美国
证券交易委员会
华盛顿特区20549
表格
(标记一个)
根据 1934 年证券交易法第 13 或 15 (d) 条的季度报告 |
截至2024年6月30日季度结束
或
根据1934年证券交易法第13或15(d)节的转型报告书 |
过渡期从 to
委托文件编号：001-39866
（依据其宪章指定的注册名称）
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（注册或组织的）提起诉讼的州或其他司法管辖区（如适用） |
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（IRS雇主 （标识号码） |
(
（注册人主要执行办公室的地址，包括邮政编码和电话号码，包括区号）
在法案第12(b)条的规定下注册的证券：
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每一类的名称 |
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交易标志 |
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在其上注册的交易所的名称 |
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请勾选以下内容：（1）在过去12个月内是否根据1934年证券交易法第13或15（d）条的规定提交了所有要求提交的报告（或者在注册人要求提交这些报告的较短期间内），以及（2）注册人是否过去90天一直要遵守这些申报要求。 ☒ NO ☐
请勾选：公司是否已在过去12个月（或公司需要提交此类文件的较短时间）通过电子方式提交了所有根据S-t规则405条（本章节第232.405条）规定需要提交的互动数据档案。 ☒ 不 ☐
请勾选以下选项以指示注册者是否为大型加速提交者、加速提交者、非加速提交者、小型报告公司或新兴增长公司，有关“大型加速提交者”、“加速提交者”、“小型报告公司”和“新兴增长公司”的定义，请参见1934年证券交易法规则12亿.2。
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大型加速档案 |
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☐ |
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☒ |
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非加速文件 |
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较小的报告公司 |
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新兴成长公司 |
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如果是新兴成长型企业，请通过复选标记表明注册申请人是否选择不使用根据《证券交易法》第13(a)条提供的任何新的或修订后的财务会计准则所规定的延长过渡期。
请勾选表示，是否登记申报人为交易所法规第120亿2条所定之空壳公司。YES ☐ NO
截至2024年11月1日，有
目录
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页面 |
第一部分 |
5 |
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第 1 项。 |
5 |
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5 |
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6 |
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7 |
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9 |
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10 |
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第 2 项。 |
20 |
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第 3 项。 |
29 |
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第 4 项。 |
30 |
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第二部分。 |
31 |
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第 1 项。 |
31 |
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第 1A 项。 |
31 |
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第 2 项。 |
31 |
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第 3 项。 |
31 |
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第 4 项。 |
31 |
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第 5 项。 |
31 |
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第 6 项。 |
32 |
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33 |
2
关于前瞻性陈述的谨慎声明
本季度报告表格10-Q截至2024年9月30日的期间（「季度报告」）包含根据1933年证券法（经修订）（「证券法」）第27A条和1934年证券交易法（经修订）（「交易所法」）的定义，关于我们及我们的行业的「前瞻性陈述」，这些陈述涉及大量已知和未知的风险和不确定性。本季度报告中除了历史事实陈述以外的所有陈述，包括但不限于，有关我们未来业务运营结果或财务控制项、业务策略、资本配置的预期、投资活动、原材料的采购、我们供应链挑战的影响、物流、分销和营销举措、我们生产力倡议的影响，包括预期的重组费用、成本节约和其他利益、我们业务中的因素和趋势，包括季节性，根据TRA（如下所述）的未来支出或支付，市场需求和消费者偏好的变化、有效竞争的能力、与esg相关的承诺、我们商标和其他智慧财产权的有效性、政府法规的影响、流动性和资本需求，包括我们现金和流动性的充足性或资本来源、满足承诺，以及管理层对未来业务的计划和目标，均为前瞻性陈述。在某些情况下，您可以通过这些陈述包含的词语，如「预期」、「相信」、「考虑」、「沉思」、「继续」、「可以」、「估计」、「期待」、「预测」、「指导」、「打算」、「可能」、「在轨」、「前景」、「计划」、「潜在」、「预测」、「项目」、「追求」、「寻求」、「应该」、「目标」、「将」或「会」或这些词语的否定形式或其他类似的词语、术语或表达来识别前瞻性陈述。
您不应依赖前瞻性声明作为对未来事件的预测。我们在本季度报告中所包含的前瞻性声明主要基于我们对未来事件和趋势的当前预期和预测，我们相信这些可能会影响我们的业务、财务状况和经营结果。所有前瞻性声明均由参考我们向美国证券交易委员会（“SEC”）于2024年3月6日提交的，涵盖截至2023年12月31日的年度报告（“年度报告”）中的风险因素部分第I部分、第1A项下讨论的因素来完全限定，以及我们随后向SEC的提交文件。这些前瞻性声明中描述的事件的结果受到风险、不确定性及本季度报告中标题为“风险因素”的部分及其他部分所描述的其他因素的影响，包括但不限于以下几点：
3
此外，我们在一个竞争激烈且快速变化的环境中运营。新的风险和不确定性不时出现，我们无法预测可能影响本季度报告中包含的前瞻性声明的所有风险和不确定性。前瞻性声明中反映的结果、事件和情况可能无法实现或发生，实际结果、事件或情况可能与前瞻性声明中描述的有实质性不同。
此外，“我们相信”等表态反映了我们对相关主题的信念和观点。这些表态基于我们在本季度报告日期前可获得的信息，虽然我们认为这些信息为这些表态提供了合理基础，但这些信息可能是有限或不完整的。我们的表态不应被理解为表明我们已对所有相关信息进行了全面调查或审查。这些表态具有固有的不确定性，投资者应当谨慎不要过度依赖这些表态。
本季度报告中提出的前瞻性陈述仅涉及陈述发表之日的事件。我们不承担更新本季度报告中提出的任何前瞻性陈述以反映本季度报告日期之后的事件或情况，或反映新信息或突发事件发生的义务，除非适用法律要求。我们可能无法实际实现在我们的前瞻性陈述中披露的计划、意图或期望，您不应过度依赖我们的前瞻性陈述。我们的前瞻性陈述不反映任何未来收购、合并、处置、合资或投资可能产生的影响。
4
第一部分 - 财务信息
项目 1 – 简明合并基本报表（未经审计）
ZEVIA PBC
简明综合资产负债表（未经审计）
(以千为单位，除每股数量和每股金额外) |
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2024年9月30日 |
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2023年12月31日 |
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资产 |
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流动资产: |
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现金及现金等价物 |
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$ |
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$ |
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应收帐款，净额 |
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存货 |
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预付费用及其他流动资产 |
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流动资产总额 |
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不动产及设备，净额 |
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租赁资产之使用权资产，净额 |
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无形资产，扣除累计摊销 |
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其他非流动资产 |
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总资产 |
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$ |
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$ |
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负债和权益 |
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流动负债： |
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应付账款 |
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$ |
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$ |
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应计费用及其他流动负债 |
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营运租赁负债的流动部分 |
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流动负债总额 |
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扣除当期偿还后之经营租赁负债净额 |
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其他非流动负债 |
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总负债 |
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股东权益 |
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每股面额$ |
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A类普通股，$ |
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B类普通股，$ |
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资本公积额额外增资 |
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累积亏损 |
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Zevia PBC股东权益总额 |
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非控股权益 |
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总股东权益 |
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负债加股东权益总额 |
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$ |
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$ |
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随附附注是这些简明综合财务报表的重要组成部分。
5
ZEVIA PBC
精简综合损益及全面损失报表（未经审计）
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截至9月30日的三个月 |
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截至9月30日的九个月 |
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（单位：千美元，除每股和每股金额外） |
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2024 |
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2023 |
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2024 |
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2023 |
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净销售额 |
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$ |
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$ |
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$ |
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$ |
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营业成本 |
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毛利润 |
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营业费用： |
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销售和市场营销 |
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总务和行政 |
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股权激励薪酬 |
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折旧和摊销 |
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重组费用 |
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总营业费用 |
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营运亏损 |
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其他收入，净 |
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税前损失 |
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所得税（益）费用 |
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净亏损和综合亏损 |
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归属于非控股权益的亏损 |
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Zevia PBC归属净亏损 |
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普通股股东应占净亏损每股金额 |
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基本 |
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$ |
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$ |
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$ |
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$ |
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稀释 |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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加权平均流通股份 |
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基本 |
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稀释 |
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附注是这些简明综合财务报表的一部分。
6
ZEVIA PBC
凝聚的合并股东权益变动表（未经审计）
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A类普通股 |
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B类普通股 |
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追加 |
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(以千元表示，股份数除外) |
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股份 |
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金额 |
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股份 |
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金额 |
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已付入 |
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累积的 |
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非控制权益 |
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总计 |
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2024年1月1日的余额 |
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$ |
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$ |
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$ |
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股权激励计划下普通股的归属和释放，净值 |
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— |
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将B类普通股换为A类普通股 |
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— |
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行使股票期权 |
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— |
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基于股权的补偿 |
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— |
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— |
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净亏损 |
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— |
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— |
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截至2024年3月31日的余额 |
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$ |
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$ |
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$ |
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$ |
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股权激励计划下普通股的归属和释放，净值 |
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— |
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将B类普通股换为A类普通股 |
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期权的行使 |
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基于股权的补偿 |
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净亏损 |
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截至2024年6月30日的余额 |
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$ |
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$ |
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$ |
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根据股权激励计划的普通股归属和释放，净额 |
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— |
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将B类普通股兑换成A类普通股 |
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期权的行使 |
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— |
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— |
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— |
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— |
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— |
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基于股权的补偿 |
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— |
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— |
