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Laird Superfood, Inc.

Laird Superfood, Inc.LSFEarnings & Financial Report

NYSE · Consumer Staples · Food and Kindred Products

Laird Superfood, Inc. develops, manufactures and sells a portfolio of plant-based functional superfood products, including premium coffee creamers, hydration blends, nutritional supplements, and plant-powered snacks. It serves health-conscious consumers through direct-to-consumer e-commerce platforms and offline retail partners, mainly operating in the North American market with a focus on sustainably sourced clean ingredients.

What changed in Laird Superfood, Inc.'s 10-K — 2023 vs 2024

Top changes in Laird Superfood, Inc.'s 2024 10-K

323 paragraphs added · 342 removed · 215 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

67 edited+38 added−62 removed16 unchanged
Our Competitive Strengths We believe the following strengths differentiate Laird Superfood and create long-term, sustainable competitive advantages. An Emerging Platform Within the Rapidly Expanding Plant-Based Natural Foods Industry Long-term opportunities lie in building Laird Superfood into a unique platform within the natural foods industry, which is currently dominated by single-product companies.
Our Competitive Strengths We believe the following strengths differentiate Laird Superfood and create long-term, sustainable advantages: An Emerging Platform Within the Rapidly Expanding Plant-Based Natural Foods Industry Long-term opportunities lie in building Laird Superfood into a unique platform within the natural foods industry, which is currently dominated by single-product companies.
In aggregate, this omnichannel strategy provides us with a diverse set of customers and wholesale partners, leading to a larger TAM opportunity than is normally available to products available primarily in grocery stores, along with an opportunity to develop a direct relationship with our customers at lairdsuperfood.com and pickybars.com .
In the aggregate, this omnichannel strategy provides us with a diverse set of customers and wholesale partners, leading to a larger TAM opportunity than is normally available to products available primarily in grocery stores, along with an opportunity to develop a direct relationship with our customers at lairdsuperfood.com and pickybars.com .
We believe that, along with a trusted brand name, extensive proprietary distribution is a critical long-term and sustainable barrier to entry in the food industry. Our Growth Strategy Our primary growth strategies are as follows: Open-Ended and Long Duration Growth Opportunity in the U.S. Grocery Market The U.S. grocery market is one of the largest retail end-markets in the world.
We believe that, along with a trusted brand name, extensive proprietary distribution is a critical long-term and sustainable barrier to entry in the food industry. Our Growth Strategy Our primary growth strategies are as follows: Open-Ended and Long Duration Growth in the U.S. Grocery Market The U.S. grocery market is one of the largest retail markets in the world.
Focus on Environmental, Social and Governance ("ESG") Best Practices Laird Superfood’s founders strongly believe we should seek to drive value for all relevant stakeholders, including customers, employees, community, shareholders and the broader environment. This philosophy of “Ohana” is particularly important to Laird Hamilton and Gabrielle Reece and permeates our culture.
Focus on Environmental, Social and Governance ( “ ESG ” ) Best Practices Laird Superfood’s founders strongly believe we should seek to drive value for all relevant stakeholders, including customers, employees, community, shareholders, and the broader environment. This philosophy of “Ohana” is particularly important to our founders, Laird Hamilton and Gabrielle Reece, and permeates through our culture.
We are subject to numerous other federal, state and local regulations involving such matters as the licensing and registration of manufacturing facilities, food safety systems, transportation of food products, record keeping, enforcement by government health agencies of standards for our products, inspection of our facilities and regulation of our trade practices in connection with the sale of food products.
We are also subject to numerous other federal, state, and local regulations involving such matters as the licensing and registration of manufacturing facilities, food safety systems, sanitary transportation of food products, record keeping, enforcement by government health agencies of standards for our products, inspection of our facilities and regulation of our trade practices in connection with the sale of food products.
We are subject to numerous other federal, state and local regulations involving such matters as the licensing and registration of manufacturing facilities, enforcement by government health agencies of standards for our products, inspection of our facilities and regulation of our trade practices in connection with the sale of food products.
We are subject to numerous other federal, state, and local regulations involving such matters as the licensing and registration of manufacturing facilities, enforcement by government health agencies of standards for our products, inspection of our facilities and regulation of our trade practices in connection with the sale of food products and dietary supplements.
