

 

 

10,139,422

 

 

 

30,355,697

 

 

 

10,141,928

 

 

Basic & Diluted Net Loss per Share

 

$

(0.53

)

 

$

(0.55

)

 

$

(0.78

)

 

$

(1.12

)

 

Additional Adjustments*:

 

 

 

 

 

 

 

 

 

 

 

 

 

PPP loan forgiveness

 

 

 

 

 

 

 

 

 

 

 

(0.16

)

 

Severances and One-Time Employee Related Costs

 

 

0.04

 

 

 

 

 

 

0.05

 

 

 

 

 

Reserves and Write Downs

 

 

0.08

 

 

 

 

 

 

0.08

 

 

 

 

 

Business combination expenses

 

 

 

 

 

0.02

 

 

 

 

 

 

0.11

 

 

Stock based compensation expense

 

 

0.01

 

 

 

 

 

 

0.02

 

 

 

 

 

Comparability adjustment - Public vs. Private

 

 

 

 

 

(0.05

)

 

 

 

 

 

(0.10

)

 

Adjusted Earnings per Share

 

$

(0.39

)

 

$

(0.58

)

 

$

(0.62

)

 

$

(1.28

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Information regarding these adjustments can be found in the Additional Adjustments to EBITDA section above.

 

 

Liquidity and Capital Resources

Overview. We have historically funded our operations with cash flow from operations, equity capital raises, and note payable agreements from shareholders and private investors, in addition to bank loans. Our principal uses of cash have been debt service, capital expenditures, and investment in working capital to fund operations. For the six months ended June 30, 2022, we incurred an operating loss of $23.1 million and used cash in operations of $20.4 million. As of June 30, 2022, we have working capital of $12.2 million which compares favorably to the $3.2 million working capital we maintained as of December 31, 2021, and have only approximately $0.2

29


million of indebtedness. On January 11, 2022, we closed a private placement offering in which we raised $35.0 million of gross proceeds to significantly strengthen our liquidity position. We have used a portion of the funds raised for working capital to support near term growth, capital expansion projects, including increasing manufacturing capacity and adding manufacturing capabilities, and general corporate purposes, including marketing and sales initiatives and repaying $6.8 million of debt.

On May 26, 2021, the Company entered into a Purchase and Sale Agreement with OK Biltong Facility, LLC (the “Buyer”), an entity controlled by Ted Casey, a member of the Company’s Board of Directors, pursuant to which the parties consummated a sale and leaseback transaction (the “Sale and Leaseback Transaction). Under the terms of the Sale and Leaseback Transaction, the Company agreed to sell its manufacturing facility and the surrounding property in Madill, Oklahoma (the “Real Property”). The Sale and Leaseback Transaction was consummated on June 4, 2021, for a total purchase price of $7.5 million. The consummation of the Sale and Leaseback Transaction provided the Company with net proceeds (after transaction related costs) of approximately $7.3 million. The net proceeds were used for general corporate purposes and to retire debt facilities in an aggregate amount of $6.5 million.

In connection with the consummation of the Business Combination, on July 20, 2021, the Company raised proceeds of $37.9 million (net of Andina’s transaction costs and expenses). Following the Closing, Stryve retired various debt facilities for an aggregate amount of approximately $11.1 million including principal and interest.

We are currently under a letter of intent to secure in excess of $20M in non-dilutive, committed borrowing capacity through a combination of facilities to augment our liquidity, as needed, through the execution of management's plan. The Company believes that cash from operations, our working capital, and our borrowing ability (given the lack of debt against our assets) will be sufficient to fund the Company’s cash requirements for at least the next twelve months from the date these financial statements are made available.

Cash Flows. The following tables show summary cash flows information for the six months ended June 30, 2022 and 2021.

 

 

Six Months
Ending

 

 

Six Months
Ending

 

 

 

June 30, 2022

 

 

June 30, 2021

 

 

 

(unaudited)

 

 

(unaudited)

 

(In thousands)

 

 

 

 

 

 

Net cash used in operating activities

 

$

(20,379

)

 

$

(15,443

)

Net cash used in investing activities

 

 

(1,992

)

 

 

(175

)

Net cash provided by financing activities

 

 

25,165

 

 

 

16,227

 

Net increase in cash and cash equivalents

 

$

2,794

 

 

$

609

 

Net Cash used in Operating Activities. Net cash used in operating activities was $225,391. increased $5.0 million from $15.4 million through the six months ended June 30, 2021 compared to $20.4 million through the six months ended June 30, 2022. This increase is primarily attributable to the increase in net losses paired with an investment in net working capital during the six months ended June 30, 2022 ,as compared to the prior year period.