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— |
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— |
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— |
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— |
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净亏损 |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
) |
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( |
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截至2024年9月30日的余额 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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||||||
7
|
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A类普通股 |
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B类普通股 |
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追加 |
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||||||||||||||
(以千元表示，股份数除外) |
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股份 |
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金额 |
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股份 |
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金额 |
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已付入 |
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累积的 |
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非控制权益 |
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总计 |
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||||||||
2023年1月1日的余额 |
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$ |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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||||||
股权激励计划下普通股的归属和释放，净额 |
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— |
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— |
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( |
) |
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— |
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— |
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— |
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||
B类普通股兑换为A类普通股 |
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( |
) |
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( |
) |
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( |
) |
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— |
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— |
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|||
行使股票期权 |
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— |
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— |
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— |
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— |
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— |
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|||
基于股权的薪酬 |
|
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— |
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— |
|
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— |
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|
— |
|
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— |
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— |
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||
净亏损 |
|
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— |
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— |
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— |
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— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
截至2023年3月31日的余额 |
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$ |
|
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$ |
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$ |
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|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
股权激励计划下普通股的归属和释放，净额 |
|
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— |
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— |
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— |
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— |
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— |
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|
|
— |
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|
|
— |
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|
B类普通股兑换为A类普通股 |
|
|
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— |
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( |
) |
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— |
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( |
) |
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— |
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— |
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||
行使股票期权 |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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基于股权的补偿 |
|
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— |
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— |
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— |
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— |
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— |
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— |
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||
净亏损 |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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|
( |
) |
|
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( |
) |
截至2023年6月30日的余额 |
|
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$ |
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$ |
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|
$ |
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|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
根据股权激励计划的普通股归属及释放，净额 |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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将B类普通股交换为A类普通股 |
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— |
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( |
) |
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— |
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( |
) |
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— |
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— |
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||
处置以成本法投资赎回B类普通股 |
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— |
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— |
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( |
) |
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— |
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— |
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— |
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( |
) |
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( |
) |
行使股票期权 |
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— |
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— |
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— |
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— |
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— |
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基于股份的补偿 |
|
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— |
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— |
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— |
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— |
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— |
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— |
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||
净亏损 |
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— |
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|
— |
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— |
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— |
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|
— |
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|
( |
) |
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|
( |
) |
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( |
) |
截至2023年9月30日的余额 |
|
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$ |
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$ |
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$ |
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|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
随附附注是这些简明综合财务报表的重要组成部分。
8
ZEVIA PBC
简明综合现金流量表（未经审核）
|
|
截至九月三十日的九个月。 |
|
|||||
（以千为单位) |
|
2024 |
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2023 |
|
||
营业活动： |
|
|
|
|
|
|
||
净亏损 |
|
$ |
( |
) |
|
$ |
( |
) |
调整项目以协调净损失与经营活动提供的现金（使用现金）： |
|
|
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|
||
非现金租赁费用 |
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|
||
折旧及摊销 |
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|
||
资产、设备和软体亏损净额 |
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债务发行成本摊销 |
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|
||
基于股权的薪酬 |
|
|
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|
|
|
||
营运资产和负债的变化： |
|
|
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|
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|
||
应收帐款，净额 |
|
|
|
|
|
( |
) |
|
存货 |
|
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( |
) |
|
预付费用及其他资产 |
|
|
|
|
|
( |
) |
|
应付账款 |
|
|
( |
) |
|
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|
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应计费用及其他流动负债 |
|
|
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( |
) |
|
租赁负债 |
|
|
( |
) |
|
|
( |
) |
其他非流动负债 |
|
|
|
|
|
|
||
营运活动所提供（使用）的净现金 |
|
|
|
|
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( |
) |
|
投资活动： |
|
|
|
|
|
|
||
购买物业、设备和软体 |
|
|
( |
) |
|
|
( |
) |
出售物业、设备和软体所得款项 |
|
|
|
|
|
|
||
投资活动提供的净现金流量（使用） |
|
|
( |
) |
|
|
|
|
融资活动: |
|
|
|
|
|
|
||
循环信用贷款收益 |
|
|
|
|
|
|
||
还款循环信用额度 |
|
|
( |
) |
|
|
|
|
行使股票期权所得 |
|
|
|
|
|
|
||
筹资活动提供的净现金 |
|
|
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|
||
来自营运、投资和融资活动的净变动 |
|
|
|
|
|
( |
) |
|
期初现金及现金等价物余额 |
|
|
|
|
|
|
||
期末现金及现金等价物 |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
非现金投资和融资活动 |
|
|
|
|
|
|
||
包括应付帐款的资本支出 |
|
$ |
|
|
$ |
|
||
类B普通股转换为类A普通股 |
|
$ |
|
|
$ |
|
||
以租赁负债交换获得的营业租赁使用权资产 |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
补充现金流量资讯： |
|
|
|
|
|
|
||
支付利息的现金 |
|
$ |
|
|
$ |
|
||
支付所得税现金 |
|
$ |
|
|
$ |
|
||
随附附注是这些简明综合财务报表的重要组成部分。
9
ZEVIA PBC
简化合并财务报表附注 （未经审计）
1. 业务描述
组织和运营
Zevia PBC（以下简称“公司”，“我们”，“我们的”），是一家以简单、植物基元素制成的零糖饮料为主的更健康饮料公司。我们是一家特拉华州的公益公司，并被指定为“认证b公司”，专注于通过提供一系列零糖、零卡路里、天然甜味饮料来解决全球由于过度糖分摄入而导致的健康挑战。所有Zevia®饮料均经过非基因改造项目的验证，无麸质，犹太人食品规范，并且是纯素食，包括苏打、能量饮料、有机茶和儿童饮料等多种口味。我们的产品主要通过美国和加拿大的各大零售商网络在杂货、药品、仓储俱乐部、大宗商品、天然、便利店和电子商务渠道中分销和销售，并在杂货店和自然产品店以及专门店销售。公司的产品在美国和加拿大的第三方饮料生产和仓储设施进行制造和维护。
公司已完成首次公开募股（“IPO”），发行了
2.重要会计政策摘要
做法的基础
附表中的未经审计的简明合并基本财务报表是根据美国通用会计准则（“U.S. GAAP”）的中期财务报告准则以及10-Q表格和S-X法规第10条的指示编制的。因此，这些财务报表不包括美国通用会计准则对完整财务报表所要求的所有信息和脚注，并不一定代表截至2024年12月31日的财政年度或任何其他中期期间或未来财政年度的预期结果。包含在此的截至2023年12月31日的简明合并资产负债表是根据该日期的审计财务报表衍生的，但不包括所有披露，包括某些注释，根据美国通用会计准则在年度报告基础上要求的。根据规定的规则和法规，已省略了按照美国通用会计准则编制的财务报表通常包括的某些信息和注释。因此，这些中期财务报表应与截至2023年12月31日财政年度的财务报表以及包含在年度报告中的附注一起阅读。根据管理层的意见，已反映了为了对所呈现期间的简明合并财务报表进行公正呈现所需的所有调整（包括正常的往复调整）。
合并原则
附表中的未经审计的简明合并财务报表包括公司及其控制的Zevia LLC子公司的账户，后者由于持有绝大部分股权而受公司控制。所有公司间交易和余额在合并中已予以清除。
公司拥有对Zevia LLC的绝大多数经济权益，并管理和控制Zevia LLC的所有业务和事务。因此，公司根据会计准则法规总论（“ASC”）主题810编制了这些附表中的未经审计的简明合并财务报表。 整合.
2022年1月1日，公司与Zevia LLC签订了一份服务协议，将公司所有员工的服务转移到Zevia LLC。根据实体之间的服务协议条款，员工的工资成本由Zevia LLC承担，而某些其他非工资成本，如与股份补偿安排有关的成本，仍由公司承担。此外，根据Zevia LLC于2021年7月21日签署的第十三次修订有限责任公司协议，Zevia LLC应根据公司的自行决定，报销公司的某些间接费用、行政费用和其他费用。截至2024年和2023年9月30日结束的三个月和九个月内，确定了大多数这些成本将由公司保留，与Zevia LLC直接相关的某些成本将由该实体承担。这些成本影响了Zevia LLC报告的净损失金额，从而影响了分配给非控股权益的金额。，确定大部分这些成本将由公司保留，相应的直接归属于Zevia LLC的一些成本将由该实体承担。这些成本影响了Zevia LLC报告的净损失额，并因此影响了分配给非控股权益的金额。
10
估计的使用
编制随附的未经审计的简明合并基本报表需要管理层进行影响资产和负债额报告以及销售净额和报告期间费用金额的估计和假设。实际结果可能与这些估计不同。公司进行的重大估计涉及：销售净额及相关成本确认；分配给和固定资产的可使用年限及回收性；库存过时调整和净变现价值调整；租赁负债的增量借贷利率；呆账准备；对无形资产分配的可使用年限及回收性；推迟的税收资产实现；以及资产公平价值的确定，其中包括限制单位奖励和以股权为基础的报酬奖励的确定。公司持续评估其与历史经验和趋势相比的估计，这形成了对资产和负债账面价值作出判断的基础。 根据美国通用会计准则编制附带的未经审计的简明合并基本报表需要管理人员进行估计和假设，从而影响资产和负债的报告金额，以及在报告期间的销售净额和费用的报告金额。实际结果可能不同于这些估计。公司进行的重大估计涉及：销售净额及相关成本确认；对固定资产和设备分配的可用寿命及回收性；库存过时调整和净变现价值调整；租赁负债的增加借款利率；坏账准备金；对无形资产分配的可用寿命和回收性；遗产税资产的实现性；以及股票工具的公允价值的确定，包括受限单位奖励和股权奖励的调整。公司将其估计与历史经验和趋势进行比较，这是对其资产和负债账面价值做出判断的基础。
最近的会计准则解释。
公司是一家新兴成长型公司，根据《创业之初投资激励法案》（“JOBS法案”）的定义属于新兴成长型公司。根据JOBS法案，新兴成长型公司可以延迟采纳JOBS法案通过后颁布的与新会计准则有关的会计准则，直至这些准则适用于私人公司。公司已选择使用此延长的过渡期来遵守对公开公司和私人公司具有不同有效日期的新或修订会计准则，直至公司（i）不再是新兴成长型公司或（ii）积极而不可撤销地选择退出JOBS法案提供的延长过渡期，以早者为准。因此，同附未经审计的简明合并基本报表可能与遵守作为公开公司有效日期的新或修订会计准则的公司不可比较。
最近发布的会计准则——尚未采纳
2013年11月，财务会计准则委员会（“FASB”）发布了会计准则更新（“ASU”）2023-07。 分部报告（主题 280）：报告服务部门（主题 280）变更披露方式，通过升级对意义重大的分部费用的披露来改进分部报告披露要求。该准则适用于 2023 年 12 月 15 日之后的财年和 2024 年 12 月 15 日之后的财年间隔期。该准则必须适用于财务报表中呈现的所有期间的追溯。该公司目前正在评估该标准对合并财务报表的影响。这项ASU要求实体在中期和年度基础上披露其可报告部门的重大费用和其他部门项目信息。仅有一个可报告部门的上市实体必须在中期和年度基础上应用ASU 2023-07的披露要求，以及ASC 280中有关所有现有部门披露和协调要求。ASU 2023-07自2023年12月15日后开始的财政年度生效，并在2024年12月15日后开始的财政年度内进行中期适用，允许提前采纳。公司目前正在评估采用这项指导的影响。
