Annual report pursuant to Section 13 and 15(d)

Quarterly Financial Information (Unaudited)

v3.24.0.1
Quarterly Financial Information (Unaudited)
 12 Months Ended
Dec. 31, 2023
Accounting Changes and Error Corrections [Abstract]  
Quarterly Financial Information (Unaudited) Quarterly Financial Information (Unaudited)
In March 2024, the Company determined that the presentation of investing activities and operating activities in the consolidated statement of cash flows included in the Quarterly Report on Form 10-Q issued for the quarter ended September 30, 2023 was incorrect as a result of two separate errors. Firstly, certain losses on the disposal of assets were improperly presented as a reduction to capital expenditures within investing activities. Secondly, the method used to calculate the non-cash portion of capital expenditures that is removed from capital expenditures within investing activities was incorrect. The financial statement line items impacted within operating activities are loss on sale of assets and accounts payable. There was no impact on the unaudited Consolidated Balance Sheet, the Consolidated Statements of Income, or the Consolidated Statements of Stockholder’s Deficit for the quarter ended September 30, 2023.
The Company has restated the interim financial statements for the third quarter of 2023. Relevant restated financial information is included in this Annual Report on Form 10-K in the table that follows. As part of the restatement, the Company recorded adjustments to correct the misstatements for the impacted period. The unaudited interim financial
statements reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim period presented.
The following tables present the effects of the changes in presentation of these cash flows, compared to the previously reported Consolidated Balance Sheet (in thousands, except share and per share amounts):
September 30, 2023
(unaudited)
As Reported Adjustment As Corrected
Assets
Current assets:
Cash and cash equivalents $ 6,667  $ —  $ 6,667 
Restricted cash 1,465  —  1,465 
Accounts receivable, net 24,621  —  24,621 
Inventories, net 91,373  —  91,373 
Prepaid expenses and other current assets 13,959  —  13,959 
Total current assets 138,085  —  138,085 
Property, plant and equipment, net 64,883  —  64,883 
Operating lease, right-of-use asset 35,963  —  35,963 
Identifiable intangibles, net 382  —  382 
Other 313  —  313 
Total assets 239,626  —  239,626 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable 26,128  —  26,128 
Accrued liabilities 33,437  —  33,437 
Deferred revenue and gift card liability 10,160  —  10,160 
Current maturities of long-term debt, net 1,896  —  1,896 
Current operating lease liability 2,402  —  2,402 
Current maturities of finance lease obligations 82  —  82 
Total current liabilities 74,105  —  74,105 
Non-current liabilities:
Long-term debt, net 70,094  —  70,094 
Finance lease obligations, net of current maturities 99  —  99 
Operating lease liability 35,252  —  35,252 
Other non-current liabilities 623  —  623 
Total non-current liabilities 106,068  —  106,068 
Total liabilities 180,173  —  180,173 
Commitments and Contingencies
Stockholders'equity:
Preferred Stock, $0.0001 par value, 1,000,000 shares authorized; no shares issued or outstanding
 —  —  — 
Class A Common Stock, $0.0001 par value, 2,500,000,000 shares authorized; 63,641,996 shares issued and outstanding at September 30, 2023
 5  —  5 
Class B Common Stock, $0.0001 par value, 300,000,000 shares authorized; 148,395,692 shares issued and outstanding at September 30, 2023
16  —  16 
Class C Common Stock, $0.0001 par value, 1,500,000 shares authorized; no shares issued or outstanding at September 30, 2023
 —  —  — 
Additional paid in capital 137,457  —  137,457 
Accumulated deficit (115,993) —  (115,993)
Total BRC Inc.'s stockholders' equity 21,485  —  21,485 
Non-controlling interests 37,968  —  37,968 
Total stockholders' equity 59,453  —  59,453 
Total liabilities, and stockholders' equity $ 239,626  $ —  $ 239,626 
The following tables present the effects of the changes in presentation of these cash flows, compared to the previously reported Consolidated Statements of Operations (in thousands, except share and per share amounts):
Three Months Ended
September 30, 2023
 (unaudited)		 Nine Months Ended
September 30, 2023
 (unaudited)
As Reported Adjustment As Corrected As Reported Adjustment As Corrected
Revenue, net $ 100,536  $ —  $ 100,536  $ 275,974  $ —  $ 275,974 
Cost of goods sold 66,477  —  66,477  182,197  —  182,197 
