Shares of Stryve Foods Inc. (SNAX) were up 10.93% at $0.345 at the time of the most recent after-hours check. We may then look to recent occurrences to offer a fuller picture of Stryve Foods as the SNAX stock increased in the absence of recent news.
How have recent events been at SNAX?
Recently, previously announced credit arrangements totaling up to $26 million in committed borrowing capacity were concluded by Stryve Foods (SNAX). These new facilities offer liquidity and a bridge to support our goals at SNAX to achieve excellent revenue growth, reduce costs via productivity, and create an execution-focused culture. Stryve Foods is laser-focused on the Company’s Restructuring Plan. As SNAX transitions from a founder-led to an operating company, these initiatives will be the main drivers of value creation.
While SNAX had a variety of options for high-cost capital and dilutive financing, the financing structure it chose was specifically designed to serve the needs of the company and all stakeholders. The result is a non-dilutive mix of facilities that is also very adaptable to suit the company’s next phase of expansion.
The financing structure consists of two facilities: an asset-backed facility based on accounts receivable and inventory, and a term loan with variable amortization based on revenues. With an accordion feature up to $20 million, the asset-backed facility offers $15 million in committed borrowing capacity at an interest rate calculated at Prime + 2.25% on borrowed amounts. The revenue-based term loan has a commitment of $6 million, with $4 million financed at closing, and amortization beginning at 2.75% of net sales each month.
How would the facilities aid SNAX’s expansion?
These facilities give Stryve Foods (SNAX) the short-term liquidity it needs to carry out its ambitions and the working capital assistance it needs to accomplish the fundamental upgrades that will position it for the future. Furthermore, the term loan’s revenue-based structure is the perfect option for an early-stage company like SNAX since the debt-service payments are very flexible and automatically move up or down to take into account the business’s future success.