COMMITMENTS AND CONTINGENCIES
Contingencies:
Litigation—The Company may engage in various litigation in the ordinary course of business. The Company intends to vigorously defend itself in such matters and management, based upon the advice of legal counsel, is of the opinion that the resolution of these matters will not have a material effect on the consolidated financial statements. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. The Company also discloses when it is reasonably possible that a material loss may be incurred. As of December 31, 2025 and 2024, the Company did not record liabilities relating to such legal matters.
Business Risk—The Company imports finished goods predominantly from manufacturers located in South American and Asian countries. The Company may be subject to certain business risks due to potential instability in these regions.
Major Customers—The Company’s customers that accounted for 10% or more of total net sales and total accounts receivable attributable to the Americas reportable segment were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net sales | | Accounts receivable |
| Year Ended December 31, | | December 31, |
| 2025 | | 2024 | | 2023 | | 2025 | | 2024 |
| Customer A | 19 | % | | 25 | % | | 30 | % | | 9 | % | | 13 | % |
| Customer B | 25 | % | | 23 | % | | 23 | % | | 30 | % | | 17 | % |
One of the customers acquired less than 5% ownership in the Company upon consummation of the IPO. The same customer also was granted 200,000 restricted stock awards at the time of the IPO, of which 100,000 vested on March 31, 2023 and 100,000 vested on March 31, 2024. The customer monetized its investment in the Company during the first quarter of 2025.
In 2023, the Company agreed to start to discontinue the Private Label coconut water and coconut oil supply relationship with one of the significant customers as the terms required to retain the business were contrary to the long term margin targets. However, at the request of this customer, the supply relationship continued for a significant portion of their Private Label coconut water needs in 2024. During 2025, the Company experienced a decrease in the number of regions that the Company services for Private Label for this customer.
Major Suppliers—The Company’s suppliers that accounted for 10% or more of the Company’s purchases were as follows:
| | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 |
| Supplier A | 18 | % | | 18 | % |
| Supplier B | 13 | % | | 15 | % |
| Supplier C | 10 | % | | 8 | % |
| | | |