UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number:
Laird Superfood, Inc.
(Exact Name of Registrant as Specified in its Charter)
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| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer |
(Address of principal executive offices, including Zip Code)
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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| Trading Symbol |
| Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.
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).
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 the 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 |
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| Accelerated filer |
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| Smaller reporting company |
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| Emerging growth company |
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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
As of November 4, 2024 the registrant had
Laird, our logo and other trademarks or service marks appearing in this report are the property of Laird Superfood, Inc. Trade names, trademarks and service marks of other companies appearing in this report are the property of their respective owners. Solely for convenience, the trademarks, service marks and trade names included in this report are without the ®, or other applicable symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names.
Unless the context otherwise indicates, references to “Laird Superfood,” “we,” “our,” “us” and the “Company” refer to Laird Superfood, Inc. and its subsidiary on a consolidated basis.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements convey our current expectations or forecasts of future events and are not guarantees of future performance. Such forward-looking statements are based on numerous assumptions that we believe are reasonable, but they are open to a wide range of uncertainties and business risks. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Any statements contained in this Quarterly Report on Form 10-Q that are not statements of historical fact may be forward-looking statements. When we use the words “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “seeks,” “should,” “will,” “would,” or the negative of these terms or other comparable terminology, we are identifying forward-looking statements.
Forward-looking statements involve risks and uncertainties, which may cause our actual results, performance, or achievements to be materially different from those expressed or implied by forward-looking statements. Key factors that could cause actual results to be different than expected or anticipated include, but are not limited to:
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our limited operating history and ability to become profitable; |
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our ability to manage our growth, including our human resource requirements; |
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our reliance on third parties for raw materials and production of our products; |
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our future capital resources and needs; |
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our ability to retain and grow our customer base; |
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our reliance on independent distributors for a substantial portion of our sales; |
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our ability to evaluate and measure our business, prospects, and performance metrics; |
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our ability to compete and succeed in a highly competitive and evolving industry; |
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the health of the premium organic and natural food industry as a whole; |
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risks related to our intellectual property rights and developing a strong brand; |
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our reliance on key personnel, including Laird Hamilton and Gabrielle Reece; |
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regulatory risks; |
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the risk of substantial dilution from future issuances of our equity securities; and |
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the other risks described herein and in our Annual Report on Form 10-K for the year ended December 31, 2023. |
In light of these risks, uncertainties and assumptions, you are cautioned not to place undue reliance on forward-looking statements, which are inherently unreliable and speak only as of the date of this Quarterly Report on Form 10-Q. You should read this Quarterly Report on Form 10-Q and the documents that we reference in this report with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. When considering forward-looking statements, you should keep in mind the cautionary statements in this report. We qualify all our forward-looking statements by these cautionary statements. We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
PART I - FINANCIAL INFORMATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(unaudited)
| As of | ||||||||
| September 30, 2024 | December 31, 2023 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash, cash equivalents, and restricted cash | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventory, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Noncurrent assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Related party license agreements | ||||||||
| Right-of-use assets | ||||||||
| Total noncurrent assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Related party liabilities | ||||||||
| Lease liabilities, current portion | ||||||||
| Total current liabilities | ||||||||
| Lease liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders’ equity | ||||||||
| Common stock, $ par value, shares authorized at September 30, 2024 and December 31, 2023; and issued and outstanding at September 30, 2024, respectively; and and issued and outstanding at December 31, 2023, respectively. | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended |
Nine Months Ended |
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| September 30, |
September 30, |
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| 2024 |
2023 |
2024 |
2023 |
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| Sales, net |
$ | $ | $ | $ | ||||||||||||
| Cost of goods sold |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Gross profit |
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| General and administrative |
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| Salaries, wages, and benefits |
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| Other general and administrative |
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| Total general and administrative expenses |
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| Sales and marketing |
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| Marketing and advertising |
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| Selling |
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| Related party marketing agreements |
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| Total sales and marketing expenses |
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| Total operating expenses |
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| Operating loss |
( |
) | ( |
) | ( |
) | ( |
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| Other income |
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| Loss before income taxes |
( |
) | ( |
) | ( |
) | ( |
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| Income tax expense |
( |
) | ( |
) | ( |
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| Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Net loss per share: |
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| Basic and diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Weighted-average shares of common stock outstanding used in computing net loss per share of common stock, basic and diluted |
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The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
| Stockholders’ Equity |
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| Common Stock |
Additional |
Accumulated |
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| Shares |
Amount |
Paid-in Capital |
Deficit |
Total |
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| Balances, January 1, 2024 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
| Stock-based compensation |
— | |||||||||||||||||||
| Common stock issuances, net of taxes |
( |
) | ( |
) | ||||||||||||||||
| Stock options exercised |
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| Net loss |
— | ( |
) | ( |
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| Balances, March 31, 2024 |
( |
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| Stock-based compensation |
— | |||||||||||||||||||
| Common stock issuances, net of taxes |
( |
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| Common stock issuance costs |
— | ( |
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| Stock options exercised |
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| Net loss |
— | ( |
) | ( |
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| Balances, June 30, 2024 |
( |
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| Stock-based compensation |
— | |||||||||||||||||||
| Common stock issuances, net of taxes |
( |
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| Common stock issuance costs |
— | |||||||||||||||||||
| Stock options exercised |
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| Net loss |
— | ( |
) | ( |
) | |||||||||||||||
| Balances, September 30, 2024 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
| Stockholders’ Equity |
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| Common Stock |
Additional |
Accumulated |
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| Shares |
Amount |
Paid-in Capital |
Deficit |
Total |
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| Balances, January 1, 2023 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
| Stock-based compensation |
— | |||||||||||||||||||
| Common stock issuances, net of taxes |
( |
) | ( |
) | ||||||||||||||||
| Net loss |
— | ( |
) | ( |
) | |||||||||||||||
| Balances, March 31, 2023 |
( |
) | ||||||||||||||||||
| Stock-based compensation |
— | |||||||||||||||||||
| Common stock issuances, net of taxes |
( |
) | ( |
) | ||||||||||||||||
| Net loss |
— | ( |
) | ( |
) | |||||||||||||||
| Balances, June 30, 2023 |
( |
) | ||||||||||||||||||
| Stock-based compensation |
— | |||||||||||||||||||
| Common stock issuances, net of taxes |
( |
) | ( |
) | ||||||||||||||||
| Net loss |
— | ( |
) | ( |
) | |||||||||||||||
| Balances, September 30, 2023 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine Months Ended September 30, |
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| 2024 |
2023 |
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| Cash flows from operating activities |
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| Net loss |
$ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash from operating activities: |
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| Depreciation and amortization |
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| Stock-based compensation |
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| Provision for inventory obsolescence |
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| Allowance for credit losses |
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| Noncash lease costs |
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| Other operating activities, net |
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| Changes in operating assets and liabilities: |
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| Accounts receivable |
( |
) | ( |
) | ||||
| Inventory |
( |
) | ( |
) | ||||
| Prepaid expenses and other current assets |
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| Operating lease liability |
( |
) | ( |
) | ||||
| Accounts payable |
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| Accrued expenses |
( |
) | ||||||
| Net cash from operating activities |
( |
) | ||||||
| Cash flows from investing activities |
( |
) | ||||||
| Cash flows from financing activities |
( |
) | ( |
) | ||||
| Net change in cash and cash equivalents |
( |
) | ||||||
| Cash, cash equivalents, and restricted cash, beginning of period |
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| Cash, cash equivalents, and restricted cash, end of period |
$ | $ | ||||||
| Supplemental disclosures of cash flow information |
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| Right-of-use assets obtained in exchange for operating lease liabilities |
$ | $ | ||||||
| Supplemental disclosures of non-cash investing activities |
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| Settlement recovery from business interruption claims included in other current assets |
$ | $ | ||||||
| Receivable from sale of assets held-for-sale included in other current assets at the end of the period |
$ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.
1. Summary of Significant Accounting Policies and Estimates
Financial Statement Preparation
The accompanying unaudited consolidated condensed financial statements (the "balance sheet(s)," "statement(s) of operations," "statement(s) of stockholders' equity," and "statement(s) of cash flows," collectively, the "financial statements") include the accounts of Laird Superfood, Inc., a Nevada corporation, and its wholly owned subsidiary, Picky Bars, LLC, (collectively, the “Company,” or “Laird Superfood”). In management's opinion, the financial statements contain all adjustments, which are normal recurring adjustments, necessary for a fair presentation of the Company's financial position and its results of operations, changes in stockholders’ equity, and cash flows for the interim periods presented in this report.
