KIDPIK Reports Fourth Quarter and Full Year 2022 Financial Results
Fourth Quarter 2022 Highlights:
-
Revenue, net: was
, a year over year decrease of$4.7 million 10.0% -
Gross margin: was
58.9% , a year over year increase of 20 basis points from58.7% in the fourth quarter of 2021 - Shipped items: were 374,000 items, compared to 477,000 shipped items in the fourth quarter of 2021
-
Average shipment keep rate: decreased to
67.6% , compared to70.8% in the fourth quarter of 2021 -
Net Loss: was
or$1.8 million loss per share$0.23 -
Adjusted EBITDA: was a loss of
$1.5
Full Year 2022 Financial Highlights:
-
Revenue, net: was
, a year over year decrease of$16.5 million 24.5% -
Gross margin: was
59.9% , a year over year increase of 40 basis points from59.5% in 2021 - Shipped items: were 1.5 million items, compared to 2.2 million shipped items in 2021
-
Average shipment keep rate: decreased to
68.3% compared to69.0% last year -
Net Loss: was
, or$7.6 million loss per share$0.99 -
Adjusted EBITDA: was a loss of
$6.1 million
“Our fourth quarter revenue was
“We remain focused on increasing subscription box sales by acquiring new customers through performance-based digital channels, including content marketing and social media. Our goal is to reduce cash burn and extend our operating runway, mainly by limiting new inventory purchases, which we believe will support our cash flow needs in the short term. Our complimentary styling service, which offers personalized children’s outfits at affordable prices through a convenient shopping experience, continues to resonate with customers," concluded Dabah.
Q4 Fiscal 2022 Summary
($ in thousands, except earnings per share) |
Q4 FY22 |
Q3 FY22 |
Q4 FY21 |
Q/Q |
Y/Y |
Revenue |
|
|
|
Up |
Down |
Gross margin |
|
|
|
Down 1.4 pts |
Up 0.2 pts |
Operating expenses |
|
|
|
Down |
Down |
Operating loss |
|
|
|
Down |
Up |
Net loss |
|
|
|
Down |
Down |
Net loss per share |
|
|
|
Down |
Down |
Revenue by Channel
|
|
13 weeks ended |
|
13 weeks ended
|
|
Change ($) |
Change (%) |
|||||||
Revenue by channel |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription boxes |
|
$ |
3,534,962 |
|
$ |
4,263,840 |
|
|
(728,878 |
) |
|
(17.1 |
)% |
|
3rd party websites sales |
|
|
593,446 |
|
|
729,070 |
|
|
(135,624 |
) |
|
(18.6 |
)% |
|
Online website sales |
|
|
615,444 |
|
|
279,029 |
|
|
336,415 |
|
|
120.6 |
% |
|
Total revenue |
|
$ |
4,743,852 |
|
$ |
5,271,939 |
|
$ |
(528,087 |
) |
|
(10.0 |
)% |
|
52 weeks ended |
|
52 weeks ended |
|
Change ($) |
Change (%) |
||||||||
Revenue by channel |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscription boxes |
|
$ |
12,861,293 |
|
$ |
18,427,057 |
|
$ |
(5,565,764 |
) |
|
(30.2 |
)% |
|
3rd party websites sales |
|
|
2,170,858 |
|
|
2,622,884 |
|
|
(452,026 |
) |
|
(17.2 |
)% |
|
Online website sales |
|
|
1,445,833 |
|
|
784,577 |
|
|
661,256 |
|
|
84.3 |
% |
|
Total revenue |
|
$ |
16,477,984 |
|
$ |
21,834,518 |
|
$ |
(5,356,534 |
) |
|
(24.5 |
)% |
Subscription Boxes Revenue
|
|
13 weeks ended |
|
13 weeks ended |
|
Change ($) |
Change (%) |
|||||||
Subscription boxes revenue from |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active subscriptions – recurring boxes |
|
$ |
2,934,645 |
|
$ |
4,091,031 |
|
$ |
(1,156,386 |
) |
|
(28.3 |
)% |
|
