Stefan Freeman - Interim CEO Dan Miles - CFO.

Selvey Knight - Selvey Knight Wealth Management Sanjay Jain - Private Investor Lucas Lee - Maxim Group LLC Gordon Hodge - Tracker Research.

All right, so Dan I'll go ahead and get started. Good afternoon and thank you for joining us today..

Wait Stefan..

Yes..

Okay. So, he is going to read his -- the operator is going to read his script..

That's right..

And he's going to introduce you..

Okay. Apologies..

Yes, no problem..

Good morning and welcome to the Reed's First Quarter 2017 Earnings Conference Call for the Period Ending March 31st, 2017. My name is Ash and I'll be your conference call operator today.

Today's call is limited to one hour and will start with a prepared remarks of Stefan Freeman, Reed's' Interim Chief Executive Officer; who will be followed by Dan Miles, Reed's Chief Financial Officer. Following management's remarks, they will take your questions. Please note that today's call is being recorded.

Before we begin today's call, I have a Safe Harbor statement to read to our listeners. I would like to remind our listeners that during this call, management's remarks may contain forward-looking statements that are subject to risks and uncertainties and that management may take additional forward-looking statements in response to your questions.

Additionally, please note non-GAAP financial measures referenced during this call are reconciled to their comparable GAAP financial measures in the press release and supplemental materials filed with the SEC.

Non-GAAP financial information is not meant as a substitute for GAAP results, but is included solely for informational and comparative purposes. The company believes that the presentation of non-GAAP financial measures provides useful information to investors regarding the company's financial condition and results of operations.

Therefore, the company claims the protection of the Safe Harbor for forward-looking statements that are contained in the Private Securities Litigation Reform Act of 1995.

Actual results may differ from those discussed today due to such risks but not limited to risks relating to demand for the company's products, dependence on third-party manufacturers and distributors, changes in the competitive environment, access to capital and other information detailed from time-to-time in the company's filings with the United States Securities and Exchange Commission.

In addition, any projections as to the company's future performance represent management's estimates as of today, May 15th, 2017. Reed's, Inc. assumes no obligation to update these projections in the future as market conditions change. And with that, I will now turn the call over to Mr. Freeman, who will begin with his prepared remarks..

Good afternoon and thank you for joining us today.

When we last spoke about a month ago, our business assessment was underway with a focus on defining actionable opportunities that can be implemented immediately and to build out a strategic plan for sales, marketing and beverage development that will drive share, accelerate growth, and build excitement in the market.

Our discussion today will be of clarity in context that is specific, actionable and underway. The simple answer is that we need to restore profitability, increase share, simplify our portfolio, and introduce our new line of low calorie, all-natural sodas both on time and on budget this fall. That being said, we need to increase our distribution.

We're focusing -- we're focused on broadening our distribution in both the conventional channel as well as the up and down the street markets. We have targeted additional change for distribution, and we'll work with brokers to expand sales to these incremental customers.

We also intend to expand our on-premise business with new wine and spirits distributors that are focused on that specific channel. The mule craze -- the Moscow Mule craze continues, and we're going to be more aggressive in capturing these customers.

We believe that there is also a significant opportunity for an all-natural product offering in the convenience store channel. To better integrate into this new channel, we are looking at making our core products available in cans for distribution where bottles are not appropriate. This will be a first for Reed's.

We have better products than our competitors and we’re going to fight to regain our market share. We have begun implementing price increases, which will be reflected in our revenues beginning in the third quarter. We believe that we should have -- we should be priced at a premium and aligned to where -- with where our key competition is priced.

We also believe that there are significant opportunities to improve our cost of goods sold by year end and we are evaluating all elements of our raw material cost. Additionally, we are analyzing our manufacturing and distribution strategy to explore more efficient opportunities without sacrificing quality or experiencing business disruptions.