Segment information is prepared on the same basis that the Company's Chief Executive Officer, who is deemed to be the Company's Chief Operating Decision Maker, reviews financial information for operational decision-making purposes. The Company has
The financial statements and related financial information should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Form 10-K") filed with the Securities and Exchange Commission (the "SEC") on March 13, 2024. The financial information as of December 31, 2023 was derived from the audited consolidated financial statements and notes for the fiscal year ended December 31, 2023 included in Item 8 of the 2023 Form 10-K. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the footnotes and management's discussion and analysis of the consolidated financial statements in the 2023 Form 10-K. Certain information in footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") has been condensed or omitted pursuant to the rules and regulations of the SEC and the accounting standards for interim financial statements.
The Company's historical results are not necessarily indicative of future operating results, and the operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results expected for the fiscal year ending December 31, 2024 or any other period.
Recently Issued Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The expanded annual disclosures are effective for the year ending December 31, 2024, and the expanded interim disclosures are effective in 2025 and will be applied retrospectively to all prior periods presented. While the Company is currently evaluating the expanded disclosure requirements, the Company does not expect the adoption of these requirements to have a material impact on the Company's consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which requires, among other things, additional disclosures primarily related to the income tax rate reconciliation and income taxes paid. The expanded annual disclosures are effective for the year ending December 31, 2025. The Company is currently evaluating the impact that ASU 2023-09 will have on its consolidated financial statements and whether the Company will apply the standard prospectively or retrospectively.
Subsequent Events
Subsequent events are events or transactions that occur after the balance sheet date but before the financial statements are available to be issued. The Company has evaluated events and transactions subsequent to September 30, 2024 for potential recognition of disclosure in the financial statements and determined that there were no such subsequent events.
2. Cash, Cash Equivalents, and Restricted Cash
Cash, cash equivalents, and restricted cash are highly liquid instruments with an original maturity of three months or less when purchased. For the purposes of the statements of cash flows, the Company includes cash on hand, cash in clearing accounts, cash on deposit with financial institutions, investments with an original maturity of three months or less, and restricted cash in determining the total balance.
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets as of:
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash, cash equivalents, and restricted cash | $ | $ | ||||||
Amounts in restricted cash represent those that are required to be set aside by the following contractual agreements:
| ● | On December 3, 2020, the Company entered into an agreement with Danone Manifesto Ventures, PBC, which provided the Company $ |
| ● | Cash equivalents of $ |
Cash, cash equivalents, and restricted cash balances that exceeded the Federal Deposit Insurance Corporation (“FDIC”) and Securities Investor Protection Corporation ("SIPC") insurable limits as of September 30, 2024 and December 31, 2023 totaled $
3. Inventory
Inventory is stated at the lower of cost or net realizable value, or the value of consideration that can be received upon sale of said product, with approximate costs determined on a first-in first-out basis. Inventories consist primarily of raw materials, packaging, and finished goods, and inventory costs include co-packing fees, indirect labor, and allocable overhead. The following table presents the components of inventory, net of reserves, as of:
| September 30, |
December 31, |
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| 2024 |
2023 |
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| Raw materials and packaging |
$ | $ | ||||||
| Finished goods |
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| Total inventory, net |
$ | $ | ||||||
The Company periodically reviews the value of items in inventory and provides write-offs of inventory based on current market assessments, which are charged to cost of goods sold. For the three and nine months ended September 30, 2024, the Company recorded $
The following table presents the components of inventory reserves as of:
| September 30, |
December 31, |
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| 2024 |
2023 |
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| Estimated based on inventory turnover, quantities on hand, and expiration dates |
$ | $ | ||||||
| Discontinued product |
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| Product quarantined for product quality |
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| Total inventory reserves |
$ | $ | ||||||
As of September 30, 2024 and December 31, 2023, the Company had a total of $
4. Prepaid Expenses and Other Current Assets
The following table presents the components of prepaid expenses and other current assets, as of:
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Prepaid insurance | $ | $ | ||||||
| Prepaid inventory | ||||||||
| Prepaid subscriptions and license fees | ||||||||
| Deposits | ||||||||
| Other current assets | ||||||||
| Prepaid expenses and other current assets | $ | $ | ||||||
5. Revolving Lines of Credit
On September 2, 2021, the Company entered into a revolving line of credit with Wells Fargo Bank National Association in a principal amount not exceeding $
6. Property and Equipment
Property and Equipment
Property and equipment, net is comprised of the following as of:
| September 30, 2024 | December 31, 2023 | |||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Depreciation | Net Carrying Amount | Gross Carrying Amount | Accumulated Depreciation | Net Carrying Amount | |||||||||||||||||||
| Furniture and office equipment | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Leasehold improvements | ( | ) | ( | ) | ||||||||||||||||||||
| $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||||
Depreciation expense was $
Assets Classified as Held-for-Sale
In the fourth quarter of 2022, the Company entered into purchase agreements for the sale of production equipment for an aggregate sales price of $
7. Intangible Assets
Intangible assets are comprised of the following:
| September 30, 2024 | December 31, 2023 | |||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
| Trade names ( years) | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Recipes ( years) | ( | ) | ( | ) | ||||||||||||||||||||
| Social media agreements ( years) | ( | ) | ( | ) | ||||||||||||||||||||
| Software ( years) | ( | ) | ( | ) | ||||||||||||||||||||
| Definite-lived intangible assets | ( | ) | ( | ) | ||||||||||||||||||||
| Licensing agreements (indefinite) | — | — | ||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||
The weighted-average remaining useful life of all the Company’s intangible assets is
For the three and nine months ended September 30, 2024, amortization expense was $
Definite-lived intangible assets
Definite-lived intangible assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Examples include a significant adverse change in the extent or manner in which the Company uses the asset, or an unexpected change in financial performance. When evaluating definite-lived intangible assets for impairment, the Company compares the carrying value of the asset to the asset’s estimated undiscounted future cash flows. An impairment is indicated if the estimated future cash flows are less than the carrying value of the asset. The Company considered the above factors when assessing whether its' long-lived assets will be recoverable.
Based on the analysis of the qualitative factors above, management determined that there were no triggering events or impairment charges for the Company's definite-lived intangible assets in the three and nine months ended September 30, 2024 and 2023.
Intangible assets are amortized using the straight-line method over estimated useful lives ranging from to years. The estimated amortization expense for each of the next five years and thereafter is as follows:
| 2024 (excluding the nine months ended September 30, 2024) | $ | |||
| 2025 | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Thereafter | ||||
| $ |
Indefinite-lived intangible assets
On August 3, 2015, the Company entered into a license agreement with the Company’s co-founder Laird Hamilton (the “LH License”). The LH License stated Mr. Hamilton’s contribution to the Company was in the form of intellectual property, granting the Company the right to use Mr. Hamilton’s name and likeness. This contribution, which was reported on the balance sheets as of September 30, 2024 and December 31, 2023, was valued at $
On May 2, 2018, the Company entered into a license agreement with Gabrielle Reece, who is married to Mr. Hamilton (the “GR License”). Pursuant to the GR License, Ms. Reece granted the Company rights to her name, signature, voice, picture, image, likeness, and biographical information. This contribution, which is reported on the consolidated balance sheets as of September 30, 2024 and December 31, 2023, was valued at $
On November 19, 2018, the Company executed a License and Preservation Agreement (the "2018 License") with Mr. Hamilton and Ms. Reece which superseded the LH License and GR License. The agreement added specific terms related to non-competition and allowable usage of the property under the license. No additional monetary consideration was exchanged in connection with the agreement and the life of the agreement was set at
On May 26, 2020, the Company executed a License and Preservation Agreement with Mr. Hamilton, and Ms. Reece (the “2020 License”), which superseded the 2018 License. Among other modifications, the agreement (i) modified certain approval rights of Mr. Hamilton and Ms. Reece for use of their respective images, signatures, voices, and names (other than those owned by the Company), rights of publicity and common law and statutory rights to the foregoing in the Company’s products, (ii) modified certain assignment, change of control and indemnification provisions, and (iii) granted the Company the right to extend the term of the agreement for additional -year terms upon the expiration of the initial one-hundred year term. No additional monetary consideration was exchanged in connection with the agreement.