Net income of $308,767 was affected by interest earned on marketable securities heldCash used in Investing Activities. Net cash used in investing activities increased from $0.2 million in the Trust Account of $413,855, an unrealized gain on marketable securities held in our Trust Account of $50 and changes in operating assets and liabilities, which used $120,253 of cash for operating activities.

We intendsix months ended June 30, 2021, to use substantially all of the funds held$2.0 million in the Trust Account, including any amountssix months ended June 30, 2022, representing interest earned ona $1.8 million increase when comparing the Trust Account (less taxes payable) to complete our initial Business Combination.same period year over year. We may withdraw interest from the Trust Account to pay franchiseanticipate increased investment in manufacturing and income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

Following the Initial Public Offering, we entered into a letter agreement with a member of our board of directors that provides for a success fee to be paid to such director upon consummation of a Business Combination with a target business introduced to us by such director in an amount equal to 0.6% of the total consideration paid by us in the transaction, subject to certain minimum and maximum amounts set forth in the agreement.

In addition, we entered into several letter agreements with unaffiliated third parties that provide for a success fee to be paid to each such third party upon consummation of a Business Combination with a target business introduced to us by such third party in amounts ranging from 0.75% to 1% of the total consideration paid by us in the transaction, subject to certain minimum and maximum amounts set forth in the various agreements.

We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.

We do not believe we will need to raise additional fundsfulfillment assets moving forward, in order to ensure we have adequate run rate capacities to meet the expenditures requiredpotential demand for operating our business priorproducts.

Net Cash provided by Financing Activities. Net cash provided by financing activities generated $9.0 million more cash for the Company in the six months ended June 30, 2022 compared to our initial Business Combination. However, if our estimatesthe comparable period a year ago. In the first half of 2022, we generated cash from financing activities of $25.2 million which included approximately $32.3 million in net proceeds from the January Offering offset by approximately $6.8 million of cash used to retire debt in the period.

30


Debt and credit facilities. The information below represents an overview of the costsCompany’s debt and prior credit facilities. The Company’s outstanding indebtedness as of identifyingJune 30, 2022 ,and December 31, 2021 is as follows:

 

 

As of
June 30,

 

 

As of
December 31,

 

 

 

2022

 

 

2021

 

Long term debt

 

$

158

 

 

$

1,567

 

Short term debt

 

 

 

 

 

2,000

 

Line of credit (Note 5)

 

 

 

 

 

3,500

 

Total notes payable

 

 

158

 

 

 

7,067

 

Less: current portion

 

 

(122

)

 

 

(3,447

)

Less: line of credit

 

 

 

 

 

(3,500

)

Total notes payable, net of current portion

 

$

36

 

 

$

120

 

Future minimum principal payments on the notes payable as of June 30, 2022, are as follows:

2022 (for the remainder of)

 

$

60,180

 

2023

 

 

72,118

 

2024

 

 

18,255

 

2025

 

 

7,299

 

2026

 

 

 

 

 

$

157,852

 

On January 28, 2022, we paid off approximately $6.8 million of outstanding principal and interest owed to Origin.

Certain Factors Affecting Our Performance

Stryve’s management believes that the Company’s future performance will depend on many factors, including the following:

Ability to Expand Distribution in both Online and Traditional Retail Channels. Stryve is currently growing its consumer base through paid and organic means both online as well as by expanding its presence in a target business, undertaking in-depth due diligencevariety of physical retail distribution channels. Online consumer acquisitions typically occur through the Company’s portfolio of DTC e-commerce websites and negotiating an initial Business CombinationAmazon.com. The Company’s online consumer acquisition program includes paid and unpaid social media, search, and display media. Stryve’s products are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeemalso sold through a significantgrowing number of our public shares upon completiontraditional retail channels where the Company has an opportunity to acquire new consumers. Traditional retail channels include grocery chains, natural food outlets, club stores, convenience stores, and drug stores, all either direct or through distribution partners.

