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Starco Brands, Inc. 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 revenues to $14,006,349 from $15,209,504 in the same quarter the previous year, attributed to a decline in Soylent (STCB0.00%) revenue due to a product category realignment at a major retail customer.
Cost of goods sold for the quarter was $8,131,015, compared to $9,178,845 in the same quarter of the previous year, while cost of goods sold related to related parties increased to $968,934 from $752,424.
The company reported a gross profit of $6,386,407 for the quarter, down from $7,741,777 in the previous year, with the decline attributed to reduced revenue.
Operating expenses increased to $11,961,922 from $5,003,679, primarily due to a fair value share adjustment loss of $5,105,535.
Net loss for the quarter was $6,257,088, compared to a net income of $2,361,251 in the previous year. After accounting for non-controlling interests, the net loss attributable to Starco Brands was $6,344,926, compared to a net income of $2,327,030 in the previous year.
Cash provided by operating activities was $517,879, while cash used in investing and financing activities was $286,327 and $377,101, respectively.
Starco had a working capital deficit of $28,787,518 as of September 30, 2024. The company acknowledges its dependence on positive operating results and potential financing to meet future obligations.
The filing also details various financial agreements, including a Loan and Security Agreement with Gibraltar Business Capital, LLC, providing a revolving line of credit up to $12.5 million.
Starco Brands 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 a lack of an audit committee and corporate documentation.
Starco continues to focus on expanding its product lines and customer base, leveraging recent acquisitions of AOS, Skylar, and Soylent, and its relationship with The Starco Group.
This content was summarized by generative artificial intelligence using public filings retrieved from SEC.gov. The original data was derived from the Starco Brands Inc quarterly 10-Q report dated November 14, 2024. To report an error, please email earnings@qz.com.