Our company has numerous strengths and assets that can be leveraged much further. This includes our B2B and B2C distribution, the strength of our flagship brand PlusCBD, our scalable infrastructure in systems and process, and most important, the talent and expertise of our employees. We are transitioning to become a global health and wellness company that will not only participate in the CBD category, but also leverage our strengths to pursue non-CBD nutraceuticals and other plant-based food products. Over the last several quarters, we have discussed our participation in select M&A opportunities. As part of this process, we have evaluated numerous opportunities that would allow us to leverage our strength and assets that I just described. We are being extremely selective, making sure that anything we do must be a good strategic fit with favorable economics to our shareholders.
With that context, I am pleased to announce that we have executed a nonbinding letter of intent to acquire a plant-based food company in Europe. Closing of this important strategic acquisition is expected to occur before the end of the year. The challenges in our industry continue, but we are well positioned with an efficient business model and operating structure. We continue to streamline operation, increase cost efficiency and are positioned to leverage our company’s assets and strengths, both organically and through our M&A strategy. We are moving towards profitability and cash flow positive in the near term because of tough decisions that we have made over the last several years. Let me pause now, and I will turn the call over to Joerg.
Joerg Grasser: Thank you, Joe, and also good morning to everyone. During the third quarter, we saw the results of several of our key initiatives, which we talked about in previous earnings calls. We realized top line revenue growth in a very competitive market where most of our competitors are experiencing sales declines and we continue to see a positive financial impact of our cost-efficiency measures across all functional areas of the company. Over the last several years, we have significantly reduced our cost structure without significant productivity losses. And we are well positioned for operating leverage as we continue to increase revenue, all with the main goal of creating shareholder value. Our third quarter revenue increased by 9% to $4.1 million compared to $3.8 million in the third quarter of 2022 and sequentially by 3% from the second quarter of 2023.
The year-over-year increase is mostly due to higher sales volume of 6.1% and higher average sales prices per unit of 3.2%. We were able to take market share from our competitors across all of our sales channels. Our new product introductions were successful and our team is doing a nice job on executing on our go-to-market strategy. New products introduced since the beginning of 2022 represented 36.4% of our Q3 2023 revenues, which shows the importance of new product innovation. Overall CBD market continues to be fragmented and very competitive. We don’t see this changing anytime soon, but we see further brand consolidation and brand contraction, which are opportunities to continue to increase our market share and increase our revenue base. Our direct-to-consumer business continued to perform well with modest digital marketing spend and associated sales represented 40.9% of total revenue in the third quarter compared to 43.8% a year earlier and 42.3% in the second quarter of 2023.
Our B2C revenue grew by 2% on a year-over-year basis as our team made solid improvements to our main digital KPIs. We were able to continue to increase our business to our website on a sequential basis despite lower paid advertisement spend. Our e-commerce team also made good improvements to our subscription and loyalty programs and increase our overall customer base, all good signs for further revenue growth in this channel. Gross margin for the third quarter of 2023 was 45.1%, our best gross margin in the last 8 quarters. We recognized gross margin of 41.6% in the third quarter of 2022 and 43.3% in the second quarter of 2023. The improvement in gross margin compared to the prior year is mostly due to reduced shipping and fulfillment costs, lower overall overhead as well as higher average sale prices.
We are working on further cost efficiencies in order to continue to improve our gross margin. SG&A expense for the third quarter was $2.2 million, down from $2.4 million a year ago. These improvements are a direct result of our ongoing efforts to reduce our overall cost structure. We have taken cost out from all areas of our business and continue to do so in order to generate positive cash flows. For the third quarter 2023, we generated an operating loss of $0.4 million compared to an operating loss of $0.9 million a year ago. Our adjusted EBITDA loss for the third quarter was also $0.4 million compared to $1.2 million in the third quarter of 2022. The improved operating performance and adjusted EBITDA loss is the result of our asset-light business model, which allowed us to implement cost savings throughout the organization to minimize our cash outflow.
On a GAAP basis, we reported a third quarter 2023 net loss of $0.4 million compared to a net loss of $1 million in the third quarter of 2022. Now let me turn to our balance sheet. We continue to manage our cash position very carefully and ended the third quarter of 2023 with $1.6 million of cash compared to $0.6 million at the end of fiscal 2022. Cash generated by operations during the first 9 months of 2023 was $2.4 million, a significant improvement from the same period a year ago, which had cash usage of $2.1 million. The improvement in our operating cash are mostly due to the receipt of ERC fund of $2.5 million and lower cost of operations. Excluding the ERC fund, our cash flow from operations is essentially breakeven. During the third quarter of 2023, we used a modest amount of $19,000 in operating cash.