2023年12月，FASB发布了ASU No. 2023-09。 所得税（主题740）：改进所得税披露。该标准要求上市的业务实体在每年披露税率调节表的特定类别，并为满足数量门限的调节项目提供其他信息（如果这些调节项目的影响相当于或大于将税前收入（或损失）与适用的法定所得税率相乘所得金额的5%）。它还要求所有实体每年披露按联邦、州和外国税种分解的所支付的所得税（扣除退款），以及按所支付的所得税（扣除退款）在个别司法管辖区分解的金额，当所支付的所得税（扣除退款）相当于或大于所支付的总所得税（扣除退款）的5%时。最后，该标准取消了要求所有实体披露未识别税务负债余额在未来12个月内合理可能变动范围的性质和估计，或声明无法估算范围的要求。该标准对公司自2026年1月1日开始的年度适用。可以提前采纳该标准。该标准应以前瞻性基础应用。允许追溯适用。公司目前正在评估该标准可能对其财务报表产生的影响。该指导要求披露关于报告实体有效税率协调的细分信息，以及有关所缴所得税的信息。该指导旨在通过提供更详细的所得税披露，帮助投资者做出有利于资本配置决策的详细信息。ASU 2023-09自2025年12月15日后开始的私营公司的年度周期生效，允许提前采纳。该指导将在前瞻性基础上应用，并选择性地以标准的回溯方式应用。公司目前正在评估采用这项指导的影响。
最近发布的任何其他会计准则对公司的重要性无关，并不会对公司的资产产生重大影响。基本报表。
3. REVENUES
Disaggregation of Revenue
The Company’s products are distributed and sold principally across the U.S. and Canada through a diverse network of major retailers, including: grocery stores, drug stores, warehouse clubs, mass stores, natural product stores, convenience, and online/e-commerce channels. The following table disaggregates the Company’s sales by channel:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Retail sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Online/e-commerce |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following table disaggregates the Company’s sales by geographic location of the respective customers:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
U.S. |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Canada |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Contract liabilities
The Company did
11
4. INVENTORIES
Inventories consisted of the following as of:
(in thousands) |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Finished goods |
|
|
|
|
|
|
||
Inventories |
|
$ |
|
|
$ |
|
||
5. PROPERTY AND EQUIPMENT, NET
Property and equipment, net, consisted of the following as of:
(in thousands) |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Leasehold improvements |
|
$ |
|
|
$ |
|
||
Computer equipment |
|
|
|
|
|
|
||
Furniture and equipment |
|
|
|
|
|
|
||
Quality control and marketing equipment |
|
|
|
|
|
|
||
Assets not yet placed in service |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Less accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
$ |
|
|
$ |
|
||
For the three months ended September 30, 2024 and 2023, depreciation expense, including the amortization of leasehold improvements, amounted to approximately $
6. INTANGIBLE ASSETS, NET
The following tables provide information pertaining to the Company’s intangible assets as of:
|
|
September 30, 2024 |
|
|||||||||||||
(in thousands) |
|
Weighted-Average Remaining Useful Life |
|
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Intangible Assets, Net |
|
||||
Software |
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Customer relationships |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Trademarks |
|
N/A |
|
|
|
|
|
|
— |
|
|
|
|
|||
Intangible assets, net |
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
|
|
December 31, 2023 |
|
|||||||||||||
(in thousands) |
|
Weighted-Average Remaining Useful Life |
|
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Intangible Assets, Net |
|
||||
Software |
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Customer relationships |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Trademarks |
|
N/A |
|
|
|
|
|
|
— |
|
|
|
|
|||
Intangible assets, net |
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
For the three months ended September 30, 2024 and 2023, total amortization expense amounted to $
12
Amortization expense for intangible assets with definite lives is expected to be as follows:
(in thousands) |
|
|
|
Remainder of 2024 |
|
|
|
2025 |
|
|
|
2026 |
|
|
|
Expected amortization expense for intangible assets with definite lives |
$ |
|
|
7. DEBT
ABL Credit Facility
On February 22, 2022, Zevia LLC (the “Borrower”) obtained a revolving credit facility (the “Secured Revolving Line of Credit”) by entering into a Loan and Security Agreement with Bank of America, N.A. (the “Loan and Security Agreement”). The Borrower may draw funds under the Secured Revolving Line of Credit up to an amount not to exceed the lesser of (i) a $
Loans under the Secured Revolving Line of Credit bear interest based on either, at the Borrower’s option, the Bloomberg Short-Term Bank Yield Index rate plus an applicable margin between
Under the Secured Revolving Line of Credit,
8. LEASES
The Company leases its office space which has a remaining lease term of 27 months. In January 2023, the Company entered into an amendment to the lease for its corporate headquarters offices to extend the term through December 31, 2026. The Company’s recognized lease costs include:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Statements of Operations and Comprehensive Loss |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating lease cost (1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following table presents information about our weighted average discount rate and remaining lease term as of:
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Weighted-average remaining lease term (months) |
|
|
|
|
|
||
Weighted-average discount rate |
|
% |
|
|
% |
||
The Company’s variable lease costs and short-term lease costs were not material.
The Company is obligated under a non-cancelable lease agreement providing for office space that expires on December 31, 2026.
(in thousands) |
|
September 30, 2024 |
|
|
2024 |
|
$ |
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
Total lease payments |
|
|
|
|
Less imputed interest |
|
|
( |
) |
Present value of lease liabilities |
|
$ |
|
|
13
9. COMMITMENTS AND CONTINGENCIES
Purchase commitments
As of September 30, 2024, the Company does not have any material agreements with suppliers for the purchase of raw material with minimum purchase quantities. Our contract manufacturers are obligated to fulfill against purchase orders that are aligned with our forecast based on terms and conditions of the contract. Our forecasts provided to our contract manufacturers are short term in nature and at no time extend beyond a year.
Legal proceedings
The Company is involved from time to time in various claims, proceedings, and litigation. The Company establishes reserves for specific legal proceedings when it determines that the likelihood of an unfavorable outcome is probable and the amount of loss can be reasonably estimated. Management does not believe that the resolution of these matters would have a material impact on the accompanying unaudited condensed consolidated financial statements. The Company has not identified any legal matters where it believes a material loss is reasonably possible.
10. BALANCE SHEET COMPONENTS
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following as of:
(in thousands) |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Prepaid expenses |
|
$ |
|
|
$ |
|
||
Other current assets |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following as of:
(in thousands) |
|
September 30, 2024 |
|
|
December 31, 2023 |
|
||
Accrued employee compensation benefits |
|
$ |
|
|
$ |
|
||
Accrued direct selling costs |
|
|
|
|
|
|
||
Accrued customer paid bottle deposits |
|
|
|
|
|
|
||
Accrued other |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
11. EQUITY-BASED COMPENSATION
In July 2021, prior to the IPO, the Company adopted the Zevia PBC 2021 Equity Incentive Plan (the “2021 Plan”) under which the Company may grant options, stock appreciation rights, restricted stock units (“RSUs”), restricted stock awards, other equity-based awards and incentive bonuses to employees, officers, non-employee directors and other service providers of the Company and its affiliates.
The number of shares available for issuance under the 2021 Plan is increased on January 1 of each year beginning in 2022 and ending with a final increase in 2031 in an amount equal to the lesser of: (i)
In October and November 2021, the Company’s Board of Directors approved an amendment to its equity-based compensation plans for a certain number of employees to allow immediate vesting upon retirement of all outstanding RSUs and stock options, and to extend the exercisability of outstanding stock options up to five years after retirement, if they meet certain conditions, including a resignation after the holder has reached 50 years of age with at least 10 years of service to the Company, so long as the holder provides advance notice of his or her resignation to the Company’s Board of Directors.
As of September 30, 2024, the 2021 Plan provides for future grants and/or issuances of up to approximately
Stock Options
The Company uses a Black-Scholes valuation model to measure stock option expense as of each respective grant date. Generally, stock option grants vest ratably over four years, have a 10-year term, and have an exercise price equal to the fair market value as of the grant date. The fair value of stock options is amortized to expense over the vesting period.
The fair value of stock option awards granted during the period was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:
|
|
Nine Months Ended September 30, |
|
||||
|
|
2024 |
|
2023 |
|
||
Stock price |
|
$ |
|
$ |
|
||
Exercise price |
|
|
|
|
|
||
Expected term (years) (1) |
|
|
|
|
|
||
Expected volatility (2) |
|
|
% |
|
% |
||
Risk-free interest rate (3) |
|
|
% |
|
% |
||
Dividend yield (4) |
|
|
% |
|
% |
||
14
(1)
(2)
(3)
(4)
The weighted average grant date fair values for stock options granted for the nine months ended September 30, 2024 and 2023 was $
The following is a summary of stock option activity for the nine months ended September 30, 2024:
|
Shares |
|
|
Weighted average exercise price |
|
|
Weighted average remaining life |
|
|
Intrinsic value |
|
||||
Outstanding balance as of January 1, 2024 |
|
|
|
$ |
|
|
|
|
|
|
|
||||
Granted |
|
|
|
$ |
|
|
|
|
|
|
|
||||
Exercised |
|
( |
) |
|
$ |
|
|
|
|
|
|
|
|||
Forfeited and expired |
|
( |
) |
|
$ |
|
|
|
|
|
|
|
|||
Balance as of September 30, 2024 |
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Exercisable at the end of the period |
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Vested and expected to vest |
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
The total intrinsic values of stock options exercised during the nine months ended September 30, 2024 was $
As of September 30, 2024, total unrecognized compensation expense related to unvested stock options was $
Restricted Stock Units
In March 2021, the Company’s Board of Directors also approved an amendment to the RSUs granted by Zevia LLC in August 2020 (“the RSU Amendment”). The RSU Amendment changed the vesting of such RSUs to occur as follows: (i) in the event of a change of control, the RSUs shall vest effective as of such change of control or (ii) in the event of an initial public offering as in the case of the IPO, the RSUs shall vest in equal monthly installments over a
15
The following is a summary of RSU activity for the nine months ended September 30, 2024:
|
Shares |
|
|
Weighted average grant date fair value |
|
|
Aggregate Intrinsic Value |
|
|||
Balance unvested shares at January 1, 2024 |
|
|
|
$ |
|
|
|
|
|||
Granted |
|
|
|
$ |
|
|
|
|
|||
Vested |
|
( |
) |
|
$ |
|
|
|
|
||
Forfeited |
|
( |
) |
|
$ |
|
|
|
|
||
Balance unvested at September 30, 2024 |
|
|
|
$ |
|
|
$ |
|
|||
Expected to vest at September 30, 2024 |
|
|
|
$ |
|
|
$ |
|
|||
As of September 30, 2024, total unrecognized compensation expense related to unvested RSUs was $
As of September 30, 2024, there were
12. SEGMENT REPORTING
The Company has one operating and reporting segment and operates as a product portfolio with a single business platform. In reaching this conclusion, management considered the definition of the Chief Operating Decision Maker (“CODM”); how the business is defined by the CODM; the nature of the information provided to the CODM and how that information is used to make operating decisions; and how resources and performance are assessed. The Company’s CODM is the Chief Executive Officer. The results of the operations are provided to and analyzed by the CODM at the Company’s level and accordingly, key resource decisions and assessment of performance are performed at the Company’s level. The Company has a common management team across all product lines and does not manage these products as individual businesses, and as a result, cash flows are not distinct.
