What changed in this filing

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Item 1. Financial Statements

2022-11-14 compared with 2022-08-29 · 362 added, 225 removed, 466 unchanged (56% of the section changed)

1 unchanged sentence

WESTROCK COFFEE COMPANY

(f/k/a Westrock Coffee Holdings, LLC)

CONDENSED CONSOLIDATED BALANCE SHEETS

(Thousands, except unit values)

June 30, 2022

(Thousands, except par value)

September 30, 2022

December 31, 2021

8 unchanged sentences

Other long-term assets

LIABILITIES, REDEEMABLE UNITS, AND UNITHOLDERS' DEFICIT

LIABILITIES, CONVERTIBLE PREFERRED SHARES, REDEEMABLE UNITS, AND SHAREHOLDERS' EQUITY (DEFICIT)

Current maturities of long-term debt

8 unchanged sentences

Deferred income taxes

Warrant liabilities

Other long-term liabilities

1 unchanged sentence

Commitments and contingencies (Note 19)

Series A Convertible Preferred Shares, $ 0.01 par value, 24,000 shares authorized, 23,588 shares issued and outstanding , $ 11.50 liquidation value

Series A Redeemable Common Equivalent Preferred Units:

$ 0 par value, 222,150,000 units authorized, issued and outstanding

$ 0.00 par value, 222,150 units authorized, no units and 222,150 units issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Series B Redeemable Common Equivalent Preferred Units:

$ 0 par value, 17,000,000 units authorized, issued and outstanding

Unitholders' Deficit

Common Units:

$ 0 par value 375,420,213 units authorized;

332,209,476 units and 329,042,787 units issued and outstanding at June 30, 2022 and December 31, 2021, respectively

$ 0.00 par value, 17,000 units authorized, no units and 17,000 units issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Shareholders' Equity (Deficit) (1)

Preferred stock, $ 0.01 par value, 26,000 shares authorized, no shares issued and outstanding

Common stock, $ 0.01 par value, 300,000 shares authorized, 73,034 shares issued and outstanding at September 30, 2022;

$ 0.00 par value, 39,389 shares authorized, 34,523 shares issued and outstanding at December 31, 2021

Additional paid-in-capital

1 unchanged sentence

Accumulated other comprehensive income

Total unitholders' deficit attributable to Westrock Coffee Holdings, LLC

Total shareholders' equity (deficit) attributable to Westrock Coffee Company

Noncontrolling interest

Total unitholders' deficit

Total Liabilities, Redeemable Units and Unitholders' Deficit

Total shareholders' equity (deficit)

Total Liabilities, Convertible Preferred Shares, Redeemable Units and Shareholders' Equity (Deficit)

(1) Retroactively restated for de-SPAC merger transaction as described in Note 4.

See accompanying notes to condensed consolidated financial statements.

WESTROCK COFFEE COMPANY

(f/k/a Westrock Coffee Holdings, LLC)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended June 30,

Six Months Ended June 30,

(Thousands, except per unit data)

Three Months Ended September 30,

Nine Months Ended September 30,

(Thousands, except per share data)

Costs of sales

4 unchanged sentences

Income from operations

Other (income) expense, net

Other (income) expense

Interest expense

Change in fair value of warrant liabilities

Loss before income taxes

1 unchanged sentence

Net (loss) income attributable to non-controlling interest

Net loss attributable to unitholders

Net loss attributable to shareholders

Loss on extinguishment of Redeemable Common Equivalent Preferred Units, net

Common equivalent preferred dividends

Accumulating preferred dividends

Net loss attributable to common unitholders

Loss per common unit:

Weighted-average number of units outstanding

Net loss attributable to common shareholders

Loss per common share (1) :

Weighted-average number of shares outstanding (1) :

(1) Retroactively restated for de-SPAC merger transaction as described in Note 4.

See accompanying notes to condensed consolidated financial statements.

WESTROCK COFFEE COMPANY

(f/k/a Westrock Coffee Holdings, LLC)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Other comprehensive income (loss), net of tax:

4 unchanged sentences

Comprehensive (loss) income attributable to non-controlling interests

Comprehensive loss attributable to unitholders

Comprehensive loss attributable to shareholders

Loss on extinguishment of Redeemable Common Equivalent Preferred Units, net

Common equivalent preferred dividends

Accumulating preferred dividends

Comprehensive loss attributable to common unitholders

Comprehensive loss attributable to common shareholders

See accompanying notes to condensed consolidated financial statements.

WESTROCK COFFEE COMPANY

(f/k/a Westrock Coffee Holdings, LLC)

CONDENSED CONSOLIDATED STATEMENTS OF UNITHOLDERS’ DEFICIT

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT) (1)

Comprehensive

1 unchanged sentence

Paid-in Capital

Total Deficit

Balance at March 31, 2021

Equity (Deficit)

Balance at June 30, 2021

Net income (loss)

2 unchanged sentences

Accumulating preferred dividends

Balance at September 30, 2021

Balance at June 30, 2022

Balance at March 31, 2022

Net income (loss)

Issuance of common shares upon closing of de-SPAC merger transaction, net of issuance costs, net of $ 2,469 of taxes (see Note 4)

Issuance of common shares related to PIPE financing

Issuance of common shares related to conversion of debt to equity (see Note 11)

Issuance of common shares related to conversion of Common Equivalent Preferred Units (see Note 4)

Common Equivalent Preferred Unit dividends ($ 0.02 per unit)

Loss on extinguishment of Common Equivalent Preferred Units

Other comprehensive income (loss)

Equity-based compensation

Accumulating preferred dividends

Balance at June 30, 2022

Balance at September 30, 2022

See accompanying notes to condensed consolidated financial statements.

Comprehensive

1 unchanged sentence

Paid-in Capital

Total Deficit

Equity (Deficit)

Balance at December 31, 2020

4 unchanged sentences

Accumulating preferred dividends

Balance at June 30, 2021

Balance at September 30, 2021

Balance at December 31, 2021

Net income (loss)

Issuance of common shares upon closing of de-SPAC merger transaction, net of issuance costs, net of $ 2,469 of taxes (see Note 4)

Issuance of common shares related to PIPE financing

Issuance of common shares related to conversion of debt to equity (see Note 11)

Issuance of common shares related to conversion of Common Equivalent Preferred Units (see Note 4)

Common Equivalent Preferred Unit dividends ($ 0.02 per unit)

Loss on extinguishment of Common Equivalent Preferred units

Other comprehensive income

2 unchanged sentences

Accumulating preferred dividends

Balance at June 30, 2022

Balance at September 30, 2022

(1) Retroactively restated for de-SPAC merger transaction as described in Note 4.

See accompanying notes to condensed consolidated financial statements.

WESTROCK COFFEE COMPANY

(f/k/a Westrock Coffee Holdings, LLC)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

3 unchanged sentences

Paid-in-kind interest added to debt principal

Allowance for credit losses

Provision for credit losses

Amortization of deferred financing fees included in interest expense

Loss on disposal of property, plant and equipment

Write-off of unamortized deferred financing fees

Loss on debt extinguishment

Loss (gain) on disposal of property, plant and equipment

Mark-to-market adjustments

Change in fair value of warrant liabilities

Foreign currency transactions

Change in deferred income taxes

Deferred income tax (benefit) expense

Change in operating assets and liabilities:

6 unchanged sentences

Cash flows from investing activities:

Additions to property and equipment

Additions to property, plant and equipment

Additions to intangible assets

Proceeds from sale of property and equipment

Proceeds from sale of property, plant and equipment

Net cash used in investing activities

2 unchanged sentences

Proceeds from debt

Proceeds from related party debt

Debt extinguishment costs

Payment of debt issuance costs

Proceeds from de-SPAC merger and PIPE financing

Payment of common equity issuance costs

Payment of preferred equity issuance costs

Net proceeds from repurchase agreements

Common equivalent preferred dividends

Net unit settlement

1 unchanged sentence

Effect of exchange rate changes on cash

Net decrease in cash and cash equivalents and restricted cash

Net increase (decrease) in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of period

3 unchanged sentences

Accumulating preferred dividends

Exchange of Redeemable Common Equivalent Preferred Units for Series A Convertible Preferred Shares

Exchange of Redeemable Common Equivalent Preferred Units for common shares

Related party debt exchanged for common shares

Loss on extinguishment of Common Equivalent Preferred Units

The total cash and cash equivalents and restricted cash is as follows:

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

Cash and cash equivalents

2 unchanged sentences

WESTROCK COFFEE COMPANY

(f/k/a Westrock Coffee Holdings, LLC)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Organization and Description of Business

Westrock Coffee Company (f/k/a Westrock Coffee Holdings, LLC) (the “Company,” “Westrock,” “we,” “us,” or “our”), a Delaware corporation is a leading integrated coffee, tea, flavors, extracts, and ingredients solutions provider in the United States, providing coffee sourcing, supply chain management, product development, roasting, packaging, and distribution services to the retail, food service and restaurant, convenience store and travel center, non-commercial account, CPG, and hospitality industries around the world.

Westrock Coffee Company, a Delaware corporation (the “Company,” “Westrock,” “we,” “us,” or “our”), is a leading integrated coffee, tea, flavors, extracts, and ingredients solutions provider in the United States, providing coffee sourcing, supply chain management, product development, roasting, packaging, and distribution services to the retail, food service and restaurant, convenience store and travel center, non-commercial account, CPG, and hospitality industries around the world.

The Company has an 85 % ownership interest in Falcon Coffees Limited, which operates our trading business and is reported within our Sustainable Sourcing & Traceability segment.

Equity interests not owned by us are reflected as non-controlling interests.

