INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference” the information we file with the SEC. This permits us to disclose important information to you by referring to these filed documents. Any information referred to in this
way is considered part of this prospectus supplement. The information incorporated by reference is an important part of this prospectus supplement and the accompanying prospectus, and information that we file later with the SEC will automatically
update and supersede this information. We incorporate by reference the following documents that have been filed with the SEC (other than information furnished under Item 2.02 or Item 7.01 of Form 8-K and all exhibits related to such items):
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our Annual Report on Form 10-K for the fiscal year ended January 29, 2022, filed with the SEC on April 29, 2022;
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our Quarterly Report on Form 10-Q for the period ended April 30, 2022, filed with the SEC on June 14, 2022;
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our Definitive Proxy Statement on Schedule 14A filed with the SEC on May 31, 2022;
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our Definitive Information Statement on Schedule 14C filed with the SEC on May 10, 2022; and
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the description of our common stock contained in the Registration Statement on Form 8-A/A filed with the SEC on November 27, 2007 (File No.
000-14818), including any amendment or report filed for the purpose of updating such description.
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We also incorporate by reference into this prospectus all documents filed by us with the SEC pursuant to Sections 12(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of any
offering of securities made by this prospectus. Nothing in this prospectus shall be deemed to incorporate information furnished but not filed with the SEC (including without limitation, information furnished under Item 2.02 or Item 7.01 of Form 8-K,
and any exhibits relating to such information).
Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference in this prospectus shall be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained herein or in the applicable prospectus supplement or in any other subsequently filed document which also is or is deemed to be incorporated by reference modifies or supersedes the statement. Any
statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
The information about us contained in this prospectus should be read together with the information in the documents incorporated by reference. You may request a copy of any or all of these filings, at no cost, by writing
or telephoning us at: 2818 N. Sullivan Road, Suite 130, Spokane Valley, WA 99216, and our telephone number is (855)-300-2710.
PROSPECTUS
$50,000,000
Kaspien Holdings Inc.
Common Stock
Preferred Stock
Warrants
Units
We may from time to time, in one or more offerings at prices and on terms that we will determine at the time of each offering, sell common stock, preferred stock, warrants, or a combination of these
securities, or units, for an aggregate initial offering price of up to $50,000,000. This prospectus describes the general manner in which our securities may be offered using this prospectus. Each time we offer and sell securities, we will provide you
with a prospectus supplement that will contain specific information about the terms of that offering. Any prospectus supplement may also add, update, or change information contained in this prospectus. You should carefully read this prospectus and the
applicable prospectus supplement as well as the documents incorporated or deemed to be incorporated by reference in this prospectus before you purchase any of the securities offered hereby.
This prospectus may not be used to offer and sell securities unless accompanied by a prospectus supplement.
Our common stock is currently traded on the NASDAQ Capital Market under the symbol “KSPN.” On February 8, 2021, the last reported sales price for our common stock was $34.40 per share. During the 12
months prior to the date of this prospectus, our common stock has traded at a low of $2.17 and a high of $63.10. From the beginning of 2021 through February 8, 2021, our common stock has traded at a low of $18.70 and a high of $63.10. For the 13 weeks
ended May 2, 2020, we reported revenue of approximately $31.5 million and a loss of approximately $5.4 million dollars. For our most recently reported 13 weeks ended October 31, 2020, we reported revenue of approximately $38.9 million and a profit of
approximately $2.5 million. We will apply to list any shares of common stock sold by us under this prospectus and any prospectus supplement on the NASDAQ Capital Market. The prospectus supplement will contain information, where applicable, as to any
other listing of the securities on the NASDAQ Capital Market or any other securities market or exchange covered by the prospectus supplement. The aggregate market value of our outstanding common stock held by non-affiliates as of the date of this
prospectus supplement was approximately $41,501,595, based on 1,926,186 shares of common stock outstanding, 795,812 of which were held by non-affiliates, and a per share price of $52.15 based on the closing sale price of our common stock on January 20,
2021. We have sold no securities pursuant to General Instructions I.B.6 of Form S-3 during the prior 12 calendar month period that ends on, and includes, the date of this prospectus.
The securities offered by this prospectus involve a high degree of risk including but not limited to the volatility of our stock price. See “Risk Factors” beginning on page 6, in addition to Risk Factors
contained in the applicable prospectus supplement.