8. Leases
Lessee
The Company leased its warehouse space under a commercial lease with RII Lundgren Mill, LLC, dated March 1, 2018. The lease commenced March 1, 2018. The initial lease term was years, and the Company had the option to renew the lease for two additional five-year periods.
The Company executed a second lease for additional warehouse and office space under a commercial lease with RII Lundgren Mill, LLC, dated December 17, 2018. The lease commenced on July 1, 2019. However, for accounting purposes the lease commencement date was June 6, 2019. The initial lease term was years.
The Company executed a third lease for additional warehouse and office space under a commercial lease with RII Lundgren Mill, LLC, dated October 1, 2021. The lease commenced on October 1, 2021. The initial lease term was years.
The Company executed a lease cancellation agreement dated December 12, 2022. Under this agreement, the Company's three leases with RII Lundgren Mill, LLC, were terminated effective January 31, 2023, and the Company agreed to pay $
The Company assumed an operating lease in the acquisition of Picky Bars, LLC on May 3, 2021. The initial lease term is
The Company entered into a sublease agreement with Somatic Experiencing Trauma Institute with a commencement date of January 1, 2023, for a
The components of lease expense were as follows:
| Three Months Ended |
Nine Months Ended |
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| September 30, 2024 |
September 30, 2024 |
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| Operating leases |
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| Operating lease cost |
$ | $ | ||||||
| Variable lease cost |
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| Operating lease expense |
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| Short-term lease rent expense |
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| Total rent expense |
$ | $ | ||||||
| Three Months Ended |
Nine Months Ended |
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| September 30, 2023 |
September 30, 2023 |
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| Operating leases |
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| Operating lease cost |
$ | $ | ||||||
| Variable lease cost |
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| Operating lease expense |
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| Short-term lease rent expense |
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| Total rent expense |
$ | $ | ||||||
| Nine Months Ended |
Nine Months Ended |
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| September 30, 2024 |
September 30, 2023 |
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| Operating cash flows - operating leases |
$ | $ | ||||||
| Right-of-use assets obtained in exchange for operating lease liabilities |
$ | $ | ||||||
| September 30, 2024 |
September 30, 2023 |
|||||||
| Weighted-average remaining lease term – operating leases (in years) |
||||||||
| Weighted-average discount rate – operating leases |
% | % | ||||||
As of September 30, 2024, future minimum payments during the next five years and thereafter are as follows:
| 2024 (excluding the nine months ended September 30, 2024) |
$ | |||
| 2025 |
||||
| 2026 |
||||
| 2027 |
||||
| Total |
||||
| Less imputed interest |
( |
) | ||
| Operating lease liabilities |
$ |
Lessor
The Company executed a sublease agreement of the Picky Bars, LLC operating lease on March 1, 2022. The lease commenced on April 1, 2022. The initial sublease term expires on April 30, 2025. The sublease meets all of the criteria of an operating lease and is accordingly recognized straight line over the sublease term with a related sublease rental asset accounting for abatements and initial direct costs. The Company had $
For each period presented below, the components of rental income were as follow:
| Three Months Ended |
Nine Months Ended |
|||||||
| September 30, 2024 |
September 30, 2024 |
|||||||
| Operating leases |
||||||||
| Operating lease income |
$ | $ | ||||||
| Variable lease income |
||||||||
| Total rental income |
$ | $ | ||||||
| Three Months Ended |
Nine Months Ended |
|||||||
| September 30, 2023 |
September 30, 2023 |
|||||||
| Operating leases |
||||||||
| Operating lease income |
$ | $ | ||||||
| Variable lease income |
||||||||
| Total rental income |
$ | $ | ||||||
As of September 30, 2024, future minimum payments to be received during the next five years and thereafter, as applicable, are as follows:
| 2024 (excluding nine months ended September 30, 2024) |
$ | |||
| 2025 |
||||
| Total |
$ |
9. Income Taxes
The Company had a tax net loss for the three and nine months ended September 30, 2024 and 2023, and therefore has recorded no assessment of current federal income taxes. The Company is subject to minimum state taxes for various jurisdictions as well as subject to franchise taxes considered income taxes under Accounting Standards Codification ("ASC") 740, Income Taxes. A reconciliation of income tax expense at the federal statutory rate to the income tax provision at the Company's effective rate is as follows:
| Nine Months Ended | ||||||||
| September 30, 2024 | September 30, 2023 | |||||||
| Income tax benefit at statutory rates | $ | $ | ||||||
| Valuation allowance for deferred tax assets | ( | ) | ( | ) | ||||
| Stock-based compensation | ( | ) | ||||||
| Other income (expense), net | ( | ) | ||||||
| Reported income tax expense | $ | ( | ) | $ | ( | ) | ||
| Effective tax rate: | % | % | ||||||
The Company’s deferred tax assets consisted of the following as of:
| September 30, 2024 | December 31, 2023 | |||||||
| Deferred tax assets: | ||||||||
| Net operating loss carryforwards | $ | $ | ||||||
| Intangible assets | ||||||||
| Property and equipment | ||||||||
| Research and development credits | ||||||||
| Research and development | ||||||||
| Inventory | ||||||||
| Accrued expenses | ||||||||
| Right of use asset | ||||||||
| Bad debt allowance | ||||||||
| Charitable contributions | ||||||||
| Unexercised options | ||||||||
| Total deferred tax assets | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Total net deferred tax assets | $ | $ | ||||||
As of September 30, 2024, the Company did not provide a current or deferred U.S. federal income tax provision or benefit for any of the periods presented because the Company has reported cumulative losses since inception. The Company has recorded a provision for state income taxes and a corresponding current state income tax payable of approximately $
The following tables presents net operating losses ("NOLs") and other income tax carryforwards for the following periods:
| September 30, 2024 | December 31, 2023 | |||||||
| NOLs and other income tax carryforwards | ||||||||
| Federal NOLs pre-2017 (1) | $ | $ | ||||||
| Federal NOLs post-2018 (2) | ||||||||
| State NOLs (3) | ||||||||
| Total NOLs | ||||||||
| Credits (4) | ||||||||
| Other carryforwards (4) | ||||||||
| Total NOLs and other income tax carryforwards | $ | $ | ||||||
| (1) Can be carried forward for 20 years and which begin to expire in 2036 | ||||||||
| (2) Can be carried forward indefinitely. | ||||||||
| (3) Can be carried forward for between 15 and 20 years and which begin to expire in 2031. | ||||||||
| (4) Can be carried forward for between one and five years and which begin to expire in 2025. | ||||||||
The use of net operating losses may be subject to certain limitations, such as those triggered by ownership changes under Section 382 of the Internal Revenue Code. Because these provisions, the use of a portion of the Company's NOLs and tax credit carryforwards may be limited in future periods. Further, a portion of the carryforwards may expire before being applied to reduce future income tax liabilities.
The Company assesses its deferred tax assets and liabilities to determine if it is more likely than not, they will be realized; if not, a valuation allowance is required to be recorded. Management has determined it is more likely than not that the deferred tax assets would not be realized, thus a full valuation allowance was recorded against the deferred tax assets. The Company may reduce the valuation allowance against definite-lived deferred tax assets at such a time when it becomes more likely than not that the definite-lived deferred tax assets will be realized. The change in the valuation allowance for deferred tax assets and liabilities for the nine months ended September 30, 2024 and 2023 were net increases of $
GAAP requires management to evaluate and report information regarding its exposure to various tax positions taken by the Company. The Company has determined whether there are any tax positions that have met the recognition threshold and has measured the Company’s exposure to those tax positions. Management believes that the Company has adequately addressed all relevant tax positions and that there are no unrecorded tax liabilities.
The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. U.S. and state jurisdictions have statutes of limitations that generally range from 3 to 5 years.