In the Condensed Consolidated Statements of Operations, we allocate net income (loss) attributable to non-controlling interest to arrive at net income (loss) attributable to unitholders based on their proportionate share.

The Company operates seven manufacturing facilities, three of which are located in Concord, North Carolina, two in North Little Rock, Arkansas, one in Kigali, Rwanda, and one in Johor Bahru, Malaysia.

On August 26, 2022, in accordance with the transaction agreement, dated April 4, 2022, by and among the Company, Riverview Acquisition Corp., a special purpose acquisition vehicle and a Delaware corporation (“Riverview”), and the other parties thereto (as amended, modified or supplemented, the “Transaction Agreement”), the Company completed its previously announced de-SPAC merger transaction (the “Transaction”) with Riverview.

In connection with the closing of the Transaction, the Company converted from a Delaware limited liability company to a Delaware corporation and changed its corporate name from “Westrock Coffee Holdings, LLC” to “Westrock Coffee Company” (the “Conversion”).

Substantially concurrently with the closing of the Transaction, the Company has received $ 230.9 million in gross proceeds (which amount includes contribution to the Company of certain notes) from common stock PIPE investments at $ 10.00 per share (the “PIPE Financing”), $ 66.3 million from the trust account of Riverview, and has entered into a credit agreement (the “Credit Agreement”) among the Company, Westrock Beverage Solutions, LLC (f/k/a Westrock Coffee Company, LLC), a Delaware limited liability company and wholly owned subsidiary of the Company (“WBS”), as the borrower, Wells Fargo Bank, N.A.

as administrative agent, as collateral agent, and as swingline leader, Wells Fargo Securities, LLC as sustainability structuring agent, and each issuing bank and lender party thereto, that includes (a) a senior secured first lien revolving credit facility in an initial aggregate principal amount of $ 175.0 million (the “Revolving Credit Facility”) and (b) a senior secured first lien term loan facility in an initial aggregate principal amount of $ 175.0 million (the “Term Loan Facility”).

Proceeds from Transaction and new Term Loan Facility of $ 175.0 million were used to pay off and terminate our then existing term loan and asset-based lending agreements, and to pay expenses related to the Transaction and Credit Agreement.

Following these payments, the Company had net proceeds of approximately $ 87.0 million and has $ 175.0 million of available borrowing capacity under our Revolving Credit Facility.

On August 26, 2022 (the “Closing Date”), pursuant to the terms of the Transaction Agreement, dated April 4, 2022, by and among the Company, Riverview Acquisition Corp., a special purpose acquisition vehicle and a Delaware corporation (“Riverview”), Origin Merger Sub I, Inc.

(“Merger Sub I”), and Origin Merger Sub II, LLC (“Merger Sub II”) (as amended, modified or supplemented, the “Transaction Agreement”), the Company completed its de-SPAC merger transaction with Riverview (the “Transaction”).

In connection with the closing of the Transaction (the “Closing”), the Company converted from a Delaware limited liability company to a Delaware corporation (the “Conversion”) and changed its corporate name from “Westrock Coffee Holdings, LLC” (the “Converting Company”) to “Westrock Coffee Company.” Pursuant to the Transaction Agreement, Merger Sub I merged with and into Riverview, with Riverview surviving the merger as a direct wholly owned subsidiary of Westrock (such merger, the “SPAC Merger”) and immediately following the consummation of the SPAC Merger, Riverview merged with and into Merger Sub II, with Merger Sub II surviving the merger as a direct wholly owned subsidiary of Westrock (the “LLC Merger”, and together with the SPAC Merger, the “Mergers”).

See Note 4 for additional disclosures related to the Transaction.

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Operating results from any interim period are not necessarily indicative of the results that may be expected for the full fiscal year.

The Condensed Consolidated Financial Statements and related notes should be read in conjunction with the audited December 31, 2021 consolidated financial statements and notes thereto included in our Registration Statement on Form S-4 (File No.

333-264464) filed with the U.S.

Securities and Exchange Commission (“SEC”) on April 25, 2022, as amended by Amendments No.

1, 2, 3 and 4 thereto filed with SEC on June 10, 2022, July 15, 2022, August 1, 2022 and August 3, 2022, respectively.

Securities and Exchange Commission (“SEC”) on September 20, 2022.

Accordingly, certain significant accounting policies and other disclosures normally provided have been omitted from the accompanying Condensed Consolidated Financial Statements and related notes since such items are disclosed in our audited financial statements.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes.

On an ongoing basis, we evaluate our estimates, including those related to the allowance for credit losses, useful lives of property, equipment, incremental borrowing rates for lease liability measurement, fair values of forward purchase and sales contracts, green coffee associated with forward contracts, and warrant liabilities, share-based compensation, contingencies, and income taxes, among others.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Actual results could differ from our estimates.

Summary of Significant Accounting Policies

7 unchanged sentences

Activity in the allowance for credit losses was as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Balance at beginning of period

Charged to selling, general and administrative expense

Green coffee associated with our forward contracts is recorded at net realizable value, which approximates market price, within our Sustainable Sourcing & Traceability segment, consistent with our forward purchase contracts recorded at fair value in accordance with ASC 815, Derivatives and Hedging (“ASC 815”).

Green coffee is a commodity with quoted market prices in active markets, may be sold without significant further processing, has predictable and insignificant disposal costs and is available for immediate delivery.

We estimate the fair value of green coffee based on the quoted market price at the end of each reporting period, with changes in fair value being reported as a component of costs of sales in our Condensed Consolidated Statements of Operations.

For the three and nine months ended September 30, 2022, we recognized $ 0.6 million and $ 8.1 million, respectively, of unrealized losses on green coffee inventory associated with our forward sales and purchase contracts.

For the three and nine months ended September 30, 2021, we recognized $ 3.3 million and $ 5.9 million, respectively, of unrealized gains on green coffee inventory associated with our forward sales and purchase contracts.

Warrant Liabilities

We account for warrants assumed in connection with the Transaction (see Note 4) in accordance with the guidance contained in ASC 815, under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities.

Accordingly, we classify the warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period.

This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations.

The Company remeasures the fair value of the Public Warrants (as defined in Note 4) based on the quoted market price of the Public Warrants.

The Private Warrants (as defined in Note 4) are valued using a binomial lattice valuation model.

For the three and nine months ended September 30, 2022, the Company recognized $ 5.2 million of losses related to the change in fair value of warrant liabilities.

Recently issued accounting pronouncements

Update ASU 2016-02 – Leases (Topic 842) and Update ASU 2018-10 – Codification Improvements to Topic 842, Leases

Effective January 1, 2022, we account for leases in accordance with Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”).

Effective January 1, 2022, we account for leases in accordance with ASC 842, Leases (“ASC 842”).

The standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months.

28 unchanged sentences

Non-lease components primarily relate to maintenance services related to the leased asset.

De-SPAC Merger Transaction

On the Closing Date, the Company completed the Transaction with Riverview (“Closing”).

At Closing, the Company issued 12,868,151 shares of common stock of the Company (“Common Shares”) to public and class B shareholders of Riverview, receiving $ 49.8 million of the cash held in the trust account of Riverview, which is net of $ 17.1 million of Riverview transaction expenses offset against proceeds received by the Company at Closing.

The 12,868,151 shares include 1,910,000 shares issued to PIPE investors who elected to satisfy their PIPE commitments through the purchase of shares of Class A common stock of Riverview (“Riverview Class A Shares”) on the public market, pursuant to the terms of their respective subscription agreements.

Substantially concurrently with the Closing, the Company received $ 205.9 million in cash proceeds (which amount excludes contribution to the Company of certain related party notes as described in Note 11) from common stock PIPE investments (the “PIPE Financing”), issued 20,590,000 Common Shares to the PIPE investors (which share amount excludes the conversion of the related party notes as described in Note 11), and entered into a credit agreement that includes (a) a senior secured first lien revolving credit facility in an initial aggregate principal amount of $ 175.0 million and (b) a senior secured first lien term loan facility in an initial aggregate principal amount of $ 175.0 million.

See Note 11 for additional disclosures regarding the new credit agreement.

Pursuant to the Transaction Agreement, (a) each issued and outstanding common unit of the Converting Company was automatically converted into 0.1049203474320 Common Shares, (b) each issued and outstanding common equivalent preferred unit of the Converting Company (the “Westrock Preferred Unit ”) for which the holder had not elected to convert such unit into shares of Series A convertible preferred stock of Westrock (the “Westrock Series A Preferred Shares”) (see Note 12), automatically converted into 0.1086138208640 Common Shares if such Westrock Preferred Unit was designated a Series A common equivalent preferred unit of the Converting Company (the “Westrock Series A Preferred Units”) or 0.1049203474320 Common Shares if such Westrock Preferred Unit was designated a Series B common equivalent preferred unit of the Converting Company (the “Westrock Series B Preferred Units”) and (c) each outstanding Westrock Preferred Unit, for which the holder thereof had made an election to convert such unit into Westrock Series A Preferred Shares, converted into 0.1086138208740 Westrock Series A Preferred Shares if such Westrock Preferred Unit was a Westrock Series A Preferred Unit or 0.0919280171940 Westrock Series A Preferred Shares if such Westrock Preferred Unit was a Westrock Series B Preferred Unit.

In connection with the Closing, holders of Westrock Preferred Units were paid a cash dividend totaling $ 4.4 million, which is equal to the accreted liquidation preference of the Westrock Preferred Units from June 30, 2022 through the Closing Date.

