Zevia PBC [ZVIA] Filings

10-Q 1 zvia-20240930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40630

Zevia PBC

(Exact Name of Registrant as Specified in its Charter)



Delaware		86-2862492
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

15821 Ventura Blvd., Suite 135

Encino, CA 91436

(424) 343-2654

(Address including Zip Code, and Telephone Number including Area Code, of Registrant’s Principal Executive Offices)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.001 per share	ZVIA	New York Stock Exchange

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YES ☒ NO ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☒

Emerging growth company	☒

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

As of November 1, 2024, there were 59,912,868 shares and 13,101,213 shares outstanding of the Registrant’s Class A and Class B common stock, respectively, $0.001 par value per share.

Table of Contents


		Page
PART I	Financial Information	5
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets (Unaudited)	5
	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	6
	Condensed Consolidated Statements of Changes in Equity (Unaudited)	7
	Condensed Consolidated Statements of Cash Flows (Unaudited)	9
	Notes to Condensed Consolidated Financial Statements (Unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30

Part II.	Other Information	31
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32
	Signatures	33

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q for the period ended September 30, 2024 (“Quarterly Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), about us and our industry that involve substantial known and unknown risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report, including, without limitation, statements regarding our future results of operations or financial condition, business strategy, expectations about capital allocation, investment activities, sourcing of raw materials, the impact of our supply chain challenges, logistics, distribution and marketing initiatives, the impact of our Productivity Initiative, including expected restructuring charges, cost savings and other benefits, factors and trends in our business, including seasonality, future expenses or payments under the TRA (as defined below), shifting market demand and consumer preferences, ability to effectively compete, ESG-related commitments, validity of our trademarks and other intellectual property, impact of government regulations, liquidity and capital requirements, including the sufficiency of our cash and liquidity or sources of capital, satisfying commitments, and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “consider,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “on track,” “outlook,” “plan,” “potential,” “predict,” “project,” “pursue,” “seek,” “should,” “target,” “will” or “would” or the negative of these words or other similar words, terms or expressions.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed under Risk Factors in Part I, Item 1A of our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 6, 2024 for the period ended December 31, 2023 (“Annual Report”), as well as our subsequent filings with the SEC. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report, including, but not limited to, the following:

•

failure to further develop, maintain, and promote our brand;

•

changes in the retail landscape or the loss of key retail customers;

•

product safety and quality concerns, including those relating to our plant-based sweetening system, which could negatively affect our business by exposing us to lawsuits, product recalls or regulatory enforcement actions, increasing our operating costs and reducing demand for our product offerings;

•

change in consumer preferences, perception and spending habits, particularly due to impacts of inflation, in the commercial beverage industry and on zero sugar, naturally sweetened products, and failure to develop or enrich our product offerings or gain market acceptance of our products, including new offerings;

•

inability to compete in our intensely competitive industry;

•

fluctuation in our net sales and earnings as a result of price concessions, promotional activities and chargebacks;

•

failure to introduce new products or successfully improve existing products;

•

inaccurate or misleading marketing claims, whether or not substantiated;

•

loss of any registered trademark or other intellectual property or actual or alleged claims of infringement of intellectual property rights;

•

our history of losses and potential inability to achieve or maintain profitability;

•

failure to attract, hire, train or retain qualified personnel, manage our future growth effectively or maintain our company culture;

•

the impact of adverse global macroeconomic conditions, including relatively high interest rates, recession fears and inflationary pressures, and geopolitical events or conflicts;

•

climate change, adverse weather conditions, natural disasters and other natural conditions;

•

difficulties and challenges associated with expansion into new markets;

•

inability to obtain raw materials on a timely basis or in sufficient quantities to produce our products or meet the demand for our products due to reliance on a limited number of third-party suppliers and trade tensions between the U.S. and China;

•

substantial disruption within our supply chain or distribution channels, including disruption at our contract manufacturers, warehouse and distribution facilities, failure by our transportation providers to facilitate on-time deliveries, or our own failure to accurately forecast;

•

extensive governmental regulation and enforcement if we are not in compliance with applicable requirements;

•

changes in laws and regulations relating to beverage containers and packaging as well as marketing and labeling;

•

dependence on distributions from Zevia LLC to pay any taxes and other expenses;

