QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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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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Address of Principal Executive Offices
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Zip Code
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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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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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Form 10-Q
Page No.
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PART I. FINANCIAL INFORMATION
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Item 1 – Interim Condensed Consolidated Financial Statements (Unaudited)
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4
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5
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6
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7
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8
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9
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22 | |
28 | |
28 | |
PART II. OTHER INFORMATION
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29 | |
29 | |
29 | |
29 | |
29 | |
29 | |
29 | |
31 |
April 30,
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January 29,
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May 1,
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||||||||||
2022
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2022
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2021
|
||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS
|
||||||||||||
Cash and cash equivalents
|
$
|
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$
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$
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||||||
Restricted cash
|
|
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|||||||||
Accounts receivable
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|||||||||
Merchandise inventory
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|||||||||
Prepaid expenses and other current assets
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|||||||||
Total current assets
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|||||||||
Restricted cash
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|||||||||
Fixed assets, net
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|||||||||
Operating lease right-of-use assets
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|||||||||
Intangible assets, net
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|||||||||
Cash surrender value
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|||||||||
Other assets
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|||||||||
TOTAL ASSETS
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$
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|
$
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|
$
|
|
||||||
LIABILITIES
|
||||||||||||
CURRENT LIABILITIES
|
||||||||||||
Accounts payable
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$
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$
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$
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|
||||||
Short-term borrowings
|
|
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|||||||||
Accrued expenses and other current liabilities
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|
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|||||||||
Current portion of operating lease liabilities
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|||||||||
Current portion of PPP loan
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|||||||||
Total current liabilities
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|||||||||
Operating lease liabilities
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|||||||||
Long-term debt
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|||||||||
Other long-term liabilities
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|||||||||
TOTAL LIABILITIES
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|||||||||
SHAREHOLDERS’ EQUITY
|
||||||||||||
Preferred stock ($
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|
|
|
|||||||||
Common stock ($
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|
|
|
|||||||||
Additional paid-in capital
|
|
|
|
|||||||||
Treasury stock at cost (
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(
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)
|
(
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)
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(
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)
|
||||||
Accumulated other comprehensive loss
|
(
|
)
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(
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)
|
(
