# Zevia PBC: Form 10-Q for the period ended Jun 30, 2025

- Company: [Zevia PBC](/companies/zvia.md) (CIK 1854139)
- Form: 10-Q
- Filed: 2025-08-06
- Accepted by EDGAR: Aug 6, 2025, 16:20 ET
- Period: 2025-06-30
- Accession: 0000950170-25-104098
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1854139/000095017025104098/zvia-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1854139/000095017025104098/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $44.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $82.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Gross profit | 3 months, 2025-04-01 to 2025-06-30 | $21.7m | us-gaap:GrossProfit |
| Gross profit | 6 months, 2025-01-01 to 2025-06-30 | $40.7m | us-gaap:GrossProfit |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | −$1.0m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | −$7.4m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $17.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $58.0k | us-gaap:IncomeTaxExpenseBenefit |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.01 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | −$0.09 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.01 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | −$0.09 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 66,332,703 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 64,651,141 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | −$4.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-06-30 | $26.3m | us-gaap:Cash |
| Current assets | at 2025-06-30 | $56.9m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $62.5m | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $24.3m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $24.8m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | $53.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 49,334 characters.

*The following discussion contains forward-looking statements that involve risks and uncertainties. The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed accompanying consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth in Part II, Item 1A. “Risk Factors” and other sections of this Quarterly Report and our consolidated financial statements and notes thereto included in our Annual Report. The financial data discussed below reflects the historical results of operations and financial position of the Company. References in this Quarterly Report to “Zevia,” the “Company,” “we,” “us,” and “our” refer (1) prior to the consummation of the Reorganization Transactions, to Zevia LLC, and (2) after the consummation of the Reorganization Transactions, to Zevia PBC and its consolidated subsidiaries unless the context indicates otherwise. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.*

### Overview

We are a better-for-you beverage company that develops, markets, sells, and distributes naturally delicious, zero sugar beverages. 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 made with a handful of simple, plant-based ingredients, contain no artificial sweeteners, and are Non-GMO Project verified, gluten-free, Kosher, and vegan, and include a variety of flavors across Soda, Energy Drinks, and Organic Tea drinks. Our products are distributed and sold principally across the U.S. and Canada through a wide-ranging network of major retailers in the grocery, drug, warehouse club, mass, natural, convenience and e-commerce channels and in 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.

### Key Events During the First Half of 2025

### Productivity Initiative

In the second quarter of 2024, we began executing a multi-year, broad-based Productivity Initiative designed to realign our cost structure in order to accelerate our route-to-market evolution and continue to build the Zevia® Brand. This Productivity Initiative is designed to focus on our most critical initiatives including driving growth and innovation in our highest margin carbonated better-for-you beverages, re-align our cost structure to support greater investments in the Zevia® Brand and improve operational excellence while simplifying processes across the organization.

The Productivity Initiative, which included a reduction in workforce in the first quarter of 2025, has resulted in the following:

- Costs associated with the Productivity Initiative, including restructuring costs, were $31 thousand and $2.2 million during the three and six months ended June 30, 2025, respectively, primarily consisting of employee related severance costs.
- The Productivity Initiative is expected to result in estimated annualized benefits of approximately $20.0 million, and we began seeing these benefits in the second half of 2024 and expect the savings to continue to be realized in 2025 and through 2026. These benefits include reduction in costs of goods sold and reduction in operating expenses. We have reinvested the majority of these costs savings thus far into brand marketing and promotional activity to drive future growth. Looking forward, we intend to balance reinvesting savings to help drive revenue growth with our plans for achieving profitability.

Restructuring charges related to the Productivity Initiative were substantially complete as of June 30, 2025.

### Factors Affecting Our Performance

### Macroeconomic Environment

We continue to monitor macroeconomic trends and uncertainties such as key ingredient inflation, the effects of tariffs, and the potential imposition of modified or additional tariffs, which may adversely affect our net sales and profitability. As a result of the rapid changes in global trade policies, including tariffs, and potential tariff modifications or the imposition of tariffs, export controls or other retaliatory actions by other countries, we have experienced and anticipate continuing to experience increased supply chain challenges, commodity cost volatility, and consumer and economic uncertainty. This has also created a complex and challenging retail environment for us as consumers reduce discretionary spending. A decline in consumer spending may have an adverse effect on our revenues, margins, and operating results. We, along with our competitors, have increased pricing on a number of products in response to widespread inflation, which could be exacerbated as a result of the tariffs. These pricing increases may result in future reductions in volume.

The following summarizes the components of our results of operations for the three and six months ended June 30, 2025 and 2024, respectively.

### Components of Our Results of Operations

### Net Sales

We generate net sales from the sales of our products, including Soda, Energy Drinks, and Organic Tea drinks, to our customers, which include grocery distributors, national retailers, convenience retailers, natural products retailers, warehouse club retailers and retailers with e-commerce channels, in the U.S. and Canada.

We offer our customers sales incentives that are designed to support the distribution of our products to consumers. These incentives and discounts include cash discounts, price allowances, volume-based rebates, product placement fees and certain other financial support for items such as trade promotions, displays, new products, consumer incentives and advertising assistance. The amounts for these incentives are deducted from gross sales to arrive at our net sales.

The following factors and trends in our business are expected to be key drivers of our net sales for the foreseeable future:

- leveraging our platform and mission to grow brand awareness, increase velocity and expand our consumer base;
- continuing to grow our strong relationships across our retailer network and retain and expand distribution amongst new and existing channels, both in-store and online; and
- continuous innovation efforts, enhancement of existing products, and introduction of additional flavors within existing categories.