10. Stock Incentive Plan
The Company adopted an incentive plan (as amended, the “2020 Omnibus Incentive Plan”) on September 22, 2020, as amended by the First Amendment to the 2020 Omnibus Incentive Plan, which was approved by the Company's stockholders on June 27, 2024, to provide for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units ("RSUs"), deferred stock units, unrestricted stock, dividend equivalent rights, performance shares, other performance-based awards, other equity-based awards, and cash bonus awards to Company employees, non-employee directors, and certain consultants and advisors. As of September 30, 2024, the Company has
Stock Options
The following tables summarize the Company’s stock option activity during the nine months ended September 30, 2024 and 2023:
| Weighted |
Weighted |
|||||||||||||||
| Average |
Average |
|||||||||||||||
| Options |
Exercise Price |
Contractual |
Aggregate |
|||||||||||||
| Activity |
(per share) |
Term (years) |
Intrinsic Value |
|||||||||||||
| Balance at January 1, 2024 |
$ | $ | ||||||||||||||
| Granted |
$ | — | $ | — | ||||||||||||
| Exercised/released (1) |
( |
) | $ | — | $ | — | ||||||||||
| Cancelled/forfeited |
( |
) | $ | — | $ | — | ||||||||||
| Balance at September 30, 2024 |
$ | $ | ||||||||||||||
| Exercisable at September 30, 2024 |
$ | $ | ||||||||||||||
| (1) Includes |
| Weighted |
Weighted |
|||||||||||||||
| Average |
Average |
|||||||||||||||
| Options |
Exercise Price |
Contractual |
Aggregate |
|||||||||||||
| Activity |
(per share) |
Term (years) |
Intrinsic Value |
|||||||||||||
| Balance at January 1, 2023 |
$ | $ | ||||||||||||||
| Granted |
$ | — | $ | — | ||||||||||||
| Exercised/released |
$ | — | $ | — | ||||||||||||
| Cancelled/forfeited |
( |
) | $ | — | $ | — | ||||||||||
| Balance at September 30, 2023 |
$ | $ | ||||||||||||||
| Exercisable at September 30, 2023 |
$ | $ | ||||||||||||||
The fair value of each stock option granted is estimated on the grant date using the Black-Scholes option valuation model. The assumptions used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect market conditions and the Company's historical experience.
Restricted Stock Units
The following tables summarize the Company’s RSU activity during the nine months ended September 30, 2024 and 2023:
| Weighted Average |
Weighted Average |
|||||||||||||||
| Grant Date Fair |
Remaining Vesting |
Aggregate |
||||||||||||||
| Number of RSUs |
Value (per share) |
Term (years) |
Fair Value |
|||||||||||||
| Balance at January 1, 2024 |
$ | $ | ||||||||||||||
| Granted |
$ | — | $ | — | ||||||||||||
| Exercised/released (1) |
( |
) | $ | — | $ | — | ||||||||||
| Cancelled/forfeited |
( |
) | $ | — | $ | — | ||||||||||
| Balance at September 30, 2024 |
$ | $ | ||||||||||||||
| (1) Includes |
| Weighted Average |
Weighted Average |
|||||||||||||||
| Grant Date Fair |
Remaining Vesting |
Aggregate |
||||||||||||||
| Number of RSUs |
Value (per share) |
Term (years) |
Fair Value |
|||||||||||||
| Balance at January 1, 2023 |
$ | $ | ||||||||||||||
| Granted |
$ | — | $ | — | ||||||||||||
| Exercised/released (1) |
( |
) | $ | — | $ | — | ||||||||||
| Cancelled/forfeited |
( |
) | $ | — | $ | — | ||||||||||
| Balance at September 30, 2023 |
$ | $ | ||||||||||||||
| (1) Includes |
The Company estimates the fair value of each RSU using the fair value of the Company’s common stock on the date of grant.
Market-Based Stock Units ("MSUs")
The following tables summarize the Company’s MSU activity during the nine months ended September 30, 2024 and 2023:
| Weighted Average |
Weighted Average |
|||||||||||||||
| Grant Date Fair |
Remaining Vesting |
Aggregate |
||||||||||||||
| Number of MSUs |
Value (per share) |
Term (years) |
Fair Value |
|||||||||||||
| Balance at January 1, 2024 |
$ | $ | ||||||||||||||
| Granted |
$ | — | — | $ | — | |||||||||||
| Exercised/released |
( |
) | $ | — | $ | — | ||||||||||
| Cancelled/forfeited |
( |
) | $ | — | $ | — | ||||||||||
| Balance at September 30, 2024 |
$ | — | $ | — | ||||||||||||
| Weighted Average |
Weighted Average |
|||||||||||||||
| Grant Date Fair |
Remaining Vesting |
Aggregate |
||||||||||||||
| Number of MSUs |
Value (per share) |
Term (years) |
Fair Value |
|||||||||||||
| Balance at January 1, 2023 |
$ | $ | ||||||||||||||
| Granted |
$ | — | $ | — | ||||||||||||
| Exercised/released |
— | $ | — | — | $ | — | ||||||||||
| Cancelled/forfeited |
( |
) | $ | — | $ | — | ||||||||||
| Balance at September 30, 2023 |
$ | $ | ||||||||||||||
The MSUs vest upon the 30-day weighted average stock price reaching or exceeding established targets within the requisite service period. The Company estimates the grant-date fair value of the MSUs using a Monte Carlo simulation which requires assumptions for expected volatility, risk-free rate of return and dividend yield. Compensation expense for these MSUs is recognized over the requisite service period regardless of whether the market conditions are satisfied.
Stock-Based Compensation
Stock-based compensation expense is recognized ratably over the requisite service period for all awards. The following tables summarize the Company’s stock-based compensation recorded as a result of applying the provisions of ASC Topic 718, Compensation - Stock Compensation to equity awards:
| Three Months Ended |
Nine Months Ended |
Unrecognized Compensation Cost Related to Non-Vested Awards as of |
Weighted-Average Remaining Vesting Period as of |
|||||||||||||
| September 30, 2024 |
September 30, 2024 |
September 30, 2024 |
September 30, 2024 (years) |
|||||||||||||
| Stock options |
$ | $ | $ | |||||||||||||
| RSUs |
||||||||||||||||
| MSUs |
— | |||||||||||||||
| Total stock-based compensation |
$ | $ | $ | |||||||||||||
| Cost of goods sold |
$ | $ | $ | |||||||||||||
| General and administrative |
||||||||||||||||
| Sales and marketing |
||||||||||||||||
| Total stock-based compensation |
$ | $ | $ | |||||||||||||
| Three Months Ended |
Nine Months Ended |
Unrecognized Compensation Cost Related to Non-Vested Awards as of |
Weighted-Average Remaining Vesting Period as of |
|||||||||||||
| September 30, 2023 |
September 30, 2023 |
December 31, 2023 |
December 31, 2023 (years) |
|||||||||||||
| Stock options |
$ | $ | $ | |||||||||||||
| RSUs |
||||||||||||||||
| MSUs |
( |
) | ||||||||||||||
| Total stock-based compensation |
$ | $ | $ | |||||||||||||
| Cost of goods sold |
$ | $ | $ | |||||||||||||
| General and administrative |
||||||||||||||||
| Sales and marketing |
||||||||||||||||
| Total stock-based compensation |
$ | $ | $ | |||||||||||||
11. Loss per Share
Basic loss per share is determined by dividing the net loss attributable to the Company's common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is similarly determined, except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if all dilutive potential common shares had been issued. Dilutive potential common shares consist of employee stock options, RSUs, and MSUs. The dilutive effect of employee stock options, RSUs, and MSUs by the Company are calculated using the treasury stock method. Basic earnings per share is reconciled to diluted earnings per share in the following table:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2024 |
2023 |
2024 |
2023 |
|||||||||||||
| Net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Weighted average shares outstanding - basic and diluted |
||||||||||||||||
| Basic and diluted: |
||||||||||||||||
| Net loss per share, basic and diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Common stock options, restricted stock awards, and market-based stock awards excluded due to anti-dilutive effect |
||||||||||||||||
12. Concentrations
The following table details the concentration of vendor accounts payable balances in excess of 10% of total accounts payable at each period:
| September 30, | December 31, | |||||||
| 2024 |
2023 |
|||||||
| Vendor A |
% | % | ||||||
| Vendor B |
% | % | ||||||
| Vendor C |
* | % | ||||||
| Vendor D |
% | * | ||||||
| Total |
% | % | ||||||
* Less than 10%.
