KRED files 2nd quarter 2014 10Q…

Net Sales for the quarter of $475K drop from same quarter 2013 of $484K,

Gross Margin only 14% (no kidding)

Net Loss of $1.1 million

So after all the increased promotion and marketing and increase in number of stores that the KRED products are in, Net Sales drop!

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Rizzz, In my initial post on Kred (#936) I said the following. I couldn’t have been clearer. If you didn’t listen it was your choice.


A new stock I’ve taken a tiny position in.

Before I say anything else let me specify, SHOUT even: DON’T take a BIG position in this stock! I’ve taken only a 0.28% position, which is truly tiny. My average position is 4.0%, so this is just one-fourteenth of a average position. My large positions are 8.0%, so this is just one-twenty-ninth of a large position. I REALLY have just a tiny position here.

Okay, now that that is out of the way, I can’t remember how I learned about this company but it may have been through a short article on Seeking Alpha which was attacking it as a “pump and dump” operation, which it may have been at one time for all I know. I’ve seen ads saying “Buy this company” and they did look like crude pump and dump ads. It’s a very little company in Hawaii called KonaRed (KRED), a penny stock, which makes health drinks out of coffee berries, and has started making other products too like health bars.

They had almost no revenue in 2012 and only about $0.9 million in revenue in all of 2013, but in the first quarter they have started to collect a lot, a real lot, of distribution, including store chains like CVS pharmacies and Walmart.

Their revenue for the first quarter of 2014 was $0.4 million (or 46% of what they had in all of last year). They had so much demand that their gross margin fell from over 70% to 25%. (This is to be expected as filling huge amounts of unexpected demand can mean paying overtime, hiring temps, outsourcing production, airfreighting instead of shipping by boat etc.) They lost a penny a share. The second quarter will be bigger, and they’ll continue to lose money. Revenue for the year should at least double. Maybe triple?

They may never make any money. This investment may go to zero, in which case my totals for the year will be 0.28% lower than they would have been. But if they hit, I may make a couple of percent. Obviously, this is not my typical kind of stock. It’s a sheer speculation, which is why my position is so small. I’m buying it because the product suddenly seems to have caught on, but it could die just as fast. If anyone is from Hawaii and has tried it, please let us know. My average buying price was 62 to 64 cents. There’s plenty of volume for taking a small position.


KRED files 2nd quarter 2014 10Q


Any forensic accountants in the crowd? Their AR was 12% of revenue in 2013 and is now 71% of revenue, yet, there cash doubled and another yet, their inventory almost doubled.

I’m lost on these numbers so a little help with interpretations would be nice.

Their distribution contracts are marvelous but…
PS they just added a link on their website that will show you by zip code where you can get their product. Since I’m in Mexico, I can’t go there but it would be nice to have someone spot their products on the shelves they say they are on (Ralphs in CA, Kroger, etc).