Financial Data and Key Metrics Changes - Net sales for Q3 2025 increased 4% to $7.0 million compared to $6.8 million in the year-ago quarter, driven by higher volumes of Reed's branded products with recurring national customers [13] - Gross profit for Q3 2025 remained flat at $1.2 million, with gross margin decreasing to 17% from 18% in the previous year, primarily due to $0.1 million of inventory write-offs [13] - Net loss improved to $4.0 million, or negative $0.48 per share, compared to $4.2 million, or negative $4.91 per share in Q3 2024 [14] - Modified EBITDA loss was $3.9 million in Q3 2025 compared to $3.0 million in Q3 2024 [15] Business Line Data and Key Metrics Changes - Core product sales saw a 4% year-over-year growth across top accounts, including Kroger, Sprouts Farmers Market, and Giant Carlisle, indicating strong momentum within the core ginger ale, ginger beer, and Virgil's portfolio [5] - The company is focusing on regaining lost distribution with key regional wins at Harmons, Bashas', and Festival Foods, while also expanding presence in underrepresented channels like food service and convenience [6] Market Data and Key Metrics Changes - Delivery and handling costs were reduced by 14% to $1.1 million during Q3 2025, reflecting early progress from operational improvements [14] - The transition from glass to cans is expected to improve cost efficiency and sustainability, with anticipated margin strengthening as the transition progresses [11] Company Strategy and Development Direction - The company is redefining its approach with distributors, moving from short-term promotions to a fully integrated 52-week strategy to enhance predictability and control over trade spend [4] - A complete restage of the functional soda line is slated for July 2026, aimed at reestablishing Reed's as a category disruptor [7] - The leadership team has been strengthened with key appointments to enhance marketing, commercial execution, and governance [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operational foundation and key initiatives that will drive long-term growth and profitability, with a focus on improving margins and optimizing operations [12] - The company is preparing for an uplist to a major exchange, which is expected to enhance visibility and broaden access to institutional capital [12] Other Important Information - The company completed a review of finished goods inventory, writing down approximately $114,000 of obsolete products as part of a broader effort to rationalize SKUs [10] - A 1-for-6 reverse stock split was implemented effective October 31, 2025, to facilitate uplisting [12] Q&A Session Summary Question: Expectations for distribution gains and shelf resets - Management highlighted the restructuring of the sales team to focus on channels and customers not currently targeted, with plans for a core product restage in 2026 [18][19] Question: Transition from bottles to cans and P&L impacts - The transition is expected to yield long-term cost savings and margin benefits, with the process taking several months to complete [22][23] Question: Marketing strategy in a competitive category - The company plans to adopt a targeted and strategic approach to marketing spend, focusing on grassroots campaigns to build brand equity [25][26] Question: Timing for uplisting and regaining lost distribution - The reverse stock split was a milestone for uplisting, and management is actively working to regain lost distribution with key regional accounts [29][32] Question: Challenges in launching new products - Management believes that operational stability will help in regaining retailer confidence when launching new products [34]

Financial Data and Key Metrics Changes - Net sales for Q2 2025 were $9.5 million, down from $11.9 million in the same quarter last year, primarily due to lower volumes with recurring national customers [16] - Gross profit decreased to $800,000 from $3.8 million year-over-year, with gross margin dropping to 8% from 32% [16][17] - The company reported a net loss of $6 million or negative $0.13 per share, compared to a net loss of $3.2 million or negative $0.77 per share in Q2 2024 [19] - Modified EBITDA was negative $2.9 million in Q2 2025, compared to a positive $45,000 in Q2 2024 [19] Business Line Data and Key Metrics Changes - The company is focusing on streamlining operations and enhancing marketing approaches, despite softer order volumes during the quarter [4][5] - The new Reed's functional soda line has gained over 9,000 points of distribution since its launch in April, indicating positive market reception [7] - Sales team secured significant commitments, including over 25,000 cases for Safeway and a new product approval at Costco, which is expected to generate seven-figure sales [10][11] Market Data and Key Metrics Changes - The company is experiencing challenges in regaining lost placements with key retailers, which has impacted revenue [25][28] - Delivery and handling costs increased to $1.6 million, representing 17% of net sales, compared to 12% in the previous year [18] Company Strategy and Development Direction - The company aims to strengthen commercial execution and position itself for long-term growth by diversifying channel mix and pursuing new distribution opportunities [4][5] - A new Vice President of On Premise Sales has been appointed to lead expansion into food service and convenience channels [5][6] - The growth strategy includes channel expansion paired with ongoing product innovation, particularly in the functional beverage space [6][9] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the ongoing challenges from operational issues that began in 2024, which have led to lost distribution and declining orders [25][28] - There is optimism about rebuilding relationships with retailers and regaining lost placements, although this process will take time [26][30] - The company is focused on improving margins and positioning for sustained growth and profitability, with a commitment to enhancing operational efficiencies [15][19] Other Important Information - The company has made significant investments in personnel and marketing to support growth initiatives, leading to increased selling, general, and administrative expenses [19] - The transition from glass to cans is expected to drive cost savings and has received positive feedback from retailers and consumers [14] Q&A Session Summary Question: Concerns about revenue decline despite having inventory and cash - Management indicated that operational challenges from 2024 have led to lost placements and distribution, impacting revenue [25][28] Question: Visibility on sales recovery timeline - Management stated that regaining placements is an ongoing process and could not provide a specific timeline, but positive conversations with retailers are happening [30] Question: Gross margin concerns - Management acknowledged that gross margin was affected by inventory write-offs and higher-than-expected trade spends, but they are working to improve this [31][32] Question: Delivery costs increase despite revenue decline - Management explained that increased delivery costs are tied to efforts to ensure timely fulfillment for customers and optimizing inventory distribution [33][36]