The following table details the concentration of customer accounts receivable balances in excess of 10% of total trade accounts receivable at each period:
| September 30, | December 31, | |||||||
| 2024 |
2023 |
|||||||
| Customer A |
% | % | ||||||
| Customer B |
% | % | ||||||
| Total |
% | % | ||||||
The following table details the concentration of sales to specific customers in excess of 10% of total gross sales for each period and the accounts receivable balances from those customers at the end of each period:
| Gross Sales |
Accounts Receivable |
|||||||||||||||||||||||
| Three months ended September 30, |
Nine months ended September 30, |
As of September 30, |
||||||||||||||||||||||
| 2024 |
2023 |
2024 |
2023 |
2024 |
2023 |
|||||||||||||||||||
| Customer A |
% | % | % | % | $ | $ | ||||||||||||||||||
| Customer B |
% | % | % | % | ||||||||||||||||||||
| Customer C |
% | % | % | % | ||||||||||||||||||||
| Total |
% | % | % | % | $ | $ | ||||||||||||||||||
During the periods presented below, the Company purchased a substantial portion of raw materials, packaging, and tolling from certain key suppliers. The following table details the concentration of purchases from specific suppliers in excess of 10% of total purchases:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2024 |
2023 |
2024 |
2023 |
|||||||||||||
| Supplier A |
* | * | % | * | ||||||||||||
| Supplier B |
% | * | % | * | ||||||||||||
| Supplier C |
* | % | % | % | ||||||||||||
| Supplier D |
% | * | % | * | ||||||||||||
| Supplier E |
* | % | * | % | ||||||||||||
| Total |
% | % | % | % | ||||||||||||
* Less than 10%.
During the periods presented below, the Company purchased a substantial portion of raw materials and packaging originating from certain key geographical regions. The following table details the concentration of purchases from specific regions in excess of 10% of total purchases:
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
| 2024 |
2023 |
2024 |
2023 |
|||||||||||||
| Sri Lanka |
% | * | % | * | ||||||||||||
| Canada |
% | * | % | * | ||||||||||||
| Vietnam |
* | % | * | % | ||||||||||||
| Total |
% | % | % | % | ||||||||||||
* Less than 10%.
13. Related Parties
ASC Topic 850, Related Party Disclosures, requires that information about transactions with related parties that would influence decision making be disclosed so that users of the financial statements can evaluate their significance. The Company conducts business with suppliers and service providers who are also stockholders of the Company. From time to time, service providers are offered shares of common stock as compensation for their services. Shares provided as compensation are calculated based on the grant date fair value of the service provided. Additional material related party transactions are noted below.
License Agreements
On May 26, 2020, the Company executed the 2020 License, which superseded the 2018 License with both Mr. Hamilton and Ms. Reece. Among other modifications, the agreement (i) modified certain approval rights, (ii) modified certain assignment, change of control and indemnification provisions, and (iii) granted the Company the right to extend the term of the agreement for additional ten-year terms upon the expiration of the initial one-hundred-year term. No additional monetary consideration was exchanged in connection with the agreement. See additional discussion related to the 2020 License in Note 7 of the financial statements.
Marketing Agreements
On October 26, 2022, the Company executed an influencer agreement with Gabby Reece to provide certain marketing services for the Company for a term ending December 31, 2023, with an option to renew for one-year terms. In connection with these services, the Company recognized advertising expenses totaling $
14. Revenue Recognition
The Company’s primary source of revenue is sales of coffee creamers, hydration and beverage enhancing supplements, harvest snacks and other food items, and coffee, tea, and hot chocolate products. The Company recognizes revenue when control of the promised good is transferred to the customer and in amounts that the Company expects to collect. The timing of revenue recognition takes into consideration the various shipping terms applicable to the Company’s sales. Each delivery or shipment made to a customer is considered to satisfy a performance obligation. Performance obligations generally occur at a point in time and are satisfied when control of the goods passes to the customer. The Company is entitled to collect the sales price under normal credit terms. Additionally, the Company estimates the impact of certain common practices employed by it and other manufacturers of consumer products, such as scan-based trading, product rebate and other pricing allowances, product returns, trade promotions, sales broker commissions and slotting fees. These estimates are recorded at the end of each reporting period.
As reflected in the table below, in accordance with ASC Topic 606, Revenue from Contracts with Customers, the Company disaggregates net sales from contracts with customers based on the characteristics of the products sold:
| Three Months Ended September 30, | ||||||||||||||||
| 2024 | 2023 | |||||||||||||||
| $ | % of Total | $ | % of Total | |||||||||||||
| Coffee creamers | $ | % | $ | % | ||||||||||||
| Coffee, tea, and hot chocolate products | % | % | ||||||||||||||
| Hydration and beverage enhancing supplements | % | % | ||||||||||||||
| Harvest snacks and other food items | % | % | ||||||||||||||
| Other | % | % | ||||||||||||||
| Gross sales | % | % | ||||||||||||||
| Shipping income | % | % | ||||||||||||||
| Discounts and promotional activity | ( | ) | ( | )% | ( | ) | ( | )% | ||||||||
| Sales, net | $ | % | $ | % | ||||||||||||
| Nine Months Ended September 30, | ||||||||||||||||
| 2024 | 2023 | |||||||||||||||
| $ | % of Total | $ | % of Total | |||||||||||||
| Coffee creamers | $ | % | $ | % | ||||||||||||
| Coffee, tea, and hot chocolate products | % | % | ||||||||||||||
| Hydration and beverage enhancing supplements | % | % | ||||||||||||||
| Harvest snacks and other food items | % | % | ||||||||||||||
| Other | % | % | ||||||||||||||
| Gross sales | % | % | ||||||||||||||
| Shipping income | % | % | ||||||||||||||
| Discounts and promotional activity | ( | ) | ( | )% | ( | ) | ( | )% | ||||||||
| Sales, net | $ | % | $ | % | ||||||||||||
The Company generates revenue through two channels: e-commerce and wholesale, which is summarized below for the periods presented:
| Three Months Ended September 30, | ||||||||||||||||
| 2024 | 2023 | |||||||||||||||
| $ | % of Total | $ | % of Total | |||||||||||||
| E-commerce | $ | % | $ | % | ||||||||||||
| Wholesale | % | % | ||||||||||||||
| Sales, net | $ | % | $ | % | ||||||||||||
| Nine Months Ended September 30, | ||||||||||||||||
| 2024 | 2023 | |||||||||||||||
| $ | % of Total | $ | % of Total | |||||||||||||
| E-commerce | $ | % | $ | % | ||||||||||||
| Wholesale | % | % | ||||||||||||||
| Sales, net | $ | % | $ | % | ||||||||||||
Receivables from contracts with customers are included in accounts receivable. Contract liabilities include deferred revenue, customer deposits, rewards programs, and refund liabilities, and are included in accrued expenses. All contract liabilities as of December 31, 2023, were recognized in net sales for the nine months ended September 30, 2024. For the periods presented below, the balances of receivables from contracts with customers and contract liabilities were as follow:
| January 1, | December 31, | September 30, | ||||||||||
| 2023 | 2023 | 2024 | ||||||||||
| Accounts receivable, net | $ | $ | $ | |||||||||
| Contract liabilities | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
On May 7, 2024, the Company entered into an accounts receivable factoring agreement (the “Factoring Agreement”) with Alterna Capital Solutions LLC (the “Purchaser”). The Factoring Agreement allows the Company to access up to $
The Factoring Agreement has an initial term of
The Company has granted a security interest it's personal property to secure the payment and performance of all obligations under the Factoring Agreement. The Factoring Agreement includes customary provisions, including representations, warranties and covenants, indemnification, waiver of jury trial, and the exercise of remedies upon a breach or default.
Factored receivables due from the purchaser to the Company of $
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the financial condition and results of operations of Laird Superfood, Inc. (together with its wholly owned subsidiary on a consolidated basis, the "Company," "Laird Superfood," "our," "us," or "we") is a supplement to and should be read in conjunction with the unaudited consolidated condensed financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Form 10-K"). This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q and the section titled “Risk Factors” included herein and in the 2023 Form 10-K.
Overview
Laird Superfood creates highly differentiated, plant-based, and functional foods, many of which incorporate adaptogens which may support a variety of brain functions. The core pillars of the Laird Superfood platform are currently (i) Superfood Creamer coffee creamers, (ii) Hydrate hydration products and beverage enhancing supplements, (iii) Harvest snacks and other food items, and (iv) functional roasted and instant coffees, teas, and hot chocolate. Consumer preferences within the evolving food and beverage industry are shifting away from processed and sugar-laden food and beverage products, as well as those containing significant amounts of highly processed and artificial ingredients. Our long-term goal is to build the first scale-level and widely recognized brand that authentically focuses on natural ingredients, nutritional density, and functionality, which we believe will allow us to maximize penetration of a multi-billion-dollar opportunity in the grocery market. We generate revenue through two channels: e-commerce and wholesale.