We expect our future growth to be driven by a combination of new distribution, increased organic sales from existing outlets, package and product innovation, and continued pricing strength; however, sales levels in any given period may continue to be impacted by seasonality, increased level of competition, customers’ efforts to manage inventory, and our ability to fulfill customer demands.

We increased our spend on promotional activity at key accounts, returning back to historical promotion levels, in order to drive velocity, which we expect to continue throughout 2025.

We sell our products in the U.S. and Canada, direct to retailers and also through distributors. We do not have short- or long-term sales commitments with our customers.

### Cost of Goods Sold

Cost of goods sold consists of all costs to acquire and manufacture the Company’s products including the cost of the various ingredients, packaging, in-bound freight and logistics, and third-party production fees—which are typically incurred at a flat rate per case produced—and all other costs incurred to bring the product to salable condition.

Our cost of goods sold is subject to price fluctuations in the marketplace, particularly in the price of aluminum and other raw materials, as well as in the cost of production, packaging, in-bound freight and logistics. Due to the implementation of a tariff on all steel and aluminum entering the U.S. (25% from March to June and 50% starting in June), and the impact of reciprocal tariff on certain countries where stevia is purchased, we began to see an increase in our cost of goods sold during the three months ended June 30, 2025, and expect to continue to see an increase in our cost of goods going forward.

During the first quarter of 2025, the U.S. government announced tariffs on certain imports, including imports from Canada. We currently believe that our production in Canada is exempt from these tariffs under the United States-Mexico-Canada Agreement ("USMCA").

Our results of operations depend on our contract manufacturers’ ability to arrange for the purchase of raw materials and the production of our products in sufficient quantities at competitive prices. We have long-term contracts with certain suppliers of stevia and certain third-party contract manufacturers governing quality control, regulatory compliance, pricing and other terms, but these contracts generally do not guarantee any minimum purchase commitments to our third-party contract manufacturers. Our third-party contract manufacturers procure packaging and ingredient materials to manufacture our products according to our submitted rolling forecasts, with the initial three months of each forecast generally constituting our purchase commitment.

Excluding the impact of tariffs discussed above, we expect our cost of goods sold to increase in absolute dollars as our volume increases, but decrease over time as a percentage of net sales as a result of the Productivity Initiative, our continued focus on cost and efficiency improvements, and as we realize the benefit of scale.

We elected to classify shipping and handling costs for salable product outside of cost of goods sold, in selling and marketing expenses in our accompanying unaudited condensed consolidated statements of operations and comprehensive loss. As a result, our gross profit and profit margin may not be comparable to other entities that present shipping and handling costs as a component of cost of goods sold.

### Gross Profit

Gross profit consists of our net sales less costs of goods sold. Our gross profit and gross margin are affected by the mix of distribution channels of our net sales in each period, as well as the level of discounts and promotions offered during the period. Gross profit may be favorably impacted by leveraging our asset-light business model and through increased distribution direct to retailers, the increased scale of our business, our Productivity Initiative, and our continued focus on cost and efficiency improvements.

### Operating Expenses

#### Selling and Marketing Expenses

Selling and marketing expenses consist primarily of warehousing and distribution costs and advertising and marketing expenses. Warehousing and distribution costs include storage, transfer, repacking and handling fees and out-bound freight and delivery charges. Advertising and marketing expenses consist of variable costs associated with production and media buying of marketing programs and trade events, as well as sampling and in-store demonstration costs. Selling and marketing expenses also include the incremental costs of obtaining contracts, such as sales commissions.

Our selling expenses are expected to decrease as a percentage of sales over time as a result of our Productivity Initiative and our continued focus on cost improvements in our supply chain. Our selling expenses are expected to decrease from the prior year in the short-term, largely due the Productivity Initiative.

Marketing expenses are expected to increase as we invest in brand awareness, which are expected to be partially funded by the Productivity Initiative. We significantly increased our investment in marketing in the first half of 2025, and expect these additional marketing costs to continue throughout 2025, in order to help build our brand, with a focus on driving trial and customer conversions.

#### General and Administrative Expenses

General and administrative expenses include all salary and other personnel expenses (other than equity-based compensation expense) for our employees, including employees related to management, marketing, sales, product development, quality control, accounting, information technology and other functions. Our ongoing general and administrative expenses are expected to remain relatively flat as a percentage of net sales over time.

#### Equity-Based Compensation Expenses

Equity-based compensation expense consists of the recorded expense of equity-based compensation for our employees and, if any, for certain consultants and service providers who are non-employees. We record equity-based compensation expense for employee grants using grant date fair value for RSUs or a Black-Scholes valuation model to calculate the fair value of stock options by date granted. Equity-based compensation cost for RSU awards is measured based on the closing fair market value of the Zevia LLC Class B unit or the Zevia PBC Class A common stock, as applicable, on the date of grant. Our equity-based compensation expense is expected to remain relatively consistent in absolute dollars but decline as a percentage of net sales over time.

#### Depreciation and Amortization

Depreciation is primarily related to computer equipment, quality control and marketing equipment, and leasehold improvements. Intangible assets subject to amortization consist of customer relationships and software applications. Non-amortizable intangible assets consist of trademarks, which represent the Company’s exclusive ownership of the Zevia® brand used in connection with the manufacturing, marketing, and distribution of its beverages. We also own several other trademarks in both the U.S. and in foreign countries. Depreciation and amortization expense is expected to increase in-line with ongoing capital expenditures as our business grows.

#### Restructuring Expenses

Restructuring expenses include employee severance and benefit costs to terminate a specified number of employees as well as costs for restructuring consulting services, impairment loss of certain assets, contract termination costs and other related charges designed to reduce costs and improve efficiency while continuing to invest in our brand and related initiatives. Restructuring charges related to the Productivity Initiative were substantially complete as of June 30, 2025.

