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]