0000950170-23-060295.txt : 20231107 0000950170-23-060295.hdr.sgml : 20231107 20231107162122 ACCESSION NUMBER: 0000950170-23-060295 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 77 CONFORMED PERIOD OF REPORT: 20230930 FILED AS OF DATE: 20231107 DATE AS OF CHANGE: 20231107 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Zevia PBC CENTRAL INDEX KEY: 0001854139 STANDARD INDUSTRIAL CLASSIFICATION: BOTTLED & CANNED SOFT DRINKS CARBONATED WATERS [2086] IRS NUMBER: 862862492 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-40630 FILM NUMBER: 231384258 BUSINESS ADDRESS: STREET 1: 15821 VENTURA BLVD. STREET 2: SUITE 145 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: (310) 202-7000 MAIL ADDRESS: STREET 1: 15821 VENTURA BLVD. STREET 2: SUITE 145 CITY: ENCINO STATE: CA ZIP: 91436 10-Q 1 zvia-20230930.htm 10-Q 10-Q
--12-310001854139falseQ3YesYes0001854139zvia:CustomerEMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2022-01-012022-12-3100018541392022-01-012022-03-310001854139srt:MinimumMemberzvia:SecuredRevolvingLineOfCreditFacilityMember2022-02-222022-02-220001854139us-gaap:NoncontrollingInterestMember2022-01-012022-03-310001854139country:US2022-01-012022-09-300001854139us-gaap:SupplierConcentrationRiskMemberzvia:CustomersMemberus-gaap:CostOfGoodsTotalMember2023-01-012023-09-300001854139us-gaap:RetainedEarningsMember2023-01-012023-03-310001854139us-gaap:ComputerEquipmentMember2023-09-300001854139us-gaap:TrademarksMember2022-12-310001854139zvia:SoftwareMember2022-07-012022-09-300001854139us-gaap:EmployeeStockOptionMember2023-07-012023-09-300001854139us-gaap:CommonClassBMember2023-11-010001854139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-03-310001854139us-gaap:VehiclesMember2023-09-300001854139us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001854139us-gaap:RetainedEarningsMember2022-04-012022-06-300001854139zvia:CustomerHMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2022-01-012022-12-310001854139us-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2023-01-012023-09-300001854139zvia:SecuredRevolvingLineOfCreditFacilityMember2022-02-222022-02-220001854139country:US2022-07-012022-09-300001854139us-gaap:SalesChannelDirectlyToConsumerMember2022-01-012022-09-300001854139us-gaap:EmployeeStockOptionMember2022-07-012022-09-300001854139us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001854139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-03-310001854139zvia:ZeviaLLCMember2022-12-310001854139zvia:TwoThousandTwentyTwoMember2022-01-012022-09-300001854139zvia:VendorAMemberus-gaap:SupplierConcentrationRiskMemberus-gaap:CostOfGoodsTotalMember2022-01-012022-09-300001854139us-gaap:RetainedEarningsMember2022-12-310001854139us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001854139zvia:QualityControlAndMarketingEquipmentMember2023-09-300001854139us-gaap:FurnitureAndFixturesMember2023-09-300001854139us-gaap:EmployeeStockOptionMember2022-01-012022-09-300001854139us-gaap:RestrictedStockUnitsRSUMember2022-07-012022-09-300001854139zvia:CustomerAMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2022-07-012022-09-300001854139us-gaap:RevenueFromContractWithCustomerMembersrt:MinimumMemberus-gaap:CustomerConcentrationRiskMember2023-01-012023-09-300001854139zvia:AssetsNotYetPlacedInServiceMember2023-09-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-04-012022-06-300001854139us-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonClassAMember2022-01-012022-09-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-04-012023-06-300001854139us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001854139zvia:SoftwareMember2022-01-012022-09-300001854139zvia:VendorAMemberus-gaap:SupplierConcentrationRiskMemberus