The FDA and FTC require that all food products be labeled to disclose the net contents, the identity of commodity, nutrition information, and the name and place of business of the product’s manufacturer, packer, or distributor. Both agencies also require that any claim on the product be truthful and not misleading.
The FDA requires that all food products be labeled to disclose the net contents, the identity of commodity, nutrition information, and the name and place of business of the product’s manufacturer, packer, or distributor. Both the FDA and FTC also require that any claim on the product be truthful and not misleading.
Laird Superfood’s strategy is to maximize penetration of this opportunity through a variety of avenues, including growing brand trust and recognition, significantly expanding our retail distribution footprint, driving shelf velocity through an acceleration of online and offline advertising and introducing new products to expand our store footprint. 5 Table of Contents Exposure to Plant-Based, Functional and Natural Foods Portions of Grocery Market Within the grocery category, there is an ongoing shift from highly processed conventional brands that demonstrate little nutritional benefit to natural, nutrient-dense, functional and plant-based alternatives.
Laird Superfood’s strategy is to maximize penetration of this opportunity through a variety of avenues, including growing brand trust and recognition, significantly expanding our retail distribution footprint, driving shelf velocity through an acceleration of online and offline advertising and introducing new products to expand our store footprint. 4 Table of Contents Exposure to Functional and Natural Foods Portions of Grocery Market Within the grocery category, there is an ongoing shift from highly processed conventional brands that demonstrate little nutritional benefit, to natural, nutrient-dense, functional, and cleaner alternatives.
You should not rely on any information contained or included on our website in making your decision whether to purchase our common stock. 14 Table of Contents
You should not rely on any information contained or included on our website in making your decision whether to purchase our common stock. 12 Table of Contents
We expect the shift in consumer tastes driving the growth of natural and plant-based alternatives will continue throughout the foreseeable future as consumers become better educated on nutrition and focus on the health and wellness of themselves, their families and the environment.
We expect the shift in consumer tastes driving the growth of natural and plant-based alternatives will continue throughout the foreseeable future as consumers become better educated on nutrition and focus on their own health and wellness, that of their families, and the environment.
For this reason, Laird Superfood has always enjoyed a meaningful base of recurring revenues due to repeat orders by its consumers and wholesale partners. Growing this base of recurring revenues is a strong focus of Laird Superfood as it evaluates new product development opportunities, and marketing strategies.
For this reason, Laird Superfood has historically experienced a meaningful base of recurring revenues due to repeat orders by its consumers and wholesale partners. Growing this base of recurring revenues is a strong focus of Laird Superfood as it evaluates new product development opportunities, and marketing strategies.
The Organic Foods Production Act mandates that the USDA develop national standards for organically produced agricultural products to assure consumers that those products marketed as organic meet consistent, uniform standards.
The Organic Foods Production Act of 1990 (the “OFPA”) mandates that the USDA develop national standards for organically produced agricultural products to assure consumers that those products marketed as organic meet consistent, uniform standards.
Food-Related Regulations As a manufacturer and distributor of food products, we are also subject to a number of federal, state and local food-related regulations, including, but not limited to, the Federal Food, Drug and Cosmetic Act of 1938 (the “FDCA”) and regulations promulgated thereunder by the FDA.
Food-Related Regulations As a manufacturer and distributor of food products and dietary supplements, we are also subject to a number of federal, state, and local food-related regulations, including, but not limited to, the Federal Food, Drug and Cosmetic Act of 1938, as amended (the “FDCA”) and extensive regulations promulgated thereunder by the FDA.
The regulation is being implemented using a tiered series of compliance dates based on the size of the U.S. importer and the foreign supplier. We have developed a program that we believe is in compliance with this regulation and are monitoring its ongoing implementation.
The regulation is being implemented using a tiered series of compliance dates based on the size of the U.S. importer and the foreign supplier. We have developed a program that we believe is in compliance with this regulation.
