UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 29, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-41032

Kidpik Corp.

(Exact name of Registrant as specified in its charter)

Delaware		81-3640708
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

200 Park Avenue South, 3rd Floor New York, New York		10003
(Address of principal executive offices)		(Zip Code)

(212) 399-2323

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		PIK		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated Filer ☐		Accelerated Filer ☐
Non-accelerated Filer ☒		Smaller reporting company ☒
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of registrant’s common stock outstanding as of August 14, 2024: 1,951,638.

TABLE OF CONTENTS

		Page
Cautionary Statement Regarding Forward-Looking Information		1

Summary Risk Factors		2

PART I	FINANCIAL INFORMATION

Item 1.	FINANCIAL STATEMENTS	F-1

	Condensed Interim Balance Sheets as of June 29, 2024 and December 30, 2023	F-1

	Condensed Interim Statements of Operations for the 13 weeks and 26 weeks ended June 29, 2024 and July 1, 2023	F-2

	Condensed Interim Statements of Changes in Stockholders’ (Deficit) Equity for the 13 weeks and 26 weeks ended June 29, 2024 and July 1, 2023	F-3

	Condensed Interim Statements of Cash Flows for the 26 weeks ended June 29, 2024 and July 1, 2023	F-4

	Notes to Condensed Interim Financial Statements	F-5

Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	4

Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	23

Item 4.	CONTROLS AND PROCEDURES	23

PART II	OTHER INFORMATION	24

Item 1.	LEGAL PROCEEDINGS	24

Item 1A.	RISK FACTORS	24

Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	32

Item 3.	DEFAULTS UPON SENIOR SECURITIES	32

Item 4.	MINE SAFETY DISCLOSURES	32

Item 5.	OTHER INFORMATION	32

Item 6.	EXHIBITS	33

SIGNATURES		34

Cautionary Statement Regarding Forward-Looking Information

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995, regarding future events and the future results of Kidpik Corp. (the “Company”) that are based on current expectations, estimates, forecasts, and projections about the industry in which the Company operates and the beliefs and assumptions of the management of the Company. In some cases, you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are not a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time the statements are made and involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Report. Factors that might cause or contribute to such differences include, but are not limited to, those discussed elsewhere in this Report, including under, or incorporated by reference into, “Risk Factors”, which factors include:

	●	our ability to obtain additional funding, the terms of such funding and potential dilution caused thereby;

	●	the Company’s ability to complete the pending acquisition of Nina Footwear Corp. and disruptions caused by such acquisition and other risks associated therewith;

	●	the continuing effect of changing interest rates and inflation on our operations, sales, and market for our products;

	●	deterioration of the global economic environment;

	●	our ability to build and maintain our brand;

	●	cybersecurity, information systems and fraud risks and problems with our websites;

	●	our ability to expand and grow our operations, and successfully market our products and services;

	●	changes in, and our compliance with, rules and regulations affecting our operations, sales, the internet in general and/or our products;

	●	competition from existing competitors or new competitors or products that may emerge;

	●	high interest rates and inflation and our ability to control our costs, including employee wages and benefits and other operating expenses, as a result thereof;

	●	Our ability to establish or maintain vendor and supplier relations and/or relationships with third parties;

	●	Our ability and third parties’ abilities to protect intellectual property rights;

	●	Our ability to attract and retain key personnel to manage our business effectively; and

	●	other risk factors included under “Risk Factors” below.

You should read the matters described in “Risk Factors” and the other cautionary statements made in this Report, as being applicable to all related forward-looking statements wherever they appear in this Report. We cannot assure you that the forward-looking statements in this Report will prove to be accurate and therefore prospective investors are encouraged not to place undue reliance on forward-looking statements. All forward-looking statements included herein speak only as of the date of the filing of this Report. All subsequent written and oral forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements above. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, even though our situation may change in the future.

Summary Risk Factors

Our business is subject to varying degrees of risk and uncertainty. Investors should consider the risks and uncertainties summarized below, as well as the risks and uncertainties discussed in Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q and Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 30, 2023, which was filed with the Securities and Exchange Commission on April 10, 2024 (the “2023 Annual Report”). Investors should also refer to the other information contained or incorporated by reference in this Quarterly Report on Form 10-Q, including our financial statements and related notes, and our other filings made from time to time with the Securities and Exchange Commission. Our business operations could also be affected by factors that we currently consider to be immaterial or that are unknown to us at the present time. If any of these risks occur, our business, financial condition, and results of operations could be materially and adversely affected, and the trading price of our common stock could decline or our common stock could become worthless:

	●	Our history of losses, our ability to achieve profitability, our need for additional funding and the availability and terms of such funding, as well as potential dilution caused thereby, and risks that if we do not raise such funding, we may be forced to seek bankruptcy protection and/or liquidate;

	●	Our ability to maintain current members and customers and grow customers;

