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Reeds Inc. (REED-0.95%) has submitted its 10-Q filing for the quarterly period ended September 30, 2024.
The filing includes financial statements for the quarter, showing a decrease in net sales to $6,752,000 from $11,856,000 in the same quarter the previous year. This decrease is attributed to a reduction in core brand sales volume and elevated trade spend.
Cost of goods sold for the quarter was $5,537,000, representing 82% of net sales, compared to 66% in the same quarter of the previous year. The increase in cost ratio is due to elevated trade spend.
The company reported a gross profit of $1,215,000 for the quarter, compared to $4,033,000 in the previous year, with the decline attributed to decreased sales and increased cost of goods sold.
Delivery and handling expenses decreased to $1,279,000 from $1,908,000, driven by efforts to mitigate inflationary costs.
Selling and marketing expenses increased to $1,283,000 from $861,000, primarily due to higher employee-related costs and marketing spend.
General and administrative expenses increased to $1,791,000 from $1,407,000, driven by higher professional fees and employee-related costs.
Net loss for the quarter was $4,150,000, compared to a net loss of $1,436,000 in the previous year. The increase in net loss is attributed to decreased gross profit and increased operating expenses.
Cash used in operating activities was $2,254,000 for the nine months ended September 30, 2024.
Reeds had a working capital deficiency of $22,923,000 as of September 30, 2024. The company acknowledges its dependence on additional financing to meet future obligations.
The filing also details various financial agreements, including a secured line of credit with Alterna Capital Solutions and secured convertible notes payable with Whitebox.
Reeds does not anticipate cash dividend payments to common stockholders in the near future.
The company identified a material weakness in its internal controls over financial reporting due to the need for improved resources and processes.
Reeds continues to focus on its core product lines, including Reed’s and Virgil’s branded beverages, and highlights its efforts to streamline operations and improve margins.
This content was summarized by generative artificial intelligence using public filings retrieved from SEC.gov. The original data was derived from the Reeds Inc. quarterly 10-Q report dated November 14, 2024. To report an error, please email earnings@qz.com.