As a result, we issued 34,855,535 Common Shares to common unitholders, 2,220,305 Common Shares to holders of Westrock Preferred Units who elected to convert their Westrock Preferred Units into Common Shares, and 23,587,952

Westrock Series A Preferred Shares to holders who elected to convert their Westrock Preferred Units into Westrock Series A Preferred Shares.

The Company realized a net loss on extinguishment of the Westrock Preferred Units of $ 2.9 million, including the payment of approximately $ 1.3 million of issuance costs, which have been recorded within accumulated deficit on our Condensed Consolidated Balance Sheets and adjusts earnings attributable to common shareholders in computing basic and diluted earnings per share.

In addition, at Closing, (i) each outstanding share of class B common stock of Riverview (the “Riverview Class B Shares” together with the Riverview Class A Shares, the “Riverview Shares”) (other than the Riverview Class B Shares held as treasury stock, which were automatically cancelled and extinguished at Closing), automatically converted into one Riverview Class A Share, (ii) each outstanding Riverview Class A Share (including the Riverview Class A Shares resulting from the conversion of Riverview Class B Shares at Closing but excluding any Riverview Class A Shares held as treasury stock, which were automatically cancelled and extinguished at Closing) were exchanged for one Common Share, (iii) each outstanding warrant to purchase Riverview Class A Shares (the “Riverview Warrants”) was, by its terms, automatically converted into a comparable warrant to purchase Common Shares (the “Westrock Warrants”) on the terms and subject to the conditions set forth in the warrant agreement for the Riverview Warrants and the amended and restated warrant agreement for the Westrock Warrants, (iv) each Riverview Share held immediately prior to Closing by Riverview as treasury stock was automatically canceled and extinguished and (v) each share of capital stock of Merger Sub I issued and outstanding immediately prior to Closing was automatically canceled and extinguished and converted into one share of common stock, par value $ 0.01 , of the surviving corporation in the SPAC Merger.

In connection with obtaining the approval of the Mergers by Riverview’s stockholders, Riverview provided an opportunity for its stockholders to redeem all or a portion of their outstanding Riverview Class A Shares.

The Transaction is a capital transaction in substance and not a business combination under ASC 805, Business Combinations (“ASC 805”) .

As a result, Westrock is treated as the accounting acquirer and Riverview is treated as the acquired company for financial reporting purposes per ASC 805.

Accordingly, for accounting purposes, the Transaction is treated similar to an equity contribution in exchange for the issuance of Common Shares.

Accordingly, for accounting purposes, the financial statements of the combined entity represent a continuation of the financial statements of Westrock, and the net assets of Riverview have been stated at historical cost, with no goodwill or other intangible assets recorded.

The equity and net loss per unit attributable to common equityholders of the Company, prior to the Closing, have been retroactively restated as shares reflecting the common unit conversion ratio discussed above.

Proceeds from the Transaction and the $ 175.0 million term loan facility were used to pay off and terminate our then existing term loan and asset-based lending agreements, and to pay expenses related to the Transaction and the new credit agreement.

The Company and Riverview incurred $ 24.2 million and $ 17.1 million, respectively, of expenses related to the Transaction.

These expenses consist of underwriting fees, professional services (legal, accounting, advisory, etc.) and other direct expenses associated with the Transaction.

Costs incurred by Westrock were initially capitalized as incurred in the other assets on the Condensed Consolidated Balance Sheets.

At Closing, $ 24.2 million of transaction costs incurred by the Company related to the issuance of shares were recognized in additional paid-in capital as a reduction of proceeds.

The $ 17.1 million of expenses incurred by Riverview were either paid by Riverview prior to Closing or netted against proceeds received by the Company at Closing.

There were no deferred transaction costs recorded in the Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021.

Common Stock Warrants

The Company assumed 12,500,000 publicly-traded Riverview Warrants (“Public Warrants”) and 7,400,000 private placement Riverview Warrants (“Private Warrants”), which were originally issued by Riverview in connection with its initial public offering and, as a result of the assumption by the Company, became Westrock Warrants.

The Public Warrants assumed by Westrock are referred to as the Westrock Public Warrants and the Private Warrants assumed by Westrock are referred to as the Westrock Private Warrants.

The Westrock Warrants are included in warrant liabilities on the Company’s Condensed Consolidated Balance Sheet.

The Westrock Warrants entitle the holder to purchase one share of Common Share at an exercise price of $ 11.50 per share.

The Westrock Warrants will become exercisable upon the effectiveness of our Registration Statement on Form S-1 (File No.

333-267509) (“Warrant Registration Statement”) registering the Common Shares issuable upon the exercise of the Westrock Warrants.

The Westrock Warrants may only be exercised for a whole number of shares, and will expire on August 26, 2027 (i.e., five years following the Closing), or earlier upon redemption or liquidations.

Once the Westrock Public Warrants become exercisable, Westrock may redeem the outstanding Westrock Public Warrants (i) in whole and not in part;

(ii) at a price of $ 0.01 per warrant;

(iii) upon not less than 30 days ’ prior written notice of redemption to each warrant holder;

and (iv) if, and only if, the reported last sale price of the Common Shares for any 20 trading days within a 30 -trading day period ending three business days before Westrock sends the notice of redemption to the warrant holders equals or exceeds $ 18.00 per share.

If the Warrant Registration Statement is not effective by November 25, 2022 (i.e., 60 business days after Closing), warrant holders may, until such time as there is an effective registration statement and during any period when Westrock will have failed to maintain an effective registration statement, exercise its Westrock Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act of 1933, as amended, or another exemption.

If and when the Public Warrants become redeemable by Westrock, Westrock may exercise its redemption right even if Westrock is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

The Westrock Private Warrants, which became transferable, assignable and salable on September 26, 2022 (i.e., 30 days after the Closing), are currently held by the Riverview Sponsor, and are generally identical to the Westrock Public Warrants, except they will not be redeemable by Westrock so long as they are held by the Riverview Sponsor or its permitted transferees.

The Riverview Sponsor, or its permitted transferees, have the option to exercise the Westrock Private Warrants on a cashless basis.

If the Westrock Private Warrants are held by holders other than the Riverview Sponsor or its permitted transferees, the Westrock Private Warrants will be redeemable by Westrock and exercisable by the holders on the same basis as the Westrock Public Warrants.

Revenue from Contracts with Customers (ASC 606)

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Although we occasionally accept returns of products from our customers, historically returns have not been material.

At times, the Company may enter into agreements in which its Sustainable Sourcing & Traceability segment will sell inventory to a third party, from whom the Company’s Beverage Solutions segment has an obligation to repurchase.

Such transactions are accounted for as financing transactions in accordance with ASC 606.

At September 30, 2022, the Company has $ 11.0 million of such repurchase agreement obligations, collateralized by the corresponding

inventory, that are recorded within accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets.

Net cash flows associated with these repurchase agreements are reported as financing activities in the Condensed Consolidated Statements of Cash Flows.

Revenue from Forward Contracts (ASC 815)

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Prior to settlement, these forward sales contracts are recognized at fair value with the unrealized gains or losses recorded within costs of sales in our Condensed Consolidated Statements of Operations.

For the three and six months ended June 30, 2022, we recorded $ 0.3 million and $ 7.2 million of net unrealized gains, respectively, within costs of sales.

For the three and six months ended June 30, 2021, we recorded $ 3.0 million and $ 0.6 million of net unrealized losses, respectively, within costs of sales.

For the three and six months ended June 30, 2022, the Company recognized $ 52.4 million and $ 90.5 million in revenues under ASC 815, respectively, and for the three and six months ended June 30, 2021, the Company recognized $ 36.5 million and $ 63.9 million in revenues under ASC 815, respectively, which are reported within the Company’s Sustainable Sourcing & Traceability segment.

For the three and nine months ended September 30, 2022, we recorded a nominal amount and $ 7.3 million of net unrealized gains, respectively, within costs of sales.

For the three and nine months ended September 30, 2021, we recorded $ 3.3 million and $ 3.9 million of net unrealized losses, respectively, within costs of sales.

For the three and nine months ended September 30, 2022, the Company recognized $ 56.6 million and $ 147.0 million in revenues under ASC 815, respectively, and for the three and nine months ended September 30, 2021, the Company recognized $ 42.3 million and $ 106.2 million in revenues under ASC 815, respectively, which are reported within the Company’s Sustainable Sourcing & Traceability segment.

Contract Estimates

2 unchanged sentences

These estimated rebates or discounts are included in the transaction price of the Company’s contracts with customers as a reduction to net revenues and are included as accrued sales incentives in accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets.

Accrued sales incentives were $ 1.7 million and $ 1.9 million at June 30, 2022 and December 31, 2021.

Accrued sales incentives were $ 1.3 million and $ 1.9 million at September 30, 2022 and December 31, 2021.

We do not disclose the value of unsatisfied performance obligations for contracts (i) with an original expected length of one year or less or (ii) for which the Company recognizes revenue at the amount in which it has the right to invoice as the product is delivered.

1 unchanged sentence

Contract balances relate primarily to advances received from the Company’s customers before revenue is recognized.

The Company does not have any material contract liabilities as of June 30, 2022 or December 31, 2021.

The Company does not have any material contract liabilities as of September 30, 2022 or December 31, 2021.

Receivables from contracts with customers are included in accounts receivable, net on the Company’s Condensed Consolidated Balance Sheets.

At June 30, 2022 and December 31, 2021, accounts receivable, net included $ 98.1 million and $ 89.0 million in receivables from contracts with customers, respectively.

At September 30, 2022 and December 31, 2021, accounts receivable, net included $ 101.0 million and $ 89.0 million in receivables from contracts with customers, respectively.

