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 June 30, 2022

OR

☐ 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 145

Encino, CA 91436

(855) 469-3842

(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 August 1, 2022, there were 44,071,479 shares and 24,562,062 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	4
Item 1.	Condensed Consolidated Financial Statements (Unaudited) of Zevia PBC	4
	Condensed Consolidated Balance Sheets (Unaudited)	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	5
	Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Units and Equity (Deficit) (Unaudited)	6
	Condensed Consolidated Statements of Cash Flows (Unaudited)	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	27
Part II.	Other Information	28
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits, Financial Statement Schedules	29
	Signatures	30

2

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q for the period ended June 30, 2022 ("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 risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations or financial condition, business strategy 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,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar 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 11, 2022 for the period ended December 31, 2021 ("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 and maintain our brand;

•change in consumer preferences, perception and spending habits in the beverage industry and on naturally sweetened products, and failure to develop or enrich our product offerings or gain market acceptance of our new products;

•product safety and quality concerns, including those relating to our natural 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;

•inability to compete in our intensely competitive categories;

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

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

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

•the impact of the COVID-19 pandemic on our business, results of operations and financial condition;

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

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

•failure to introduce new products or successfully improve existing products;

•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;

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

3

PART I - FINANCIAL INFORMATION

ITEM 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) OF ZEVIA PBC

ZEVIA PBC

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except share and per share amounts)	June 30, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	49,648		$	43,110
Short-term investments		—			30,000
Accounts receivable, net		17,115			9,047
Inventories		33,924			31,501
Prepaid expenses and other current assets		2,079			3,421
Total current assets		102,766			117,079
Property and equipment, net		4,710			3,664
Right-of-use assets under operating leases, net		1,049			211
Intangible assets, net		3,638			3,738
Other non-current assets		575			301
Total assets	$	112,738		$	124,993
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	16,539		$	13,492
Accrued expenses and other current liabilities		7,947			6,705
Current portion of operating lease liabilities		685			236
Total current liabilities		25,171			20,433
Operating lease liabilities, net of current portion		368			1
Total liabilities		25,539			20,434
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 June 30, 2022 and December 31, 2021.		—			—
Class A common stock, $0.001 par value. 550,000,000 shares authorized, 43,406,758 and 34,463,417 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively.		43			34
Class B common stock, $0.001 par value. 250,000,000 shares authorized, 24,562,062 and 30,113,152 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively.		25			30
Additional paid-in capital		183,239			174,404
Accumulated deficit		(67,974	)		(45,986	)
Total Zevia PBC stockholder's equity		115,333			128,482
Noncontrolling interests		(28,134	)		(23,923	)
Total equity		87,199			104,559
Total liabilities and equity	$	112,738		$	124,993

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

4

ZEVIA PBC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except share and per share amounts)	2022			2021			2022			2021
Net sales	$	45,542		$	34,352		$	83,576		$	65,046
Cost of goods sold		28,168			18,112			51,581			34,618
Gross profit		17,374			16,240			31,995			30,428
Operating expenses:
Selling and marketing		13,928			10,703			26,723			18,691
General and administrative		9,818			5,978			19,947			11,654
Equity-based compensation		8,043			36			16,944			73
Depreciation and amortization		328			230			679			474
Total operating expenses		32,117			16,947			64,293			30,892
Loss from operations		(14,743	)		(707	)		(32,298	)		(464	)
Other (expense) income, net		(44	)		(42	)		38			(38	)
Loss before income taxes		(14,787	)		(749	)		(32,260	)		(502	)
Provision for income taxes		(9	)		—			(21	)		—
Net loss and comprehensive loss		(14,796	)		(749	)		(32,281	)		(502	)
Net loss attributable to Zevia LLC prior to the Reorganization Transactions		—			749			—			502
Loss attributable to noncontrolling interest		3,706			—			10,293			—
Net loss attributable to Zevia PBC	$	(11,090	)	$	—		$	(21,988	)	$	—
Net loss per share attributable to common stockholders
Basic	$	(0.28	)	N/A			$	(0.57	)	N/A
Diluted	$	(0.28	)	N/A			$	(0.57	)	N/A
Weighted average common shares outstanding
Basic		40,167,570		N/A				38,523,985		N/A
Diluted		40,167,570		N/A				38,523,985		N/A

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

5

ZEVIA PBC

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED UNITS AND EQUITY (DEFICIT) (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, 2022		34,463,417	$	34		30,113,152		$	30		$	174,404		$	(45,986	)	$	(23,923	)	$	104,559
Vesting and release of common stock under equity incentive plans, net		2,298,547		3		—			—			(2,133	)		—			—			(2,130	)
Exchange of Class B common stock for Class A common stock		1,970,802		2		(1,970,802	)		(2	)		(1,929	)		—			1,929			—
Exercise of stock options		56,659		—		—			—			16			—			—			16
Equity-based compensation		—		—		—			—			8,901			—			—			8,901
Net loss post-Reorganization Transactions		—		—		—			—			—			(10,898	)		(6,587	)		(17,485	)
Balance at March 31, 2022		38,789,425	$	39		28,142,350		$	28		$	179,259		$	(56,884	)	$	(28,581	)	$	93,861
Vesting and release of common stock under equity incentive plans, net		917,664		1		—			—			(1	)		—			—			—
Exchange of Class B common stock for Class A common stock		3,580,288		3		(3,580,288	)		(3	)		(4,153	)		—			4,153			—
Exercise of stock options		119,381		—		—			—			91			—			—			91
Equity-based compensation		—		—		—			—			8,043			—			—			8,043
Net loss post-Reorganization Transactions		—		—		—			—			—			(11,090	)		(3,706	)		(14,796	)
Balance at June 30, 2022		43,406,758	$	43		24,562,062		$	25		$	183,239		$	(67,974	)	$	(28,134	)	$	87,199

Redeemable Convertible Preferred Units and Members' Deficit
(in thousands, except for share amounts)	Units		Amount		Members' Deficit
Balance at January 1, 2021		26,322,803	$	232,457	$	(196,812	)
Exercise of common units prior to the Reorganization Transactions		—		—		10
Equity-based compensation prior to the Reorganization Transactions		—		—		37
Net income prior to the Reorganization Transactions		—		—		247
Balance at March 31, 2021		26,322,803		232,457		(196,518	)
Equity-based compensation prior to the Reorganization Transactions		—		—		36
Net loss prior to the Reorganization Transactions		—		—		(749	)
Distributions to unitholders for tax payments		—		—		(2,669	)
Balance at June 30, 2021		26,322,803	$	232,457	$	(199,900	)

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

6

ZEVIA PBC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Six Months Ended June 30,
(in thousands)	2022			2021
Operating activities:
Net loss	$	(32,281	)	$	(502	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash lease expense		312			275
Depreciation and amortization		679			474
Loss on sale of equipment		3			8
Amortization of debt issuance cost		25			17
Equity-based compensation		16,944			73
Changes in operating assets and liabilities:
Accounts receivable, net		(8,068	)		(2,473	)
Inventories		(2,423	)		(1,744	)
Prepaid expenses and other assets		1,371			350
Accounts payable		2,976			3,693
Accrued expenses and other current liabilities		1,242			95
Operating lease liabilities		(334	)		(303	)
Net cash used in operating activities		(19,554	)		(37	)
Investing activities:
Proceeds from maturities of securities		30,000			—
Purchases of property and equipment		(1,557	)		(2,031	)
Net cash provided by (used in) investing activities		28,443			(2,031	)
Financing activities:
Proceeds from revolving line of credit (1)		—			64,308
Repayment of revolving line of credit (1)		—			(64,308	)
Payment of debt issuance costs		(328	)		—
Minimum tax withholding paid on behalf of employees for net share settlement		(2,130	)		—
Proceeds from exercise of common units		—			10
Proceeds from exercise of stock options		107			—
Payment of deferred IPO costs		—			(3,829	)
Distribution to unitholders for tax payments		—			(2,669	)
Net cash used in financing activities		(2,351	)		(6,488	)
Net change from operating, investing, and financing activities		6,538			(8,556	)
Cash and cash equivalents at beginning of period		43,110			14,936
Cash and cash equivalents at end of period	$	49,648		$	6,380
Non-cash investing and financing activities
Capital expenditures included in accounts payable	$	196		$	—
Conversion of Class B common stock to Class A common stock	$	6,082		$	—
Operating lease right-of-use assets obtained in exchange for lease liabilities	$	1,150		$	—
Unpaid IPO offering costs	$	—		$	1,038
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	—		$	72

(1) Zevia PBC’s revolving line of credit provides for daily drawdowns and repayments of amounts outstanding. As of June 30, 2022, no amounts were drawn under the new Secured Revolving Line of Credit.(as defined in the Notes to Condensed Consolidated Financial Statements (Unaudited), Note 7 “Debt,” and no amounts were outstanding as a result of the termination of the Stonegate line of credit in July 2021. Consistent with the provisions of ASC Topic 230, Statement of Cash Flows, Zevia PBC has presented daily draw-downs and repayments under its revolving line of credit with its lender on a gross basis in the statement of cash flows for the period ended June 30, 2021.

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

7

ZEVIA PBC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. DESCRIPTION OF BUSINESS

Organization and operations

Zevia PBC (the "Company") develops, markets, sells, and distributes a wide variety of zero calorie, zero sugar, non-GMO Project verified, gluten-free, Kosher, vegan, zero sodium carbonated and non-carbonated beverages under the Zevia® brand name that include a broad variety of flavors across Soda, Energy Drinks, Organic Teas, Mixers, Kidz drinks, and Sparkling Water. Zevia PBC’s products are distributed and sold principally in the United States and Canada through a diverse network of retailers (both brick-and-mortar and e-commerce), including grocery stores, natural products stores, warehouse clubs, and specialty outlets. Zevia PBC’s products are manufactured and generally maintained at third-party beverage production and warehousing facilities located in both the United States and Canada.

Initial Public Offering

On July 21, 2021, the SEC declared effective Zevia PBC's registration statement on Form S-1 for the initial public offering ("IPO") of its Class A common stock. On July 22, 2021, the Company’s Class A common stock began trading on the New York Stock Exchange under the ticker symbol “ZVIA”. The Company completed the 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. The Company received aggregate net proceeds of approximately $139.7 million after deducting underwriting discounts and commissions of $10.1 million.

Immediately following the closing of the IPO on July 26, 2021, 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. This reorganization is accounted for as a reorganization of entities under common control. As a result, the condensed consolidated financial statements of the Company recognize the assets and liabilities received in the reorganization at their historical carrying amounts, as reflected in the historical financial statements of Zevia LLC. The Company has consolidated Zevia LLC in its financial statements and records a noncontrolling interest related to the Class B units held by the Class B stockholders on its condensed consolidated balance sheets and statement of operations. As of June 30, 2022, the Company holds an economic interest of 63.9% in Zevia LLC and the remaining 36.1% represents the non-controlling interest.

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 ("US 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 US GAAP for complete financial statements and are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2022, or for any other interim period or any other future fiscal year. The balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date but does not include all disclosures, including certain notes, required by US GAAP that are required on an annual reporting basis. Certain information and note disclosures normally included in the financial statements prepared in accordance with US 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, 2021 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 condensed consolidated financial statements include the accounts of the Company and its subsidiary, Zevia LLC, that it controls due to ownership of a majority voting 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 business and affairs of, Zevia LLC. Accordingly, the Company has prepared these condensed consolidated financial statements in accordance with Accounting Standards Codification ("ASC") Topic 810, Consolidation.

In connection with the IPO, the Company completed certain reorganization transactions (the “Reorganization Transactions") described in the Annual Report, which were accounted for consistent with a combination of entities under common control. As a result, the financial reports filed with the SEC by the Company subsequent to the Reorganization Transactions are prepared “as if” Zevia LLC is the accounting predecessor of the Company. The historical operations of Zevia LLC are deemed to be those of the Company. Thus, the condensed consolidated financial statements included in this Quarterly Report reflect (i) the historical operating results and financial position of Zevia LLC prior to the Reorganization Transactions; (ii) the condensed consolidated results of operations and financial position of the Company and Zevia LLC following the Reorganization Transactions; and (iii) the Company's equity structure for all periods presented. No step-up basis of intangible assets or goodwill was recorded.

Reclassifications

Certain amounts from prior periods have been reclassified in the condensed consolidated statements of operations and comprehensive loss and condensed consolidated statement of cash flows to conform to the current period presentation. For the activity in the periods prior to the IPO and Reorganization Transactions, common stock, additional paid-in capital, and accumulated deficit information have been combined and presented as member’s deficit in the accompanying condensed consolidated balance sheets and condensed consolidated statements of changes in redeemable convertible preferred units and stockholders' equity (deficit).

8

Condensed Consolidated Statements of Operations and Comprehensive Loss:

The following table presents the reclassifications made to the Condensed Consolidated Statements of Operations and Comprehensive Loss:

(in thousands)	Three Months Ended June 30, 2021  (as reported)		Reclassification			Three Months Ended June 30, 2021 (adjusted)		Six Months Ended June 30, 2021  (as reported)		Reclassification			Six Months Ended June 30, 2021 (adjusted)
General and administrative	$	6,014	$	(36	)	$	5,978	$	11,727	$	(73	)	$	11,654
Equity-based compensation		—		36			36		—		73			73

Condensed Consolidated Statements of Cash Flows:

The following table presents the reclassifications made to the Condensed Consolidated Statement of Cash Flows:

(in thousands)	Six Months Ended June 30, 2021  (as reported)			Reclassification			Six Months Ended June 30, 2021 (adjusted)
Changes in operating assets and liabilities:
Prepaid expenses and other assets		380			(30	)		350
Right of use asset		(30	)		30			—
Accounts payable		3,036			657			3,693
Accrued expenses and other current liabilities		(778	)		873			95
Operating lease liabilities		(75	)		(228	)		(303	)
Other current liabilities		1,530			(1,530	)		—
Operating lease liabilities, net of current portion		(228	)		228			—

Use of estimates

The preparation of the unaudited condensed consolidated financial statements in accordance with US 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; reserves recorded for inventory obsolescence; the incremental borrowing rate for lease liabilities; allowance for doubtful accounts; recoverability of intangible assets; realization of deferred tax assets; and the determination of the fair value of equity instruments, including redeemable convertible preferred and common units, 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.

As of June 30, 2022, the Company’s operations continue to be impacted by the effects of the COVID-19 pandemic including the emergence of new variants, with respect to broad-based inflation in input costs, logistics, manufacturing and labor costs. During the three and six months ended June 30, 2022, the Company experienced significant inflationary impact, which has created headwinds that the Company expects to continue throughout 2022. The effects of the COVID-19 pandemic continues to impact global economies, and the Company will continue to monitor the situation and the effects on its business and operations, particularly if the COVID-19 pandemic including the emergence of new variants, continues for an extended period of time.

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 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 – Recently Adopted

In April 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2021-04, which included Topic 260, Earnings Per Share and Topic 718, Compensation - Stock Compensation. This guidance clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options due to a lack of explicit guidance in the FASB Codification. This ASU is effective for all entities for fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company adopted ASU 2021-04 as of January 1, 2022. The adoption of ASU 2021-04 did not have a significant impact on the Company's financial statements as the Company does not have freestanding equity-classified written call options.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. This ASU improves areas of US GAAP and reduces cost and complexity while maintaining usefulness. The main provisions remove certain exceptions, including the exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. In addition, the amendments simplify income tax accounting in the areas such as income based franchise taxes, eliminating the requirements to allocate consolidated current and deferred tax expense in certain instances and a requirement that an entity reflects the effect of enacted changes in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. This ASU is effective for private companies for annual reporting periods beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022. The Company adopted ASU 2019-12 as of January 1, 2022. The adoption of ASU 2019-12 did not have a significant impact on the Company’s financial statements.

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Recently Issued Accounting Pronouncements – Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU provides for a new impairment model that requires measurement and recognition of expected credit losses for most financial assets held. The ASU is effective for private companies for annual periods, and interim periods within those annual periods, beginning after December 15, 2022. The Company currently does not expect this guidance to have a significant impact on the Company’s financial statements as it does not have a history of material credit losses.

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, natural products stores, specialty outlets, and warehouse club stores; and through e-commerce channels. The following table disaggregates the Company’s sales by channel:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Retail sales	$	39,596	$	30,902	$	73,761	$	56,769
Online/e-commerce		5,946		3,450		9,815		8,277
Net sales	$	45,542	$	34,352	$	83,576	$	65,046

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

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
United States	$	40,123	$	30,414	$	74,312	$	58,137
Canada		5,419		3,938		9,264		6,909
Net sales	$	45,542	$	34,352	$	83,576	$	65,046

Contract liabilities

The Company did not have any material unsatisfied performance obligations as of June 30, 2022 or December 31, 2021.

4. INVENTORIES

Inventories consist of the following as of:

(in thousands)	June 30, 2022		December 31, 2021
Raw materials	$	11,106	$	10,193
Finished goods		22,818		21,308
Inventories	$	33,924	$	31,501

5. PROPERTY AND EQUIPMENT, NET

Property and equipment consist of the following as of:

(in thousands)	June 30, 2022			December 31, 2021
Land	$	336		$	336
Leasehold improvements		463			463
Computer equipment and software		2,941			2,254
Furniture and equipment		544			521
Vehicles		156			38
Quality control and marketing equipment		900			532
Buildings and improvements		1,575			1,443
Assets not yet placed in service		730			456
		7,645			6,043
Less accumulated depreciation		(2,935	)		(2,379	)
Property and equipment, net	$	4,710		$	3,664

For the three months ended June 30, 2022 and 2021, depreciation expense, including the amortization of leasehold improvements, amounted to approximately $0.3 million and $0.2 million, respectively. For the six months ended June 30, 2022 and 2021, depreciation expense, including the amortization of leasehold improvements, amounted to approximately $0.6 million and $0.4 million, respectively. These amounts are included under depreciation and amortization in the accompanying condensed consolidated statements of operations and comprehensive loss.

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6. INTANGIBLE ASSETS, NET

The following table provides information pertaining to the Company’s intangible assets as of:

(in thousands)	June 30, 2022			December 31, 2021
Customer relationships	$	3,007		$	3,007
Accumulated amortization		(2,369	)		(2,269	)
		638			738
Trademarks		3,000			3,000
Intangible assets, net	$	3,638		$	3,738

For the three months ended June 30, 2022 and 2021, total amortization expense amounted to $0.1 million and $0.1 million, respectively. For the six months ended June 30, 2022 and 2021, total amortization expense amounted to $0.1 million and $0.1 million, respectively. No impairment losses have been recorded on any of the Company’s intangible assets for the three and six months ended June 30, 2022 and 2021, respectively.

Amortization expense for intangible assets with definite lives is expected to be as follows:

(in thousands)
Remainder of 2022	$	100
2023		200
2024		200
2025		138
Expected amortization expense for intangible assets with definite lives	$	638

7. DEBT

ABL Credit Facility

On February 22, 2022, Zevia LLC (the "Borrower") 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"). The Borrower may draw loans under the Secured Revolving Line of Credit 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 and the Borrower has 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. There have been no amounts drawn under the Secured Revolving Line of Credit.

Loans under the Secured Revolving Line of Credit bear interest based on either, at the Borrower’s option, the Bloomberg Short-Term Bank Yield Index 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.

The Borrower is required under the Secured Revolving Line of Credit to comply with certain covenants, including, among others, by maintaining Liquidity (as defined therein) of $7 million at all times until December 31, 2023. Thereafter, the Borrower 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, 2022, the Company was in compliance with its liquidity covenant.

8. LEASES

The Company leases office space and vehicles. The leases have remaining lease terms of one to 18 months. On March 25, 2022, the Company entered into an amendment to the lease for its corporate headquarters offices to extend the term through December 31, 2023, and to expand the total square footage from 17,923 square feet to 20,185 square feet commencing on May 1, 2022. The Company’s recognized lease costs include:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Income Statement
Operating lease cost(1)	$	178	$	151	$	329	$	302

(1)Operating lease cost is recorded within general and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive loss.

	Six Months Ended June 30,
	2022			2021
Weighted-average remaining lease term (months)		17.9			10.4
Weighted-average discount rate		7.56	%		7.56	%

The Company’s variable lease costs and short-term lease costs were not material.

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The Company is obligated under various non-cancellable lease agreements providing for office space and vehicles that expire at various dates through 2023. Maturities of lease payments under non-cancellable leases were as follows:

(in thousands)	June 30, 2022
Remainder of 2022	$	372
2023		744
Total lease payments		1,116
Less Imputed Interest		(63	)
Present value of lease liabilities	$	1,053

9. COMMITMENTS AND CONTINGENCIES

Purchase commitments

As of June 30, 2022, the Company does not have any material agreements with suppliers for the purchase of raw material with minimum purchase quantities.

Legal proceedings

The Company is involved from time to time in various claims, proceedings, and litigation. The Company establishes reserves for specific legal proceedings when it determines that the likelihood of an unfavorable outcome is probable, and the amount of loss can be reasonably estimated. The Company has not identified any material legal matters where it believes an unfavorable material outcome is reasonably possible and/or for which an estimate of possible losses can be made. Management does not believe that the resolution of these matters would have a material impact on the condensed consolidated financial statements.

10. BALANCE SHEET COMPONENTS

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of:

(in thousands)	June 30, 2022		December 31, 2021
Accrued employee compensation benefits	$	3,713	$	3,032
Accrued direct selling costs	$	1,513	$	1,011
Accrued other		2,721		2,662
Total	$	7,947	$	6,705

11. EQUITY-BASED COMPENSATION

In connection with the IPO, the Company assumed all outstanding equity awards of Zevia LLC on a one-to-two basis and assumed all equity incentive plans and related award agreements from Zevia LLC.

In July 2021, prior to the IPO, the Company adopted the Zevia PBC 2021 Equity Incentive Plan (the “2021 Plan") under which the Company may grant options, stock appreciation rights, restricted stock units ("RSUs"), restricted stock awards, other equity-based awards and incentive bonuses to employees, officers, non-employee directors and other service providers of the Company and its affiliates.

The number of shares available for issuance under the 2021 Plan is increased on January 1 of each year beginning in 2022 and ending with a final increase in 2031 in an amount equal to the lesser of: (i) 5% of the total number of shares of Class A common stock outstanding on the preceding December 31, and (ii) a smaller number of shares determined by the Company's Board of Directors.

In October and November 2021, the Company amended outstanding RSU awards and outstanding stock options held by certain senior management employees, in each case, to provide for accelerated vesting upon the holder’s retirement on or after January 17, 2022. For this purpose, “retirement” generally includes a resignation after the holder has reached 50 years of age with at least 10 years of service to the Company, so long as the holder provides a one-year advance notice of such retirement, unless otherwise waived by the Company's Board of Directors.

As of June 30, 2022, the 2021 Plan provides for future grants and/or issuances of up to approximately 3.1 million shares of our common stock. Stock-based awards under our employee compensation plans are made with newly issued shares reserved for this purpose.

Stock Options

The Company uses a Black-Scholes valuation model to measure stock option expense as of each respective grant date. Generally, stock option grants vest ratably over four years, have a ten-year term, and have an exercise price equal to the fair market value as of the grant date. The fair value of stock options is amortized to expense over the vesting period.