•

impact from our status, duty and liability exposure as a public benefit corporation;

•

inadequacy, failure, interruption or security breaches of our information technology systems and failure to comply with data privacy and information security laws and regulations;

•

failure to maintain compliance with the continued listing standards on the New York Stock Exchange (“NYSE”), which could result in the delisting of our securities, limit stockholders’ and investors’ ability to make transactions in our securities and subject us to additional trading restrictions;

•

the impact of any future pandemics, epidemics, or other disease outbreaks on our business, results of operations and financial condition; and

•

other risks, uncertainties and factors set forth under “Item 1A. Risk Factors.” of our Annual Report.

Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report and while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Quarterly Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report to reflect events or circumstances after the date of this Quarterly Report or to reflect new information or the occurrence of unanticipated events, except as required by applicable law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

PART I – FINANCIAL INFORMATION

ITEM 1 – CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ZEVIA PBC

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)


(in thousands, except share and per share amounts)	September 30, 2024			December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	32,688		$	31,955
Accounts receivable, net		10,008			11,119
Inventories		20,690			34,550
Prepaid expenses and other current assets		2,676			5,063
Total current assets		66,062			82,687
Property and equipment, net		1,490			2,109
Right-of-use assets under operating leases, net		1,509			1,959
Intangible assets, net		3,276			3,523
Other non-current assets		522			579
Total assets	$	72,859		$	90,857
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	14,865		$	21,169
Accrued expenses and other current liabilities		7,700			5,973
Current portion of operating lease liabilities		629			575
Total current liabilities		23,194			27,717
Operating lease liabilities, net of current portion		892			1,373
Other non-current liabilities		58			—
Total liabilities		24,144			29,090
Commitments and contingencies (Note 9)
Stockholders’ equity
Preferred Stock, $0.001 par value. 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2024 and December 31, 2023.		—			—
Class A common stock, $0.001 par value. 550,000,000 shares authorized, 59,853,556 and 54,220,017 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.		60			54
Class B common stock, $0.001 par value. 250,000,000 shares authorized, 13,101,213 and 17,283,177 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.		13			17
Additional paid-in capital		188,014			191,144
Accumulated deficit		(115,579	)		(101,337	)
Total Zevia PBC stockholders’ equity		72,508			89,878
Noncontrolling interests		(23,793	)		(28,111	)
Total equity		48,715			61,767
Total liabilities and equity	$	72,859		$	90,857

The accompanying notes are an integral part of these condensed consolidated financial statements.

ZEVIA PBC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands, except share and per share amounts)	2024			2023			2024			2023
Net sales	$	36,366		$	43,089		$	115,591		$	128,630
Cost of goods sold		18,516			23,517			63,080			69,261
Gross profit		17,850			19,572			52,511			59,369
Operating expenses:
Selling and marketing		11,981			20,455			40,673			48,467
General and administrative		7,377			8,250			23,186			23,102
Equity-based compensation		1,034			1,876			3,950			6,614
Depreciation and amortization		310			411			1,041			1,234
Restructuring		112			—			977			—
Total operating expenses		20,814			30,992			69,827			79,417
Loss from operations		(2,964	)		(11,420	)		(17,316	)		(20,048	)
Other income, net		118			165			357			908
Loss before income taxes		(2,846	)		(11,255	)		(16,959	)		(19,140	)
(Benefit) provision for income taxes		(4	)		(5	)		43			31
Net loss and comprehensive loss		(2,842	)		(11,250	)		(17,002	)		(19,171	)
Loss attributable to noncontrolling interest		315			3,033			2,760			4,932
Net loss attributable to Zevia PBC	$	(2,527	)	$	(8,217	)	$	(14,242	)	$	(14,239	)

Net loss per share attributable to common stockholders
Basic	$	(0.04	)	$	(0.16	)	$	(0.25	)	$	(0.27	)
Diluted	$	(0.04	)	$	(0.16	)	$	(0.25	)	$	(0.27	)

Weighted average common shares outstanding
Basic		59,490,258			50,754,470			58,037,780			50,074,992
Diluted		59,490,258			50,754,470			58,037,780			50,074,992

The accompanying notes are an integral part of these condensed consolidated financial statements.