Turning now to our product portfolio. Our initial assessment of our product portfolio determined that we have offerings in the market that are not increasing share, growth or margin. We realized that we have over 100 different types of packaging configurations that generate limited profitability. Those product configurations are being tabled.

Our short-term objective is to drive sales of our core product line, four packs of our award-winning all-natural craft sodas and to increase our distribution channels.

By focusing our distributors on our high-volume flavors, we can better serve the customer and increase the profitability for additional shelf space for our new and exciting low calorie soda introductions this fall.

The top one-third of our stock keeping units, or SKUs, delivered over 80% of our revenues and even a higher percentage of our gross profits. By reducing our SKU count by approximately two-thirds, primarily through a reduction in packaging options, we believe we can simplify the business and improve our margins.

Rest assured, we're keeping our core brands of flavors and we intend to introduce the much-anticipated low calorie soda line this fall to accompany our existing Virgil's ZERO calorie and Reed's 55 Ginger Brew products.

We believe that these changes and our renewed focus on our core SKUs will drive improved margins and operational efficiencies in the near-term. Our Founder and Chief Innovation Officer, Chris Reed, has completed development of our low calorie flavors for the Reed's and Virgil brand.

The products taste amazing and it's hard to believe that it's only about 10% of the calories of a traditional sugar-based soda. Consumers have been demanding it and we have developed it. Its all-natural ingredients. Simply put, it's fantastic. Some of the best stuff I've ever drank in my life.

The overall soft drink industry has found itself out of favor as consumers seek alternatives to beverages that are perceived to be healthier, notably Kombucha juices and flavored waters. Those alternatives don't include ingredients like the sweetener aspartame, which has fallen out of favor in recent years.

Our beverage introductions into the low calorie market are the all-natural with no preservatives and low calorie, which will equip our distributors and customers with the product that they need to meet the demands of the consumer.

In summary, the benefits include a healthier, low calorie soda, no additional soda taxes, and unbelievable great taste that come to be expected from Reed's. In Q3 and Q4, you will see a refresh of our packaging and graphics deployed in tandem with our new low calorie flavor offerings.

And as we check on our brand visibility, we have feedback from millennials to support our decisions. What this says is that we're listening, we're acting, and we will deliver this year.

Speaking of healthy alternatives and listening to our consumers and shareholders, another change you will see in the marketplace is our Kombucha line moving to industry-standard packaging. We will launch in Q3 of this year with new bottles, labels, and graphics to differentiate our brands in the marketplace.

We remain the top-selling soda in the natural food channel and intend to leverage these relationships for our Kombucha relaunch this fall. Turning now to our Bag in the Box initiative. We continue to field test our natural fountain soda in one of the largest fast-casual restaurant chains in the country.

Our plan is to expand this program to additional customer pilots later this year. These revolutionary product launches take time and it is a key area of focus for Chris Reed, our Founder and Chief Innovation Officer. Turning now to the future of the company, our own Los Angeles production facility.

The first step is to get a firm understanding as to where we stand with our current co-factory partners, particularly now that we have simplified the production model with fewer primary SKUs. We see opportunities in the area of toll fees and in material costs as we drive higher volumes through fewer items.

We will leverage these savings that commit to strategic partnerships that improve quality service and cost. In the short-term, we're allocating production to the Los Angeles plant to reduce the inefficient shipment of co-manufactured products from East to the West Coast.

However, in the long-term, in order to be considered a strategic advantage, the total cost of products manufactured in our L.A. plant must be competitive when compared to the total fees of our strategic partners. And as a reminder, we currently utilize the L.A.

plant to support the innovation, unique packaging, Kombucha production, private-label production, and new product trials. In summary, we are moving swiftly with our low cal beverages -- beverage offerings, reducing our cost of goods and negotiating strategic alliances that we believe will lead to increased profitability.

We intend to leverage a portion of the savings through increased marketing and point-of-sale displays to drive more volume and resume topline growth. There's still a lot of work to be done and after my first month in the role of Interim CEO, I'm excited to say that the team at Reed's is energized and aligned.

