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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
10-Q
(Mark One)
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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For the quarterly period ended
June 30,
2022
OR
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
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For the transition period from ________ to ________
Commission File Number:
001-41055
Winc, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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45-2988960
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( State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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1751 Berkeley St, Studio 3
Santa Monica,
CA
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90404
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(Address of principal executive offices)
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(Zip Code)
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(800)
297-1760
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed
since last report)
Securities registered pursuant to Section 12(b) of the
Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange on which registered
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Common Stock, $0.0001 par value per share
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WBEV
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NYSE American LLC
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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. ☒
Yes
☐ 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
☐ 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 the
definitions of "large accelerated filer," "accelerated filer,"
"smaller reporting company," and "emerging growth company" in Rule
12b-2 of the Exchange Act.
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☒
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Smaller reporting company
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☒
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Emerging growth company
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☒
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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 ☒ No
As of August 8, 2022, the registrant had
13,281,140
shares of common stock, $0.0001 par value per share,
outstanding.
TABLE OF CONTENTS
i
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q, or this Quarterly Report,
contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. We intend such
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in Section 27A
of the Securities Act of 1933, as amended, or the Securities Act,
and Section 21E of the Securities Exchange Act of 1934, as amended,
or the Exchange Act. The words "believe," "may," "will,"
"estimate," "continue," "anticipate," "intend," "expect," "could,"
"would," "project," "plan," "potentially," "preliminary," "likely,"
and similar expressions are intended to identify forward-looking
statements. All statements contained in this Quarterly Report other
than statements of historical fact, are forward-looking statements,
including statements regarding:
•
our ability to obtain adequate financing and continue as a going
concern;
•
our total addressable market, future results of operations,
financial position, research and development costs, capital
requirements and needs for additional financing;
•
our expectations about market trends and our ability to capitalize
on these trends;
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our business strategy and plans;
•
the impact on our business, financial condition and results of
operation from the ongoing and global COVID-19 pandemic, or any
other pandemic, epidemic or outbreak of an infectious disease in
the United States or worldwide;
•
our ability to effectively and efficiently develop new brands of
wines and introduce products in beverage categories beyond
wine;
•
our ability to efficiently attract and retain
consumers;
•
our ability to increase awareness of our portfolio of brands in
order to successfully compete with other companies;
•
our ability to maintain and improve our technology platform
supporting the Winc digital platform;
•
our ability to maintain and expand our relationships with wholesale
distributors and retailers;
•
our ability to continue to operate in a heavily regulated
environment;
•
our ability to establish and maintain intellectual property
protection or avoid claims of infringement; and
•
our ability to hire and retain qualified personnel.
We caution you that the foregoing list may not contain all of the
forward-looking statements made in this Quarterly
Report.
We have based the forward-looking statements contained in this
Quarterly Report on our current expectations and projections about
future events and trends that we believe may affect our financial
condition, results of operations, business strategy, short-term and
long-term business operations and objectives and financial needs.
These forward-looking statements are subject to a number of known
and unknown risks, uncertainties and assumptions, including those
described under the sections in this Quarterly Report entitled
"Risk Factors" and "Management’s Discussion and Analysis of
Financial Condition and Results of Operations" and elsewhere in
this Quarterly Report, as may be updated in our other periodic
filings with the SEC. Moreover, we operate in a very competitive
and rapidly changing environment. New risks emerge from time to
time. It is not possible for our management to predict all risks,
nor can we assess the impact of all factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements we may make. In light of these risks,
uncertainties, and assumptions, the future events and trends
discussed in this Quarterly Report may not occur, and actual
results could differ materially and adversely from those
anticipated or implied in the forward-looking
statements.
Any forward-looking statements made herein speak only as of the
date of this Quarterly Report. Except as required by applicable
law, we undertake no obligation to update any of these
forward-looking statements for any reason after the date of this
Quarterly Report or to conform these statements to actual results
or revised expectations. Any forward-looking statements do not
reflect the potential impact of any future acquisitions, mergers,
dispositions, restructurings, joint ventures, partnerships or
investments we may make.
These forward-looking statements are based upon information
available to us as of the date of this Quarterly Report, and while
we believe such information forms a reasonable basis for such
statements, such information may be limited or incomplete, and
statements should not be read to indicate that we have conducted an
exhaustive inquiry into, or review of, all potentially available
relevant information. These statements are inherently uncertain and
investors are cautioned not to unduly rely upon these
statements.