Financial Highlights
Net sales were $11.8 million and $9.2 million, respectively, for the three months ended September 30, 2024 and 2023, representing 28% growth from the prior year period. For the nine months ended September 30, 2024 and 2023, net sales were $31.7 million and $25.0 million, respectively, representing 27% growth from the prior year period. E-commerce channel sales increased by 42% in the third quarter of 2024 and 41% in year-to-date ("YTD") 2024 compared to the same periods in 2023 despite significant, planned reductions in media spend. Sales through Amazon.com increased by 133% in the third quarter of 2024 ("Q3 2024") compared to the third quarter of 2023 ("Q3 2023"), and by 85% when comparing the 2024 and 2023 YTD periods, driven primarily by product availability and successful sales execution. Direct-to-Consumer ("DTC") sales, on lairdsuperfood.com and pickybars.com, increased by 10% in Q3 2024 compared to the prior year period, and increased by 22% comparing YTD periods, driven by strong performance in both subscription and repeat customers, increasing average order value, and improved discount rates due to strategic shifts in promotional spend. Wholesale channel net sales increased by 13% in Q3 2024 compared to Q3 2023, and increased 11% comparing YTD periods, driven by distribution expansion in grocery as well as velocity growth and more efficient promotional spend across.
Our e-commerce channel is comprised of sales through DTC (lairdsuperfood.com and pickybars.com) and Amazon.com. For the three and nine months ended September 30, 2024, the e-commerce channel made up 58% and 59% of our net sales, respectively, compared to 53% and 54% for the three and nine months ended September 30, 2023, respectively. Amazon.com accounted for 43% and 40% of our e-commerce channel sales for the three and nine months ended September 30, 2024, respectively, as compared to 26% and 30% for the corresponding prior year periods. Lairdsuperfood.com and pickybars.com are platforms that provide an authentic brand experience for our consumers that drive engagement through educational content and provide feedback for future product development. We view our proprietary database of customers ordering directly from our website as a strategic asset, as it enhances our ability to develop a long-term relationship with these customers. We believe the content on our websites allows Laird Superfood to educate consumers on the benefits of our products and ingredients while providing a positive customer experience. We believe this experience leads to higher retention rates among repeat users and subscribers, as evidenced by repeat users and subscribers accounting for over three quarters of DTC sales for the three and nine months ended September 30, 2024 and 2023.
For the three and nine months ended September 30, 2024, the wholesale channel made up 42% and 41% of our net sales, respectively, compared to 47% and 46% for the three and nine months ended September 30, 2023, respectively. Laird Superfood products are sold through a diverse set of retail channels, including conventional, natural, and specialty grocery stores, and club stores.
Recent Developments
Entry into an Accounts Receivable Factoring Agreement
On May 7, 2024, we entered into an accounts receivable factoring agreement (the “Factoring Agreement”) with Alterna Capital Solutions LLC (the “Purchaser”). The Factoring Agreement allows us to access up to $2 million on a revolving basis. The upfront purchase price for factored accounts is up to 70% of their face value, with the remainder payable to us upon collection by the Purchaser. The proceeds, if any, will be used to fund general working capital needs. Pursuant to the Factoring Agreement, we will pay fees, including a funds usage fee (prime rate + 1.5%, minimum 10% per annum) and a collateral monitoring fee (0.05% per month). The Factoring Agreement provides that the Purchaser can require repurchase of uncollectable or ineligible accounts.
The Factoring Agreement has an initial term of 12 months and will automatically renew annually, unless terminated in accordance with the Factoring Agreement. We may terminate the Factoring Agreement at any time upon 30 days prior written notice and payment to Purchaser of an early termination fee equal to 2.0% of the Maximum Amount (as defined in the Factoring Agreement) if terminated during the first 12 months and 1.0% of the Maximum Amount during the subsequent terms.
Pursuant to the Factoring Agreement, we granted a security interest to the Purchaser in our personal property to secure the payment and performance of all obligations under the Factoring Agreement.
Our Strategy and Key Factors Affecting our Performance
We believe that our future performance will depend on many factors, including the following:
Ability to Grow Our Customer Base in both E-commerce and Traditional Wholesale Distribution Channels
We are currently seeking to grow our customer base through both paid and organic online channels, as well as by expanding our presence in a variety of physical wholesale distribution channels. E-commerce customer acquisitions typically occur at our websites, lairdsuperfood.com and pickybars.com, and through Amazon.com. Our e-commerce customer acquisition program includes paid and unpaid social media, search, display, and traditional media. Our products are also sold through a growing number of wholesale channels. Wholesale customers include grocery chains, natural food outlets, club stores, drug stores, and food service customers including coffee shops, gyms, restaurants, hospitality venues and corporate dining services, among others. Customer acquisition in physical wholesale channels depends on, among other things, paid promotions through retailers, display, and traditional media.
Ability to Manage Co-Manufacturer and Third-Party Logistics Relationships
All of our production and logistics is handled by third parties, and our performance is and will continue to be highly dependent on the ability of these partners to produce and deliver our products in a timely manner and to our standards and at a reasonable cost.
Ability to Acquire and Retain Customers at a Reasonable Cost
We believe an ability to consistently acquire and retain customers at a reasonable cost relative to projected lifetime value will be a key factor affecting future performance. To accomplish this goal, we intend to balance advertising spend between online and offline channels, as well as balancing more targeted and measurable “direct response” marketing spend with advertising focused on increasing our long-term brand recognition, where success attribution is less directly measurable on a near-term basis.
Ability to Drive Repeat Usage of Our Products
We accrue substantial economic value from repeat customers who consistently re-order our products. The pace of our growth will be affected by the repeat usage dynamics of existing and newly acquired customers.
Ability to Expand Our Product Line
Our goal is to expand our product line over time to increase our growth opportunity and reduce product-specific risks through diversification into multiple products, each designed around daily use. Our pace of growth will be partially affected by the cadence and magnitude of new product launches over time.
Ability to Expand Gross Margins
Our overall profitability will be impacted by our ability to expand gross margins through effective sourcing of raw materials, controlling labor and shipping costs, controlling the impacts of inflationary market factors, as well as managing co-packer relationships.
Ability to Expand Operating Margins
Our ability to expand operating margins will be impacted by our ability to cover fixed general and administrative costs and variable sales and marketing costs with higher revenues and gross profit dollars.
Ability to Manage Our Global Supply Chain
Our ability to grow and meet future demand will be affected by our ability to properly plan for and source inventory from a variety of suppliers located inside and outside the United States. We may encounter difficulties in sourcing products.
Ability to Optimize Key Components of Working Capital
Our ability to reduce cash burn in the near-term and eventually generate positive cash flow will be partially impacted by our ability to effectively manage all the key working capital components that could influence our cash conversion cycle.
Components of Results of Operations
Sales, net
We sell our products indirectly to consumers through a broad set of physical wholesale channels. We also derive revenue from the sale of our products directly to consumers through our direct websites, as well as third-party online channels.
Cost of Goods Sold
Cost of goods sold includes the cost of raw materials and packaging, and overhead including inbound and outbound freight, direct and indirect labor, third-party logistics fees, warehouse storage costs, and other miscellaneous costs related to manufacturing and distributing our products.
Operating Expenses
Our operating expenses consist of general and administrative expenses and sales and marketing expenses.
Income Taxes
Due to our history of operating losses, we do not expect any significant income tax expenses or benefits for the foreseeable future.
Results of Operations
Comparison of the three months ended September 30, 2024 (“Q3 2024”) and September 30, 2023 (“Q3 2023”)
The following tables summarize our results of operations for the periods indicated, as well as the monetary and percentage increase or decrease between those periods:
| Three Months Ended September 30, |
$ |
% |
||||||||||||||
| 2024 |
2023 |
Change |
Change |
|||||||||||||
| Sales, net |
$ | 11,776,346 | $ | 9,179,781 | $ | 2,596,565 | 28 | % | ||||||||
| Cost of goods sold |
(6,712,214 | ) | (6,332,624 | ) | (379,590 | ) | 6 | % | ||||||||
| Gross profit |
5,064,132 | 2,847,157 | 2,216,975 | 78 | % | |||||||||||
| Gross margin |
43.0 | % | 31.0 | % | ||||||||||||
| General and administrative |
2,624,694 | 2,248,336 | 376,358 | 17 | % | |||||||||||
| Sales and marketing |
2,708,028 | 3,385,890 | (677,862 | ) | (20 | )% | ||||||||||
| Total operating expenses |
5,332,722 | 5,634,226 | (301,504 | ) | (5 | )% | ||||||||||
| Operating loss |
(268,590 | ) | (2,787,069 | ) | 2,518,479 | (90 | )% | |||||||||
| Other income |
107,891 | 132,185 | (24,294 | ) | (18 | )% | ||||||||||
| Loss before income taxes |
(160,699 | ) | (2,654,884 | ) | 2,494,185 | (94 | )% | |||||||||
| Income tax expense |
(5,421 | ) | — | (5,421 | ) | 100 | % | |||||||||
| Net loss |
$ | (166,120 | ) | $ | (2,654,884 | ) | $ | 2,488,764 | (94 | )% | ||||||
| Three Months Ended September 30, |
$ |
% |
||||||||||||||
| 2024 |
2023 |
Change |
Change |
|||||||||||||
| Sales, net |
$ | 11,776,346 | $ | 9,179,781 | $ | 2,596,565 | 28 | % | ||||||||
The increase in net sales was primarily driven by a 42% increase in sales in the e-commerce channel through both Amazon.com and DTC platforms. DTC grew despite planned reductions in media spend and was fueled by a growing subscription and repeat customer base as well as higher average order value ("AOV"). Amazon grew 133% as compared to reduced sales volume in the 2023 period from out-of-stocks associated with a quality event. Further, the wholesale channel also grew by 13% in Q3 2024 compared to Q3 2023 driven primarily by velocity improvements and distribution gains in grocery stores, and more efficient promotional spend.