-gaap:CostOfGoodsTotalMember2023-07-012023-09-300001854139us-gaap:NoncontrollingInterestMember2021-12-310001854139us-gaap:RestrictedStockUnitsRSUMemberzvia:TwoThousandTwentyTwo1Member2023-09-300001854139us-gaap:CommonClassAMember2023-07-012023-09-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-01-012022-03-310001854139zvia:TaxReceivableAgreementMember2022-12-310001854139us-gaap:SupplierConcentrationRiskMemberus-gaap:CostOfGoodsTotalMemberzvia:VendorEMember2023-01-012023-09-3000018541392023-01-012023-09-300001854139srt:RestatementAdjustmentMember2022-01-012022-09-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-07-012023-09-300001854139zvia:SoftwareMember2023-09-300001854139us-gaap:RetainedEarningsMember2022-06-300001854139us-gaap:RetainedEarningsMember2023-07-012023-09-300001854139us-gaap:AdditionalPaidInCapitalMember2022-04-012022-06-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2021-12-310001854139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-09-300001854139country:US2023-01-012023-09-300001854139us-gaap:RetainedEarningsMember2021-12-310001854139us-gaap:VehiclesMember2022-12-310001854139zvia:EquityIncentivePlanTwoThousandTwentyOneMember2023-01-012023-09-300001854139us-gaap:RestrictedStockUnitsRSUMember2022-12-310001854139us-gaap:SupplierConcentrationRiskMemberzvia:VendorCMemberus-gaap:CostOfGoodsTotalMember2022-01-012022-09-3000018541392022-06-3000018541392022-02-222022-02-220001854139zvia:TwoThousandTwentyTwoMember2022-09-300001854139us-gaap:RevenueFromContractWithCustomerMemberzvia:CustomerCMemberus-gaap:CustomerConcentrationRiskMember2023-07-012023-09-300001854139us-gaap:SalesChannelDirectlyToConsumerMember2023-01-012023-09-300001854139srt:RestatementAdjustmentMember2022-07-012022-09-3000018541392022-09-300001854139us-gaap:NoncontrollingInterestMember2023-06-300001854139us-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-300001854139us-gaap:RetainedEarningsMember2022-07-012022-09-300001854139us-gaap:AdditionalPaidInCapitalMember2023-03-310001854139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-04-012022-06-300001854139us-gaap:RetainedEarningsMember2023-09-300001854139us-gaap:RetainedEarningsMember2022-01-012022-03-310001854139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-09-300001854139us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-09-300001854139us-gaap:CommonClassAMember2023-09-300001854139country:CA2023-07-012023-09-300001854139us-gaap:RetainedEarningsMember2023-06-300001854139srt:MaximumMemberzvia:SecuredRevolvingLineOfCreditFacilityMember2022-02-222022-02-220001854139us-gaap:ComputerEquipmentMember2022-12-3100018541392022-04-012022-06-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-03-310001854139us-gaap:CommonClassAMember2022-01-012022-09-300001854139us-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonClassAMember2022-07-012022-09-300001854139us-gaap:NoncontrollingInterestMember2023-01-012023-03-310001854139us-gaap:RetainedEarningsMember2023-03-310001854139srt:ParentCompanyMemberus-gaap:IPOMemberus-gaap:CommonClassAMember2021-07-210001854139us-gaap:AdditionalPaidInCapitalMember2022-09-300001854139us-gaap:CommonClassAMember2023-01-012023-09-300001854139zvia:CustomerBMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-09-3000018541392023-09-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-06-300001854139us-gaap:RetainedEarningsMember2023-04-012023-06-300001854139us-gaap:CommonClassBMember2022-12-310001854139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2021-12-310001854139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-07-012023-09-300001854139us-gaap:SalesChannelThroughIntermediaryMember2022-01-012022-09-3000018541392021-12-310001854139us-gaap:AdditionalPaidInCapitalMember2022-03-310001854139us-gaap:AdditionalPaidInCapitalMember2021-12-310001854139us-gaap:BuildingMember2023-09-300001854139us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001854139us-gaap:LeaseholdImprovementsMember2023-09-300001854139us-gaap:NoncontrollingInterestMember2022-03-310001854139us-gaap:SupplierConcentrationRiskMemberus-gaap:CostOfGoodsTotalMemberzvia:VendorEMember2023-07-012023-09-300001854139us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001854139us-gaap:NoncontrollingInterestMember2022-09-3000018541392022-01-012022-09-300001854139us-gaap:RetainedEarningsMember2022-03-310001854139us-gaap:NoncontrollingInterestMember2023-03-310001854139us-gaap:LandMember2022-12-310001854139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-12-310001854139us-gaap:SalesChannelThroughIntermediaryMember2023-07-012023-09-300001854139us-gaap:CommonClassAMember2023-11-0100018541392022-03-310001854139us-gaap:RetainedEarningsMember2022-09-300001854139us-gaap:AdditionalPaidInCapitalMember2022-06-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-06-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-09-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-07-012022-09-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-12-310001854139zvia:SecuredRevolvingLineOfCreditFacilityMember2022-02-220001854139us-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2023-01-012023-09-3000018541392022-12-310001854139zvia:CustomerBMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2023-01-012023-09-300001854139us-gaap:NoncontrollingInterestMember2022-07-012022-09-300001854139zvia:CustomerAMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2023-07-012023-09-300001854139srt:RestatementAdjustmentMember2023-07-012023-09-300001854139us-gaap:EmployeeStockOptionMember2023-09-300001854139country:CA2023-01-012023-09-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-04-012023-06-300001854139zvia:VendorAMemberus-gaap:SupplierConcentrationRiskMemberus-gaap:CostOfGoodsTotalMember2023-01-012023-09-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-01-012023-03-310001854139us-gaap:SupplierConcentrationRiskMemberus-gaap:CostOfGoodsTotalMember2023-01-012023-09-300001854139zvia:TaxReceivableAgreementMemberus-gaap:CommonClassBMember2023-09-300001854139us-gaap:SupplierConcentrationRiskMemberzvia:VendorBMemberus-gaap:CostOfGoodsTotalMember2023-01-012023-09-300001854139us-gaap:AdditionalPaidInCapitalMember2023-09-300001854139us-gaap:SalesChannelDirectlyToConsumerMember2023-07-012023-09-300001854139us-gaap:AdditionalPaidInCapitalMember2022-12-310001854139us-gaap:RestrictedStockUnitsRSUMember2021-03-012021-03-310001854139us-gaap:SupplierConcentrationRiskMemberzvia:VendorCMemberus-gaap:CostOfGoodsTotalMember2023-07-012023-09-300001854139us-gaap:SupplierConcentrationRiskMemberzvia:VendorBMemberus-gaap:CostOfGoodsTotalMember2023-07-012023-09-300001854139zvia:SoftwareMember2022-12-310001854139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-06-300001854139srt:ParentCompanyMemberus-gaap:IPOMemberus-gaap:CommonClassAMember2021-07-212021-07-210001854139us-gaap:CommonClassAMember2022-12-310001854139us-gaap:NoncontrollingInterestMember2023-09-300001854139zvia:CustomerAMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2023-01-012023-09-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2023-03-310001854139zvia:QualityControlAndMarketingEquipmentMember2022-12-310001854139zvia:CustomerEMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2023-01-012023-09-300001854139country:US2023-07-012023-09-300001854139zvia:RestrictedPhantomClassACommonUnitsMember2021-07-012021-07-310001854139zvia:CustomerAMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-09