New subscriptions - first box |
|
|
600,317 |
|
|
172,809 |
|
|
427,508 |
|
|
247.4 |
% |
|
Total Subscription boxes revenue |
|
$ |
3,534,962 |
|
$ |
4,263,840 |
|
$ |
(728,878 |
) |
|
(17.1 |
)% |
|
|
52 weeks ended |
|
52 weeks ended |
|
Change ($) |
Change (%) |
|||||||
Subscription boxes revenue from |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Active subscriptions – recurring boxes |
|
$ |
11,007,517 |
|
$ |
15,565,533 |
|
$ |
(4,558,016 |
) |
|
(29.3 |
)% |
|
New subscriptions - first box |
|
|
1,853,776 |
|
|
2,861,524 |
|
|
(1,007,748 |
) |
|
(35.2 |
)% |
|
Total Subscription boxes revenue |
|
$ |
12,861,293 |
|
$ |
18,427,057 |
|
$ |
(5,565,764 |
) |
|
(30.2 |
)% |
Revenue by Product Line
|
|
13 weeks ended |
|
13 weeks ended |
|
Change ($) |
Change (%) |
|||||||
Revenue by product line |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Girls’ apparel |
|
$ |
3,499,888 |
|
$ |
4,016,285 |
|
$ |
(516,397 |
) |
|
(12.9 |
)% |
|
Boys’ apparel |
|
|
988,939 |
|
|
1,011,104 |
|
|
(22,165 |
) |
|
(2.2 |
)% |
|
Toddlers’ apparel |
|
|
255,026 |
|
|
244,550 |
|
|
10,476 |
|
|
4.3 |
% |
|
Total revenue |
|
$ |
4,743,853 |
|
$ |
5,271,939 |
|
$ |
(528,086 |
) |
|
(10.0 |
)% |
|
|
52 weeks ended |
|
52 weeks ended |
|
Change ($) |
Change (%) |
|||||||
Revenue by product line |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Girls’ apparel |
|
$ |
12,211,914 |
|
$ |
16,663,366 |
|
$ |
16,663,366 |
) |
|
(26.7 |
)% |
|
Boys’ apparel |
|
|
3,437,117 |
|
|
4,352,523 |
|
|
4,352,523 |
) |
|
(21.0 |
)% |
|
Toddlers’ apparel |
|
|
828,953 |
|
|
818,629 |
|
|
818,629 |
|
|
1.3 |
% |
|
Total revenue |
|
$ |
16,477,984 |
|
$ |
21,834,518 |
|
$ |
21,834,518 |
) |
|
(24.5 |
)% |
Balance Sheet and Cash Flow
-
Cash at the end of the fourth quarter totaled
compared to$0.6 million last year.$8.4 million -
Net cash used in operating activities decreased to
in 2022, compared to$6.7 million of cash used in operating activities in 2021.$11.0 million -
As of
December 31, 2022 , we had in total current assets,$14.6 million in total current liabilities and a working capital of$6.3 million .$8.3 million
Statements of Operations
Years Ended |
||||||||||||||||
|
|
For the 13 weeks ended |
|
|
For the 52 weeks ended |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues, net |
|
$ |
4,743,852 |
|
|
$ |
5,271,939 |
|
|
$ |
16,477,984 |
|
|
$ |
21,834,518 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
1,950,455 |
|
|
|
2,177,872 |
|
|
|
6,600,007 |
|
|
|
8,836,884 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
2,793,397 |
|
|
|
3,094,067 |
|
|
|
9,877,977 |
|
|
|
12,997,634 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shipping and handling |
|
|
1,201,517 |
|
|
|
1,543,942 |
|
|
|
4,334,928 |
|
|
|
6,087,283 |
|
Payroll, related costs and non-cash stock-based compensation |
|
|
1,139,224 |
|
|
|
1,304,611 |
|
|
|
5,276,719 |
|
|
|
4,258,604 |
|
General and administrative |
|
|
2,211,759 |
|
|
|
1,969,936 |
|
|
|
8,061,825 |
|
|
|
8,288,119 |
|
Depreciation and amortization |
|
|
7,925 |
|
|
|
5,559 |
|
|
|
27,914 |
|
|
|
26,914 |
|
Total operating expenses |
|
|
4,560,425 |
|
|
|
4,824,048 |
|
|
|
17,701,386 |
|
|
|
18,660,920 |
|
Operating loss |
|
|
(1,767,028 |
) |
|
|
(1,729,981 |
) |
|
|
(7,823,409 |
) |
|
|
(5,663,286 |
) |