Contract acquisition costs for obtaining contracts that are deemed recoverable are capitalized as contract costs.

Such costs result from the payment of sales incentives and are amortized over the contract life.

As of June 30, 2022 and December 31, 2021, no costs were capitalized as all arrangements were less than a year.

As of September 30, 2022 and December 31, 2021, no costs were capitalized as all arrangements were less than a year.

Disaggregated Revenue

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Further disaggregation of revenues from sales to external customers by type are presented below:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Flavors, extracts & ingredients

The following table summarizes inventories as of June 30, 2022 and December 31, 2021:

June 30, 2022

The following table summarizes inventories as of September 30, 2022 and December 31, 2021:

September 30, 2022

December 31, 2021

3 unchanged sentences

Green coffee inventories represent green coffee held for re-sale.

At June 30, 2022 and December 31, 2021, all green coffee held for resale was included within our Sustainable Sourcing & Traceability segment.

At September 30, 2022 and December 31, 2021, all green coffee held for resale was included within our Sustainable Sourcing & Traceability segment.

Property, Plant and Equipment, Net

1 unchanged sentence

Depreciable Lives

June 30, 2022

September 30, 2022

December 31, 2021

10 - 40 years

Leasehold improvements 1

10 unchanged sentences

3 - Lease right-of-use assets are amortized over the shorter of the useful life of the asset or the lease term.

Depreciation expense for the three and six months ended June 30, 2022 was $ 4.3 million and $ 8.5 million, respectively, and depreciation expense for the three and six months ended June 30, 2021 was $ 4.4 million and $ 9.0 million, respectively.

Depreciation expense for the three and nine months ended September 30, 2022 was $ 4.1 million and $ 12.7 million, respectively, and depreciation expense for the three and nine months ended September 30, 2021 was $ 4.4 million and $ 13.4 million, respectively.

Assets classified as construction in progress and equipment deposits are not depreciated, as they are not ready for production use.

All assets classified as construction in progress and equipment deposits at June 30, 2022 are expected to be in production use.

All assets classified as construction in progress and equipment deposits at September 30, 2022 are expected to be in production use.

The following table reflects the carrying amount of goodwill:

Accumulated impairment loss

Balance at June 30, 2022, net

Balance at September 30, 2022, net

Intangible Assets, Net

The following table summarizes intangible assets, net as of June 30, 2022 and December 31, 2021:

June 30, 2022

The following table summarizes intangible assets, net as of September 30, 2022 and December 31, 2021:

September 30, 2022

Customer relationships

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Intangible assets, net

Amortization expense of intangible assets was $ 1.7 million and $ 3.4 million for the three and six months ended June 30, 2022, respectively, and amortization expense of intangible assets was $ 1.7 million and $ 3.3 million for the three and six months ended June 30, 2021, respectively.

As of June 30, 2022, the weighted average useful life for definite-lived intangibles is approximately 20 years .

Amortization expense of intangible assets was $ 1.7 million and $ 5.0 million for the three and nine months ended September 30, 2022, respectively, and amortization expense of intangible assets was $ 1.7 million and $ 5.0 million for the three and nine months ended September 30, 2021, respectively.

As of September 30, 2022, the weighted average useful life for definite-lived intangibles is approximately 20 years .

We have operating leases for manufacturing and production facilities, warehouse facilities, vehicles and machinery and equipment.

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Balance Sheet Location

June 30, 2022

September 30, 2022

Right-of-use operating lease assets

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Depending on the nature of the lease, lease costs are classified within costs of sales or selling, general and administrative expense on the Company’s Condensed Consolidated Statements of Operations.

The components of lease costs are as follow:

Three Months Ended June 30, 2022

Six Months Ended June 30, 2022

The components of lease costs are as follows:

Three Months Ended September 30, 2022

Nine Months Ended September 30, 2022

Operating lease cost

1 unchanged sentence

The following table presents information about the Company’s weighted average discount rate and remaining lease term:

June 30, 2022

September 30, 2022

Weighted-average discount rate

1 unchanged sentence

Supplemental cash flow information about the Company’s leases is as follows:

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Operating cash flows from operating leases

Finance lease assets are recorded in property, plant and equipment, net with the corresponding lease liabilities included in accrued expenses and other current liabilities and long-term debt, net on the Condensed Consolidated Balance Sheets.

There were no material finance leases as of June 30, 2022.

Future minimum lease payments under non-cancellable operating leases as of June 30, 2022 are as follows:

There were no material finance leases as of September 30, 2022.

Future minimum lease payments under non-cancellable operating leases as of September 30, 2022 are as follows:

Remainder of 2022

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Disclosures related to periods prior to adoption of ASC 842

Rent expense for operating lease agreements under the previous lease guidance was $ 1.1 million and $ 2.2 million for the three and six months ended June 30, 2021, respectively.

Rent expense for operating lease agreements under the previous lease guidance was $ 1.0 million and $ 3.2 million for the three and nine months ended September 30, 2021, respectively.

As previously reported in our audited Consolidated Financial Statements for year ended December 31, 2021, the minimum future lease payments under the previous lease guidance as of December 31, 2021 were as follows:

Our long-term debt was as follows:

June 30, 2022

September 30, 2022

December 31, 2021

Term loan facility

Prior term loan facility

Prior ABL facility

International trade finance lines

4 unchanged sentences

Long-term debt, net

Credit Agreement

On August 29, 2022, the Company entered into a credit agreement (the “Credit Agreement”) among the Company, Westrock Beverage Solutions, LLC, as the borrower (the “Borrower”), Wells Fargo Bank, N.A., as administrative agent, collateral agent, and swingline lender, Wells Fargo Securities, LLC, as sustainability structuring agent, and each issuing bank and lender party thereto.

The Credit Agreement includes (a) a senior secured first lien revolving credit facility in an initial aggregate principal amount of $ 175.0 million (the “Revolving Credit Facility”) and (b) a senior secured first lien term loan facility in an initial aggregate principal amount of $ 175.0 million (the “Term Loan Facility”).

Proceeds from the Term Loan Facility were used for paying off existing indebtedness.

The Revolving Credit Facility and the Term Loan Facility will mature on August 29, 2027.

All obligations under the Credit Agreement are guaranteed by the Company and each of the Borrower’s domestic subsidiaries, which comprise our Beverage Solutions segment, and are secured by substantially all of the assets of the Company’s assets.

Borrowings under the Revolving Credit Facility and the Term Loan Facility will bear interest, at the Borrower’s option, initially at an annual rate equal to (i) Term SOFR plus a credit spread adjustment of 0.10 % for loans with an interest period of one month , 0.15 % for loans with an interest period of three months and 0.25 % for loans with an interest period of six months , as applicable, (the “Adjusted Term SOFR Rate”) or (ii) the base rate (determined by reference to the greatest of (i) the rate of interest last quoted by The Wall Street Journal in the U.S.

as the prime rate in effect, (ii) the NYFRB Rate from time to time plus 0.50 % and (iii) the Adjusted Term SOFR Rate for a one month interest period plus 1.00 %, (the “Base Rate”)), in each case plus the Applicable Margin.

The Applicable Margin ranges from 1.50 % to 2.50 % for Adjusted Term SOFR loans and from 0.50 % to 1.50 % for Base Rate loans, in each case depending on the total net leverage ratio.

Commitment fees on the daily unused amount of commitments under the Revolving Credit Facility range from 0.20 % to 0.35 % depending on the total net leverage ratio.

At September 30, 2022, the Revolving Credit Facility was undrawn (other than the standby letters of credit outstanding described below) and the interest rate applicable to our Term Loan Facility was 5.7 %.

The Term Loan Facility requires quarterly principal payments during the first three years of approximately $ 2.2 million ( 1.25 % of the original principal balance beginning December 31, 2022).

Quarterly payments increase to approximately $ 3.3 million and $ 4.4 million ( 1.875 % and 2.5 % of the original principal balance) during the fourth and fifth years, respectively.

We incurred $ 6.0 million of financing fees in connection with the Credit Agreement.

$ 3.0 million of the fees were allocated to the Term Loan Facility and are being amortized utilizing the frozen effective yield method based on the interest rate in place at the issuance of the Term Loan Facility.

$ 3.0 million of the fees were allocated to the Revolving Credit Facility, are reported within other long-term assets on the Condensed Consolidated Balance Sheets and are being amortized ratably over the term of the Revolving Credit Facility.

We had $ 2.6 million of standby letters of credit outstanding at September 30, 2022.

The Credit Agreement contains two financial covenants requiring maintenance of a total net leverage ratio not to exceed 4.50 to 1.00, with a stepdown to 4.00 to 1.00 on the 18-month anniversary of the closing date of Credit Agreement (with an option to increase to 4.50 to 1.00 following certain permitted acquisitions), and an interest coverage ratio of at least 1.50 to 1.00 (the “Financial Covenants”).

As of September 30, 2022, the Company was in compliance with the Financial Covenants.

Prior Term Loan Facility

On February 28, 2020, WBS, as borrower, borrowed $ 240.0 million of term loans from various financial institutions pursuant to a loan and security agreement (the “Prior Term Loan Agreement”) (such term loans, the “Prior Term Loan Facility”).

The Prior Term Loan Facility, which was secured by substantially all the assets of WBS, accrued interest quarterly, at the borrower’s option, at the LIBOR or Prime Rate plus an Applicable Margin, as such terms were defined in the Prior Term Loan Agreement, that corresponded to our total leverage ratio at the end of each quarter.

All outstanding loans during the period presented accrued interest at the LIBOR Rate, and the interest rate on the Prior Term Loan Facility was 9.75 % on June 30, 2022.