13. MAJOR CUSTOMERS, ACCOUNTS RECEIVABLE AND VENDOR CONCENTRATION
The table below represents the Company’s major customers that accounted for more than
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Customer A |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Customer B |
|
* |
|
|
* |
|
|
|
% |
|
|
% |
||||
Customer C |
|
|
% |
|
* |
|
|
|
% |
|
* |
|
||||
Customer D |
|
* |
|
|
|
% |
|
* |
|
|
* |
|
||||
The table below represents the Company’s customers that accounted for more than
|
|
September 30, 2024 |
|
|
December 31, 2023 |
|
|
||
Customer B |
|
* |
|
|
|
% |
|
||
Customer D |
|
|
% |
|
* |
|
|
||
Customer I |
|
* |
|
|
|
% |
|
||
The table below represents raw material and finished goods vendors that accounted for more than
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Vendor A |
|
* |
|
|
|
% |
|
* |
|
|
|
% |
||||
Vendor B |
|
* |
|
|
|
% |
|
* |
|
|
|
% |
||||
Vendor C |
|
* |
|
|
|
% |
|
* |
|
|
|
% |
||||
Vendor D |
|
|
% |
|
* |
|
|
|
% |
|
* |
|
||||
Vendor E |
|
|
% |
|
* |
|
|
|
% |
|
* |
|
||||
Vendor F |
|
|
% |
|
* |
|
|
|
% |
|
* |
|
||||
Vendor G |
|
* |
|
|
|
% |
|
* |
|
|
|
% |
||||
The increase in vendor concentration during the three and nine months ended September 30, 2024 and 2023 was driven by the changes made in our supply chain whereby our contract manufacturers are responsible for the procurement of raw materials to produce our products, which are then sold to us as finished goods.
* Less than
16
14. LOSS PER SHARE
Basic loss per share of Class A common stock is computed by dividing net loss attributable to the Company for the period by the weighted-average number of shares of Class A common stock outstanding during the same period. Diluted loss per share of Class A common stock is computed by dividing net loss attributable to the Company by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities and assumed conversion of Class B common stock into shares of Class A common stock on a one-for-one basis using the if-converted method.
The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted loss per share of Class A common stock:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
||||
(in thousands, except for share and per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss and comprehensive loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Less: net loss attributable to non-controlling interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Add: adjustment to reallocate net loss to controlling interest |
|
|
( |
) |
(1) |
|
( |
) |
(1) |
|
( |
) |
(1) |
|
|
(1) |
|
Net loss to Zevia PBC - basic |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares of Class A common stock outstanding – basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Add: weighted average shares of vested and unreleased RSUs |
|
|
|
(2) |
|
|
(2) |
|
|
(2) |
|
|
(2) |
||||
Weighted-average basic and diluted shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss per share of Class A common stock – basic |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Loss per share of Class A common stock – diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
(1)
(2)
The following weighted average outstanding shares were excluded from the computation of diluted loss per share available to Class A common stockholders as they were anti-dilutive:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Zevia LLC Class B units exchangeable to shares of Class A common stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stock options |
|
|
|
|
|
|
|
|
|
|
|
|
||||
RSUs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
17
15. RESTRUCTURING
Restructuring
In May 2024, we initiated certain restructuring actions designed to reduce costs and improve efficiency while continuing to invest in our brand and related initiatives (the “Productivity Initiative”). As a result, we recognized $
As of September 30, 2024, accrued restructuring costs of less than $
16. INCOME TAXES AND TAX RECEIVABLE AGREEMENT
Income Taxes
The Company is the managing member of Zevia LLC and as a result, consolidates the financial results of Zevia LLC in the accompanying unaudited condensed consolidated financial statements of Zevia PBC. Zevia LLC is a pass-through entity for U.S. federal and most applicable state and local income tax purposes following the Reorganization Transactions effected in connection with the IPO. As an entity classified as a partnership for tax purposes, Zevia LLC is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Zevia LLC is passed through to its members, including the Company. The Company is taxed as a C corporation and pays corporate federal, state and local taxes with respect to income allocated from Zevia LLC based on Zevia PBC's economic interest in Zevia LLC, which was
The provision for income taxes differs from the amount of income tax computed by applying the applicable U.S. statutory federal income tax rate of
Tax Receivable Agreement
The Company expects to obtain an increase in its share of tax basis in the net assets of Zevia LLC when Class B units are exchanged by the holders of Class B units for shares of Class A common stock of the Company and upon certain qualifying transactions. Each change in outstanding shares of Class A common stock of the Company results in a corresponding change in the Company's ownership of Class A units of Zevia LLC. The Company intends to treat any exchanges of Class B units as direct purchases of LLC interests for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that Zevia PBC would otherwise pay in the future to various taxing authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.
In connection with the IPO, the Company entered into a Tax Receivable Agreement (“TRA”) with continuing members of Zevia LLC and the shareholders of blocker companies (“Blocker Companies”) of certain pre-IPO institutional investors (“the Direct Zevia Stockholders”). In the event that such parties exchange any or all of their Class B units for Class A common stock, the TRA requires the Company to make payments to such holders for
The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Company generates each year and the tax rate then applicable. The Company calculates the liability under the TRA using a complex TRA model, which includes an assumption related to the fair market value of assets. Payments are generally due under the TRA within a specified period of time following the filing of the Company’s tax return for the taxable year with respect to which the payment obligation arises, although interest on such payments will begin to accrue at a rate of the Secured Overnight Financing Rate plus 300 basis points from the due date (without extensions) of such tax return.
The TRA provides that if (i) certain mergers, asset sales, other forms of business combinations, or other changes of control were to occur; (ii) there is a material uncured breach of any obligations under the TRA; or (iii) the Company elects an early termination of the TRA, then the TRA will terminate and the Company’s obligations, or the Company’s successor’s obligations, under the TRA will accelerate and become due and payable, based on certain assumptions, including an assumption that the Company would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the TRA and that any Class B units that have not been exchanged are deemed exchanged for the fair market value of the Company’s Class A common stock at the time of termination.
18
As of September 30, 2024, the Company believes, based on applicable accounting standards, that it was more likely than not that its DTAs subject to the TRA would not be realized as of September 30, 2024; therefore, the Company has not recorded a liability related to the tax savings it may realize from utilization of such DTAs. The TRA liability that would be recognized if the associated tax benefits were determined to be fully realizable totaled $
19
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion contains forward-looking statements that involve risks and uncertainties. The following discussion of our financial condition and results of operations should be read in conjunction with our accompanying unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth in Part II, Item 1A. “Risk Factors” and other sections of this Quarterly Report and our consolidated financial statements and notes thereto included in our Annual Report. The financial data discussed below reflects the historical results of operations and financial position of the Company. References in this Quarterly Report to “Zevia,” the “Company,” “we,” “us,” and “our” refer (1) prior to the consummation of the Reorganization Transactions, to Zevia LLC, and (2) after the consummation of the Reorganization Transactions, to Zevia PBC and its consolidated subsidiaries unless the context indicates otherwise. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.
Overview
We are a better-for-you beverage company that develops, markets, sells, and distributes great tasting, zero sugar beverages made with simple, plant-based ingredients. We are a Delaware public benefit corporation and have been designated as a “Certified B Corporation,” and are focused on addressing the global health challenges resulting from excess sugar consumption by offering a broad portfolio of zero sugar, zero calorie, naturally sweetened beverages. All Zevia® beverages are Non-GMO Project verified, gluten-free, Kosher, and vegan and include a variety of flavors across Soda, Energy Drinks, Organic Tea, and Kids drinks. Our products are distributed and sold principally across the U.S. and Canada through a diverse network of major retailers in the grocery, drug, warehouse club, mass, natural, convenience and e-commerce channels and in grocery and natural product stores and specialty outlets. The Company’s products are manufactured and maintained at third-party beverage production and warehousing facilities located in both the U.S. and Canada. We believe that consumers increasingly select beverage products based on taste, ingredients and fit with today’s consumer preferences, which has benefited the Zevia® brand and resulted in over 2.1 billion cans of Zevia sold to date.
Key Events During the Third Quarter of 2024
Productivity Initiative
In the second quarter of 2024, we began executing a multi-year, broad-based Productivity Initiative designed to realign our cost structure in order to accelerate our route-to-market evolution and continue to build the Zevia Brand. This Productivity Initiative is designed to focus on our most critical initiatives including driving growth and innovation in our highest margin carbonated better-for-you beverages, re-align our cost structure to support greater investments in the Zevia Brand and improve operational excellence while simplifying processes across the organization.
The Productivity Initiative has resulted in the following:
Additional restructuring charges or cash expenditures may be incurred as the Company makes further progress on this Productivity Initiative, which we expect to be substantially completed by the end of the first quarter of 2025.
NYSE Notice
The Company previously received a noncompliance notice from the New York Stock Exchange (“NYSE”) on June 26, 2024, because the average closing price of the Company’s Class A common stock had been less than $1.00 per share over a consecutive 30 trading-day period. On September 30, 2024, the Company’s Class A common stock closed above $1.00 and had an average closing share price of at least $1.00 over the prior 30 trading-day period. On October 1, 2024, the Company regained compliance with the minimum stock price continued listing standard set forth in Section 802.01C of the NYSE Listed Company Manual.
Factors Affecting Our Performance
Macroeconomic Environment
A number of external factors, including the global economy, global health emergencies, inflationary pressures, relatively high interest rates, volatility in the financial markets, recession fears, financial institution instability, any potential shutdown of the U.S. government, global hostilities, including the military conflicts in Ukraine and Israel and the surrounding areas, and political tensions between the U.S. and China, have impacted and may continue to impact transportation, labor, and commodity costs. These pressures have impacted, and are expected to continue to impact our margins and operating results. We, along with our competitors, have increased pricing on a number of products in response to widespread inflation. These pricing increases may result in future reductions in volume.
The following summarizes the components of our results of operations for the three and nine months ended September 30, 2024 and 2023, respectively.
Components of Our Results of Operations
Net Sales
We generate net sales from the sales of our products, including Soda, Energy Drinks, Organic Tea, and Kids drinks, to our customers, which include grocery distributors, national retailers, convenience retailers, natural products retailers, warehouse club retailers and retailers with e-commerce channels, in the U.S. and Canada.