	●	Risks associated with our third-party service providers, costs due to inflation, disruptions at our warehouse facility and/or of our data or information services, issues affecting our shipping providers, and disruptions to the internet, any of which may have a material adverse effect on our operations and other risks associated with the fact that we are not currently manufacturing any new products;

	●	Risks of changes in consumer spending due to changes in interest rates, increased inflation, declines in economic activity or recessions;

	●	Risks that effect our ability to successfully market our products to key demographics;

	●	The effect of data security breaches, malicious code and/or hackers;

	●	Increased competition and our ability to maintain and strengthen our brand name;

	●	Changes in consumer tastes and preferences and changing fashion trends;

	●	Material changes and/or terminations of our relationships with key vendors;

	●	Significant product returns from customers, excess inventory and our ability to manage our inventory;

	●	Our ability to compete against competitors which may have greater resources;

	●	Our significant reliance on related party transactions and loans;

	●	The fact that our Chief Executive Officer, Ezra Dabah, has majority voting control over the Company;

	●	If the use of “cookie” tracking technologies is further restricted, regulated, or blocked, or if changes in technology cause cookies to become less reliable or acceptable as a means of tracking consumer behavior, the amount or accuracy of internet user information would decrease, which could harm our business and operating results;

	●	Our ability to comply with loan and funding covenants, conditions to obtaining additional funding under securities purchase agreements, dilution caused by the conversion of convertible notes, our ability to pay amounts due under convertible notes and comply with covenants associated therewith;

	●	Our ability to prevent credit card and payment fraud;

	●	The risk of unauthorized access to confidential information;

	●	System interruptions that impair client access to our website or other performance failures in our technology infrastructure could damage our business;

	●	Our ability to protect our intellectual property and trade secrets, claims from third parties that we have violated their intellectual property or trade secrets and potential lawsuits in connection therewith;

	●	Our ability to comply with changing regulations and laws, penalties associated with any non-compliance (inadvertent or otherwise), the effect of new laws or regulations, our ability to comply with such new laws or regulations, and changes in tax rates;

	●	Our reliance on our current management, who is not party to any employment agreements with us;

	●	The outcome of future lawsuits, litigation, regulatory matters or claims;

	●	Certain terms and provisions of our governing documents which may prevent a change of control, and which provide for indemnification of officers and directors, limit the liability of officers or directors, and provide for the Board of Directors’ ability to issue blank check preferred stock;

	●	Dilution which will occur upon the closing of the Merger (defined below); costs, fees and expenses, and the timing associated with, the Merger Agreement; the Company’s ability to meet conditions to closing the Merger Agreement; the ability of the parties to the Merger Agreement (defined below) to terminate such agreement, and potential break-fees due in connection therewith; uncertainties while the Merger Agreement is pending; and risks related to the ability of the combined company to recognize the benefits of the Merger;

	●	The fact that we have a limited operating history; the effect of future acquisitions on our operations and expenses;

	●	Our significant indebtedness;

	●	The fact that we may require additional capital to support business, and this capital might not be available or may be available only by diluting existing stockholders;

	●	The anticipated volatile nature of the trading prices of our common stock and dilution which may be caused by future sales of securities; and

	●	Our ability to maintain the listing of our common stock on the Nasdaq Capital Market.

Additional Information

Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to “we,” “us,” “our,” “our company,” and “Kidpik” refer to Kidpik Corp. The Kidpik design logo, “kidpik,” and our other registered or common law trademarks, service marks, or trade names appearing in this Quarterly Report on Form 10-Q are the property of Kidpik Corp. Other trade names, trademarks, and service marks used in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, we have omitted the ® and ™ designations, as applicable, for the trademarks we name in this Quarterly Report on Form 10-Q.

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

Kidpik Corp.

Condensed Interim Balance Sheets

	June 29, 2024		December 30, 2023
	(Unaudited)		(Audited)
Assets
Current assets
Cash	$	34,030	$	194,515
Restricted cash		4,618		4,618
Accounts receivable		90,158		211,739
Inventory		3,799,522		4,854,641
Prepaid expenses and other current assets		712,512		761,969
Total current assets		4,640,840		6,027,482

Leasehold improvements and equipment, net		72,495		97,136
Operating lease right-of-use assets		1,572,529		992,396
Total assets	$	6,285,864	$	7,117,014

Liabilities and Stockholders’ (Deficit) Equity

Current liabilities
Accounts payable	$	1,748,897	$	1,862,266
Accounts payable, related party		2,094,866		1,868,411
Accrued expenses and other current liabilities		296,032		438,034
Operating lease liabilities, current		406,656		281,225
Short-term debt		784,217		-
Related party loans		1,281,154		850,000
Total current liabilities		6,611,822		5,299,936

Operating lease liabilities, net of current portion		1,253,980		780,244

Total liabilities		7,865,802		6,080,180

Commitments and contingencies		-		-

Stockholders’ (deficit) equity
Preferred stock, par value $0.001, 25,000,000 shares authorized, of which

SEC Form 10-Q filed by Kidpik Corp.