We are required to comply with the regulations and policies promulgated by the Environmental Protection Agency (“EPA”), the United States Department of Agriculture (the “USDA”), the Food and Drug Administration (“FDA”), the Federal Trade Commission (“FTC”), the Equal Employment Opportunity Commission ("EEOC"), the United States Department of Health and Human Services ("HHS"), the United States Department of Labor ("DOL"), and the Occupational Safety and Health Administration (“OSHA”), in addition to corresponding state and local agencies.
We are required to comply with the regulations and policies promulgated by the Environmental Protection Agency (“EPA”), the United States Department of Agriculture (the “USDA”), the Food and Drug Administration (“FDA”), the Federal Trade Commission (“FTC”), the Equal Employment Opportunity Commission (“EEOC”), the United States Department of Health and Human Services (“HHS”), the United States Department of Labor (“DOL”), and the Occupational Safety and Health Administration (“OSHA”), among others, in addition to corresponding state, and local agencies.
The FDA also has detailed regulations and requirements governing various types of claims about products’ nutritional value and wellness benefits, such as a nutrient content claims, health claims, and structure-function claims. Claims falling under these regulations must be phrased in specific ways to avoid misrepresenting the food.
The FDA also has detailed regulations and requirements governing various types of claims about products’ nutritional value and wellness benefits, such as a nutrient content claims, health claims, and structure-function claims. Claims falling under these regulations must be phrased in specific ways to avoid misrepresenting the food. We believe we are in compliance with applicable FDA and FTC claims regulations.
Powdered Coffee Creamers Laird Superfood’s Superfood Creamer originated in powdered form for convenience, sustainability, and to maximize the nutritional profile. Our powdered coffee creamers have an 18-month shelf life. Powdered coffee creamers have historically represented a smaller , lower-price-point segment of the coffee creamer market with a focus purely on convenience and price.
Powdered Coffee Creamers Laird Superfood’s coffee creamers originated in powdered form for convenience, sustainability, and to maximize nutritional benefits. Our powdered coffee creamers typically have 18 to 24-month shelf lives. Powdered coffee creamers have historically represented a smaller , lower-price-point segment of the coffee creamer market with a focus purely on convenience and price.
In addition to being coffee additives, our powdered creamers are used by consumers in a variety of different applications, such as smoothies and baked goods. Our liquid creamers are differentiated by functional mushroom extracts in their ingredient set. Powdered creamers have the further appeal of shelf stability and on-the-go convenience.
In addition to being coffee additives, our powdered creamers are used by consumers in a variety of different applications, such as smoothies and baked goods. Our liquid creamers utilize functional mushroom extracts, and our powdered creamers have the additional appeal of shelf stability and provide our customers with on-the-go convenience.
For sales through Amazon.com , we utilize both fulfilled by Amazon (“FBA”) and fulfilled by merchant ("FBM") distribution processes. Related to FBA, we send products to Amazon, and Amazon fulfills orders placed through its online marketplace from its fulfillment centers. Amazon charges us fulfillment fees for this service and may charge storage fees for certain inventory.
On Amazon, we utilize the fulfilled by Amazon (“FBA”) distribution processes, wherein we send products to Amazon, and Amazon fulfills orders placed through its online marketplace from its fulfillment centers. Amazon charges us fulfillment fees for this service and may charge storage fees for certain inventory.
If our advertising does not comply with FTC and similar state requirements, we could become subject to an investigation by the FTC or a consent decree, which could have a material adverse impact on our business and reputation. We believe that we are in material compliance with existing consumer protection regulations applicable to our business.
If our advertising does not comply with FTC and similar state requirements, we could become subject to an investigation by the FTC or a consent decree, which could have a material adverse impact on our business and reputation.
We have included our website address in this Annual Report as an inactive textual reference only. Information contained on, or that can be accessed through, our website is not part of this Annual Report.
We have included our website address in this Form 10-K as an inactive textual reference only. Information contained on, or that can be accessed through, our websites are not part of this Form 10-K.
Business Model Characterized by Repeat and Recurring Revenues Because the consumption of coffee, creamers, and hydration products is a daily ritual for many consumers, there is a natural and frequent repeat usage of Laird Superfood products among large portions of our customer base.
Repeat and Recurring Revenues Because the consumption of coffee, creamers, greens, and hydration products is a “Daily Ritual” for many consumers, there is a natural and frequent repeat usage of Laird Superfood products among large portions of our customer base.
