Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and to ensure that information required to be disclosed is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.
Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023, the end of the period covered by this Annual Report. Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2023 due to the material weaknesses in our internal control over financial reporting, described below.
However, after giving full consideration to the material weaknesses, management believes that our consolidated financial statements included in this Annual Report on Form 10-K have been prepared in accordance with U.S. GAAP. Our Principal Executive Officer and Principal Financial Officer have certified that, based on such officer’s knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report.
Management’s Report on Internal Control Over Financial Reporting
Our management, with the participation of our Principal Executive Office and Principal Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023, based on criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013) (“COSO Framework”). Based on that assessment, management has concluded that, as of December 31, 2023, due to the material weaknesses in internal control over financial reporting discussed below, the Company’s internal control over financial reporting was not effective.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. We have identified the following material weaknesses in our internal control over financial reporting, which remain outstanding as of December 31, 2023.
Westrock did not design and maintain effective controls in response to the risks of material misstatement as changes to existing controls or the implementation of new controls were not sufficient to respond to changes to the risks of material
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misstatement to financial reporting. This material weakness in risk assessment contributed to the following material weaknesses:
● Westrock did not design and maintain effective controls over the period-end financial reporting process to achieve complete and accurate financial accounting, reporting and disclosures, including the presentation and classification of various accounts and the recognition of operating lease right-of-use assets and operating lease liabilities in the consolidated financial statements, which resulted in immaterial adjustments to certain interim and annual periods for the years ending December 31, 2020 through December 31, 2023, and material adjustments to the cash flow presentation of net repayments from repurchase agreements within financing activities within the condensed consolidated statement of cash flows for the six months ended June 30, 2023 and to operating lease right-of-use assets and operating lease liabilities within the consolidated balance sheet as of December 31, 2023.
● Westrock did not design and maintain effective controls related to ensuring appropriate segregation of duties as it relates to the preparation and review of journal entries and account reconciliations, which did not result in adjustments to the consolidated financial statements .
● Westrock did not design and maintain effective controls over certain information technology (“IT”) or general computer controls for information systems that are relevant to the preparation of the consolidated financial statements. Specifically, Westrock did not design and maintain: (i) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately; (ii) user access controls to ensure appropriate segregation of duties and adequate restricted user and privileged access to financial applications, data and programs to the appropriate personnel; (iii) computer operations controls to ensure that data backups are authorized and monitored; and (iv) testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements. These IT deficiencies did not result in adjustments to the consolidated financial statements. However, the deficiencies, when aggregated, could impact Westrock’s ability to maintain effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected. Accordingly, it was determined that these deficiencies in the aggregate constitute a material weakness .
Additionally, the material weaknesses could result in a misstatement of substantially all of Westrock’s accounts or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.
This Annual Report on Form 10-K does not include an attestation report of the Company’s independent registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for emerging growth companies.
Remediation Activities
Westrock has taken and is taking certain measures to remediate the material weaknesses described above, including the following:
● Hired additional accounting and IT personnel, including a new chief accounting officer hired in May 2021, a new technical accounting resource hired in April 2022, a new IT compliance resource hired in March 2023, and a new internal controls resource hired in April 2023 with the appropriate level of knowledge, training, and experience to improve our internal control over financial reporting and IT capabilities. Hired a Chief Information Officer in November 2023 with public company IT compliance and cybersecurity experience.
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● Developing and formalizing a risk assessment process across the organization to identify risks and design new controls or enhance existing controls responsive to such risks to ensure timely and accurate financial reporting based on criteria established in the COSO Framework. Entity level controls necessary to support management’s risk assessment and a process to evaluate the control environment in accordance with the COSO Framework were improved or implemented throughout 2023. Management is at various stages of designing or implementing additional controls that would further improve risk assessment .
● Engaged a third party to assist in designing and implementing controls related to period-end financial reporting, segregation of duties and IT general controls .
● Designed and implemented controls during the quarters ended June 30, September 30, and December 31, 2023 to formalize roles and review responsibilities to align with Westrock’s team’s skills and experience and designing and implementing controls over segregation of duties that include workflow automation and documentation, task reassignment, and policies and procedures enhancement around the preparation, review and oversight of account reconciliations and journal entries .