-300001854139zvia:VendorAMemberus-gaap:SupplierConcentrationRiskMemberus-gaap:CostOfGoodsTotalMember2022-07-012022-09-300001854139us-gaap:RestrictedStockUnitsRSUMember2023-09-300001854139country:CA2022-07-012022-09-300001854139us-gaap:NoncontrollingInterestMember2022-12-310001854139us-gaap:NoncontrollingInterestMember2023-04-012023-06-3000018541392022-07-012022-09-300001854139us-gaap:SalesChannelThroughIntermediaryMember2023-01-012023-09-300001854139us-gaap:FurnitureAndFixturesMember2022-12-310001854139us-gaap:NoncontrollingInterestMember2022-06-300001854139us-gaap:CustomerRelationshipsMember2022-12-310001854139us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001854139us-gaap:SupplierConcentrationRiskMemberzvia:VendorCMemberus-gaap:CostOfGoodsTotalMember2022-07-012022-09-300001854139us-gaap:SalesChannelThroughIntermediaryMember2022-07-012022-09-300001854139us-gaap:AdditionalPaidInCapitalMember2023-06-300001854139us-gaap:RevenueFromContractWithCustomerMemberzvia:CustomersMemberus-gaap:CustomerConcentrationRiskMember2023-01-012023-09-300001854139us-gaap:LandMember2023-09-300001854139us-gaap:SupplierConcentrationRiskMemberus-gaap:CostOfGoodsTotalMemberzvia:VendorBMember2022-01-012022-09-3000018541392023-07-282023-07-2800018541392023-01-012023-03-310001854139zvia:EquityIncentivePlanTwoThousandTwentyOneMember2023-09-300001854139us-gaap:LeaseholdImprovementsMember2022-12-310001854139us-gaap:NoncontrollingInterestMember2023-07-012023-09-300001854139zvia:CustomerDMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2023-01-012023-09-300001854139zvia:SoftwareMember2023-07-012023-09-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-06-300001854139us-gaap:BuildingMember2022-12-310001854139us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001854139us-gaap:CommonClassBMember2023-09-300001854139us-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonClassAMember2023-01-012023-09-3000018541392023-04-012023-06-300001854139us-gaap:SalesChannelDirectlyToConsumerMember2022-07-012022-09-300001854139us-gaap:EmployeeStockOptionMember2022-01-012022-09-300001854139us-gaap:SupplierConcentrationRiskMemberus-gaap:CostOfGoodsTotalMemberzvia:VendorBMember2022-07-012022-09-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2022-01-012022-03-310001854139zvia:AssetsNotYetPlacedInServiceMember2022-12-310001854139us-gaap:CommonStockMemberus-gaap:CommonClassBMember2023-01-012023-03-310001854139us-gaap:CommonClassAMember2022-07-012022-09-3000018541392023-06-300001854139zvia:CustomerDMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2022-01-012022-12-310001854139srt:RestatementAdjustmentMember2023-01-012023-09-300001854139us-gaap:CommonStockMemberus-gaap:CommonClassAMember2022-07-012022-09-300001854139zvia:CustomersMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2023-01-012023-09-300001854139us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001854139us-gaap:SupplierConcentrationRiskMemberzvia:VendorCMemberus-gaap:CostOfGoodsTotalMember2023-01-012023-09-300001854139country:CA2022-01-012022-09-3000018541392023-07-012023-09-3000018541392023-03-310001854139zvia:SoftwareMember2023-01-012023-09-300001854139zvia:ZeviaLLCMember2023-09-300001854139zvia:TaxReceivableAgreementMember2023-09-300001854139zvia:LoanAndSecurityAgreementMembersrt:MaximumMember2022-02-222022-02-220001854139us-gaap:CustomerRelationshipsMember2023-09-300001854139zvia:LoanAndSecurityAgreementMembersrt:MinimumMember2022-02-222022-02-220001854139us-gaap:RestrictedStockUnitsRSUMemberus-gaap:CommonClassAMember2023-07-012023-09-300001854139us-gaap:NoncontrollingInterestMember2022-04-012022-06-300001854139us-gaap:TrademarksMember2023-09-30iso4217:USDxbrli:sharesxbrli:purexbrli:sharesiso4217:USD

