8-K - LSF - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENTREPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 5, 2021

Laird Superfood, Inc.

(Exact name of registrant as specified in its charter)

Delaware	1-39537	81-1589788
(State or other jurisdictionof incorporation)	(CommissionFile Number)	(IRS EmployerIdentification No.)
275 W. Lundgren Mill Drive, Sisters, Oregon	97759
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(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (888)670-6796

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act<br>(17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Tradingsymbol	Name of each exchangeon which registered
Common Stock, par value $0.001 per share	LSF	NYSE American

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02	Results of Operations and Financial Condition.

On August 11, 2021, Laird Superfood, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2021. The press release is being furnished as Exhibit 99.1 hereto and is incorporated by reference herein.

The information contained in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

Item 5.02	Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;Compensatory Arrangements of Certain Officers.

On August 5, 2021, Paul Hodge, Jr. informed the Company’s Board of Directors that he intends to transition to a non-executive role and step down as President and Chief Executive Officer upon identifying an appropriate successor. The Board of Directors has commenced a search for his replacement. Mr. Hodge intends to remain a director of the Company.

Item 7.01	Regulation FD Disclosure.

On August 11, 2021, the Company issued a press release announcing the anticipated management changes described in Item 5.02 of this Current Report on Form 8-K. The press release is being furnished as Exhibit 99.2 hereto and is incorporated by reference herein.

The information contained in this Item 7.01, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

Item 9.01	Financial Statements and Exhibits.
(d)	Exhibits
---	---
Exhibit No.	Description
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99.1	Press release dated August 11, 2021.
99.2	Press release dated August 11, 2021.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 11, 2021	Laird Superfood, Inc.
	By:	/s/ Valerie Ells
	Name: Valerie Ells
	Title: Chief Financial Officer

EX-99.1

Exhibit 99.1

LOGO

Laird Superfood Reports Second Quarter 2021 Financial Results

Net Sales Increase 64% Year Over Year to $9.2 Million

Direct-To-Consumer Sales Up 94% Year Over Year

SISTERS, Oregon – August 11, 2021 – Laird Superfood, Inc. (NYSE American: LSF) (“Laird Superfood”, “we” and “our”), today reported financial results for its second quarter ended June 30, 2021.

SecondQuarter 2021 Highlights

•	Net Sales increased to $9.2 million, an increase of 64% year over year.
•	Online sales contributed 63% of net sales, increasing 57% year over year with direct-to-consumer up 94%.
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•	Wholesale sales contributed 35% of net sales, increasing 77% year over year, and included continued traction<br>in grocery and liquid creamer gains.
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•	Gross profit was $2.2 million and gross margin was 23.9% compared to gross profit of $1.3 million<br>and gross margin of 23.6% in the prior year quarter.
---	---
•	Net loss attributable to common stockholders was $6.3 million, or $0.70 per diluted share, compared to<br>net loss attributable to common stockholders of $4.0 million, or $0.93 per diluted share, in the prior year period.
---	---

“Broad-based growth was a key theme from our second quarter results as we delivered solid gains across all major channels and categories,” said Paul Hodge Jr., Co-founder, President and Chief Executive Officer of Laird Superfood. “Our direct-to-consumer sales were up 94% reflecting our strong metrics around attracting, converting and retaining customers. Wholesale increased 77% as we continued to make solid progress expanding our presence in the grocery channel. We introduced several new innovative products during the quarter and are very pleased with the early results from the acquisition of Picky,” concluded Hodge. “Our powerful omnichannel platform remains a key point of differentiation enabling multiple growth drivers for new and existing products. During the second quarter, approximately one-third of our revenue growth was attributable to products introduced over the past year. As we continue gaining share in our legacy categories and expanding our total addressable market via new offerings, Laird Superfood’s long-term vision of delivering better for you, plant-based alternatives for every moment of consumers’ daily ritual comes closer to reality.”

For the Three Months Ended June 30, 2021

	Three Months Ended June 30,
	2021					2020
			% of Total					% of Total
Coffee creamers				55	%				71	%
Hydration and beverage enhancing supplements				16	%				17	%
Coffee, tea, and hot chocolate products				18	%				22	%
Harvest snacks and other food items				15	%				0	%
Other				3	%				3	%
Gross sales				108	%				114	%
Shipping income				0	%				1	%
Returns and discounts		)		(8	%)		)		(15	%)
Sales, net				100	%				100	%

All values are in US Dollars.