● Designed and implemented formal accounting procedures and controls during the quarters ended September 30, and December 31, 2023 that support Westrock’s period-end financial reporting process, including controls over close procedures workflow, the preparation, review and oversight of account reconciliations and journal entries, evaluation of internal information for disclosure, and controls to reconcile financial statement and disclosure information to source documentation. Management is at various stages of designing other controls that would further improve period-end financial reporting .
● During the quarter ended September 30, 2023, enhanced policies and procedures related to the management and approval of (i) changes in our IT environment, including procedures to review changes in IT data and the configuration of systems, (ii) system implementations and projects to ensure adequate governance, development, change management, and implementation controls, (iii) security access, including policies and procedures to set up or remove users to our IT systems, (iv) periodic security access reviews of our key financial systems’ users to ensure the appropriateness of their roles and security access levels, and (v) review of service organization reports and related end-user control considerations.
● Designed and implemented IT general controls, including controls over change management, the review and update of user access rights and privileges, controls over batch jobs and data backups, and program development approvals and testing for all IT systems during the quarters ended September 30, and December 31, 2023.
The enhancements are expected to remediate the material weaknesses described above when each is fully implemented and operating effectively.
Changes in Internal Control Over Financial Reporting
Other than the remediation activities related to the material weaknesses described above in the Remediation Activities section, there were no changes in our internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act, that occurred during the quarter ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting .
Item 9B. Other Information
(a) None.
(b) During the three months ended December 31, 2023, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, (as such terms are defined in Item 408(a) of Regulation S-K).
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection s
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
Except as set forth below, the information required by this item is incorporated by reference from our definitive proxy statement for our 2024 annual meeting of stockholders (our “Proxy Statement”), which we expect to be filed with the SEC no later than 120 days after December 31, 2023, pursuant to Regulation 14A under the Exchange Act.
Our board of directors has adopted a code of business conduct and ethics, or “Code of Ethics,” which apply to all of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions. The board of directors also adopted the Westrock Coffee Company Supplemental Code of Ethics for Chief Executive Officer and Senior Financial Officers (the “Supplemental Code of Ethics”). The Supplemental Code of Ethics applies to the Company’s chief executive officer, president, if any, chief financial officer and principal accounting officer. The Code of Ethics and Supplemental Code of Ethics are available on our website at www.investors.westrockcoffee.com. If we amend or grant any waiver from a provision of our Code of Ethics that applies to any of our executive officers or Supplemental Code of Ethics, we will publicly disclose such amendment or waiver as required by applicable law.
Item 11. Executive Compensation
Information required to be set forth herein is incorporated by reference, when filed, from our Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Except as set forth below, information required to be set forth herein is incorporated by reference, when filed, from our Proxy Statement.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table contains information about our common stock that may be issued under our existing equity compensation plans as of December 31, 2023.
Equity Compensation Plan Information
Number of
Securities Remaining
Available for
Number of
Future Issuance under
Securities to be Issued
Weighted-Average
Equity Compensation
Upon Exercise of
Exercise Price of
Plans (excluding
Outstanding Options,
Outstanding Options,
securities reflected
Plan Category
Warrants and Rights
Warrants and Rights (2)
in column (a))
(a)
(b)
(c)
Equity compensation plans approved by security holders
2,831,487
(1)
$ 9.54
2,168,278
(3)
Equity compensation plans not approved by security holders
—
—
—
Total
2,831,487
$ 9.54
2,168,278
(1) This amount represents the number of shares of common stock underlying (i) stock options granted under the 2020 Option Plan (841,705) and (ii) RSUs granted under the 2022 Equity Plan (1,989,782).
(2) The weighted average exercise price set forth in this column is calculated excluding outstanding RSUs since recipients are not required to pay an exercise price to receive the shares subject to such awards.
(3) Shares of common stock remaining available for grant under the 2022 Equity Plan, excluding shares underlying awards reflected in column (a). No further awards may be granted under the 2020 Option Plan.
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Item 13. Certain Relationships and Related Transactions, and Director Independence
Information required to be set forth herein is incorporated by reference, when filed, from our Proxy Statement.
Item 14. Principal Accountant Fees and Services
Information required to be set forth herein is incorporated by reference, when filed, from our Proxy Statement.
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PART IV
Item 15. E xhibit and Financial Statement Schedules
Financial Statements
See Index to Consolidated Financial Statements in Part II, Item 8 in this Annual Report on Form 10-K.
Financial Statement Schedules
Except as noted below, Financial Statement Schedules are omitted because they are not required or are not applicable, or the required information is provided in the consolidated financial statements or related notes in Part II, Item 8 in this Annual Report on Form 10-K.