2
AVAILABLE INFORMATION
All reports we file with the SEC are available for download free of
charge via the Electronic Data Gathering Analysis and Retrieval
(EDGAR) System on the SEC’s website at
www.sec.gov.
We also make electronic copies of our reports available for
download, free of charge, through our investor relations website
at
ir.winc.com
as soon as reasonably practicable after filing such material with
the SEC.
We may announce material business and financial information to our
investors using our investor relations website at
ir.winc.com.
We therefore encourage investors and others interested in Winc to
review the information that we make available on our website, in
addition to following our filings with the SEC, webcasts, press
releases and conference calls. Information contained on our website
is not part of this Quarterly Report.
GLOSSARY
Unless the context otherwise requires, all references in this
Quarterly Report to "we," "us," "our," "Winc" or the "Company"
refer to Winc, Inc. and its condensed consolidated
subsidiaries.
As used in this Quarterly Report, unless the context otherwise
requires, reference to:
•
"ABC" means the California Department of Alcoholic Beverage
Control;
•
"Alcoholic Beverages" means wine, spirits and beer and the
"Alcoholic Beverages market" or "Alcoholic Beverages industry"
means the wine, spirits and beer market in the United
States;
•
"AOV" means average order value, which, for any period, represents
the sum of DTC net revenues divided by the total orders placed in
that period;
•
"BoC Credit Agreement" means that certain credit agreement, by and
between the Company, BWSC, LLC and Pacific Mercantile Bank, dated
as of December 15, 2020, as amended;
•
"BoC Line of Credit" means the revolving line of credit under the
BoC Credit Agreement;
•
"CCPA" means the California Consumer Privacy Act of
2018;
•
"core brands" refers to the following brands: (i) "Summer Water" or
"SW;" (ii) "Wonders" (formerly "Wonderful Wine Company" or "WWC");
(iii) "Lost Poet" or "LP;" (iv) "Folly of the Beast" or "Folly;"
and (v) "Chop Shop" or "Chop;"
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"CPG" means consumer product goods;
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"CPRA" means the California Privacy Rights Act of
2020;
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"DTC" means direct-to-consumer;
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"DTSA" means the Defend Trade Secrets Act of
2016;
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"EPA" means the U.S. Environmental Protection
Agency;
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"FDA" means the U.S. Food and Drug
Administration;
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"FTC" means the Federal Trade Commission;
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"GDPR" means the European Union General Data Protection
Regulation;
3
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"IPO" means our initial public offering, which closed on November
15, 2021;
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"JOBS Act" means the Jumpstart Our Business Startups Act of
2012;
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"Multiplier" means Multiplier Capital II,
LP;
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"Multiplier LSA" means that certain loan and security agreement,
dated as of December 29, 2017, by and among the Company and
Multiplier, as amended;
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"Multiplier Term Loan" means the term loan under the Multiplier
LSA;
•
"OSHA" means the Occupational Safety and Health
Administration;
•
"Sarbanes-Oxley Act" means the Sarbanes-Oxley Act of
2002;
•
"SEC" means the U.S. Securities and Exchange
Commission;
•
"TTB" means the Alcohol and Tobacco Tax and Trade Bureau;
and
•
"USDA" means the U.S. Department of Agriculture.
4
Risk Factor Summary
Our business is subject to numerous risks and uncertainties,
including those described in Part II. Item 1A. "Risk Factors" in
this Quarterly Report. You should carefully consider these risks
and uncertainties when investing in our common stock. The principal
risks and uncertainties affecting our business include the
following:
•
We have a history of net losses, and we may not be able to achieve
or maintain profitability in the future.
•
Our need to secure additional funds for our liquidity needs and our
existing debt obligations raise substantial doubt about our ability
to continue as a going concern.
•
Our ability to raise capital in the future may be limited, we may
be unable to secure funds for our liquidity needs, and our failure
to raise capital when needed could prevent us from
growing.
•
Our historical growth may not be indicative of our future growth,
and we may not be able to effectively manage our growth or evaluate
our future prospects. If we fail to effectively manage our future
growth or evaluate our future prospects, our business could be
adversely affected.