	Three Months Ended June 30,
	2021				2020
		% of Total				% of Total
Online			63	%			66	%
Wholesale			35	%			33	%
Food service			2	%			2	%
Sales, net			100	%			100	%

All values are in US Dollars.

Net sales increased 64% to $9.2 million in the second quarter of 2021 compared to $5.6 million in the second quarter of 2020. **** Growth in net sales in the second quarter of 2021 was due primarily to solid gains in DTC, including two months of newly acquired Picky Bars.

Gross profit was $2.2 million, a 66% increase compared to the prior year period of $1.3 million. Gross margin was 23.9% of net sales in the second quarter of 2021, compared to 23.6% of net sales in the prior year period. The year over year increase in gross margin was primarily due to optimization of direct-to-consumer shipping costs and improvements in liquid creamer distribution and disposals.

Operating expenses were $8.5 million compared to $4.3 million in the year ago period and reflect General and Administrative expense increases of $2.3 million, primarily due to stock-based compensation, personnel costs, insurance expense, reserves against prepaid assets, and professional fees, as well as Sales and Marketing expense increases of $1.5 million, primarily due to advertising and marketing fees.

Loss from operations was $6.3 million in the second quarter of 2021, compared to a loss of $3.0 million in the prior year period.

Net loss attributable to common stockholders was $6.3 million, or $0.70 per diluted share, in the second quarter of 2021, compared to net loss attributable to common stockholders of $4.0 million, or $0.93 per diluted share, in the prior year period.

Valerie Ells, Chief Financial Officer, commented, “In addition to delivering strong top-line growth, we’ve made significant strides operationally through the first half of 2021 putting us firmly on track toward our long-term goals around margins and profitability. Continued optimization of our direct-to-consumer shipping expenses, driven by an improvement in our average order value, aided our gross margin this quarter. Similarly, continued improvements related to our liquid creamer products, including an extended shelf life and logistical enhancements, resulted in significant improvement in manufacturing waste and spoils. With over $43 million of cash and investments and essentially no debt, our balance sheet remains strong providing the capacity and flexibility to pursue multiple growth drivers on our path to scale and profitability.”

For the Six Months Ended June 30, 2021

	Six Months Ended June 30,
	2021					2020
			% of Total					% of Total
Coffee creamers				61	%				72	%
Hydration and beverage enhancing supplements				15	%				17	%
Coffee, tea, and hot chocolate products				21	%				18	%
Harvest snacks and other food items				9	%				0	%
Other				3	%				2	%
Gross sales				110	%				109	%
Shipping income				0	%				2	%
Returns and discounts		)		(10	%)		)		(10	%)
Sales, net				100	%				100	%

All values are in US Dollars.

	Six Months Ended June 30,
	2021				2020
		% of Total				% of Total
Online			61	%			59	%
Wholesale			37	%			41	%
Food service			2	%			1	%
Sales, net			100	%			100	%

All values are in US Dollars.

Net sales increased 50% to $16.6 million in the first six months of 2021 compared to $11.1 million in the first six months of 2020. **** Year-to-date growth in net sales was due to growth in both online and wholesale channels, and broad based with all categories showing strong double-digit increases. In addition, we completed the acquisition of Picky Bars in early May, which significantly increased our business in Harvest snacks and other food products.

Gross profit was $4.1 million, an increase of 18% compared to the prior year period of $3.4 million. Gross margin was 24.4% of net sales in the first six months of 2021, compared to 31.0% of net sales in the prior year period. The year over year decrease in gross margin was primarily due to elevated outbound shipping costs combined with the launch of a free shipping initiative for direct online purchases made on lairdsuperfood.com, increased personnel costs and costs associated with our liquid creamer product line.

Operating expenses were $15.7 million compared to $8.5 million in the first six months of 2021 and reflect General and Administrative expense increases of $4.4 million, primarily due to stock-based compensation, personnel costs, insurance expense, reserves against prepaid assets, and professional fees, as well as Sales and Marketing expense increases of $2.5 million, primarily due to advertising and marketing fees.

Loss from operations was $11.6 million in the first six months of 2021, compared to a loss of $5.0 million in the prior year period.

Net loss attributable to common stockholders was $11.6 million, or $1.30 per diluted share, in the first six months of 2021, compared to net loss attributable to common stockholders of $6.0 million, or $1.40 per diluted share.

Balance Sheet and Cash Flow Highlights

The Company’s current assets include cash, cash equivalents, and restricted cash of $34.9 million and investment securities of $8.7 million as of June 30, 2021. Total outstanding debt was $51,000 as of June 30, 2021. Net cash used in operating activities was $11.0 million in the six months ended June 30, 2021, compared to $4.6 million in the comparative prior year period.