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

(Mark One)

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

 

For the quarterly period ended September 30, 2023

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 135

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 November 1, 2023, there were 50,407,874 shares and 20,932,461 shares outstanding of the registrant’s Class A and Class B common stock, respectively, $0.001 par value per share.

 


 

Table of Contents

 

Page

PART I

Financial Information

5

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

5

 

Condensed Consolidated Balance Sheets (Unaudited)

5

 

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

6

 

Condensed Consolidated Statements of Changes in Equity (Unaudited)

7

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

9

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

10

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

27

Item 4.

Controls and Procedures

28

 

 

 

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

29

 

Signatures

30

 

 

2


 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q for the period ended September 30, 2023 (“Quarterly Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) about us and our industry that involve substantial known and unknown risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report, including, without limitation, statements regarding our future results of operations or financial condition, business strategy, expectations about shifting market demand and consumer preferences, ability to effectively compete, commitment to creating ESG impact, human capital objectives, validity of our trademarks and other intellectual property, impact of government regulations, liquidity and capital requirements, and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “consider,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “on track,” “outlook,” “plan,” “potential,” “predict,” “project,” “pursue,” “seek,” “should,” “target,” “will” or “would” or the negative of these words or other similar words, terms or expressions.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. All of the forward-looking statements are qualified in their entirety by reference to the factors discussed under Risk Factors in Part I, Item 1A of our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 10, 2023 for the period ended December 31, 2022 (“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, particularly due to impacts of inflation, in the beverage industry and on zero sugar, naturally sweetened products, and failure to develop or enrich our product offerings or gain market acceptance of our products, including new offerings;
product safety and quality concerns, including those relating to our plant-based sweetening system, which could negatively affect our business by exposing us to lawsuits, product recalls or regulatory enforcement actions, increasing our operating costs and reducing demand for our product offerings;
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 any future pandemics or other public health crises on our business, results of operations and financial condition;
the impact of adverse global macroeconomic conditions, including rising interest rates, instability in financial institutions, recession fears and inflationary pressures, the prospect of a shutdown of the U.S. federal government 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;
inaccurate or misleading marketing claims, whether or not substantiated;
climate change, adverse weather conditions, natural disasters and other natural conditions;
difficulties and challenges associated with expansion into new markets and channels;
inability to obtain raw materials on a timely basis or in sufficient quantities to produce our products or meet the demand for our products due to reliance on a limited number of third-party suppliers and trade tensions between the U.S. and China;
our ability to address disruptions and logistics challenges in our supply chain;
substantial disruption at our independent third-party manufacturing and distribution facilities;
concentration in our customer base and the loss of any large customer;
extensive governmental regulation and enforcement if we are not in compliance with applicable requirements;
dependence on distributions from Zevia LLC to pay any taxes and other expenses;
changes in laws and regulations relating to beverage containers and packaging;
impacts from our status, duty and liability exposure as a public benefit corporation;
loss of any registered trademark or other intellectual property;

3


 

inadequacy, failure, interruption or security breaches of our information technology systems and failure to comply with data privacy and information security laws and regulations; and
other risks, uncertainties and factors set forth under “Item 1A. Risk Factors.” of our Annual Report.
 