We believe our creamers are differentiated from competing products due to their superior taste profile, rigorous ingredient guardrails, simple and short ingredient lists, and a differentiated energy profile due to the inclusion of plant-based fats and mushrooms where applicable.
We believe our creamers are differentiated from competing products due to their superior taste profile, our rigorous ingredient standards, our focus on whole ingredients, and a differentiated energy profile due to the inclusion of plant-based fats and mushrooms, where applicable.
Laird Superfood is leading the way in bringing functional benefits, such as functional mushrooms, to the set. 7 Table of Contents Coffee, Tea, and Hot Chocolate Products Instant Latte and Hot Chocolate with Functional Mushrooms Laird Superfood sells high-quality instant beverage products pre-mixed with our superfood creamer, in a just-add-hot-water line of Instant Latte products, as well as Hot Chocolate with Functional Mushrooms.
In our view, Laird Superfood is leading the way in bringing functional ingredients, such as functional mushrooms, to the product set. 6 Table of Contents Coffee, Tea, and Hot Chocolate Products Instant Latte and Hot Chocolate with Functional Mushrooms Laird Superfood sells high-quality instant beverage products that are pre-mixed with our superfood creamer and functional mushrooms, in just-add-hot-water lines of Instant Latte and Hot Chocolate products.
This platform provides opportunities for continual expansion of our total addressable market (“TAM”) to allow long-duration growth, sustained differentiation of our brand, product diversification and leveraging our core strengths and operating costs to increase profit margins.
We believe our platform provides opportunities for continual expansion of our total addressable market (“TAM”) to allow long-duration growth, sustained differentiation of our brand, product diversification and leveraging our core strengths and operating costs to increase profit margins. Omnichannel Distribution Strategy Our omnichannel distribution strategy has two key components: e-commerce and wholesale.
We believe our powdered Superfood Creamers are expanding that segment and bringing new consumers into the set by establishing a premium product proposition - great taste, recognizable ingredient lists, and functional ingredients such as mushrooms that support the body and mind. Liquid Coffee Creamers Our liquid coffee creamers were developed internally based on naturally sourced, delicious and functional ingredients.
We believe that the great taste and recognizable ingredients of our powdered coffee creamers, and utilization of functional ingredients such as mushrooms that support the body and mind, are expanding the segment and attracting new consumers. Liquid Coffee Creamers Our liquid coffee creamers were developed internally based on naturally sourced, delicious, and functional ingredients.
Our principal executive offices are located at 5303 Spine Road, Suite 204, Boulder, Colorado, 80301. Our websites are www.lairdsuperfood.com and www.pickybars.com . We make available on or through w ww.lairdsuperfood.com certain reports and amendments to those reports that we file with or furnish to the SEC in accordance with the Securities Exchange Act of 1934, as amended.
Our websites are www.lairdsuperfood.com and www.pickybars.com . We make available on or through w ww.lairdsuperfood.com certain reports and amendments to those reports that we file with or furnish to the United States Securities and Exchange Commission (the "SEC") in accordance with the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Our Performance Granola and Performance Oatmeal compete in the $36.5 billion global cereal market, which is expected to grow at a 3.7% CAGR through 2030, per Grand View Research. Top competitors are Bob’s Red Mill, Kellogg, General Mills and Purely Elizabeth.
S. snack bar market, which is expected to grow to $9.6 billion by 2029, per Mintel. Our Performance Granola and Performance Oatmeal products compete with top brands such as Bob’s Red Mill, Kellogg, and General Mills, in the $36.5 billion global cereal market, which is expected to grow at a 3.7% CAGR through 2030, per Grand View Research.
We expect to continue expanding our Superfood Creamer platform going forward with additional flavors, functional benefits, and formulations based on consumer preferences and demand. Such products demonstrate attractive repeat usage and customer lifetime value characteristics.
We expect to continue expanding our coffee creamer selection with additional flavors, functional ingredients, and formulations based on consumer preferences and demand. Such products historically experienced repeat usage and customer lifetime value characteristics.