20
We offer our customers sales incentives that are designed to support the distribution of our products to consumers. These incentives include discounts, trade promotions, price allowances and product placement fees. The amounts for these incentives are deducted from gross sales to arrive at our net sales.
The following factors and trends in our business are expected to be key drivers of our net sales for the foreseeable future:
We expect our future growth to be driven by a combination of new distribution, increased organic sales from existing outlets, package and product innovation, and continued pricing strength; however, sales levels in any given period may continue to be impacted by seasonality, increased level of competition, customers’ efforts to manage inventory, and our ability to fulfill customer demands. During 2024, we experienced reduced sales volumes, primarily due to lost distribution at certain retailers, largely in the club channel and one customer in the mass channel, and to a lesser degree as a result of a strategic decision we made to exit our Kids and Mixers product categories to focus on soda. We also increased our spend on promotional activity at key accounts, returning back to historical promotion levels, in order to drive velocity, which we expect to continue through the end of the year and in 2025. We also increased promotions in order to liquidate excess and obsolete inventory, which we expect to be temporary and complete by the end of 2024. We are focused on building distribution in our key accounts and concurrently evolving our route-to-market; however we expect it will take time to regain lost distribution in an increasingly competitive environment.
We sell our products in the U.S. and Canada, direct to retailers and also through distributors. We do not have short- or long-term sales commitments with our customers.
Cost of Goods Sold
Historically, cost of goods sold consists of all costs to acquire and manufacture our products, including the cost of ingredients, raw materials, packaging, in-bound freight and logistics and third-party production fees. Beginning in the first quarter of 2024, our contract manufacturers are responsible for the procurement of raw materials to produce our products, which are then sold to us as finished goods; therefore, cost of goods sold for the three and nine months ended September 30, 2024 consists of all costs to purchase our product from our contract manufacturers as a finished good.
Our cost of goods sold is subject to price fluctuations in the marketplace, particularly in the price of aluminum and other raw materials, as well as in the cost of production, packaging, in-bound freight and logistics. Our results of operations depend on our contract manufacturers’ ability to arrange for the purchase of raw materials and the production of our products in sufficient quantities at competitive prices. We have long-term contracts with certain suppliers of stevia and certain third-party contract manufacturers governing quality control, regulatory compliance, pricing and other terms, but these contracts generally do not guarantee any minimum purchase commitments to our third-party contract manufacturers. Our third-party contract manufacturers procure packaging and ingredient materials to manufacture our products according to our submitted rolling forecasts, with the initial three months of each forecast generally constituting our purchase commitment.
We expect our cost of goods sold to increase in absolute dollars as our volume increases, but decrease over time as a percentage of net sales as a result of the Productivity Initiative, our continued focus on cost and efficiency improvements, and as we realize the benefit of scale.
We elected to classify shipping and handling costs for salable product outside of cost of goods sold, in selling and marketing expenses in our accompanying unaudited condensed consolidated statements of operations and comprehensive loss. As a result, our gross profit and profit margin may not be comparable to other entities that present shipping and handling costs as a component of cost of goods sold.
Gross Profit
Gross profit consists of our net sales less costs of goods sold. Our gross profit and gross margin are affected by the mix of distribution channels of our net sales in each period, as well as the level of discounts and promotions offered during the period. Gross profit may be favorably impacted by leveraging our asset-light business model and through increased distribution direct to retailers, the increased scale of our business, our Productivity Initiative, and our continued focus on cost and efficiency improvements.
Operating Expenses
Selling and Marketing Expenses
Selling and marketing expenses consist primarily of warehousing and distribution costs and advertising and marketing expenses. Warehousing and distribution costs include storage, transfer, repacking and handling fees and out-bound freight and delivery charges. Advertising and marketing expenses consist of variable costs associated with production and media buying of marketing programs and trade events, as well as sampling and in-store demonstration costs. Selling and marketing expenses also include the incremental costs of obtaining contracts, such as sales commissions.
Our selling expenses are expected to increase in absolute dollars in the long-term as a result of increased warehousing and distribution costs driven by increased net sales, but decrease as a percentage of sales over time as a result of our Productivity Initiative and our continued focus on cost improvements in our supply chain. Our selling expenses are expected to decrease from the prior year in the short-term, largely due to a decrease in logistics expenses compared to the prior year as a result of the historical supply chain logistics challenges encountered during 2023 as well as due to the Productivity Initiative.
Marketing expenses are expected to increase as we invest in in brand awareness, which are expected to be partially funded by the selling expense cost savings and Productivity Initiative.
21
General and Administrative Expenses
General and administrative expenses include all salary and other personnel expenses (other than equity-based compensation expense) for our employees, including employees related to management, marketing, sales, product development, quality control, accounting, information technology and other functions. Our ongoing general and administrative expenses are expected to remain flat in absolute dollars in the near term and as a percentage of net sales over time.
Equity-Based Compensation Expenses
Equity-based compensation expense consists of the recorded expense of equity-based compensation for our employees and, if any, for certain consultants and service providers who are non-employees. We record equity-based compensation expense for employee grants using grant date fair value for RSUs or a Black-Scholes valuation model to calculate the fair value of stock options by date granted. Equity-based compensation cost for RSU awards is measured based on the closing fair market value of the Zevia LLC Class B unit or the Zevia PBC Class A common stock, as applicable, on the date of grant. Our equity-based compensation expense is expected to remain relatively consistent in absolute dollars but decline as a percentage of net sales over time.
Depreciation and Amortization
Depreciation is primarily related to computer equipment, quality control and marketing equipment, and leasehold improvements. Intangible assets subject to amortization consist of customer relationships and software applications. Non-amortizable intangible assets consist of trademarks, which represent the Company’s exclusive ownership of the Zevia® brand used in connection with the manufacturing, marketing, and distribution of its beverages. We also own several other trademarks in both the U.S. and in foreign countries. Depreciation and amortization expense is expected to increase in-line with ongoing capital expenditures as our business grows.
Restructuring Expenses
Restructuring expenses include employee severance and benefit costs to terminate a specified number of employees as well as costs to exit two of our third-party warehouse and distribution facilities designed to reduce costs and improve efficiency while continuing to invest in our brand and related initiatives. Additional restructuring charges or cash expenditures may be incurred as the Company makes further progress on the Productivity Initiative, which we expect to be substantially completed by the end of the first fiscal quarter of 2025.
Other income, net
Other income, net consists primarily of interest income (expense), and foreign currency (loss) gains.
Results of Operations
The following table sets forth selected items in our accompanying unaudited condensed consolidated statements of operations and comprehensive loss for the periods presented:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
||||
(in thousands, except per share amounts) |
|
|
|
|
|
|
|
||||||||||
Net sales |
|
$ |
36,366 |
|
|
$ |
43,089 |
|
|
$ |
115,591 |
|
|
$ |
128,630 |
|
|
Cost of goods sold |
|
|
18,516 |
|
|
|
23,517 |
|
|
|
63,080 |
|
|
|
69,261 |
|
|
Gross profit |
|
|
17,850 |
|
|
|
19,572 |
|
|
|
52,511 |
|
|
|
59,369 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling and marketing |
|
|
11,981 |
|
|
|
20,455 |
|
|
|
40,673 |
|
|
|
48,467 |
|
|
General and administrative |
|
|
7,377 |
|
|
|
8,250 |
|
|
|
23,186 |
|
|
|
23,102 |
|
|
Equity-based compensation |
|
|
1,034 |
|
|
|
1,876 |
|
|
|
3,950 |
|
|
|
6,614 |
|
|
Depreciation and amortization |
|
|
310 |
|
|
|
411 |
|
|
|
1,041 |
|
|
|
1,234 |
|
|
Restructuring |
|
|
112 |
|
|
|
— |
|
|
|
977 |
|
|
|
— |
|
|
Total operating expenses |
|
|
20,814 |
|
|
|
30,992 |
|
|
|
69,827 |
|
|
|
79,417 |
|
|
Loss from operations |
|
|
(2,964 |
) |
|
|
(11,420 |
) |
|
|
(17,316 |
) |
|
|
(20,048 |
) |
|
Other income, net |
|
|
118 |
|
|
|
165 |
|
|
|
357 |
|
|
|
908 |
|
|
Loss before income taxes |
|
|
(2,846 |
) |
|
|
(11,255 |
) |
|
|
(16,959 |
) |
|
|
(19,140 |
) |
|
(Benefit) provision for income taxes |
|
|
(4 |
) |
|
|
(5 |
) |
|
|
43 |
|
|
|
31 |
|
|
Net loss and comprehensive loss |
|
|
(2,842 |
) |
|
|
(11,250 |
) |
|
|
(17,002 |
) |
|
|
(19,171 |
) |
|
Loss attributable to noncontrolling interest |
|
|
315 |
|
|
|
3,033 |
|
|
|
2,760 |
|
|
|
4,932 |
|
|
Net loss attributable to Zevia PBC |
|
$ |
(2,527 |
) |
|
$ |
(8,217 |
) |
|
$ |
(14,242 |
) |
|
$ |
(14,239 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share attributable to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
(0.04 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.27 |
) |
|
Diluted |
|
$ |
(0.04 |
) |
|
$ |
(0.16 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.27 |
) |
|
22
The following table presents selected items in our accompanying unaudited condensed consolidated statements of operations and comprehensive loss as a percentage of net sales for the respective periods presented. Percentages may not sum due to rounding:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net sales |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