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The fair value of stock option awards granted during the period was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:

	Six Months Ended June 30,
	2022
Stock price	$	3.29
Exercise Price	$	3.29
Expected term (years)(1)		6.25
Expected volatility (2)		63.0	%
Risk-Free interest rate (3)		2.7	%
Dividend yield (4)		0.0	%

(1) Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.

(2) Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.

(3) The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.

(4) We have assumed a dividend yield of zero as we have no plans to declare dividends in the foreseeable future.

The weighted average grant date fair value for RSUs granted for the six months ended June 30, 2022 was $2.00.

A summary of stock option activity for the six months ended June 30, 2022:

	Shares			Weighted average exercise price		Weighted average remaining life		Intrinsic value (in thousands)
Outstanding Balance as of January 1, 2022		1,409,693		$	2.30
Granted		1,119,011		$	3.29
Exercised		(176,040	)	$	0.61
Forfeited and expired		(61,390	)	$	3.04
Balance as of June 30, 2022		2,291,274		$	2.89		8.1	$	2,585
Exercisable at the end of the period		916,036		$	1.12		6.0	$	2,155
Vested and expected to vest		2,291,274		$	2.89		8.1	$	2,585

The total intrinsic values of options exercised during the six months ended June 30, 2022 was $0.6 million.

As of June 30, 2022, total unrecognized compensation expense related to unvested stock options was $3.0 million, which is expected to be recognized over a weighted-average period of 3.4 years.

Restricted Phantom Units and Restricted Stock Units

In July 2021, the Company’s Board of Directors approved an amendment to 2,422,644 restricted phantom units (the "Restricted Phantom Units") previously granted by Zevia LLC (the “Phantom Unit Amendment"). The Phantom Unit Amendment changed the settlement feature of all outstanding Restricted Phantom Units so that following vesting, each award Restricted Phantom Units would be settled in shares of Class A common stock having a fair market value equal to (i) the number of Restricted Phantom Units subject to such award, multiplied by (ii) the difference between the fair market value of a share of Class A common stock and the grant date price per Restricted Phantom Unit. All other terms related to the Restricted Phantom Units remained unchanged. As a result of the Phantom Unit Amendment, the estimated fair value of the modified awards was $33.9 million and was recognized as an expense over the vesting period subsequent to the performance condition being met.

In March 2021, the Company's Board of Directors approved an amendment to the RSUs granted in August 2020 ("the RSU Amendment"). The RSU Amendment changed the vesting of such RSUs to occur as follows: (i) in the event of a change of control, the RSUs shall vest effective as of such change of control or (ii) in the event of an IPO, the RSUs shall vest in equal monthly installments over a 36-month period following the termination of any lockup period and shall be subject to the participant’s continued employment through such vesting date. Additionally, settlement shall occur within 30 days following the vesting of the RSUs and the participant shall be entitled to receive one share of Class A common stock for each vested RSU. All other terms remained unchanged. As a result of the RSU Amendment, the estimated fair value of the modified awards was $48.9 million and are being recognized as expense over the vesting period subsequent to the performance condition being met.

In November 2021, the Company's Board of Directors approved an amendment to its share-based compensation plans for certain senior management employees to allow immediate vesting upon retirement of all outstanding RSUs and stock options, and to extend the exercisability of outstanding stock options up to five years after retirement, if they meet certain conditions, including length of service and age, and they provide a one-year notice to the Board of Directors. During the six months ended June 30, 2022, two senior management employees retired from the Company and all outstanding awards and related stock compensation expense was accelerated through their retirement date.

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RSU activity during the six months ended June 30, 2022 was as follows:

	Shares				Weighted average grant date fair value		Aggregate Intrinsic Value (in thousands)
Balance unvested shares at January 1, 2022		7,981,444			$	5.33
Granted		990,143			$	3.37
Vested		(5,470,827	)	*	$	5.81
Forfeited		(25,654	)		$	7.97
Balance unvested at June 30, 2022		3,475,106			$	4.00		9,765
Expected to vest at June 30, 2022		3,475,106			$	4.00		9,765

*Shares vested includes approximately 1.9 million of RSUs which vested but are subject to a deferred settlement provision over the next three years.

As of June 30, 2022, total unrecognized compensation expense related to unvested RSUs was $18.6 million, which is expected to be recognized over a weighted-average period of 2.72 years.

12. REDEEMABLE CONVERTIBLE PREFERRED UNITS

Prior to the IPO and the Reorganization Transactions, Zevia LLC had various classes of redeemable convertible preferred units ("preferred units") outstanding that were issued at various times since inception.

In connection with the IPO and the Reorganization Transactions, all outstanding preferred units were reclassified into a single class of common units and each common unit outstanding after giving effect thereto was reclassified as two Class B units on a one-to-two basis.

13. SEGMENT REPORTING

The Company has one operating and reporting segment, which operates as a product portfolio with a single business platform. In reaching this conclusion, management considered the definition of the Chief Operating Decision Maker ("CODM"); how the business is defined by the CODM; the nature of the information provided to the CODM and how that information is used to make operating decisions; and how resources and performance are accessed. The Company’s CODM is the Chief Executive Officer. The results of the operations are provided to and analyzed by the CODM at the Company's level and accordingly, key resource decisions and assessment of performance are performed at the Company's level. The Company has a common management team across all product lines and does not manage these products as individual businesses and as a result, cash flows are not distinct.

14. MAJOR CUSTOMERS, ACCOUNTS RECEIVABLE AND VENDOR CONCENTRATION

The table below represents the Company’s major customers which accounted for more than 10% of total net sales for the following periods:

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Customer A		13	%		19	%		16	%		18	%
Customer B		12	%		17	%		11	%		17	%
Customer C		11	%	*			*				11	%
Customer D	*				11	%	*				11	%

The table below represents the Company’s customers which accounted for more than 10% of total accounts receivable, net as of:

	June 30, 2022			December 31, 2021
Customer B		17	%		13	%
Customer D		14	%		15	%
Customer E	*				11	%
Customer F	*				12	%

The table below represents raw material vendors that accounted for more than 10% of all raw material purchases for the following periods:

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Vendor A		29	%		30	%		28	%		32	%
Vendor B		14	%		24	%		17	%		23	%
Vendor C		12	%		12	%		12	%		13	%

* Less than 10% of total net sales, accounts receivable, net or raw material purchases.

15. LOSS PER SHARE

Basic earnings per share of Class A common stock is computed by dividing net loss attributable to the Company for the period by the weighted-average number of shares of Class A common stock outstanding during the same period. Diluted earnings per share of Class A common stock is computed by dividing net loss attributable to the Company by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. There were no shares of Class A or Class B common stock outstanding prior to July 22, 2021, and therefore, no earnings per share information has been presented for any period prior to that date.

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Shares of the Company’s Class B common stock do not share in the earnings or losses attributable to Zevia PBC and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented. Shares of the Company’s Class B common stock are, however, considered potentially dilutive shares of Class A common stock because shares of Class B common stock, together with the related Zevia LLC Class B Common Units, are exchangeable into shares of Class A common stock on a one-for-one basis.

Prior to the IPO, the Zevia LLC membership structure included various classes of preferred units. The Company analyzed the calculation of earnings per unit for periods prior to the IPO and determined that it resulted in values that would not be meaningful to the users of these condensed consolidated financial statements. Therefore, earnings per share information has not been presented for the three and six months ended June 30, 2021.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:

	Three Months Ended June 30,			Six Months Ended June 30,
	2022			2022
(in thousands, except for share and per share amounts)
Net loss per share:
Numerator:
Net loss and comprehensive loss	$	(14,796	)	$	(32,281	)
Less: net loss attributable to non-controlling interests		3,706			10,293
Net loss to Zevia PBC	$	(11,090	)	$	(21,988	)
Denominator:
Weighted-average shares of Class A common stock outstanding – basic		40,167,570			38,523,985
Weighted-average shares of Class A common stock outstanding – diluted		40,167,570			38,523,985
Loss per share of Class A common stock – basic	$	(0.28	)	$	(0.57	)
Loss per share of Class A common stock – diluted	$	(0.28	)	$	(0.57	)

Zevia LLC Class B Common Units, stock options and restricted stock units were evaluated under the treasury stock method for potential dilutive effects and were determined to be anti-dilutive. The following weighted average outstanding shares were excluded from the computation of diluted net loss per share available to common stockholders:

	Three Months Ended June 30,		Six Months Ended June 30,
	2022		2022
Zevia LLC Class B Common Units exchangeable to shares of Class A common Stock		27,080,067		28,229,324
Stock Options		1,997,721		1,742,949
Restricted stock units		3,781,796		4,164,669
Restricted stock units vested but unsettled		1,903,262		1,708,612

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16. INCOME TAXES AND TAX RECEIVABLE AGREEMENT

Income Taxes

The Company is the managing member of Zevia LLC and as a result, consolidates the financial results of Zevia LLC in the unaudited condensed consolidated financial statements of Zevia PBC. Zevia LLC is a pass-through entity for U.S. federal and most applicable state and local income tax purposes following the Reorganization Transactions effected in connection with our IPO. As an entity classified as a partnership for tax purposes, Zevia LLC is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Zevia LLC is passed through to its members, including the Company. The Company is taxed as a C corporation and pays corporate federal, state and local taxes with respect to income allocated from Zevia LLC based on Zevia PBC's economic interest in Zevia LLC, which was 63.9% as of June 30, 2022.

The provision for income taxes differs from the amount of income tax computed by applying the applicable U.S. statutory federal income tax rate of 21% to income before provision of income taxes due to Zevia LLC’s pass-through structure for U.S. income tax purposes, pass-through permanent differences, state franchise taxes, tax effects of stock-based compensation, and the valuation allowance against the deferred tax assets. Except for state franchise taxes, Zevia PBC did not recognize an income tax expense (benefit) on its share of pre-tax book loss, exclusive of the noncontrolling interest of 36.1%, due to the full valuation allowance against its deferred tax assets.

Tax Receivable Agreement

The Company expects to obtain an increase in its share of tax basis in the net assets of Zevia LLC when Class B units are exchanged by the holders of Class B units for shares of Class A common stock of the Company and upon other qualifying transactions. Each change in outstanding shares of Class A common stock of the Company results in a corresponding increase or decrease in the Company's ownership of Class A units of Zevia LLC. The Company intends to treat any exchanges of Class B units as direct purchases of LLC interests for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that Zevia PBC would otherwise pay in the future to various taxing authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.

In connection with the IPO, the Company entered into the Tax Receivable Agreement ("TRA") with continuing members of Zevia LLC and the shareholders of blocker companies of certain pre-IPO institutional investors (the "Direct Zevia Stockholders"). In the event that such parties exchange any or all of their Class B units for Class A common stock, the TRA requires the Company to make payments to such holders for 85% of the tax benefits realized, or in some cases deemed to be realized, by the Company by such exchange as a result of (i) certain favorable tax attributes acquired from the blocker companies in the course of mergers related to the IPO (including net operating losses and the blocker companies’ allocable share of existing tax basis), (ii) increases in tax basis resulting from Zevia PBC's acquisition of continuing members' Zevia LLC units in connection with the IPO and in future exchanges and, (iii) tax basis increases attributable to payments made under the TRA (including tax benefits related to imputed interest). The annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such benefits. The Company expects to benefit from the remaining 15% of any tax benefits that it may actually realize. The TRA payments are not conditioned upon any continued ownership interest in Zevia LLC or the Company. To the extent that the Company is unable to timely make payments under the TRA for any reason, such payments generally will be deferred and will accrue interest until paid.

The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Company generates each year and the tax rate then applicable. The Company calculates the liability under the TRA using a complex TRA model, which includes an assumption related to the fair market value of assets. Payments are generally due under the TRA within a specified period of time following the filing of the Company’s tax return for the taxable year with respect to which the payment obligation arises, although interest on such payments will begin to accrue at a rate of the Secured Overnight Financing Rate plus 300 basis points from the due date (without extensions) of such tax return.

The TRA provides that if (i) certain mergers, asset sales, other forms of business combinations, or other changes of control were to occur; (ii) there is a material uncured breach of any obligations under the TRA; or (iii) the Company elects an early termination of the TRA, then the TRA will terminate and the Company's obligations, or the Company's successor’s obligations, under the TRA will accelerate and become due and payable, based on certain assumptions, including an assumption that the Company would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the TRA and that any Class B units that have not been exchanged are deemed exchanged for the fair market value of the Company's Class A common stock at the time of termination.

As of June 30, 2022, management believes based on applicable accounting standards and the weight of all available evidence, it is not more likely than not that the Company will generate sufficient taxable income to realize the Company's deferred tax assets ("DTAs") including the difference in the Company's tax basis in excess of the financial reporting value for the Company's investment in Zevia LLC. Consequently, management has established a full valuation allowance against the Company's DTAs as of June 30, 2022 and determined that it was more likely than not that its DTAs subject to the TRA would not be realized as of June 30, 2022. The Company has not recognized a liability related to the tax savings it may realize from utilization of such DTAs. As of June 30, 2022, the total unrecorded TRA liability is approximately $52.5 million. If utilization of the DTAs subject to the TRA becomes more likely than not in the future, the Company will record a liability related to the TRA, to the extent probable at that time, which will be recognized as an expense within its condensed consolidated statements of operations and comprehensive loss.

17. SUBSEQUENT EVENTS

On July 7, 2022, the Chief Strategy Officer and Executive Vice President, Sales and Marketing informed the Company of his intention to retire effective July 15, 2022. On July 9, 2022, the Board of Directors approved the acceleration of all outstanding RSU awards and stock options and the Company will recognize the related equity-based compensation upon retirement in the third quarter of 2022.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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 condensed 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 high-growth beverage company that is disrupting the liquid refreshment beverage industry with great tasting, zero sugar beverages made with simple, plant-based ingredients. We are a Delaware public benefit corporation 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, vegan and zero sodium and include a variety of flavors across Soda, Energy Drinks, Organic Tea, Mixers, Kidz drinks and Sparkling Water. Our products are distributed across the U.S. and Canada through a diverse network of major retailers in the food, drug, warehouse club, mass, natural and e-commerce channels. We believe that consumers increasingly select beverage products based on taste, ingredients and fit with today’s consumer preferences, which has benefited the Zevia® brand and resulted in over one billion cans of Zevia sold to date.

Consumers can purchase our products in both brick-and-mortar and e-commerce channels. Zevia was initially distributed in the U.S. natural products retail channel, where we still maintain the leading position. Fueled by a loyal and growing consumer base, we expanded our presence online and into conventional food, drug, warehouse club and mass retailers. In the second quarter of 2022, Zevia was the highest selling carbonated soft drink brand on Amazon according to Stackline, which we believe is representative of an online product discovery and education-oriented purchasing process that is gaining traction among shoppers.

Key Events During the Second Quarter of 2022

On June 16, 2022, the Company announced that Padraic “Paddy” Spence, Chair of the Board of Directors (the “Board”) and Chief Executive Officer (“CEO”) of the Company, would step down as CEO effective August 1, 2022. Following such date, Mr. Spence will continue to serve on the Board as Non-Executive Chair.

In connection with Mr. Spence’s decision to step down from the position of CEO, and consistent with the succession plan developed and approved by the Board, the Board appointed Amy Taylor, the Company’s current President and a member of the Board, to serve as CEO, effective August 1, 2022. Following such date, Ms. Taylor will continue to serve as President and as a member of the Board.

IPO and Reorganization Transactions

On July 26, 2021, we completed our IPO of Class A common stock, in which we sold 10,700,000 shares to the underwriters. Shares of Class A common stock began trading on the New York Stock Exchange under the ticker symbol “ZVIA” on July 22, 2021. These shares were sold at an IPO price of $14.00 per share for net proceeds of approximately $139.7 million, after deducting underwriting discounts and commissions of $10.1 million.

Immediately following the closing of the IPO on July 26, 2021, Zevia LLC became the predecessor of Zevia PBC for financial reporting purposes. Zevia PBC 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, Zevia PBC operates and controls all of the business and affairs of Zevia LLC. This reorganization is accounted for as a reorganization of entities under common control. As a result, the condensed consolidated financial statements of the Company will recognize the assets and liabilities received in the reorganization at their historical carrying amounts, as reflected in the historical financial statements of Zevia LLC. Zevia PBC has consolidated Zevia LLC in its financial statements and records a noncontrolling interest related to the Class B units held by the Class B stockholders on its condensed consolidated balance sheet and statement of operations. As of June 30, 2022, Zevia PBC holds an economic interest of 63.9% in Zevia LLC and the remaining 36.1% represents the non-controlling interest.

Factors Affecting the Comparability of Our Results of Operations

As a result of a number of factors, our historical results of operations are not comparable from period to period and may not be comparable to our financial results of operations in future periods. Set forth below is a brief discussion of the key factors impacting the comparability of our results of operations.

Impact of the Reorganization Transactions

The Company is a corporation for U.S. federal and state income tax purposes. Our accounting predecessor, Zevia LLC, was and is treated as a flow-through entity for U.S. federal and most applicable state and local income tax purposes. As an entity classified as a partnership for tax purposes, Zevia LLC is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Zevia LLC is passed through to its members, including the Company. Zevia PBC is taxed as a corporation and pays corporate federal, state and local taxes with respect to income allocated from Zevia LLC based on the Company's economic ownership interest in Zevia LLC, which was 63.9% as of June 30, 2022. Accordingly, the historical results of operations and other financial information set forth in this Quarterly Report do not include a provision for U.S. federal income taxes.

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Following the completion of the Reorganization Transactions, the Company is taxed as a corporation and pays corporate federal, state and local taxes with respect to income allocated from Zevia LLC based on the Company's 63.9% economic interest in Zevia LLC.

Zevia LLC is the predecessor of the Company for financial reporting purposes. As a result, the condensed consolidated financial statements of the Company recognize the assets and liabilities received in the reorganization at their historical carrying amounts, as reflected in the historical condensed consolidated financial statements of Zevia LLC, the accounting predecessor.

In addition, in connection with the Reorganization Transactions and the IPO, we entered into the tax receivable agreement described in Note 16, - Income Taxes and Tax Receivable Agreement in the Notes to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.

Initial Public Offering

In July 2021, the Company completed its IPO, which significantly impacted our cash, debt, and equity balances. Concurrent with the IPO, the Company also terminated its previous credit facility, which reduced our outstanding debt to zero, and our interest expense was significantly reduced in the second half of 2021 and in 2022 relative to historical results.

Equity-Based Compensation

In March 2021, Zevia LLC modified certain outstanding RSU awards originally granted in August 2020 to provide for vesting as follows: (i) in the event of a change of control, the RSUs shall vest effective as of such change of control, or (ii) in the event of an IPO, the RSUs shall vest in equal monthly installments over a 36-month period following the termination of any lockup period and shall be subject to the participant’s continued employment through such vesting date. In July 2021, Zevia modified all outstanding restricted phantom unit awards to permit settlement into shares, eliminating the existing cash-settlement provision. These modifications resulted in the revaluation of the awards in accordance with US GAAP. No equity-based compensation had been recognized for all of the RSU and phantom awards as the qualifying vesting event (i.e., the IPO) was not probable. From completion of the IPO through June 30, 2022, the Company recognized $93.9 million of compensation expense attributable to these RSUs and restricted phantom unit awards, as well as other outstanding RSUs. The remaining unamortized fair value of the RSU awards will be recognized as equity-based compensation over the remaining service period of the awards, which vest over a 36-month period following the termination of the lockup period. Refer to Note 11 - Equity-based Compensation in the Notes to our Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report for unamortized equity-based compensation costs related to each type of equity-based incentive award.

Other Factors Affecting Our Performance

COVID-19 UPDATE

The ongoing COVID-19 pandemic, including the emergence of new variants and its resulting impacts on the global economy, including supply chain challenges and labor shortages, have led to broad-based inflation in input costs, logistics, manufacturing and labor costs. During the six months ended June 30, 2022, we have experienced supply chain constraints and a significant inflationary impact compared to the prior year. These impacts have created headwinds for our products that we expect to continue throughout 2022. These inflationary pressures have and could continue to impact our margins and operating results. We, along with our competitors, have increased pricing on a number of products in response to widespread inflation. 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, 2022 and 2021, respectively.

Components of Our Results of Operations

Net Sales

We generate net sales from sales of our products, including Soda, Energy Drinks, Organic Tea, Mixers, Kidz beverages and Sparkling Water, to our customers, which include grocery distributors, national retailers, natural products retailers, warehouse club and 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 include discounts, trade promotions, price allowances and product placement fees. The amounts for these incentives are deducted from gross sales to arrive at our net sales.

We have experienced substantial growth in net sales in the past three years. The following factors and trends in our business have driven net sales growth over this period and are expected to continue to be key drivers of our net sales growth 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 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, as well as entering into new categories.

We expect both new distribution and increased organic sales from existing outlets to contribute to growth going forward.

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.

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Cost of Goods Sold

Cost of goods sold consists of all costs to acquire and manufacture our products, including the cost of ingredients, packaging, in-bound freight and logistics and third-party production fees. 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. Our cost of goods sold is generally higher for products sold through our e-commerce and warehouse club channels than through our retail store channel due to additional packaging requirements. Our results of operations depend on our 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 aluminum cans. We expect over the long term that, as the scale of our business increases, we will purchase a greater percentage of our aluminum cans directly rather than through third-party manufacturers. We have long-term contracts with certain manufacturers governing pricing and other terms and minimum commitments on our part, but these contracts generally do not guarantee any minimum production volumes on the part of the manufacturers.

We expect our cost of goods sold to increase in absolute dollars as our volume increases.

We elected to classify shipping and handling costs for salable product outside of cost of goods sold, in selling and marketing expenses in our 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 and our continued focus on cost improvements, particularly in our supply chain.

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 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. Selling and marketing expenses also includes the incremental costs of obtaining contracts, such as sales commissions.

Our selling and marketing expenses are expected to increase in absolute dollars, both as a result of the increased warehousing and distribution costs resulting from increased net sales, which we expect to be partially offset by our continued focus on cost improvements in our supply chain, and as a result of increased focus on marketing.

General and Administrative Expenses

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 ("IT") and other functions. Our general and administrative expenses are expected to grow at a lower percentage of net sales over time.

Equity-Based Compensation Expense

Equity-based compensation expense consists of the recorded expense of equity-based compensation for our employees and 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. Over time, we expect our equity-based compensation expense to significantly decrease compared to the year ended December 31, 2021 as a result of the expiration of the lockup period in January 2022, which coincided with the end of the vesting period for the majority of the awards.

Depreciation and Amortization

Depreciation is primarily related to building, software applications, computer equipment and leasehold improvements. Intangible assets subject to amortization consist of customer relationships. Non-amortizable intangible assets consist of trademarks, which represents 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.