The outstanding Prior Term Loan Facility also carried a Payment-in-Kind (“PIK”) interest rate of 0.25 % that accrued to the outstanding balance quarterly as long as the Run-Rate EBITDA, as such term is defined in the Prior Term Loan Agreement, was under certain defined thresholds.

For the three and six months ended June 30, 2022, $ 0.1 million and $ 0.3 million of PIK interest was accrued, respectively.

For the three and six months ended June 30, 2021, $ 0.4 million and $ 1.0 million of PIK interest was accrued, respectively.

Principal payments on the Prior Term Loan Facility were due quarterly, in the amount of 0.625 % of the original principal beginning June 30, 2021, 0.9375 % of the original principal beginning June 30, 2023, and 1.25 % of the original principal balance beginning June 30, 2024 through maturity.

We incurred $ 5.6 million of financing fees in connection with the issuance of the Prior Term Loan Facility.

The financing fees were being amortized using the straight-line method, which is approximate to the effective interest method, over a period of five years , which represents the term to maturity of the Prior Term Loan Facility.

On July 13, 2022, the Company entered into Amendment No.

6 to the Prior Term Loan Agreement (the “Sixth Term Loan Amendment”) to permit the Wooster Pre-fund, as defined in Note 18.

The Sixth Term Loan Amendment included the following modifications:

(i) permitting the incurrence of subordinated debt from Wooster in the form of the Convertible Note, as defined in Note 18;

(ii) extending the PIK interest period to December 31, 2022;

(iii) amending the definitions of EBITDA, Fixed Charge Coverage Ratio and Total Debt (which excludes the Convertible Note);

and (iv) amending the level of the Minimum Liquidity covenant that the Company is required to comply with.

The definition of EBITDA was modified to increase the cap on add-backs for the quarter ended June 30, 2022 and the quarter ended September 30, 2022 from 15 % of EBITDA to 20 % of EBITDA.

The Wooster Pre-fund, together with the Sixth Term Loan Amendment, allowed the Company to meet increased capital expenditure and working capital needs of the business and to remain in compliance with its financial covenants as of June 30, 2022.

In connection with the closing of the Transaction, all outstanding Prior Term Loan Facility balances were repaid, and the associated Prior Term Loan Agreement was terminated.

See Note 18 for additional disclosures related to the new credit agreement.

On February 28, 2020, Westrock Beverage Solutions, LLC, as borrower, borrowed $ 240.0 million of term loans from various financial institutions pursuant to a loan and security agreement (the “Prior Term Loan Agreement”) (such term loans, the “Prior Term Loan Facility”).

In connection with the Closing, all outstanding Prior Term Loan Facility balances were repaid, and the associated Prior Term Loan Agreement was terminated.

The Company paid a $ 1.6 million early termination fee, and wrote off $ 4.0 million of unamortized deferred financing fees associated with the termination of the Prior Term Loan Facility, which are recorded within interest expense on the Condensed Consolidated Statement of Operations.

Prior ABL Facility

On February 28, 2020, WBS, as borrower, entered into a credit agreement with Bank of America as administrative agent (the “Prior ABL Credit Agreement”) that created an asset-based loan of $ 90.0 million (the “Prior ABL Facility”).

Proceeds from the Prior ABL Facility could be used for any lawful corporate purposes, including working capital.

Depending on the loan type, interest accrued, at the borrower’s option, at the LIBOR or Base Rate plus an Applicable Margin, as such terms were defined in the Prior ABL Credit Agreement.

The Applicable Margin ranged from 1.50 % to 3.00 % for LIBOR Rate loans and 0.50 % to 2.00 % for Base Rate loans.

We incurred related financing fees of $ 2.6 million which were capitalized and reported within other long-term assets on our Condensed Consolidated Balance Sheets and were being amortized using the straight-line method over the duration of the amended Prior ABL Facility.

As of June 30, 2022, our total availability under the Prior ABL Facility was $ 14.5 million, which was based on our borrowing base (accounts receivables and inventory as of May 31, 2022).

As of June 30, 2022, we had $ 72.8 million of outstanding borrowings under the Prior ABL Facility and $ 2.7 million of outstanding letters of credit.

The Prior ABL Facility carried a commitment fee on any of the unused commitment of 0.375 % per annum.

The weighted average effective interest rate on our outstanding borrowings was 5.8 % on June 30, 2022.

On July 13, 2022, the Company entered into Amendment No.

4 to the Prior ABL Credit Agreement, which included the following modifications:

(i) permitting the incurrence of the Wooster Pre-fund, as defined in Note 18, and (ii) amending the definitions of EBITDA, Fixed Charge Coverage Ratio and Total Debt (which excludes the Convertible Note, as defined in Note 18).

The definition of EBITDA was modified to increase the cap on add-backs for the quarter ended June 30, 2022 and the quarter ended September 30, 2022 from 15 % of EBITDA to 20 % of EBITDA.

In connection with the closing of the Transaction, all outstanding Prior ABL Facility balances were repaid, and the associated Prior ABL Credit Agreement was terminated.

Outstanding letters of credit will be replaced by letters of credit under the new credit agreement entered into in connection with the Transaction.

See Note 18 for additional disclosures related to the new credit agreement.

Covenant Compliance

The respective loan and security agreements, as amended, governing the Prior ABL Facility and the Prior Term Loan Facility each contain a number of covenants and restrictions, including covenants that limit our and certain of our subsidiaries’ ability, subject to certain exceptions and qualifications, to (i) pay dividends or make distributions, repurchase equity securities, prepay subordinated debt or make certain investments, (ii) incur additional debt or issue certain disqualified stock or preferred stock, (iii) create or incur liens on assets securing indebtedness, (iv) merge or consolidate with another company or sell all or substantially all of our assets taken as a whole, (v) enter into transactions with affiliates, and (vi) sell assets.

The covenants and restrictions are substantially similar across both credit facilities.

As of June 30, 2022, and the Closing, we were in compliance with covenants under both the Prior Term Loan Facility and Prior ABL Facility.

As of August 29, 2022, upon termination of the Prior Term Loan Facility and Prior ABL Facility, the Company is no longer subject to the covenants and restrictions under these agreements.

Under the terms of the Credit Agreement entered into on August 29, 2022, beginning on September 30, 2022, the Company will be subject to a number of covenants and restrictions, including a maximum net leverage ratio and minimum interest coverage ratio, each as defined in the Credit Agreement.

On February 28, 2020, Westrock Beverage Solutions, LLC, as borrower, entered into a loan and security agreement with Bank of America as administrative agent (the “Prior ABL Credit Agreement”) that created an asset-based loan of $ 90.0 million (the “Prior ABL Facility”).

In connection with the Closing, all outstanding Prior ABL Facility balances were repaid, and the associated Prior ABL Credit Agreement was terminated.

Upon termination, we wrote off $ 0.3 million of the $ 1.3 million unamortized deferred financing fees associated with the Prior ABL Facility, which are recorded within interest expense on the Condensed Consolidated Statement of Operations.

The remaining unamortized deferred financing fees were allocated to the new Revolving Credit Facility and will be amortized over the life of the Revolving Credit Facility.

Outstanding letters of credit under the Prior ABL Facility were replaced by letters of credit under the Credit Agreement.

International Debt and Lending Facilities

At June 30, 2022, Westrock Coffee International, LLC, an Arkansas limited liability company and wholly owned subsidiary of the Company, through its subsidiary Falcon Coffees Limited (“Falcon”) had a $ 1.6 million promissory note payable with responsAbility SICAV (Lux), split into two tranches.

At September 30, 2022, Westrock Coffee International, LLC, an Arkansas limited liability company and wholly owned subsidiary of the Company, through its subsidiary Falcon Coffees Limited (“Falcon”) had a $ 0.7 million promissory note payable with responsAbility SICAV (Lux).

Proceeds from the note are restricted for the sole purpose of financing Falcon’s trading activities.

The note was amended in January 2022 to adjust the maturity of certain tranches, and to re-set interest rates.

Borrowings on the note bear interest at a fixed rate of 9.5 % for both the $ 0.9 million

tranche and the $ 0.7 million tranche maturing on September 30, 2022 and December 31, 2022, respectively.

Borrowings on the note bear interest at a fixed rate of 9.5 % and mature on December 31, 2022.

Westrock Coffee International, LLC, through its subsidiary Rwanda Trading Company, maintains two mortgage-backed lending facilities with a local bank in Rwanda:

a short-term trade finance facility with a balance of $ 8.9 million at June 30, 2022 and a long-term note payable with a balance of $ 1.9 million at June 30, 2022.

a short-term trade finance facility with a balance of $ 9.1 million at September 30, 2022 and a long-term note payable with a balance of $ 1.9 million at September 30, 2022.

The short-term trade finance facility and the long-term note payable bear interest at a rate of 6.5 % and 7.0 %, respectively.

Falcon maintains a working capital trade finance facility with multiple financial institutions, which prior to March 16, 2022, was agented by Brown Brothers Harriman (“BBH”), a related party of the Company through its equity interests in the Company, and was reported as short-term related party debt on the Condensed Consolidated Balance Sheets.

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On April 29, 2022, the facility size increased from $ 50 million to $ 55 million and subsequently, on June 16, 2022, the facility size increased to $ 62.5 million.

At June 30, 2022, there was $ 52.0 million outstanding under the facility, which is recorded in short-term debt in the Condensed Consolidated Balance Sheets.

At September 30, 2022, there was $ 49.6 million outstanding under the facility, which is recorded in short-term debt in the Condensed Consolidated Balance Sheets.

Interest is payable monthly at the U.S.