Schedule I – Condensed Financial Information of the Registrant (Parent Company) as of December 31, 2023 and 2022, and for each of the three years in the period ended December 31, 2023 appearing on pages S-1, S-2, S-3 and S-4 of this report.
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Index to Exhibits
Incorporated by Reference
Exhibit
Number
Exhibit Description
Form
File No.
Exhibit
Filing
Date
Filed
Herewith
2.1
Transaction Agreement, dated as of April 4, 2022, by and among Riverview Acquisition Corp., Westrock Coffee Holdings, LLC, Origin Merger Sub I, Inc. and Origin Merger Sub II, LLC
S-4
333-264464
2.1
August 3, 2022
3.1
Certificate of Incorporation of Westrock Coffee Company
10-Q
001-41485
3.1
August 29, 2022
3.2
Bylaws of Westrock Coffee Company
10-Q
001-41485
3.2
August 29, 2022
4.1
Amended and Restated Warrant Agreement by and among Westrock Coffee Company, Computershare Inc. and Computershare Trust Company, N.A.
10-Q
001-41485
4.1
August 29, 2022
4.2
Specimen Common Stock Certificate of Westrock Coffee Company
S-4
333-264464
4.5
August 3, 2022
4.3
Specimen Warrant Certificate of Westrock Coffee Company
S-4
333-264464
4.6
August 3, 2022
4.4
Amended and Restated Investor Rights Agreement, dated as of June 29, 2023, by and among Westrock Coffee Company, Westrock Group, LLC, BBH Capital Partners V, L.P., BBH Capital Partners V-A, L.P., BBH CPV WCC Co-Investment LLC, Riverview Sponsor Partners, LLC and HF Direct Investments Pool, LLC
8-K
001-41485
4.2
June 30, 2023
4.5
Form of Convertible Note of Westrock Coffee Company, dated February 15, 2024
8-K
001-41485
4.1
February 15, 2024
4.6
Description of the Registrant’s Securities Registered under Section 12 of the Securities Exchange Act of 1934
*
10.1
Registration Rights Agreement, dated as of April 4, 2022, by and among Westrock Coffee Holdings, LLC and the other parties thereto
S-4
333-264464
10.1
August 3, 2022
10.2
Sponsor Support Agreement, dated as of April 4, 2022, by and among Westrock Coffee Holdings, LLC, Riverview Acquisition Corp., and Riverview Sponsor Partners, LLC
S-4
333-264464
10.4
August 3, 2022
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10.3#
Form of Indemnification Agreement
S-4
333-264464
10.6
August 3, 2022
10.4
Credit Agreement, dated as of August 29, 2022, among Westrock Beverage Solutions, LLC, as the borrower, Westrock Coffee Company, 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.
10-Q
001-41485
10.3
August 29, 2022
10.5
Incremental Assumption Agreement and Amendment No. 1, dated as of February 14, 2023, among Westrock Beverage Solutions, LLC, as borrower, Westrock Coffee Company, as holdings, the other guarantors party thereto, the Amendment No. 1 delayed draw term loan lenders, the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent.
8-K
001-41485
10.1
February 14, 2023
10.6
Amendment No. 2, dated as of June 30, 2023, among Westrock Beverage Solutions, LLC, as the borrower, the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent.
