Who is SOS Hydration?
SOS Hydration Inc (NASDAQ: SOSH) sells electrolyte-enhanced powdered drinks to consumers and organizations worldwide. The company’s proprietary formulation is focused on low sugar content and fast electrolyte absorption to combat the debilitating effects of dehydration.
SOS Hydration’s offerings come in an array of flavors, including watermelon, coconut, citrus, mango and berry. It also sells children’s versions branded with popular characters such as Paw Patrol in the UK.
We derive revenue from the sale of our SOS Hydration liquids and powders, including our PAW Patrol kids’ brand, primarily through sales to our retail channel partners, and also direct to consumers through e-commerce channels such as our website.
Dehydration can lead to frequent illness, headaches, low concentration, poor sleep, fatigue and poor performance.
The company also sells branded merchandise, including sports bottles and a trucker hat.
The company was founded by James Mayo, Thomas Mayo & Blanca Lizaola-Mayo on 24th January 2013 and is headquartered in Longmont, CO.
When Will SOS Hydration IPO?
The SOS Hydration IPO was anticipated to take place on the NASDAQ stock exchange on April 22, 2022, but as yet there is no SEC filing or confirmed date.
The company prospectus states it will issue 1,818,181 Units, assuming a public offering price of $5.50 per Unit. This is the midpoint of the IPO price range. Each Unit will consist of one share of common stock and one Warrant to purchase one share of common stock.
According to FactSet, the SOS Hydration implied market cap at IPO will be $41.1m.
IPO is the process of taking a private company public so that they can list on a stock exchange. Still not sure? Check out our handy guide on IPO's
Who is the SOSH Underwriter?
Maxim Group LLC is the sole book-running manager on the IPO. Maxim Group is a leading investment banking, securities and investment management firm.
The company provides various financial services, including investment banking, equity research, private wealth management, structured products, global institutional equity, fixed-income and derivative sales & trading to various corporate clients, institutional investors, and high net worth individuals.
Use of Proceeds
Management intends to use proceeds from the SOS Hydration IPO to increase its financial flexibility in the following ways:
Around $700k will be used to recruit new sales and support staff
$700k will be utilized in paid internet search advertising
$1.8m will be used for sales and marketing
Around $1.73m will pay off debt obligations
Approximately $3.67m will be considered for working capital and general corporate purposes.
In 2020 SOS Hydration achieved gross profits of $540,872. This more than doubled to $1,165,116 in 2021. The revenue increase was in part attributable to new retail partners (Walmart and Whole Foods), increased accessibility with current retail partners (CVS), and increased online sales.
Unfortunately, the company endured a net loss of -$1.74m in 2020, which soared to a net loss of -$7.08m in 2021, partly due to professional services costs related to the SOSH IPO. The company also faced higher interest fees on its loans.
Meanwhile, inflationary pressures are significantly affecting raw material costs. And advertising, marketing and salary costs also rose last year.
In this current financial year, SOS Hydration expects to incur a $1,282,100 expense related to vesting 250,000 shares of restricted stock units issued to CEO James Mayo at IPO.
Altogether SOS Hydration appears to be an interesting growth stock operating in a competitive but growing industry.
SOS Hydration Overview
One of SOS Hydration’s main goals is to deliver impactful social change by educating and addressing the needs of its consumers to enable healthier lifestyles.
Its products have less sugar and fewer calories than competitive brands such as Gatorade and LiquidIV while providing the same or higher levels of electrolyte replacement.
Who is James Mayo?
James Mayo is the co-founder and CEO of SOS Hydration. He served in the military and was a professional track athlete. However, he was pre-diabetic, resulting from excess consumption of hydration drinks high in sugar. This spurred his decision to produce a low-sugar alternative.
Sugar consumption, and specifically an uptick in sugary drinks, create a health crisis in the western world. This contributes to a higher incidence of diabetes, obesity, and other life-threatening conditions.
The same also goes for zero sugar drinks which tend to use synthetic sweeteners that the body does not recognize as a sugar and cannot break down, leading to the same debilitating result.