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)
|
||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
TOTAL SHAREHOLDERS’ EQUITY
|
|
|
|
|||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
|
$
|
|
$
|
|
Thirteen Weeks Ended
|
||||||||
April 30,
2022
|
May 1,
2021
|
|||||||
Net revenue
|
$
|
|
$
|
|
||||
Cost of sales
|
|
|
||||||
Gross profit
|
|
|
||||||
Selling, general and administrative expenses
|
|
|
||||||
Loss from operations
|
(
|
)
|
(
|
)
|
||||
Interest expense
|
|
|
||||||
Loss from operations before income tax expense |
( |
) | ( |
) | ||||
Income tax expense
|
|
|
||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
BASIC AND DILUTED INCOME PER SHARE:
|
||||||||
Basic and diluted loss per common share
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Weighted average number of common shares outstanding – basic and diluted
|
|
|
Thirteen Weeks Ended
|
||||||||
April 30,
2022
|
May 1,
2021
|
|||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Amortization of pension gain
|
|
|
||||||
Comprehensive loss
|
$
|
(
|
)
|
$
|
(
|
)
|
Thirteen Weeks Ended April 30, 2022
|
||||||||||||||||||||||||||||||||
Number of shares outstanding
|
Accumulated
Other
Comprehensive
Loss
|
Retained
Earnings
(Accumulated
Deficit)
|
Shareholders’
Equity
|
|||||||||||||||||||||||||||||
Common
Shares
|
Treasury
Shares
|
Common
Stock
|
Additional
Paid-in
Capital
|
Treasury
Stock
At Cost
|
||||||||||||||||||||||||||||
Balance as of January 29, 2022
|
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||||||||||||
Net Loss
|
-
|
-
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||
Issuance of warrants
|
|
-
|
|
|
|
|
|
|
||||||||||||||||||||||||
Balance as of April 30, 2022
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
Thirteen Weeks Ended May 1, 2021
|
||||||||||||||||||||||||||||||||
Number of shares outstanding
|
Accumulated
Other
Comprehensive
Loss
|
Retained
Earnings
(Accumulated
Deficit)
|
Shareholders’
Equity
|
|||||||||||||||||||||||||||||
Common
Shares
|
Treasury
Shares
|
Common
Stock
|
Additional
Paid-in
Capital
|
Treasury
Stock
At Cost
|
||||||||||||||||||||||||||||
Balance as of January 30, 2021
|
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||||||||||||
Net Loss
|
-
|
-
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||
Exercise of warrants | ( |
) | ||||||||||||||||||||||||||||||
Sale of shares, net of expenses
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Amortization of unearned compensation/restricted stock amortization
|
-
|
-
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance as of May 1, 2021
|
|
$ |
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$ |
Thirteen Weeks Ended
|
||||||||
April 30,
2022
|
May 1,
2021
|
|||||||
OPERATING ACTIVITIES:
|
||||||||
Net income loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation of fixed assets
|
|
|
||||||
Amortization of intangible assets
|
|
|
||||||
Stock-based compensation
|
|
|
||||||
Interest on long-term debt
|
|
|
||||||
Amortization of ROU asset
|
|
|
||||||
Change in cash surrender value
|
|
(
|
)
|
|||||
Changes in operating assets and liabilities that provide (use) cash:
|
||||||||
Accounts receivable
|
(
|
)
|
(
|
)
|
||||
Merchandise inventory
|
(
|
)
|
|
|||||
Prepaid expenses and other current assets
|
|
(
|
)
|
|||||
Other long-term assets
|
|
|
||||||
Accounts payable
|
|
(
|
)
|
|||||
Accrued expenses and other current liabilities
|
(
|
)
|
|
|||||
Other long-term liabilities
|
(
|
)
|
(
|
)
|
||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
INVESTING ACTIVITIES:
|
||||||||
Purchases of fixed assets
|
( |
) | ( |
) | ||||
Net cash provided by (used in) investing activities
|
( |
) | ( |
) | ||||
FINANCING ACTIVITIES:
|
||||||||
Proceeds from short term borrowings
|
|
|
||||||
Proceeds from long term borrowings
|
|
|
||||||
Proceeds from stock offering
|
|
|
||||||
Exercise of warrants
|
|
|
||||||
Payment of short term borrowings
|
|
(
|
)
|
|||||
Net cash provided by financing activities
|
|
|
||||||
Net decrease in cash, cash equivalents, and restricted cash
|
(
|
)
|
|
|||||
Cash, cash equivalents, and restricted cash, beginning of period
|
|
|
||||||
Cash, cash equivalents, and restricted cash, end of period
|
$
|
|
$
|
|
||||
Supplemental disclosures and non-cash investing and financing activities: |
||||||||
Interest paid |
$ |
$ |
||||||
Warrants issued with debt |
$ |
$ |
•
|
We are partner obsessed. Our customers are our partners. Every decision is focused on building mutually beneficial relationships that deliver results.
|
•
|
We are insights driven. We make data actionable. Our curiosity drives us to discover opportunities early and often.
|
•
|
We create simplicity. We challenge the status quo. We take the complicated and simplify it.
|
•
|
We take ownership. We make things happen. We hold ourselves accountable and have a bias for action.
|
•
|
We empower each other. We welcome and learn from diverse experiences. Our empathy ignites innovation and empowers meaningful change.
