Reed's, Inc. reported significant financial challenges in its third quarter of 2024, with net sales declining to $6.8 million, down from $11.9 million in Q3 2023. For the nine months ended September 30, 2024, total net sales were $28.2 million, compared to $33.0 million in the same period last year. The gross profit for Q3 2024 was $1.2 million, a decrease from $4.0 million in Q3 2023, while gross profit for the nine-month period fell to $8.5 million from $9.2 million.
The company reported a loss from operations of $(3.1) million for Q3 2024, compared to a loss of $(0.1) million in Q3 2023. The net loss for Q3 2024 was $(4.2) million, significantly higher than the $(1.4) million loss reported in Q3 2023. For the nine months ended September 30, 2024, the net loss totaled $(9.0) million, slightly worse than the $(8.9) million loss in the same period of 2023. The loss per share for Q3 2024 was $(0.82), compared to $(0.34) in Q3 2023.
As of September 30, 2024, Reed's reported total assets of $15.0 million, down from $18.9 million at the end of 2023. Total current assets also decreased to $14.1 million from $17.8 million. Cash reserves were notably reduced to $306,000 from $603,000, and accounts receivable decreased to $2.8 million from $3.6 million. Inventory levels also fell to $9.3 million from $11.3 million.
The company faced increased operational challenges, including supply chain disruptions, inflation in raw materials, and rising logistics costs. These factors contributed to suppressed margins and increased lead times. Reed's has implemented mitigation plans to address these issues and anticipates a moderation in inflation throughout 2024.
On the balance sheet, total current liabilities rose to $37.0 million from $27.2 million, primarily due to an increase in the current portion of convertible notes payable, which surged to $21.8 million from $6.7 million. The total stockholders' deficit increased to $(22.0) million from $(19.2) million.
Reed's has also made strategic financing moves, including a line of credit with Alterna Capital Solutions, which allows for borrowings of up to $13.0 million. As of September 30, 2024, the company had $7.5 million in additional borrowing capacity. The company continues to navigate a challenging market environment while managing its financial obligations and operational hurdles.
About REED'S, INC.
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