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

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

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

4


 

PART I – FINANCIAL INFORMATION

ITEM 1 – CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ZEVIA PBC

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands, except share and per share amounts)

 

September 30, 2023

 

 

December 31, 2022

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

38,542

 

 

$

47,399

 

Accounts receivable, net

 

 

16,372

 

 

 

11,077

 

Inventories

 

 

49,398

 

 

 

27,576

 

Prepaid expenses and other current assets

 

 

2,909

 

 

 

2,607

 

Total current assets

 

 

107,221

 

 

 

88,659

 

Property and equipment, net

 

 

2,472

 

 

 

4,641

 

Right-of-use assets under operating leases, net

 

 

2,103

 

 

 

708

 

Intangible assets, net

 

 

3,929

 

 

 

4,385

 

Other non-current assets

 

 

630

 

 

 

539

 

Total assets

 

$

116,355

 

 

$

98,932

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

37,831

 

 

$

8,023

 

Accrued expenses and other current liabilities

 

 

7,174

 

 

 

8,408

 

Current portion of operating lease liabilities

 

 

576

 

 

 

715

 

Total current liabilities

 

 

45,581

 

 

 

17,146

 

Operating lease liabilities, net of current portion

 

 

1,521

 

 

 

 

Total liabilities

 

 

47,102

 

 

 

17,146

 

Commitments and contingencies (Note 10)

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Preferred Stock, $0.001 par value. 10,000,000 shares authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022.

 

 

 

 

 

 

Class A common stock, $0.001 par value. 550,000,000 shares authorized, 50,347,141 and 47,774,046 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively.

 

 

50

 

 

 

48

 

Class B common stock, $0.001 par value. 250,000,000 shares authorized, 20,932,461 and 21,798,600 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively.

 

 

21

 

 

 

22

 

Additional paid-in capital

 

 

195,268

 

 

 

189,724

 

Accumulated deficit

 

 

(94,082

)

 

 

(79,843

)

Total Zevia PBC stockholders’ equity

 

 

101,257

 

 

 

109,951

 

Noncontrolling interests

 

 

(32,004

)

 

 

(28,165

)

Total equity

 

 

69,253

 

 

 

81,786

 

Total liabilities and equity

 

$

116,355

 

 

$

98,932

 

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

5


 

ZEVIA PBC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

(in thousands, except share and per share amounts)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

Net sales

 

$

43,089

 

 

$

44,239

 

 

$

128,630

 

 

$

127,815

 

 

Cost of goods sold

 

 

23,517

 

 

 

25,071

 

 

 

69,261

 

 

 

73,445

 

 

Gross profit

 

 

19,572

 

 

 

19,168

 

 

 

59,369

 

 

 

54,370

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and marketing

 

 

20,455

 

 

 

12,916

 

 

 

48,467

 

 

 

42,845

 

 

General and administrative

 

 

8,250

 

 

 

8,310

 

 

 

23,102

 

 

 

28,257

 

 

Equity-based compensation

 

 

1,876

 

 

 

6,837

 

 

 

6,614

 

 

 

23,781

 

 

Depreciation and amortization

 

 

411

 

 

 

326

 

 

 

1,234

 

 

 

1,005

 

 

Total operating expenses

 

 

30,992

 

 

 

28,389

 

 

 

79,417

 

 

 

95,888

 

 

Loss from operations

 

 

(11,420

)

 

 

(9,221

)

 

 

(20,048

)

 

 

(41,518

)

 

Other income, net

 

 

165

 

 

 

26

 

 

 

908

 

 

 

64

 

 

Loss before income taxes

 

 

(11,255

)

 

 

(9,195

)

 

 

(19,140

)

 

 

(41,454

)

 

(Benefit) provision for income taxes

 

 

(5

)

 

 

1

 

 

 

31

 

 

 

23

 

 

Net loss and comprehensive loss

 

 

(11,250

)

 

 

(9,196

)

 

 

(19,171

)

 

 

(41,477

)

 

Loss attributable to noncontrolling interest

 

 

3,033

 

 

 

1,712

 

 

 

4,932

 

 

 

12,005

 

 

Net loss attributable to Zevia PBC

 

$

(8,217

)

 

$

(7,484

)

 

$

(14,239

)

 

$

(29,472

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share attributable to common stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.16

)

 

$

(0.16

)

 

$

(0.27

)

 

$

(0.72

)

 

Diluted

 