Continued Expansion of Distribution Footprint Currently, our products are marketed and sold through a diverse set of e-commerce and wholesale channels, including grocery chains, club stores, specialty and natural food outlets, lairdsuperfood.com , pickybars.com, and Amazon.com .
Continued Expansion of Distribution Footprint Currently, our products are marketed and sold through a diverse set of e-commerce and wholesale channels, including grocery chains, club stores, specialty and natural food outlets, lairdsuperfood.com , pickybars.com, and Amazon.com (“Amazon”). Maximizing potential distribution in stores and attracting new consumers online will be key growth drivers for Laird Superfood.
Liquid creamers provide the added benefits of being on the perimeter refrigerated shelf space and a lower price point per unit. Though the more sizable category, liquid creamer plant-based innovation has been limited due to differences in base, flavor, and sugar levels.
Liquid creamers provide the added benefits of being on the perimeter refrigerated shelf space and a lower price point per unit than key competing products. While consumers have historically had more options for liquid coffee creamer, clean innovation in the market has been limited due to differences in base, flavor, and sugar levels.
Our importers, packers, distributors, and suppliers are also subject to various laws and regulations relating to environmental protection and worker health and safety matters. 10 Table of Contents USDA National Organic Program and Similar Regulations We are involved in the sourcing, manufacturing, supplying, processing, marketing, selling and distribution of organic food products and, as such, are subject to certain organic quality assurance standards.
USDA National Organic Program and Similar Regulations We are involved in the sourcing, manufacturing, supplying, processing, marketing, selling and distribution of organic food products and, as such, are subject to certain organic certification and quality assurance standards.
Finished goods are then warehoused and shipped to both retail and wholesale customers, as well as distributors across the country. Laird Superfood has a supplier code of conduct for the ethical sourcing of raw materials from within and outside the United States, which we provide to suppliers as part of the supplier-onboarding process.
Laird Superfood has a supplier code of conduct for the ethical sourcing of raw materials from within and outside the United States, which we provide to suppliers as part of the supplier-onboarding process. Regulation We are subject to a wide range of governmental regulations and policies.
Laird Superfood is conscientious in its sourcing of raw materials, the carbon-benefits of facilitating plant-based alternatives, the impact of our operations on the environment and our community and providing products that discourage the culture of single-use plastics. 6 Table of Contents Our Products Our authentic and sustainably differentiated plant-based products become part of our customer’s “Daily Ritual,” providing sustained energy and nutrition throughout the day, presenting the opportunity to expand a portfolio of plant-based products.
Laird Superfood is conscientious in its sourcing of raw materials, the carbon-benefits of facilitating plant-based alternatives, the impact of our operations on the environment and our community and providing products that discourage the culture of single-use plastics.
The law provides the FDA with new enforcement authorities and tools designed to achieve higher rates of compliance with prevention- and risk-based food safety standards and to better respond to and contain problems when they do occur. We believe that we are in material compliance with the current regulations promulgated to implement FSMA that are applicable to our business.
Food Safety Regulations FSMA enabled the FDA to better protect public health by strengthening the food safety system through several new foundational regulations. The law provided the FDA with new enforcement authorities and tools designed to achieve higher rates of compliance with prevention- and risk-based food safety standards and to better respond to and contain problems when they do occur.
There are multiple sources of roasted coffee products, coconut milk powder and coconut water powder available to the Company, and management believes that the Company could find suitable replacements for these suppliers on substantially similar terms. Raw materials are shipped to our co-manufacturers' production facilities where they are stored. These raw materials are then mixed and packaged into finished goods.
There are multiple sources of roasted coffee products, coconut milk powder, and coconut water powder available, and we believe that we would be able to find suitable replacements for these suppliers on substantially similar terms. Raw materials are shipped to third-party production facilities (“co-manufacturer”) where they are stored until used in production.
Because our Hot Chocolate with Functional Mushrooms are made with coconut sugar rather than refined sugars and include functional mushrooms, we believe our hot chocolate product to be highly differentiated from conventional hot chocolate brands. Whole Bean, and Functional Ground and K-Cup Coffees Coffees offer an intuitive and complementary sale to customers purchasing our creamers.