Other (income) expenses |
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense |
|
|
27,162 |
|
|
|
127,508 |
|
|
|
78,646 |
|
|
|
711,974 |
|
Other income |
|
|
- |
|
|
- |
|
|
|
(286,794 |
) |
|
|
(429,045 |
) |
|
Total other (income) expenses |
|
|
27,162 |
|
|
|
127,508 |
|
|
|
(208,148 |
) |
|
|
282,929 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before provision for income taxes |
|
|
(1,794,190 |
) |
|
|
(1,857,489 |
) |
|
|
(7,615,261 |
) |
|
|
(5,946,215 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
1,332 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(1,794,190 |
) |
|
$ |
(1,857,489 |
) |
|
$ |
(7,615,261 |
) |
|
$ |
(5,947,547 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share attributable to common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.23 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.99 |
) |
|
$ |
(1.05 |
) |
Diluted |
|
$ |
(0.23 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.99 |
) |
|
$ |
(1.05 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
7,688,194 |
|
|
|
6,700,187 |
|
|
|
7,662,486 |
|
|
|
5,648,344 |
|
Diluted |
|
|
7,688,194 |
|
|
|
6,700,187 |
|
|
|
7,662,486 |
|
|
|
5,648,344 |
|
Balance Sheets
|
||||||||
|
|
2022 |
|
|
2021 |
|
||
Assets |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash |
|
$ |
600,595 |
|
|
$ |
8,415,797 |
|
Restricted cash |
|
|
4,618 |
|
|
|
4,703 |
|
Accounts receivable |
|
|
336,468 |
|
|
|
342,274 |
|
Inventory |
|
|
12,625,948 |
|
|
|
11,618,597 |
|
Prepaid expenses and other current assets |
|
|
1,043,095 |
|
|
|
1,726,516 |
|
Total current assets |
|
|
14,610,724 |
|
|
|
22,107,887 |
|
|
|
|
|
|
|
|
|
|
Leasehold improvements and equipment, net |
|
|
67,957 |
|
|
|
46,968 |
|
Operating lease right-of-use assets |
|
|
1,469,665 |
|
|
|
- |
|
Total assets |
|
$ |
16,148,346 |
|
|
$ |
22,154,855 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
2,153,389 |
|
|
$ |
2,560,361 |
|
Accounts payable, related party |
|
|
1,107,665 |
|
|
|
913,708 |
|
Accrued expenses and other current liabilities |
|
|
587,112 |
|
|
|
800,972 |
|
Advance payable |
|
|
- |
|
|
|
932,155 |
|
Operating lease liabilities |
|
|
438,957 |
|
|
|
- |
|
Short-term debt, related party |
|
|
2,050,000 |
|
|
|
2,200,000 |
|
Total current liabilities |
|
|
6,337,123 |
|
|
|
7,407,196 |
|
|
|
|
|
|
|
|
|
|
Operating lease liabilities, net of current portion |
|
|
1,061,469 |
|
|
|
- |
|
Total liabilities |
|
|
7,398,592 |
|
|
|
7,407,196 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
Preferred stock, par value |
|
|
- |
|
|
|
- |
|
Common stock, par value |
|
|
7,688 |
|
|
|
7,618 |
|
Additional paid-in capital |
|
|
50,276,511 |
|
|
|
48,659,225 |
|
Accumulated deficit |
|
|
(41,534,445 |
) |
|
|
(33,919,184 |
) |
Total stockholders’ equity |
|
|
8,749,754 |
|
|
|
14,747,659 |
|
Total liabilities and stockholders’ equity |
|
$ |
16,148,346 |
|
|
$ |
22,154,855 |
|
Statements of Cash Flows
Years Ended |
||||||||
|
|
|
2022 |
|
|
2021 |
|
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(7,615,261 |
) |
$ |
(5,947,547 |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
27,914 |
|
|
26,914 |
|
|
Amortization of debt issuance costs |
|
- |
|
|
58,397 |
|
||
Forgiveness of loan payable |
|
|
- |
|
|
(442,352 |
) |
|