Gross profit 34,059  —  34,059  93,777  —  93,777 
Operating expenses
Marketing and advertising 8,260  —  8,260  22,418  —  22,418 
Salaries, wages and benefits 13,907  —  13,907  52,087  —  52,087 
General and administrative 19,474  —  19,474  56,529  —  56,529 
Other operating (income) expense, net (596) —  (596) 734  —  734 
Total operating expenses 41,045  —  41,045  131,768  —  131,768 
Operating loss (6,986) —  (6,986) (37,991) —  (37,991)
Non-operating income (expense)
Interest expense, net (3,544) —  (3,544) (4,658) —  (4,658)
Other income (expense), net (108) —  (108) 138  —  138 
Change in fair value of earn-out liability —  —  —  —  —  — 
Change in fair value of warrant liability —  —  —  —  —  — 
Change in fair value of derivative liability —  —  —  —  —  — 
Total non-operating expenses (3,652) —  (3,652) (4,520) —  (4,520)
Loss before income taxes (10,638) —  (10,638) (42,511) —  (42,511)
Income tax expense 56  —  56  169  —  169 
Net loss (10,694) —  (10,694) (42,680) —  (42,680)
Less: Net loss attributable to non-controlling interest (7,462) —  (7,462) (30,420) —  (30,420)
Net loss attributable to BRC Inc. (3,232) —  (3,232) (12,260) —  (12,260)
Net loss per share attributable to Class A Common Stock
Basic and diluted $ (0.05) $ —  $ (0.05) $ (0.21) $ —  $ (0.21)
Weighted-average shares of Class A Common Stock outstanding
Basic and diluted 61,964,157  —  61,964,157  59,738,542  —  59,738,542 
The following tables present the effects of the changes in presentation of these cash flows, compared to the previously reported Consolidated Statements of Cash Flows (dollars in thousands):
Nine Months Ended
September 30, 2023
(unaudited)
As Reported Adjustment As Corrected
Operating activities
Net loss $ (42,680) $ —  $ (42,680)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 5,354  —  5,354 
Equity-based compensation 5,645  —  5,645 
Non-employee equity-based compensation —  —  — 
Amortization of debt issuance costs 260  —  260 
(Gain) Loss on disposal of assets (735) 4,357  3,622 
Other 252  —  252 
Change in fair value of earn-out liability —  —  — 
Change in fair value of warrant liability —  —  — 
Change in fair value of derivative liability —  —  — 
Changes in operating assets and liabilities:
Accounts receivable, net (2,284) —  (2,284)
Inventories, net (14,190) —  (14,190)
Prepaid expenses and other assets (7,374) —  (7,374)
Accounts payable 10,350  2,279  12,629 
Accrued liabilities (3,285) —  (3,285)
Deferred revenue and gift card liability 655  —  655 
Operating lease liability 915  —  915 
Other liabilities 122  —  122 
Net cash used in operating activities (46,995) 6,636  (40,359)
Investing activities
Purchases of property, plant and equipment (12,236) (6,636) (18,872)
Proceeds from sale of property and equipment 5,576  —  5,576 
Net cash used in investing activities (6,660) (6,636) (13,296)
Financing activities
Proceeds from issuance of long-term debt, net of discount 294,501  —  294,501 
Debt issuance costs paid (3,876) —  (3,876)
Repayment of long-term debt (267,381) —  (267,381)
Financing lease obligations (73) —  (73)
Repayment of promissory note (1,047) —  (1,047)
Issuance of stock from the Employee Stock Purchase Plan 673  —  673 
Distribution and redemption of Series A preferred equity —  —  — 
Proceeds from Business Combination, including PIPE investment —  —  — 
Payment of Business Combination costs —  —  — 
Redemption of Class A and Class B units —  —  — 
Redemption of incentive units —  —  — 
Net cash provided by financing activities 22,797  —  22,797 
Net increase (decrease) in cash, cash equivalents, and restricted cash (30,858) —  (30,858)
Cash and cash equivalents, beginning of period 38,990  —  38,990 
Restricted cash, beginning of period —  —  — 
Cash and cash equivalents, end of period $ 6,667  $ —  $ 6,667 
Restricted cash, end of period $ 1,465  $ —  $ 1,465 
Consolidated Statements of Cash Flows (continued) (unaudited)

Nine Months Ended
September 30, 2023
(unaudited)
As Reported Adjustment As Corrected
Non-cash operating activities
Recognition of right-of-use operating lease assets $ 15,913  $ —  $ 15,913 
Recognition of revenue for inventory exchanged for prepaid advertising 7,480  —  7,480 
Non-cash investing and financing activities
Property and equipment purchased but not yet paid 3,349  —  3,349 
Series A preferred exchange for PIPE shares —  —  — 
Series A preferred equity amortization —  —  — 
Supplemental cash flow information
Cash paid for income taxes $ 665  $ —  $ 665 
Cash paid for interest $ 2,591  $ —  $ 2,591