Other (expense) income, net

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

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Results of Operations

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
(in thousands, except per share amounts)
Net sales	$	45,542		$	34,352		$	83,576		$	65,046
Cost of goods sold		28,168			18,112			51,581			34,618
Gross profit		17,374			16,240			31,995			30,428
Operating expenses:
Selling and marketing		13,928			10,703			26,723			18,691
General and administrative		9,818			5,978			19,947			11,654
Equity-based compensation		8,043			36			16,944			73
Depreciation and amortization		328			230			679			474
Total operating expenses		32,117			16,947			64,293			30,892
Loss from operations		(14,743	)		(707	)		(32,298	)		(464	)
Other (expense) income, net		(44	)		(42	)		38			(38	)
Loss before income taxes		(14,787	)		(749	)		(32,260	)		(502	)
Provision for income taxes		(9	)		—			(21	)		—
Net loss and comprehensive loss		(14,796	)		(749	)		(32,281	)		(502	)
Net loss attributable to Zevia LLC prior to the Reorganization Transactions		—			749			—			502
Loss attributable to noncontrolling interest		3,706			—			10,293			—
Net loss attributable to Zevia PBC	$	(11,090	)	$	—		$	(21,988	)	$	—
Net loss per share attributable to common stockholders
Basic	$	(0.28	)	N/A			$	(0.57	)	N/A
Diluted	$	(0.28	)	N/A			$	(0.57	)	N/A

The following table presents selected items in our 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,						Six Months Ended June 30,
	2022			2021			2022			2021
Net sales		100	%		100	%		100	%		100	%
Cost of goods sold		62	%		53	%		62	%		53	%
Gross profit		38	%		47	%		38	%		47	%
Operating expenses:
Selling and marketing		31	%		31	%		32	%		29	%
General and administrative		22	%		17	%		24	%		18	%
Equity-based compensation		18	%		0	%		20	%		0	%
Depreciation and amortization		1	%		1	%		1	%		1	%
Total operating expenses		71	%		49	%		77	%		47	%
Loss from operations		(32	)%		(2	)%		(39	)%		(1	)%
Other (expense) income, net		(0	)%		(0	)%		0	%		(0	)%
Loss before income taxes		(32	)%		(2	)%		(39	)%		(1	)%
Provision for income taxes		(0	)%		—			(0	)%		—
Net loss and comprehensive loss		(32	)%		(2	)%		(39	)%		(1	)%
Net loss attributable to Zevia LLC prior to the Reorganization Transactions		0	%		2	%		0	%		1	%
Loss attributable to noncontrolling interest		8	%		—			12	%		—
Net loss attributable to Zevia PBC		(24	)%		—			(26	)%		—

Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021

Net sales

	Three Months Ended June 30,				Change
(in thousands)	2022		2021		Amount		Percentage
Net sales	$	45,542	$	34,352	$	11,190		33	%

Net sales were $45.5 million for the three months ended June 30, 2022 as compared to $34.4 million for the three months ended June 30, 2021. Net sales growth was driven by a 30% increase in the number of equivalized cases sold, primarily from distribution expansion of $7.1 million, organic growth, pricing increases and optimizing promotional investments. We define an equivalized case as a 288 fluid ounce case.

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Cost of Goods Sold

	Three Months Ended June 30,				Change
(in thousands)	2022		2021		Amount		Percentage
Cost of goods sold	$	28,168	$	18,112	$	10,056		56	%

Cost of goods sold was $28.2 million for the three months ended June 30, 2022 as compared to $18.1 million for the three months ended June 30, 2021. The increase of $10.1 million or 56%, was primarily due to a 30% increase in the shipment of equivalized cases resulting in $5.3 million higher costs of goods sold, and $5.1 million higher cost of goods sold due to broad-based inflation, slightly offset by product mix.

Gross Profit and Gross Margin

	Three Months Ended June 30,						Change
(in thousands)	2022			2021			Amount		Percentage
Gross profit	$	17,374		$	16,240		$	1,134		7	%
Gross margin		38	%		47	%

Gross profit was $17.4 million for the three months ended June 30, 2022 as compared to $16.2 million for the three months ended June 30, 2021. The increase in gross profit of $1.1 million, or 7%, was primarily driven by higher net sales, offset by higher cost of goods sold.

Gross margin for the three months ended June 30, 2022 declined to 38% from 47% in the prior-year period. The decline was primarily due to higher cost of goods sold as a result of broad-based inflation.

Selling and Marketing Expenses

	Three Months Ended June 30,				Change
(in thousands)	2022		2021		Amount		Percentage
Selling and marketing expenses	$	13,928	$	10,703	$	3,225		30	%

Selling and marketing expenses were $13.9 million for the three months ended June 30, 2022 as compared to $10.7 million for the three months ended June 30, 2021. The increase of $3.2 million, or 30%, was primarily due to higher freight and warehousing costs of $4.0 million largely due to increases in equivalized cases produced and sold, broad-based inflation and higher freight costs amidst a challenging transportation market in the U.S. and Canada. This increase was offset by a $0.8 million decrease in marketing spend largely due to shifting of timing and increased efficiency of marketing programs.

General and Administrative Expenses

	Three Months Ended June 30,				Change
(in thousands)	2022		2021		Amount		Percentage
General and administrative expenses	$	9,818	$	5,978	$	3,840		64	%

General and administrative expenses were $9.8 million for the three months ended June 30, 2022 as compared to $6.0 million for the three months ended June 30, 2021. The increase of $3.8 million, or 64%, was primarily driven by a $2.7 million increase in headcount and personnel costs to support our growth, and a $1.4 million increase in costs related to being a public company, including insurance, accounting, and legal and other professional fees.

Equity-Based Compensation Expenses

	Three Months Ended June 30,				Change
(in thousands)	2022		2021		Amount		Percentage
Equity-based compensation	$	8,043	$	36	$	8,007	N/M

Equity-based compensation expense was $8.0 million for the three months ended June 30, 2022, of which $3.8 million related to restricted stock unit awards that were accelerated upon retirement of certain senior management employees, and the remaining $4.2 million related to outstanding equity-based awards being recognized over the remaining service periods of the awards.

Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021

Net sales

	Six Months Ended June 30,				Change
(in thousands)	2022		2021		Amount		Percentage
Net sales	$	83,576	$	65,046	$	18,530		28	%

Net sales were $83.6 million for the six months ended June 30, 2022 as compared to $65.0 million for the six months ended June 30, 2021. Net sales growth was driven by a 26% increase in the number of equivalized cases sold, primarily from distribution expansion of $11.9 million, organic growth, and optimizing promotional investments. We define an equivalized case as a 288 fluid ounce case.

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Cost of Goods Sold

	Six Months Ended June 30,				Change
(in thousands)	2022		2021		Amount		Percentage
Cost of goods sold	$	51,581	$	34,618	$	16,963		49	%

Cost of goods sold was $51.6 million for the six months ended June 30, 2022 as compared to $34.6 million for the six months ended June 30, 2021. The increase of $17.0 million, or 49%, was primarily due to a 26% increase in the shipment of equivalized cases resulting in $8.9 million higher cost of goods sold, and $9.2 million higher cost of goods sold primarily due to broad-based inflation, slightly offset by product mix.

Gross Profit and Gross Margin

	Six Months Ended June 30,						Change
(in thousands)	2022			2021			Amount		Percentage
Gross profit	$	31,995		$	30,428		$	1,567		5	%
Gross margin		38	%		47	%

Gross profit was $32.0 million for the six months ended June 30, 2022 as compared to $30.4 million for the six months ended June 30, 2021. The increase in gross profit of $1.6 million, or 5%, was primarily driven by higher net sales, offset by higher cost of goods sold.

Gross margin for the six months ended June 30, 2022 declined to 38% from 47% in the prior-year period. The decline was primarily due to higher cost of goods sold as a result of broad-based inflation.

Selling and Marketing Expenses

	Six Months Ended June 30,				Change
(in thousands)	2022		2021		Amount		Percentage
Selling and marketing expenses	$	26,723	$	18,691	$	8,032		43	%

Selling and marketing expenses were $26.7 million for the six months ended June 30, 2022 as compared to $18.7 million for the six months ended June 30, 2021. The increase of $8.0 million or 43%, was primarily due to higher freight and warehousing costs of $7.8 million largely due to increases in equivalized cases produced and sold, broad-based inflation and higher freight costs amidst a challenging transportation market in the U.S. and Canada.

General and Administrative Expenses

	Six Months Ended June 30,				Change
(in thousands)	2022		2021		Amount		Percentage
General and administrative expenses	$	19,947	$	11,654	$	8,293		71	%

General and administrative expenses were $19.9 million for the six months ended June 30, 2022 as compared to $11.7 million for the six months ended June 30, 2021. The increase of $8.3 million, or 71%, was primarily driven by a $5.3 million increase in headcount and personnel costs to support our growth, and a $3.1 million increase in costs related to being a public company, including insurance, accounting, and legal and other professional fees.

Equity-Based Compensation Expense

	Six Months Ended June 30,				Change
(in thousands)	2022		2021		Amount		Percentage
Equity-based compensation	$	16,944	$	73	$	16,871	N/M

Equity-based compensation expense was $16.9 million for the six months ended June 30, 2022, of which $3.1 million related to RSU awards and phantom stock awards that vested as of the expiration of the IPO lock-up period in January 2022, $4.0 million related to RSU awards that were accelerated upon retirement of certain senior management employees, and the remaining $9.8 million related to outstanding equity-based awards being recognized over the remaining service periods of the awards.

Seasonality

Generally, we experience greater demand for our products during the second and third fiscal quarters of the year, 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, 2022, we had $49.6 million in cash and cash equivalents. We believe that our cash and cash equivalents as of June 30, 2022, together with our operating activities and available borrowings under the Secured Revolving Line of Credit, will provide adequate liquidity for ongoing operations, planned capital expenditures and other investments beyond the next 12 months.

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Our principal sources of liquidity are our existing cash and cash equivalents, cash generated from sales of our product, 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. We expect operating and capital expenditures to increase in the future as we expand business activities and increase headcount to promote growth. 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 transactions. Additional funds may not be available on terms favorable to us or at all. Also, we will continue to assess our liquidity needs as the effects of the COVID-19 pandemic, global health emergencies, inflationary pressures, and the hostilities in Eastern Europe continue to disrupt and impact the global and national economies and global financial markets. If the 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.

Prior to our IPO, we had financed our operations through private sales of equity securities and through sales of our products. In connection with our IPO, which was completed on July 26, 2021, we sold an aggregate of 10,700,000 shares of our Class A common stock at an IPO price of $14.00 per share and retained approximately $90.1 million in net proceeds, after deducting underwriting discounts and commissions and giving effect to the use of proceeds thereto. In addition, we incurred $8.4 million of offering costs in connection with the IPO. Upon consummation of the IPO, the Company became a holding company with no operations of its own. Accordingly, the Company will be 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, 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 $61.8 million through 2037. 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 $52.5 million through 2037.

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. 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 Line of Credit matures on February 22, 2027. There have been no amounts drawn from the Secured Revolving Line of Credit.

Loans under the Secured Revolving Line of Credit bear interest based on either, at our option, the Bloomberg Short-Term Bank Yield Index 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.

We are required under the Secured Revolving Line of Credit to comply with certain covenants, including, among others, by maintaining Liquidity (as defined therein) of $7 million at all times until December 31, 2023. Thereafter, 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.

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Cash Flows

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

	Six Months Ended June 30,
(in thousands)	2022			2021
Cash (used in) provided by:
Operating activities	$	(19,554	)	$	(37	)
Investing activities	$	28,443		$	(2,031	)
Financing activities	$	(2,351	)	$	(6,488	)

Net Cash Used in Operating Activities

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

Net cash used in operating activities of $19.6 million for the six months ended June 30, 2022 was primarily driven by a net loss of $32.3 million and by a net decrease in cash related to changes in operating assets and liabilities of $5.2 million, partially offset by non-cash expenses of $18.0 million primarily related to equity-based compensation. Changes in cash flows related to operating assets and liabilities were primarily due to an increase in accounts receivable of $8.1 million due to increases in net sales, an increase in inventories of $2.4 million in anticipation of future sales, offset by a $1.4 million decrease in prepaid expenses and other assets, primarily due to amortization of prepaid insurance policies, and a $4.2 million increase in accounts payable, accrued expenses and other current liabilities due to our overall growth.

Net cash used in operating activities of $0.0 million for the six months ended June 30, 2021 was primarily driven by net loss of $0.5 million and by a net decrease in cash related to changes in operating assets and liabilities of $0.4 million, partially offset by non-cash expenses of $0.8 million primarily related to depreciation and amortization. Changes in cash flows related to operating assets and liabilities primarily consisted of a $2.5 million increase in accounts receivable due to increase in net sales, and a $1.7 million increase in inventory due to the timing of inventory purchases, offset by a $3.8 million increase in accounts payable, accrued expenses and other current liabilities due to our overall growth.

Net Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities of $28.4 million for the six months ended June 30, 2022 was primarily due to proceeds from maturities of short-term investments of $30.0 million, offset by purchases of property and equipment of $1.6 million for marketing fixtures, software applications and computer equipment used in ongoing operations.

Net cash used in investing activities of $2.0 million for the six months ended June 30, 2021 was due to purchases of software applications and computer equipment used in ongoing operations.

Net Cash Used in Financing Activities

Net cash used in financing activities of $2.4 million for the six months ended June 30, 2022 was primarily due to minimum tax withholdings paid on behalf of employees for net share settlements of $2.1 million and payment of debt issuance costs of $0.3 million in connection with the Secured Revolving Line of Credit.

Net cash used in financing activities of $6.5 million for the six months ended June 30, 2021 was primarily driven by a distribution to unitholders for tax payments of $2.7 million and payment of deferred IPO-related costs of $3.8 million.

Non-GAAP Financial Measures

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

We calculate Adjusted EBITDA as net loss adjusted to exclude: (1) other income (expense), net, which includes interest (income) expense, foreign currency (gains) losses, and (gains) losses on disposal of fixed assets (2) provision (benefit) for income taxes (3) depreciation and amortization and (4) equity-based compensation. Adjusted EBITDA may in the future also 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 US GAAP. We believe that Adjusted EBITDA, when taken together with our financial results presented in accordance with US 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 US 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 (gains)/losses on disposal of fixed assets. 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) or income and other results stated in accordance with US GAAP.

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

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2022			2021			2022			2021
Net loss and comprehensive loss	$	(14,796	)	$	(749	)	$	(32,281	)	$	(502	)
Other expense (income), net*		44			42			(38	)		38
Provision for income taxes		9			—			21			—
Depreciation and amortization		328			230			679			474
Equity-based compensation		8,043			36			16,944			73
Adjusted EBITDA	$	(6,372	)	$	(441	)	$	(14,675	)	$	83

* Includes interest (income) expense, foreign currency (gains) losses, and (gains) losses on disposal of fixed assets.

Commitments

Our leases generally consist of long-term operating leases, which are payable monthly and relate to our office space and vehicles. For a further discussion on our debt and operating lease commitments as of June 30, 2022, see the sections above as well as Note 7, Debt, and Note 8, Leases, included in the condensed consolidated financial statements of this Quarterly Report.

On March 25, 2022, the Company entered into an amendment to the lease for our corporate headquarters offices to extend the term through December 31, 2023 and expand the total square footage from 17,923 square feet to 20,185 square feet commencing on May 1, 2022.

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, 2022.

Critical Accounting Policies and Estimates

Our condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report are prepared in accordance with US 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 Condensed Consolidated Financial Statements of this Quarterly Report for a discussion of recently issued accounting pronouncements not yet adopted.

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 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 $1.07 billion in annual revenue, (ii) we have more than $700.0 million in market value of our 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.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

Raw Material 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. We have a two-year agreement effective June 1, 2021 with a large multi-national ingredient company for the supply of stevia on similar terms as our prior agreement with the same ingredient company, including fixed pricing for the duration of the term. The prices of stevia and other ingredients we use are subject to many factors beyond our control, such as market conditions, climate change, supply chain challenges, and adverse weather conditions.

The price for aluminum cans also fluctuates depending on market conditions. There is currently an ongoing North American shortage of aluminum cans. We have contracts with certain suppliers of aluminum cans, but such contracts do not cover all of our expected future needs for aluminum cans. We might not be able to source enough aluminum cans in the future to meet our consumers’ demand. Our ability to continue to procure enough aluminum cans at reasonable prices will depend on future developments that are highly uncertain. For the six months ended June 30, 2022, a hypothetical 10%

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increase or 10% decrease in the weighted average cost of aluminum would have resulted in an increase of approximately $0.9 million or a decrease of $0.9 million, respectively, to cost of goods sold.

We are working to diversify our sources of supply and intend to enter into additional long-term contracts to better ensure stability of prices of our raw materials.

Foreign Exchange Risk

The majority of our sales and costs are denominated in United States dollars and are not subject to foreign exchange risk. As we source some ingredients and packaging materials from international sources, 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 we increase sourcing from outside the United States or increase net sales outside of the United States 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 six months ended June 30, 2022 and 2021.

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 our purchases of aluminum, diesel fuel, cartons and corrugate.

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Item 4. CONTROLS AND PROCEDURES.

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 and determined that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2022.

Management determined that as of June 30, 2022, 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.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are not subject to any material legal proceedings.

Item 1A. Risk Factors

Our business is subject to various risks, including those described in the section titled “Risk Factors” in Part I, Item 1A of our 2021 Annual Report. There have been no material changes from the risk factors disclosed in Item 1A of our Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information

None.

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EXHIBIT INDEX

Exhibit       No.	Description of Exhibit
3.1	Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 26, 2021).
3.2	Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on July 26, 2021).
4.1	Description of Securities (incorporated herein by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K filed with the SEC on March 11, 2022).
10.1#*	Separation Agreement and General Release of Claims dated May 6, 2022, between the Company and William D. Beech.
10.2#*	Addendum to Separation Agreement and General Release of Claims, dated May 13, 2022, between the Company and William D. Beech.
10.3#*	Amended & Restated Offer Letter dated June 15, 2022, between the Company and Amy Taylor.
10.4#*	Amended & Restated Severance Agreement dated June 15, 2022, between the Company and Amy Taylor.
10.5#	Form of Nonqualified Stock Options Grant Notice and Standard Terms and Conditions under the Zevia PBC 2021 Equity Incentive Plan (incorporated herein by reference to Exhibit 99.3 to the Company’s Registration Statement on Form S-8 filed with the SEC on July 26, 2021).
31.1*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32**	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	Inline XBRL Instance Document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith.
**	Furnished herewith.

# Management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Zevia PBC
By:		/s/ Amy E. Taylor
	Name:	Amy E. Taylor
	Title:	President and Chief Executive Officer
		(Principal Executive Officer)
	Date:	August 11, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:		/s/ Amy E. Taylor
	Name:	Amy E. Taylor
	Title:	President and Chief Executive Officer
		(Principal Executive Officer)
	Date:	August 11, 2022

By:		/s/ Denise D. Beckles
	Name:	Denise D. Beckles
	Title:	Chief Financial Officer
		(Principal Financial Officer)
	Date:	August 11, 2022

By:		/s/ Hany Mikhail
	Name:	Hany Mikhail
	Title:	Chief Accounting Officer
		(Principal Accounting Officer)
	Date:	August 11, 2022

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EX-10.1

Exhibit 10.1

SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS

This SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS (this “Agreement”) is entered into by and between Zevia PBC, a Delaware public benefit corporation (the “Company”), and William D. Beech (“Employee”). Employee and the Company are each referred to herein as a “Party” and collectively as the “Parties.”

WHEREAS, Employee’s employment with the Company terminated effective as of May 6, 2022 (such actual date of termination, the “Separation Date”);

WHEREAS, as of the Separation Date, the following equity awards of the Company remain outstanding: (i) options to purchase [26,778] shares of Class A common stock of the Company (the “Options”) pursuant to those certain Unit Option Agreements dated May 9, 2018 and July 17, 2020 and the Zevia LLC 2011 Unit Incentive Plan (collectively, the “Option Agreements”) and (ii) [75,000] vested restricted stock units pursuant to that certain Notice of Restricted Class C Common Unit Award and Restricted Class C Common Unit Agreement dated March 17, 2021 and the Zevia 2020 Incentive Plan (collectively, together with the Option Agreements, the “Award Agreements”);

WHEREAS, reference is made to that certain Employment, Confidential Information, and Invention Assignment Agreement between Employee and the Company, dated May 14, 2020 (the “Confidentiality Agreement”);and

WHEREAS, the Company wishes to provide Employee with certain severance payments and benefits, which are conditioned upon Employee’s execution, delivery, non-revocation of and compliance with this Agreement.

NOW, THEREFORE, in consideration of the promises set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Employee and the Company, the Parties hereby agree as follows:

1.Separation from Employment.

(a)The Company and Employee acknowledge and agree that Employee’s employment with the Company ended as of the Separation Date. As of the Separation Date, Employee is no longer employed by the Company or any other Company Party (as defined below), and Employee is deemed to have automatically resigned (i) as an officer of the Company and its affiliates (as applicable) and (ii) from the board of managers, board of directors or similar governing body of each of the Company and its affiliates (as applicable) and any other corporation, limited liability company, trade organization, or other entity in which the Company or any of its affiliates holds an equity interest or with respect to which board or similar governing body Employee serves as the designee or other representative of the Company or any of its affiliates.

(b)Employee acknowledges and agrees that Employee has been paid in full all bonuses, been provided all benefits, and otherwise received all wages, compensation and other sums that Employee has been owed by each Company Party. Employee further acknowledges and

agrees that Employee has received all leaves (paid and unpaid) that Employee has been entitled to receive from each Company Party.

2.Separation Payments and Benefits. Provided that Employee: (x) executes this Agreement and returns a copy of this Agreement that has been executed by Employee to the Company so that it is received by Soley Van Lokeren, Senior Vice President, People, 15821 Ventura Blvd., Suite 145, Encino, California 91436 (email: soley@zevia.com) no later than 5:00 pm PT on May 27, 2022; (y) does not revoke this Agreement during the Release Revocation Period (as defined below); and (z) remains in compliance with the other terms and conditions set forth in this Agreement (including under Section 5), Employee shall receive the following separation payments and benefits:

(a)aggregate severance payments in an amount equal to $280,000.00 payable in equal installments in accordance with the Company’s normal payroll practices for the 12 months following the expiration of the Release Revocation Period; and

(b)subject to Employee’s timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and subject to Employee’s copayment of premium amounts at the active employees’ rate, reimbursement for the amount of the remainder of the premiums for Employee’s and Employee’s covered dependents’ participation in the Company’s group health plans pursuant to COBRA for a period ending on the earliest of (A) the first anniversary of the Separation Date, (B) Employee first becoming eligible after the Employee’s COBRA election for other employer-sponsored group health benefits or Medicare, and (C) the expiration of Employee’s rights under COBRA. Employee agrees to promptly notify the Company in the event that Employee first becomes eligible for other employer-sponsored group health benefits or Medicare after the date of Employee’s COBRA election.

Employee acknowledges and agrees that the consideration referenced in this Section 2 represents the entirety of the amounts Employee is eligible to receive as severance pay and benefits from the Company or any other Company Party. Employee further acknowledges that as of the Separation Date, Employee automatically forfeited all then unvested Options, and such awards shall terminate automatically and without any further action by the Company and at no cost to the Company.

3.Release of Liability for Claims.