ZEVIA PBC

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)


	Class A Common Stock				Class B Common Stock						Additional
(in thousands, except for share amounts)	Shares		Amount		Shares			Amount			Paid in Capital			Accumulated Deficit			Noncontrolling interest			Total Equity
Balance at January 1, 2024		54,220,017	$	54		17,283,177		$	17		$	191,144		$	(101,337	)	$	(28,111	)	$	61,767
Vesting and release of common stock under equity incentive plans, net		743,465		1		—			—			(1	)		—			—			—
Exchange of Class B common stock for Class A common stock		3,165,826		3		(3,165,826	)		(3	)		(5,266	)		—			5,266			—
Exercise of stock options		6,000		—		—			—			—			—			—			—
Equity-based compensation		—		—		—			—			1,489			—			—			1,489
Net loss		—		—		—			—			—			(5,824	)		(1,375	)		(7,199	)
Balance at March 31, 2024		58,135,308	$	58		14,117,351		$	14		$	187,366		$	(107,161	)	$	(24,220	)	$	56,057
Vesting and release of common stock under equity incentive plans, net		385,632		1		—			—			(1	)		—			—			—
Exchange of Class B common stock for Class A common stock		473,358		—		(473,358	)		—			(823	)		—			823			—
Exercise of stock options		9,000		—		—			—			—			—			—			—
Equity-based compensation		—		—		—			—			1,427			—			—			1,427
Net loss		—		—		—			—			—			(5,891	)		(1,070	)		(6,961	)
Balance at June 30, 2024		59,003,298	$	59		13,643,993		$	14		$	187,969		$	(113,052	)	$	(24,467	)	$	50,523
Vesting and release of common stock under equity incentive plans, net		223,478		—		—			—			—			—			—			—
Exchange of Class B common stock for Class A common stock		542,780		1		(542,780	)		(1	)		(989	)		—			989			—
Exercise of stock options		84,000		—		—			—			—			—			—			—
Equity-based compensation		—		—		—			—			1,034			—			—			1,034
Net loss		—		—		—			—			—			(2,527	)		(315	)		(2,842	)
Balance at September 30, 2024		59,853,556	$	60		13,101,213		$	13		$	188,014		$	(115,579	)	$	(23,793	)	$	48,715


	Class A Common Stock				Class B Common Stock						Additional
(in thousands, except for share amounts)	Shares		Amount		Shares			Amount			Paid in Capital			Accumulated Deficit			Noncontrolling interest			Total Equity
Balance at January 1, 2023		47,774,046	$	48		21,798,600		$	22		$	189,724		$	(79,843	)	$	(28,165	)	$	81,786
Vesting and release of common stock under equity incentive plans, net		981,902		1		—			—			(1	)		—			—			—
Exchange of Class B common stock for Class A common stock		537,991		1		(537,991	)		(1	)		(724	)		—			724			—
Exercise of stock options		30,424		—		—			—			23			—			—			23
Equity-based compensation		—		—		—			—			2,380			—			—			2,380
Net loss		—		—		—			—			—			(2,091	)		(821	)		(2,912	)
Balance at March 31, 2023		49,324,363	$	50		21,260,609		$	21		$	191,402		$	(81,934	)	$	(28,262	)	$	81,277
Vesting and release of common stock under equity incentive plans, net		436,722		—		—			—			—			—			—			—
Exchange of Class B common stock for Class A common stock		5,635		—		(5,635	)		—			(8	)		—			8			—
Exercise of stock options		8,669		—		—			—			—			—			—			—
Equity-based compensation		—		—		—			—			2,358			—			—			2,358
Net loss		—		—		—			—			—			(3,931	)		(1,078	)		(5,009	)
Balance at June 30, 2023		49,775,389	$	50		21,254,974		$	21		$	193,752		$	(85,865	)	$	(29,332	)	$	78,626
Vesting and release of common stock under equity incentive plans, net		236,072		—		—			—			—			—			—			—
Exchange of Class B common stock for Class A common stock		261,990		—		(261,990	)		—			(362	)		—			362			—
Disposition of cost method investment in redemption of Class B common stock		—		—		(60,523	)		—			—			—			(1	)		(1	)
Exercise of stock options		73,690		—		—			—			2			—			—			2
Equity-based compensation		—		—		—			—			1,876			—			—			1,876
Net loss		—		—		—			—			—			(8,217	)		(3,033	)		(11,250	)
Balance at September 30, 2023		50,347,141	$	50		20,932,461		$	21		$	195,268		$	(94,082	)	$	(32,004	)	$	69,253

The accompanying notes are an integral part of these condensed consolidated financial statements.