Once again, thank you for your time today and your continued interest in Reed's..

Thank you, Stefan and thanks to all of you participating in today's call. My name is Dan Miles, the CFO of Reed's, Inc. In addition to today's press release, we issued our 10-Q today that will have additional details about the quarter. At the completion of my prepared remarks, both Stefan and I will take your questions.

So, first, let me discuss the first quarter financial results. Gross sales of $9.4 million decreased 13% in the first quarter compared to $10.8 million in the prior year quarter. Gross sales were primarily impacted by private label in Kombucha that were down 87% and 66%, respectively, representing $1 million of the $1.4 million gross sales decrease.

Highlighting were -- included our Ginger Brews and our gross revenue from Stronger Ginger Brew that was up 199% or $0.3 million. The combination of Extra and Stronger gross revenue led to the flat over the same period from last year.

Virgil gross sales were down 9% or $0.3 million, partitionally [ph] offsetting the overall gross sales revenue were increases in our other Reed's beverages; and candy, where gross sales were up 23% or $0.2 million collectively. Net sales of $8.3 million decreased 17% in the first quarter compared to $10 million in the first quarter of last year.

Sales discounts were up 37% to $1.1 million for the quarter or 11% of gross sales compared to $0.8 million or 7% of gross sales in the prior year. The increase was due to the discount. Cost of goods sold decreased 17% to $6.5 million from $7.8 million in the first quarter last year largely driven by lower production volumes.

So, let's turn to the operating expenses. We're determined to continue to control and reduce all operating expenses. Delivery and handling expenses of $0.7 million in the first quarter of 2017 declined 12% versus the same period in 2016. On a percentage of net sales, costs were flat at 9%.

Selling and marketing expenses of $0.8 million in the first quarter of 2017 declined 24% versus the same period in 2016. On a percentage of net sales, selling and marketing costs decreased to 9% from 7%. The main drivers of the decrease was the reduction in employee-related costs and lower brokerage costs.

General and administrative expenses of $1.1 million in the first quarter declined 8% over the same period in 2016. As a percentage of net sales, general and administrative costs increased slightly to 13% from 12%. All of the [Indiscernible] operating expenses declined in total for the year almost 14%.

Interest expense and bank-related charges increased 10% to $0.4 million. For the first quarter of the year, our net loss was $2 million or $0.14 per diluted share compared to a net loss of $1.6 million or $0.12 per diluted share. We generated cash from operations of $527,000 in the first quarter.

And during the quarter, we paid down $740,000 in overall debt and we purchased $87,000 in new equipment. In summary, we're confident that we've corrected the supply chain shortages created in the prior years by delivering 97% of all orders on time in 2016 and through the first quarter of this year.

As noted by Stefan, we're now focused on streamlining the portfolio by brand, flavor, and package. We'll continue to focus on delivering the highest quality soft drinks to our customers and at the right price. So, I want to thank you for your time, and Stefan and I will now be happy to answer any of your questions. Ash, I turn it over to you..

Thank you. [Operator Instructions] And our first question comes from Selvey Knight with Selvey Knight Wealth Management. Please proceed with your question..

Yes. I just have one quick question. Mr.

Stefan, will the new -- the low calorie beverages that are coming out in the fall, will they be branded underneath the Virgil's? Or are you coming out with another line? How is that going to look?.

Right now we're really debating that. It's such a great brand that we're trying to make a decision as to whether or not we would want to do that. We've been working on graphics right now where it could be either one..

Okay, all right. Thanks very much..

You're welcome..

[Operator Instructions] Our next question comes from the line of Sanjay Jain with -- a Private Investor. Please go ahead..

Hi, thank you very much for taking my call. So, I also have a question around low calorie soda. Just wondering what kind of marketers there is or tests have you done.

What kind of sweetener or Stevia product do you use in your drink?.