Cost of goods sold |
|
|
51 |
% |
|
|
55 |
% |
|
|
55 |
% |
|
|
54 |
% |
Gross profit |
|
|
49 |
% |
|
|
45 |
% |
|
|
45 |
% |
|
|
46 |
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling and marketing |
|
|
33 |
% |
|
|
47 |
% |
|
|
35 |
% |
|
|
38 |
% |
General and administrative |
|
|
20 |
% |
|
|
19 |
% |
|
|
20 |
% |
|
|
18 |
% |
Equity-based compensation |
|
|
3 |
% |
|
|
4 |
% |
|
|
3 |
% |
|
|
5 |
% |
Depreciation and amortization |
|
|
1 |
% |
|
|
1 |
% |
|
|
1 |
% |
|
|
1 |
% |
Restructuring |
|
|
0 |
% |
|
|
0 |
% |
|
|
1 |
% |
|
|
0 |
% |
Total operating expenses |
|
|
57 |
% |
|
|
72 |
% |
|
|
60 |
% |
|
|
62 |
% |
Loss from operations |
|
|
(8 |
)% |
|
|
(27 |
)% |
|
|
(15 |
)% |
|
|
(16 |
)% |
Other income, net |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
1 |
% |
Loss before income taxes |
|
|
(8 |
)% |
|
|
(26 |
)% |
|
|
(15 |
)% |
|
|
(15 |
)% |
(Benefit) provision for income taxes |
|
|
(0 |
)% |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
|
Net loss and comprehensive loss |
|
|
(8 |
)% |
|
|
(26 |
)% |
|
|
(15 |
)% |
|
|
(15 |
)% |
Loss attributable to noncontrolling interest |
|
|
1 |
% |
|
|
7 |
% |
|
|
2 |
% |
|
|
4 |
% |
Net loss attributable to Zevia PBC |
|
|
(7 |
)% |
|
|
(19 |
)% |
|
|
(12 |
)% |
|
|
(11 |
)% |
Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023
净销售额
|
|
截至9月30日的三个月 |
|
|
改变 |
|
||||||||||
（以千计） |
|
2024 |
|
|
2023 |
|
|
金额 |
|
|
百分比 |
|
||||
净销售额 |
|
$ |
36,366 |
|
|
$ |
43,089 |
|
|
$ |
(6,723 |
) |
|
|
(15.6 |
)% |
截至2024年9月30日的三个月，净销售额为3640万美元，而截至2023年9月30日的三个月净销售额为4310万美元。在截至2024年9月30日的三个月中，销售的等效箱数为290万，而截至2023年9月30日的三个月为330万。净销售额的下降主要是由于等效箱数的减少，导致净销售额减少630万美元，这在很大程度上是由于我们俱乐部渠道的预期失去分销和我们大众渠道的一个客户造成的，以及由于零售商的促销增加和为了清理过剩和过时库存而增加的促销导致净销售额减少40万美元。我们将等效箱定义为288液盎司的箱数。
营业成本
|
|
截至9月30日的三个月 |
|
|
改变 |
|
||||||||||
（以千计） |
|
2024 |
|
|
2023 |
|
|
金额 |
|
|
百分比 |
|
||||
售出商品的成本 |
|
$ |
18,516 |
|
|
$ |
23,517 |
|
|
$ |
(5,001 |
) |
|
|
(21.3 |
)% |
截至2024年9月30日的三个月，营业成本为1850万美元，而截至2023年9月30日的三个月为2350万美元。500万美元的降低，或21.3%，主要是由于等价箱的装运减少了12.2%，导致营业成本减少260万美元，与过剩和过时存货相关的减值减少230万美元，以及由生产力倡议推动的有利单位成本减少了10万美元。
毛利润和毛利率
|
|
截至9月30日的三个月 |
|
|
改变 |
|
||||||||||
（以千计） |
|
2024 |
|
|
2023 |
|
|
金额 |
|
|
百分比 |
|
||||
毛利润 |
|
$ |
17,850 |
|
|
$ |
19,572 |
|
|
$ |
(1,722 |
) |
|
|
(8.8 |
)% |
毛利率 |
|
|
49.1 |
% |
|
|
45.4 |
% |
|
|
|
|
|
3.7 |
% |
|
2024年9月30日结束的三个月，毛利润为1790万美元，而2023年9月30日结束的三个月为1960万美元。毛利润下降了170万美元，或8.8%，主要是由于销量较低和促销活动支出增加，部分抵消了库存减值的降低。
2024年9月30日结束的三个月的毛利率从去年同期的45.4%提高到49.1%。主要原因是库存减值减少和有利的单位成本，部分抵消了促销活动支出的增加。
23
Selling and Marketing Expenses
|
|
Three Months Ended September 30, |
|
|
Change |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Amount |
|
|
Percentage |
|
||||
Selling and marketing expenses |
|
$ |
11,981 |
|
|
$ |
20,455 |
|
|
$ |
(8,474 |
) |
|
|
(41.4 |
)% |
Selling and marketing expenses were $12.0 million for the three months ended September 30, 2024 as compared to $20.5 million for the three months ended September 30, 2023. The decrease of $8.5 million, or 41.4%, was primarily due to a decrease in freight transfer costs of $3.1 million as a result of the impact of supply chain logistics challenges in the prior year, a decrease in warehousing costs of $3.1 million due to efficiencies related to the Productivity Initiative and lower inventory levels, decreases in freight costs of $1.3 million due to improved rates and $0.6 million due to lower volumes, and a decrease in repackaging costs of $0.4 million due to the automation of certain processes. These decreases were partially offset by higher marketing expenses of $0.2 million as a result of investments made to drive brand awareness.
General and Administrative Expenses
|
|
Three Months Ended September 30, |
|
|
Change |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Amount |
|
|
Percentage |
|
||||
General and administrative expenses |
|
$ |
7,377 |
|
|
$ |
8,250 |
|
|
$ |
(873 |
) |
|
|
(10.6 |
)% |
General and administrative expenses were $7.4 million for the three months ended September 30, 2024 as compared to $8.3 million for the three months ended September 30, 2023. The decrease of $0.9 million, or 10.6%, was primarily due to a decrease in costs as a result of the Productivity Initiative, primarily related to lower employee costs.
Equity-Based Compensation Expenses
|
|
Three Months Ended September 30, |
|
|
Change |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Amount |
|
|
Percentage |
|
||||
Equity-based compensation expenses |
|
$ |
1,034 |
|
|
$ |
1,876 |
|
|
$ |
(842 |
) |
|
|
(44.9 |
)% |
Equity-based compensation expenses were $1.0 million for the three months ended September 30, 2024 as compared to $1.9 million for the three months ended September 30, 2023, primarily related to outstanding equity-based awards being recognized over the remaining service periods of the awards. The decrease of $0.8 million was primarily driven by a $0.9 million decrease related to the accelerated method of expense recognition on certain equity awards issued in connection with the Company’s IPO in 2021, partially offset by equity-based compensation expenses related to new equity awards granted.
Restructuring Expenses
|
|
Three Months Ended September 30, |
|
|
Change |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Amount |
|
|
Percentage |
|
||||
Restructuring expenses |
|
$ |
112 |
|
|
$ |
— |
|
|
$ |
112 |
|
|
|
100.0 |
% |
Restructuring expenses were $0.1 million for the three months ended September 30, 2024 which primarily includes costs to exit two of our third-party warehouse and distribution facilities.
Nine Months Ended September 30, 2024, Compared to Nine Months Ended September 30, 2023
Net Sales
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Amount |
|
|
Percentage |
|
||||
Net sales |
|
$ |
115,591 |
|
|
$ |
128,630 |
|
|
$ |
(13,039 |
) |
|
|
(10.1 |
)% |
Net sales were $115.6 million for the nine months ended September 30, 2024 as compared to $128.6 million for the nine months ended September 30, 2023. Equivalized cases sold were 8.9 million during the nine months ended September 30, 2024 as compared to 9.9 million during the nine months ended September 30, 2023. The decrease in net sales was primarily due to a decrease in the number of equivalized cases sold, which resulted in $13.9 million lower net sales and was largely caused by lost distribution in our club channel and one customer in our mass channel, partially offset by pricing increases of $0.8 million, which is inclusive of greater promotional levels at retailers as well as increased promotions in order to liquidate excess and obsolete inventory. We define an equivalized case as a 288 fluid ounce case.
24
Cost of Goods Sold
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Amount |
|
|
Percentage |
|
||||
Cost of goods sold |
|
$ |
63,080 |
|
|
$ |
69,261 |
|
|
$ |
(6,181 |
) |
|
|
(8.9 |
)% |
Cost of goods sold was $63.1 million for the nine months ended September 30, 2024 as compared to $69.3 million for the nine months ended September 30, 2023. The decrease of $6.2 million, or 8.9%, was primarily due to a 9.5% decrease in the shipment of equivalized cases, resulting in $6.3 million lower costs of goods sold, lower write-downs related to excess and obsolete inventory of $1.1 million, and favorable product mix of $0.9 million, partially offset by unfavorable unit costs of $2.0 million primarily due to investments in enhanced package-specific designs to improve on-shelf visibility and drive brand awareness.
Gross Profit and Gross Margin
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Amount |
|
|
Percentage |
|
||||
Gross profit |
|
$ |
52,511 |
|
|
$ |
59,369 |
|
|
$ |
(6,858 |
) |
|
|
(11.6 |
)% |
Gross margin |
|
|
45.4 |
% |
|
|
46.2 |
% |
|
|
|
|
|
(0.7 |
)% |
|
Gross profit was $52.5 million for the nine months ended September 30, 2024 as compared to $59.4 million for the nine months ended September 30, 2023. The decrease in gross profit of $6.9 million, or 11.6%, was primarily due to lower volumes, unfavorable unit costs, and increased spend on promotional activity, partially offset by lower inventory write-downs and favorable product mix.
Gross margin for the nine months ended September 30, 2024 declined to 45.4% from 46.2% in the prior-year period. The decrease was primarily due to unfavorable unit costs and increased spend on promotional activity, partially offset by lower inventory write-downs and favorable product mix.
Selling and Marketing Expenses
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Amount |
|
|
Percentage |
|
||||
Selling and marketing expenses |
|
$ |
40,673 |
|
|
$ |
48,467 |
|
|
$ |
(7,794 |
) |
|
|
(16.1 |
)% |
Selling and marketing expenses were $40.7 million for the nine months ended September 30, 2024 as compared to $48.5 million for the nine months ended September 30, 2023. The decrease of $7.8 million, or 16.1%, was primarily due to a decrease in freight transfer costs of $4.6 million as a result of the impact of supply chain logistics challenges in the prior year, a decrease in repackaging costs of $2.0 million due to the automation of certain processes, a decrease in warehousing costs of $1.6 million due to efficiencies related to the Productivity Initiative and lower inventory levels, and decreases in freight costs of $1.1 million due to lower volume and $0.9 million due to improved rates. These decreases were partially offset by higher marketing expenses of $2.1 million as a result of investments made to drive brand awareness.
General and Administrative Expenses
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Amount |
|
|
Percentage |
|
||||
General and administrative expenses |
|
$ |
23,186 |
|
|
$ |
23,102 |
|
|
$ |
84 |
|
|
|
0.4 |
% |
General and administrative expenses were $23.2 million for the nine months ended September 30, 2024 as compared to $23.1 million for the nine months ended September 30, 2023. The increase of $0.1 million, or 0.4%, was primarily due to an increase in employee compensation costs of $0.2 million, partially offset by a decrease in costs as a result of our Productivity Initiative discussed above.
Equity-Based Compensation Expenses
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Amount |
|
|
Percentage |
|
||||
Equity-based compensation expenses |
|
$ |
3,950 |
|
|
$ |
6,614 |
|
|
$ |
(2,664 |
) |
|
|
(40.3 |
)% |
Equity-based compensation expenses were $4.0 million for the nine months ended September 30, 2024 as compared to $6.6 million for the nine months ended September 30, 2023, primarily related to outstanding equity-based awards being recognized over the remaining service periods of the awards. The decrease of $2.7 million was primarily due to a $2.9 million decrease related to the accelerated method of expense recognition on certain equity awards issued in connection with the Company’s IPO in 2021, partially offset by equity-based compensation expenses related to new equity awards granted.