Because our Hot Chocolate with Functional Mushrooms are made with coconut sugar rather than more highly refined sugars and include functional mushrooms, we believe our hot chocolate products are highly differentiated from conventional hot chocolate brands.
Hydration and beverage enhancing supplements include sales of Hydrate coconut waters and our supplement lines. Harvest snacks and other food items primarily include protein bars. Coffee, tea, and hot chocolate products include traditional and functional mushroom ground and whole bean coffee, hot chocolate with functional mushrooms, and our Instant Latte line of just-add-water coffee and tea products.
Coffee, tea, and hot chocolate products include traditional and functional mushroom-ground and whole-bean coffee, hot chocolate with functional mushrooms, and our instant latte line of just-add-water coffee and tea products. Other products include primarily coffee tools and other miscellaneous branded goods.
As of December 31, 2023, we had 25 full-time employees and two part-time employees. None of these employees are represented by labor unions or covered by collective bargaining agreements.
Human Capital Resources Laird Superfood is guided by a strong vision, mission, and values set. As of December 31, 2024, we had 26 full-time employees and two part-time employees, none of whom are represented by labor unions or covered by collective bargaining agreements.
Morning Jumpstart competes largely as an alternative to single-serve cold-pressed juices which frequently focus on similar ingredients (lemon cayenne mixes, and superfood greens mixes), and certain other powdered beverages. The product is set apart from many due to the lack of added sweeteners and convenient powdered form.
Business Market Insights sized the U.S. greens powder market at $95 million in 2023. Morning Jumpstart competes largely as an alternative to single-serve cold-pressed juices which frequently focus on similar ingredients (lemon cayenne mixes, and superfood greens mixes), and certain other powdered beverages.
These products include a limited number of ingredients; no artificial sugars, ingredients or colors that are prevalent in most competing sports drinks; and a lower cost per serving than traditional single use packaged sports drinks, electrolyte, and coconut waters. Hydrate is also environmentally friendly due to its powdered form, avoiding single use plastics and the fuel required to transport liquids.
Hydrate Hydrate, our line of powdered coconut water drink mixes, includes a limited number of ingredients, no artificial sweeteners, chemicals, or colors that are prevalent in most competing sports drinks, and a lower cost per serving than traditional single use packaged sports drinks, electrolyte, and coconut waters.
We do not expect the cost of our continued compliance with existing consumer protection regulations to have a material effect on our capital expenditures, earnings, cash flows or competitive position in the foreseeable future. Employee Safety Regulations We are subject to certain safety regulations, including OSHA regulations.
We do not expect the cost of our continued compliance with existing consumer protection regulations to have a material effect on our capital expenditures, earnings, cash flows or competitive position in the foreseeable future. 11 Table of Contents Intellectual Property We have the right to the following material trademarks: Laird Superfood, Superfood Creamer, Picky Bars, and Picky Bars Drizzle in the United States, and Laird Superfood in several international jurisdictions, including the European Union.
We believe that we are in material compliance with existing environmental regulations applicable to our business. We do not expect the cost of our continued compliance with existing environmental regulations to have a material effect on our capital expenditures, earnings, cash flows or competitive position in the foreseeable future.
It is possible, although we believe unlikely, that the cost of our continued compliance with existing and future food-related regulations could have a material effect on our capital expenditures, earnings, cash flows, or competitive position in the foreseeable future, due to increased regulatory changes and uncertainty associated with the 2025 change in presidential administration.
We currently manufacture and distribute a number of organic products that are subject to the standards set forth in the Organic Foods Production Act and the regulations adopted thereunder by the USDA National Organic Program.
USDA has implemented the Organic Food Production Act through the Natural Organic Program (“NOP”) regulations which were recently updated and strengthened through the USDA's Strengthening Organic Enforcement rule. We currently manufacture and distribute a number of organic products that are subject to the standards set forth in the OFPA and the NOP regulations.
Natural, Organic and Functional Food and Beverages and Supplement sales were approximately $272 billion and are expected to grow to $300 billion by 2024. Consumer preferences within the evolving food and beverage industry are shifting away from processed and sugar-laden food and beverage products, as well as those containing significant amounts of highly processed and artificial ingredients.