#### Other income, net

Other income, net consists primarily of interest income (expense), and foreign currency (loss) gains.

### Results of Operations

The following table sets forth selected items in our accompanying unaudited condensed consolidated statements of operations and comprehensive loss for the periods presented:

*(in thousands, except per share amounts)*

|  | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| **Net sales** | $44,524 | $40,426 | $82,547 | $79,225 |
| Cost of goods sold | 22,834 | 23,484 | 41,822 | 44,564 |
| **Gross profit** | 21,690 | 16,942 | 40,725 | 34,661 |
| **Operating expenses:** |  |  |  |  |
| Selling and marketing | 13,375 | 13,622 | 28,698 | 28,692 |
| General and administrative | 8,082 | 7,694 | 15,060 | 15,809 |
| Equity-based compensation | 982 | 1,427 | 1,713 | 2,916 |
| Depreciation and amortization | 236 | 403 | 488 | 731 |
| Restructuring | 31 | 865 | 2,169 | 865 |
| **Total operating expenses** | 22,706 | 24,011 | 48,128 | 49,013 |
| **Loss from operations** | (1,016) | (7,069) | (7,403) | (14,352) |
| Other income, net | 382 | 142 | 439 | 239 |
| **Loss before income taxes** | (634) | (6,927) | (6,964) | (14,113) |
| Provision for income taxes | 17 | 34 | 58 | 47 |
| **Net loss and comprehensive loss** | (651) | (6,961) | (7,022) | (14,160) |
| Loss (income) attributable to noncontrolling interest | (46) | 1,070 | 1,099 | 2,445 |
| **Net loss attributable to Zevia PBC** | $(697) | $(5,891) | $(5,923) | $(11,715) |
| Net loss per share attributable to common stockholders |  |  |  |  |
| Basic | $(0.01) | $(0.10) | $(0.09) | $(0.20) |
| Diluted | $(0.01) | $(0.10) | $(0.09) | $(0.20) |

21

The following table presents selected items in our accompanying unaudited condensed consolidated statements of operations and comprehensive loss as a percentage of net sales for the respective periods presented. Percentages may not sum due to rounding:

|  | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| **Net sales** | 100% | 100% | 100% | 100% |
| Cost of goods sold | 51% | 58% | 51% | 56% |
| **Gross profit** | 49% | 42% | 49% | 44% |
| **Operating expenses:** |  |  |  |  |
| Selling and marketing | 30% | 34% | 35% | 36% |
| General and administrative | 18% | 19% | 18% | 20% |
| Equity-based compensation | 2% | 4% | 2% | 4% |
| Depreciation and amortization | 1% | 1% | 1% | 1% |
| Restructuring | 0% | 2% | 3% | 1% |
| **Total operating expenses** | 51% | 59% | 58% | 62% |
| **Loss from operations** | (2)% | (17)% | (9)% | (18)% |
| Other income, net | 1% | 0% | 1% | 0% |
| **Loss before income taxes** | (1)% | (17)% | (8)% | (18)% |
| Provision for income taxes | 0% | 0% | 0% | 0 |
| **Net loss and comprehensive loss** | (1)% | (17)% | (9)% | (18)% |
| Loss (income) attributable to noncontrolling interest | (0)% | 3% | 1% | 3% |
| **Net loss attributable to Zevia PBC** | (2)% | (15)% | (7)% | (15)% |

### Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

#### Net Sales

*(in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | Change Amount | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Net sales | $44,524 | $40,426 | $4,098 | 10.1% |

Net sales were $44.5 million for the three months ended June 30, 2025 as compared to $40.4 million for the three months ended June 30, 2024. Equivalized cases sold were 3.5 million during the three months ended June 30, 2025 as compared to 3.1 million during the three months ended June 30, 2024. The increase in net sales was primarily due to a 14.3% increase in the number of equivalized cases sold, which resulted in $5.8 million higher net sales largely the result of expanded distribution at one customer in the mass channel and one customer in the drug channel, and pricing increases of $0.3 million, partially offset by higher allowance for incentives and discounts of $2.0 million resulting from greater promotional levels at retailers. We define an equivalized case as a 288 fluid ounce case.

#### Cost of Goods Sold

*(in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | Change Amount | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Cost of goods sold | $22,834 | $23,484 | $(650) | (2.8)% |

Cost of goods sold was $22.8 million for the three months ended June 30, 2025 as compared to $23.5 million for the three months ended June 30, 2024. The decrease of $0.7 million, or 2.8%, was largely due to lower write-downs related to excess and obsolete inventory of $2.0 million, and favorable unit costs of $1.7 million driven by the Productivity Initiative, which was partially offset by increased volumes which resulted in $3.1 million higher cost of goods sold.

#### Gross Profit and Gross Margin

*(in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | Change Amount | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Gross profit | $21,690 | $16,942 | $4,748 | 28.0% |
| Gross margin | 48.7% | 41.9% |  | 6.8% |

Gross profit was $21.7 million for the three months ended June 30, 2025 as compared to $16.9 million for the three months ended June 30, 2024. The increase in gross profit of $4.7 million, or 6.8%, was primarily due to higher volumes, favorable unit costs, selling price increases and lower inventory write-downs, partially offset by increased spend on promotional activity and channel mix.

Gross margin for the three months ended June 30, 2025 improved to 48.7% from 41.9% in the prior-year period. The increase was primarily due to lower inventory write-downs, favorable unit costs, and selling price increases, partially offset by increased spend on promotional activity and channel mix.