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The credit facility is secured by substantially all liquid assets of Falcon.

Falcon’s facility contains certain restrictive financial covenants which require Falcon to maintain certain levels of working capital, debt, and net worth.

Falcon was in compliance with these financial covenants as of June 30, 2022.

Falcon’s facility

contains certain restrictive financial covenants which require Falcon to maintain certain levels of working capital, debt, and net worth.

Falcon was in compliance with these financial covenants as of September 30, 2022.

Subordinated Related Party Debt

On February 28, 2020, we issued $ 13.3 million of subordinated debt (the “Subordinated Notes”) to Wooster Capital, LLC (“Wooster”) and Jo Ellen Ford, related parties of the Company through their equity ownership and relation with Joe Ford, the chairman of our board of directors.

The Subordinated Notes provided for maturity on the earlier of (i) six months after the Prior Term Loan Facility due in 2025 is paid in full or (ii) 10 years from the date of issuance (February 2030).

The Subordinated Notes provided for maturity on the earlier of (i) six months after the Prior Term Loan Facility due in 2025 was paid in full or (ii) 10 years from the date of issuance (February 2030).

Interest was payable quarterly at the end of each calendar quarter at a rate of 6 % per annum.

Substantially concurrently with the closing of the Transaction and pursuant to the terms of their respective subscription agreements with the Company, Wooster and Jo Ellen Ford contributed their respective Subordinated Notes to the Company and in exchange for such contribution, the Company issued shares of common stock, par value $ 0.01 per share, of the Company (“Common Stock”) to Wooster and Jo Ellen Ford.

The Company issued a total of 1,330,000 shares of Common Stock in exchange for the contribution of the Subordinated Notes, which were subsequently extinguished.

Substantially concurrently with the Closing and pursuant to the terms of their respective subscription agreements with the Company, Wooster and Jo Ellen Ford contributed their respective Subordinated Notes to the Company and in exchange for such contribution, the Company issued Common Shares, par value $ 0.01 per share, to Wooster and Jo Ellen Ford.

The Company issued a total of 1,330,000 Common Shares in exchange for the contribution of the Subordinated Notes, which were subsequently extinguished.

In connection with the Transaction, on July 14, 2022, pursuant to the terms of the subscription agreement entered into between the Company and Wooster, in which Wooster agreed to subscribe for and purchase, and the Company agreed to issue and sell to Wooster, prior to and substantially concurrently with the Closing, an aggregate of 2,150,000 Common Shares at a purchase price of $ 10.00 per share, for aggregate gross proceeds of $ 21,500,000 to the Company, Wooster pre-funded $ 11.7 million of its commitment (the “Wooster Pre-fund”) and in exchange thereof was issued a subordinated convertible note by the Company (the “Convertible Note”).

The Convertible Note had a principal amount of $ 11.7 million, a maturity of one year and an interest rate of 8 % per annum which was payable quarterly on the last business day of each quarter.

On August 26, 2022, in connection with the Closing, the Convertible Note automatically converted, in accordance with its terms, into 1,170,000 Common Shares.

Series A Preferred Shares

In connection with the Transaction, the Company issued 23,587,952 Westrock Series A Preferred Shares, which rank senior to the Common Shares with respect to dividend rights and/or distribution rights upon the liquidation, winding up or dissolution, as applicable, of Westrock.

Each holder of Westrock Series A Preferred Shares is entitled to vote, on an as-converted basis, as a single class with the holders of Common Shares and the holders of any other class or series of capital stock of Westrock then entitled to vote with the Common Shares on all matters submitted to a vote of the holders of Common Shares.

The initial liquidation preference of Westrock Series A Preferred Shares is $ 11.50 per share, plus any declared but unpaid dividends and subject to accretion under certain circumstances.

In the event of our liquidation, dissolution or winding up, holders of Westrock Series A Preferred Shares are entitled to receive, per Westrock Series A Preferred Share, the greater of (a) the liquidation preference and (b) the amount such holder would have received had they converted their Westrock Series A Preferred Shares into Common Shares immediately prior to such liquidation event.

Holders of Westrock Series A Preferred Shares may voluntarily convert their Westrock Series A Preferred Shares into a whole number of Common Shares at any time at a rate equal to the quotient of (a) the liquidation preference as of the applicable conversion date, divided by (b) the conversion price as of the applicable conversion date, which is currently $ 11.50 per Westrock Series A Preferred Share, plus cash in lieu of fractional shares.

The initial conversion price of $ 11.50 per Westrock Series A Preferred Share is subject to customary adjustments for the issuance of Common Shares as a dividend or distribution to the holders of Common Shares, a subdivision or combination of the Common Shares, reclassification of the Common Shares into a greater or lesser number of Common Shares, certain tender or exchange offers for the Common Shares, and issuances of Common Shares below a specified price.

After February 26, 2028 (i.e., the five and a half year anniversary of the Closing), any holder of Westrock Series A Preferred Shares may require Westrock to redeem all or any whole number of such holder’s Westrock Series A Preferred Shares in cash, subject to applicable law and the terms of any credit agreement or similar arrangement pursuant to which

a third-party lender provides debt financing to Westrock or its subsidiaries, at a redemption price per share equal to the greater of (a) the liquidation preference and (b) the product of (i) the number of Common Shares that would have been obtained from converting one Westrock Series A Preferred Share on the redemption notice date and (ii) the simple average of the daily volume weighted average price per Common Share for the ten trading days ending on and including the trading day immediately preceding the redemption notice date.

At any time after February 26, 2028 (i.e., the five and a half year anniversary of the date of Closing), Westrock may redeem, ratably, in whole or, from time to time in part, the Westrock Series A Preferred Shares of any holder then outstanding at the redemption price in cash, equal to the greater of (i) the liquidation preference and (ii) the product of (x) the number of Common Shares that would have been obtained from converting one Westrock Series A Preferred Share on the date of the exercise of such call is notified by Westrock (including fractional shares for this purpose) and (y) the simple average of the daily volume weighted average price per Common Share for the ten trading days ending on and including the trading day immediately preceding the date of the exercise of such call by Westrock.

The redemption price for the Westrock Series A Preferred Shares held by controlled affiliates of Brown Brothers Harriman & Co.

(“BBH Investors”) may not be less than the $ 18.50 per Westrock Series A Preferred Share (subject to adjustments);

provided that, Westrock may redeem such shares in such a case if it pays an incremental price per share on the redemption date to the BBH Investors equal to the difference between $ 18.50 (subject to adjustments) and the redemption price otherwise.

Upon issuance, the Westrock Series A Preferred Shares were recorded on our Condensed Consolidated Balance Sheets at fair value.

Subsequently, the Company will accrete changes in the redemption value from the date of issuance to the earliest redemption date (i.e., the five and a half year anniversary of the date of Closing) using the effective interest rate method.

The accretion will be recorded as a deemed dividend, which adjusts retained earnings (or in the absence of retained earnings, additional paid-in capital) and earnings attributable to common shareholders in computing basic and diluted earnings per share.

However, at no time will the Westrock Series A Preferred Shares be reported at a value less than its initial carrying value.

At September 30, 2022 the redemption value of the Westrock Series A Preferred Shares was less than its initial carrying value, as a result, no accretion was recorded for the three months ended September 30, 2022.

We record all derivatives, whether designated in a hedging relationship or not, at fair value on the Condensed Consolidated Balance Sheets.

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The changes in fair values of hedges that are determined to be ineffective are immediately reclassified from AOCI into earnings.

We did not discontinue any cash flow hedging relationships during the six months ended June 30, 2022 or 2021.

We did not discontinue any cash flow hedging relationships during the nine months ended September 30, 2022 or 2021.

Within our Beverage Solutions segment, we have entered into coffee futures and options contracts to hedge our exposure to price fluctuations on green coffee associated with certain price-to-be-fixed purchase contracts, which generally range from three to twelve months in length.

1 unchanged sentence

The objective of this hedging program is to reduce the variability of cash flows associated with future purchases of green coffee.

The notional amount for the coffee futures contracts that were designated and qualified for our commodity cash flow hedging program was 1.5 million pounds and 7.9 million pounds as of June 30, 2022 and December 31, 2021, respectively.

During the three and six months ended June 30, 2022, the Company purchased coffee futures contracts and coffee options contracts under our cash flow hedging program with aggregate notional amounts of 6.9 million pounds and 48.2 million pounds, respectively.

During the three and six months ended June 30, 2021, the Company purchased coffee futures contracts and coffee options contracts under our cash flow hedging program with aggregate notional amounts of 21.3 million pounds and 48.6 million pounds, respectively.

Approximately $ 2.7 million and $ 6.8 million of net realized gains, representing the effective portion of the cash flow hedge, were subsequently reclassified from AOCI to earnings and recognized in costs of sales in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022, respectively.

Approximately $ 1.3 million and $ 1.9 million of net realized gains, representing the effective portion of the cash flow hedge, were subsequently reclassified from AOCI to earnings and recognized in costs of sales in the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2021, respectively.

As of June 30, 2022, the estimated amount of net gains reported in AOCI that is expected to be reclassified to the Condensed Consolidated Statements of Operations within the next twelve months is $ 2.1 million.

The notional amount for the coffee futures contracts that were designated and qualified for our commodity cash flow hedging program was 11.4 million pounds and 7.9 million pounds as of September 30, 2022 and December 31, 2021, respectively.

During the three and nine months ended September 30, 2022, the Company purchased coffee futures contracts and coffee options contracts under our cash flow hedging program with aggregate notional amounts of 8.8 million pounds and 57.0 million pounds, respectively.