Market Opportunity Consumer preferences within the evolving food and beverage industry continue to shift away from processed and sugar-laden food and beverage products, as well as those containing significant amounts of ultra-processed and artificial ingredients.
Diversity and inclusion better positions us to understand our customers’ needs and to ultimately succeed in our vision of providing better food for a better world. Our workforce is likewise gender diverse. We continue to seek opportunities for building an inclusive culture that encourages, supports, and celebrates the diverse voices of our world.
We believe diversity and inclusion enable the Company to benefit from multiple points of view and broad thinking innovation. Diversity and inclusion better position us to understand our customers’ needs and to ultimately succeed in our vision of providing better food for a better world. Our workforce is likewise gender diverse.
Available in whole, ground, and k-cup formats, the Laird Superfood lines can match any consumer ritual. Our coffees are a hand-picked, high altitude, shade grown variety selected for their low acidity. The caffeine from our coffee, combined with the naturally occurring MCTs in our creamers, provides sustained energy that many consumers seek.
We believe that these products have intuitive and natural synergies for many consumers of our superfood creamer products, and the convenience of combined ordering on our e-commerce platform. Available in whole, ground, and k-cup options, Laird Superfood coffees can complement any consumer routine. Our coffees are a hand-picked, high altitude, and shade-grown variety selected for their low acidity.
Performance Mushrooms compete in the natural supplement market, which is highly fragmented with several peer companies. As mushroom trends continue to accelerate, and consumers become more knowledgeable on mushroom benefits Laird Superfood Performance Mushrooms stand apart due to the ingredients being simple, organic mushrooms powders in a blend of varieties that Laird Hamilton specifically chose to fuel his body.
Performance Mushrooms stand apart due to the ingredients being simple, and the fact that its organic mushroom powders, which are grown and manufactured in the U.S., are composed of a blend of varieties that Laird Hamilton specifically chose to fuel his body.
These dynamics create meaningful recurring revenues and the combination of repeat usage, order frequency and retention rates inform our views on strategic marketing spend and customer unit economics. Distribution Channels We generate revenue through two channels: e-commerce and wholesale.
These dynamics create meaningful recurring revenues and the combination of repeat usage, order frequency and retention rates inform our views on strategic marketing spend and customer unit economics. 8 Table of Contents Wholesale Laird Superfood products are sold through a diverse set of retail stores, including conventional, natural, and specialty grocery, club, and food service outlets.
We believe we are in compliance with applicable FDA claims regulations. 11 Table of Contents Other state and local statutes and regulations may impose additional food labeling requirements.
Other state and local statutes and regulations may impose additional food labeling requirements.
Our creamer products primarily compete within the $6.9 billion domestic creamer market that, according to Mintel, is expected to grow at a 6.3% compound annual growth rate ("CAGR") through 2027, and includes products offered by Danone SA, TreeHouse Foods Inc., Nestle SA and Dean Foods Co, among others.
Research and Markets estimated that the U.S. creamer market was $27 billion in 2024 and expects it to grow at a 3.8% CAGR through 2029. This market includes products offered by Danone SA, TreeHouse Foods Inc., Nestle SA, and Dean Foods Co, among others.
Demand for Instant Latte continues to grow as younger consumers look for convenience and understand that instant coffee can also equal a quality experience. The hot chocolate market is estimated to reach $1.8 billion in the U.S. in 2024, according to Statista.
These products compete with other just-add-water lines of instant coffee products and hot chocolate. Demand for Instant Latte continues to grow as younger consumers look for convenience and recognize that instant coffee can also equal a quality experience.
This comprehensive regulatory framework governs the manufacture (including composition and ingredients), labeling, packaging and safety of food in the U.S. The FDA: • regulates manufacturing practices for foods through its current good manufacturing practices and regulations affecting food manufacturing; • regulates ingredient safety; and • prescribes the format and content of certain information required to appear on food product labels.
Among other matters, the FDA: • Requires the registration of facilities that process, pack, and hold food (including dietary supplements) and regulates manufacturing practices for foods through its current good manufacturing practices, preventative controls regulations, and other regulations impacting food manufacturing; • Regulates the use of specific direct and indirect food additives, other ingredients, and ingredient safety; and • Prescribes the format and content of certain information required to appear on food and dietary supplement product labels. 9 Table of Contents Some of the key food safety and food labeling regulations in the U.S. are discussed in the following sections.