|
Thirteen Weeks Ended
|
||||||||
(amounts in thousands)
|
April 30,
2022
|
May 1,
2021
|
||||||
Amortized intangible assets:
|
||||||||
Technology
|
$ |
|
$ |
|
||||
Trade names and trademarks
|
|
|
||||||
Total amortization expense
|
$
|
|
$
|
|
April 30,
2022
|
January 29,
2022
|
May 1,
2021
|
||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
||||||
Restricted cash
|
|
|
|
|||||||||
Total cash, cash equivalents and restricted cash
|
$
|
|
$
|
|
$
|
|
Employee Stock Award Plans
|
||||||||||||||||||||
Number of
Shares
Subject To
Option
|
Weighted Average Exercise
Price
|
Weighted Average Remaining Contractual Term
|
Other
Share
Awards (1)
|
Weighted
Average
Grant Fair
Value
|
||||||||||||||||
Balance January 29, 2022
|
|
$
|
|
|
$ | |||||||||||||||
Granted
|
|
|
|
|||||||||||||||||
Forfeited
|
(
|
)
|
|
|
( |
) | ||||||||||||||
Canceled
|
(
|
)
|
|
-
|
||||||||||||||||
Exercised
|
|
|
-
|
|||||||||||||||||
Balance April 30, 2022
|
|
$
|
|
|
$ | |||||||||||||||
Exercisable April 30, 2022
|
|
$
|
|
|
$ |
Thirteen Weeks Ended
|
||||||||
(amounts in thousands)
|
April 30,
2022
|
May 1,
2021
|
||||||
|
$
|
|
$
|
|
||||
Net periodic pension cost
|
$
|
|
$
|
|
• |
We are partner obsessed. Our customers are our partners. Every decision is focused on building mutually beneficial relationships that deliver results.
|
• |
We are insights driven. We make data actionable. Our curiosity drives us to discover opportunities early and often.
|
• |
We create simplicity. We challenge the status quo. We take the complicated and simplify it.
|
• |
We take ownership. We make things happen. We hold ourselves accountable and have a bias for action.
|
• |
We empower each other. We welcome and learn from diverse experiences. Our empathy ignites innovation and empowers meaningful change.
|
Thirteen weeks ended
|
Change
|
|||||||||||||||||||||||
April 30, 2022
|
May 1, 2021
|
$ |
|
%
|
||||||||||||||||||||
Amazon US
|
$
|
29,620
|
93.2
|
%
|
$
|
37,516
|
92.4
|
%
|
$
|
(7,896
|
)
|
-21.0
|
%
|
|||||||||||
Amazon International
|
1,287
|
4.0
|
%
|
2,268
|
5.6
|
%
|
(981
|
)
|
-43.3
|
%
|
||||||||||||||
Walmart, Target & other marketplaces
|
430
|
1.4
|
%
|
378
|
0.9
|
%
|
52
|
13.8
|
%
|
|||||||||||||||
Subtotal Retail as a Service
|
31,337
|
98.6
|
%
|
40,162
|
98.9
|
%
|
(8,825
|
)
|
-22.0
|
%
|
||||||||||||||
Subscriptions
|
454
|
1.4
|
%
|
455
|
1.1
|
%
|
(1
|
)
|
-0.2
|
%
|
||||||||||||||
Net revenue
|
$
|
31,791
|
100.0
|
%
|
$
|
40,617
|
100.0
|
%
|
$
|
(8,826
|
)
|
-21.7
|
%
|
Thirteen Weeks Ended
|
Change
|
|||||||||||||||
(amounts in thousands)
|
April 30,
2022
|
May 1,
2021
|
$ |
|
%
|
|||||||||||
Merchandise margin
|
$
|
14,046
|
$
|
18,982
|
$
|
(4,936
|
)
|
(26.0
|
)%
|
|||||||
% of net revenue
|
44.2
|
%
|
46.7
|
%
|
(2.5
|
)%
|
||||||||||
Fulfillment fees
|
(4,568
|
)
|
(6,449
|
)
|
(1,881
|
)
|
(29.2
|
)%
|
||||||||
Warehousing and freight
|
(2,627
|
)
|
(2,737
|
)
|
(110
|
)
|
(4.0
|
)%
|
||||||||
Gross profit
|
$
|
6,851
|
$
|
9,796
|
$
|
(2,945
|
)
|
(30.1
|
)%
|
|||||||
% of net revenue
|
21.6
|
%
|
24.1
|
%
|
Thirteen weeks ended
|
Change
|
|||||||||||||||
April 30,
2022
|
May 1,
2021
|
$ |
%
|
|||||||||||||
Selling expenses
|
$
|
4,601
|
$
|
6,230
|
$
|
(1,629
|
)
|
-26.1
|
%
|
|||||||
General and administrative expenses
|
5,916
|
4,427
|
1,489
|
33.6
|
%
|
|||||||||||
SG&A Expenses
|
$
|
10,517
|
$
|
10,657
|
$
|
(140
|
)
|
-1.3
|
%
|
|||||||
As a % of total revenue
|
33.1
|
%
|
26.2
|
%
|
As of or for the
|
||||||||||||
Thirteen Weeks Ended
|
Change
|
|||||||||||
(amounts in thousands)