(a)For good and valuable consideration, including the consideration set forth in Section 2 (and any portion thereof), Employee knowingly and voluntarily (for Employee, Employee’s family, and Employee’s heirs, executors, administrators and assigns) hereby releases and forever discharges the Company, Zevia LLC (together with the Company, the “Zevia Affiliated Entities”) and their respective affiliates, predecessors, successors, subsidiaries and benefit plans, and the foregoing entities’ respective equity-holders, officers, directors, managers, members, partners, employees, agents, representatives, and other affiliated persons, and the Company’s and its affiliates’ benefit plans (and the fiduciaries and trustees of such plans) (collectively, the “Company Parties”), from liability for, and Employee hereby waives, any and all claims, damages, or causes of action of any kind related to Employee’s ownership of any interest in any Company Party, Employee’s employment with any Company Party, the termination of such employment, and any other acts or omissions related to any matter occurring on or prior to the date

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that Employee executes this Agreement, including (i) any alleged violation through such time of: (A) any federal, state or local anti-discrimination or anti-retaliation law, regulation or ordinance, including the Age Discrimination in Employment Act of 1967 (including as amended by the Older Workers Benefit Protection Act), Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, Sections 1981 through 1988 of Title 42 of the United States Code and the Americans with Disabilities Act of 1990; (B) the Employee Retirement Income Security Act of 1974 (“ERISA”); (C) the Immigration Reform Control Act; (D) the National Labor Relations Act; (E) the Occupational Safety and Health Act; (F) the Family and Medical Leave Act of 1993; (G) California’s Fair Employment and Housing Act, the California Pregnancy Disability Leave law, the California Family Rights Act, the Healthy Workplace Healthy Family Act of 2014, the California Labor Code, the Private Attorneys’ General Act (Labor Code§ 2698 et seq.), any Wage Orders issued by the California Industrial Welfare Commission and the California Business and Professionals Code; (H) any federal, state or local wage and hour law; (I) any other local, state or federal law, regulation or ordinance; or (J) any public policy, contract, tort, or common law claim; (ii) any allegation for costs, fees, or other expenses including attorneys’ fees incurred in or with respect to a Released Claim; (iii) any and all rights, benefits or claims Employee may have under any employment contract, incentive compensation plan or equity-based plan with any Company Party [or to any ownership interest in any Company Party] (other than any rights under the Award Agreements); and (iv) any claim for compensation or benefits of any kind not expressly set forth in this Agreement (collectively, the “Released Claims”). This Agreement is not intended to indicate that any such claims exist or that, if they do exist, they are meritorious. Rather, Employee is simply agreeing that, in exchange for any consideration received by Employee pursuant to Section 2, any and all potential claims of this nature that Employee may have against any of the Company Parties, regardless of whether they actually exist, are expressly settled, compromised and waived. THIS RELEASE INCLUDES MATTERS ATTRIBUTABLE TO THE SOLE OR PARTIAL NEGLIGENCE (WHETHER GROSS OR SIMPLE) OR OTHER FAULT, INCLUDING STRICT LIABILITY, OF ANY OF THE COMPANY PARTIES.

(b)Section 1542 of the Civil Code of the State of California (“Section 1542”) provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

Employee waives all rights under Section 1542 or any other law or statute of similar effect in any jurisdiction with respect to the Released Claims. Employee acknowledges that Employee understands the significance and specifically assumes the risk regarding the consequences of such release and such specific waiver of Section 1542.

(c)For the avoidance of doubt, nothing in this Agreement releases Employee’s rights to receive payments or benefits pursuant to Section 2. Further, in no event shall the Released Claims include (i) any claim that arises after the date that Employee signs this Agreement; (ii) any claim to vested benefits under an employee benefit plan that is subject to ERISA; and (iii) any claim for breach of, or otherwise arising out of, this Agreement. Further notwithstanding this

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release of liability, nothing in this Agreement prevents Employee from filing any non-legally waivable claim (including a challenge to the validity of this Agreement) with the Equal Employment Opportunity Commission (“EEOC”) or comparable state or local agency or participating in (or cooperating with) any investigation or proceeding conducted by the EEOC or comparable state or local agency or cooperating in any such investigation or proceeding; however, Employee understands and agrees that Employee is waiving any and all rights to recover any monetary or personal relief from a Company Party as a result of such EEOC or comparable state or local agency or proceeding or subsequent legal actions. Further, nothing in this Agreement prohibits or restricts Employee from filing a charge or complaint with, or cooperating in any investigation with, the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, or any other governmental agency, entity or authority (each, a “Government Agency”). This Agreement does not limit Employee’s right to receive an award for information provided to a Government Agency.

4.Representations and Warranties Regarding Claims. Employee represents and warrants that Employee has not made any assignment, sale, delivery, transfer or conveyance of any rights Employee has asserted or may have against any of the Company Parties with respect to any Released Claim.

5.Restrictive Covenants.

(a)Employee acknowledges and agrees that Employee has continuing obligations to the Company and its affiliates pursuant to the Confidentiality Agreement, including obligations relating to confidentiality, intellectual property and non-solicitation (collectively, the “Covenants”). In entering into this Agreement, Employee acknowledges the continued effectiveness and enforceability of the Covenants, and Employee expressly reaffirms Employee’s commitment to abide by, and agrees that Employee will abide by, the terms of the Covenants.

(b)In consideration of the mutual covenants in this Section 5(b), Employee shall refrain from making (or causing or assisting any other person or entity to make) any oral or written statements about the Company and any Company Party that (i) are slanderous, libelous, disparaging or defamatory or (ii) place the Company, any Company Party or any of their respective directors, officers, managers, members, employees, consultants, agents or representatives in a false light before the public; and the Company shall instruct members of the Board of Directors of the Company and the Company’s officers and human resources personnel to refrain from making (or causing or assisting any other person or entity to make) any oral or written statements about Employee that (A) are slanderous, libelous, disparaging or defamatory or (B) place Employee in a false light before the public. Nothing in this Agreement or the Confidentiality Agreement prevents Employee from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that Employee has reason to believe is unlawful.

(c)Employee agrees that this Agreement is confidential and agrees not to disclose any information regarding the terms of this Agreement, except to Employee’s immediate family and any tax, legal or other counsel Employee has consulted regarding the meaning or effect hereof or as required by law, and Employee will instruct each of the foregoing not to disclose the same to anyone; provided that to the extent that the terms of this Agreement are disclosed by the Company

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in a public filing, this Section 5(c) shall no longer restrict Employee to the extent of such disclosed terms.

6.Covenant to Cooperate in Legal Proceedings. Employee agrees to reasonably cooperate with the Zevia Affiliated Entities in any internal investigation, any administrative, regulatory, or judicial proceeding or any dispute with a third party. Employee understands and agrees that Employee’s cooperation may include, but not be limited to, making Employee available to the Zevia Affiliated Entities upon reasonable notice for interviews and factual investigations; appearing at the Zevia Affiliated Entities’ request to give testimony without requiring service of a subpoena or other legal process; volunteering to the Zevia Affiliated Entities pertinent information received by Employee in Employee’s capacity as an employee; and turning over to the Zevia Affiliated Entities all relevant documents which are or may come into Employee’s possession in Employee’s capacity as an employee or otherwise, all at times and on schedules that are reasonably consistent with Employee’s other permitted activities and commitments. The Company shall promptly reimburse Employee for all expenses reasonably incurred by Employee arising out of or relating to Employee’s compliance with the provisions of this Section.

7.Employee’s Acknowledgements. By executing and delivering this Agreement, Employee expressly acknowledges that:

(a)Employee has been given at least 21 days to review and consider this Agreement. If Employee signs this Agreement before the expiration of 21 days after Employee’s receipt of this Agreement, Employee has knowingly and voluntarily waived any longer consideration period than the one provided to Employee. No changes (whether material or immaterial) to this Agreement shall restart the running of this 21-day period;

(b)Employee is receiving, pursuant to this Agreement, consideration in addition to anything of value to which Employee is already entitled;

(c)Employee has been advised, and hereby is advised in writing, to discuss this Agreement with an attorney of Employee’s choice and that Employee has had an adequate opportunity to do so prior to executing this Agreement;

(d)Employee fully understands the final and binding effect of this Agreement; the only promises made to Employee to sign this Agreement are those stated herein; and Employee is signing this Agreement knowingly, voluntarily and of Employee’s own free will, and that Employee understands and agrees to each of the terms of this Agreement;

(e)The only matters relied upon by Employee in causing Employee to sign this Agreement are the provisions set forth in writing within the four corners of this Agreement; and

(f)No Company Party has provided any tax or legal advice regarding this Agreement, and Employee has had an adequate opportunity to receive sufficient tax and legal advice from advisors of Employee’s own choosing such that Employee enters into this Agreement with full understanding of the tax and legal implications thereof.

8.Revocation Right. Notwithstanding the initial effectiveness of this Agreement, Employee may revoke the delivery (and therefore the effectiveness) of this Agreement within the seven-day

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period beginning on the Signing Date (such seven-day period being referred to herein as the “Release Revocation Period”). To be effective, such revocation must be in writing signed by Employee and must be delivered personally or by courier to the Company so that it is received by Soley Van Lokeren, Senior Vice President, People, 15821 Ventura Blvd., Suite 145, Encino, California 91436 (email: soley@zevia.com) no later than 11:59 pm PT on the last day of the Release Revocation Period. If an effective revocation is delivered in the foregoing manner and timeframe, the release of claims set forth in Section 3 will be of no force or effect, Employee will not receive the payments or benefits set forth in Section 2, and the remainder of this Agreement will remain in full force and effect.

9.Return of Property. Other than with respect to property specifically authorized by the Company as an exclusion from this Section 9, Employee represents and warrants that Employee has returned to the Company all property belonging to the Company or any other Company Party, including all computer files, electronically stored information, computers and other materials and items provided to Employee by the Company or any other Company Party in the course of Employee’s employment and Employee further represents and warrants that Employee has not maintained a copy of any such materials or items in any form.

10.Governing Law; Arbitration. This Agreement and its performance will be construed and interpreted in accordance with the laws of the State of California, without regard to principles of conflicts of law that would apply the substantive law of any other jurisdiction. For the avoidance of doubt, the arbitration and equitable relief provisions of that certain Mutual Arbitration Agreement entered into by and between the Company and Employee, dated May 14, 2020, shall apply to any dispute arising under this Agreement.

11.Counterparts. This Agreement may be executed in several counterparts, including by .PDF or .GIF attachment to email or by facsimile, each of which is deemed to be an original, and all of which taken together constitute one and the same agreement.

12.Amendment; Entire Agreement. This Agreement may not be changed orally but only by an agreement in writing agreed to and signed by both Parties. This Agreement and the Award Agreements constitute the entire agreement of the Parties with regard to the subject matter hereof and supersede all prior and contemporaneous agreements and understandings, oral or written, between Employee and any Company Party with regard to the subject matter hereof.

13.Third-Party Beneficiaries. Employee expressly acknowledges and agrees that each Company Party that is not a party to this Agreement shall be a third-party beneficiary of Sections 3, 5, 6 and 9 and entitled to enforce such provisions as if it were a party hereto.

14.Further Assurances. Employee shall, and shall cause Employee’s affiliates, representatives and agents to, from time to time at the request of the Company and without any additional consideration, furnish the Company with such further information or assurances, execute and deliver such additional documents, instruments and conveyances, and take such other actions and do such other things, as may be reasonably necessary or desirable, as determined in the sole discretion of the Company, to carry out the provisions of this Agreement.

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15.Severability. Any term or provision of this Agreement (or part thereof) that renders such term or provision (or part thereof) or any other term or provision (or part thereof) hereof invalid or unenforceable in any respect shall be severable and shall be modified or severed to the extent necessary to avoid rendering such term or provision (or part thereof) invalid or unenforceable, and such modification or severance shall be accomplished in the manner that most nearly preserves the benefit of the Parties’ bargain hereunder.

16.Interpretation. The Section headings have been inserted for purposes of convenience and shall not be used for interpretive purposes. The words “hereof,” “herein” and “hereunder” and other compounds of the word “here” shall refer to the entire Agreement and not to any particular provision hereof. The use herein of the word “including” following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation”, “but not limited to”, or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter. The word “or” as used herein is not exclusive and is deemed to have the meaning “and/or.” Unless the context requires otherwise, all references herein to a law, agreement, instrument or other document shall be deemed to refer to such law, agreement, instrument or other document as amended, supplemented, modified and restated from time to time to the extent permitted by the provisions thereof. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against any Party, whether under any rule of construction or otherwise. This Agreement has been reviewed by each of the Parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of the Parties.

17.No Assignment. No right to receive payments and benefits under this Agreement shall be subject to set off, offset, anticipation, commutation, alienation, assignment, encumbrance, charge, pledge or hypothecation or to execution, attachment, levy, or similar process or assignment by operation of law.

18.Withholdings; Deductions. The Company may withhold and deduct from any payments or benefits made or to be made pursuant to this Agreement (a) all federal, state, local and other taxes as may be required pursuant to any law or governmental regulation or ruling and (b) any deductions consented to in writing by Employee.

19.Section 409A. This Agreement and the benefits provided hereunder are intended to be exempt from, or compliant with, the requirements of Section 409A of the Internal Revenue Code of 1986 and the Treasury regulations and other guidance issued thereunder (collectively, “Section 409A”) and shall be construed and administered in accordance with such intent. Each installment payment under this Agreement shall be deemed and treated as a separate payment for purposes of Section 409A. The Company has determined that Employee is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code as of the Separation Date. Notwithstanding the foregoing, the Company makes no representations that the benefits provided under this Agreement are exempt from the requirements of Section 409A and in no event shall the Company or any other Company Party be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by Employee on account of non-compliance with Section 409A.

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8

Exhibit 10.1

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates set forth beneath their names below, effective for all purposes as provided above.

EMPLOYEE

/s/ William D. Beech

William D. Beech

ZEVIA PBC

By: /s/ Soley Van Lokeren

Name: Soley Van Lokeren

Title: Sr. VP, People

Signature Page to

Separation Agreement

and General Release of Claims

EX-10.2

Exhibit 10.2

ADDENDUM

TO SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS

This ADDENDUM (this “Addendum”) TO SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS (the “Agreement”) is entered into by and between Zevia PBC, a Delaware public benefit corporation (the “Company”), and William D. Beech (“Employee”). Employee and the Company are each referred to herein as a “Party” and collectively as the “Parties.”

WHEREAS, pursuant to Section 12 of the Agreement, the Parties may amend the Agreement in writing agreed to and signed by both Parties;

WHEREAS, pursuant to the Agreement, Employee’s employment with the Company terminated effective as of May 6, 2022 (such actual date of termination, the “Separation Date”);

WHEREAS, this Addendum corrects an administrative error contained in the Agreement.

NOW, THEREFORE, in consideration of the promises set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Employee and the Company, the Parties hereby agree as follows:

That the second WHEREAS clause in the Agreement is hereby amended and restated in its entirety to read as follows:

“WHEREAS, as of the Separation Date, the following equity awards of the Company remain outstanding: (i) options to purchase 26,151 shares of Class A common stock of the Company (the “Options”) pursuant to those certain Unit Option Agreements dated May 9, 2018 and July 17, 2020 and the Zevia LLC 2011 Unit Incentive Plan (collectively, the “Option Agreements”) and (ii) 75,000 vested restricted stock units pursuant to that certain Notice of Restricted Class C Common Unit Award and Restricted Class C Common Unit Agreement dated March 17, 2021 and the Zevia 2020 Incentive Plan (collectively, together with the Option Agreements, the “Award Agreements”);”

All capitalized terms used but not otherwise defined herein shall have the meaning assigned to them in the Agreement. Except as expressly amended hereby, the Agreement shall remain in full force and effect in accordance with its terms.

IN WITNESS WHEREOF, the Parties have executed this Addendum as of the dates set forth beneath their names below, effective for all purposes as provided above.

EMPLOYEE

/s/ William D. Beech

William D. Beech

ZEVIA PBC

By: /s/ Soley Van Lokeren

Name: Soley Van Lokeren

Title: Sr. VP, People

A-2

EX-10.3

Exhibit 10.3

June 15, 2022

AMY TAYLOR

Re: Offer of Promotion by Zevia PBC

Dear Amy:

I am very pleased to confirm our offer to you of continued employment with Zevia PBC (the “Company” or “Zevia”) in the role of President and Chief Executive Officer. This offer and your continued employment relationship will be subject to the terms and conditions in this promotion letter (this “Letter”). The Company reserves the right to modify job titles, reporting structures, wages and benefits from time to time as it deems necessary and appropriate. The terms and conditions described in this Letter, including the compensation described herein, will become effective as of August 1, 2022, and will supersede and replace that certain offer letter dated June 9, 2021.

1.Effective August 1, 2022 (your “Start Date”), your job title will be President and Chief Executive Officer, and you will report to the Board of Directors of the Company (the “Board”).

2.As a regular full-time employee, you will be paid on a semi-monthly basis at an annual rate of $600,000.00 (your “Base Salary”), less payroll deductions and all required withholdings. The position is classified as exempt from the overtime provisions of state and federal law, which means you will not be paid overtime compensation. Your position will be subject to job performance reviews consistent with the review process applicable to other members of the Company’s executive leadership team.

3.You agree to relocate from your current residence to the Los Angeles, California metropolitan area by no later than August 28, 2022. You will also be eligible to receive an allowance of $50,000 for moving expenses at the time of your relocation to California, which allowance shall be grossed up to cover the applicable tax withholdings on the allowance and the gross-up amount. The allowance will be paid via payroll on your first payroll check after relocation and will be subject to payroll deductions and all required withholdings.

4.In connection with your promotion, the Company will pay you a cash retention bonus of $200,000.00 (the “Retention Bonus”), less payroll deductions and all required withholdings, within 60 days following August 1, 2022. In the event your employment with the Company is terminated by the Company for Cause (as defined in that certain Amended and Restated Severance Agreement between you and the Company effective as of August 1, 2022 (the “Severance Agreement”)) or you resign without Good Reason (as defined in the Severance Agreement), in either case, (i) on or prior to August 1, 2023, you will be required to repay the gross amount of the Retention Bonus, or (ii) after August 1, 2023, but on or prior to August 1, 2024, you will be required to repay one-half of the gross amount of the Retention Bonus,

 

in each case, with such repayment due within 60 days of the effective date of such termination or resignation.

5.You will also be eligible to earn discretionary merit-based compensation and the Company reserves the right to modify its plan for such potential additional compensation as circumstances change. Subject to you continuing employment with the Company through the bonus payment date, you will be eligible to earn an annual bonus upon your achieving certain milestones that will be determined by the Company’s Board of Directors in consultation with you. Your bonus target for 2022 is 100% of your Base Salary and will be paid no later than March 31, 2023.

6.As approved by unanimous written consent of the Board on the date hereof, you will be granted options to purchase 463,745 shares of the Company’s common stock (the “Options”), subject to the terms and conditions set forth in the applicable award agreement and the Company’s equity incentive plan. 231,873 of the shares subject to the Option will have a per share exercise price equal to the closing price of the Company’s common stock on the Start Date, and 231,872 of the shares subject to the Option will have a per share exercise price equal to the greater of $7.50 or the closing price of the Company’s common stock on Start Date.

7.Subject to the approval of the Board or the Compensation Committee of the Board (the “Compensation Committee”), you will receive a long-term incentive award for 2023 in a form of award that is no less favorable than the awards granted to other executives of the Company, with the minimum size of such award equal to the lesser of: (i) 1% of the outstanding equity of Company or (ii) a grant date fair value equal to $1.8 million.

8.You will continue to be eligible for benefits, vacation, sick/personal days, and company holidays at least as favorable as those benefits offered to other members of the Company’s executive leadership team. You will also continue to be entitled to reimbursement for all reasonable and necessary out-of-pocket business, entertainment, and travel expenses you incur in connection with the performance of your duties hereunder in accordance with the Company’s expense reimbursement policies and procedures as in effect from time to time.

9.As an employee of the Company, you will continue to have access to certain confidential information of the Company and you may, during the course of your employment, develop certain information or inventions which will be the property of the Company. To protect the interests of the Company, you have previously executed the Company’s Confidential Information and Invention Assignment Agreement (the “Confidentiality Agreement”) and Mutual Arbitration Agreement (the “Arbitration Agreement”). You hereby acknowledge the continued effectiveness and enforceability of the Confidentiality Agreement and the Arbitration Agreement, and you expressly reaffirm your commitment to abide by the terms of the Confidentiality Agreement and the Arbitration Agreement. We wish to impress upon you that we do not want you, and we hereby direct you not, to bring with you any confidential or proprietary material of any former employer or to violate any other obligations you may

15821 Ventura Boulevard, Suite 145

Encino, California 91436

 

have to any former employer. During the period that you render services to the Company, you agree to not engage in any employment, business or activity that is in any way competitive with the business or then-proposed business of the Company. You will disclose to the Company in writing any other gainful employment, business or activity that you are currently associated with or participate in that competes with the Company. You represent that your signing of this Letter, the Confidentiality Agreement and your continued employment with the Company will not violate any agreement currently in place between yourself and past employers. For the avoidance of doubt, nothing in this Letter or the Confidentiality Agreement prevents you from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that you have reason to believe is unlawful.

10.You will continue to be an at-will employee of the Company, which means the employment relationship can be terminated by either of us for any reason, at any time, with or without notice, subject to the terms of the Severance Agreement.

11.If you decide to accept our offer, and I hope you will, please sign the enclosed copy of this Letter in the space indicated and return it to our SVP, People at soley@zevia.com. Your signature will acknowledge that you have read and understood and agreed to the terms and conditions of this Letter. Should you have anything else that you wish to discuss, please do not hesitate to call me.

12.As a Zevia employee, you are required to follow its rules and regulations, and you have previously acknowledged in writing that you have read the Zevia employee handbook, accessible through Zevia’s HR department and public network. In order to retain necessary flexibility in the administration of its policies and procedures, Zevia reserves the right to change or revise its policies, procedures, and benefits at any time.

13.This Letter, the Confidentiality Agreement, the Arbitration Agreement, the Severance Agreement and any outstanding equity award agreements constitute the entire agreement between you and the Company regarding the terms and conditions of your continued employment, and they supersede all prior negotiations, representations or agreements between you and the Company. The provisions of this agreement regarding “at will” employment and arbitration may only be modified by a document signed by you and either an authorized member of the Board or an authorized officer of the Company, as approved by the Board or the Compensation Committee of the Board.

We look forward to continuing to work with you at the Company. We are very excited about your new role and this new phase for Zevia. Please sign and date this Letter on the spaces provided below to acknowledge your acceptance of the terms of this agreement.

15821 Ventura Boulevard, Suite 145

Encino, California 91436

 

Very truly yours,

/s/ Philip H. O'Brien

PHILIP H. O’BRIEN

Lead Independent Director and Chair of the Compensation Committee

I have read and understand this Letter and hereby acknowledge, accept and agree to the terms set forth above and further acknowledge that no other commitments were made to me as part of my promotion offer except as specifically set forth herein.

AMY TAYLOR

/s/ Amy Taylor

15821 Ventura Boulevard, Suite 145

Encino, California 91436

EX-10.4

Exhibit 10.4

AMENDED AND RESTATED SEVERANCE AGREEMENT

This AMENDED AND RESTATED SEVERANCE AGREEMENT (this “Agreement”) is entered into effective as of August 1, 2022 (the “Effective Date”), by and between Zevia PBC, a Delaware public benefit corporation (the“Company”), and Amy Taylor (“Executive”) and amends and restates in its entirety that certain Severance Agreement between the Company and Executive dated March 8, 2022.

1.At-Will Employment. Executive acknowledges and agrees that Executive’s employment relationship with the Company is at will. This Agreement does not in any way alter Executive’s at-will status or limit the Company’s or Executive’s right to terminate Executive’s employment with the Company at any time, with or without Cause or advance notice.

2.Definitions.

(a)“Affiliate” means (i) all persons or entities directly or indirectly controlling, controlled by or under common control with the Company, (ii) all entities in which the Company directly or indirectly owns an equity interest; and (iii) all predecessors, successors and assigns of those Affiliates identified in (i) and (ii).

