Financial Performance - Total revenues for the three months ended June 30, 2024, were $877,799, a decrease from $1,334,980 in the same period of 2023, representing a decline of approximately 34.2%[192] - Total revenues decreased by $457,181, or 34.25%, to $877,799 for the three months ended June 30, 2024, from $1,334,980 for the same period in 2023[196] - Total revenues for the six months ended June 30, 2024, were $1,356,707, a decrease from $2,940,822 for the same period in 2023[211] - Total revenues decreased by $1,584,115, or 53.87%, to $1,356,707 for the six months ended June 30, 2024, compared to $2,940,822 for the same period in 2023[214] Gross Profit and Margins - Gross profit for the three months ended June 30, 2024, was $406,084, which is 46.26% of total revenues, compared to $313,401 or 23.48% in the same period of 2023, indicating a significant improvement in gross margin[193] - Gross profit increased by $92,683, or 29.57%, to $406,084 for the three months ended June 30, 2024, with a gross profit margin of 46.26% compared to 23.48% in 2023[202] - Gross profit decreased by $67,421, or 9.90%, to $613,744 for the six months ended June 30, 2024, with gross profit as a percentage of revenues at 45.24%[220] Operating Expenses - Total operating expenses for the three months ended June 30, 2024, were $1,442,835, which is 164.37% of total revenues, compared to $4,040,780 or 302.68% in the same period of 2023, showing a reduction in operating expenses relative to revenues[193] - General and administrative expenses decreased by $1,091,168, or 77.34%, to $319,736 for the three months ended June 30, 2024, representing 36.42% of revenues compared to 105.69% in 2023[203] - General and administrative expenses decreased by $1,443,665, or 60.01%, to $962,083 for the six months ended June 30, 2024, representing 70.91% of revenues[221] - Compensation expenses decreased by $770,763, or 59.96%, to $514,684 for the three months ended June 30, 2024, accounting for 58.63% of revenues compared to 96.29% in 2023[205] Losses - The operating loss for the three months ended June 30, 2024, was $(1,036,751), an improvement from $(3,727,379) in the same period of 2023, reflecting a narrowing of losses[193] - Net loss for the three months ended June 30, 2024, was $2,211,021, an improvement from a net loss of $4,219,996 for the same period in 2023[210] - Operating loss for the six months ended June 30, 2024, was $(3,028,631), compared to $(6,456,487) for the same period in 2023[211] - Net loss was $5,107,195 for the six months ended June 30, 2024, compared to a net loss of $8,504,311 for the same period in 2023[228] Cash and Debt - Cash and cash equivalents at the end of the period were $31,703, down from $315,014 at the end of June 30, 2023[233] - Total outstanding debt was $5,320,969 as of June 30, 2024, with a current portion of $3,302,823[237] - The company has a working capital deficiency of $9.7 million as of June 30, 2024, raising substantial doubt about its ability to continue as a going concern[230] Business Strategy and Operations - The company has executed a buy-and-build strategy with serial accretive acquisitions to create a vertically integrated company focused on health and wellness products[182] - The company operates a network platform in the affiliate marketing space, which compensates third-party digital marketers for generating traffic or leads[183] - The company acquired 100% of GSP Nutrition Inc. on December 6, 2021, expanding its portfolio in the sports nutrition sector[187] - The company has classified the financial results of Ceautamed as discontinued operations following the sale of nearly all its assets on January 29, 2024[191] - The company intends to rely on exemptions from certain disclosure requirements as an "emerging growth company" under the JOBS Act[188] - The company has relocated the operations of Bonne Sante Natural Manufacturing, Inc. to a new facility in Riviera Beach, Florida, enhancing its manufacturing capabilities[184] Revenue Breakdown - Revenues from the nutraceutical business decreased by $446,565, or 33.72%, to $877,799 for the three months ended June 30, 2024, primarily due to cash constraints affecting raw material purchases[197] - Revenues from the nutraceutical business decreased by $1,228,759, or 47.53%, to $1,356,592 for the six months ended June 30, 2024, primarily due to cash constraints affecting raw material purchases[215] - Revenues from the digital marketing business decreased by $355,356, or 99.97%, to $115 for the six months ended June 30, 2024, due to a shift in focus from affiliate network management[216] Cost of Revenues - Total cost of revenues decreased by $549,864, or 53.82%, to $471,715 for the three months ended June 30, 2024, from $1,021,579 for the same period in 2023[199] - Total cost of revenues decreased by $1,516,694, or 67.12%, to $742,963 for the six months ended June 30, 2024, directly related to the decrease in revenues[217] - Total other expense increased to $1,174,119 for the three months ended June 30, 2024, compared to $89,176 for the same period in 2023, primarily due to increased interest expense[209]
Smart for Life(SMFL) - 2024 Q2 - Quarterly Report