Yerbaé Brands Corp. Reports Significant Financial Challenges, Decline in Revenue and Increased Liabilities in Q2 2024

Yerbaé Brands Corp. reported significant financial challenges in its 10-Q filing for the second quarter of 2024, reflecting a substantial decline in revenue and increased liabilities. As of June 30, 2024, total current assets decreased to $2.66 million from $3.83 million at the end of 2023, while total assets fell from $4.10 million to $2.86 million. Current liabilities surged to $6.47 million, up from $2.99 million, contributing to a total liabilities increase to $6.60 million from $5.38 million. Shareholders' equity also declined sharply, moving from $(1.28 million) to $(3.74 million).

In terms of revenue, Yerbaé reported $1.56 million for Q2 2024, a 57% decrease from $3.62 million in Q2 2023. Year-to-date revenues also fell by 57%, totaling $2.99 million compared to $7.01 million in the prior year. The decline was attributed to the non-renewal of a partnership with Sam’s Club and challenges in the consumer packaged goods market due to inflation. Despite these setbacks, the company noted a 48% growth in its eCommerce channel and secured new partnerships with major retailers like Kroger and Target.

Gross profit for Q2 2024 was $660,035, down from $1.82 million in Q2 2023, while total expenses decreased to $3.15 million from $5.34 million. The net loss before other income for Q2 2024 was $(2.49 million), an improvement from $(3.51 million) in the same quarter of the previous year. For the six months ended June 30, 2024, the net loss was $(5.55 million), significantly reduced from $(12.53 million) in 2023.

The company has been actively managing its costs, with general and administrative expenses dropping to $5.7 million for the first half of 2024, down from $12.1 million in the prior year. Sales, advertising, and marketing expenses also decreased to $0.8 million from $3.7 million, reflecting a strategic focus on optimizing retailer performance and reducing promotional activities.

Yerbaé's cash position weakened, with cash and cash equivalents at $0.1 million as of June 30, 2024, compared to $1.0 million at the end of 2023. The company is exploring additional financing options to address its liquidity concerns, as management expressed substantial doubt about its ability to continue as a going concern. The company completed a reverse merger with Yerbaé USA in February 2023, which has influenced its current financial structure and operations.