Revenue Performance - Total revenues decreased by $976,182, or 43.47%, to $1,269,373 for the three months ended September 30, 2024, from $2,245,555 for the same period in 2023[226] - Revenues from the nutraceutical business decreased by $970,183, or 43.32%, to $1,269,373 for the three months ended September 30, 2024, primarily due to cash constraints affecting the ability to purchase raw materials[227] - Total revenues decreased by $2,560,296, or 49.37%, to $2,626,080 for the nine months ended September 30, 2024, from $5,186,376 in the same period of 2023[240] - Revenues from the nutraceutical business decreased by $2,198,941, or 45.57%, to $2,625,965 for the nine months ended September 30, 2024, primarily due to cash constraints[242] - The digital marketing business did not generate any revenues for the three months ended September 30, 2024, compared to $5,999 for the same period in 2023[228] Profitability and Loss - Gross profit increased to $518,056, representing 40.81% of total revenues for the three months ended September 30, 2024, compared to 37.25% for the same period in 2023[226] - Operating loss for the three months ended September 30, 2024, was $(1,204,102), or (94.86)%, compared to $(2,916,431), or (129.88)%, for the same period in 2023[226] - Net loss for the three months ended September 30, 2024, was $(3,235,878), or (254.92)%, compared to $(4,344,107), or (193.45)%, for the same period in 2023[226] - Gross profit decreased by $318,331, or 38.06%, to $518,056 for Q3 2024 from $836,387 in Q3 2023, with gross profit as a percentage of revenues at 40.81% versus 37.25%[232] - Net loss for Q3 2024 was $3,235,878, a decrease of $1,108,229 or 25.51% from a net loss of $4,344,107 in Q3 2023[239] - Net loss for the nine months ended September 30, 2024 was $8,343,073, a decrease of $4,505,346, or 35.07%, from a net loss of $12,848,419 in the same period of 2023[255] Expenses Management - The total cost of revenues decreased by $657,851, or 46.68%, to $751,317 for the three months ended September 30, 2024, from $1,409,168 for the same period in 2023[229] - General and administrative expenses decreased to $428,554, or 33.76% of revenues, for the three months ended September 30, 2024, from $1,174,348, or 52.30% of revenues, for the same period in 2023[226] - Compensation expenses decreased to $570,126, or 44.91% of revenues, for the three months ended September 30, 2024, from $1,907,195, or 84.93% of revenues, for the same period in 2023[226] - General and administrative expenses decreased by $745,793, or 63.51%, to $428,554 for Q3 2024 from $1,174,348 in Q3 2023, representing 33.76% of revenues compared to 52.30%[233] - Compensation expenses decreased by $1,337,069, or 70.11%, to $570,126 for Q3 2024 from $1,907,195 in Q3 2023, with a percentage of revenues at 44.91% versus 84.93%[234] Financial Position and Cash Flow - The company reported a working capital deficiency of $8.2 million as of September 30, 2024, raising substantial doubt about its ability to continue as a going concern[257] - Net cash used in operating activities decreased to $516,784 for the nine months ended September 30, 2024, compared to $5,952,710 for the same period in 2023[260] - Net cash provided by financing activities was $403,069 for the nine months ended September 30, 2024, down from $5,897,604 in 2023[262] - Total outstanding debt as of September 30, 2024, amounted to $3,239,177, with current debt at $2,221,163[265] - The company is dependent on raising additional capital through common and preferred stock placements and debt financing to fund planned expenditures over the next 12 months[258] - Cash and cash equivalents at the end of the period were $35,608, compared to $5,684 at the end of the same period in 2023[260] - The company had net cash used in investing activities of $5,343 for the nine months ended September 30, 2024, which was entirely for additions to property and equipment[261] - The company has no off-balance sheet arrangements that could affect its financial condition[267] - Management believes that currently available resources will not be sufficient to fund planned expenditures, indicating potential financial challenges ahead[258] Strategic Initiatives - The company continues to execute a buy-and-build strategy with a focus on acquiring profitable companies to drive growth and earnings[214]
Smart for Life(SMFL) - 2024 Q3 - Quarterly Report