Capital expenditures totaled $0.5 million for the six months ended June 30, 2021, compared to $0.3 million in the comparative prior year period.

Leadership Transition

Also announced today, Paul Hodge, Jr. will be transitioning to a non-executive role and stepping down as President and Chief Executive Officer. The Company’s Board of Directors has commenced a search for his successor. Additional details on this transition can be found in a separate media release issued this afternoon.

Conference Call and Webcast Details

The Company will host a conference call and webcast at 5:00 p.m. ET today to discuss results. The live conference call can be accessed by dialing (833) 772-0381 from the U.S. or (236) 384-2050 internationally. The conference I.D. code is 3667069. Alternatively, participants may access the live webcast on the Laird Superfood Investor Relations website at https://investors.lairdsuperfood.com under “Events.”

About Laird Superfood

Laird Superfood, Inc. creates award-winning, plant-based superfood products that are both delicious and functional. The Company’s products are designed to enhance your daily ritual and keep consumers fueled naturally throughout the day. The Company was co-founded in 2015 by the world’s most prolific big-wave surfer, Laird Hamilton. Laird Superfood’s offerings are environmentally conscientious, responsibly tested, and made with real ingredients. Shop all products online at lairdsuperfood.com and join the Laird Superfood community on social media for the latest news and daily doses of inspiration.

Forward-Looking Statements

This press release and the earnings call referencing this press release contain “forward-looking” statements, as that term is defined under the federal securities laws, including but not limited to statements regarding Laird Superfood’s future financial performance, including our outlook for fiscal year 2021. These forward-looking statements are based on Laird Superfood’s current assumptions, expectations and beliefs and are subject to substantial risks, uncertainties, assumptions and changes in circumstances that may cause Laird Superfood’s actual results, performance or achievements to differ materially from those expressed or implied in any forward-looking statement. We expressly disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

The risks and uncertainties referred to above include, but are not limited to: (1) the effects of the current COVID-19 pandemic, or of other global outbreaks of pandemics or contagious diseases or fear of such outbreaks, including on our supply chain, the demand for our products, and on overall economic conditions and consumer confidence and spending levels; (2) our expectations regarding our revenue, expenses, including shipping expenses, and other operating results; (3) our ability to acquire new direct and wholesale customers and successfully retain existing customers; (4) our ability to attract and retain our suppliers, distributors and co-manufacturers, and effectively manage their costs and performance; (5) our expectations regarding real or perceived quality with our products or other issues that adversely affect our brand and reputation; (6) our ability to innovate on a timely and cost-effective basis, predict changes in consumer preferences and develop successful new products, or updates to existing products, and develop innovative marketing strategies; (7) expectations regarding prices and availability of raw materials and other inputs, a substantial amount of which come from a limited number of suppliers outside the United States, including in areas which may be adversely affected by climate change; (8) effects of changes in the tastes and preferences of our consumers and consumer preferences for natural and organic food products; (9) the financial condition of, and our relationships with, our suppliers, co-manufacturers, distributors, retailers and foodservice customers, as well as the health of the foodservice industry generally; (10) effects of real or perceived quality or health issues with our products or other issues that adversely affect our brand and reputation; (11) the ability of ourselves, our suppliers and co-manufacturers to comply with food safety, environmental or other laws or regulations; (12) our plans for future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements; (13) the costs and success of our marketing efforts, and our ability to promote our brand; (14) our reliance on our executive team and other key personnel and our ability to identify, recruit and retain skilled and general working personnel; (15) our ability to effectively manage our growth; (16) our ability to compete effectively with existing competitors and new market entrants; (17) the impact of adverse economic conditions; and (18) the growth rates of the markets in which we compete.