Ability to Acquire and Retain Consumers at a Reasonable Cost. Stryve’s management believes an ability to consistently acquire and retain consumers at a reasonable cost relative to projected life-time value will be a key factor affecting future performance. To accomplish this goal, Stryve intends to strategically allocate advertising spend between online and offline channels favoring digital media, as well as emphasizing more targeted and measurable “direct response” digital marketing spend with advertising focused on increasing consumer awareness and driving trial of our Business Combination,products. Further, we acknowledge that changes to third-party algorithms that may be utilized directly, or indirectly, by Stryve in its advertising efforts may impact the effectiveness of Stryve's advertising which case we may issue additional securitiesincrease its overall cost to acquire and retain consumers.

Ability to Drive Repeat Usage of Our Products. Stryve accrues substantial economic value from repeat consumers who consistently purchase its products either online or incur debt in connection with such Business Combination. If we are unable to complete our initial Business Combination because we do not have sufficient funds available to us, wetraditional retail. The pace of Stryve’s growth rate will be forcedaffected by the repeat usage dynamics of existing and newly acquired customers. The Company utilizes a number of methods to cease operationsdrive repeat behavior including intelligent e-mail and liquidatetext campaigns, targeted digital media, and subscribe and save incentives.

Ability to Expand Gross Margins. Stryve’s overall profitability will be impacted by its ability to expand gross margins through effective sourcing of raw materials, managing production yields and drying times, controlling labor and shipping costs, as well as spreading other production-related costs over greater manufacturing volumes. Additionally, Stryve's ability to expand gross margins will be influenced by its revenue channel and customer mix as well as by Stryve's ability to pass price increases to its customers.

Ability to Expand Operating Margins. The Company’s ability to expand operating margins will be impacted by its ability to effectively manage its fixed and variable operating expenses as net sales increase.

31


Ability to Manage Supply Chain and Expand Production In-line with Demand. Stryve’s ability to grow and meet future demand will be affected by its ability to effectively plan for and source inventory from a variety of suppliers located inside and outside the trust account.United States. Additionally, efficiently scaling production capacity ahead of growth in net sales will be critical to the Company’s ability to meet future demand without disruption.

 

Off-balance sheet financing arrangementsAbility to Optimize Key Components of Working Capital. Stryve’s ability to reduce cash burn in the near-term and eventually generate positive cash flow will be partially impacted by the Company’s ability to effectively manage the key components of working capital which have a direct impact on the cash conversion cycle.

 

Seasonality. Because Stryve is so early in its lifecycle of growth, it is difficult to discern the exact magnitude of seasonality affecting its business. Any evidence of seasonality is not clearly discernable from the Company’s historical growth. However, understanding potential trends in seasonality will be key in Stryve’s management of its expenses, liquidity, and working capital.

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements as of March 31, 2019.June 30, 2022. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

16

Contractual obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term.

Critical Accounting PoliciesEstimates

The preparationOur management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements which have been prepared in accordance with GAAP. In preparing our financial statements, we make estimates, assumptions, and related disclosures in conformityjudgments that can have a significant impact on our reported revenue, results of operations, and comprehensive net income or loss, as well as on the value of certain assets and liabilities on our balance sheet during, and as of, the reporting periods. These estimates, assumptions, and judgments are necessary and are made based on our historical experience, market trends and on other assumptions and factors that we believe to be reasonable under the circumstances because future events and their effects on our results of operations and value of our assets cannot be determined with accounting principles generally acceptedcertainty. These estimates may change as new events occur or additional information is obtained. We may periodically be faced with uncertainties, the outcomes of which are not within our control and may not be known for a prolonged period of time. Because the use of estimates is inherent in the United States of Americafinancial reporting process, actual results could differ from those estimates or assumptions.

The critical accounting estimates, assumptions, and judgments that we believe have the most significant impact on our consolidated financial statements are described below. Our significant accounting policies are more fully described in Note 3 to our consolidated financial statements.

