Jeffs’ Brands (JFBR) - 2025 Q2 - Quarterly Report

Financial Performance - Total revenues for the six months ended June 30, 2025, were $6,984 thousand, an increase of 12.7% compared to $6,198 thousand for the same period in 2024[6] - Gross profit decreased to $569 thousand, down 24.8% from $757 thousand in the prior year[6] - Net loss for the period was $2,742 thousand, an improvement from a net loss of $3,875 thousand in the same period of 2024[6] - Operating expenses rose to $4,220 thousand, compared to $3,266 thousand in the same period of 2024, reflecting increased investment in sales and marketing[6] - Revenue for the six months ended June 30, 2025, was $6,984 thousand, an increase from $6,198 thousand in the same period of 2024[63] - The company reported a net loss of $2,742 thousand for the six months ended June 30, 2025, compared to a net loss of $3,875 thousand for the same period in 2024[63] Assets and Liabilities - Total current assets increased to $11,623 thousand as of June 30, 2025, compared to $7,544 thousand at the end of 2024, reflecting a growth of 54.7%[5] - Total assets reached $22,985 thousand, up 67.5% from $13,724 thousand at December 31, 2024[5] - Shareholders' equity increased to $8,161 thousand, a rise of 46.5% from $5,557 thousand at the end of 2024[5] - Cash and cash equivalents at the end of the period were $6,066 thousand, significantly higher than $2,564 thousand at the beginning of the period[12] - The company's liabilities included other payables of $882 thousand and convertible promissory notes totaling $7,071 thousand, resulting in total liabilities of $7,953 thousand as of June 30, 2025, compared to $120 thousand as of December 31, 2024[68] Acquisitions and Investments - The company acquired Pure Logistics for $2,253 thousand, enhancing its logistics capabilities[12] - The acquisition of Pure NJ Logistics LLC was completed on March 18, 2025, for a total purchase price of $2,822 thousand, which included $2,347 thousand in cash and a deferred payment of $475 thousand[34][36] - The fair value of identifiable assets acquired from Pure Logistics included $1,732 thousand, with goodwill recognized at $1,090 thousand[36][37] - The Company acquired approximately 49.1% of SciSparc U.S. for approximately $3.0 million in cash, accounting for the investment using the equity method[38] - The balance of the investment in SciSparc U.S. as of June 30, 2025, was $678 thousand, reflecting equity losses of $76 thousand during the period[38] - The company entered into a share purchase agreement with Plantify Foods, Inc. for the acquisition of Smart Pro, which will result in the company receiving up to a 90% equity interest in the acquiror based on milestone achievements[48] Financing Activities - The company plans to continue financing operations through product sales and raising additional capital as needed[19] - The Company entered into a Securities Purchase Agreement in June 2025, allowing for the issuance of convertible promissory notes up to $100 million, which is expected to support operations for over 12 months[20] - The Company plans to issue convertible promissory notes in an aggregate principal amount of up to $100 million under a new securities purchase agreement entered on June 26, 2025[47] - The company issued a non-recourse convertible promissory note in January 2025 for $2,850 thousand, with net proceeds of $2,565 thousand after a 10% discount[39] - The company plans to request additional drawdowns of up to $2,500 thousand each quarter beginning December 1, 2025, under the terms of the June Note[50] Shareholder Actions - A one-for-seventeen reverse share split was executed on June 16, 2025, consolidating every 17 shares into 1 ordinary share[21] - The exercise price of outstanding Series A warrants and the January Warrant was adjusted downward to $5.10 following the offering due to anti-dilution provisions[47] - The company issued 38,971 ordinary shares at an offering price of $5.10 per share, raising approximately $582 thousand in gross proceeds from a registered direct offering[49] Consulting and Agreements - The company entered into a consulting agreement with Pure Capital for a monthly fee of approximately $16 thousand, with additional payments based on gross proceeds from warrant exercises and brand acquisitions[69] - An amendment to the Pure Capital Consulting Agreement allows for bonus payments based on gross proceeds from securities offerings, with potential bonuses ranging from $175 thousand to $1,300 thousand depending on the amount raised[71] - The monthly consulting fee for Xylo Technologies was reduced from $20 thousand to $10 thousand effective January 1, 2025[72] Other Notable Events - The company reduced its right-of-use asset by $1,826 thousand and its lease liability by $1,715 thousand due to the return of a warehouse[52] - The fair value of the outstanding June Notes was $6,801 thousand as of June 30, 2025, down from $8,393 thousand at issuance[52] - The company recorded an expense of $509 thousand in general and administrative expenses related to the grant of 30,797 ordinary shares to service providers[49] - The company experienced a change in fair value of convertible promissory notes and derivative liabilities, resulting in a financial expense of $942 thousand for the six months ended June 30, 2025[60] - Following the resignation of the CEO, the company appointed a new CEO effective August 1, 2025[75] - Subsequent to June 30, 2025, the company raised $598 thousand from the exercise of Series A warrants and June Notes[78]