#### Selling and Marketing Expenses

*(in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | Change Amount | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Selling and marketing expenses | $13,375 | $13,622 | $(247) | (1.8)% |

Selling and marketing expenses were $13.4 million for the three months ended June 30, 2025 as compared to $13.6 million for the three months ended June 30, 2024. Marketing expenses were $4.7 million for the three months ended June 30, 2025 as compared to $4.3 million for the three months ended June 30, 2024, an increase of $0.4 million, or 9.6%. Selling expenses were $8.7 million for the three months ended June 30, 2025 as compared to $9.3 million for the three months ended June 30, 2024, a decrease of $0.6 million, or 7.1%.

The increase in marketing expense of $0.4 million was driven by investments made to drive brand awareness, which was funded by the savings in direct selling expenses as a result of the Productivity Initiative.

The decrease in selling expenses of $0.6 million was primarily due to decreases in freight transfer costs of $0.7 million and warehousing costs of $0.5 million largely driven by the Productivity Initiative, partially offset by an increase in distribution fees of $0.4 million and freight out costs of $0.2 million driven by increased volumes.

#### General and Administrative Expenses

*(in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | Change Amount | Percentage |
| --- | ---: | ---: | ---: | ---: |
| General and administrative expenses | $8,082 | $7,694 | $388 | 5.0% |

General and administrative expenses were $8.1 million for the three months ended June 30, 2025 as compared to $7.7 million for the three months ended June 30, 2024. The increase of $0.4 million, or 5.0%, was primarily driven by higher variable compensation as well as higher use of outside services, which was partially offset by lower headcount as a result of the Company's Productivity Initiative to right-size the business and focus on growth driving initiatives.

#### Equity-Based Compensation Expenses

*(in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | Change Amount | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Equity-based compensation | $982 | $1,427 | $(445) | (31.2)% |

Equity-based compensation expenses were $1.0 million for the three months ended June 30, 2025 as compared to $1.4 million for the three months ended June 30, 2024, primarily related to outstanding equity-based awards being recognized over the remaining service periods of the awards. The decrease of $0.4 million was primarily driven by a $0.5 million decrease related to the accelerated method of expense recognition on certain equity awards issued in connection with the Company’s IPO in 2021 in which the service period was completed during the first quarter of 2025.

#### Restructuring Expenses

*(in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | Change Amount | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Restructuring expenses | $31 | $865 | $(834) | (96.4)% |

Restructuring expenses were $31 thousand for the three months ended June 30, 2025, as compared to $0.9 million for the three months ended June 30, 2024. The restructuring expenses primarily includes employee related severance costs.

### Six months Ended June 30, 2025, Compared to Six months Ended June 30, 2024

#### Net Sales

*(in thousands)*

|  | Six Months Ended June 30, 2025 | 2024 | Change Amount | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Net sales | $82,547 | $79,225 | $3,322 | 4.2% |

Net sales were $82.5 million for the six months ended June 30, 2025 as compared to $79.2 million for the six months ended June 30, 2024. Equivalized cases sold were 6.5 million during the six months ended June 30, 2025 as compared to 6.0 million during the six months ended June 30, 2024. The increase in net sales was primarily due to an increase in the number of equivalized cases sold, which resulted in $5.8 million higher net sales, which was largely the result of expanded distribution at one customer in the mass channel, and pricing increases of $2.0 million, partially offset by higher allowance for incentives and discounts of $4.5 million resulting from greater promotional levels at retailers. We define an equivalized case as a 288 fluid ounce case.

#### Cost of Goods Sold

*(in thousands)*

|  | Six Months Ended June 30, 2025 | 2024 | Change Amount | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Cost of goods sold | $41,822 | $44,564 | $(2,742) | (6.2)% |

Cost of goods sold was $41.8 million for the six months ended June 30, 2025 as compared to $44.6 million for the six months ended June 30, 2024. The decrease of $2.7 million, or 6.2%, was largely due to favorable unit costs of $3.5 million driven by the Productivity Initiative, and lower write-downs related to excess and obsolete inventory of $2.4 million, which was partially offset by increased volumes which resulted in $3.1 million higher cost of goods sold.

#### Gross Profit and Gross Margin

*(in thousands)*

|  | Six Months Ended June 30, 2025 | 2024 | Change Amount | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Gross profit | $40,725 | $34,661 | $6,064 | 17.5% |
| Gross margin | 49.3% | 43.8% |  | 5.5% |

Gross profit was $40.7 million for the six months ended June 30, 2025 as compared to $34.7 million for the six months ended June 30, 2024. The increase in gross profit of $6.1 million, or 17.5%, was primarily due to higher volumes, favorable unit costs, selling price increases and lower inventory write-downs, partially offset by increased spend on promotional activity and channel mix.

Gross margin for the six months ended June 30, 2025 improved to 49.3% from 43.8% in the prior-year period. The increase was primarily due to lower inventory write-downs, favorable unit costs, and selling price increases, partially offset by increased spend on promotional activity and channel mix.

#### Selling and Marketing Expenses

*(in thousands)*

|  | Six Months Ended June 30, 2025 | 2024 | Change Amount | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Selling and marketing expenses | $28,698 | $28,692 | $6 | 0.0% |

Selling and marketing expenses were $28.7 million for the six months ended June 30, 2025 as compared to $28.7 million for the six months ended June 30, 2024. Marketing expenses were $10.9 million for the six months ended June 30, 2025 as compared to $7.1 million for the six months ended June 30, 2024, an increase of $3.8 million, or 54.5%. Selling expenses were $17.8 million for the six months ended June 30, 2025 as compared to $21.6 million for the six months ended June 30, 2024, a decrease of $3.8 million, or 17.7%.