•
Failure to introduce and effectively market new brands may
adversely affect our ability to continue to
grow.
•
Our success is dependent upon our ability to expand our existing
consumer relationships and acquire new consumers, and we must
expend significant resources to maintain consumer awareness of our
brand, build brand loyalty and generate interest in our brands. If
we fail to cost-effectively acquire new consumers or retain our
existing consumers, our business could be adversely
affected.
•
We may not be able to compete successfully in our highly
competitive market.
•
Our ability to maintain our competitive position is largely
dependent on the services of our senior management and other key
personnel.
•
The consumer reception of the launch and expansion of our brands is
inherently uncertain and may present new and unknown risks and
challenges in production and marketing that we may fail to manage
optimally and which could have a materially adverse effect on our
business, financial condition, results of operations and
prospects.
•
Our business may be adversely affected if we are unable to provide
our consumers with a technology platform that is able to respond
and adapt to rapid changes in technology, if our platform
encounters disruptions in usability or if our consumers find our
platform less usable or attractive than those of our
competitors.
•
Our business performance by segment may be subject to significant
variability.
•
Our business, including our costs and supply chain, is subject to
risks associated with sourcing, production, warehousing,
distribution and logistics, and the loss of any of our key
suppliers or logistical service providers could negatively impact
our business.
•
The occurrence of an environmental catastrophe could disrupt our
business. Climate change, wildfires, disease, pests, weather
conditions and problems with water supply could also have adverse
effects on our business.
•
If we are unable to obtain adequate supplies of premium grapes and
bulk wine from third-party grape growers and bulk wine suppliers,
the quantity or quality of our annual production of wine could be
adversely affected, causing a negative impact on our business,
financial condition, results of operations and
prospects.
•
Our wholesale channel operations and revenues depend largely on
independent wholesale distributors whose performance and continuity
are not assured.
5
•
Consumer demand for Alcoholic Beverages could decline for a variety
of reasons. Reduced demand could harm our results of operations,
financial condition and prospects.
•
As a producer of Alcoholic Beverages, we are regularly the subject
of regulatory reviews, proceedings and audits by governmental
entities, any of which could result in an adverse ruling or
conclusion, and which could have a material adverse effect on our
business, financial condition, results of operations and future
prospects.
6
PART I—FINANCIAL INFORMATION
Winc, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
|
2022
|
|
|
2021
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash
|
|
$
|
4,914
|
|
|
$
|
4,883
|
|
|
Accounts receivable, net of allowance for doubtful accounts and
sales returns of $0.2 million
and $0.2 million
as of June 30, 2022 and December 31, 2021, respectively
|
|
|
4,414
|
|
|
|
2,575
|
|
|
Inventory
|
|
|
26,443
|
|
|
|
23,888
|
|
|
Prepaid expenses and other current assets
|
|
|
5,362
|
|
|
|
6,887
|
|
|
Total current assets
|
|
|
41,133
|
|
|
|
38,233
|
|
|
Property and equipment, net
|
|
|
570
|
|
|
|
496
|
|
|
Right of use lease assets
|
|
|
4,401
|
|
|
|
—
|
|
|
Intangible assets, net
|
|
|
11,443
|
|
|
|
11,537
|
|
|
Other assets
|
|
|
127
|
|
|
|
122
|
|
|
Total assets
|
|
$
|
57,674
|
|
|
$
|