During the three and nine months ended September 30, 2021, the Company purchased coffee futures contracts and coffee options contracts under our cash flow hedging program with aggregate notional amounts of 26.5 million pounds and 75.1 million pounds, respectively.

Approximately $ 4.3 million and $ 11.1 million of net realized gains, representing the effective portion of the cash flow hedge, were subsequently reclassified from AOCI to earnings and recognized in costs of sales in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022, respectively.

Approximately $ 1.7 million and $ 3.6 million of net realized gains, representing the effective portion of the cash flow hedge, were subsequently reclassified from AOCI to earnings and recognized in costs of sales in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021, respectively.

As of September 30, 2022, the estimated amount of net losses reported in AOCI that is expected to be reclassified to the Condensed Consolidated Statements of Operations within the next twelve months is $ 1.6 million.

Within our Sustainable Sourcing & Traceability segment, the Company’s forward sales and forward purchase contracts are for physical delivery of green coffee in a future period.

3 unchanged sentences

Balance Sheet Location

June 30, 2022

September 30, 2022

December 31, 2021

5 unchanged sentences

Derivative assets not designated as cash flow hedging instruments:

Forward sales contracts

Forward purchase and sales contracts

Derivative assets

6 unchanged sentences

Derivative liabilities not designated as cash flow hedging instruments:

Forward purchase contracts

Forward purchase and sales contracts

Derivative liabilities

2 unchanged sentences

The following table presents the pre-tax net gains and losses for our derivative instruments:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Statement of Operations Location

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ASC 820, Fair Value Measurements , defines fair value at the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.

Additionally, the inputs used to measure fair value are prioritized based on a three-level hierarchy.

Additionally, the inputs used to measure fair value are

prioritized based on a three-level hierarchy.

This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.

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These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.

The following table summarizes the fair value of financial instruments at June 30, 2022:

June 30, 2022

The following table summarizes the fair value of financial instruments at September 30, 2022:

September 30, 2022

Green coffee associated with forward contracts

Forward sales contracts

Coffee futures contracts

Forward purchase and sales contracts

Coffee options

Coffee futures contracts

Forward purchase contracts

Forward purchase and sales contracts

Coffee options

Westrock Public Warrants

Westrock Private Warrants

The following table presents the change in the fair value of Level 3 Westrock Private Warrant liabilities:

Westrock Private Warrants

Fair value as of January 1, 2022

Assumption of warrants

Change in fair value

Fair value as of September 30, 2022

The following table summarizes the fair value of financial instruments at December 31, 2021:

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Coffee futures contracts

Forward sales contracts

Forward purchase contracts

Forward purchase and sales contracts

Coffee options

Forward purchase and sales contracts

Coffee futures contracts and coffee options are valued based on quoted market prices.

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As a result, green coffee associated with forward contracts and forward sales and purchase contracts are classified within Level 2 of the fair value hierarchy.

Westrock Public Warrants are valued based on their quoted market price of $ 1.45 per warrant as of September 30, 2022.

Westrock Private Warrants price of $ 1.92 per warrant are valued using a binomial lattice valuation model, which is considered to be a Level 3 fair value measurement.

The primary unobservable inputs were as follows:

September 30, 2022

Exercise price

Expected term (years)

Expected volatility

Risk-free rate of return

Dividend yield

Financial instruments consist primarily of cash, accounts receivable, accounts payable, and long-term debt.

The carrying amount of cash, accounts receivable and accounts payable was estimated by management to approximate fair value due to the relatively short period of time to maturity for those instruments.

In November 2021, we amended our Prior Term Loan Agreement and our Prior ABL Credit Agreement, which comprise our material long-term debt obligations.

As there was no re-pricing of those obligations in connection with the amendments, the carrying amount of these obligations was estimated by management to approximate fair value as of June 30, 2022 and December 31, 2021.

Due to the LIBOR-based nature of the Prior Term Loan Facility and the Prior ABL Facility, the Prior Term Loan Facility and the Prior ABL Facility are carried on the Condensed Consolidated Balance Sheets at amortized costs.

The fair value of the Prior Term Loan Facility and the Prior ABL Facility was determined based on Level 2 inputs under the fair value hierarchy.

On August 29, 2022, the Company entered into the Credit Agreement, which includes the Term Loan Facility and the Revolving Credit Facility.

The Term Loan Facility and the Revolving Credit Facility are carried on the Condensed Consolidated Balance Sheets at amortized cost.

In November 2021, we amended our Prior Term Loan Agreement and our Prior ABL Credit Agreement, which comprised our material long-term debt obligations at December 31, 2021.

The Prior Term Loan Facility and the Prior ABL Facility were carried on the Condensed Consolidated Balance Sheets at amortized cost.

The fair value of the Term Loan Facility, Revolving Credit Facility, Prior Term Loan Facility and the Prior ABL Facility was determined based on Level 2 inputs under the fair value hierarchy.

Non-financial assets and liabilities, including property, plant and equipment, goodwill, and intangible assets are measured at fair value on a non-recurring basis.

No events occurred during the three or six months ended June 30, 2022 and 2021, requiring these non-financial assets and liabilities to be subsequently recognized at fair value.

No events occurred during the three or nine months ended September 30, 2022 and 2021, requiring these non-financial assets and liabilities to be subsequently recognized at fair value.

Accumulated Other Comprehensive Income

Changes in accumulated other comprehensive loss, net of tax by component is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Cash flow hedge changes in fair value gain (loss):

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Amounts reclassified from accumulated comprehensive income

Net accumulated other comprehensive income

Net other comprehensive income

Other comprehensive income attributable to noncontrolling interests

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Accumulated other comprehensive income at end of period

Earnings per Unit

Prior to the Conversion, the Company’s ownership interests consisted of two classes of equity units, referred to as Common Units and Common Equivalent Preferred Units (“CEP Units”).

The dilutive effect of CEP Units is calculated by using the “if-converted” method.

This assumes an add-back of dividends on the CEP Units to net income attributable to unitholders as if the securities were converted to Common Units at the beginning of the reporting period (or at the time of issuance, if later), and the resulting Common Units are included in the number of weighted-average units outstanding.

The dilutive effect of time-based option awards and restricted stock units is calculated using the treasury stock method, while performance-based vesting units are treated as contingently issuable.

We have excluded from the computation of diluted units the effect of time-based unit options, restricted Common Units, and CEP Units because their inclusion would have an anti-dilutive effect due to our reported net loss.

We had 16.4 million unit options, 4.5 million restricted Common Units, and 239.2 million CEP Units outstanding at June 30, 2022, and 13.1 million, 9.1 million and 222.2 million of unit options, restricted Common Units, and CEP Units outstanding, respectively, at June 30, 2021.

Three Months Ended June 30,

Six Months Ended June 30,

Equity-Based Compensation

In August 2022, the Company’s Board of Directors adopted the Westrock Coffee Company 2022 Equity Incentive Plan (“2022 Equity Plan”), which is administered by the Compensation Committee of the Board of Directors.

Awards issuable under the 2022 Equity Plan include restricted stock, restricted stock units, incentive stock options, “non-qualified” stock options, stock appreciation rights and performance shares.

Restricted Stock Unit Awards

During the quarter ended September 30, 2022, the Company granted 1.1 million restricted stock units (“RSUs”) to employees, which had a grant date fair value of $ 12.8 million.

We calculate the grant date fair value of non-vested RSUs using the closing price of the Company’s Common Shares on the day of the grant.

The RSUs are amortized on a straight-line basis to expense over the vesting period, which is generally three years .

As of September 30, 2022, there were 3.5 million shares available for future issuance under the 2022 Equity Plan.

The following table sets forth the number of unvested RSUs and the weighted-average fair value of these awards at the date of grant.

Outstanding at December 31, 2021

Outstanding at September 30, 2022

Furthermore, in August 2022, in connection with the Transaction, unit option awards issued under the Company’s 2020 Unit Option Incentive Plan, were equitably converted in accordance with the terms of the 2020 Unit Option Incentive Plan and the Transaction Agreement.

Each outstanding option to purchase units of Westrock Coffee Holdings, LLC, whether vested or unvested, was converted into an option to purchase Common Shares based on an exchange ratio (the “Exchange Ratio”) defined in the Transaction Agreement.

The per unit exercise price of unit options was converted to a per share exercise price based on the Exchange Ratio, and with respect to performance-based options, such options converted into performance-based options to purchase Common Shares that vest once the simple average of the daily volume weighted average price per share of Common Shares for 10 trading days in any consecutive 30 -day period is $ 18.50 per share.

These changes were deemed to be Type I modifications under ASC 718, Compensation – Stock Compensation ;

however, these modifications did not result in any additional compensation expense to be recognized by the Company.

Earnings per Share

Prior to the Conversion, the Company’s ownership interests consisted of two classes of equity units, referred to as Common Units and Common Equivalent Preferred Units (“CEP Units”), which have been retroactively restated as shares reflecting the conversion ratios discussed in Note 4.

Our Series A Preferred Shares and RSUs issued under our 2022 Equity Incentive Plan are considered participating securities as they receive non-forfeitable rights to dividends at the same rate as Common Shares.

As participating securities, we include these instruments in the computation of earnings per share under the two-class method described in ASC 260, Earnings per Share.

Prior to the Conversion, the dilutive effect of CEP Units is calculated by using the “if-converted” method.

This assumes an add-back of dividends on the CEP Units to net income attributable to unitholders as if the securities were converted to common shares at the beginning of the reporting period (or at the time of issuance, if later), and the resulting common shares are included in the number of weighted-average units outstanding.

The dilutive effect of time-based option awards and RSUs is calculated using the treasury stock method, while performance-based awards are treated as contingently issuable.