The increase in marketing expense of $3.8 million was driven by investments made to drive brand awareness, which was funded by the savings in direct selling expenses as a result of the Productivity Initiative.

The decrease in selling expenses of $3.8 million was primarily due to decreases in freight transfer costs of $2.0 million, warehousing costs of $2.2 million, all largely driven by the Productivity Initiative, partially offset by higher freight out costs of $0.2 million driven by increased volumes and an increase in distribution fees of $0.2 million.

#### General and Administrative Expenses

*(in thousands)*

|  | Six Months Ended June 30, 2025 | 2024 | Change Amount | Percentage |
| --- | ---: | ---: | ---: | ---: |
| General and administrative expenses | $15,060 | $15,809 | $(749) | (4.7)% |

General and administrative expenses were $15.1 million for the six months ended June 30, 2025 as compared to $15.8 million for the six months ended June 30, 2024. The decrease of $0.7 million, or 4.7%, was primarily due to lower headcount as a result of the Company's Productivity Initiative to right-size the business and focus on growth driving initiatives of $1.2 million, and a decrease in other costs of $0.4 million as a result of our Productivity Initiative discussed above, partially offset by higher variable compensation.

#### Equity-Based Compensation Expenses

*(in thousands)*

|  | Six Months Ended June 30, 2025 | 2024 | Change Amount | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Equity-based compensation | $1,713 | $2,916 | $(1,203) | (41.3)% |

Equity-based compensation expenses were $1.7 million for the six months ended June 30, 2025 as compared to $2.9 million for the six months ended June 30, 2024, primarily related to outstanding equity-based awards being recognized over the remaining service periods of the awards. The decrease of $1.2 million was primarily due to a $1.2 million decrease related to the accelerated method of expense recognition on certain equity awards issued in connection with the Company’s IPO in 2021.

#### Restructuring Expenses

*(in thousands)*

|  | Six Months Ended June 30, 2025 | 2024 | Change Amount | Percentage |
| --- | ---: | ---: | ---: | ---: |
| Restructuring expenses | $2,169 | $865 | $1,304 | 150.8% |

Restructuring expenses were $2.2 million for the six months ended June 30, 2025 which primarily includes employee related severance costs as well as costs to exit two of our third-party warehouse and distribution facilities.

### Seasonality

Generally, we experience greater demand for our products during the second and third fiscal quarters, which correspond to the warmer months of the year in our major markets. As our business continues to grow, we expect to see continued seasonality effects, with net sales tending to be greater in the second and third quarters of the year.

### Liquidity and Capital Resources

### Liquidity and Capital Resources

As of June 30, 2025, we had $26.3 million in cash and cash equivalents. We believe that our cash and cash equivalents as of June 30, 2025, together with our operating activities and available borrowings under the Secured Revolving Line of Credit (as defined below), will provide adequate liquidity for ongoing operations, planned capital expenditures and other investments beyond the next 12 months.

Our principal sources of liquidity are our existing cash and cash equivalents, cash generated from sales of our products, and borrowing capacity currently available under our Secured Revolving Line of Credit. Our primary cash needs are for operating expenses, working capital, and capital expenditures to support the growth in our business.

Future capital requirements will depend on many factors, including our rate of revenue growth, gross margin and the level of expenditures in all areas of the Company. In future years, we may experience an increase in operating and capital expenditures from time to time, as needed, as we expand business activities. To the extent that existing capital resources and sales growth are not sufficient to fund future activities, we may seek alternative financing through additional equity or debt financing transactions. Additional funds may not be available on terms favorable to us or at all. Also, we will continue to assess our liquidity needs in light of current and future global health emergencies, inflationary pressures, tariffs as well as changes in tariff or U.S. foreign trade policies, relatively high interest rates, volatility in the financial markets, recession fears, current and future global hostilities, and political tensions between the U.S. and China that may continue to disrupt and impact the global and national economies and global financial markets. If any disruption continues into the future, we may not be able to access the financial markets and could experience an inability to access additional capital, which could negatively affect our operations in the future. Failure to raise additional capital, if and when needed, could have a material adverse effect on our financial position, results of operations, and cash flows.

The Company is a holding company, and is the sole managing member of Zevia LLC. The Company operates and controls all of the business and affairs of Zevia LLC. Accordingly, the Company is dependent on distributions from Zevia LLC to pay its taxes, its obligations under the TRA and other expenses. Any future credit facilities may impose limitations on the ability of Zevia LLC to pay dividends to the Company.

In connection with the IPO and the Reorganization Transactions in July 2021, the Direct Zevia Stockholders and certain continuing members of Zevia LLC received the right to receive future payments pursuant to the TRA. The amount payable under the TRA will be based on an annual calculation of the reduction in our U.S. federal, state and local taxes resulting from the utilization of certain pre-IPO tax attributes and tax benefits resulting from sales and exchanges by continuing members of Zevia LLC. See “Certain Relationships and Related Party Transactions—Tax Receivable Agreement” included in the prospectus dated July 21, 2021 and filed with the SEC on July 23, 2021. We expect that the payments that we may be required to make under the TRA may be substantial. Assuming no material changes in the relevant tax law and that we earn sufficient taxable income to realize all tax benefits that are subject to the TRA, we expect that the reduction in tax payments for us associated with the federal, state and local tax benefits described above would aggregate to approximately $68.9 million through 2040. Under such scenario we would be required to pay the Direct Zevia Stockholders and certain continuing members of Zevia LLC 85% of such amount, or $58.6 million, through 2040.

The actual amounts may materially differ from these hypothetical amounts, as potential future reductions in tax payments for us and TRA payments by us will be calculated using prevailing tax rates applicable to us over the life of the TRA and will be dependent on us generating sufficient future taxable income to realize the benefit.