50,388
|
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
3,568
|
|
|
$
|
4,040
|
|
|
Accrued liabilities
|
|
|
6,332
|
|
|
|
6,762
|
|
|
Contract liabilities
|
|
|
13,577
|
|
|
|
12,127
|
|
|
Early exercise stock option liability, current
|
|
|
678
|
|
|
|
922
|
|
|
Lease liabilities, current
|
|
|
1,378
|
|
|
|
—
|
|
|
Line of credit
|
|
|
6,500
|
|
|
|
—
|
|
|
Short-term advances
|
|
|
2,620
|
|
|
|
—
|
|
|
Total current liabilities
|
|
|
34,653
|
|
|
|
23,851
|
|
|
Lease liabilities, non-current
|
|
|
3,200
|
|
|
|
—
|
|
|
Early exercise stock option liability, non-current
|
|
|
524
|
|
|
|
839
|
|
|
Other liabilities
|
|
|
2,078
|
|
|
|
2,216
|
|
|
Total liabilities
|
|
|
40,455
|
|
|
|
26,906
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
Common stock, par value $0.0001 per
share;
300,000,000 shares
authorized as of June 30, 2022 and December 31, 2021,
13,280,402 and
13,214,612,
shares issued and outstanding as of June 30, 2022 and December 31,
2021, respectively
|
|
|
1
|
|
|
|
2
|
|
|
Preferred stock, par value $0.0001 per
share;
10,000,000 shares
authorized as of June 30, 2022 and December 31, 2021,
zero shares
issued and outstanding as of June 30, 2022 and December 31,
2021
|
|
|
—
|
|
|
|
—
|
|
|
Treasury stock (168,750 shares
outstanding as of June 30, 2022 and December 31, 2021)
|
|
|
(7
|
)
|
|
|
(7
|
)
|
|
Additional paid-in capital
|
|
|
97,169
|
|
|
|
95,207
|
|
|
Accumulated deficit
|
|
|
(79,944
|
)
|
|
|
(71,720
|
)
|
|
Total stockholders’ equity
|
|
|
17,219
|
|
|
|
23,482
|
|
|
Total liabilities and stockholders’ equity
|
|
$
|
57,674
|
|
|
$
|
50,388
|
|
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
7
Winc, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
2022
|
|
|
2021
|
|
|
2022
|
|
|
2021
|
|
|
Net revenues
|
|
$
|
17,642
|
|
|
$
|
17,651
|
|
|
$
|
36,099
|
|
|
$
|
35,116
|
|
|
Cost of revenues
|
|
|
9,966
|
|
|
|
10,327
|
|
|
|
20,980
|
|
|
|
19,953
|
|
|
Gross profit
|
|
|
7,676
|
|
|
|
7,324
|
|
|
|
15,119
|
|
|
|
15,163
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing
|
|
|
3,115
|
|
|
|
3,874
|
|
|
|
5,759
|
|
|
|
7,979
|
|
|
Personnel
|
|
|
3,778
|
|
|
|
2,971
|
|
|
|
7,986
|
|
|
|
5,387
|
|
|
General and administrative
|
|
|
4,847
|
|
|
|
3,415
|
|
|
|
9,680
|
|
|
|
5,567
|
|
|
Production and operation
|
|
|
42
|
|
|
|
20
|
|
|
|
192
|
|
|
|
54
|
|
|
Creative development
|
|
|
29
|
|
|
|
115
|
|
|
|
109
|
|
|
|
156
|
|
|
Total operating expenses
|
|
|
11,811
|
|
|
|
10,395
|
|
|
|
23,726
|
|
|
|
19,143
|
|
|
Loss from operations
|
|
|
(4,135
|
)
|
|
|
(3,071
|
)
|
|
|
(8,607
|
)
|
|
|
(3,980
|
)
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(123
|
)
|
|
|
(281
|
)
|
|
|
(146
|
)
|
|
|
(421
|
)
|
|
Expense from change in fair value of warrant liabilities
|
|
|
—
|
|
|
|
(872
|
)
|
|
|
—
|
|
|
|
(893
|
)
|
|
Other income, net
|
|
|
279
|
|
|
|
312
|
|
|
|
549
|
|
|
|
608
|
|
|
Gain on debt forgiveness from Paycheck Protection Program note
payable
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,364
|
|
|
Total other income (expense), net
|
|
|
156
|
|
|
|
(841
|
)
|
|
|
403
|
|
|
|
658
|
|
|
Loss before provision for income taxes
|
|
|
(3,979
|
)
|
|
|
(3,912
|
)
|
|
|
(8,204
|
)
|
|
|
(3,322
|
)
|
|
Income tax expense
|
|
|
4
|
|
|
|
18
|
|
|
|
20
|
|
|
|
15
|
|
|
Net loss
|
|
$
|
(3,983
|
)
|
|
$
|
(3,930
|
)
|
|
$
|
(8,224
|
)
|
|
$
|
(3,337
|
)
|
|
Net loss per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
$
|
(0.32
|
)
|
|
$
|
(2.06
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
(1.90
|
)
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
|
12,481,397
|
|
|
|
1,909,564
|
|
|
|
12,446,187
|
|
|
|
1,754,958
|
|
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
8
Winc, Inc.