|
April 30,
|
May 1,
|
||||||||||
2022
|
2021
|
$ | ||||||||||
Operating Cash Flows
|
$
|
(5,820
|
)
|
$
|
(2,513
|
)
|
$
|
(3,307
|
)
|
|||
Investing Cash Flows
|
(399
|
)
|
(444
|
)
|
45
|
|||||||
Financing Cash Flows
|
5,542
|
5,893
|
(351
|
)
|
||||||||
Capital Expenditures(1)
|
(399
|
)
|
(444
|
)
|
45
|
|||||||
Cash, Cash Equivalents, and Restricted Cash (2)
|
4,146
|
9,491
|
(5,345
|
)
|
||||||||
Merchandise Inventory
|
32,254
|
22,567
|
9,687
|
|||||||||
(1)Included in Investing Cash Flows
|
||||||||||||
(2)Cash and cash equivalents per condensed consolidated balance sheets
|
$
|
828
|
$
|
5,030
|
||||||||
Add: restricted cash
|
3,318
|
4,461
|
||||||||||
Cash, cash equivalents, and restricted cash
|
$
|
4,146
|
$
|
9,491
|
(A)Exhibits -
Exhibit No.
|
Description
|
Certificate of Amendment of Certificate of Incorporation of Kaspien Holdings Inc., dated March 8, 2022 (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K dated March 8, 2022).
|
|
Amendment No. 3 to Bylaws of Kaspien Holdings Inc., dated March 8, 2022 (incorporated by reference to Exhibit 3.2 of the Company’s Form 8-K dated March 8, 2022).
|
Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 of the Company’s Form 8-K dated March 8, 2022).
|
|
Amendment No. 4 to Loan and Security Agreement (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K dated March 8, 2022).
|
|
Amendment No. 2 to Subordinated Loan and Security Agreement (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K dated March 8, 2022).
|
|
Registration Rights Agreement (incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K dated March 8, 2022).
|
|
Contingent Values Rights Agreement (incorporated by reference to Exhibit 10.4 of the Company’s Form 8-K dated March 8, 2022).
|
|
Kunal Chopra Separation Agreement dated as of March 30, 2022 (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K dated April 1, 2022)
|
|
Brock Kowalchuk Offer Letter dated as of March 28, 2022 (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K dated April 1, 2022)
|
|
Brock Kowalchuk Severance Agreement dated as of July 31, 2020 (incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K dated April 1, 2022)
|
|
Amended and Restated Common Stock Purchase Warrant, dated as of April 4, 2022 (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K dated April 5, 2022)
|
|
Chief Executive Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Chief Financial Officer certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS
|
XBRL Instance Document (furnished herewith)
|
101.SCH
|
XBRL Taxonomy Extension Schema (furnished herewith)
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase (furnished herewith)
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase (furnished herewith)
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase (furnished herewith)
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase (furnished herewith)
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
|
June 14, 2022
|
By: /s/ Brock Kowalchuk
|
|
Brock Kowalchuk
|
||
Principal Executive Officer
|
||
(Principal Executive Officer)
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June 14, 2022
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By: /s/ Edwin Sapienza
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Edwin Sapienza
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Chief Financial Officer
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(Principal and Chief Accounting Officer)
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