Accounts Receivable and Allowance for Doubtful Accounts, Returns, and Deductions. Accounts receivable are customer obligations due under normal trade terms. The Company records accounts receivable at their net realizable value, which requires management to make estimates and assumptions that affectestimate the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the datecollectability of the Company’s receivables. Judgment is required in assessing the realization of these receivables, including the credit worthiness of each counterparty and the related aging of past due balances. Management provides for an allowance for doubtful accounts equal to the estimated uncollectable amounts, in addition to a general provision based on historical experience. Management provides for the customer accommodations based upon a general provision of 11% percentage of sales in addition to known deductions. The estimates are based on collection experience and a review of trade accounts. As of June 30, 2022 and December 31, 2021, the allowance for doubtful accounts and returns and deductions totaled $1,350,080 and $1,236,497, respectively. Total bad debt expense for the three months ended three months ended June 30, 2022 and 2021 was $288,623 and $262,888, respectively.

 

 

As of June 30,

 

 

As of December 31,

 

(In thousands)

 

2022

 

 

2021

 

 

2021

 

 

2020

 

Beginning balance

 

$

1,236

 

 

$

1,603

 

 

$

1,603

 

 

$

688

 

Provisions

 

 

456

 

 

 

254

 

 

$

1,154

 

 

$

915

 

Write-offs/ reversals

 

 

(474

)

 

 

(559

)

 

$

(1,521

)

 

$

 

Ending balance

 

$

1,218

 

 

$

1,298

 

 

$

1,236

 

 

$

1,603

 

32


Reporting Unit Analysis

The Company presents a single segment for purposes of financial reporting and prepared its consolidated financial statements upon that basis. The Company considered ASC 350-20-35-35 related to reporting unit determination and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:aggregation of components into one reporting unit.

The economic characteristics considered were whether:

Ordinary shares subject to redemption

We account for our ordinary shares subject to possible conversion in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Ordinary shares subject to mandatory redemption are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control1) The nature of the holderproducts and services are similar

2) The type of class of customer for products and services are similar

3) The methods used to distribute the products or subjectprovide the services are similar

4) The manner in which an entity operates and the nature of those operations is similar

Currently, the Company has one reporting unit due to redemption upon the occurrencesimilarity of uncertain events not solely within our control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. Our ordinary shares feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, ordinary shares subject to possible redemption are presented at redemption value as temporary equity, outside ofits components when evaluated against the shareholders’ equity section of our balance sheet.aforementioned economic characteristics.

Net loss per ordinary share

We apply the two-class method in calculating earnings per share. Ordinary shares subject to possible redemption which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net loss per ordinary share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. Our net income is adjusted for the portion of income that is attributable to ordinary shares subject to redemption, as these shares only participate in the earnings of the Trust Account and not our income or losses.

Recent accounting pronouncements

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Stryve’s future income, cash flows and fair values relevant to financial instruments are dependent upon prevalent market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates.

FollowingConcentration of credit risk. The balance sheet items that potentially subject the consummationCompany to concentrations of credit risk are primarily cash, accounts receivable, and accounts payable. The Company continuously evaluates the Offering,credit worthiness of its customers’ financial condition and generally does not require collateral. The Company maintains cash balances in bank accounts that may, at times, exceed Federal Deposit Insurance Corporation (“FDIC”) limits of $250,000 per institution. The Company incurred no losses from such accounts and management considers the net proceedsrisk of loss to be minimal.

As of and for the Offering, including amountssix months ended June 30, 2022, customer and vendor concentrations in the Trust Account,excess of 10% consolidated sales, purchases accounts receivable, and accounts payable are as follows:

 

 

Sales

 

Purchases

 

Accounts
Receivable

 

Accounts
Payable

Customer A

 

46%

 

 

22%

 

Customer B

 

 

 

29%

 

Vendor A

 

 

12%

 

 

Vendor B

 

 

 

 