Equity-based compensation |
|
|
1,651,048 |
|
|
328,515 |
|
|
Bad debt expense |
|
|
742,037 |
|
|
783,979 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(736,231 |
) |
|
(805,807 |
) |
|
Inventory |
|
|
(1,007,351 |
) |
|
(4,138,525 |
) |
|
Prepaid expenses and other current assets |
|
|
683,421 |
|
|
(903,937 |
) |
|
Operating lease right-of-use assets and liabilities |
30,761 |
- |
||||||
Accounts payable |
|
|
(406,972 |
) |
|
(601,264 |
) |
|
Accounts payable, related parties |
|
|
193,957 |
|
|
313,897 |
|
|
Accrued expenses and other current liabilities |
|
|
(213,860 |
) |
|
311,862 |
|
|
Net cash flows used in operating activities |
|
|
(6,650,537 |
) |
|
(11,015,868 |
) |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
Purchases of leasehold improvements and equipment |
|
|
(48,903 |
) |
|
(45,394 |
) |
|
Net cash used in investing activities |
|
|
(48,903 |
) |
|
(45,394 |
) |
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Proceeds from issuance of long-term debt from related party |
|
|
- |
|
|
2,000,000 |
|
|
Net repayment to line of credit |
|
|
- |
|
|
(2,090,515 |
) |
|
Net proceeds (repayments) from loan related party |
|
|
(150,000 |
) |
|
2,200,000 |
|
|
Net proceeds (repayments) from advance payable |
|
|
(932,155 |
) |
|
103,125 |
|
|
Cash used to settle net share equity awards |
|
|
(33,692 |
) |
|
- |
|
|
Receipts of initial public offering, net of offering costs |
|
|
- |
|
|
16,083,856 |
|
|
Proceeds from issuance of common stock |
|
|
- |
|
|
500,000 |
|
|
Net cash (used in) provided by financing activities |
|
|
(1,115,847 |
) |
|
18,796,466 |
|
|
Net (decrease) increase in cash and restricted cash |
|
|
(7,815,287 |
) |
|
7,735,204 |
|
|
|
|
|
|
|
|
|
|
|
Cash and restricted cash, beginning of year |
|
|
8,420,500 |
|
|
685,296 |
|
|
Cash and restricted cash, end of year |
|
$ |
605,213 |
|
$ |
8,420,500 |
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow data: |
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
38,607 |
|
$ |
573,618 |
|
|
Taxes paid |
|
$ |
- |
|
$ |
1,332 |
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of noncash investing and financing activities: |
|
|
|
|
|
|
|
|
Record right-of use asset and operating lease liabilities |
|
|
1,857,925 |
|
- |
|
||
Conversion of shareholder debt |
|
$ |
- |
|
$ |
2,000,000 |
|
RESULTS OF OPERATIONS
The Company’s revenue, net is disaggregated based on the following categories:
|
|
For the 13 weeks ended |
|
For the 52 weeks ended |
||||||||
|
|
|
|
|
|
|
|
|
||||
Subscription boxes |
|
$ |
3,534,962 |
|
$ |
4,263,840 |
|
$ |
12,861,293 |
|
$ |
18,427,057 |
3rd party websites sales |
|
|
593,446 |
|
|
729,070 |
|
|
2,170,858 |
|
|
2,622,884 |
Online website sales |
|
|
615,444 |
|
|
279,029 |
|
|
1,445,833 |
|
|
784,577 |
Total revenue |
|
$ |
4,743,852 |
|
$ |
5,271,939 |
|
$ |
16,477,984 |
|
$ |
21,834,518 |
Gross Margin
Gross profit is equal to our net sales (revenues, net) less cost of goods sold. Gross profit as a percentage of our net sales is referred to as gross margin. Cost of sales consists of the purchase price of merchandise sold to customers and includes import duties and other taxes, freight in, defective merchandise returned from customers, receiving costs, inventory write-offs, and other miscellaneous shrinkage.