(b)“Arbitration Agreement” means that certain Mutual Arbitration Agreement between Executive and the Company.

(c)“Board” means the Board of Directors of the Company.

(d)“Cause” means (i) Executive’s failure to materially perform Executive’s duties and responsibilities to the Company and the Affiliates (other than any such failure resulting from incapacity due to physical or mental illness), other than any failure which is capable of cure and is cured by Executive within 15 days following Executive’s receipt of notice from the Company; (ii) Executive’s failure to comply with any valid and legal directive of the Board, other than any failure which is capable of cure and is cured by Executive within 15 days following Executive’s receipt of notice from the Company; (iii) Executive’s engagement in conduct, which demonstrably results in material financial or reputational harm to the Company or the Affiliates; (iv) Executive’s embezzlement, misappropriation or fraud, whether or not related to Executive’s employment with the Company; (v) Executive’s conviction of or plea of guilty or nolo contendere to a felony (or state law equivalent); or (vi) Executive’s material breach of this Agreement, the Confidentiality Agreement, or any other written agreement between the Company and Executive or any of the Company’s material written policies, including its code of conduct, other than any failure which is capable of cure and is cured by Executive within 15 days following Executive’s receipt of notice from the Company.

(e)“Change in Control” has the meaning set forth in the Zevia PBC 2021 Equity Incentive Plan or any successor equity incentive plan.

(f)“CIC Protection Period” means the 18-month period beginning on the consummation of a Change in Control.

(g)“Confidentiality Agreement” means that certain Employment, Confidential Information, and Invention Assignment Agreement between Executive and the Company.

(h)“Disability” means Executive is unable to perform each of the essential duties of Executive’s position by reason of a medically determinable physical or mental impairment which is potentially permanent in character or which can be expected to last for a continuous period of not less than 12 months. A determination of Disability shall be made by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances, and in this respect, Executive shall submit to an examination by a physician upon request by the Board.

(i)“Good Reason” means the occurrence of any one or more of the following: (i) a material diminution in Executive’s annual base salary or target annual bonus; (ii) a material diminution in Executive’s authority, duties or responsibilities with the Company or an Affiliate; (iii) a requirement that Executive report to anyone other than the Board; (iv) a required relocation of Executive’s principal place of employment by more than 30 miles; and (v) the Company’s material breach of any material obligation under this Agreement, the Confidentiality Agreement or any other written agreement between the Company and Executive; provided, however, that any assertation by Executive of Good Reason shall not be effective unless (A) Executive provides written notice to the Company of the existence of one or more of the foregoing conditions within 30 days after Executive becomes aware of such conditions; (B) the condition(s) specified in such notice must remain uncorrected for 30 days following the Company’s receipt of such notice; and (C) the date of the termination of Executive’s employment must occur within 90 days after Executive becomes aware of the condition(s) specified in such notice.

(j)“Qualifying Termination” means a termination of Executive’s employment with the Company by the Company without Cause (other than by reason of death or Disability) or by Executive for Good Reason.

(k)“Termination Date” means the date of Executive’s termination of employment with the Company.

3.Effect of Termination.

(a)Accrued Obligations. Upon any termination of Executive’s employment with the Company, Executive shall be entitled to receive:

(i)Executive’s base salary accrued through the Termination Date, payable as soon as practicable following the date of such termination or as otherwise required by applicable law;

(ii)Executive’s accrued but unused vacation as of the Termination Date, payable as soon as practicable following the date of such termination or as otherwise required by applicable law or Company policy;

(iii)employee benefits, if any, as to which Executive may be entitled under the employee benefit plans of the Company, which shall be paid in accordance with the terms of the applicable plans (the amounts described in clauses (A) through (C) hereof, the “Accrued Obligations”).

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(b)Qualifying Termination. Upon a Qualifying Termination that does not occur during a CIC Protection Period, subject to Executive’s execution and non-revocation of a release of claims, in the form provided by the Company (the “Release”), within the time period specified therein and Executive’s continued compliance with the provisions of the Confidentiality Agreement and Sections 4, 5, 6 and 8(k) Executive shall be entitled to receive:

(i)if such Qualifying Termination occurs on or prior to December 31, 2023, aggregate severance payments in an amount equal to the sum of (A) 150% of Executive’s annual base salary at the rate in effect on the Termination Date (and prior to any reduction that constitutes Good Reason) and (B) Executive’s target annual bonus for the year in which the Termination Date occurs, payable in equal installments in accordance with the Company’s normal payroll practices for the 18 months following the date the Release becomes effective and irrevocable; provided, that if the period during which the Release could become effective and irrevocable spans two calendar years, payments of such installments shall not commence until the first normal payroll date in the second calendar year;

(ii)if such Qualifying Termination occurs following December 31, 2023, aggregate severance payments in an amount equal to the sum of (A) Executive’s annual base salary at the rate in effect on the Termination Date (and prior to any reduction that constitutes Good Reason) and (B) Executive’s target annual bonus for the year in which the Termination Date occurs, payable in equal installments in accordance with the Company’s normal payroll practices for the 12 months following the date the Release becomes effective and irrevocable; provided, that if the period during which the Release could become effective and irrevocable spans two calendar years, payments of such installments shall not commence until the first normal payroll date in the second calendar year;

(iii)subject to Executive’s timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and subject to Executive’s copayment of premium amounts at the active employees’ rate, reimbursement for the amount of the remainder of the premiums for Executive’s and his or her covered dependents’ participation in the Company’s group health plans pursuant to COBRA for a period ending on the earliest of (A) the first anniversary of the Termination Date, (B) Executive becoming eligible for other employer-sponsored group health benefits or Medicare, and (C) the expiration of Executive’s rights under COBRA; provided, however, that in the event that the benefits provided herein would subject the Company or any of the Affiliates to any tax or penalty under the Patient Protection and Affordable Care Act (the “PPACA”) or Section 105(h) of the Internal Revenue Code of 1986 (the “Code”), Executive and the Company agree to work together in good faith to restructure the foregoing benefit;

(iv)a pro-rata portion of the actual annual bonus that Executive would have earned for the fiscal year in which the Termination Date occurs, based on the number of days Executive is employed during such fiscal year, payable on the date when bonuses are otherwise paid to the Company’s executives and in all events by March 15 of the calendar year following the calendar year in which the Termination Date occurs; and

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(v)any earned but unpaid annual bonus for the fiscal year preceding the fiscal year in which the Termination Date occurs, payable on the date when bonuses for such fiscal year are otherwise paid to the Company’s executives for such fiscal year.

Following Executive’s Qualifying Termination that does not occur during a CIC Protection Period, except as set forth in Section 3(a) and this Section 3(b), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

(c)Qualifying Termination during CIC Protection Period. Upon a Qualifying Termination that occurs during a CIC Protection Period, subject to Executive’s execution and non-revocation of a Release within the time period specified therein and Executive’s continued compliance with the provisions of the Confidentiality Agreement and Sections 4, 5, 6 and 8(k) Executive shall be entitled to receive:

(i)a lump sum severance payment in an amount equal to the sum of (A) 200% of Executive’s annual base salary at the rate in effect on the Termination Date (and prior to any reduction that constitutes Good Reason) and (B) Executive’s target annual bonus for the year in which the Termination Date occurs, payable within 60 days following the date the Release becomes effective and irrevocable; provided, that if the period during which the Release could become effective and irrevocable spans two calendar years, payment shall occur in the second calendar year;

(ii)subject to Executive’s timely election of continuation coverage under COBRA, and subject to Executive’s copayment of premium amounts at the active employees’ rate, reimbursement for the amount of the remainder of the premiums for Executive’s and his or her covered dependents’ participation in the Company’s group health plans pursuant to COBRA for a period ending on the earliest of (A) the first anniversary of the Termination Date, (B) Executive becoming eligible for other employer-sponsored group health benefits or Medicare, and (C) the expiration of Executive’s rights under COBRA; provided, however, that in the event that the benefits provided herein would subject the Company or any Affiliate to any tax or penalty under the PPACA or Section 105(h) of the Code, Executive and the Company agree to work together in good faith to restructure the foregoing benefit;

(iii)a pro-rata portion of the actual annual bonus that Executive would have earned for the fiscal year in which the Termination Date occurs, based on the number of days Executive is employed during such fiscal year, payable on the date when bonuses are otherwise paid to the Company’s executives and in all events by March 15 of the calendar year following the calendar year in which the Termination Date occurs; and

(iv)any earned but unpaid annual bonus for the fiscal year preceding the fiscal year in which the Termination Date occurs, payable on the date when bonuses for such fiscal year are otherwise paid to the Company’s executives for such fiscal year.

Following Executive’s Qualifying Termination that occurs during a CIC Protection Period, except as set forth in Section 3(a) and this Section 3(c), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

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(d)Other Terminations. Upon a termination of Executive’s employment that is not described in Section 3(b) or Section 3(c), except for the Accrued Obligations, Executive shall have no further rights to any compensation or any other benefits under this Agreement.

(e)Termination and Offices Held. Upon termination of Executive’s employment for any reason, Executive shall be deemed to have resigned from all positions that Executive may then hold as an employee, officer or director of the Company or any Affiliate. Executive shall promptly deliver to the Company any additional documents reasonably required by the Company to confirm such resignations.

4.Confidential Information.

(a)During the course of Executive’s employment with the Company, Executive will be given access to and receive Company Confidential Information (as defined in the Confidentiality Agreement) regarding the business of the Company and the Affiliates. Executive agrees that the Company Confidential Information constitutes a protectable business interest of the Company and the Affiliates and covenants and agrees that at all times during Executive’s employment with the Company, and at all times following Executive’s termination for any reason, Executive will not, directly or indirectly, disclose any Company Confidential Information other than in the proper performance of Executive’s duties.

(b)Notwithstanding the foregoing, nothing in this Agreement shall prohibit or restrict Executive from lawfully: (i) initiating communications directly with, cooperating with, providing information to, causing information to be provided to, or otherwise assisting in an investigation by, any governmental authority regarding a possible violation of any law; (ii) responding to any inquiry or legal process directed to Executive from any such governmental authority; (iii) testifying, participating or otherwise assisting in any action or proceeding by any such governmental authority relating to a possible violation of law; or (iv) making any other disclosures that are protected under the whistleblower provisions of any applicable law. Additionally, pursuant to the federal Defend Trade Secrets Act of 2016, an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and (2) solely for the purpose of reporting or investigating a suspected violation of law; (B) is made to the individual’s attorney in relation to a lawsuit for retaliation against the individual for reporting a suspected violation of law; or (C) is made in a complaint or other document filed in a lawsuit or proceeding, if such filing is made under seal. Nothing in this Agreement requires Executive to obtain prior authorization before engaging in any conduct described in this paragraph, or to notify the Company that Executive has engaged in any such conduct.

5.Non-Disparagement. Executive shall not, while employed by the Company or at any time thereafter, disparage the Company (or any Affiliate) in any way that materially and adversely affects the goodwill, reputation or business relationships of the Company or the Affiliate with the public generally, or with any of its customers, vendors or employees. Executive shall not make comments to the media, including through social media, or otherwise regarding Executive’s employment with the Company or the circumstances regarding the termination thereof without the prior written consent of the Board. Notwithstanding the foregoing, this Section 5 shall not prohibit

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Executive from rebutting claims or statements made by any other person. Nothing in this Agreement prevents Executive from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that Executive has reason to believe is unlawful.

6.Non-Competition; Non-Solicitation.

(a)Executive acknowledges that the Company has spent significant time, effort and resources protecting its Company Confidential Information and customer goodwill. Executive further acknowledges that the Company Confidential Information is of significant competitive value to the Company in the supermarket and grocery industry in which it competes, and that the use or disclosure, even if inadvertent, of such Company Confidential Information for the benefit of a competitor would cause significant damage to the legitimate business interests of the Company. Accordingly, in order to protect the legitimate business and customer goodwill interests of the Company, to protect that Company Confidential Information against inappropriate use or disclosure, and in consideration for Executive’s employment and the benefits provided to Executive herein, Executive agrees that:

(i)During the Non-Compete Restricted Period (as defined below) the Executive shall not, directly or indirectly (including as an employee, officer, director, owner, consultant, manager, or independent contractor), other than in connection with Executive’s employment by the Company, engage in the Business (as defined below) in any country in which the Company or an Affiliate is engaged in the Business at the time of Executive’s separation as an employee of the Company. The Restricted Period shall be extended for a period equal to any time period that the Executive is in violation of this Section 6(a)(i).

(ii)Without the prior written consent of the Company, during the Non-Solicit Restricted Period (as defined below), Executive shall not, directly or indirectly, solicit, recruit or hire any person who is as of the date of Executive’s termination (or was within 12 months prior to the date of Executive’s termination) an employee of the Company or an Affiliate; provided, however, that the foregoing provision shall not prohibit solicitations made by Executive to the general public, including through a general public posting site or forum.

(iii) Without the prior written consent of the Company, during the Non-Compete Restricted Period, Executive shall not directly or indirectly (A) solicit or encourage any client, customer, bona fide prospective client or customer, supplier, licensee, licensor, landlord or other business relation of the Company or any Affiliate with whom Executive had material personal dealings in the 12-month period immediately preceding Executive’s termination (each a “Business Contact”) to terminate or diminish its relationship with them; or (B) seek to persuade any such Business Contact to conduct with anyone else any business or activity conducted or, to Executive’s knowledge, under consideration by the Company or any Affiliate as of the date of his termination that such Business Contact conducts or could conduct with the Company or any Affiliate.

(b)Nothing contained in this Section 6 shall be construed to prevent Executive from (i) investing in the equity of any competing entity listed on a national securities exchange or traded in the over-the-counter market, but only if Executive is not involved directly or indirectly in the management of said entity and if the Executive and the Executive’s associates (as such term is

6

defined in Regulation 14(A) promulgated under the Securities Exchange Act of 1934, as in effect on the date hereof), collectively, do not own more than an aggregate of 5% of the equity of such entity, or (ii) indirectly owning securities through ownership of shares of a registered investment company or mutual fund.

(c)If a court of competent jurisdiction determines that any portion of this Section 6 is invalid or unenforceable, the remainder of this Section 6 shall be given full effect without regard to the invalid provision. If any court of final and non-appealable judgment construes any of the provisions of this Section 6, or any part thereof, to be unreasonable because of the duration, geographic location, or scope of such provision, such provision shall be deemed to be amended to cover the maximum duration, geographic location, and scope not so determined to be unreasonable.

(d)As used herein:

(i)“Business” means the sale of liquid refreshment beverages.

(ii)“Non-Compete Restricted Period” means during Executive’s employment with the Company.

(iii)“Non-Solicit Restricted Period” means during Executive’s employment with the Company and the 12-month period following the Termination Date.

7.Breach.

(a)Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Sections 4, 5 and 6 would be inadequate and the Company would suffer irreparable damages as a result of such breach or threatened breach. In recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

(b)If, during the two-year period following Executive’s Termination Date, a court of competent jurisdiction or the arbitrator under the Arbitration Agreement determines pursuant to a final, nonappealable order that Executive has breached Executive’s obligations under Sections 4, 5 or 6, the Company shall have the right to cease payments under Section 3(b) and 3(c), and Executive shall promptly return to the Company any payments received pursuant to Section 3(b) or 3(c).

8.Miscellaneous.

(a)Arbitration. For the avoidance of doubt, the arbitration provisions of the Arbitration Agreement shall apply to any dispute concerning Executive’s employment with the Company or arising under or in any way related to this Agreement.

7

(b)Governing Law; Consent to Personal Jurisdiction. THIS AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD FOR CONFLICTS OF LAWS PRINCIPLES. SUBJECT TO THE ARBITRATION PROVISION IN THE ARBITRATION AGREEMENT, EXECUTIVE HEREBY EXPRESSLY CONSENTS TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN CALIFORNIA FOR ANY LAWSUIT FILED THERE AGAINST EXECUTIVE BY THE COMPANY CONCERNING EXECUTIVE’S EMPLOYMENT OR THE TERMINATION OF EXECUTIVE’S EMPLOYMENT OR ARISING FROM OR RELATING TO THIS AGREEMENT.

(c)Entire Agreement/Amendments. This Agreement, the Confidentiality Agreement and the Arbitration Agreement contain the entire understanding of the parties with respect to the matters set forth herein; provided, however, that the covenants set forth in Sections 4, 5 and 6 shall be in addition to, and not in lieu of, any other confidentiality, non-disparagement, non-solicitation or non-competition covenants between Executive and the Company or any Affiliate, including under the Confidentiality Agreement. There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein or as may be set forth from time to time in the Company’s employee benefit plans and policies applicable to Executive. For the avoidance of doubt, this Agreement supersedes and replaces any severance entitlements set forth in any other agreement between the Company and Executive, including any individual employment agreement or offer letter. This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto. In the event of any inconsistency between this Agreement and any other plan, program, practice or agreement of which Executive is a participant or a party, this Agreement shall control unless such other plan, program, practice or agreement specifically refers to the provisions of this sentence.

(d)No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(e)Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

(f)Assignment. This Agreement, and all of Executive’s rights and duties hereunder, shall not be assignable or delegable by Executive. Any purported assignment or delegation by Executive in violation of the foregoing shall be null and void ab initio and of no force and effect. This Agreement may be assigned by the Company to a person or entity which is an Affiliate or a successor in interest to substantially all of the business operations of the Company. Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such Affiliate or successor person or entity.

(g)Counterclaim; No Mitigation. The Company’s obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall be subject to counterclaim and to seek recoupment of amounts owed by Executive to the Company or the

8

Affiliates. Executive shall not be required to mitigate the amount of any payment provided for pursuant to this Agreement by seeking other employment, and such payments shall not be reduced by any compensation or benefits received from any subsequent employer or other endeavor.

(h)Compliance with Code Section 409A. Notwithstanding anything herein to the contrary, (i) if on the Termination Date Executive is a “specified employee” as defined in Section 409A of the Code and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to Executive) until the date that is six months following Executive’s termination of employment with the Company or Executive’s earlier death (or the earliest date as is permitted under Section 409A of the Code) and (ii) if any other payments of money or other benefits due to Executive hereunder could cause the application of an accelerated or additional tax under Section 409A of the Code, such payments or other benefits shall be deferred if deferral will make such payment or other benefits compliant under Section 409A of the Code, or otherwise such payment or other benefits shall be restructured, to the extent possible, in a manner, determined by the Board, that does not cause such an accelerated or additional tax. For purposes of Section 409A of the Code, each payment made under this Agreement shall be designated as a “separate payment” within the meaning of the Section 409A of the Code, and references herein to Executive’s “termination of employment” shall refer to Executive’s separation from service with the Company within the meaning of Section 409A. To the extent any reimbursements or in-kind benefits due to Executive under this Agreement constitute “deferred compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to Executive in a manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv). The Company shall consult with Executive in good faith regarding the implementation of the provisions of this Section 8(h); provided that neither the Company nor any of its employees or representatives shall have any liability to Executive with respect to thereto or any tax imposed under Section 409A.

(i)Successors; Binding Agreement. This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. In the event of Executive’s death prior to receipt of all amounts payable to Executive (including any unpaid amounts due under Section 3), such amounts shall be paid to Executive’s beneficiary designated in a Notice provided to and accepted by the Company or, in the absence of such designation, to Executive’s estate.

(j)Notice. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand or overnight courier or three postal delivery days after it has been mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below in this Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that Notice of change of address shall be effective only upon receipt (each such communication, “Notice”).

If to the Company, addressed to:

9

Zevia PBC

Attn: General Counsel

15821 Ventura Blvd., Suite 145

Encino, CA 91436

If to Executive, to the address listed in the Company’s payroll records from time to time.

(k)Cooperation. Executive shall provide Executive’s reasonable cooperation in connection with any investigation, action or proceeding (or any appeal from any action or proceeding) which relates to events occurring during Executive’s employment hereunder, provided, that, following termination of Executive’s employment, the Company shall pay all reasonable expenses incurred by Executive in providing such cooperation. This provision shall survive any termination of this Agreement.

(l)Withholding Taxes. The Company may withhold from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

(m)Interpretation. Titles and headings to Sections hereof are for the purpose of reference only and shall in no way limit, define or otherwise affect the provisions hereof. Unless the context requires otherwise, all references to laws, regulations, contracts, agreements and instruments refer to such laws, regulations, contracts, agreements and instruments as they may be amended from time to time, and references to particular provisions of laws or regulations include a reference to the corresponding provisions of any succeeding law or regulation. All references to “dollars” or “$” in this Agreement refer to United States dollars. The word “or” is not exclusive. The words “herein”, “hereof”, “hereunder” and other compounds of the word “here” shall refer to the entire Agreement, including all Exhibits attached hereto, and not to any particular provision hereof. Wherever the context so requires, the masculine gender includes the feminine or neuter, and the singular number includes the plural and conversely. All references to “including” shall be construed as meaning “including without limitation.” Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against any party hereto, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by each of the parties hereto and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of the parties hereto.

(n)Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

[Signature Page Follows this Page]

10

Exhibit 10.4

IN WITNESS WHEREOF, the parties hereto have duly executed this Amended and Restated Severance Agreement as of the Effective Date.

ZEVIA PBC

/s/ Lorna R. Simms

Name: Lorna R. Simms

Title: Senior Vice President, General Counsel and Corporate Secretary

EXECUTIVE

/s/ Amy Taylor

Name: Amy Taylor

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Amy E. Taylor, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of ZEVIA PBC;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Amy E. Taylor
Name:	Amy E. Taylor
Title:	President and Chief Executive Officer
	(principal executive officer)
Date:	August 11, 2022

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Denise D. Beckles, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of ZEVIA PBC;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Denise D. Beckles
Name:	Denise D. Beckles
Title:	Chief Financial Officer
	(principal financial officer)
Date:	August 11, 2022

EX-32

Exhibit 32

Zevia PBC

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to

18 U.S.C. Section 1350, as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q (the “Report”) of Zevia PBC (the “Company”) for the quarter ended June 30, 2022, as filed with the U.S. Securities and Exchange Commission on the date hereof, Amy E. Taylor, as President and Chief Executive Officer of the Company, and Denise D. Beckles, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to each officer’s knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ AMY E. TAYLOR
Name:	Amy E. Taylor
Title:	President and Chief Executive Officer (principal executive officer)
Date:	August 11, 2022
/s/ DENISE D. BECKLES
Name:	Denise D. Beckles
Title:	Chief Financial Officer (principal financial officer)
Date:	August 11, 2022

A signed original of this certification required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the U.S. Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished as an exhibit to the Report pursuant to Item 601(b)(32) of Regulation S-K and Section 1350 of Title 18 of the United States Code and, accordingly, is not being filed with the U.S. Securities and Exchange Commission as part of the Report and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934 (whether made before or after the date of the Report, irrespective of any general incorporation language contained in such filing).