Restructuring Expenses
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
Amount |
|
|
Percentage |
|
||||
Restructuring expenses |
|
$ |
977 |
|
|
$ |
— |
|
|
$ |
977 |
|
|
|
100.0 |
% |
Restructuring expenses were $1.0 million for the nine months ended September 30, 2024 which primarily includes employee related severance costs as well as costs to exit two of our third-party warehouse and distribution facilities.
25
Seasonality
Generally, we experience greater demand for our products during the second and third fiscal quarters, which correspond to the warmer months of the year in our major markets. As our business continues to grow, we expect to see continued seasonality effects, with net sales tending to be greater in the second and third quarters of the year.
Liquidity and Capital Resources
Liquidity and Capital Resources
As of September 30, 2024, we had $32.7 million in cash and cash equivalents. We believe that our cash and cash equivalents as of September 30, 2024, together with our operating activities and available borrowings under the Secured Revolving Line of Credit (as defined below), will provide adequate liquidity for ongoing operations, planned capital expenditures and other investments beyond the next 12 months.
Our principal sources of liquidity are our existing cash and cash equivalents, cash generated from sales of our products, and borrowing capacity currently available under our Secured Revolving Line of Credit. Our primary cash needs are for operating expenses, working capital, and capital expenditures to support the growth in our business.
Future capital requirements will depend on many factors, including our rate of revenue growth, gross margin and the level of expenditures in all areas of the Company. In future years, we may experience an increase in operating and capital expenditures from time to time, as needed, as we expand business activities. To the extent that existing capital resources and sales growth are not sufficient to fund future activities, we may seek alternative financing through additional equity or debt financing transactions. Additional funds may not be available on terms favorable to us or at all. Also, we will continue to assess our liquidity needs in light of current and future global health emergencies, inflationary pressures, relatively high interest rates, volatility in the financial markets, recession fears, financial institution instability, any potential shutdown of the U.S. government, current and future global hostilities, and political tensions between the U.S. and China that may continue to disrupt and impact the global and national economies and global financial markets. If any disruption continues into the future, we may not be able to access the financial markets and could experience an inability to access additional capital, which could negatively affect our operations in the future. Failure to raise additional capital, if and when needed, could have a material adverse effect on our financial position, results of operations, and cash flows.
The Company is a holding company, and is the sole managing member of Zevia LLC. The Company operates and controls all of the business and affairs of Zevia LLC. Accordingly, the Company is dependent on distributions from Zevia LLC to pay its taxes, its obligations under the TRA and other expenses. Any future credit facilities may impose limitations on the ability of Zevia LLC to pay dividends to the Company.
In connection with the IPO and the Reorganization Transactions in July 2021, the Direct Zevia Stockholders and certain continuing members of Zevia LLC received the right to receive future payments pursuant to the TRA. The amount payable under the TRA will be based on an annual calculation of the reduction in our U.S. federal, state and local taxes resulting from the utilization of certain pre-IPO tax attributes and tax benefits resulting from sales and exchanges by continuing members of Zevia LLC. See “Certain Relationships and Related Party Transactions—Tax Receivable Agreement” included in the prospectus dated July 21, 2021 and filed with the SEC on July 23, 2021. We expect that the payments that we may be required to make under the TRA may be substantial. Assuming no material changes in the relevant tax law and that we earn sufficient taxable income to realize all tax benefits that are subject to the TRA, we expect that the reduction in tax payments for us associated with the federal, state and local tax benefits described above would aggregate to approximately $66.3 million through 2037. Under such scenario we would be required to pay the Direct Zevia Stockholders and certain continuing members of Zevia LLC 85% of such amount, or $56.4 million, through 2037.
The actual amounts may materially differ from these hypothetical amounts, as potential future reductions in tax payments for us and TRA payments by us will be calculated using prevailing tax rates applicable to us over the life of the TRA and will be dependent on us generating sufficient future taxable income to realize the benefit.
We cannot reasonably estimate future annual payments under the TRA given the difficulty in determining those estimates as they are dependent on a number of factors, including the extent of exchanges by continuing Zevia LLC unitholders, the associated fair value of the underlying Zevia LLC units at the time of those exchanges, the tax rates applicable, our future income, and the associated tax benefits that might be realized that would trigger a TRA payment requirement.
However, a significant portion of any potential future payments under the TRA is anticipated to be payable over 15 years, consistent with the period over which the associated tax deductions would be realized by us, assuming Zevia LLC generates sufficient income to utilize the deductions. If sufficient income is not generated by Zevia LLC, the associated taxable income of Zevia will be impacted and the associated tax benefits to be realized will be limited, thereby similarly reducing the associated TRA payments to be made. Given the length of time over which payments would be payable, the impact to liquidity in any single year is greatly reduced.
Although the timing and extent of future payments could vary significantly under the TRA for the factors discussed above, we anticipate funding payments from the TRA from cash flows generated from operations.
26
Credit Facility
ABL Credit Facility
On February 22, 2022, we obtained a revolving credit facility (the “Secured Revolving Line of Credit”) by entering into a Loan and Security Agreement with Bank of America, N.A (the “Loan and Security Agreement”). Under the Secured Revolving Line of Credit, we may draw funds up to an amount not to exceed the lesser of (i) a $20 million revolving commitment and (ii) a borrowing base which is comprised of inventory and receivables. Up to $2 million of the Secured Revolving Line of Credit may be used for letter of credit issuances with the option to increase the commitment under the Secured Revolving Line of Credit by up to $10 million, subject to certain conditions. The Secured Revolving Line of Credit matures on February 22, 2027. During the first quarter of 2024, the Company drew $8 million on the Secured Revolving Line of Credit which was subsequently repaid in the same period. As of September 30, 2024, there was no amount outstanding on the Secured Revolving Line of Credit. The Secured Revolving Line of Credit is secured by a first priority security interest in substantially all of the Company’s assets.
Loans under the Secured Revolving Line of Credit bear interest based on either, at our option, the Bloomberg Short-Term Bank Yield Index rate plus an applicable margin between 1.50% to 2.00% or the Base Rate (customarily defined) plus an applicable margin between 0.50% to 1.00% with margin, in each case, determined by the average daily availability under the Secured Revolving Line of Credit. The Loan and Security Agreement was amended on September 30, 2024 to replace the Bloomberg Short-Term Bank Yield Index, which will be discontinued on November 15, 2024, with the Term Secured Overnight Financing rate, effective November 20, 2024.
Under the Secured Revolving Line of Credit we must satisfy a financial covenant requiring a minimum fixed charge coverage ratio of 1.00 to 1.00 as of the last day of any fiscal quarter following the occurrence of certain events of default that are continuing or any day on which availability under the Secured Revolving Line of Credit is less than the greater of $3 million and 17.5% of the borrowing base, and must again satisfy such financial covenant as of the last day of each fiscal quarter thereafter until such time as there are no events of default and availability has been above such threshold for 30 consecutive days. As of September 30, 2024, the Company was in compliance with its financial covenant.
Cash Flows
The following table presents the major components of net cash flows provided by and used in operating, investing and financing activities for the periods indicated.
|
|
Nine Months Ended September 30, |
|
|||||
(in thousands) |
|
2024 |
|
|
2023 |
|
||
Cash provided by (used in): |
|
|
|
|
|
|
||
Operating activities |
|
$ |
971 |
|
|
$ |
(9,668 |
) |
Investing activities |
|
$ |
(238 |
) |
|
$ |
786 |
|
Financing activities |
|
$ |
— |
|
|
$ |
25 |
|
Net Cash Provided by (Used in) Operating Activities
Our cash flows provided by or used in operating activities are primarily influenced by working capital requirements.
Net cash provided by operating activities of $1.0 million for the nine months ended September 30, 2024 was primarily driven by a net increase in cash related to changes in operating assets and liabilities of $12.4 million. Changes in cash flows related to operating assets and liabilities were primarily due to a decrease in inventories of $13.9 million due to decreased production of inventory as inventory levels are managed, decreased prepaid expenses and other assets of $2.4 million largely due to a decrease in prepaid deposits related to the sale of raw materials, and a decrease in accounts receivable of $1.1 million due to timing of payments, partially offset by a net decrease in accounts payable, accrued expenses and other current liabilities of $4.6 million due to timing of purchases and decreased production of inventory. These increases were partially offset by a decrease in cash due to a net loss of $17.0 million, partially offset by non-cash expenses of $5.6 million primarily related to equity-based compensation and depreciation and amortization expense.
Net cash used in operating activities of $9.7 million for the nine months ended September 30, 2023 was primarily due to a net loss of $19.2 million, partially offset by non-cash expenses of $8.4 million primarily related to equity-based compensation and depreciation and amortization expense and a net increase in cash related to changes in operating assets and liabilities of $1.1 million. Changes in cash flows related to operating assets and liabilities were primarily due to an increase of $29.1 million in accounts payable, accrued expenses and other current liabilities due to timing of purchases and increased production of inventory, partially offset by an increase in inventories of $21.8 million due to increased production of inventory as a result of the supply chain logistics challenges in the prior year, increase in accounts receivable of $5.3 million due to timing of invoices, and an increase in prepaid expenses and other assets of $0.5 million due to timing of prepayments.
Net Cash (Used in) Provided by Investing Activities
Net cash used in investing activities of $0.2 million for the nine months ended September 30, 2024 was primarily due to purchases of property, equipment, and software of $0.2 million for computer equipment, marketing fixtures, and software used in ongoing operations.
Net cash provided by investing activities of $0.8 million for the nine months ended September 30, 2023 was primarily due to proceeds from the sale of its warehouse and related assets of $2.3 million, partially offset by purchases of property, equipment, and software of $1.6 million for leasehold improvements and computer equipment and software used in ongoing operations.
Net Cash Provided By Financing Activities
Net cash provided by financing activities of less than $0.1 million for the nine months ended September 30, 2024 was due to proceeds from the Secured Revolving Line of Credit of $8 million which was repaid in the same period.
27
Net cash provided by financing activities of less than $0.1 million for the nine months ended September 30, 2023 was primarily due to proceeds from the exercise of stock options.
Non-GAAP Financial Measures
We report our financial results in accordance with U.S. GAAP. However, management believes that Adjusted EBITDA, a non-GAAP financial measure, provides investors with additional useful information in evaluating our operating performance.