13%

Interest rate risk. Stryve is subject to interest rate risk in connection with borrowing based on a variable interest rate. Derivative financial instruments, such as interest rate swap agreements and interest rate cap agreements, are not currently but may be investedused for the purpose of managing fluctuating interest rate exposures that exist from Stryve’s variable rate debt obligations that are expected to remain outstanding. Interest rate changes do not affect the market value of such debt, but could impact the amount of Stryve’s interest payments, and accordingly, Stryve’s future earnings and cash flows, assuming other factors are held constant. Additionally, changes in U.S. government treasury bills, notesprevailing market interest rates may affect Stryve’s ability to refinance existing debt or bonds with a maturitysecure new debt financing. Notwithstanding the foregoing, management acknowledges that both foreign and domestic central bank actions as well as geopolitical uncertainty and conflict, such as Russia's recent invasion of 180 days or less or in certain money market funds that invest solely in US treasuries. Due toUkraine, may have unpredictable effects on the short-term nature of these investments, we believe there will be no associated materialCompany's exposure to interest rate risk.risk either directly or indirectly.

Foreign currency risk. Stryve is exposed to changes in currency rates as a result of its revenue generated in currencies other than U.S. dollars. Revenue and profit generated by international operations will increase or decrease compared to prior periods as a result of changes in foreign currency exchange rates. However, the operations that are impacted by foreign currency risk are less than 5% of Stryve’s net income (loss) for the six months ended June 30, 2022 and the 52-week period ended December 31, 2021 and therefore, the risk of this is insignificant. Notwithstanding the foregoing, management acknowledges that both foreign and domestic central bank actions as well as geopolitical uncertainty and conflict, such as Russia's recent invasion of Ukraine, may have unpredictable effects on the Company's exposure to foreign currency risk either directly or indirectly.

Raw material risk. Stryve’s profitability depends, among other things, on its ability to anticipate and react to raw material costs, primarily beef. The price of beef and other raw materials are subject to many factors beyond Stryve’s control, including general economic

33


conditions, inflation, processing labor shortages, cost of feed, demand, natural disasters, weather and other factors that may affect beef supply chain participants. Changes in the prices of beef and other raw materials have already negatively affected Stryve's results of operations, and any continued or further changes could have a material impact on Stryve’s business, financial condition and results of operations. Notwithstanding the foregoing, management acknowledges that both foreign and domestic central bank actions as well as geopolitical uncertainty and conflict, such as Russia’s recent invasion of Ukraine, may have unpredictable effects on the Company's exposure to raw material commodity risks.

Inflation risk. Inflation may impact Stryve’s revenue and cost of services and products, Stryve believes the effects of inflation, if any, on its business, financial condition and results of operations have been material to date which management hopes to alleviate through mitigating strategies. However, there can be no assurance that any mitigation strategies management employs will be effective or that its business, financial condition and results of operations will not be materially impacted by continued inflation in the future. Notwithstanding the foregoing, management acknowledges that both foreign and domestic central bank actions as well as geopolitical uncertainty and conflict, such as Russia’s recent invasion of Ukraine, may have unpredictable effects on the Company's exposure to inflation risk either directly or indirectly.

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participationThe Company maintains a system of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended March 31, 2019, as such term is(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective at a reasonable assurance level and, accordingly, provided reasonable assuranceAct of 1934 (the "Exchange Act") designed to ensure that the information required to be disclosed by usthe Company in the reports that are filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.forms of the Securities and Exchange Commission, and is accumulated and communicated to our management, including our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), as appropriate, to allow timely decisions regarding required disclosure.

 

17

The Company's management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures under the Exchange Act as of June 30, 2022, the end of the period covered by this report on Form 10-Q. Based on such evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective.

Changes in Internal Control Overover Financial Reporting

 

There waswere no changechanges in our internal control over financial reporting, as identified in connection with the evaluation required by Rule 13a-15(d) and Rule 15d-15(d) of the Exchange Act, that occurred during the most recently completed fiscal quarter covered by this Quarterly Report on Form 10-Qthree months ended June 30, 2022 that hashave materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

34


 

PART II - OTHER INFORMATION

From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of its business. We are not currently a party to any material legal proceedings. Regardless of outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors and there can be no assurances that favorable outcomes will be obtained.

Item 1A. Risk Factors

There have been no material changes to the factors disclosed in Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

In July and August 2016, we issuedDuring the three-months ended June 30, 2022, 3,553,589 pre-funded warrants were exercised for an aggregate of 2,875,000 ordinary3.553.589 shares to our initial shareholders for an aggregate purchase price of $25,000, or approximately $0.009 per share,Class A common stock. The exercised pre-funded warrants do not affect the EPS calculation as pre-funded warrants are included in connection with our organization pursuant tothe weighted EPS calculation.