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2022	Aug. 01, 2022
Document Information [Line Items]
Document Type	10-Q
Entity Registrant Name	Zevia PBC
Amendment Flag	false
Entity Central Index Key	0001854139
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Incorporation, State or Country Code	DE
Entity File Number	001-40630
Entity Tax Identification Number	86-2862492
Entity Address, Address Line One	15821 Ventura Blvd.
Entity Address, Address Line Two	Suite 145
Entity Address, City or Town	Encino
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	91436
City Area Code	855
Local Phone Number	469-3842
Title of 12(b) Security	Class A common stock, par value $0.001 pershare
Trading Symbol	ZVIA
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Small Business	true
Entity Shell Company	false
Common Class A [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		44,071,479
Common Class B [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		24,562,062

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 49,648	$ 43,110
Short-term investments	0	30,000
Accounts receivable, net	17,115	9,047
Inventories	33,924	31,501
Prepaid expenses and other current assets	2,079	3,421
Total current assets	102,766	117,079
Property and equipment, net	4,710	3,664
Right-of-use assets under operating leases, net	1,049	211
Intangible assets, net	3,638	3,738
Other non-current assets	575	301
Total assets	112,738	124,993
Current liabilities:
Accounts payable	16,539	13,492
Accrued expenses and other current liabilities	7,947	6,705
Current portion of operating lease liabilities	685	236
Total current liabilities	25,171	20,433
Operating lease liabilities, net of current portion	368	1
Total liabilities	25,539	20,434
Commitments and contingencies (Note 9)
Permanent Equity (Deficit)
Preferred Stock, $0.001 par value. 10,000,000 shares authorized, no shares issued and outstanding as of June 30, 2022 and December 31, 2021.	0	0
Class A common stock, $0.001 par value. 550,000,000 shares authorized, 43,406,758 and 34,463,417 shares issued and outstanding as of June 30 2022 and December 31, 2021, respectively.	43	34
Class B common stock, $0.001 par value. 250,000,000 shares authorized, 24,562,062 and 30,113,152 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively.	25	30
Additional paid-in capital	183,239	174,404
Accumulated deficit	(67,974)	(45,986)
Total Zevia PBC stockholder's equity	115,333	128,482
Noncontrolling Interests	(28,134)	(23,923)
Total equity	87,199	104,559
Total liabilities and equity	$ 112,738	$ 124,993

XML

Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares	Jun. 30, 2022	Dec. 31, 2021
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common Class A [Member]
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	550,000,000	550,000,000
Common stock shares issued	43,406,758	34,463,417
Common stock shares outstanding	43,406,758	34,463,417
Common Class B [Member]
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	250,000,000	250,000,000
Common stock shares issued	24,562,062	30,113,152
Common stock shares outstanding	24,562,062	30,113,152

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Statement of Comprehensive Income [Abstract]
Net sales	$ 45,542	$ 34,352	$ 83,576	$ 65,046
Cost of goods sold	28,168	18,112	51,581	34,618
Gross profit	17,374	16,240	31,995	30,428
Operating expenses:
Selling and marketing	13,928	10,703	26,723	18,691
General and administrative	9,818	5,978	19,947	11,654
Equity based compensation	8,043	36	16,944	73
Depreciation and amortization	328	230	679	474
Total operating expenses	32,117	16,947	64,293	30,892
Loss from operations	(14,743)	(707)	(32,298)	(464)
Other (expense) income, net	(44)	(42)	38	(38)
Loss before income taxes	(14,787)	(749)	(32,260)	(502)
Provision for income taxes	(9)	0	(21)	0
Net loss and comprehensive loss	(14,796)	(749)	(32,281)	(502)
Net loss attributable to Zevia LLC prior to the Reorganization Transactions	0	749	0	502
Loss attributable to noncontrolling interest	3,706	0	10,293	0
Net loss attributable to Zevia PBC	$ (11,090)	$ 0	$ (21,988)
Net loss per share attributable to common stockholders, basic	$ (0.28)		$ (0.57)
Net loss per share attributable to common shareholders, diluted	$ (0.28)		$ (0.57)
Weighted average common units outstanding, basic	40,167,570		38,523,985
Weighted average common units outstanding, diluted	40,167,570		38,523,985

XML

Consolidated Statements of Changes in Redeemable Convertible Preferred Units and Equity (Deficit) - USD ($) $ in Thousands	Total	Redeemable Convertible Preferred Units [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Member Defecit [Member]	Noncontrolling Interest [Member]	Common Stock [Member] Common Class A [Member]	Common Stock [Member] Common Class B [Member]
Beginning Balance at Dec. 31, 2020					$ (196,812)
Beginning Balance (in shares) at Dec. 31, 2020		26,322,803
Beginning Balance at Dec. 31, 2020		$ 232,457
Exercise of common units prior the Reorganization Transactions					10
Equity-based compensation prior to the Reorganization Transactions					37
Net income loss prior to the Reorganization Transactions					247
Ending Balance at Mar. 31, 2021					(196,518)
Ending Balance at Mar. 31, 2021		$ 232,457
Ending Balance (in shares) at Mar. 31, 2021		26,322,803
Beginning Balance at Dec. 31, 2020					(196,812)
Vesting and release of common stock under equity incentive plans, net	$ 0
Beginning Balance (in shares) at Dec. 31, 2020		26,322,803
Beginning Balance at Dec. 31, 2020		$ 232,457
Net loss post-Reorganization Transactions	(502)
Ending Balance at Jun. 30, 2021					(199,900)
Ending Balance at Jun. 30, 2021		$ 232,457
Ending Balance (in shares) at Jun. 30, 2021		26,322,803
Beginning Balance at Mar. 31, 2021					(196,518)
Beginning Balance (in shares) at Mar. 31, 2021		26,322,803
Beginning Balance at Mar. 31, 2021		$ 232,457
Equity-based compensation prior to the Reorganization Transactions					36
Net income loss prior to the Reorganization Transactions					(749)
Dividends					(2,669)
Ending Balance at Jun. 30, 2021					$ (199,900)
Ending Balance at Jun. 30, 2021		$ 232,457
Ending Balance (in shares) at Jun. 30, 2021		26,322,803
Beginning Balance (in shares) at Dec. 31, 2021							34,463,417	30,113,152
Beginning Balance at Dec. 31, 2021	104,559		$ 174,404	$ (45,986)		$ (23,923)	$ 34	$ 30
Vesting and release of common stock under equity incentive plans, net (in shares)							2,298,547
Vesting and release of common stock under equity incentive plans, net	(2,130)		(2,133)				$ 3
Exchange of Class B common stock for Class A common stock (in shares)							1,970,802	(1,970,802)
Exchange of Class B common stock for Class A common stock			(1,929)			1,929	$ 2	$ (2)
Exercise of stock options	16		16
Exercise of stock options Shares							56,659
Equity-based compensation	8,901		8,901
Net loss post-Reorganization Transactions	(17,485)			(10,898)		(6,587)
Ending Balance at Mar. 31, 2022	93,861		179,259	(56,884)		(28,581)	$ 39	$ 28
Ending Balance (in shares) at Mar. 31, 2022							38,789,425	28,142,350
Beginning Balance (in shares) at Dec. 31, 2021							34,463,417	30,113,152
Beginning Balance at Dec. 31, 2021	104,559		174,404	(45,986)		(23,923)	$ 34	$ 30
Vesting and release of common stock under equity incentive plans, net	$ (2,130)
Exercise of stock options Shares	176,040
Net loss post-Reorganization Transactions	$ (32,281)
Ending Balance at Jun. 30, 2022	87,199		183,239	(67,974)		(28,134)	$ 43	$ 25
Ending Balance (in shares) at Jun. 30, 2022							43,406,758	24,562,062
Beginning Balance (in shares) at Mar. 31, 2022							38,789,425	28,142,350
Beginning Balance at Mar. 31, 2022	93,861		179,259	(56,884)		(28,581)	$ 39	$ 28
Vesting and release of common stock under equity incentive plans, net (in shares)							917,664
Vesting and release of common stock under equity incentive plans, net			1				$ (1)
Exchange of Class B common stock for Class A common stock (in shares)							3,580,288	(3,580,288)
Exchange of Class B common stock for Class A common stock			(4,153)			4,153	$ 3	$ (3)
Exercise of stock options	91		91
Exercise of stock options Shares							119,381
Equity-based compensation	8,043		8,043
Net loss post-Reorganization Transactions	(14,796)			(11,090)		(3,706)
Ending Balance at Jun. 30, 2022	$ 87,199		$ 183,239	$ (67,974)		$ (28,134)	$ 43	$ 25
Ending Balance (in shares) at Jun. 30, 2022							43,406,758	24,562,062

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands		6 Months Ended
		Jun. 30, 2022	Jun. 30, 2021
Operating activities:
Net loss		$ (32,281)	$ (502)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash lease expense		312	275
Depreciation and amortization		679	474
Loss on sale of equipment		3	8
Amortization of debt issuance cost		25	17
Equity based compensation		16,944	73
Changes in operating assets and liabilities:
Accounts receivable, net		(8,068)	(2,473)
Inventories		(2,423)	(1,744)
Prepaid expenses and other assets		1,371	350
Accounts payable		2,976	3,693
Accrued expenses and other current liabilities		1,242	95
Operating lease liabilities		(334)	(303)
Net cash used in operating activities		(19,554)	(37)
Investing activities:
Proceeds from maturities of securities		30,000
Purchases of property and equipment		(1,557)	(2,031)
Net cash provided by (used in) investing activities		28,443	(2,031)
Financing activities:
Proceeds from revolving line of credit	[1]	0	64,308
Repayment of revolving line of credit	[1]	0	(64,308)
Payment of debt issuance costs		(328)
Minimum tax withholding paid on behalf of employees for net share settlement		(2,130)	0
proceeds from exercise of common units		0	10
Proceeds from exercise of stock options		107	0
Payment of deferred IPO costs		0	(3,829)
Distribution to unitholders for tax payments		0	(2,669)
Net cash used in financing activities		(2,351)	(6,488)
Net change from operating, investing, and financing activities		6,538	(8,556)
Cash and cash equivalents at beginning of period		43,110	14,936
Cash and cash equivalents at end of period		49,648	6,380
Non-cash investing and financing activities
Capital expenditures included in accounts payable		196	0
Non-cash financing activities
Conversion of Class B common stock to Class A common stock		6,082	0
Operating lease right-of-use assets obtained in exchange for lease liabilities		1,150	0
Unpaid IPO offering costs		0	1,038
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest		$ 0	$ 72

[1] (1) Zevia PBC’s revolving line of credit provides for daily drawdowns and repayments of amounts outstanding. As of June 30, 2022, no amounts were drawn under the new Secured Revolving Line of Credit.(as defined in the Notes to Condensed Consolidated Financial Statements (Unaudited), Note 7 “Debt,” and no amounts were outstanding as a result of the termination of the Stonegate line of credit in July 2021. Consistent with the provisions of ASC Topic 230, Statement of Cash Flows, Zevia PBC has presented daily draw-downs and repayments under its revolving line of credit with its lender on a gross basis in the statement of cash flows for the period ended June 30, 2021.

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Condensed Consolidated Statements of Cash Flows (Parenthetical) (Unaudited)	Jun. 30, 2022 USD ($)
Revolving Credit Facility Member
Line of credit	$ 0

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Description of Business and Basis of Presentation

6 Months Ended

Jun. 30, 2022

Organization Consolidation And Presentation Of Financial Statements [Line Items]

Description of Business and Basis of Presentation

1. DESCRIPTION OF BUSINESS

Organization and operations

Zevia PBC (the "Company") develops, markets, sells, and distributes a wide variety of zero calorie, zero sugar, non-GMO Project verified, gluten-free, Kosher, vegan, zero sodium carbonated and non-carbonated beverages under the Zevia® brand name that include a broad variety of flavors across Soda, Energy Drinks, Organic Teas, Mixers, Kidz drinks, and Sparkling Water. Zevia PBC’s products are distributed and sold principally in the United States and Canada through a diverse network of retailers (both brick-and-mortar and e-commerce), including grocery stores, natural products stores, warehouse clubs, and specialty outlets. Zevia PBC’s products are manufactured and generally maintained at third-party beverage production and warehousing facilities located in both the United States and Canada.

Initial Public Offering

On July 21, 2021, the SEC declared effective Zevia PBC's registration statement on Form S-1 for the initial public offering ("IPO") of its Class A common stock. On July 22, 2021, the Company’s Class A common stock began trading on the New York Stock Exchange under the ticker symbol “ZVIA”. The Company completed the 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. The Company received aggregate net proceeds of approximately $139.7 million after deducting underwriting discounts and commissions of $10.1 million.

Immediately following the closing of the IPO on July 26, 2021, 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. This reorganization is accounted for as a reorganization of entities under common control. As a result, the condensed consolidated financial statements of the Company recognize the assets and liabilities received in the reorganization at their historical carrying amounts, as reflected in the historical financial statements of Zevia LLC. The Company has consolidated Zevia LLC in its financial statements and records a noncontrolling interest related to the Class B units held by the Class B stockholders on its condensed consolidated balance sheets and statement of operations. As of June 30, 2022, the Company holds an economic interest of 63.9% in Zevia LLC and the remaining 36.1% represents the non-controlling interest.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2022

Summary of Significant Accounting Policies

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 ("US 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 US GAAP for complete financial statements and are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2022, or for any other interim period or any other future fiscal year. The balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date but does not include all disclosures, including certain notes, required by US GAAP that are required on an annual reporting basis. Certain information and note disclosures normally included in the financial statements prepared in accordance with US 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, 2021 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 condensed consolidated financial statements include the accounts of the Company and its subsidiary, Zevia LLC, that it controls due to ownership of a majority voting 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 business and affairs of, Zevia LLC. Accordingly, the Company has prepared these condensed consolidated financial statements in accordance with Accounting Standards Codification ("ASC") Topic 810, Consolidation.

In connection with the IPO, the Company completed certain reorganization transactions (the “Reorganization Transactions") described in the Annual Report, which were accounted for consistent with a combination of entities under common control. As a result, the financial reports filed with the SEC by the Company subsequent to the Reorganization Transactions are prepared “as if” Zevia LLC is the accounting predecessor of the Company. The historical operations of Zevia LLC are deemed to be those of the Company. Thus, the condensed consolidated financial statements included in this Quarterly Report reflect (i) the historical operating results and financial position of Zevia LLC prior to the Reorganization Transactions; (ii) the condensed consolidated results of operations and financial position of the Company and Zevia LLC following the Reorganization Transactions; and (iii) the Company's equity structure for all periods presented. No step-up basis of intangible assets or goodwill was recorded.

Reclassifications

Certain amounts from prior periods have been reclassified in the condensed consolidated statements of operations and comprehensive loss and condensed consolidated statement of cash flows to conform to the current period presentation. For the activity in the periods prior to the IPO and Reorganization Transactions, common stock, additional paid-in capital, and accumulated deficit information have been combined and presented as member’s deficit in the accompanying condensed consolidated balance sheets and condensed consolidated statements of changes in redeemable convertible preferred units and stockholders' equity (deficit).

Condensed Consolidated Statements of Operations and Comprehensive Loss:

The following table presents the reclassifications made to the Condensed Consolidated Statements of Operations and Comprehensive Loss:

(in thousands)	Three Months Ended June 30, 2021  (as reported)		Reclassification			Three Months Ended June 30, 2021 (adjusted)		Six Months Ended June 30, 2021  (as reported)		Reclassification			Six Months Ended June 30, 2021 (adjusted)
General and administrative	$	6,014	$	(36	)	$	5,978	$	11,727	$	(73	)	$	11,654
Equity-based compensation		—		36			36		—		73			73

Condensed Consolidated Statements of Cash Flows:

The following table presents the reclassifications made to the Condensed Consolidated Statement of Cash Flows:

(in thousands)	Six Months Ended June 30, 2021  (as reported)			Reclassification			Six Months Ended June 30, 2021 (adjusted)
Changes in operating assets and liabilities:
Prepaid expenses and other assets		380			(30	)		350
Right of use asset		(30	)		30			—
Accounts payable		3,036			657			3,693
Accrued expenses and other current liabilities		(778	)		873			95
Operating lease liabilities		(75	)		(228	)		(303	)
Other current liabilities		1,530			(1,530	)		—
Operating lease liabilities, net of current portion		(228	)		228			—

Use of estimates

The preparation of the unaudited condensed consolidated financial statements in accordance with US 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; reserves recorded for inventory obsolescence; the incremental borrowing rate for lease liabilities; allowance for doubtful accounts; recoverability of intangible assets; realization of deferred tax assets; and the determination of the fair value of equity instruments, including redeemable convertible preferred and common units, 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.

As of June 30, 2022, the Company’s operations continue to be impacted by the effects of the COVID-19 pandemic including the emergence of new variants, with respect to broad-based inflation in input costs, logistics, manufacturing and labor costs. During the three and six months ended June 30, 2022, the Company experienced significant inflationary impact, which has created headwinds that the Company expects to continue throughout 2022. The effects of the COVID-19 pandemic continues to impact global economies, and the Company will continue to monitor the situation and the effects on its business and operations, particularly if the COVID-19 pandemic including the emergence of new variants, continues for an extended period of time.

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 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 – Recently Adopted

In April 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2021-04, which included Topic 260, Earnings Per Share and Topic 718, Compensation - Stock Compensation. This guidance clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options due to a lack of explicit guidance in the FASB Codification. This ASU is effective for all entities for fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company adopted ASU 2021-04 as of January 1, 2022. The adoption of ASU 2021-04 did not have a significant impact on the Company's financial statements as the Company does not have freestanding equity-classified written call options.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. This ASU improves areas of US GAAP and reduces cost and complexity while maintaining usefulness. The main provisions remove certain exceptions, including the exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. In addition, the amendments simplify income tax accounting in the areas such as income based franchise taxes, eliminating the requirements to allocate consolidated current and deferred tax expense in certain instances and a requirement that an entity reflects the effect of enacted changes in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. This ASU is effective for private companies for annual reporting periods beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022. The Company adopted ASU 2019-12 as of January 1, 2022. The adoption of ASU 2019-12 did not have a significant impact on the Company’s financial statements.

Recently Issued Accounting Pronouncements – Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU provides for a new impairment model that requires measurement and recognition of expected credit losses for most financial assets held. The ASU is effective for private companies for annual periods, and interim periods within those annual periods, beginning after December 15, 2022. The Company currently does not expect this guidance to have a significant impact on the Company’s financial statements as it does not have a history of material credit losses.

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

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Revenues

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenues

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, natural products stores, specialty outlets, and warehouse club stores; and through e-commerce channels. The following table disaggregates the Company’s sales by channel:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Retail sales	$	39,596	$	30,902	$	73,761	$	56,769
Online/e-commerce		5,946		3,450		9,815		8,277
Net sales	$	45,542	$	34,352	$	83,576	$	65,046

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

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
United States	$	40,123	$	30,414	$	74,312	$	58,137
Canada		5,419		3,938		9,264		6,909
Net sales	$	45,542	$	34,352	$	83,576	$	65,046

Contract liabilities

The Company did not have any material unsatisfied performance obligations as of June 30, 2022 or December 31, 2021.

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Inventories

6 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

Inventories

4. INVENTORIES

Inventories consist of the following as of:

(in thousands)	June 30, 2022		December 31, 2021
Raw materials	$	11,106	$	10,193
Finished goods		22,818		21,308
Inventories	$	33,924	$	31,501

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Property and Equipment, Net

6 Months Ended

Jun. 30, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

5. PROPERTY AND EQUIPMENT, NET

Property and equipment consist of the following as of:

(in thousands)	June 30, 2022			December 31, 2021
Land	$	336		$	336
Leasehold improvements		463			463
Computer equipment and software		2,941			2,254
Furniture and equipment		544			521
Vehicles		156			38
Quality control and marketing equipment		900			532
Buildings and improvements		1,575			1,443
Assets not yet placed in service		730			456
		7,645			6,043
Less accumulated depreciation		(2,935	)		(2,379	)
Property and equipment, net	$	4,710		$	3,664

For the three months ended June 30, 2022 and 2021, depreciation expense, including the amortization of leasehold improvements, amounted to approximately $0.3 million and $0.2 million, respectively. For the six months ended June 30, 2022 and 2021, depreciation expense, including the amortization of leasehold improvements, amounted to approximately $0.6 million and $0.4 million, respectively. These amounts are included under depreciation and amortization in the accompanying condensed consolidated statements of operations and comprehensive loss.

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Intangible Assets, Net

6 Months Ended

Jun. 30, 2022

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Intangible Assets, Net

6. INTANGIBLE ASSETS, NET

The following table provides information pertaining to the Company’s intangible assets as of:

(in thousands)	June 30, 2022			December 31, 2021
Customer relationships	$	3,007		$	3,007
Accumulated amortization		(2,369	)		(2,269	)
		638			738
Trademarks		3,000			3,000
Intangible assets, net	$	3,638		$	3,738

For the three months ended June 30, 2022 and 2021, total amortization expense amounted to $0.1 million and $0.1 million, respectively. For the six months ended June 30, 2022 and 2021, total amortization expense amounted to $0.1 million and $0.1 million, respectively. No impairment losses have been recorded on any of the Company’s intangible assets for the three and six months ended June 30, 2022 and 2021, respectively.

Amortization expense for intangible assets with definite lives is expected to be as follows:

(in thousands)
Remainder of 2022	$	100
2023		200
2024		200
2025		138
Expected amortization expense for intangible assets with definite lives	$	638

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Debt

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Debt

7. DEBT

ABL Credit Facility

On February 22, 2022, Zevia LLC (the "Borrower") 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"). The Borrower may draw loans under the Secured Revolving Line of Credit 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 and the Borrower has 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. There have been no amounts drawn under the Secured Revolving Line of Credit.

Loans under the Secured Revolving Line of Credit bear interest based on either, at the Borrower’s option, the Bloomberg Short-Term Bank Yield Index 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.

The Borrower is required under the Secured Revolving Line of Credit to comply with certain covenants, including, among others, by maintaining Liquidity (as defined therein) of $7 million at all times until December 31, 2023. Thereafter, the Borrower 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, 2022, the Company was in compliance with its liquidity covenant.

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Leases

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Leases

8. LEASES

The Company leases office space and vehicles. The leases have remaining lease terms of one to 18 months. On March 25, 2022, the Company entered into an amendment to the lease for its corporate headquarters offices to extend the term through December 31, 2023, and to expand the total square footage from 17,923 square feet to 20,185 square feet commencing on May 1, 2022. The Company’s recognized lease costs include:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Income Statement
Operating lease cost(1)	$	178	$	151	$	329	$	302

(1)Operating lease cost is recorded within general and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive loss.

	Six Months Ended June 30,
	2022			2021
Weighted-average remaining lease term (months)		17.9			10.4
Weighted-average discount rate		7.56	%		7.56	%

The Company’s variable lease costs and short-term lease costs were not material.

The Company is obligated under various non-cancellable lease agreements providing for office space and vehicles that expire at various dates through 2023. Maturities of lease payments under non-cancellable leases were as follows:

(in thousands)	June 30, 2022
Remainder of 2022	$	372
2023		744
Total lease payments		1,116
Less Imputed Interest		(63	)
Present value of lease liabilities	$	1,053

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Commitments And Contingencies

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

9. COMMITMENTS AND CONTINGENCIES

Purchase commitments

As of June 30, 2022, the Company does not have any material agreements with suppliers for the purchase of raw material with minimum purchase quantities.

Legal proceedings

The Company is involved from time to time in various claims, proceedings, and litigation. The Company establishes reserves for specific legal proceedings when it determines that the likelihood of an unfavorable outcome is probable, and the amount of loss can be reasonably estimated. The Company has not identified any material legal matters where it believes an unfavorable material outcome is reasonably possible and/or for which an estimate of possible losses can be made. Management does not believe that the resolution of these matters would have a material impact on the condensed consolidated financial statements.