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Gross Margin |
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Shipped Items
We define shipped items as the total number of items shipped in a given period to our customers through our active subscription, Amazon and online website sales.
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(In thousands) |
(In thousands) |
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|||||
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|||
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|
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|||||||
Shipped Items |
|
374 |
|
477 |
|
1,457 |
|
2,157 |
|
Average Shipment Keep Rate
Average shipment keep rate is calculated as the total number of items kept by our customers divided by total number of shipped items in a given period.
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Average Shipment Keep Rate |
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Non-GAAP Financial Measures
We report our financial results in accordance with generally accepted accounting principles in
Our non-GAAP financial measure should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
- Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
- Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
- Adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;
- Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us;
- Adjusted EBITDA does not reflect certain non-routine items that may represent a reduction in cash available to us; and
- Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.
We compensate for these limitations by providing a reconciliation of this non-GAAP measure to the most comparable GAAP measure. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view this non-GAAP measure in conjunction with the most directly comparable GAAP financial measure. For more information on these non-GAAP financial measure, please see the section titled “Unaudited Reconciliation of Net Loss to Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)”, included at the end of this release.
Adjusted EBITDA
Unaudited Reconciliation of Net Loss to Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)
We define adjusted EBITDA as net loss excluding interest income, other (income) expense, net, provision for income taxes, depreciation and amortization, and equity-based compensation expense. The following table presents a reconciliation of net loss, the most comparable GAAP financial measure, to adjusted EBITDA for each of the periods presented:
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For the 13 weeks ended |
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For the 52 weeks ended |
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||||||||
Net loss |
|
$ |
(1,794,190 |
) |
$ |
(1,857,489 |
) |
|
$ |
(7,615,261 |
) |
$ |
(5,947,547 |
) |
||
Add (deduct) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Interest expense |
|
|
27,162 |
|
|
|
127,508 |
|
|
|
78,646 |
|
|
|
711,974 |
|
Other income |
|
|
- |
|
|
|
- |
|
|
|
(286,794 |
) |
|
|
(429,045 |
|
Provision for income taxes |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,332 |
|
Depreciation and amortization |
|
|
7,925 |
|
|
|
5,559 |
|
|
|
27,914 |
|
|
|
26,914 |
|
Equity based compensation |
|
|
295,980 |
|
|
|
328,515 |
|
|
|
1,651,048 |
|
|
|
328,515 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
(1,463,123 |
) |
|
$ |
(1,395,907 |
) |
|
$ |
(6,144,447 |
) |
$ |
(5,307,857 |
) |
Earnings Call Information:
On
A replay of the conference call will be available approximately two hours after the conclusion of the call on the investor relations section of the
About
Founded in 2016,
Forward-Looking Statements
This press release may contain statements that constitute “forward-looking statements” within the federal securities laws, including The Private Securities Litigation Reform Act of 1995, which provide a safe-harbor for forward-looking statements. In particular, when used in the preceding discussion, the words “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would” and variations of these terms and similar expressions, or the negative of these terms or similar expressions are intended to identify forward-looking statements within the meaning of such laws, and are subject to the safe harbor created by such applicable laws. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of
View source version on businesswire.com: https://www.businesswire.com/news/home/20230403005780/en/
Investor Relations Contact:
ir@kidpik.com
Media:
press@kidpik.com
Source: