Sow Good Inc.(SOWG) - 2024 Q3 - Quarterly Results

Financial Performance - Revenue for Q3 2024 was $3.6 million, down from$5.0 million in Q3 2023, primarily due to delayed shipments caused by extreme heat affecting product quality [4]. - Gross profit for Q3 2024 was $0.6 million, with a gross margin of 16.0$1.3 million and 27.0% in Q3 2023, reflecting higher costs of goods sold [5]. - Net loss for Q3 2024 was $3.4 million, or$(0.33) per diluted share, compared to net income of $0.3 million, or$0.04 per diluted share, in Q3 2023 [7]. - Adjusted EBITDA for Q3 2024 was ($1.9) million, down from$0.6 million in Q3 2023, indicating a decline in operational performance [8]. - Year-to-date revenue for 2024 reached $30.6 million, significantly up from$6.5 million in 2023, highlighting effective retail distribution expansion [9]. - Year-to-date gross profit increased to $14.2 million with a gross margin of 46.4$(0.1) million and negative 2.0% margin in 2023 [10]. - Net income for the nine months ended September 30, 2024, was $465,821, compared to a net loss of$4,388,446 for the same period in 2023 [31]. - Adjusted EBITDA for the nine months ended September 30, 2024, was $6,831,057, compared to a loss of$2,208,203 for the same period in 2023 [32]. Operating Expenses - Operating expenses increased to $3.8 million in Q3 2024 from$1.0 million in Q3 2023, driven by strategic investments in brand expansion and infrastructure [6]. - Operating expenses for the nine months ending September 30, 2024, rose to $11.6 million from$2.9 million in 2023, reflecting scaling operations to support revenue growth [11]. - The company reported a depreciation and amortization expense of $582,948 for the nine months ended September 30, 2024, compared to$306,092 for the same period in 2023 [32]. Cash and Equity - Total stockholders' equity increased to $32,822,608 as of September 30, 2024, up from$2,869,986 a year earlier [30]. - Cash and cash equivalents at the end of the period were $6,946,387, an increase from$2,096,672 at the end of the previous year [31]. - The company reported a net cash used in operating activities of $6,124,944 for the nine months ended September 30, 2024, compared to$3,328,516 for the same period in 2023 [31]. - Proceeds from common stock offerings, net of offering costs, were $15,712,976 for the nine months ended September 30, 2024 [31]. - The company issued 1,380,000 shares in a public offering, netting$11,974,976 after offering costs [29]. Inventory and Receivables - The company experienced an increase in accounts receivable by $1,169,269, while inventory decreased by$15,319,762 during the operating activities [31]. Strategic Initiatives - The company is expanding its sales team to target over 100,000 U.S. stores that currently do not carry its products, indicating significant growth potential [3]. - The company is implementing temperature-controlled distribution to prevent product quality issues in the future, aiming to restore sales growth [2]. Stock Options - Common stock options granted to directors and advisors for services amounted to $86,892, while options granted to officers and employees totaled$3,307,854 [29].