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Balance Sheet Components

6 Months Ended

Jun. 30, 2022

Payables and Accruals [Abstract]

Balance Sheet Components

10. BALANCE SHEET COMPONENTS

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of:

(in thousands)	June 30, 2022		December 31, 2021
Accrued employee compensation benefits	$	3,713	$	3,032
Accrued direct selling costs	$	1,513	$	1,011
Accrued other		2,721		2,662
Total	$	7,947	$	6,705

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Equity-Based Compensation

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Equity-Based Compensation

11. EQUITY-BASED COMPENSATION

In connection with the IPO, the Company assumed all outstanding equity awards of Zevia LLC on a one-to-two basis and assumed all equity incentive plans and related award agreements from Zevia LLC.

In July 2021, prior to the IPO, the Company adopted the Zevia PBC 2021 Equity Incentive Plan (the “2021 Plan") under which the Company may grant options, stock appreciation rights, restricted stock units ("RSUs"), restricted stock awards, other equity-based awards and incentive bonuses to employees, officers, non-employee directors and other service providers of the Company and its affiliates.

The number of shares available for issuance under the 2021 Plan is increased on January 1 of each year beginning in 2022 and ending with a final increase in 2031 in an amount equal to the lesser of: (i) 5% of the total number of shares of Class A common stock outstanding on the preceding December 31, and (ii) a smaller number of shares determined by the Company's Board of Directors.

In October and November 2021, the Company amended outstanding RSU awards and outstanding stock options held by certain senior management employees, in each case, to provide for accelerated vesting upon the holder’s retirement on or after January 17, 2022. For this purpose, “retirement” generally includes a resignation after the holder has reached 50 years of age with at least 10 years of service to the Company, so long as the holder provides a one-year advance notice of such retirement, unless otherwise waived by the Company's Board of Directors.

As of June 30, 2022, the 2021 Plan provides for future grants and/or issuances of up to approximately 3.1 million shares of our common stock. Stock-based awards under our employee compensation plans are made with newly issued shares reserved for this purpose.

Stock Options

The Company uses a Black-Scholes valuation model to measure stock option expense as of each respective grant date. Generally, stock option grants vest ratably over four years, have a ten-year term, and have an exercise price equal to the fair market value as of the grant date. The fair value of stock options is amortized to expense over the vesting period.

The fair value of stock option awards granted during the period was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:

	Six Months Ended June 30,
	2022
Stock price	$	3.29
Exercise Price	$	3.29
Expected term (years)(1)		6.25
Expected volatility (2)		63.0	%
Risk-Free interest rate (3)		2.7	%
Dividend yield (4)		0.0	%

(1) Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.

(2) Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.

(3) The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.

(4) We have assumed a dividend yield of zero as we have no plans to declare dividends in the foreseeable future.

The weighted average grant date fair value for RSUs granted for the six months ended June 30, 2022 was $2.00.

A summary of stock option activity for the six months ended June 30, 2022:

	Shares			Weighted average exercise price		Weighted average remaining life		Intrinsic value (in thousands)
Outstanding Balance as of January 1, 2022		1,409,693		$	2.30
Granted		1,119,011		$	3.29
Exercised		(176,040	)	$	0.61
Forfeited and expired		(61,390	)	$	3.04
Balance as of June 30, 2022		2,291,274		$	2.89		8.1	$	2,585
Exercisable at the end of the period		916,036		$	1.12		6.0	$	2,155
Vested and expected to vest		2,291,274		$	2.89		8.1	$	2,585

The total intrinsic values of options exercised during the six months ended June 30, 2022 was $0.6 million.

As of June 30, 2022, total unrecognized compensation expense related to unvested stock options was $3.0 million, which is expected to be recognized over a weighted-average period of 3.4 years.

Restricted Phantom Units and Restricted Stock Units

In July 2021, the Company’s Board of Directors approved an amendment to 2,422,644 restricted phantom units (the "Restricted Phantom Units") previously granted by Zevia LLC (the “Phantom Unit Amendment"). The Phantom Unit Amendment changed the settlement feature of all outstanding Restricted Phantom Units so that following vesting, each award Restricted Phantom Units would be settled in shares of Class A common stock having a fair market value equal to (i) the number of Restricted Phantom Units subject to such award, multiplied by (ii) the difference between the fair market value of a share of Class A common stock and the grant date price per Restricted Phantom Unit. All other terms related to the Restricted Phantom Units remained unchanged. As a result of the Phantom Unit Amendment, the estimated fair value of the modified awards was $33.9 million and was recognized as an expense over the vesting period subsequent to the performance condition being met.

In March 2021, the Company's Board of Directors approved an amendment to the RSUs granted in August 2020 ("the RSU Amendment"). The RSU Amendment changed the vesting of such RSUs to occur as follows: (i) in the event of a change of control, the RSUs shall vest effective as of such change of control or (ii) in the event of an IPO, the RSUs shall vest in equal monthly installments over a 36-month period following the termination of any lockup period and shall be subject to the participant’s continued employment through such vesting date. Additionally, settlement shall occur within 30 days following the vesting of the RSUs and the participant shall be entitled to receive one share of Class A common stock for each vested RSU. All other terms remained unchanged. As a result of the RSU Amendment, the estimated fair value of the modified awards was $48.9 million and are being recognized as expense over the vesting period subsequent to the performance condition being met.

In November 2021, the Company's Board of Directors approved an amendment to its share-based compensation plans for certain senior management employees to allow immediate vesting upon retirement of all outstanding RSUs and stock options, and to extend the exercisability of outstanding stock options up to five years after retirement, if they meet certain conditions, including length of service and age, and they provide a one-year notice to the Board of Directors. During the six months ended June 30, 2022, two senior management employees retired from the Company and all outstanding awards and related stock compensation expense was accelerated through their retirement date.

RSU activity during the six months ended June 30, 2022 was as follows:

	Shares				Weighted average grant date fair value		Aggregate Intrinsic Value (in thousands)
Balance unvested shares at January 1, 2022		7,981,444			$	5.33
Granted		990,143			$	3.37
Vested		(5,470,827	)	*	$	5.81
Forfeited		(25,654	)		$	7.97
Balance unvested at June 30, 2022		3,475,106			$	4.00		9,765
Expected to vest at June 30, 2022		3,475,106			$	4.00		9,765

*Shares vested includes approximately 1.9 million of RSUs which vested but are subject to a deferred settlement provision over the next three years.

As of June 30, 2022, total unrecognized compensation expense related to unvested RSUs was $18.6 million, which is expected to be recognized over a weighted-average period of 2.72 years.

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Redeemable Convertible Preferred Units

6 Months Ended

Jun. 30, 2022

Redeemable Convertible Preferred Units [Abstract]

Redeemable Convertible Preferred Units

12. REDEEMABLE CONVERTIBLE PREFERRED UNITS

Prior to the IPO and the Reorganization Transactions, Zevia LLC had various classes of redeemable convertible preferred units ("preferred units") outstanding that were issued at various times since inception.

In connection with the IPO and the Reorganization Transactions, all outstanding preferred units were reclassified into a single class of common units and each common unit outstanding after giving effect thereto was reclassified as two Class B units on a one-to-two basis.

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Segment Reporting

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Segment Reporting

13. SEGMENT REPORTING

The Company has one operating and reporting segment, which operates as a product portfolio with a single business platform. In reaching this conclusion, management considered the definition of the Chief Operating Decision Maker ("CODM"); how the business is defined by the CODM; the nature of the information provided to the CODM and how that information is used to make operating decisions; and how resources and performance are accessed. The Company’s CODM is the Chief Executive Officer. The results of the operations are provided to and analyzed by the CODM at the Company's level and accordingly, key resource decisions and assessment of performance are performed at the Company's level. The Company has a common management team across all product lines and does not manage these products as individual businesses and as a result, cash flows are not distinct.

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Major Customers, Accounts Receivable and Vendor Concentration

6 Months Ended

Jun. 30, 2022

Risks and Uncertainties [Abstract]

Major Customers, Accounts Receivable and Vendor Concentration

14. MAJOR CUSTOMERS, ACCOUNTS RECEIVABLE AND VENDOR CONCENTRATION

The table below represents the Company’s major customers which accounted for more than 10% of total net sales for the following periods:

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Customer A		13	%		19	%		16	%		18	%
Customer B		12	%		17	%		11	%		17	%
Customer C		11	%	*			*				11	%
Customer D	*				11	%	*				11	%

The table below represents the Company’s customers which accounted for more than 10% of total accounts receivable, net as of:

	June 30, 2022			December 31, 2021
Customer B		17	%		13	%
Customer D		14	%		15	%
Customer E	*				11	%
Customer F	*				12	%

The table below represents raw material vendors that accounted for more than 10% of all raw material purchases for the following periods:

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Vendor A		29	%		30	%		28	%		32	%
Vendor B		14	%		24	%		17	%		23	%
Vendor C		12	%		12	%		12	%		13	%

* Less than 10% of total net sales, accounts receivable, net or raw material purchases.

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Loss Per Share

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Loss Per Share

15. LOSS PER SHARE

Basic earnings per share of Class A common stock is computed by dividing net loss attributable to the Company for the period by the weighted-average number of shares of Class A common stock outstanding during the same period. Diluted earnings per share of Class A common stock is computed by dividing net loss attributable to the Company by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. There were no shares of Class A or Class B common stock outstanding prior to July 22, 2021, and therefore, no earnings per share information has been presented for any period prior to that date.

Shares of the Company’s Class B common stock do not share in the earnings or losses attributable to Zevia PBC and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented. Shares of the Company’s Class B common stock are, however, considered potentially dilutive shares of Class A common stock because shares of Class B common stock, together with the related Zevia LLC Class B Common Units, are exchangeable into shares of Class A common stock on a one-for-one basis.

Prior to the IPO, the Zevia LLC membership structure included various classes of preferred units. The Company analyzed the calculation of earnings per unit for periods prior to the IPO and determined that it resulted in values that would not be meaningful to the users of these condensed consolidated financial statements. Therefore, earnings per share information has not been presented for the three and six months ended June 30, 2021.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:

	Three Months Ended June 30,			Six Months Ended June 30,
	2022			2022
(in thousands, except for share and per share amounts)
Net loss per share:
Numerator:
Net loss and comprehensive loss	$	(14,796	)	$	(32,281	)
Less: net loss attributable to non-controlling interests		3,706			10,293
Net loss to Zevia PBC	$	(11,090	)	$	(21,988	)
Denominator:
Weighted-average shares of Class A common stock outstanding – basic		40,167,570			38,523,985
Weighted-average shares of Class A common stock outstanding – diluted		40,167,570			38,523,985
Loss per share of Class A common stock – basic	$	(0.28	)	$	(0.57	)
Loss per share of Class A common stock – diluted	$	(0.28	)	$	(0.57	)

Zevia LLC Class B Common Units, stock options and restricted stock units were evaluated under the treasury stock method for potential dilutive effects and were determined to be anti-dilutive. The following weighted average outstanding shares were excluded from the computation of diluted net loss per share available to common stockholders:

	Three Months Ended June 30,		Six Months Ended June 30,
	2022		2022
Zevia LLC Class B Common Units exchangeable to shares of Class A common Stock		27,080,067		28,229,324
Stock Options		1,997,721		1,742,949
Restricted stock units		3,781,796		4,164,669
Restricted stock units vested but unsettled		1,903,262		1,708,612

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Income Taxes And Tax Receivable Agreement

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes And Tax Receivable Agreement

16. INCOME TAXES AND TAX RECEIVABLE AGREEMENT

Income Taxes

The Company is the managing member of Zevia LLC and as a result, consolidates the financial results of Zevia LLC in the unaudited condensed consolidated financial statements of Zevia PBC. Zevia LLC is a pass-through entity for U.S. federal and most applicable state and local income tax purposes following the Reorganization Transactions effected in connection with our IPO. As an entity classified as a partnership for tax purposes, Zevia LLC is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Zevia LLC is passed through to its members, including the Company. The Company is taxed as a C corporation and pays corporate federal, state and local taxes with respect to income allocated from Zevia LLC based on Zevia PBC's economic interest in Zevia LLC, which was 63.9% as of June 30, 2022.

The provision for income taxes differs from the amount of income tax computed by applying the applicable U.S. statutory federal income tax rate of 21% to income before provision of income taxes due to Zevia LLC’s pass-through structure for U.S. income tax purposes, pass-through permanent differences, state franchise taxes, tax effects of stock-based compensation, and the valuation allowance against the deferred tax assets. Except for state franchise taxes, Zevia PBC did not recognize an income tax expense (benefit) on its share of pre-tax book loss, exclusive of the noncontrolling interest of 36.1%, due to the full valuation allowance against its deferred tax assets.

Tax Receivable Agreement

The Company expects to obtain an increase in its share of tax basis in the net assets of Zevia LLC when Class B units are exchanged by the holders of Class B units for shares of Class A common stock of the Company and upon other qualifying transactions. Each change in outstanding shares of Class A common stock of the Company results in a corresponding increase or decrease in the Company's ownership of Class A units of Zevia LLC. The Company intends to treat any exchanges of Class B units as direct purchases of LLC interests for U.S. federal income tax purposes. These increases in tax basis may reduce the amounts that Zevia PBC would otherwise pay in the future to various taxing authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.

In connection with the IPO, the Company entered into the Tax Receivable Agreement ("TRA") with continuing members of Zevia LLC and the shareholders of blocker companies of certain pre-IPO institutional investors (the "Direct Zevia Stockholders"). In the event that such parties exchange any or all of their Class B units for Class A common stock, the TRA requires the Company to make payments to such holders for 85% of the tax benefits realized, or in some cases deemed to be realized, by the Company by such exchange as a result of (i) certain favorable tax attributes acquired from the blocker companies in the course of mergers related to the IPO (including net operating losses and the blocker companies’ allocable share of existing tax basis), (ii) increases in tax basis resulting from Zevia PBC's acquisition of continuing members' Zevia LLC units in connection with the IPO and in future exchanges and, (iii) tax basis increases attributable to payments made under the TRA (including tax benefits related to imputed interest). The annual tax benefits are computed by calculating the income taxes due, including such tax benefits, and the income taxes due without such benefits. The Company expects to benefit from the remaining 15% of any tax benefits that it may actually realize. The TRA payments are not conditioned upon any continued ownership interest in Zevia LLC or the Company. To the extent that the Company is unable to timely make payments under the TRA for any reason, such payments generally will be deferred and will accrue interest until paid.

The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income the Company generates each year and the tax rate then applicable. The Company calculates the liability under the TRA using a complex TRA model, which includes an assumption related to the fair market value of assets. Payments are generally due under the TRA within a specified period of time following the filing of the Company’s tax return for the taxable year with respect to which the payment obligation arises, although interest on such payments will begin to accrue at a rate of the Secured Overnight Financing Rate plus 300 basis points from the due date (without extensions) of such tax return.

The TRA provides that if (i) certain mergers, asset sales, other forms of business combinations, or other changes of control were to occur; (ii) there is a material uncured breach of any obligations under the TRA; or (iii) the Company elects an early termination of the TRA, then the TRA will terminate and the Company's obligations, or the Company's successor’s obligations, under the TRA will accelerate and become due and payable, based on certain assumptions, including an assumption that the Company would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the TRA and that any Class B units that have not been exchanged are deemed exchanged for the fair market value of the Company's Class A common stock at the time of termination.

As of June 30, 2022, management believes based on applicable accounting standards and the weight of all available evidence, it is not more likely than not that the Company will generate sufficient taxable income to realize the Company's deferred tax assets ("DTAs") including the difference in the Company's tax basis in excess of the financial reporting value for the Company's investment in Zevia LLC. Consequently, management has established a full valuation allowance against the Company's DTAs as of June 30, 2022 and determined that it was more likely than not that its DTAs subject to the TRA would not be realized as of June 30, 2022. The Company has not recognized a liability related to the tax savings it may realize from utilization of such DTAs. As of June 30, 2022, the total unrecorded TRA liability is approximately $52.5 million. If utilization of the DTAs subject to the TRA becomes more likely than not in the future, the Company will record a liability related to the TRA, to the extent probable at that time, which will be recognized as an expense within its condensed consolidated statements of operations and comprehensive loss.

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Subsequent Events

6 Months Ended

Jun. 30, 2022

Subsequent Events [Abstract]

Subsequent Events

17. SUBSEQUENT EVENTS

On July 7, 2022, the Chief Strategy Officer and Executive Vice President, Sales and Marketing informed the Company of his intention to retire effective July 15, 2022. On July 9, 2022, the Board of Directors approved the acceleration of all outstanding RSU awards and stock options and the Company will recognize the related equity-based compensation upon retirement in the third quarter of 2022.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2022

Basis of Presentation

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("US 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 US GAAP for complete financial statements and are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2022, or for any other interim period or any other future fiscal year. The balance sheet as of December 31, 2021 included herein was derived from the audited financial statements as of that date but does not include all disclosures, including certain notes, required by US GAAP that are required on an annual reporting basis. Certain information and note disclosures normally included in the financial statements prepared in accordance with US 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, 2021 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

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its subsidiary, Zevia LLC, that it controls due to ownership of a majority voting 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 business and affairs of, Zevia LLC. Accordingly, the Company has prepared these condensed consolidated financial statements in accordance with Accounting Standards Codification ("ASC") Topic 810, Consolidation.

In connection with the IPO, the Company completed certain reorganization transactions (the “Reorganization Transactions") described in the Annual Report, which were accounted for consistent with a combination of entities under common control. As a result, the financial reports filed with the SEC by the Company subsequent to the Reorganization Transactions are prepared “as if” Zevia LLC is the accounting predecessor of the Company. The historical operations of Zevia LLC are deemed to be those of the Company. Thus, the condensed consolidated financial statements included in this Quarterly Report reflect (i) the historical operating results and financial position of Zevia LLC prior to the Reorganization Transactions; (ii) the condensed consolidated results of operations and financial position of the Company and Zevia LLC following the Reorganization Transactions; and (iii) the Company's equity structure for all periods presented. No step-up basis of intangible assets or goodwill was recorded.

Reclassifications

Reclassifications

Certain amounts from prior periods have been reclassified in the condensed consolidated statements of operations and comprehensive loss and condensed consolidated statement of cash flows to conform to the current period presentation. For the activity in the periods prior to the IPO and Reorganization Transactions, common stock, additional paid-in capital, and accumulated deficit information have been combined and presented as member’s deficit in the accompanying condensed consolidated balance sheets and condensed consolidated statements of changes in redeemable convertible preferred units and stockholders' equity (deficit).

Condensed Consolidated Statements of Operations and Comprehensive Loss:

The following table presents the reclassifications made to the Condensed Consolidated Statements of Operations and Comprehensive Loss:

(in thousands)	Three Months Ended June 30, 2021  (as reported)		Reclassification			Three Months Ended June 30, 2021 (adjusted)		Six Months Ended June 30, 2021  (as reported)		Reclassification			Six Months Ended June 30, 2021 (adjusted)
General and administrative	$	6,014	$	(36	)	$	5,978	$	11,727	$	(73	)	$	11,654
Equity-based compensation		—		36			36		—		73			73

Condensed Consolidated Statements of Cash Flows:

The following table presents the reclassifications made to the Condensed Consolidated Statement of Cash Flows:

(in thousands)	Six Months Ended June 30, 2021  (as reported)			Reclassification			Six Months Ended June 30, 2021 (adjusted)
Changes in operating assets and liabilities:
Prepaid expenses and other assets		380			(30	)		350
Right of use asset		(30	)		30			—
Accounts payable		3,036			657			3,693
Accrued expenses and other current liabilities		(778	)		873			95
Operating lease liabilities		(75	)		(228	)		(303	)
Other current liabilities		1,530			(1,530	)		—
Operating lease liabilities, net of current portion		(228	)		228			—

Use of estimates

Use of estimates

The preparation of the unaudited condensed consolidated financial statements in accordance with US 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; reserves recorded for inventory obsolescence; the incremental borrowing rate for lease liabilities; allowance for doubtful accounts; recoverability of intangible assets; realization of deferred tax assets; and the determination of the fair value of equity instruments, including redeemable convertible preferred and common units, 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.

As of June 30, 2022, the Company’s operations continue to be impacted by the effects of the COVID-19 pandemic including the emergence of new variants, with respect to broad-based inflation in input costs, logistics, manufacturing and labor costs. During the three and six months ended June 30, 2022, the Company experienced significant inflationary impact, which has created headwinds that the Company expects to continue throughout 2022. The effects of the COVID-19 pandemic continues to impact global economies, and the Company will continue to monitor the situation and the effects on its business and operations, particularly if the COVID-19 pandemic including the emergence of new variants, continues for an extended period of time.

Recent accounting pronouncements

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 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 – Recently Adopted

In April 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2021-04, which included Topic 260, Earnings Per Share and Topic 718, Compensation - Stock Compensation. This guidance clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options due to a lack of explicit guidance in the FASB Codification. This ASU is effective for all entities for fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company adopted ASU 2021-04 as of January 1, 2022. The adoption of ASU 2021-04 did not have a significant impact on the Company's financial statements as the Company does not have freestanding equity-classified written call options.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. This ASU improves areas of US GAAP and reduces cost and complexity while maintaining usefulness. The main provisions remove certain exceptions, including the exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. In addition, the amendments simplify income tax accounting in the areas such as income based franchise taxes, eliminating the requirements to allocate consolidated current and deferred tax expense in certain instances and a requirement that an entity reflects the effect of enacted changes in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. This ASU is effective for private companies for annual reporting periods beginning after December 15, 2021, and interim periods within annual periods beginning after December 15, 2022. The Company adopted ASU 2019-12 as of January 1, 2022. The adoption of ASU 2019-12 did not have a significant impact on the Company’s financial statements.

Recently Issued Accounting Pronouncements – Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU provides for a new impairment model that requires measurement and recognition of expected credit losses for most financial assets held. The ASU is effective for private companies for annual periods, and interim periods within those annual periods, beginning after December 15, 2022. The Company currently does not expect this guidance to have a significant impact on the Company’s financial statements as it does not have a history of material credit losses.