ZEVIA PBC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Nine Months Ended September 30,
(in thousands)	2024			2023
Operating activities:
Net loss	$	(17,002	)	$	(19,171	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Non-cash lease expense		450			423
Depreciation and amortization		1,041			1,234
Loss on disposal of property, equipment and software, net		55			101
Amortization of debt issuance cost		57			57
Equity-based compensation		3,950			6,614
Changes in operating assets and liabilities:
Accounts receivable, net		1,111			(5,295	)
Inventories		13,860			(21,822	)
Prepaid expenses and other assets		2,387			(451	)
Accounts payable		(6,296	)		30,312
Accrued expenses and other current liabilities		1,727			(1,234	)
Operating lease liabilities		(427	)		(436	)
Other non-current liabilities		58			-
Net cash provided by (used in) operating activities		971			(9,668	)
Investing activities:
Purchases of property, equipment and software		(238	)		(1,557	)
Proceeds from sales of property, equipment and software		—			2,343
Net cash (used in) provided by investing activities		(238	)		786
Financing activities:
Proceeds from revolving line of credit		8,000			—
Repayment of revolving line of credit		(8,000	)		—
Proceeds from exercise of stock options		—			25
Net cash provided by financing activities		—			25
Net change from operating, investing, and financing activities		733			(8,857	)
Cash and cash equivalents at beginning of period		31,955			47,399
Cash and cash equivalents at end of period	$	32,688		$	38,542

Non-cash investing and financing activities
Capital expenditures included in accounts payable	$	4		$	2
Conversion of Class B common stock to Class A common stock	$	7,078		$	1,094
Operating lease right-of-use assets obtained in exchange for lease liabilities	$	—		$	1,818

Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	73		$	59
Cash paid for income taxes	$	90		$	94

The accompanying notes are an integral part of these condensed consolidated financial statements.

ZEVIA PBC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. DESCRIPTION OF BUSINESS

Organization and operations

Zevia PBC (the “Company,” “we,” “us,” “our”), is a better-for-you beverage company that develops, markets, sells, and distributes great tasting, zero sugar beverages made with simple, plant-based ingredients. We are a Delaware public benefit corporation and have been designated as a “Certified B Corporation,” and are focused on addressing the global health challenges resulting from excess sugar consumption by offering a broad portfolio of zero sugar, zero calorie, naturally sweetened beverages. All Zevia® beverages are Non-GMO Project verified, gluten-free, Kosher, and vegan and include a variety of flavors across Soda, Energy Drinks, Organic Tea, and Kids drinks. Our products are distributed and sold principally across the United States (“U.S.”) and Canada through a diverse network of major retailers in the grocery, drug, warehouse club, mass, natural, convenience and e-commerce channels and in grocery and natural product stores and specialty outlets. The Company’s products are manufactured and maintained at third-party beverage production and warehousing facilities located in both the U.S. and Canada.

The Company completed its initial public offering (“IPO”) of 10,700,000 shares of its Class A common stock at an offering price of $14.00 per share on July 26, 2021. Its Class A common stock is listed on the NYSE trading under the ticker symbol “ZVIA.” In connection with the IPO, the Company also completed certain reorganization transactions (the “Reorganization Transactions”), pursuant to which Zevia LLC became the predecessor of the Company for financial reporting purposes. The Company is a holding company, and its sole material asset is its controlling equity interest in Zevia LLC. As the sole managing member of Zevia LLC, the Company operates and controls all of the business and affairs of Zevia LLC.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial reporting and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all information and footnotes required by U.S. GAAP for complete financial statements and are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2024, or for any other interim period or any other future fiscal year. The condensed consolidated balance sheet as of December 31, 2023 included herein was derived from the audited financial statements as of that date but does not include all disclosures, including certain notes, required by U.S. GAAP that are required on an annual reporting basis. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such rules and regulations. Therefore, these interim financial statements should be read in conjunction with the financial statements for the fiscal year ended December 31, 2023 and accompanying notes included in the Annual Report. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for the fair presentation of the condensed consolidated financial statements for the periods presented have been reflected.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary, Zevia LLC, that it controls due to ownership of a majority equity interest. All intercompany transactions and balances have been eliminated in consolidation.