Well, right now the formulas are confidential, so we cannot release those. But like I said, Chris is -- I mean, he's one of the number one disruptors in the whole natural market, and Chris is constantly searching for all-natural sweeteners all over the globe. So, when he finds something, we look at it, he assesses it.

And with him being the Chief Innovation Officer, he's coming up with the recipes and he's dedicating himself full-time for that. I can tell you, it's not Stevia prominent.

How's that?.

All right, that's very good to hear.

But what about tests? Have we done any taste test for the low calorie soda?.

We have been doing tasting and actually, we've been working with a teacher at one of the Universities that's taking it to millennials and having them taste and getting feedback directly from them..

Okay.

And I assume those have been relatively positive so far, right?.

Yes..

Very good to hear that..

They are great. I am too..

Perfect. So, on the last call, you mentioned that there's some operation issue with soda fountain at the customers that you're currently working with, right? Could you please talk about how the whole thing works? I mean, I don't even know actually what kind of -- this soda bag you have.

Is it liquid? Is it in a powder form? What does your customer need to do? And what does the pack on, what does the end consumer need to do in order to make a drink out of it?.

Well, it's set up directly as you would any other Bag in the Box operation. So, if you go and see a Coke machine or something like that, you'll see Bag in the Box in there. The big difference between us -- excuse me….

Yes, please go ahead, yes..

Yes, so Bag in the Box is usually a five-gallon plastic bag that goes into a corrugated box and you fill that up. The difference is, is that we have to have -- with our product being natural, we've got to pasteurize and things like that, which make it a lot more complex and then also there's some proprietary work going on.

We've invest in one of the vendors on the technology to put that into a fountain and put out a good, high-quality product with low chances of any quality issues coming about. So, -- but similar-type technology, just a lot more complex than some other spaces..

All right.

And I'm assuming you guys are working through those, right?.

Absolutely. We're working through those, and we've been getting great results back from where the product is actually being tested right now..

Great. Could you also talk about your pricing strategy? In my neighborhood, I have [Indiscernible], Whole Foods, I have Trader Joe's. Now prices have gone up for [Indiscernible], but they haven't changed at Whole Foods, at Trader Joe's so far. So, I was wondering, I mean, what has been the reaction of the distributors -- of the retailers so far.

And how do you plan to roll out the new pricing, let's say, over the next couple of months or quarters?.

Sanjay, so when we usually -- when we work with distributors, when we take a price increase, it's usually like a 90-day window from the time of notification until you actually see the change.

And historically, if you look at Reed's, we held price for almost eight years in order to be effective and help drive the innovation and just honestly, if things are more expensive, we've got to take price so that we can continue to innovate and keep the high-quality products out there that we make.

And we're going to continue to do that, but we had to take price. But you won't see the impact of that for -- it's usually 90 days, and we've already notified all the customers of that. So, you'll start to see a change coming through probably here in the next 30 days. We're getting closer to the 90-day window, when you'll start to see a change.

But they might be keeping their price down in the store and just taking price, where even though we're getting our money, you might not necessarily see a huge shift at the -- on the shelf..

Okay. By the way, I love your products and I love Moscow Mule, that's my favorite drink..

Excellent. Thank you very much..

I can see your prices -- yes, I can see -- I mean, compared to other products out there, you definitely have a premium product and it's not priced correctly. So, I do agree with that strategy.

The next question I have was if I look at again the stores around my neighborhood, most of them carry maybe one Ginger Brew, right? Most of them carry maybe one Virgil's flavor.

Does it make sense to look at your entire portfolio not from a packaging perspective, but you need to have original and premium, right, in addition to having Extra, Strong and other flavors. I mean, if only you can simplify their supply chain, if only you can simplify your distribution, if you reduce the number of your SKUs overall.

And I know you're doing it on the packaging perspective, but I was wondering, do you really need to have that many flavors..

I would tell you that if the market says we don't need it now, we won't carry it.

But the feedback that we're getting from the marketing on our Reed's brands -- and you have to remember, as you start looking at the different gingers that we carry, we're the only ones in the United States that I'm aware of, anyone that actually crushes their ginger and presses it and puts it into -- it goes through a whole brewing process anywhere.

So, all the competitions that you see out there are using preservatives and things like that in flavors and extracts and we're the only one out there who's doing this right now. So, when you look at those, for example, you see 17 grams of fresh ginger in our original and premium brands.

And when you get to our Extras and Strongs, you're getting up to 26 or 39 grams of ginger, which is very substantial and significant in terms of that overall product. And the great news is the feedback that's coming from the consumers that they're saying that they want those.

So, unless they say different, we're going to continue to carry those brands for right now..

[Operator Instructions] And with that our next question comes from the line of Samuel [Indiscernible], a Private Investor. Please proceed with your question..

Hello. Thank you for taking the call. I'm probably one of your oldest investors. I've been investing for a long time. I have a few questions because there's quite a dramatic change that's been happening here with Chris changing roles. The first one has to do with the product Kombucha. Did you essentially give up on producing that? Hello--.

I hear I -- yes, I can hear you..

I heard a noise, okay. Sorry.

Did you give up on producing Kombucha? Because it just disappeared from this New England market or is it being still produce and sold in areas?.

Okay, so we're still producing. And one of the things that we quickly realize is that we weren't meeting our competitors directly. And so we're actually getting ready to release Kombucha in the back half of this year, the third quarter.

You're going to start to see it coming out in a larger-sized package with improved graphics and the same great quality that Chris put into that product.

So, apologies for not having it out there, but it is coming and it's getting ready to -- we're going to put it out there in the marketplace and hopefully get the distribution that we need with that brand..

Okay.

And in the markets where you still distribute and sell, is it still doing well?.

Our whole Kombucha line has been impacted by the fits of the starts and stocks due to production issues. And as we've regained delivery, we unfortunately lost the space. So, in places where we have spaces, yes, I could look at it and say while down slightly, it's not down completely.

However, we continue to lose shelf space and that is affecting our overall volume..

Okay. That's kind of sad and surprising because one of the unique qualities of Reed's Kombucha is it's a step above all the competition, at least here in the New England market. So, I, for my own personal benefit, would like to see that back on the shelves and getting the market share it deserves..

Sam, let me just assure you that the discussion about Kombucha is very robust here. And we are focused on getting back to being at least number two in volume in that brand. We've been squeezed by competitors, some of which that have been spawned by ourselves.

But we believe that the superior product that you're referring to will once again rise to the top. It is our function and our goal this year, not next -- this year to have the new packages in front, in the stores, where it can be obtained by our customers.

And at that time, we believe our head-to-head competition with our competitors, we will do very well..

So, like as the second part of this, despite my fondness for the drink, is it going to make you money?.

Yes..

Yes..

Yes, absolutely..

Because the line for Kombucha was there is -- it had a really high margin and the marketplace supported that.

So, will that continue? Because I see a lot of competition, the mom-and-pop Kombucha makers, can you compete with them?.

Yes, I don't -- right now, I can tell you that it's got great margins on it. It's how we produce it is a little complex.

But the goal and objective is to get Reed's Culture Club Kombucha back out there in the marketplace and our top five SKUs go through our rebranding, our repackaging and release that product back out and to drive share and having contribute to as one of our long-term brands for Reed's..

Chris also had -- I was just going to let you know, Sam, Chris has also improved the production capabilities of it, which will also accelerate. So, our costs should be while not as much as before, maybe the price won't be, we believe the margin will still be there..

Is it true that you can only make that in Los Angeles? You don't form that out?.

We do at this time only make it in L.A. Yes, that is correct..

I'm very happy with that answer. I would hate to see you give on that. And also, of course, I want you to make money on it. I'm surprised that your indication that you're going to cans.