Condensed Consolidated Statements of Redeemable Convertible
Preferred Stock and Stockholders’ Equity (Deficit)
(Unaudited)
(In thousands, except share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable Convertible
Preferred Stock
|
|
|
Common Stock
|
|
|
Treasury Stock
|
|
|
Additional Paid-in
|
|
|
Accumulated
|
|
|
Total
Stockholders’
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Deficit
|
|
|
Equity
|
|
|
Balance at December 31, 2021
|
|
|
—
|
|
|
$
|
—
|
|
|
|
13,214,612
|
|
|
$
|
2
|
|
|
|
168,750
|
|
|
$
|
(7
|
)
|
|
$
|
95,207
|
|
|
$
|
(71,720
|
)
|
|
$
|
23,482
|
|
|
Stock-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
822
|
|
|
|
—
|
|
|
|
822
|
|
|
Vesting of early exercised stock options
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
329
|
|
|
|
—
|
|
|
|
329
|
|
|
Stock cancellation
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,234
|
)
|
|
|
(1
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(39
|
)
|
|
|
—
|
|
|
|
(40
|
)
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,241
|
)
|
|
|
(4,241
|
)
|
|
Balance at March 31, 2022
|
|
|
—
|
|
|
|
—
|
|
|
|
13,213,378
|
|
|
|
1
|
|
|
|
168,750
|
|
|
|
(7
|
)
|
|
|
96,319
|
|
|
|
(75,961
|
)
|
|
|
20,352
|
|
|
Stock-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
622
|
|
|
|
—
|
|
|
|
622
|
|
|
Vesting of early exercised stock options
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
232
|
|
|
|
—
|
|
|
|
232
|
|
|
Vesting of restricted stock units
|
|
|
—
|
|
|
|
—
|
|
|
|
67,024
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
|
—
|
|
|
|
(4
|
)
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,983
|
)
|
|
|
(3,983
|
)
|
|
Balance at June 30, 2022
|
|
|
—
|
|
|
|
—
|
|
|
|
13,280,402
|
|
|
|
1
|
|
|
|
168,750
|
|
|
|
(7
|
)
|
|
|
97,169
|
|
|
|
(79,944
|
)
|
|
|
17,219
|
|
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
9
Winc, Inc.
Condensed Consolidated Statements of Redeemable Convertible
Preferred Stock and Stockholders’ Equity (Deficit)
(Unaudited)
(In thousands, except share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable Convertible
Preferred Stock
|
|
|
Common Stock
|
|
|
Treasury Stock
|
|
|
Promissory Notes for Common
|
|
|
Additional
Paid-In
|
|
|
Accumulated
|
|
|
Total
Stockholders’
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Stock Issued
|
|
|
Capital
|
|
|
Deficit
|
|
|
Deficit
|
|
|
Balance at December 31, 2020
|
|
|
7,266,986
|
|
|
$
|
56,462
|
|
|
|
945,794
|
|
|
$
|
1
|
|
|
|
168,750
|
|
|
$
|
(7
|
)
|
|
$
|
—
|
|
|
$
|
2,229
|
|
|
$
|
(57,072
|
)
|
|
$
|
(54,849
|
)
|
|
Stock-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
72
|
|
|
|
—
|
|
|
|
72
|
|
|
Stock option exercises
|
|
|
—
|
|
|
|
—
|
|
|
|
875,075
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,042
|
|
|
|
—
|
|
|
|
1,042
|
|
|
Employee promissory notes issued for the exercise of stock
options
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,046
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,046
|
)
|
|
Issuance of Series E Preferred Stock, net of $487 of
issuance costs
|
|
|
332,220
|
|
|
|
4,173
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Issuance of Series F Preferred Stock, net of $694 of
issuance costs
|
|
|
714,272
|
|
|
|
9,306
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net income
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
593
|
|
|
|
593
|
|
|
Balance at March 31, 2021
|
|
|
8,313,478
|
|
|
|
69,941
|
|
|
|
1,820,869
|
|
|
|
1
|
|
|
|
168,750
|
|
|
|
(7
|
)
|
|
|
(1,046
|
)
|
|
|
3,343
|
|
|
|
(56,479
|
)
|
|
|