| Three Months Ended September 30, |
$ |
% |
||||||||||||||
| 2024 |
2023 |
Change |
Change |
|||||||||||||
| Cost of goods sold |
$ | (6,712,214 | ) | $ | (6,332,624 | ) | $ | (379,590 | ) | 6 | % | |||||
The increase in cost of goods sold is driven by growth in sales volume, offset by lower product costs due to a shift to the direct procurement of key raw materials, as well as recoveries on costs previously incurred in connection with the quality event we experienced in 2023 as part of the settlement we reached with a supplier.
| Three Months Ended September 30, |
$ |
% |
||||||||||||||
| 2024 |
2023 |
Change |
Change |
|||||||||||||
| Gross profit |
$ | 5,064,132 | $ | 2,847,157 | $ | 2,216,975 | 78 | % | ||||||||
Gross margin improved to 43.0% in Q3 2024 from 31.0% in the prior year period. The increase in gross profit and expansion of gross margin is driven primarily by lower ingredient costs due to a shift to the direct procurement of key raw materials, settlement recoveries, and a reduction in trade discounts due to a pullback in inefficient trade spend.
| Three Months Ended September 30, |
$ |
% |
||||||||||||||
| 2024 |
2023 |
Change |
Change |
|||||||||||||
| Operating expenses |
||||||||||||||||
| General and administrative |
$ | 2,624,694 | $ | 2,248,336 | $ | 376,358 | 17 | % | ||||||||
| Sales and marketing |
2,708,028 | 3,385,890 | (677,862 | ) | (20 | )% | ||||||||||
| Total operating expenses |
$ | 5,332,722 | $ | 5,634,226 | $ | (301,504 | ) | (5 | )% | |||||||
The increase in general and administrative expenses was primarily driven by personnel costs as well as by professional and accounting fees.
The decrease in sales and marketing expenses was driven by planned reductions in marketing and advertising spend as we improve our media efficiency.
| Three Months Ended September 30, |
$ |
% |
||||||||||||||
| 2024 |
2023 |
Change |
Change |
|||||||||||||
| Other income |
$ | 107,891 | $ | 132,185 | $ | (24,294 | ) | (18 | )% | |||||||
Other income is composed of interest income and expense, rental income, and other non-operating gains and losses. The decrease in other income was driven by decreases in dividend income on money market funds as the amounts carried in those accounts decreased.
Comparison of the nine months ended September 30, 2024 ("YTD 2024”) and September 30, 2023 (“YTD 2023”)
The following tables summarize our results of operations for the periods indicated, as well as the monetary and percentage increase or decrease between those periods:
| Nine Months Ended September 30, |
$ |
% |
||||||||||||||
| 2024 |
2023 |
Change |
Change |
|||||||||||||
| Sales, net |
$ | 31,688,938 | $ | 25,016,810 | $ | 6,672,128 | 27 | % | ||||||||
| Cost of goods sold |
(18,483,424 | ) | (18,419,709 | ) | (63,715 | ) | 0 | % | ||||||||
| Gross profit |
13,205,514 | 6,597,101 | 6,608,413 | 100 | % | |||||||||||
| Gross margin |
41.7 | % | 26.4 | % | ||||||||||||
| General and administrative |
6,930,614 | 8,029,147 | (1,098,533 | ) | (14 | )% | ||||||||||
| Sales and marketing |
7,970,673 | 9,313,110 | (1,342,437 | ) | (14 | )% | ||||||||||
| Total operating expenses |
14,901,287 | 17,342,257 | (2,440,970 | ) | (14 | )% | ||||||||||
| Operating loss |
(1,695,773 | ) | (10,745,156 | ) | 9,049,383 | (84 | )% | |||||||||
| Other income |
321,957 | 452,288 | (130,331 | ) | (29 | )% | ||||||||||
| Loss before income taxes |
(1,373,816 | ) | (10,292,868 | ) | 8,919,052 | (87 | )% | |||||||||
| Income tax expense |
(47,902 | ) | (13,172 | ) | (34,730 | ) | 264 | % | ||||||||
| Net loss |
$ | (1,421,718 | ) | $ | (10,306,040 | ) | $ | 8,884,322 | (86 | )% | ||||||
| Nine Months Ended September 30, |
$ |
% |
||||||||||||||
| 2024 |
2023 |
Change |
Change |
|||||||||||||
| Sales, net |
$ | 31,688,938 | $ | 25,016,810 | $ | 6,672,128 | 27 | % | ||||||||
The increase in net sales was primarily driven by 41% growth in the e-commerce channel sales through both the Amazon.com and DTC platforms. DTC grew despite reductions in media spend and was fueled by a growing subscriber and repeat customer base as well as higher AOV. Amazon grew 85% as compared to reduced sales volume in 2023 from out-of-stocks associated with a quality event. Further, the wholesale channel also grew by 11% in the nine months ended September 30, 2024 as compared to the corresponding 2023 period, driven primarily by distribution expansion, growing velocities, and more efficient promotional spend.
| Nine Months Ended September 30, |
$ |
% |
||||||||||||||
| 2024 |
2023 |
Change |
Change |
|||||||||||||
| Cost of goods sold |
$ | (18,483,424 | ) | $ | (18,419,709 | ) | $ | (63,715 | ) | 0 | % | |||||
Cost of goods sold were nearly flat despite a period of 27% sales growth, which was offset by the full benefits realization of the transition to a variable cost third-party co-manufacturing business model, lower ingredient costs due to a shift to the direct procurement of key raw materials, and recoveries of costs previously incurred in connection with the quality event experienced in 2023 as part of a settlement with a supplier.
| Nine Months Ended September 30, |
$ |
% |
||||||||||||||
| 2024 |
2023 |
Change |
Change |
|||||||||||||
| Gross profit |
$ | 13,205,514 | $ | 6,597,101 | $ | 6,608,413 | 100 | % | ||||||||
Gross margin improved to 41.7% in YTD 2024 from 26.4% in YTD 2023. The increase in gross profit and gross margin expansion reflects increased net sales, due to both increased sales volume and a reduction in trade discounts due to improved promotional efficiencies compared to elevated trade spend in the prior year associated with the quality event that occurred in 2023, lower ingredient costs, settlement recoveries, and the full benefit realization of outsourcing.
| Nine Months Ended September 30, |
$ |
% |
||||||||||||||
| 2024 |
2023 |
Change |
Change |
|||||||||||||
| Operating expenses |
||||||||||||||||
| General and administrative |
$ | 6,930,614 | $ | 8,029,147 | $ | (1,098,533 | ) | (14 | )% | |||||||
| Sales and marketing |
7,970,673 | 9,313,110 | (1,342,437 | ) | (14 | )% | ||||||||||
| Total operating expenses |
$ | 14,901,287 | $ | 17,342,257 | $ | (2,440,970 | ) | (14 | )% | |||||||
The decrease in general and administrative expenses was primarily driven by lower personnel costs and broad, strategic reductions in spending.
The decrease in sales and marketing expenses was driven by planned reductions in marketing and advertising spend.
| Nine Months Ended September 30, |
$ |
% |
||||||||||||||
| 2024 |
2023 |
Change |
Change |
|||||||||||||
| Other income |
$ | 321,957 | $ | 452,288 | $ | (130,331 | ) | (29 | )% | |||||||
Other income is composed of interest income and expense, rental income, and other non-operating gains and losses. The decrease in other income was driven by decreases in dividend income on money market funds as the amounts carried in those accounts decrease.