We cannot reasonably estimate future annual payments under the TRA given the difficulty in determining those estimates as they are dependent on a number of factors, including the extent of exchanges by continuing Zevia LLC unitholders, the associated fair value of the underlying Zevia LLC units at the time of those exchanges, the tax rates applicable, our future income, and the associated tax benefits that might be realized that would trigger a TRA payment requirement.

However, a significant portion of any potential future payments under the TRA is anticipated to be payable over 15 years, consistent with the period over which the associated tax deductions would be realized by us, assuming Zevia LLC generates sufficient income to utilize the deductions. If sufficient income is not generated by Zevia LLC, the associated taxable income of Zevia will be impacted and the associated tax benefits to be realized will be limited, thereby similarly reducing the associated TRA payments to be made. Given the length of time over which payments would be payable, the impact to liquidity in any single year is greatly reduced.

Although the timing and extent of future payments could vary significantly under the TRA for the factors discussed above, we anticipate funding payments from the TRA from cash flows generated from operations.

### Credit Facility

#### ABL Credit Facility

On February 22, 2022, we obtained a revolving credit facility (the “Secured Revolving Line of Credit”) by entering into a Loan and Security Agreement with Bank of America, N.A (the “Loan and Security Agreement”). Under the Secured Revolving Line of Credit, we may draw funds up to an amount not to exceed the lesser of (i) a $20 million revolving commitment and (ii) a borrowing base which is comprised of inventory and receivables. Up to $2 million of the Secured Revolving Line of Credit may be used for letter of credit issuances with the option to increase the commitment under the Secured Revolving Line of Credit by up to $10 million, subject to certain conditions. The Secured Revolving Line of Credit matures on February 22, 2027. As of June 30, 2025, there was no amount outstanding on the Secured Revolving Line of Credit. The Secured Revolving Line of Credit is secured by a first priority security interest in substantially all of the Company’s assets.

Loans under the Secured Revolving Line of Credit bear interest based on either, at our option, the Term Secured Overnight Financing rate plus an applicable margin between 1.50% to 2.00% or the Base Rate (customarily defined) plus an applicable margin between 0.50% to 1.00% with margin, in each case, determined by the average daily availability under the Secured Revolving Line of Credit.

Under the Secured Revolving Line of Credit we must satisfy a financial covenant requiring a minimum fixed charge coverage ratio of 1.00 to 1.00 as of the last day of any fiscal quarter following the occurrence of certain events of default that are continuing or any day on which availability under the Secured Revolving Line of Credit is less than the greater of $3 million and 17.5% of the borrowing base, and must again satisfy such financial covenant as of the last day of each fiscal quarter thereafter until such time as there are no events of default and availability has been above such threshold for 30 consecutive days. As of June 30, 2025, the Company was in compliance with its financial covenant.

### Cash Flows

The following table presents the major components of net cash flows provided by and used in operating, investing and financing activities for the periods indicated.

*(in thousands)*

| Cash provided by (used in): | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Operating activities | $(4,312) | $(2,920) |
| Investing activities | $(45) | $(93) |
| Financing activities | $5 | $— |

#### Net Cash Used in Operating Activities

Our cash flows provided by or used in operating activities are primarily influenced by working capital requirements.

Net cash used in operating activities of $4.3 million for the six months ended June 30, 2025 was primarily driven by a net loss of $7.0 million, partially offset by non-cash expenses of $2.5 million primarily related to equity-based compensation and depreciation and amortization expense, and a net increase in cash related to changes in operating assets and liabilities of $0.2 million. Changes in cash flows related to operating assets and liabilities were primarily due to a decrease in inventories of $2.9 million due to decreased production of inventory as inventory levels are managed partially offset by an increase in accounts receivable of $2.3 million largely due to the increase in net sales, a net decrease in accounts payable, accrued expenses and other current liabilities of $0.2 million due to timing of purchases and decreased production of inventory.

Net cash used in operating activities of $2.9 million for the six months ended June 30, 2024 was primarily driven by a net loss of $14.2 million, partially offset by non-cash expenses of $4.0 million primarily related to equity-based compensation and depreciation and amortization expense and a net increase in cash related to changes in operating assets and liabilities of $7.3 million. Changes in cash flows related to operating assets and liabilities were primarily due to a decrease in inventories of $12.3 million due to decreased production of inventory as inventory levels are managed as well as higher inventory reserves, decreased prepaid expenses and other assets of $2.1 million largely due to a decrease in prepaid deposits related to the sale of raw materials, partially offset by a decrease in accounts payable, accrued expenses and other current liabilities of $6.6 million due to timing of purchases and decreased production of inventory, and an increase in accounts receivable of $0.2 million due to timing of payments.

#### Net Cash Used in Investing Activities

Net cash used in investing activities of less than $45 thousand for the six months ended June 30, 2025 was primarily due to purchases of computer equipment and quality control equipment used in ongoing operations.

Net cash used in investing activities of $0.1 million for the six months ended June 30, 2024 was primarily due to purchases of property, equipment, and software of $0.1 million for computer equipment, marketing fixtures, and software used in ongoing operations.

#### Net Cash Provided By Financing Activities

Net cash provided by financing activities of $5 thousand for the six months ended June 30, 2025 was primarily due to proceeds from the exercise of stock options offset by financing costs paid.

Net cash provided by financing activities of less than $0.1 million for the six months ended June 30, 2024 was due to proceeds from the Secured Revolving Line of Credit of $8 million which was repaid in the same period.

### Non-GAAP Financial Measures

We report our financial results in accordance with U.S. GAAP. However, management believes that Adjusted EBITDA, a non-GAAP financial measure, provides investors with additional useful information in evaluating our operating performance.