Contact

ICR

Reed Anderson

646-277-1260

Reed.Anderson@icrinc.com

	For the Three Months EndedJune 30,						For the Six Months EndedJune 30,
	2021			2020			2021			2020
Sales, net	$	9,195,786		$	5,608,830		$	16,622,039		$	11,092,055
Cost of goods sold		(6,998,695	)		(4,285,128	)		(12,558,194	)		(7,650,736	)
Gross profit		2,197,091			1,323,702			4,063,845			3,441,319
General and administrative
Salaries, wages and benefits		1,019,845			804,903			2,225,698			1,621,075
Stock-based compensation		955,369			116,249			1,854,604			299,452
Professional fees		609,448			191,130			953,070			373,177
Insurance expense		500,821			25,866			1,023,221			57,061
Office expense		206,448			108,883			393,279			222,248
Occupancy		62,957			56,343			119,478			109,774
Merchant service fees		151,882			89,014			258,257			145,049
Netsuite subscription expense		74,117			30,923			129,138			57,318
Impairment on asset held for sale		—			239,734			—			239,734
Other expense		582,024			169,397			847,235			307,124
Total general and administrative expenses		4,162,911			1,832,442			7,803,980			3,432,012
Research and product development
Salaries, wages and benefits		116,187			72,931			186,548			147,833
Stock-based compensation		5,385			2,192			8,952			4,384
Product development expense		249,948			40,175			412,792			97,917
Other expense		3,332			2,499			7,247			10,977
Total research and product development expenses		374,852			117,797			615,539			261,111
Sales and marketing
Salaries, wages and benefits		630,328			697,547			1,264,079			1,443,556
Stock-based compensation		55,706			35,938			97,095			110,434
Advertising		1,699,865			1,154,060			3,381,209			2,090,423
General marketing		1,260,489			261,662			1,971,012			570,884
Amazon selling fee		210,842			208,317			413,118			395,889
Travel expense		11,604			3,950			20,360			73,964
Other expense		67,658			34,227			116,698			103,368
Total sales and marketing expenses		3,936,492			2,395,701			7,263,571			4,788,518
Total expenses		8,474,255			4,345,940			15,683,090			8,481,641
Operating loss		(6,277,164	)		(3,022,238	)		(11,619,245	)		(5,040,322	)
Other income (expense)
Interest and dividend income		11,623			8,171			25,525			31,025
Loss on sale of fixed assets		—			—			(2,325	)		—
Gain on sale of<br>available-for-sale securities		—			7,677			—			7,677
Total other income (expense)		11,623			15,848			23,200			38,702
Loss before income taxes		(6,265,541	)		(3,006,390	)		(11,596,045	)		(5,001,620	)
Income tax expense		(36,718	)		—			(36,718	)		—
Net loss	$	(6,302,259)		$	(3,006,390	)	$	(11,632,763	)	$	(5,001,620	)
Less deemed dividend of beneficial conversion feature		—			(825,366	)		—			(825,366	)
Less deemed dividend on warrant discount		—			(179,427	)		—			(179,427	)
Net loss attributable to Laird Superfood, Inc. common stockholders	$	(6,302,259)		$	(4,011,183	)	$	(11,632,763	)	$	(6,006,413	)
Net loss per share attributable to Laird Superfood, Inc common stockholders:
Basic	$	(0.70	)	$	(0.93	)	$	(1.30	)	$	(1.40	)
Diluted	$	(0.70	)	$	(0.93	)	$	(1.30	)	$	(1.40	)
Weighted-average shares of common stock outstanding used in computing net loss per share of common<br>stock, basic and diluted		8,967,797			4,325,265			8,931,736			4,303,305

LAIRD SUPERFOOD, INC.

STATEMENTS OF CASH FLOWS

	For the Six Months Ended June 30,
	2021			2020
Cash flows used in operating activities
Net loss	$	(11,632,763	)	$	(5,001,620	)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation		302,261			229,284
Amortization		103,803			5,048
Loss on disposal of equipment		2,325			—
Stock-based compensation		2,100,077			471,320
Provision for inventory obsolescence		18,266			—
Reserve for prepaid assets		179,000			—
Restricted stock awards		—			62,431
Impairment on asset held for sale		—			239,734
Gain on sale of investment securities available-for-sale		—			7,677
Changes in operating assets and liabilities:
Accounts receivable		98,534			(324,211	)
Accrued investment income receivable		513			—
Inventory		(3,778,699	)		(1,048,010	)
Prepaid expenses and other current assets		729,881			(371,883	)
Deferred rent		179,503			180,677
Deposits		2,602			10,941
Accounts payable		208,131			568,088
Payroll liabilities		129,397			167,576
Accrued expenses		367,209			155,943
Deferred taxes		36,718			—
Net cash from operating activities		(10,953,242	)		(4,647,005	)
Cash flows used in (provided by) investing activities
Purchase of property, plant, and equipment		(522,564	)		(312,746	)
Deposits on equipment to be acquired		(407,412	)		(319,174	)
Purchase of software		(109,795	)		—
Acquisiton of a business, net of cash acquired (note 2)		(10,449,587	)		—
Sale of investment securities<br>available-for-sale		—			513,544
Proceeds from maturities of investment securities available-for-sale		—			475,000
Net cash from investing activities		(11,488,658	)		356,624
Cash flows from financing activities
Issuance of common stock		—			1,997,665
Issuance of preferred stock		—			10,000,006
Common stock issuance costs		(82,043	)		—
Preferred stock issuance costs		—			(147,721	)
Withholding tax payments for share based compensation		(219,156	)		—
Restricted stock units issued		3			—
Repurchased common stock		—			(20,532	)
Stock options exercised		394,666			6,030
Net cash from financing activities		93,470			11,835,448
Net change in cash and cash equivalents		(22,348,430	)		7,545,067
Cash and cash equivalents beginning of period		57,208,080			1,004,109
Cash and cash equivalents end of period	$	34,859,650		$	8,549,176
Supplemental disclosures of non-cashinformation
Unrealized gain (loss) on<br>available-for-sale securities	$	(24,001	)	$	17,345

