Yerbaé Brands Corp. Reports 15% Revenue Decline and Increased Net Loss in Q1 2025

Yerbaé Brands Corp. reported a decline in financial performance for the first quarter of 2025, with revenues totaling $1.21 million, a decrease of 15% from $1.43 million in the same period of 2024. The company attributed this drop to a strategic shift in its customer portfolio, which involved discontinuing less profitable accounts and exiting unprofitable retailers. The cost of sales also increased by 13% to $703,684, primarily due to rising material and production costs, leading to a gross profit of $510,199, down from $814,709 a year earlier.

The company's net loss for the quarter was $3.33 million, compared to a loss of $2.79 million in the first quarter of 2024. This increase in net loss was influenced by higher general and administrative expenses, which rose to $3.19 million from $2.89 million, largely due to increased share-based compensation and professional fees. Additionally, sales, advertising, and marketing expenses saw a significant reduction of 53%, reflecting a strategic evaluation of retailer performance and a focus on optimizing digital marketing efforts.

Yerbaé's total assets increased to $2.18 million as of March 31, 2025, up from $1.91 million at the end of 2024. However, the company also reported a working capital deficit of $8 million, compared to $6.4 million in the previous period. The total liabilities rose to $10.04 million, up from $8.17 million, driven by an increase in accounts payable and accrued expenses. The company’s accumulated deficit reached $48.4 million, indicating ongoing financial challenges.

In terms of operational developments, Yerbaé has been focusing on expanding its distribution network, adding 14 new distributors in late 2024 to support growth initiatives. The company also launched new product variety packs and enhanced its direct-to-consumer segment through increased brand visibility via social media. Despite these efforts, the broader market conditions, including inflationary pressures in the U.S. consumer packaged goods sector, have posed challenges to revenue growth.

Looking ahead, Yerbaé's management has expressed concerns about the company's ability to continue as a going concern, citing the need for additional financing to meet operational obligations. The company is currently in the process of negotiating a potential acquisition by Safety Shot, which could provide necessary capital and resources. However, as of the filing date, this arrangement had not yet been finalized, leaving uncertainty regarding the company's future financial stability.