That's definitely not in the culture of the Reed's product lines so far, do you think that's going to work? Or is there a demand for that you are meeting?.

Well, there's certain channels out in the marketplace where cans are something that's needed. Now, I will tell you that we're not going to compromise on quality at all. We do have one product in a can. It's an energy drink and it's doing very well. But when we make these types of decisions, trust me, we're protecting the quality and the brand.

So, that no matter which you open up, you're getting the same quality that you get from us any day of the year or week or at any time. So, feel comfortable in that. And there's work to be done with that, as with all things. But there's certain channels where, honestly, that's what they need. And we've got to listen to our customers.

And if we're going to generate the growth that we need, we have to make sure that we're providing those alternatives to them so that we can grow the brand..

Our next question comes from the line of Lucas Lee with Maxim Group. Pleaser proceed with your question..

Hi guys, can you hear me well?.

Yes, I can hear you?.

Great. Thanks for taking the question. So, I have, I guess, I would say two. You said you plan to relaunch Kombucha line and new low calorie brands in the fall.

What should we think about in terms of revenue potential and its gross margins?.

Well, I can tell you that on our margins, our Chairman of the Board has said everything must be above a 30% margin and that's what we're driving towards.

And when we make these type of products with the complexity that goes in, you won't see products like these coming in at the same price point, as you would with some of the other products, just simply by the complexity of the blends and stuff that have to go into make those products. But we're excited about it.

We know we've got the right products and we feel very comfortable right now with the timing that we're doing, giving us a little bit of room to just make sure that before we release that we've got it -- all of it completely vetted by the millennial. The packaging is cool, the graphics are cool and it tastes unbelievable..

When we're looking for the margin improvement on the COGS side is to streamlining of all those packages. That is -- like Stefan indicated, that's almost two-thirds of our SKUs, but we're keeping primarily the same brands and flavors.

So, we believe we have substantial savings coming out of our productions for streamlining the number of packages we put out. There's a significant upside to that. And we're looking forward to executing that as we're doing that now, which should really enjoy the marginal differences in the third and fourth quarters..

Okay, that's really helpful. If I could ask you one more. You mentioned to that a price increase.

Is that currently being implemented or should we expect the pricing to go up?.

It's already been implemented. But when we deal with our distributors, usually, there's a number of days that you have to provide notification to them. So, for example, it's usually a 90-day notification and we made those well over a month ago. So we're probably halfway or almost a month out from starting to see that actually hit the financials..

Okay.

So, we should expect seeing everything kicking in starting third quarter, right?.

Correct..

Okay, that's really helpful. Thank you..

Thank you..

Our next question comes from the line of Gordon Hodge with Tracker Research. Please proceed with your question..

Yes, good afternoon. Thanks for taking the question. Just had a couple.

One is as far as the convenience store opportunity goes, is that going to require new distribution relationships? Or is that -- and if not, how does that get implemented in terms of pushing products into that channel?.

Well, there's a couple of different supply channels that we can go through to try to achieve this. So, we do have one that we're working with right now. But just in terms of overall scale and size, they can't meet what we need them to do. So, we'll be bringing some more on to help support that effort.

And then the other piece, too, is the potential of a strategic partner to help assist with that effort as well on the distribution side.

And so these are all the things now that I would tell you that -- the great news is, is that the Reed's senior leadership team has been looking at these things, and now -- so that Chris is focusing in on the innovation, it gives us all the opportunity to put our legs on the ground and actually go out there and beat the ground and work with these different opportunities to help drive volumes.

So, it's not easy. I think everybody knows that when you go into a convenience and gas store, you'll see a lot of saturation in the coolers and the -- where the beverages are. But working with the right brokers, the right distribution customers that we can -- they're the ones that can get us in there.

And we're going to find the right ones to help drive our visibility in that channel..

Okay, great. And then I just had a question on the Bag in the Box. Is the pilot that's going on now, I was under the impression that, that was an exclusive -- or there was some exclusivity for the restaurant chain or whatever it is there. But it sounds like you might be able to pilot with some other players as well. So, I'm just curious how that works.