Cash Flows
The following table shows a summary of our cash flows for the nine months ended September 30, 2024 and 2023:
| Nine Months Ended September 30, |
||||||||
| 2024 |
2023 |
|||||||
| Cash flows from operating activities |
$ | 526,258 | $ | (10,929,145 | ) | |||
| Cash flows from investing activities |
(19,178 | ) | 567,459 | |||||
| Cash flows from financing activities |
(12,495 | ) | (23,066 | ) | ||||
| Net change in cash, cash equivalents, and restricted cash |
$ | 494,585 | $ | (10,384,752 | ) | |||
Cash provided by operating activities for YTD 2024 was enabled by our greatly improved margins and reduced selling, marketing, and administrative expenses resulting from the business model transformation we undertook over the last twelve months, as well as efficient working capital management.
Cash used in investing activities for YTD 2024 consists of purchases of office equipment. The cash generated in in the prior year period was due to the sale of property and equipment related to the Sisters, Oregon exit.
Cash used in financing activities consists of common stock related costs, offset in part by stock option exercises.
Liquidity and Capital Resources
As of September 30, 2024, we had an accumulated deficit of $107.7 million, which includes operating losses of $1.7 million and $10.7 million for YTD 2024 and YTD 2023, respectively. While we expect to incur additional operating losses as we continue efforts to grow our business, the strategic business transformation that we have undertaken over the last two years has become evident in our significant gross margin expansion, optimized investments in trade and marketing, lower selling, general, and administrative spending, and reduced cash burn. We will continue to seek opportunities to optimize spending, expand gross margins, and free up cash flow through efficient working capital management. We have historically financed our operations and capital expenditures through private placements of our common stock, our initial public offering ("IPO"), lines of credit, and term loans. Our historical uses of cash have primarily consisted of cash used in operating activities and working capital needs.
As of September 30, 2024 and December 31, 2023, we had $8.2 million and $7.7 million, respectively, of cash-on-hand, and total net working capital of $11.8 million and $12.0 million for the same periods. As of September 30, 2024, we had access to up to $1.2 million of advances under the Factoring Agreement, of which none had been utilized. We have no significant unused sources of liquid assets outside of our working capital.
Additionally, on September 15, 2023, we entered into a settlement agreement (the "2023 Settlement Agreement") with a supplier (the "Supplier") to recover losses incurred in connection with the product quality issue with coconut milk powder that we experienced in 2023, pursuant to which the Supplier was obligated to, among other things, pay the Company $50,000 and provide a discount to the Company on the sale of future products of up to $950,000. On February 27, 2024, we filed a complaint against the Supplier in the District Court of Boulder, Colorado alleging that the Supplier breached the 2023 Settlement Agreement by failing to deliver acceptable coconut milk powder (the "Litigation"). Both parties dispute liability. As a result of the Litigation, on July 30, 2024, the Company entered into an additional settlement agreement with the Supplier, pursuant to which, among other things, the Supplier agreed to remit cash payment to us of approximately $500,000. As of September 30, 2024, $285,000 was receivable from the Supplier and was included in prepaid and other current assets on the balance sheets.
Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support research and development efforts, the continued expansion of sales and marketing activities, the enhancement of our product platforms, and the introduction of new products, and acquisition activity. Recent and expected working and other capital requirements, in addition to the above matters, also include the items described below:
| ● |
We have lease arrangements for corporate office space. As of September 30, 2024, we had fixed lease payment obligations of $0.3 million, with $0.1 million payable within 12 months. |
| ● |
As of September 30, 2024, $5.4 million of current liabilities were accrued related to short-term operating activities and personnel costs, excluding the aforementioned current lease liabilities. |
| ● |
Marketing and advertising expenditures, including related party advertising costs, were $5.2 million in YTD 2024 and $6.7 million in YTD 2023. We expect to continue to invest in these activities as part of the strategic expansion of sales volume, however, we have made strategic shifts to reduce and improve the efficacy of future customer acquisition costs. |
Based on our current business plans, we believe that our existing cash balances, including our anticipated cash flow from operations, will be sufficient to finance our operations and meet our foreseeable cash requirements through at least the eighteen months following the date of this report. In the future, we may raise funds by issuing debt or equity securities, or securities convertible into or exchangeable for our common stock. Such financing and other potential financing may result in dilution to stockholders, reduction in the market price of our common stock, imposition of debt covenants and repayment obligations, or other restrictions that may adversely affect our business. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. However, we may be unable to raise additional funds or enter into such other arrangements when needed, on favorable terms, or at all.
Segment Information
We have one operating segment and one reportable segment. Our Chief Executive Officer reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and our management's discussion and analysis of our financial condition and operating results require our management to make judgments, assumptions and estimates that affect the amounts reported. Note 1, “Summary of Significant Accounting Policies” of the Notes to the Unaudited Consolidated Condensed Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8 of the 2023 Form 10-K describe the significant accounting policies and methods used in the preparation of our financial statements. There have been no material changes to our critical accounting estimates since the 2023 Form 10-K.
Emerging Growth Company Status
As a company with less than $1.235 billion in annual gross revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:
| ● |
a requirement to have only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations; |
| ● |
an exemption from the auditor attestation requirement on the effectiveness of our internal control over financial reporting; |
| ● |
reduced disclosure about our executive compensation arrangements; and |
| ● |
no non-binding advisory votes on executive compensation or golden parachute arrangements. |
We may take advantage of these provisions until the end of the fiscal year in which the fifth anniversary of our IPO occurs, or such earlier time when we no longer qualify as an emerging growth company. We will cease to be an emerging growth company on the earlier of (1) the last day of the fiscal year (a) in which we have more than $1.235 billion in annual gross revenue or (b) in which we have more than $700 million in market value of our capital stock held by non-affiliates, or (2) the date on which we issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all these reduced burdens.
In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption from new or revised accounting standards, and therefore we will not be subject to the same requirements to adopt new or revised accounting standards as other public companies that are not emerging growth companies.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Not Applicable.
Item 4. Controls and Procedures.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act 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 Company management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), to allow timely decisions regarding required disclosure.
Our management, with the participation of our CEO and CFO, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of September 30, 2024, the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2024.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
From time to time, we may be involved in claims and legal actions that arise in the ordinary course of business. To our knowledge, there are no material pending legal proceedings to which we are a party or of which any of our property is the subject.
There were no material changes to the Risk Factors disclosed in "Item 1A. Risk Factors" in the 2023 Form 10-K during the three and nine months ended September 30, 2024. This Quarterly Report on Form 10-Q should be read in conjunction with the risk factors previously described in the Company's 2023 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
During the three months ended September 30, 2024, of the Company's directors or executive officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified, or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.
The documents set forth below are filed herewith or incorporated herein by reference to the location indicated.
| Incorporated by Reference |
||||||||||||
| Exhibit Number |
Description |
Form |
File No. |
Exhibit |
Filing Date |
Filed / |
||||||
| 3.1 | Articles of Incorporation of Laird Superfood, Inc. | 8-K | 001-39537 | 3.1 | 1/2/2024 | |||||||
| 3.2 | Bylaws of Laird Superfood, Inc. | 8-K | 001-39537 | 3.2 | 1/2/2024 | |||||||
| 31.1 |
Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a). |
* |
||||||||||
| 31.2 |
Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a). |
* |
||||||||||
| 32.1 |
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350. |
** |
||||||||||
| 32.2 |
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350. |
** |
||||||||||
| 101.INS |
Inline XBRL Instance Document |
* |
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| 101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
* |
||||||||||
| 101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
* |
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| 101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
* |
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| 101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document |
* |
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| 101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
* |
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| 104 |
Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) |
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* Filed herewith.
** The certifications attached as Exhibit 32.1 and 32.2 are furnished and not deemed filed with the SEC and are not incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Laird Superfood, Inc. |
|
| (Registrant) |
|
| Date: November 6, 2024 |
/s/ Jason Vieth |
| Jason Vieth |
|
| President and Chief Executive Officer |
|
| (Principal Executive Officer and duly authorized officer) | |
| Date: November 6, 2024 |
/s/ Anya Hamill |
| Anya Hamill |
|
| Chief Financial Officer |
|
| (Principal Financial and Accounting Officer) |