8-K
001-41485
10.2
June 30, 2023
10.7
Amendment No. 3, dated as of February 15, 2024, among Westrock Beverage Solutions, LLC, as the borrower, the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent
8-K
001-41485
10.1
February 15, 2024
10.8#
Employment Agreement, dated August 26, 2022, by and between Westrock Coffee Company and Scott T. Ford
10-Q
001-41485
10.4
August 29, 2022
10.9#
Employment Agreement, dated August 26, 2022, by and between Westrock Coffee Company and T. Christopher Pledger
10-Q
001-41485
10.5
August 29, 2022
10.10#
Employment Agreement, dated August 26, 2022, by and between Westrock Coffee Company and William A. Ford
10-Q
001-41485
10.6
August 29, 2022
10.11#
Employment Agreement, dated August 26, 2022, by and between Westrock Coffee Company and Robert P. McKinney
10-K
001-41485
10.9
March 21, 2023
10.12#
Employment Agreement, dated August 26, 2022, by and between Westrock Coffee Company and John Blake Schuhmacher
10-K
001-41485
10.10
March 21, 2023
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10.13#
Westrock Coffee Company 2022 Equity Incentive Plan
10-Q
001-41485
10.7
August 29, 2022
10.14#
Form of Restricted Stock Unit Award Agreement
10-Q
001-41485
10.8
November 14, 2022
10.15#
Westrock Coffee Company Annual Cash Incentive Plan
10-Q
001-41485
10.8
August 29, 2022
10.16#
Amended and Restated Westrock Coffee Company 2020 Stock Option Incentive Plan
10-Q
001-41485
10.9
August 29, 2022
10.17#
Westrock Coffee Holdings, LLC Form of Option Award Agreement
S-4
333-264464
10.19
August 3, 2022
10.18#
Westrock Coffee Holdings, LLC Form of Restricted Unit Award Agreement
S-4
333-264464
10.20
August 3, 2022
10.19#
Westrock Coffee Company Deferred Compensation Plan for Non-Employee Directors
*
21
List of Subsidiaries of Westrock Coffee Company
*
23
Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm
*
31.1
Chief Executive Officer—Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*
31.2
Chief Financial Officer—Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*
32.1
Chief Executive Officer—Certification pursuant to Rule13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
**
32.2
Chief Financial Officer—Certification pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
**
97
Westrock Coffee Company Compensation Recovery Policy (“Clawback Policy”)
*
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101.INS
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
*
101.SCH
XBRL Taxonomy Extension Schema Document.
*
101.CAL
XBRL Taxonomy Calculation Linkbase Document.
*
101.DEF
XBRL Definition Linkbase Document.
*
101.LAB
XBRL Taxonomy Label Linkbase Document.
*
101.PRE
XBRL Taxonomy Presentation Linkbase Document.
*
104
Cover Page Interactive Data File – The Cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
* Filed herewith.
** Furnished herewith.
# Designates management contract or compensatory plan or arrangement.
Item 16. Form 10-K Summary
None.
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Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Westrock Coffee Company
Date: March 15, 2024
By:
/s/ T. Christopher Pledger
Name:
T. Christopher Pledger
Title:
Chief Financial Officer
(Principal Financial Officer)
Date: March 15, 2024
By:
/s/ Blake Schuhmacher
Name:
Blake Schuhmacher
Title:
Chief Accounting Officer
(Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Name
Title
Date
/s/ Scott T. Ford
Chief Executive Officer and Director
March 15, 2024
Scott T. Ford
(Principal Executive Officer)
/s/ T. Christopher Pledger
Chief Financial Officer
March 15, 2024
T. Christopher Pledger
(Principal Financial Officer)
/s/ Blake Schuhmacher
Chief Accounting Officer
March 15, 2024
Blake Schuhmacher
(Principal Accounting Officer)
/s/ Joe T. Ford
Chairman of the Board, Director
March 15, 2024
Joe T. Ford
/s/ R. Patrick Kruczek
Director
March 15, 2024
R. Patrick Kruczek
/s/ Hugh McColl, III
Director
March 15, 2024
Hugh McColl, III
/s/ R. Brad Martin
Director
March 15, 2024
R. Brad Martin
/s/ Mark Edmunds
Director
March 15, 2024
Mark Edmunds
/s/ Josie C. Natori
Director
March 15, 2024
Josie C. Natori
/s/ Leslie Starr
Director
March 15, 2024
Leslie Starr
/s/Oluwatoyin Umesiri
Director
March 15, 2024
Oluwatoyin Umesiri
/s/Jeffrey H. Fox
Director
March 15, 2024
Jeffrey H. Fox
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SCHEDULE I
WESTROCK COFFEE COMPANY
PARENT COMPANY ONLY
CONDENSED BALANCE SHEET
(Thousands, except par value)
December 31, 2023
December 31, 2022
ASSETS
Cash and cash equivalents
$
49
$
77
Related party receivables
60
2,000
Total current assets
109
2,077
Deferred income taxes
4,332
1,032
Investment in consolidated subsidiaries
432,991
336,753
Total Assets
$
437,432
$
339,862
LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY
Accrued expenses and other current liabilities
$
30
$
38
Related party payables
4,645
98
Total current liabilities
4,675
136
Warrant liabilities
44,801
55,521
Total liabilities
49,476
55,657
Series A Convertible Preferred Shares, $ 0.01 par value, 24,000 shares authorized, 23,512 shares and 23,588 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively, $ 11.50 liquidation value
274,216
274,936
Shareholders' Equity
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, 88,051 shares and 75,020 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively
880
750
Additional paid-in-capital
471,666
342,664
Accumulated deficit
( 362,624 )
( 328,042 )
Accumulated other comprehensive income (loss)
3,818
( 6,103 )
Total shareholders' equity
113,740
9,269
Total Liabilities, Convertible Preferred Shares and Shareholders' Equity
$
437,432
$
339,862
See accompanying notes to the condensed financial statements.