We calculate Adjusted EBITDA as net loss adjusted to exclude: (1) other income (expense), net, which includes interest (income) expense and foreign currency (gains) losses, (2) (benefit) provision for income taxes, (3) depreciation and amortization, (4) equity-based compensation, and (5) restructuring expenses. Also, Adjusted EBITDA may in the future be adjusted for amounts impacting net income related to the TRA liability and other infrequent and unusual transactions.

Adjusted EBITDA is a financial measure that is not required by, or presented in accordance with U.S. GAAP. We believe that Adjusted EBITDA, when taken together with our financial results presented in accordance with U.S. GAAP, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of Adjusted EBITDA is helpful to our investors as it is a measure used by management in assessing the health of our business, determining incentive compensation and evaluating our operating performance, as well as for internal planning and forecasting purposes.

Adjusted EBITDA is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. Some of the limitations of Adjusted EBITDA include that (1) it does not properly reflect capital commitments to be paid in the future, (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures, (3) it does not consider the impact of equity-based compensation expense, including the potential dilutive impact thereof, and (4) it does not reflect other non-operating expenses, including interest (income) expense, foreign currency (gains)/losses, and restructuring. In addition, our use of Adjusted EBITDA may not be comparable to similarly-titled measures of other companies because they may not calculate Adjusted EBITDA in the same manner, limiting its usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider Adjusted EBITDA alongside other financial measures, including our net income (loss) and other results stated in accordance with U.S. GAAP.

The following table presents a reconciliation of net loss, the most directly comparable financial measure stated in accordance with U.S. GAAP, to Adjusted EBITDA for the periods presented:

*(in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Net loss and comprehensive loss | $(651) | $(6,961) | $(7,022) | $(14,160) |
| Other income, net\* | (382) | (142) | (439) | (239) |
| Provision for income taxes | 17 | 34 | 58 | 47 |
| Depreciation and amortization | 236 | 403 | 488 | 731 |
| Equity-based compensation | 982 | 1,427 | 1,713 | 2,916 |
| Restructuring | 31 | 865 | 2,169 | 865 |
| Adjusted EBITDA | $233 | $(4,374) | $(3,033) | $(9,840) |

\* Includes interest (income) expense and foreign currency (gains) losses.

### Commitments

Effective March 2022, the Company entered into an amendment to the lease for its corporate headquarters offices to extend the lease term through December 31, 2023 and expand the total square footage from 17,923 square feet to 20,185 square feet which commenced on May 1, 2022. In January 2023, the Company entered into another amendment to the lease and further extended the lease term through December 31, 2026. In September 2024, the Company entered into a sublease agreement related to 8,468 square feet of its corporate office, which commenced on October 8, 2024 and ends on December 31, 2026.

Our leases generally consist of long-term operating leases, which are payable monthly and relate to our office space. For a further discussion on our debt and operating lease commitments as of June 30, 2025, see the sections above including Note 7, *Debt*, and Note 8, *Leases*, included in the accompanying unaudited condensed consolidated financial statements of this Quarterly Report.

Our inventory purchase commitments are generally short-term in nature and have ordinary commercial terms. We did not have any material long-term inventory purchase commitments as of June 30, 2025. Our contract manufacturers are obligated to fulfill against purchase orders that are aligned with our forecast based on terms and conditions of the contract. Our forecasts provided to our contract manufacturers are short term in nature and at no time extend beyond a year.

Other than as discussed above, there have been no material changes to our commitments from those discussed in our Annual Report.

We expect to satisfy these commitments through a combination of cash on hand and cash generated from sales of our products.

### Critical Accounting Policies and Estimates

Our accompanying unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report are prepared in accordance with U.S. GAAP. The preparation of financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.

There have been no material changes to our critical accounting policies from those discussed in our Annual Report.

### Recent Accounting Pronouncements

Refer to Note 2, *Summary of Significant Accounting Policies,* included in the accompanying unaudited condensed consolidated financial statements of this Quarterly Report for a discussion of recently issued accounting pronouncements.

### Emerging Growth Company Status

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” We may take advantage of these exemptions until we are no longer an “emerging growth company.” Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. We have elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates. We may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of the IPO which is December 31, 2026 or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if any of the following events occur: (i) we have more than $1.235 billion in annual revenue, (ii) we have more than $700.0 million in market value of our Class A common stock held by non-affiliates (and we have been a public company for at least 12 months and have filed one annual report on Form 10-K) or (iii) we issue more than $1.0 billion of non-convertible debt securities over a three-year period.

## Market risk

As filed, 4,309 characters.

We are exposed to certain market risks in the ordinary course of our business. These risks primarily consist of raw material and finished goods prices, foreign exchange, inflation and commodities as follows:

#### Raw Material and Finished Goods Risk

Our profitability is dependent on, among other things, our ability to anticipate and react to raw material costs. Currently, a key ingredient in our products is stevia extract. Our stevia leaf extract is procured by our contract manufacturers and was previously sourced from a single large multi-national ingredient company with whom we have a long-standing relationship through a two-year agreement that was entered into effective October 15, 2023, which includes fixed pricing for the duration of the term. During 2024, we approved and began sourcing from a second multi-national ingredient company to supply stevia leaf extract in order to diversify our source of stevia leaf extract, with the aim of mitigating price and supply disruptions. However, there can be no assurance that we will be able to continue to secure additional alternative sources of supply. Additionally, the prices of stevia and other ingredients we use are subject to many factors beyond our control, such as market conditions, changes in trade policies, climate change, supply chain challenges, and adverse weather conditions.