Neither the Securities and Exchange Commission nor any State securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
We may offer the securities directly or through agents or to or through underwriters or dealers. If any agents or underwriters are involved in the sale of the securities their names, and any
applicable purchase price, fee, commission or discount arrangement between or among them, will be set forth, or will be calculable from the information set forth, in an accompanying prospectus supplement. We can sell the securities through agents,
underwriters or dealers only with delivery of a prospectus supplement describing the method and terms of the offering of such securities. See “Plan of Distribution.”
This prospectus is dated March 11, 2021
You should rely only on the information contained or incorporated by reference in this prospectus or any prospectus supplement. We have not authorized anyone to provide you with information different
from that contained or incorporated by reference into this prospectus. If any person does provide you with information that differs from what is contained or incorporated by reference in this prospectus, you should not rely on it. No dealer,
salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You should assume that the information contained in this prospectus or any prospectus supplement is accurate only as of the
date on the front of the document and that any information contained in any document we have incorporated by reference is accurate only as of the date of the document incorporated by reference, regardless of the time of delivery of this prospectus or
any prospectus supplement or any sale of a security. These documents are not an offer to sell or a solicitation of an offer to buy these securities in any circumstances under which the offer or solicitation is unlawful.
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or SEC, using a “shelf” registration process. Under this shelf registration process, we may sell any
combination of the securities described in this prospectus in one of more offerings up to a total dollar amount of proceeds of $50,000,000. This prospectus describes the general manner in which our securities may be offered by this prospectus. Each
time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus or in documents
incorporated by reference in this prospectus. The prospectus supplement that contains specific information about the terms of the securities being offered may also include a discussion of certain U.S. Federal income tax consequences and any risk
factors or other special considerations applicable to those securities. To the extent that any statement that we make in a prospectus supplement is inconsistent with statements made in this prospectus or in documents incorporated by reference in this
prospectus, you should rely on the information in the prospectus supplement. You should carefully read both this prospectus and any prospectus supplement together with the additional information described under “Where You Can Find More Information”
before buying any securities in this offering.
The terms “Kaspien,” the “Company,” “we,” “our” or “us” in this prospectus refer to Kaspien Holding Inc. and its wholly-owned subsidiary, unless the context suggests otherwise.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents and information incorporated by reference in this prospectus include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the
Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking
statements include statements concerning:
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trends in our operating expenses, including personnel costs, sales and marketing expense, and general and administrative expense;
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the effect of competitors and competition in our markets;
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our products and services and their market acceptance and future potential;
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our ability to develop, timely introduce and effectively manage the introduction of new products and services or improve our existing products and services;
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expected technological advances by us or by third parties and our ability to leverage them;
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our ability to attract and retain vendors;
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our ability to accurately forecast consumer demand and adequately manage inventory;
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our ability to deliver an adequate supply of product to meet demand;
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our ability to maintain and promote our brand and expand brand awareness;
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our ability to detect, prevent, or fix defects in our products and services;
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our reliance on third-party suppliers and logistics providers and our limited control over such parties;
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trends in revenue, costs of revenue, and gross margin and our possible or assumed future results of operations;
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our ability to attract and retain highly skilled employees;
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the impact of foreign currency exchange rates;
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the effect of future regulations;
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the sufficiency of our existing cash and cash equivalent balances and cash flow from operations to meet our working capital and capital expenditure needs for at least the next 12 months;
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Our ability to obtain additional financing, if needed or on acceptable terms; and
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general market, political, economic and business conditions.
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All statements in this prospectus and the documents and information incorporated by reference in this prospectus that are not historical facts are forward-looking statements. We may, in some cases, use terms such as
“anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would” or similar expressions or the negative of such items that convey uncertainty of future events or
outcomes to identify forward-looking statements.
Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates
and opinions or other circumstances should change, except as may be required by applicable law. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements.
ABOUT KASPIEN HOLDINGS INC.
Kaspien Holdings Inc., formerly Trans World Entertainment Corporation, which, together with its consolidated subsidiaries, is referred to herein as “the Company”, “we”, “us” and
“our”, was incorporated in New York in 1972. We own 100% of the outstanding common stock of Kaspien Inc., formerly etailz, Inc (“Kaspien”), through which our principal operations are conducted. Previously, we also operated fye, a chain of retail
entertainment stores and e-commerce sites, www.fye.com and www.secondspin.com. On February 20, 2020, we consummated the sale of substantially all of the assets and
certain of the liabilities relating to fye to a subsidiary of 2428391 Ontario Inc. o/a Sunrise Records.