S-1
Table of Contents
SCHEDULE I
WESTROCK COFFEE COMPANY
PARENT COMPANY ONLY
CONDENSED STATEMENTS OF OPERATIONS
Year Ended December 31,
(Thousands, except per share data)
2023
2022
2021
Selling, general and administrative expense
$
8,764
$
—
$
—
Transaction, restructuring and integration expense
344
—
—
Total operating expenses
9,108
—
—
Loss from operations
( 9,108 )
—
—
Other (income) expense
Change in fair value of warrant liabilities
( 10,207 )
29,675
—
Other, net
( 24 )
—
—
Loss (earnings) from consolidated subsidiaries
39,006
23,364
21,947
Loss before income taxes
( 37,883 )
( 53,039 )
( 21,947 )
Income tax expense (benefit)
( 3,301 )
2,146
—
Net loss attributable to shareholders
( 34,582 )
( 55,185 )
( 21,947 )
Comprehensive loss attributable to common shareholders
$
( 24,822 )
$
( 95,754 )
$
( 37,957 )
See accompanying notes to the condensed financial statements.
S-2
Table of Contents
SCHEDULE I
WESTROCK COFFEE COMPANY
PARENT COMPANY ONLY
CONDENSED STATEMENTS OF CASH FLOWS
Year Ended December 31,
(Thousands)
2023
2022
2021
Cash flows from operating activities:
Net cash used in operating activities
$
( 22,981 )
$
( 14,950 )
$
( 22,425 )
Cash flows from financing activities:
Proceeds from related party debt
—
11,700
—
Proceeds from issuance of common equivalent preferred units
—
—
17,000
Proceeds from de-SPAC merger and PIPE financing
—
255,737
—
Payment of common equity issuance costs
( 1,000 )
( 23,998 )
—
Proceeds from common equity issuance
118,767
—
—
Payment of preferred equity issuance costs
—
( 1,250 )
—
Common equivalent preferred dividends
—
( 4,380 )
—
Payment of taxes for net share settlement of equity awards
( 2,977 )
( 477 )
—
Proceeds from exercise of stock options
848
375
( 162 )
Proceeds from exercise of Public Warrants
2,632
—
—
Intercompany transactions, net
( 95,317 )
( 223,700 )
6,607
Net cash provided by financing activities
22,953
14,007
23,445
Net increase (decrease) in cash and cash equivalents and restricted cash
( 28 )
( 943 )
1,020
Cash and cash equivalents and restricted cash at beginning of period
77
1,020
—
Cash and cash equivalents and restricted cash at end of period
$
49
$
77
$
1,020
See accompanying notes to the condensed financial statements.
S-3
Table of Contents
Notes to Parent Company Only Condensed Financial Statements
Note 1. Basis of Presentation
The condensed financial statements of Westrock Coffee Company (the “Registrant”) have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X, as the restricted assets of the subsidiaries of Westrock, as defined in Rule 4-08(e)(3) of Regulation S-X, exceed 25% of the consolidated net assets of the Company.
The condensed financial statements of Westrock Coffee Company have been prepared using the same accounting principles and policies described in Note 3, Summary of Significant Accounting Policies, of Part II, Item 8 Financial Statements and Supplementary Data of this Annual Report on Form 10-K, with the only exception being that the parent company accounts for its subsidiaries using the equity method of accounting. The parent company condensed financial information should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes thereto included in Part II, Item 8 of this Annual Report on Form 10-K.
Note 2. Debt Restrictions
Pursuant to the terms of the Credit Agreement, Westrock Beverage Solutions, LLC has restrictions on its ability to (i) declare or pay dividends or make any other distribution whether in cash, property, securities or a combination thereof or (ii) directly or indirectly redeem, purchase, retire or otherwise acquire for value any of Westrock Beverage Solutions, LLC’s equity interests or set aside any amount for such purpose, other than through the issuance of qualified equity interests, as defined in the Credit Agreement.
S-4