The Company owns a majority economic interest in, and operates and controls all of the businesses and affairs of, Zevia LLC. Accordingly, the Company has prepared these accompanying unaudited condensed consolidated financial statements in accordance with Accounting Standards Codification (“ASC”) Topic 810, Consolidation.

On January 1, 2022, the Company and Zevia LLC entered into a service agreement to transfer the services of all employees of the Company to Zevia LLC. Under terms of the service agreement between the entities, the payroll costs of employees are borne by Zevia LLC while certain other non-payroll costs, such as those associated with stock compensation arrangements, remain with the Company. In addition, pursuant to the Thirteenth Amended and Restated Limited Liability Company Agreement of Zevia LLC, dated as of July 21, 2021, Zevia LLC shall reimburse the Company for certain expenses for overhead, administrative, and other expenses, at the Company’s discretion. For the three and nine months ended September 30, 2024 and 2023, it was determined that the majority of such costs will be retained by the Company, with certain costs directly attributable to Zevia LLC being borne by that entity. These costs impacted the amount of net loss reported by Zevia LLC and consequently impacted the amount allocated to noncontrolling interest.

Use of estimates

The preparation of the accompanying unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the reported amount of net sales and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates made by the Company relate to: net sales and associated cost recognition; the useful lives assigned to and the recoverability of property and equipment; adjustments recorded for inventory obsolescence and adjustments made for net realizable value; the incremental borrowing rate for lease liabilities; allowance for doubtful accounts; the useful lives assigned to and the recoverability of intangible assets; realization of deferred tax assets; and the determination of the fair value of equity instruments, including restricted unit awards, and equity-based compensation awards. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of its assets and liabilities.

Recent accounting pronouncements

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the accompanying unaudited condensed consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Recently Issued Accounting Pronouncements – Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU requires entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance.

In December 2023, the FASB issued ASU No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The guidance is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. ASU 2023-09 is effective for private companies for annual periods beginning after December 15, 2025, with early adoption permitted. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. The Company is currently evaluating the impact of adopting this guidance.

Any other recently issued accounting pronouncements are neither relevant, nor expected to have a material impact on the Company’s financial statements.

3. REVENUES

Disaggregation of Revenue

The Company’s products are distributed and sold principally across the U.S. and Canada through a diverse network of major retailers, including: grocery stores, drug stores, warehouse clubs, mass stores, natural product stores, convenience, and online/e-commerce channels. The following table disaggregates the Company’s sales by channel:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Retail sales	$	31,523	$	39,533	$	102,180	$	114,525
Online/e-commerce		4,843		3,556		13,411		14,105
Net sales	$	36,366	$	43,089	$	115,591	$	128,630

The following table disaggregates the Company’s sales by geographic location of the respective customers:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
U.S.	$	32,584	$	38,499	$	103,809	$	115,686
Canada		3,782		4,590		11,782		12,944
Net sales	$	36,366	$	43,089	$	115,591	$	128,630

Contract liabilities

The Company did not have any material unsatisfied performance obligations as of September 30, 2024 or December 31, 2023.

4. INVENTORIES

Inventories consisted of the following as of:


(in thousands)	September 30, 2024		December 31, 2023
Raw materials	$	1,214	$	4,714
Finished goods		19,476		29,836
Inventories	$	20,690

Zevia PBC [ZVIA] Filings
10-Q	[2024-11-06]
10-Q	[2024-08-07]
10-Q	[2024-05-08]
10-K	[2024-03-06]
10-Q	[2023-11-07]
10-Q	[2023-08-08]
10-Q	[2023-05-09]
10-K	[2023-03-10]
10-Q	[2022-11-10]
10-Q	[2022-08-11]
10-Q	[2022-05-12]
10-K	[2022-03-11]
10-Q	[2021-11-12]
10-Q	[2021-08-13]
S-1	[2021-06-25]