We have excluded from the computation of diluted shares the effect of Warrants, time-based options awards and RSUs because their inclusion would have an anti-dilutive effect due to our reported net loss.

We had 19.9 million warrants, 1.6 million time-based options awards, and 1.1 million RSUs outstanding at September 30, 2022, and 15.3 million, 9.1 million and 222.2 million unit options, restricted Common Units, and CEP Units outstanding, respectively, at September 30, 2021, which if converted into common shares would yield 1.6 million, 1.0 million, and 23.3 million common shares, respectively.

The following table sets forth the computation of basic and diluted earnings per share under the two-class method.

Three Months Ended September 30,

Nine Months Ended September 30,

(Thousands, except per unit data)

Diluted Earnings per Common Unit

Net loss attributable to common unitholders - basic

Impact of if-converted securities

Net loss attributable to common unitholders - diluted

Weighted-average common units outstanding - basic

Basic Earnings per Common Share

Net loss attributable to common shareholders

Basic weighted-average common shares outstanding

Basic Loss per common share

Diluted Earnings per Common Share

Net loss attributable to common shareholders

Impact of non-participating securities

Net loss attributable to common shareholders - diluted

Basic weighted-average common shares outstanding

Impact of dilutive non-participating securities

Impact of if-converted securities

Effect of other dilutive securities

Weighted-average common units outstanding - diluted

Dilutive loss per common unit

Weighted-average shares for dilutive earnings per common share

Dilutive loss per common share

Segment Information

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Management evaluates the performance of each segment using Adjusted EBITDA, which is a segment performance measure we define as net income determined in accordance with GAAP, before interest expense, provision for income taxes, depreciation and amortization, equity-based compensation expense and the impact, which may be recurring in nature, of acquisition, transaction and integrations costs, including management services and consulting agreements entered into in connection with the acquisition of S&D Coffee, Inc.

(“S&D”), impairment charges, non-cash mark-to-market adjustments, certain costs specifically excluded from the calculation of EBITDA under our material debt agreements, and other similar or infrequent items (although we may not have had such charges in the periods presented).

(“S&D”), impairment charges, changes in the fair value of warrant liabilities, non-cash mark-to-market adjustments, certain costs specifically excluded from the calculation of EBITDA under our material debt agreements, such as facility start-up costs, and other similar or infrequent items (although we may not have had such charges in the periods presented).

Selected financial data related to our segments is presented below:

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Adjusted EBITDA

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Acquisition, restructuring and integration expense

Management and consulting fees

Change in fair value of warrants

Management and consulting fees (S&D Coffee, Inc.

Equity-based compensation

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Loss on disposal of property, plant and equipment

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Adjusted EBITDA

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Acquisition, restructuring and integration expense

Management and consulting fees

Management and consulting fees (S&D Coffee, Inc.

Equity-based compensation

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Gain on disposal of property, plant and equipment

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Adjusted EBITDA

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Acquisition, restructuring and integration expense

Management and consulting fees

Change in fair value of warrants

Management and consulting fees (S&D Coffee, Inc.

Equity-based compensation

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Loss on disposal of property, plant and equipment

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Adjusted EBITDA

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Acquisition, restructuring and integration expense

Management and consulting fees

Management and consulting fees (S&D Coffee, Inc.

Equity-based compensation

Mark-to-market adjustments

Loss on disposal of property, plant and equipment

Gain on disposal of property, plant and equipment

The following table presents net sales information by geographic area.

Net sales are attributed to countries based on the customer invoice location.

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

United States

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Management believes that the resolution of these matters will not have a material adverse effect on our financial position, results of operations, or cash flow.

We had $ 2.7 million in standby letters of credit outstanding as of June 30, 2022.

We have future purchase obligations of $ 371.7 million as of June 30, 2022 that consist of commitments for the purchase of inventory over the next 12 months.

We have future purchase obligations of $ 284.6 million as of September 30, 2022 that consist of commitments for the purchase of inventory over the next 12 months.

These obligations represent the minimum contractual obligations expected under the normal course of business.

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As such, these persons and entities are deemed related parties.

In connection with the acquisition of S&D on February 28, 2020, certain affiliates of BBH were issued CEP Units, at which time BBH became a related party.

In connection with the acquisition of S&D on February 28, 2020, certain affiliates of BBH were issued equity of the Company at which time BBH became a related party.

The consolidated financial statements reflect the following transactions with related parties:

June 30, 2022

September 30, 2022

December 31, 2021

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Jo Ellen Ford (1)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Interest expense, net:

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The associated expense is recorded within selling, general and administrative expense in our Condensed Consolidated Statements of Operations.

The Company recognized $ 0.8 million and $ 1.7 million of such expenses during the three and six months ended, respectively, for both June 30, 2022 and 2021.

The Company recognized $ 0.8 million and $ 2.5 million of such expenses during the three and nine months ended, respectively, for both September 30, 2022 and 2021.

In addition, the Company reimburses Westrock Group for the usage of a corporate aircraft, and its portion of shared office space.

For the three and six months ended June 30, 2022, the Company incurred expenses of $ 0.2 million and $ 0.5 million, respectively, for such items, which are recorded in selling, general and administrative expenses on our Condensed Consolidated Statements of Operations.

For the three and six months ended June 30, 2021, the Company incurred expenses of $ 0.2 million and $ 0.3

million, respectively, for such items.

At June 30, 2022 and December 31, 2021, we had payables to Westrock Group of $ 0.5 million and $ 0.2 million, respectively, reported within accrued expenses and other current liabilities on our Condensed Consolidated Balance Sheets.

For the three and nine months ended September 30, 2022, the Company incurred expenses of $ 0.3 million and $ 1.0 million, respectively, for such items, which are recorded in selling, general and administrative expenses on our Condensed Consolidated Statements of Operations.

For the three and nine months ended September 30, 2021, the Company incurred expenses of $ 0.2 million and $ 0.5 million, respectively, for such items.

At September 30, 2022 and December 31, 2021, we had

payables to Westrock Group of $ 0.1 million and $ 0.2 million, respectively, reported within accrued expenses and other current liabilities on our Condensed Consolidated Balance Sheets.

Subsequent Events

On August 26, 2022, in accordance with the Transaction Agreement, the Company completed its previously announced de-SPAC merger transaction with Riverview.

The Company issued 6,618,151 million shares of Common Stock to shareholders of Riverview, receiving $ 66.3 million of the cash held in the trust account of Riverview.

The 6,618,151 million shares include 1,910,000 shares issued to PIPE investors who elected to satisfy their PIPE commitments through the purchase of Riverview Class A Shares on the public market, as permitted under the terms of their subscription agreements.

As a part of the Transaction, Westrock converted from a Delaware limited liability company to a Delaware corporation and the Company changed its corporate name from “Westrock Coffee Holdings, LLC” to “Westrock Coffee Company.” Substantially concurrently with the closing of the Transaction, the Company has received $ 230.9 million in gross proceeds (which amount includes the contribution to the Company of the Subordinated Notes and the Convertible Note, defined below) from PIPE Financing and has entered into a credit agreement among the Company, WBS, as the borrower, Wells Fargo Bank, N.A.

as administrative agent, as collateral agent, and as swingline leader, Wells Fargo Securities, LLC, as sustainability structuring agent, and each issuing bank and lender party thereto, that includes (a) the Revolving Credit Facility in an initial aggregate principal amount of $ 175.0 million, under which there were no outstanding borrowings as of August 29, 2022, and (b) the Term Loan Facility in an initial aggregate principal amount of $ 175.0 million.

Proceeds from the Transaction and the Term Loan Facility were used, in part, to retire borrowings under the Company’s existing term loan agreement and asset-based lending facility.

The Revolving Credit Facility and the Term Loan Facility will mature on August 29, 2027.

In connection with the Transaction, on July 14, 2022, and as discussed within Note 10, pursuant to the terms of the subscription agreement entered into between the Company and Wooster, in which Wooster agreed to subscribe for and purchase, and the Company agreed to issue and sell to Wooster, prior to and substantially concurrently with the closing of the Transaction, an aggregate of 2,150,000 shares of Common Stock at a purchase price of $ 10.00 per share, for aggregate gross proceeds of $ 21,500,000 to the Company, Wooster pre-funded $ 11.7 million of its commitment (the “Wooster Pre-fund”) and in exchange thereof was issued a subordinated convertible note by the Company (the “Convertible Note”).

The Convertible Note had a principal amount of $ 11.7 million, a maturity of one year and an interest rate of 8 % per annum which was payable quarterly on the last business day of each quarter.

On August 26, 2022, in connection with the closing of the Transaction, the Convertible Note automatically converted, in accordance with its terms, into 1,170,000 shares of Common Stock.

On November 14, 2022, Westrock Beverage Solutions, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company, acquired one hundred percent ( 100 %) of the equity securities of Kohana Coffee, LLC (“Kohana Coffee”), a Texas limited liability company.

Kohana Coffee is an extract and ready-to-drink focused business, based in Richmond, California, serving customers in the retail and CPG industries.

Aggregate consideration paid for Kohana Coffee included 1,852,608 shares of common stock of the Company, par value $ 0.01 per share, and approximately $ 15.5 million in cash, subject to customary adjustments.

We expect the business combination to be accounted for using the acquisition method of accounting under ASC 805.

However, due to the timing of the acquisitions subsequent to our September 30, 2022 reporting date, the initial accounting, including the allocation of purchase price and related supplemental pro form information, is incomplete as of the filing date.

As a result, applicable disclosures related to the acquisition of Kohana Coffee are not included herein.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements