Hawaii coffee-cherry drink maker KonaRed Corp. suffered major growing pains in the second quarter with a dramatically higher net loss and a small decline in sales.

The Kauai-based company reported losing $1.1 million in the three months ended June 30, up from a loss of $116,622 in the same period last year.

Revenue for the fledgling company dropped 2 percent to $474,650 in the recent quarter from $484,462 a year earlier.

The slip in revenue happened despite KonaRed announcing an expansion of its products into 2,100 Walmart stores in March.

KonaRed said the second-quarter sales decline was primarily the result of phasing out wholesale ingredient sales to other beverage manufactures. Ceasing ingredient sales represented a $155,284 drop-off in total sales and was implemented as part of a legal settlement with Illinois company VDF FutureCeuticals Inc. over patent and trademark infringements that VDFclaimed against KonaRed.

KonaRed has been selling a line of drinks since 2011 and working to expand sales and distribution. In April the company outsourced its sales operations to Florida-based Splash Beverage Group Inc. under a five-year agreement in which KonaRed will sell all its products to Splash at a preferred standard wholesale price for U.S. resale.

Shares of KonaRed stock fell to a 52-week low of 27 cents Tuesday, several days after the company disclosed its second-quarter financial results in a filing with the Securities and Exchange Commission. KonaRed stock hit a high of $1.24 in January.

On Wednesday, KonaRed CEOShaun Roberts released a letter to shareholders to address concerns. Roberts claimed that the company "has never been in better shape" and projected that 2014 sales will double over last year.

For the first six months of this year, revenue was up 33 percent to $919,592 from $689,532 a year earlier.

KonaRed has been substantially investing to expand production, marketing and sales, which has produced operating losses that are expected to continue at least for the near horizon. To fund growth, the company has largely been selling stock, including about 412,000 shares sold for $200,000 since June 30.

"We hope investors will understand that we are building the base for substantial returns over a period of years, not days or months,"Roberts said in the letter. "For investors who have a very short-term high-return expectation, we might not be the right stock for them. What we are building is real and as such requires time for execution."