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

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Summary of Reclassifications of Consolidated Statement of Operations and Comprehensive Loss

The following table presents the reclassifications made to the Condensed Consolidated Statements of Operations and Comprehensive Loss:

(in thousands)	Three Months Ended June 30, 2021  (as reported)		Reclassification			Three Months Ended June 30, 2021 (adjusted)		Six Months Ended June 30, 2021  (as reported)		Reclassification			Six Months Ended June 30, 2021 (adjusted)
General and administrative	$	6,014	$	(36	)	$	5,978	$	11,727	$	(73	)	$	11,654
Equity-based compensation		—		36			36		—		73			73

Summary of Reclassifications of Consolidated Statement of Cash Flows

The following table presents the reclassifications made to the Condensed Consolidated Statement of Cash Flows:

(in thousands)	Six Months Ended June 30, 2021  (as reported)			Reclassification			Six Months Ended June 30, 2021 (adjusted)
Changes in operating assets and liabilities:
Prepaid expenses and other assets		380			(30	)		350
Right of use asset		(30	)		30			—
Accounts payable		3,036			657			3,693
Accrued expenses and other current liabilities		(778	)		873			95
Operating lease liabilities		(75	)		(228	)		(303	)
Other current liabilities		1,530			(1,530	)		—
Operating lease liabilities, net of current portion		(228	)		228			—

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Revenues (Tables)

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Summary of Disaggregation of Revenue

The following table disaggregates the Company’s sales by channel:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Retail sales	$	39,596	$	30,902	$	73,761	$	56,769
Online/e-commerce		5,946		3,450		9,815		8,277
Net sales	$	45,542	$	34,352	$	83,576	$	65,046

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

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
United States	$	40,123	$	30,414	$	74,312	$	58,137
Canada		5,419		3,938		9,264		6,909
Net sales	$	45,542	$	34,352	$	83,576	$	65,046

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Inventories (Tables)

6 Months Ended

Jun. 30, 2022

Inventory Disclosure [Abstract]

Summary of Inventories

Inventories consist of the following as of:

(in thousands)	June 30, 2022		December 31, 2021
Raw materials	$	11,106	$	10,193
Finished goods		22,818		21,308
Inventories	$	33,924	$	31,501

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Property and Equipment, Net (Tables)

6 Months Ended

Jun. 30, 2022

Property, Plant and Equipment [Abstract]

Summary of Property and Equipment

Property and equipment consist of the following as of:

(in thousands)	June 30, 2022			December 31, 2021
Land	$	336		$	336
Leasehold improvements		463			463
Computer equipment and software		2,941			2,254
Furniture and equipment		544			521
Vehicles		156			38
Quality control and marketing equipment		900			532
Buildings and improvements		1,575			1,443
Assets not yet placed in service		730			456
		7,645			6,043
Less accumulated depreciation		(2,935	)		(2,379	)
Property and equipment, net	$	4,710		$	3,664

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Intangible Assets, Net (Tables)

6 Months Ended

Jun. 30, 2022

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Summary of Intangible Assets

The following table provides information pertaining to the Company’s intangible assets as of:

(in thousands)	June 30, 2022			December 31, 2021
Customer relationships	$	3,007		$	3,007
Accumulated amortization		(2,369	)		(2,269	)
		638			738
Trademarks		3,000			3,000
Intangible assets, net	$	3,638		$	3,738

Summary of Expected Amortization Expense for Intangible Assets with Definite Lives

Amortization expense for intangible assets with definite lives is expected to be as follows:

(in thousands)
Remainder of 2022	$	100
2023		200
2024		200
2025		138
Expected amortization expense for intangible assets with definite lives	$	638

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Leases (Tables)

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Summary of Lease Cost

The Company leases office space and vehicles. The leases have remaining lease terms of one to 18 months. On March 25, 2022, the Company entered into an amendment to the lease for its corporate headquarters offices to extend the term through December 31, 2023, and to expand the total square footage from 17,923 square feet to 20,185 square feet commencing on May 1, 2022. The Company’s recognized lease costs include:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2022		2021		2022		2021
Income Statement
Operating lease cost(1)	$	178	$	151	$	329	$	302

(1)Operating lease cost is recorded within general and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive loss.

	Six Months Ended June 30,
	2022			2021
Weighted-average remaining lease term (months)		17.9			10.4
Weighted-average discount rate		7.56	%		7.56	%

Summary of Maturities of Lease Payments Under Non-Cancellable Leases Were As Follows

Maturities of lease payments under non-cancellable leases were as follows:

(in thousands)	June 30, 2022
Remainder of 2022	$	372
2023		744
Total lease payments		1,116
Less Imputed Interest		(63	)
Present value of lease liabilities	$	1,053

XML

Balance Sheet Components (Tables)

6 Months Ended

Jun. 30, 2022

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following as of:

(in thousands)	June 30, 2022		December 31, 2021
Accrued employee compensation benefits	$	3,713	$	3,032
Accrued direct selling costs	$	1,513	$	1,011
Accrued other		2,721		2,662
Total	$	7,947	$	6,705

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Equity Based Compensation (Tables)

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Schedule for Fair Value of Stock Options Granted Estimated on the Date of Grant Using the Black-Scholes Option

The fair value of stock option awards granted during the period was determined on the grant date using the Black-Scholes valuation model based on the following weighted-average assumptions:

	Six Months Ended June 30,
	2022
Stock price	$	3.29
Exercise Price	$	3.29
Expected term (years)(1)		6.25
Expected volatility (2)		63.0	%
Risk-Free interest rate (3)		2.7	%
Dividend yield (4)		0.0	%

(1) Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.

(2) Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.

(3) The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.

(4) We have assumed a dividend yield of zero as we have no plans to declare dividends in the foreseeable future.

The weighted average grant date fair value for RSUs granted for the six months ended June 30, 2022 was $2.00.

Summary of Stock Option Activity

A summary of stock option activity for the six months ended June 30, 2022:

	Shares			Weighted average exercise price		Weighted average remaining life		Intrinsic value (in thousands)
Outstanding Balance as of January 1, 2022		1,409,693		$	2.30
Granted		1,119,011		$	3.29
Exercised		(176,040	)	$	0.61
Forfeited and expired		(61,390	)	$	3.04
Balance as of June 30, 2022		2,291,274		$	2.89		8.1	$	2,585
Exercisable at the end of the period		916,036		$	1.12		6.0	$	2,155
Vested and expected to vest		2,291,274		$	2.89		8.1	$	2,585

Summary of Restricted Stock Unit Activity

RSU activity during the six months ended June 30, 2022 was as follows:

	Shares				Weighted average grant date fair value		Aggregate Intrinsic Value (in thousands)
Balance unvested shares at January 1, 2022		7,981,444			$	5.33
Granted		990,143			$	3.37
Vested		(5,470,827	)	*	$	5.81
Forfeited		(25,654	)		$	7.97
Balance unvested at June 30, 2022		3,475,106			$	4.00		9,765
Expected to vest at June 30, 2022		3,475,106			$	4.00		9,765

*Shares vested includes approximately 1.9 million of RSUs which vested but are subject to a deferred settlement provision over the next three years.

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Major Customers, Accounts Receivable and Vendor Concentration (Tables)

6 Months Ended

Jun. 30, 2022

Customer Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member]

Concentration Risk [Line Items]

 Summary Sales to Significant Customers

The table below represents the Company’s major customers which accounted for more than 10% of total net sales for the following periods:

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Customer A		13	%		19	%		16	%		18	%
Customer B		12	%		17	%		11	%		17	%
Customer C		11	%	*			*				11	%
Customer D	*				11	%	*				11	%

Customer Concentration Risk [Member] | Accounts Receivable [Member]

Concentration Risk [Line Items]

 Summary Sales to Significant Customers

The table below represents the Company’s customers which accounted for more than 10% of total accounts receivable, net as of:

	June 30, 2022			December 31, 2021
Customer B		17	%		13	%
Customer D		14	%		15	%
Customer E	*				11	%
Customer F	*				12	%

Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member]

Concentration Risk [Line Items]

 Summary Sales to Significant Customers

The table below represents raw material vendors that accounted for more than 10% of all raw material purchases for the following periods:

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Vendor A		29	%		30	%		28	%		32	%
Vendor B		14	%		24	%		17	%		23	%
Vendor C		12	%		12	%		12	%		13	%

* Less than 10% of total net sales, accounts receivable, net or raw material purchases.

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Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Summary of Computation of Basic and Diluted Earnings per Share

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:

	Three Months Ended June 30,			Six Months Ended June 30,
	2022			2022
(in thousands, except for share and per share amounts)
Net loss per share:
Numerator:
Net loss and comprehensive loss	$	(14,796	)	$	(32,281	)
Less: net loss attributable to non-controlling interests		3,706			10,293
Net loss to Zevia PBC	$	(11,090	)	$	(21,988	)
Denominator:
Weighted-average shares of Class A common stock outstanding – basic		40,167,570			38,523,985
Weighted-average shares of Class A common stock outstanding – diluted		40,167,570			38,523,985
Loss per share of Class A common stock – basic	$	(0.28	)	$	(0.57	)
Loss per share of Class A common stock – diluted	$	(0.28	)	$	(0.57	)

Summary of Antidilutive Securities Excluded From Computation of Earnings Per Share

The following weighted average outstanding shares were excluded from the computation of diluted net loss per share available to common stockholders:

	Three Months Ended June 30,		Six Months Ended June 30,
	2022		2022
Zevia LLC Class B Common Units exchangeable to shares of Class A common Stock		27,080,067		28,229,324
Stock Options		1,997,721		1,742,949
Restricted stock units		3,781,796		4,164,669
Restricted stock units vested but unsettled		1,903,262		1,708,612

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Description of Business and Basis of Presentation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	Jul. 21, 2021	Jun. 30, 2022
Zevia L L C [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Percentage of ownership and economic interest held by parent		63.90%
Percentage of ownership and economic interest held by non-controlling interest		36.10%
ZEVIA PBC [Member] | IPO [Member] | Common Class A [Member]
Organization Consolidation And Presentation Of Financial Statements [Line Items]
Stock issued during period shares new issues	10,700,000
Sale of stock, price per share	$ 14.00
Proceeds from issuance of initial public offering	$ 139.7
Underwriting discounts and commissions	$ 10.1

XML

Summary of Significant Accounting Policies - Summary of Reclassifications of Consolidated Statements of Operations and Comprehensive Loss (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
General and administrative	$ 9,818	$ 5,978	$ 19,947	$ 11,654
Equity based compensation	$ 8,043	36	$ 16,944	73
Previously Reported [Member]
General and administrative		6,014		11,727
Equity based compensation		0
Revision of Prior Period, Adjustment [Member]
General and administrative		(36)		(73)
Equity based compensation		$ 36		$ 73

XML

Summary of Significant Accounting Policies - Summary of Reclassifications of Consolidated Statement of Cash Flows (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Changes in operating assets and liabilities:
Prepaid expenses and other assets	$ 1,371	$ 350
Right of use asset		0
Accounts payable	2,976	3,693
Accrued expenses and other current liabilities	1,242	95
Operating lease liabilities	$ (334)	(303)
Other current liabilities		0
Operating lease liabilities, net of current portion		0
Previously Reported [Member]
Changes in operating assets and liabilities:
Prepaid expenses and other assets		380
Right of use asset		(30)
Accounts payable		3,036
Accrued expenses and other current liabilities		(778)
Operating lease liabilities		(75)
Other current liabilities		1,530
Operating lease liabilities, net of current portion		(228)
Revision of Prior Period, Adjustment [Member]
Changes in operating assets and liabilities:
Prepaid expenses and other assets		(30)
Right of use asset		30
Accounts payable		657
Accrued expenses and other current liabilities		873
Operating lease liabilities		(228)
Other current liabilities		(1,530)
Operating lease liabilities, net of current portion		$ 228

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Revenues - Summary of Disaggregation of Revenue (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Disaggregation of Revenue [Line Items]
Net sales	$ 45,542	$ 34,352	$ 83,576	$ 65,046
UNITED STATES
Disaggregation of Revenue [Line Items]
Net sales	40,123	30,414	74,312	58,137
CANADA
Disaggregation of Revenue [Line Items]
Net sales	5,419	3,938	9,264	6,909
Retail sales [Member]
Disaggregation of Revenue [Line Items]
Net sales	39,596	30,902	73,761	56,769
Online/e-commerce [Member]
Disaggregation of Revenue [Line Items]
Net sales	$ 5,946	$ 3,450	$ 9,815	$ 8,277

XML

Revenues - Additional Information (Detail) - USD ($)	Jun. 30, 2022	Dec. 31, 2021
Revenue from Contract with Customer [Abstract]
Revenue, remaining performance obligation, amount	$ 0	$ 0

XML

Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 11,106	$ 10,193
Finished goods	22,818	21,308
Inventories	$ 33,924	$ 31,501

XML

Property and Equipment, Net - Summary of Property and Equipment (Detail) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 7,645	$ 6,043
Less accumulated depreciation	(2,935)	(2,379)
Property and equipment, net	4,710	3,664
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	463	463
Computer Equipment and Software [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	2,941	2,254
Furniture and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	544	521
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	156	38
Quality Control and Marketing Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	900	532
Buildings and improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	1,575	1,443
Land [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	336	336
Assets not yet Placed in Service [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 730	$ 456

XML

Property and Equipment, Net - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 0.3	$ 0.2	$ 0.6	$ 0.4

XML

Intangible Assets, Net - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Schedule Of Intangible Assets [Line Items]
Accumulated amortization	$ (2,369)	$ (2,269)
Finite-Lived Intangible Assets, Net, Total	638	738
Intangible assets, net	3,638	3,738
Trademarks [Member]
Schedule Of Intangible Assets [Line Items]
Indefinite-lived intangible assets, excluding goodwill	3,000	3,000
Customer Relationships [Member]
Schedule Of Intangible Assets [Line Items]
Finite-Lived intangible assets, gross	$ 3,007	$ 3,007

XML

Intangible Assets, Net - Summary of Expected Amortization Expense for Intangible Assets with Definite Lives (Detail) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Remainder of 2022	$ 100
2023	200
2024	200
2025	138
Expected amortization expense for intangible assets with definite lives	$ 638	$ 738

XML

Intangible Assets, Net - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Amortization expense	$ 100,000	$ 100,000	$ 100,000	$ 100,000
Impairment losses on intangible assets	$ 0	$ 0	$ 0	$ 0

XML

Debt - Additional Information (Detail) $ in Millions	Feb. 22, 2022 USD ($)
Line of Credit Facility [Line Items]
Fixed Charge Coverage Ratio	Thereafter, the Borrower must satisfy a financial covenant requiring a minimum fixed charge coverage ratio of 1.00 to 1.00
Loan And Security Agreement Member | Minimum Member
Line of Credit Facility [Line Items]
Applicable Margin	1.50%
Loan And Security Agreement Member | Maximum Member
Line of Credit Facility [Line Items]
Applicable Margin	2.00%
Secured Revolving Line of Credit [Member]
Line of Credit Facility [Line Items]
Aggregate Principal Amount	$ 20
Amount of line of credit use for letter of credit issuances	2
Commitment of secured line of credit	10
Liquidity commitment	7
Borrowing base secured revolving line of credit	$ 3
Borrowing Base	17.50%
Secured Revolving Line of Credit [Member] | Minimum Member
Line of Credit Facility [Line Items]
Applicable Margin	0.50%
Secured Revolving Line of Credit [Member] | Maximum Member
Line of Credit Facility [Line Items]
Applicable Margin	1.00%

XML

Leases - Additional Information (Detail)	Mar. 25, 2022 ft²
Minimum Member
Lessee, Lease, Description [Line Items]
Area of land	17,923
Maximum Member
Lessee, Lease, Description [Line Items]
Area of land	20,185

XML

Leases - Summary of Lease Costs As Follows (Detail) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Statement
Operating lease cost	[1]	$ 178	$ 151	$ 329	$ 302
Other Information
Weighted-average remaining lease term (months)		17 months 27 days	10 months 12 days	17 months 27 days	10 months 12 days
Weighted-average discount rate		7.56%	7.56%	7.56%	7.56%

[1] Operating lease cost is recorded within general and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive loss.

XML

Leases - Summary of Maturities of Lease Payments Under Non Cancellable Leases Were As Follows (Detail) $ in Thousands	Jun. 30, 2022 USD ($)
Lessee, Operating Lease, Liability, to be Paid [Abstract]
Remainder of 2022	$ 372
2023	744
Total lease payments	1,116
Less Imputed Interest	(63)
Present value of lease liabilities	$ 1,053

XML

Balance Sheet Components - Summary of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accrued employee compensation benefits	$ 3,713	$ 3,032
Accrued direct selling costs	1,513	1,011
Accrued other	2,721	2,662
Total	$ 7,947	$ 6,705

XML

Equity-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended		6 Months Ended
	Jul. 31, 2021	Mar. 31, 2021	Jun. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate intrinsic value			$ 0.6
Equity Incentive Plan 2021 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
The amount of common stock available under the plan for future grants and/or issuances			3,100,000
Percentage of increase in shares available for issuance			5.00%
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated weighted average period over which expense is expected to be recognized			2 years 8 months 19 days
Share-based Payment Arrangement, Plan Modification, Incremental Cost		$ 48.9
Number of Monthly Installments Granted Equally Following The Termination Of Lockup Period		36 months
Settlement period on vesting of RSUs		30 days
Granted (in dollars per share)			$ 2.00
Amount of cost to be recognized for non-vested award under share-based payment arrangement			$ 18.6
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized unit compensation expense on unvested unit options			$ 3.0
Estimated weighted average period over which expense is expected to be recognized			3 years 4 months 24 days
Restricted Phantom Class A Common Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of RSUs that were modified during the period	2,422,644
Share-based Payment Arrangement, Plan Modification, Incremental Cost	$ 33.9

XML

Equity Based Compensation - Fair Value of Stock Options Granted Estimated on the Date of Grant Using the Black-Scholes Option (Details) - 2022	6 Months Ended
	Jun. 30, 2022 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock price	$ 3.29
Exercise Price	$ 3.29
Expected term (years)	6 years 3 months	[1]
Expected volatility	63.00%	[2]
Risk-Free interest rate	2.70%	[3]
Dividend yield	0.00%	[4]

[1] (1) Expected term represents the estimated period of time until an award is exercised and was determined using the simplified method.

[2] (2) Expected volatility is based on the historical volatility of a selected peer group over a period equivalent to the expected term.

[3] (3) The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.

[4] (4) We have assumed a dividend yield of zero as we have no plans to declare dividends in the foreseeable future.

XML

Equity Based Compensation - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2022
Share-Based Payment Arrangement [Abstract]
Outstanding Balance as of January 1, 2022	1,409,693
Granted	1,119,011
Exercised	(176,040)
Forfeited and expired	(61,390)
Balance as of june 30, 2022	2,291,274
Exercisable at the end of the period	916,036
Vested and expected to vest	2,291,274
Weighted average exercise price, Beginning balance	$ 2.30
Weighted average exercise price, Granted	3.29
Weighted average exercise price, Exercised	0.61
Weighted average exercise price, Forfeited and cancelled	3.04
Weighted average exercise price, Ending balance	2.89
Weighted average exercise price, Exercisable	1.12
Weighted average exercise price, Vested and expected to vest	$ 2.89
Weighted average remaining life Outstanding	8 years 1 month 6 days
Weighted average remaining life Exercisable	6 years
Weighted average remaining life Vested and expected to vest	8 years 1 month 6 days
Aggregate intrinsic value	$ 2,585
Aggregate intrinsic value, Exercisable	2,155
Aggregate intrinsic value, Vested and expected to vest	$ 2,585

XML

Equity Based Compensation - Summary of Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) [Member] $ / shares in Units, $ in Thousands	6 Months Ended
	Jun. 30, 2022 USD ($) $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Balance unvested shares at January 1, 2022 | shares	7,981,444
Restricted stock units, Granted | shares	990,143
Restricted stock units, Vested | shares	(5,470,827)
Restricted stock units, Forfeited | shares	(25,654)
Balance unvested at June 30, 2022 | shares	3,475,106
Expected to vest at june 30, 2022 | shares	3,475,106
Weighted average grant date fair value, Beginning balance | $ / shares	$ 5.33
Weighted average grant date fair value, Granted | $ / shares	3.37
Weighted average grant date fair value, Vested | $ / shares	5.81
Weighted average grant date fair value, Forfeited | $ / shares	7.97
Weighted average grant date fair value, Ending balance | $ / shares	4.00
Weighted average grant date fair value, Expected to vest at March 31, 2022 | $ / shares	$ 4.00
Aggregate intrinsic value, non vested | $	$ 9,765
Aggregate intrinsic value, Expected to vest | $	$ 9,765

XML

Equity-Based Compensation - Summary of Restricted Stock Unit Activity (Parenthetical) (Details)	6 Months Ended
	Jun. 30, 2022 shares
Share-Based Payment Arrangement [Abstract]
Restricted Unsettled Shares, Vested	1,900,000

XML

Redeemable Convertible Preferred Units - Additional Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Temporary Equity [Line Items]
Redeemable Convertible Preferred Stock, Issuance Cost	$ 0	$ 3,829

XML

Major Customers, Accounts Receivable And Vendor Concentration - Summary Sales to Significant Customers (Detail)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Customer Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer A [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	13.00%	19.00%	16.00%	18.00%
Customer Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer B [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	12.00%	17.00%	11.00%	17.00%
Customer Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer C [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	11.00%			11.00%
Customer Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer D [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage		11.00%		11.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer B [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage			17.00%		13.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer D [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage			14.00%		15.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer E [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage					11.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer F [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage					12.00%
Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | Vendor A [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	29.00%	30.00%	28.00%	32.00%
Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | Vendor B [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	14.00%	24.00%	17.00%	23.00%
Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | Vendor C [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	12.00%	12.00%	12.00%	13.00%

XML

Major Customers, Accounts Receivable And Vendor Concentration - Additional Information (Detail)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Customer Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member] | Minimum [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	10.00%	10.00%	10.00%	10.00%
Customer Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member] | Customers [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	10.00%	10.00%	10.00%	10.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customers [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage			10.00%		10.00%
Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | Customers [Member]
Concentration Risk [Line Items]
Concentration Risk, Percentage	10.00%	10.00%	10.00%	10.00%

XML

Loss Per Share - Summary of Computation of Basic and Diluted Earnings per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Basic net loss per share:
Loss attributable to noncontrolling interest	$ 3,706	$ 0	$ 10,293	$ 0
Net income (loss) attributable to Zevia PBC	$ (14,796)	$ (749)	$ (32,281)	$ (502)
Weighted average common units outstanding, basic	40,167,570		38,523,985
Weighted average common units outstanding, diluted	40,167,570		38,523,985
Basic earning per share	$ (0.28)		$ (0.57)
Diluted earnings per share	$ (0.28)		$ (0.57)
Common Class A [Member]
Basic net loss per share:
Net loss and comprehensive loss	$ (14,796)		$ (32,281)
Loss attributable to noncontrolling interest	3,706		10,293
Net income (loss) attributable to Zevia PBC	$ (11,090)		$ (21,988)
Weighted average common units outstanding, basic	40,167,570		38,523,985
Weighted average common units outstanding, diluted	40,167,570		38,523,985
Basic earning per share	$ (0.28)		$ (0.57)
Diluted earnings per share	$ (0.28)		$ (0.57)

XML

Loss Per Share - Summary of Antidilutive Securities Excluded From Computation of Earnings Per Share (Detail) - shares	3 Months Ended	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2022
Common Class A [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	27,080,067	28,229,324
Employee Stock Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,997,721	1,742,949
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	3,781,796	4,164,669
Restricted Stock Units Vested But Unsettled [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,903,262	1,708,612

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Income Taxes And Tax Receivable Agreement (Additional Information) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2022 USD ($)
Income Tax Contingency [Line Items]
Federal income tax rate	21.00%
Tax Receivable Agreement [Member]
Income Tax Contingency [Line Items]
Deferred Tax Assets Liabilities Net	$ 52.5
Common Class B [Member] | Tax Receivable Agreement [Member]
Income Tax Contingency [Line Items]
Income tax benefit percentage attributable to exchange for class A common stock	85.00%
Zevia LLC [Member]
Income Tax Contingency [Line Items]
Economic interest percentage	63.90%
Percentage of ownership and economic interest held by non-controlling interest	36.10%

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Subsequent Events (Additional Information) (Details)	Jul. 07, 2022
Subsequent Event Member
Subsequent Event [Line Items]
Date of subsequent event	Jul. 07, 2022