Hawaii beverage company KonaRed Corp. had to limit product promotion spending during the past several months, and the result was a drop in sales and a higher first-quarter net loss.
Kauai-based KonaRed reported a $544,036 net loss on sales of $239,665 during the January-March period, up from a $506,082 loss on sales of $444,942 during the same time frame last year.
The company, which reported the financial results in a report filed with the U.S. Securities and Exchange Commission on Thursday, said the 46 percent drop in sales was due to "capital restraints" that reduced spending on marketing and advertising in late 2014 and early 2015.
Promotional spending fell 33 percent to $124,941 in the recent quarter from $185,087 a year earlier, the company said.
KonaRed projects that advertising and marketing will increase for the balance of this year.
KonaRed, which makes juice from Hawaii coffee cherry fruit, was started in 2008 and is trying to expand production and distribution after investing heavily in product research and development financed by investors.
Through March 31 the company has incurred losses totaling $16.8 million.
KonaRed products are in more than 1,000 supermarkets and 2,100 Walmart stores on the mainland and locally. The company in April also arranged to distribute its beverages in 250 retail stores in Japan.
Still, becoming a major beverage firm in the health drink industry with what KonaRed calls a "superfruit" is largely dependent on the company continuing to raise capital in the stock market.
In January, KonaRed arranged $1 million in additional financing from an investor who may convert the debt into company stock. Under the arrangement, KonaRed received $400,000 in cash in January and might obtain more later this year. KonaRed began the year with $39,987 in cash and ended the quarter with $240,536.
KonaRed stock closed Friday at about 18 cents a share, unchanged from Thursday. KonaRed’s stock over the last 52 weeks was as high as 72 cents in May 2014 and as low as 6 cents in February.