And then if you can give us any early feedback in terms of how it's gone so far with your current pilot..

Yes, I would tell you that the greatest thing that I've seen so far is knowing that the -- from a quality perspective, the product is doing what it needs to do. And I think that's one of the biggest things that from a comfort perspective, not only did we need that, but also the company that we're working of it, that was one of their primary goals.

They wanted to feel comfortable with that. So, we're starting to meet all those goals, where Chris is actually blending up some different blends, low cal solutions on the Bag in the Box side of the business. And we'll be moving some of those forward into testing as well.

But the good news is whether it winds up being with one customer or multiple customers, we're getting the testing in the field, which proves that out. And so whether that customer decides that product is a long-term strategy for them, it's definitely a long-term strategy for us and we can open that up to the other customers..

Got it. And then last question. You just made some comments about the -- sort of evaluating the L.A. plant. And it sounded like -- obviously, I think there was -- correct me if I'm wrong, but I think you had just been upgraded.

So curious, it sounded like you're pushing more volume through there to basically cover the -- or absorb the fixed costs of that plant.

But are you also looking at to determine whether it's not efficient enough relative to co-packing? Is that kind of the process that you're undergoing right now?.

Well, hopefully, I didn't convey what you said earlier. What we're saying here is, is that when we go out and we bid with co-manufacturers, we look at the total cost for the production as well as the transportation cost.

And the one thing that we've always said, the stewards of business, always make sure that from a financial perspective that all of whatever we do is the high quality, viable option for us to run our business.

The good thing is, is that the plant here, it's close to us and so when you look at historical innovation and the stuff that Chris has been doing, there's not a place down the street that he could just go to and cook things up.

But now that the product is starting to mature over the years and with the level of experience that he has, it's something that he can do relatively quickly now. But the main thing is, is that wherever the low-cost solution is that delivers the right quality -- and we're talking about from production to shelf, is where we need to be.

And that might mean being closest to the customer. But the good thing is, is the way that he's doing this, we should be able to take what he's done and scale it such that we can get it to someone else to manufacture. But if this plant is the most -- is the low-cost solution, then we will say this is where we need to be and we will do that accordingly.

So, right now, we're running it and we're running hard right now and the goal is to take advantage of what we have while we continue to innovate and then we will continue to look at different alternatives that are the most economically viable ones with a good -- high quality..

Got it. Perfect, makes sense. Thank you..

And with that, I will now turn the call over to our speakers for today for any final remarks..

Well, this is Stefan. I would like to say I appreciate all of the great conversations that went on the call today. We are terribly excited about the work that we're doing. The team is completely energized and everyone is getting focused and grounded on the mission. And we wouldn't be here unless we believe in the brands.

And if we didn't believe in Chris, we wouldn't be here. But we're all here because we believe in both those things. So, I appreciate everybody's patience as we go through some of these growing pains.

But I will tell you that when you hear our Chairman of the Board speak, what you quickly realize is he's probably one of the most passionate people that we have in the beverage industry. And also, Chris, our Founder, is one of the most passionate people that you'll see.

And taking what those two have accomplished and having them not only as mentors, but also as support as we go through this journey of turning this into a unbelievable company, it's just a pleasure for all of us to be here and fight the struggle together to get Reed's to where it used to be and to surpass where it's been before.

So, hopefully, what you're hearing from us, from myself and Dan included, is that we know -- and we have solid ideas and understanding in terms of what needs to be done here. And we're heavily invested in this with our time and our efforts. And we understand that the priority is to create shareholder value here.

And we have signed up for that mission and that's what we're going to do. So, I'll end with that for this quarter. I look forward to talking to you again in the future..

Ladies and gentlemen, that does conclude the call for today. We thank you for your participation and ask that you please disconnect your lines. Have a great day everyone..