We calculate Adjusted EBITDA as net loss adjusted to exclude: (1) other income, net, which includes interest (income) expense and foreign currency (gains) losses, (2) (benefit) provision for income taxes, (3) depreciation and amortization, (4) equity-based compensation, and (5) restructuring expenses (for 2024, in light of our Productivity Initiative). Also, Adjusted EBITDA may in the future be adjusted for amounts impacting net income related to the TRA liability and other infrequent and unusual transactions.
Adjusted EBITDA is a financial measure that is not required by, or presented in accordance with, U.S. GAAP. We believe that Adjusted EBITDA, when taken together with our financial results presented in accordance with U.S. GAAP, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of Adjusted EBITDA is helpful to our investors as it is a measure used by management in assessing the health of our business, determining incentive compensation and evaluating our operating performance, as well as for internal planning and forecasting purposes.
Adjusted EBITDA is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. Some of the limitations of Adjusted EBITDA include that (1) it does not properly reflect capital commitments to be paid in the future, (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures, (3) it does not consider the impact of equity-based compensation expense, including the potential dilutive impact thereof, and (4) it does not reflect other non-operating expenses, including interest (income) expense, foreign currency (gains)/losses, and restructuring. In addition, our use of Adjusted EBITDA may not be comparable to similarly-titled measures of other companies because they may not calculate Adjusted EBITDA in the same manner, limiting its usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider Adjusted EBITDA alongside other financial measures, including our net income (loss) and other results stated in accordance with U.S. GAAP.
The following table presents a reconciliation of net loss, the most directly comparable financial measure stated in accordance with U.S. GAAP, to Adjusted EBITDA for the periods presented:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
(in thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net loss and comprehensive loss |
|
$ |
(2,842 |
) |
|
$ |
(11,250 |
) |
|
$ |
(17,002 |
) |
|
$ |
(19,171 |
) |
Other income, net* |
|
|
(118 |
) |
|
|
(165 |
) |
|
|
(357 |
) |
|
|
(908 |
) |
(Benefit) provision for income taxes |
|
|
(4 |
) |
|
|
(5 |
) |
|
|
43 |
|
|
|
31 |
|
Depreciation and amortization |
|
|
310 |
|
|
|
411 |
|
|
|
1,041 |
|
|
|
1,234 |
|
Equity-based compensation |
|
|
1,034 |
|
|
|
1,876 |
|
|
|
3,950 |
|
|
|
6,614 |
|
Restructuring |
|
|
112 |
|
|
|
— |
|
|
|
977 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
(1,508 |
) |
|
$ |
(9,133 |
) |
|
$ |
(11,348 |
) |
|
$ |
(12,200 |
) |
* Includes interest (income) expense and foreign currency (gains) losses.
Commitments
Effective March 2022, the Company entered into an amendment to the lease for its corporate headquarters offices to extend the lease term through December 31, 2023 and expand the total square footage from 17,923 square feet to 20,185 square feet which commenced on May 1, 2022. In January 2023, the Company entered into another amendment to the lease and further extended the lease term through December 31, 2026.
Our leases generally consist of long-term operating leases, which are payable monthly and relate to our office space. For a further discussion on our debt and operating lease commitments as of September 30, 2024, see the sections above including Note 7, Debt, and Note 8, Leases, included in the accompanying unaudited condensed consolidated financial statements of this Quarterly Report.
Our inventory purchase commitments are generally short-term in nature and have ordinary commercial terms. We did not have any material long-term inventory purchase commitments as of September 30, 2024. Our contract manufacturers are obligated to fulfill against purchase orders that are aligned with our forecast based on terms and conditions of the contract. Our forecasts provided to our contract manufacturers are short term in nature and at no time extend beyond a year.
We expect to satisfy these commitments through a combination of cash on hand and cash generated from sales of our products.
Critical Accounting Policies and Estimates
Our accompanying unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report are prepared in accordance with U.S. GAAP. The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.
There have been no material changes to our critical accounting policies from those discussed in our Annual Report.
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Recent Accounting Pronouncements
Refer to Note 2, Summary of Significant Accounting Policies, included in the accompanying unaudited condensed consolidated financial statements of this Quarterly Report for a discussion of recently issued accounting pronouncements.
Emerging Growth Company Status
We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” We may take advantage of these exemptions until such time we are no longer an “emerging growth company.” Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. We have elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. We may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of the IPO or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if any of the following events occur: (i) we have more than $1.235 billion in annual revenue, (ii) we have more than $700.0 million in market value of our Class A common stock held by non-affiliates (and we have been a public company for at least 12 months and have filed one annual report on Form 10-K) or (iii) we issue more than $1.0 billion of non-convertible debt securities over a three-year period.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are exposed to certain market risks in the ordinary course of our business. These risks primarily consist of raw material and finished goods prices, foreign exchange, inflation and commodities as follows:
Raw Material and Finished Goods Risk
Our profitability is dependent on, among other things, our ability to anticipate and react to raw material costs. Currently, a key ingredient in our products is stevia extract. Our stevia leaf extract is procured by our contract manufacturers and sourced from a large multi-national ingredient company with whom we have a long-standing relationship through a two-year agreement that was entered into effective October 15, 2023, which includes fixed pricing for the duration of the term. During 2023, we tested, qualified, and approved the use of another stevia leaf extract supplier, whose stevia leaf is derived from a region different than the above supplier, and we continue to seek to diversify to alternative sources of supply to mitigate potential supply disruptions. However, there can be no assurance that we will be able to secure alternative sources of supply. Additionally, the prices of stevia and other ingredients we use are subject to many factors beyond our control, such as market conditions, climate change, supply chain challenges, and adverse weather conditions.
Our aluminum cans are procured by our contract manufacturers through various can manufacturers. The price for aluminum cans also fluctuates depending on market conditions. Our contract manufacturers’ ability to continue to procure enough aluminum cans at reasonable prices will depend on future developments that are highly uncertain.
We are seeking to diversify our sources of supply and intend to enter into arrangements to better ensure stability of prices of our raw materials.
Due to a change in supply chain processes during the first quarter of 2024, our contract manufacturers are now responsible for the procurement of raw materials to produce our products, which are then sold to us as finished goods. As a result, during the nine months ended September 30, 2024, we had three vendors accounting for approximately 87% of our total raw material and finished goods purchases. Refer to Note 13, Major Customers, Accounts Receivable and Vendor Concentration, included in the accompanying unaudited condensed consolidated financial statements.
Foreign Exchange Risk
The majority of our sales and costs are denominated in U.S. dollars and are not subject to foreign exchange risk. Our contract manufacturers source some ingredients and packaging materials from international sources, and as a result our results of operations could be impacted by changes in exchange rates. We sell and distribute our products to Canadian customers, who are invoiced and remit payment in Canadian dollars. All Canadian dollar transactions are translated into U.S. dollars using period-end rates of exchange for assets and liabilities, and average rates of exchange for the period for sales and expenses. To the extent our contract manufacturers increase sourcing from outside the U.S. or we increase net sales outside of the U.S. that are denominated in currencies other than the U.S. dollar, the impact of changes in exchange rates on our results of operations would increase. Foreign exchange gains and losses were not material for the three and nine months ended September 30, 2024 and 2023, respectively.
Inflation Risk
We believe that inflation has had a material effect on our business, results of operations, and financial condition. If our costs were to become subject to further and prolonged significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, results of operations and financial condition.
Commodity Risk
We are subject to market risks with respect to commodities because our ability to recover increased costs through higher pricing may be limited by the competitive environment in which we operate. Our principal commodities risks relate to purchases of aluminum, diesel fuel, cartons and corrugate.
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Item 4. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024. Based on the foregoing evaluation, management determined that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2024.
Internal Control over Financial Reporting
Management determined that as of September 30, 2024, no changes in our internal control over financial reporting had occurred during the fiscal quarter then ended that materially affected or are reasonably likely to materially affect our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are not subject to any material legal proceedings.
Item 1A. Risk Factors
Our business is subject to various risks, including those described in the section titled “Risk Factors” in Part I, Item 1A of our Annual Report. Except as disclosed in the section titled “Risk Factors” in Part II, Item 1A of our Quarterly Report on Form 10-Q for the three months ended June 30, 2024, there have been no material changes from the risk factors disclosed in Item 1A of our Annual Report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
无。
条目 3. 关于高级证券的违约。
没有。
项目4. 矿山安全披露。
不适用。
项目5.其他信息
(c) 我们的董事或执行官都没有
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附件 指数
展览 编号 |
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3.2 |
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4.1 |
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10.1* |
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31.1* |
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根据《证券交易法》第13a-14(a)和15d-14(a)条的规定，信安金融首席财务官的认证书，该规定根据2002年《萨班斯-奥克斯利法》第302条的规定采纳。 |
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31.2* |
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根据《证券交易法》第13a-14(a)条和第15d-14(a)条规定文件，信安金融主要财务负责人的认证，根据《萨班斯-奥克斯利法案》第302条通过。 |
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根据2002年《萨班斯-豪利法案》第906条以及第18节的18 U.S.C. 第1350条规定，负责执行官员和负责财务主管的认证 |
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101.INS* |
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Inline XBRL 实例文档 |
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101.SCH* |
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Inline XBRL 分类扩展架构文档 |
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101.CAL* |
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Inline XBRL 分类扩展计算链接库文档 |
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101.DEF* |
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Inline XBRL 分类扩展定义链接库文档 |
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101.LAB* |
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Inline XBRL 分类扩展标签链接库文档 |
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101.PRE* |
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Inline XBRL 分类扩展展示链接库文档 |
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104 |
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封面交互数据文件（格式为Inline XBRL，并包含在展览101中） |
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随附提交。 |
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随附文件。 |
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管理合同或补偿计划或安排。 |
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签名
根据1934年证券交易法的要求，登记人已正式授权下面签字的人员代表其签署本季度报告。
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Zevia PBC |
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/s/ 艾米·E·泰勒 |
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姓名： |
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艾米·E·泰勒 |
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职务： |
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总裁兼首席执行官 |
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(首席执行官) |
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日期： |
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2024年11月6日 |
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根据1934年证券交易法的要求，以下人员代表发行人签署了本报告，并声称对本报告中任何事实无虚假陈述，或者对本报告中任何事实的遗漏存在虚假陈述。
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作者： |
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/s/ 艾米·E·泰勒 |
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姓名： |
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艾米·E·泰勒 |
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职务： |
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总裁兼首席执行官 |
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(首席执行官) |
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日期： |
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2024年11月6日 |
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作者： |
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/s/ 吉里什·萨蒂亚 |
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吉里什·萨蒂亚 |
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职务： |
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首席财务官和信安金融 |
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（信安金融财务负责人和财务会计负责人） |
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日期： |
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2024年11月6日 |
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