LAIRD SUPERFOOD, INC.

BALANCE SHEETS

	As of
	June 30, 2021			December 31, 2020
Assets
Current assets
Cash and cash equivalents	$	34,859,650		$	57,208,080
Accounts receivable, net		789,642			839,659
Investment securities<br>available-for-sale		8,682,330			8,706,844
Inventory		10,782,337			6,295,898
Prepaid expenses and other current assets, net		2,175,604			2,847,319
Deposits		508,484			97,674
Total current assets		57,798,047			75,995,474
Noncurrent assets
Property and equipment, net		3,786,144			3,513,488
Intangible assets, net		5,073,084			137,092
Goodwill		6,486,000			—
Deferred rent		2,517,143			2,696,646
Total noncurrent assets		17,862,371			6,347,226
Total assets	$	75,660,418		$	82,342,700
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	1,571,418		$	1,315,964
Payroll liabilities		861,501			722,915
Accrued expenses		1,219,863			704,543
Total current liabilities		3,652,782			2,743,422
Long-term liabilities
Deferred tax liability, net		36,718			—
Note payable		51,000			51,000
Total long-term liabilities		87,718			51,000
Total liabilities		3,740,500			2,794,422
Stockholders’ equity
Common stock, $0.001 par value, 100,000,000 shares authorized as of June 30, 2021 and<br>December 31, 2020; 9,365,085 and 8,999,381 issued and outstanding at June 30, 2021, respectively; 9,247,758 and 8,892,886 issued and outstanding at December 31, 2020, respectively	$	8,999		$	8,893
Additional paid-in capital		115,480,644			111,452,346
Accumulated other comprehensive income (loss)		(9,794	)		14,207
Accumulated deficit		(43,559,931	)		(31,927,168	)
Total stockholders’ equity		71,919,918			79,548,278
Total liabilities and stockholders’ equity	$	75,660,418		$	82,342,700

EX-99.2

Exhibit 99.2

LOGO

Laird Superfood Announces Leadership Transition ****

SISTERS, Oregon – August 11, 2021 – Laird Superfood, Inc. (NYSE American: LSF) (“Laird Superfood”, “we” and “our”), today announced that Paul Hodge, Jr. will begin transitioning to a non-executive role and stepping down as President and Chief Executive Officer once a successor is named. The Company’s Board of Directors has commenced a search for his successor.

“It has been a privilege to lead this company for the past six years and I’m extremely proud of all we’ve accomplished together,” said Mr. Hodge. “In a short period of time we’ve gone from ideation to creating a leading consumer brand and dominant omnichannel platform while staying true to our values around high-quality, natural ingredients and sustainability. My deep passion for this Company is widely known as is my commitment to its long-term success for all stakeholders. As a large shareholder myself, I recognize the benefit that complementary platform expertise would bring to accelerating growth on the path to becoming the multi-billion dollar business to which we aspire. So the search is underway for a person who shares our passion, vision and values for the Laird Superfood brand along with possessing other key attributes including large CPG experience. I thank you all for your support. The next chapter of growth for Laird Superfood is underway, it’s going to be an exciting journey.”

“We are grateful for Paul’s vision in inventing and building the Laird Superfood brand from the ground up, and his leadership throughout a period of rapid growth,“ said Geoffrey Barker, Chairman of the Board of Directors. “He and his team have created significant value for our customers and shareholders. On behalf of the entire Board, I want to thank Paul for his efforts in making Laird Superfood the unique, dynamic company it is today, well positioned for substantial long-term growth. Paul will remain a valued member of the Company’s Board of Directors and we look forward to continuing our work together.”

About Laird Superfood

Forward-Looking Statements

Contact

ICR

Reed Anderson

646-277-1260

Reed.Anderson@icrinc.com