
Revenue Growth - Revenue for Q2 2024 increased by 23.4% to $1.44 million compared to $1.167 million in Q2 2023, driven by growth in branded consumer products, including $380,000 from Silly George sales[136] - Revenue increased by $920K (51.5%) to $2,706K for the six months ended June 30, 2024, driven by growth in branded consumer products, including $380K from Silly George[147] Gross Profit and Margin - Gross profit for Q2 2024 rose to $410,000, a 28.5% gross margin, up from $175,000 (15.0% gross margin) in Q2 2023, primarily due to increased branded consumer product sales[139] - Gross profit rose by $570K to $687K, with a gross profit margin of 25.4% for the six months ended June 30, 2024, compared to 6.6% in the same period in 2023[147] Cost of Revenues - Cost of revenues increased by 3.8% to $1.03 million in Q2 2024, aligned with higher sales of branded consumer products, including Silly George and Kenkoderm acquisitions[141] - Cost of revenues increased by $350K (21.0%) to $2,019K, primarily due to higher materials and finished products costs aligned with branded consumer product sales[149] Selling, General, and Administrative Expenses - Selling, general, and administrative expenses increased by 57.4% to $1.388 million in Q2 2024, driven by higher compensation, advertising, and professional fees[142] - Selling, general, and administrative expenses increased by $855K (50.9%) to $2,534K, driven by higher advertising, marketing, and Amazon fees[149] Advertising and Marketing Expenses - Advertising and marketing expenses surged by 166.3% to $442,000 in Q2 2024, primarily due to promoting Kenkoderm and Silly George brands[143] - Advertising, marketing, and Amazon fees surged by $435K (167.3%) to $695K, attributed to promoting Kenkoderm and Silly George[150] Research and Development - Research and development expenses increased by 38.2% to $76,000 in Q2 2024, reflecting costs for potential new products[146] Acquisitions - The company acquired Kenkoderm in December 2023 for $546,500, with additional quarterly earn-outs of $136,625 based on performance[132][133] - The company acquired Silly George in May 2024 for $400,000 in cash and $200,000 in shares, with future earn-outs based on 20% of net profits[134] Joint Ventures and Product Expansion - The company formed joint ventures with CG Labs (March 2023) and Moiety (January 2023) to expand into converting, packaging, and branded consumer product opportunities[130][131] - The company expanded its product portfolio with Kenkoderm (skincare for psoriasis) and Silly George (beauty and cosmetics) in 2023 and 2024, respectively[130][134] Cash Flow and Working Capital - Net cash used in operating activities was $1,792K for the six months ended June 30, 2024, compared to $1,926K in the same period in 2023[153] - Cash and cash equivalents decreased to $1,069K as of June 30, 2024, from $2,700K at December 31, 2023[153] - Working capital decreased to $955K as of June 30, 2024, from $2,503K at December 31, 2023, due to operational losses and capital expenditures[155] Future Plans and Expectations - The company plans to explore new product channels, including cosmetics, athletic products, and proprietary medical devices, to expand its customer base[158] - The company expects to continue incurring losses in the near term and may consider equity or debt offerings to fund potential acquisitions[160]