Kaspien’s mission is to optimize and grow brands on leading online marketplaces such as Amazon, Walmart and eBay. The Company helps brands achieve their online retail goals through its one stop shop
marketplace growth platform of software and technology enabled services, driven by innovative and proprietary technology, tailored strategies, and mutually beneficial partnerships.
The Company’s approach is informed by seven key Leadership Principles:
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Partner Obsession
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Results
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Insights Driven
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Ownership
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Simplicity
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Diversity and Teamwork
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Innovation
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A high-level overview of the Kaspien Intelligent Marketplace Growth platform is shown in Figure 1.
Figure 1: Kaspien platform of software and technology enabled services
Kaspien’s partners include brands, suppliers, distributors, liquidators, and affiliates such as venture capital firms, marketing agencies and brand aggregators.
Kaspien’s customizable solutions for its partners include, but are not limited to, scaling the market, growing beyond Amazon, protecting a brand, expanding globally, converting more customers, and
launching new products. Kaspien uses its platform to customize solutions to cater to partner needs.
Kaspien works with partners in three different partnership models:
Retail as a Service: In this model, Kaspien buys inventory and sells it on marketplaces such as Amazon, Walmart and eBay as a third-party seller.
Additionally, Kaspien supports dropship integrations with various suppliers and distributors and incubates its own brands. At the end of fiscal 2019, Kaspien had a total of 6 incubated brands – Jump Off Joe, Brilliant Bee, Big Betty, Domestic Corner,
Coy Beauty and Keto. In Retail as a Service, Kaspien’s business model is the same as that of a wholesale retailer.
Agency as a Service: In this model, Kaspien serves as an extension of a partner’s e-commerce team providing full service and managed services in the areas of
inventory management, marketing management, creative, brand control, tax, compliance and other marketplace growth services. Kaspien charges a subscription fee and receives a percentage of the revenue generated.
Software as a Service: In this model, Kaspien provides partners access to software through its platform of proprietary technology to empower partners to
self-manage their marketplace channel. Kaspien charges a subscription fee and receives a percentage of the transaction.
By offering a platform of software and services, Kaspien intends to diversify its risk and leverage its assets to capture more market share.
The “Agency as a Service” and “Software as a Service” models are collectively called “Subscriptions.”
Technology and Integrations
Kaspien’s marketplace growth platform of software and services is a one stop shop insights driven platform across the categories of brand protection, logistics, inventory management, pricing, digital
marketing, creative, tax and compliance among others, all accessible through a centralized portal. The platform has been developed over a period of 12 years and over one billion in revenue has been processed through the platform.
The platform uses an insight driven approach to digital marketplace retailing using proprietary software. Using data collected from marketplaces, optimal inventory thresholds and purchasing trends are
calculated within its advanced inventory management software developed in-house. Kaspien also has proprietary software related to pricing, advertisement management, marketplace seller tracking and channel auditing.
Additionally, the platform can be extended to various software and service providers, thereby enabling a network of partner integrations. Kaspien has formed a strategic partnership with third party
logistics provider, Deliverr and tax provider – TaxCloud. During 2020, Kaspien has expanded its partnership network to MyFBAPrep, VantageBP and Levin Consulting.
The platform lends itself to network effects. The more partners Kaspien has on its platform, the more data and insights it can collect. The more insights it gets, more products and services it can serve
its partners and more marketplace integrations it can support. The more marketplace providers that can be integrated, the more partners Kaspien can acquire. This facilitates rapid scale as shown in Figure 2.
Figure 2: Network Effects through the Kaspien Marketplace Growth Platform
Other Information
We reported a net loss of $3.8 million for the thirty-nine weeks ended October 31, 2020, a net loss of $58.7 million for the year ended February 1, 2020, and a net loss of $97.4 million for
the year ended February 1, 2019. We have an accumulated deficit of $112.8 million as of October 31, 2020.
Previously, we also operated fye, a chain of retail entertainment stores and e-commerce sites, www.fye.com and www.secondspin.com.
On February 20, 2020, we consummated the sale of substantially all of the assets and certain of the liabilities relating to fye to a subsidiary of 2428391 Ontario Inc. o/a Sunrise Records.
The Company’s headquarters are located at 2818 N. Sullivan Road, Suite 130, Spokane Valley, WA 99216, and its telephone number is (855)-300-2710. The Company’s corporate website address is
www.kaspien.com. The information contained on, connected to or that can be accessed via our website is not part of this prospectus. We have included our website address in this prospectus as an inactive textual reference only and not as an
active hyperlink.