Our aluminum cans are procured by our contract manufacturers through various can manufacturers. The price for aluminum cans also fluctuates depending on market conditions and U.S. foreign trade policies. The implementation of an import tax on all steel and aluminum entering the U.S. (25% from March to June and 50% starting in June), has increased our operating costs. We expect to continue to see an increase in our cost of goods sold going forward.

During the first quarter of 2025, the U.S. government announced tariffs on certain imports, including imports from Canada. We currently believe that our production in Canada is exempt from these tariffs under the United States-Mexico-Canada Agreement ("USMCA"), but this is an area that continues to evolve and there is no assurance that our production in Canada will not be subject to tariffs in the future.

Our contract manufacturers’ ability to continue to procure enough aluminum cans at reasonable prices will depend on future developments that are highly uncertain.

We are seeking to diversify our sources of supply and intend to enter into arrangements to better ensure stability of prices of our raw materials.

#### Foreign Exchange Risk

The majority of our sales and costs are denominated in U.S. dollars and are not subject to foreign exchange risk. Our contract manufacturers source some ingredients and packaging materials from international sources, and as a result our results of operations could be impacted by changes in exchange rates. We sell and distribute our products to Canadian customers, who are invoiced and remit payment in Canadian dollars. All Canadian dollar transactions are translated into U.S. dollars using period-end rates of exchange for assets and liabilities, and average rates of exchange for the period for sales and expenses. To the extent our contract manufacturers increase sourcing from outside the U.S. or we increase net sales outside of the U.S. that are denominated in currencies other than the U.S. dollar, the impact of changes in exchange rates on our results of operations would increase. Foreign exchange gains and losses were not material for the three and six months ended June 30, 2025 and 2024, respectively.

#### Inflation Risk

We believe that inflation has had a material effect on our business, results of operations, and financial condition. If our costs were to become subject to further and prolonged significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, results of operations and financial condition.

#### Commodity Risk

We are subject to market risks with respect to commodities because our ability to recover increased costs through higher pricing may be limited by the competitive environment in which we operate. Our principal commodities risks relate to purchases of aluminum, diesel fuel, cartons and corrugate.

## Controls and procedures

As filed, 1,568 characters.

### Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. Based on the foregoing evaluation, management determined that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025.

### Internal Control over Financial Reporting

Management determined that as of June 30, 2025, no changes in our internal control over financial reporting had occurred during the fiscal quarter then ended that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

## Risk factors

As filed, 4,165 characters.

Our business is subject to various risks, including those described in the section titled “Risk Factors” in Part I, Item 1A of our Annual Report. Other than the following risk factor, there have been no material changes from the risk factors disclosed in Item 1A of our Annual Report.

***Disruptions in the worldwide economy, including changes to trade policies, may adversely affect our business, results of operations and financial condition.***

Adverse and uncertain economic conditions, including the impacts of inflation, changes in trade policies, and governmental tariffs, may impact distributor, retailer and consumer demand for our products. For example, on March 12, 2025, the U.S. government imposed a 25% tariff on all steel and aluminum imports, which was raised to 50% in June 2025. On April 2, 2025, the U.S. government announced a 10% tariff on product imports from almost all countries and individualized higher tariffs on certain other countries and in July 2025, the U.S government announced an intention to increase the baseline reciprocal tariff rate to 15–20%. These announcements have been followed by announcements of retaliatory tariffs and other actions by other countries, as well as limited exemptions and temporary pauses for U.S.-imposed tariffs and ongoing negotiations for potential trade deals. Changes in tariffs and trade restrictions can be announced with little or no advance notice. These actions, some of which are subject to litigation, have caused substantial uncertainty and volatility in financial markets and may result in additional retaliatory measures on U.S. goods. It is unknown whether and to what extent these tariffs will remain in place or if other new laws or regulations will be adopted. In addition, our ability to manage normal commercial relationships with our contract manufacturers, distributors, retailers and creditors may suffer. Due to broad uncertainty regarding the timing, content and extent of any regulatory changes in the U.S. or abroad, we cannot predict the nature and magnitude of the impact that these changes could have to our business, financial condition and results of operations.

Any resulting economic downturn or increase in geopolitical tensions may adversely impact consumers’ discretionary income and/or adversely affect consumer purchasing behavior, which could have a material adverse effect on our results of operations and financial condition. Tariff changes could worsen economic conditions in markets in which our products are sold, which could negatively affect the affordability of, and consumer demand for, our beverages. Consumers may shift purchases to lower-priced or other perceived value offerings during economic downturns and periods of high inflation. Customers in countries like Canada that have been targets of these tariffs and have announced their retaliatory tariffs on goods produced in the United States may boycott or find our products otherwise more expensive than domestic substitutes. In addition, distributors and retailers may become more conservative in response to these conditions and seek to reduce their inventories.

The imposition or threat of tariffs or additional sanctions on imports or exports in the U.S., Canada or jurisdictions from which we source our supplies could have an adverse impact on our supply chain, results of operations, or overall business. Additionally, the recent implementation of an import tariff on all steel and aluminum entering the U.S. has increased our cost of goods sold. We expect to continue to see an increase in our cost of goods sold going forward. Our results of operations depend upon, among other things, our ability to maintain and increase sales volume with our existing distributors, retailer customers, our ability to attract new consumers, the financial condition of our consumers and our ability to provide products that appeal to consumers at the right price. In the past, inflationary pressures raised overall supply chain costs and manufacturing and labor costs, which impacted our margins. Prolonged unfavorable economic conditions may have an adverse effect on our sales and profitability.

Filed Aug 6, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-104098. Last ingested by Listed: Oct 29, 2026, 19:54 ET. No prices; not investment advice.