$

(0.16

)

 

$

(0.16

)

 

$

(0.27

)

 

$

(0.72

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

50,754,470

 

 

 

45,938,507

 

 

 

50,074,992

 

 

 

42,155,463

 

 

Diluted

 

 

50,754,470

 

 

 

45,938,507

 

 

 

50,074,992

 

 

 

42,155,463

 

 

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

6


 

ZEVIA PBC

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Unaudited)

 

 

Class A Common Stock

 

 

Class B Common Stock

 

 

Additional

 

 

 

 

 

 

 

 

 

 

(in thousands, except for share amounts)

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Paid in
Capital

 

 

Accumulated
Deficit

 

 

Noncontrolling interest

 

 

Total
Equity

 

 Balance at January 1, 2023

 

 

47,774,046

 

 

$

48

 

 

 

21,798,600

 

 

$

22

 

 

$

189,724

 

 

$

(79,843

)

 

$

(28,165

)

 

$

81,786

 

 Vesting and release of common stock under equity incentive plans, net

 

 

981,902

 

 

 

1

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 Exchange of Class B common stock for Class A common stock

 

 

537,991

 

 

 

1

 

 

 

(537,991

)

 

 

(1

)

 

 

(724

)

 

 

 

 

 

724

 

 

 

 

 Exercise of stock options

 

 

30,424

 

 

 

 

 

 

 

 

 

 

 

 

23

 

 

 

 

 

 

 

 

 

23

 

 Equity-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,380

 

 

 

 

 

 

 

 

 

2,380

 

 Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,091

)

 

 

(821

)

 

 

(2,912

)

 Balance at March 31, 2023

 

 

49,324,363

 

 

$

50

 

 

 

21,260,609

 

 

$

21

 

 

$

191,402

 

 

$

(81,934

)

 

$

(28,262

)

 

$

81,277

 

 Vesting and release of common stock under equity incentive plans, net

 

 

436,722

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Exchange of Class B common stock for Class A common stock

 

 

5,635

 

 

 

 

 

 

(5,635

)

 

 

 

 

 

(8

)

 

 

 

 

 

8

 

 

 

 

 Exercise of stock options

 

 

8,669

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Equity-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,358

 

 

 

 

 

 

 

 

 

2,358

 

 Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,931

)

 

 

(1,078

)

 

 

(5,009

)

 Balance at June 30, 2023

 

 

49,775,389

 

 

$

50

 

 

 

21,254,974

 

 

$

21

 

 

$

193,752

 

 

$

(85,865

)

 

$

(29,332

)

 

$

78,626

 

 Vesting and release of common stock under equity incentive plans, net

 

 

236,072

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Exchange of Class B common stock for Class A common stock

 

 

261,990

 

 

 

 

 

 

(261,990

)

 

 

 

 

 

(362

)

 

 

 

 

 

362

 

 

 

 

 Disposition of cost method investment in redemption of Class B common stock

 

 

 

 

 

 

 

 

(60,523

)

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

(1

)

 Exercise of stock options

 

 

73,690

 

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

2

 

 Equity-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,876

 

 

 

 

 

 

 

 

 

1,876

 

 Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,217

)

 

 

(3,033

)

 

 

(11,250

)

 Balance at September 30, 2023

 

 

50,347,141

 

 

$

50

 

 

 

20,932,461

 

 

$

21

 

 

$

195,268

 

 

$

(94,082

)

 

$

(32,004

)

 

$

69,253

 

 

7


 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 Vesting and release of common stock under equity incentive plans, net

 

 

822,113

 

 

 

1

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 Exchange of Class B common stock for Class A common stock

 

 

551,846

 

 

 

1

 

 

 

(551,846

)

 

 

(1

)

 

 

(660

)

 

 

 

 

 

660

 

 

 

 

 Exercise of stock options

 

 

13,519

 

 

 

 

 

 

 

 

 

 

 

 

11<