The securities were issued in reliance on the exemption from registration contained inprovided by Section 4(a)(2) ofunder the Securities Act of 1933, as amended, (“Securities Act”). As a result of the underwriters’ election to partially exercise their over-allotment option, 175,000 ordinary shares were forfeited, resulting in an aggregate of 2,700,000 ordinary shares issued and outstanding.and/or Regulation D promulgated thereunder.

Item 3. Defaults Upon Senior Securities.

On January 31, 2019, we consummated the Initial Public Offering of 10,800,000 units, including 800,000 units subject to the underwriters’ over-allotment option. Each unit consisted of one ordinary share, one right to receive one-tenth of one ordinary share, and one redeemable warrant, with each warrant entitling the holder to purchase one ordinary share at a price of $11.50 per share. The units were sold at an offering price of $10.00 per unit, generating gross proceeds of $108,000,000. Cowen and Company, LLC and Craig-Hallum Capital Group LLC acted as joint book-running managers of the offering. The securities sold in the Initial Public Offering were registered under the Securities Act on a registration statement on Form S-1 (No. 333-228530) which became effective under Section 8(a) of the Securities Act on January 24, 2019.None.

Item 4. Mine Safety Disclosures.

Simultaneously with the consummation of the Initial Public Offering, we consummated the Private Placement of 395,000 Private Units at a price of $10.00 per Private Unit, generating total proceeds of $3,950,000, to certain of our initial shareholders and the joint book-running managers of the Initial Public Offering and their respective affiliates. This issuance was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act. The Private Units are identical to the units sold in the Initial Public Offering, except that the warrants underlying the Private Units are non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial shareholders or their permitted transferees. The purchasers of the Private Units have agreed (A) to vote the ordinary shares underlying the Private Units in favor of any proposed Business Combination, (B) not to propose, or vote in favor of, an amendment to our amended and restated memorandum and articles of association with respect to our pre-Business Combination activities prior to the consummation of such a Business Combination unless we provide public shareholders with the opportunity to convert their public shares in connection with any such vote, (C) not to convert any ordinary shares underlying the Private Units for cash from the trust account in connection with a shareholder vote to approve a proposed initial Business Combination or a vote to amend the provisions of our amended and restated memorandum and articles of association relating to shareholders’ rights or pre-Business Combination activity, and (D) that the ordinary shares underlying the Private Units shall not participate in any liquidating distribution from the trust account upon winding up if a Business Combination is not consummated. The purchasers of Private Units have also agreed not to transfer, assign or sell any of the Private Units or underlying securities (except to certain permitted transferees) until the completion of our initial Business Combination.Not applicable.

Item 5. Other Information.

Transaction costs amounted to $3,204,451, consisting of $2,700,000 of underwriting fees and $504,451 of offering costs. In addition, $715,097 of cash was held outside of the trust account established in connection with the Initial Public Offering and was available for working capital purposes.None.

35


 

For a description of the use of the proceeds generated in our Initial Public Offering, see Part I, Item 2 of this Form 10-Q.

Item 6. Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

 

No.Description of Exhibit
31.1*

Exhibit No.

Document

31.1*

Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*

Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32**

32.1*

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS*

Inline XBRL Instance Document

101.CAL*

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.SCH*

Inline XBRL Taxonomy Extension Schema Document

101.DEF*

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*

Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE*

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

 

*Filed herewith.
**Furnished.

SIGNATURES* Furnished.

 

36


SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

STRYVE FOODS, INC. (f/k/a ANDINA ACQUISITION CORP. IIIIII)

Date: May 14, 2019August15, 2022

By:

/s/ Julio TorresChristopher Boever

Name:

Julio Torres

Christopher Boever

Title:

Chief Executive Officer and Director

(Principal Executive Officer)

By:

/s/ Mauricio OrellanaR. Alex Hawkins

Name:

Mauricio Orellana

R. Alex Hawkins

Title:

Chief Financial Officer

(Principal Financial and Accounting Officer)

37