(54,188
|
)
|
|
Stock-based compensation expense
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
100
|
|
|
|
—
|
|
|
|
100
|
|
|
Stock option exercises
|
|
|
—
|
|
|
|
—
|
|
|
|
1,234,233
|
|
|
|
1
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
585
|
|
|
|
—
|
|
|
|
586
|
|
|
Vesting of early exercised stock options
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5
|
|
|
|
—
|
|
|
|
5
|
|
|
Employee promissory notes issued for the exercise of stock
options
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,407
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,407
|
)
|
|
Issuance costs of Series E preferred stock
|
|
|
—
|
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of Series F Preferred Stock Series warrants
|
|
|
—
|
|
|
|
(2,034
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Issuance of Series F Preferred Stock in connection with an
acquisition
|
|
|
71,428
|
|
|
|
1,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Net loss
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,930
|
)
|
|
|
(3,930
|
)
|
|
Balance at June 30, 2021
|
|
|
8,384,906
|
|
|
|
68,896
|
|
|
|
3,055,102
|
|
|
|
2
|
|
|
|
168,750
|
|
|
|
(7
|
)
|
|
|
(3,453
|
)
|
|
|
4,033
|
|
|
|
(60,409
|
)
|
|
|
(59,834
|
)
|
The accompanying notes are an integral part of these unaudited
condensed consolidated financial statements.
10
Winc, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
|
|
2022
|
|
|
2021
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(8,224
|
)
|
|
$
|
(3,337
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
550
|
|
|
|
294
|
|
|
Amortization of debt issuance costs
|
|
|
35
|
|
|
|
85
|
|
|
Stock-based compensation
|
|
|
1,444
|
|
|
|
172
|
|
|
Bad debt expense
|
|
|
(50
|
)
|
|
|
345
|
|
|
Gain on debt forgiveness - Paycheck Protection Program note
payable
|
|
|
—
|
|
|
|
(1,364
|
)
|
|
Change in fair value of warrant liabilities
|
|
|
—
|
|
|
|
893
|
|
|
Other non-cash
|
|
|
(98
|
)
|
|
|
(17
|
)
|
|
Change in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(1,789
|
)
|
|
|
(1,135
|
)
|
|
Inventory
|
|
|
(2,555
|
)
|
|
|
(8,271
|
)
|
|
Prepaid expenses and other current assets
|
|
|
1,525
|
|
|
|
(1,053
|
)
|
|
Other assets
|
|
|
(6
|
)
|
|
|
(486
|
)
|
|
Accounts payable
|
|
|
(472
|
)
|
|
|
2,296
|
|
|
Accrued liabilities
|
|
|
(430
|
)
|
|
|
499
|
|
|
Contract liabilities
|
|
|
1,450
|
|
|
|
1,936
|
|
|
Other liabilities
|
|
|
(26
|
)
|
|
|
(6
|
)
|
|
Net cash used in operating activities
|
|
|
(8,646
|
)
|
|
|
(9,149
|
)
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
Cash paid for asset acquisitions
|
|
|
—
|
|
|
|
(8,758
|
)
|
|
Purchases of property and equipment
|
|
|
(265
|
)
|
|
|
(99
|
)
|
|
Capitalized software development costs
|
|
|
(174
|
)
|
|
|
(152
|
)
|
|
Net cash used in investing activities
|
|
|
(439
|
)
|
|
|
(9,009
|
)
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
Borrowings on line of credit, net
|
|
|
6,500
|
|
|
|
1,000
|
|
|
Repayments of long-term debt
|
|
|
—
|
|
|
|
(833
|
)
|
|
Proceeds from issuance of preferred stock and warrants, net of
issuance costs
|
|
|
—
|
|
|
|
13,309
|
|
|
Proceeds from exercise of employee stock options
|
|
|
—
|
|
|
|
70
|
|
|
Taxes paid related to restricted stock unit net share
settlement
|
|
|
(4
|
)
|
|
|
—
|
|
|
Advances received under financing arrangements
|
|
|
2,620
|
|
|
|
—
|
|
|
Net cash provided by financing activities
|
|
|
9,116
|
|
|
|
13,546
|
|
|
Net increase (decrease) in cash
|
|
|
31
|
|
|
|
(4,612
|
)
|
|
Cash at beginning of period
|
|
|
4,883
|
|
|
|
7,008
|
|