Subscriptions play an important role in driving retention rates for our e-commerce direct-to-consumer ("DTC") business at lairdsuperfood.com and pickybars.com and in 2023 and 2022 subscriptions made up 55% and 40% of our DTC net sales, respectively. In addition to subscriptions, our DTC business has a high percentage of repeat users.
We sell a number of our top selling SKUs on Amazon, including our powdered coffee creamers, functional coffees, and Performance Mushrooms. Subscriptions play an important role in driving retention rates for our DTC business at lairdsuperfood.com and pickybars.com and in 2024 and 2023 subscriptions made up 52% and 55% of our DTC net sales, respectively.
Census Bureau estimates to be an $800 billion grocery market as of 2023. Laird Superfood is specifically focused on the U.S. Natural, Organic and Functional Food and Beverages sub-segment of the food and beverage market. According to the New Hope Network, in 2022, U.S.
Laird Superfood is specifically focused on the U.S. Natural, Organic, and Functional Food and Beverages and Supplement sub-segment, which accounted for approximately $270 billion of that market in 2024 and is expected to grow to $300 billion by the end of 2025.
In 2023 and 2022, 81% and 83% of the DTC net sales came from either subscribers or repeat users. Subscriptions on Amazon.com reached 19% of sales in that channel in 2023 and are growing.
In addition to subscriptions, our DTC business has a high percentage of repeat users. Over 80% of DTC net sales came from either subscribers or repeat users in both 2024 and 2023. Subscriptions on Amazon reache d 21% and 19% of sales in that channel in 2024 and 2023, respectively. We expect this trend to continue growing.
The core pillars of the Laird Superfood platform are Superfood Coffee creamers, Hydration and beverage enhancing supplements including powdered supplements such as Performance Mushrooms, Harvest snacks and other food items, and functional Coffee, tea and hot chocolate products such as our instant lattes.
As part of our focus on these goals, our primary products include: (i) coffee creamers, (ii) hydration and beverage enhancing products, (iii) harvest snacks and other food items, and (iv) functional coffee, tea, and hot chocolate products. Our creamers include sales of powdered and liquid coffee creamers.
Laird Superfood’s long-term goal is to build the first scale-level and widely recognized brand that authentically focuses on natural ingredients, nutritional density and functionality, allowing the Company to maximize penetration of a multi-billion-dollar opportunity in the grocery market.
Our primary products include: (i) coffee creamers, (ii) hydration and beverage enhancing products, (iii) harvest snacks and other food items, and (iv) coffee, tea, and hot chocolate products. Laird Superfood’s long-term goal is to build the first scale-level and widely recognized brand that authentically focuses on natural ingredients, nutritional density, and functionality.
Some of the key food safety and food labeling regulations in the U.S. are discussed in the following sections. We are subject to the Food Safety Modernization Act of 2011, which, among other things, mandates that the FDA adopt preventative controls to be implemented by food facilities in order to minimize or prevent hazards to food safety.
We are subject to the Food Safety Modernization Act of 2011 (“FSMA”), which, among other things, amended the FDCA to require FDA-regulated food facilities to develop and implement a written food safety plan including a hazard analysis and preventative controls program to minimize or prevent food safety hazards (“HACCP” plans).
We also offer employer paid medical and vision insurance, dental insurance, life and short-term disability insurance, paid time off, and a retirement savings plan with an employer safe harbor contribution. 13 Table of Contents Diversity and Inclusion We believe diversity and inclusion enable the company to benefit from multiple points of view and broad thinking innovation.
With the goal of retaining top talent and ensuring equitable pay practices, we offer competitive salaries and benefits including employer paid medical and vision insurance, dental insurance, life and short-term disability insurance, paid time off, and a retirement savings plan with an employer safe harbor contribution, and participation in our equity incentive program.
Our gross sales by product category are reflected below: Year Ended December 31, 2023 2022 $ % of Total $ % of Total Coffee creamers $ 20,381,166 60 % $ 19,800,429 55 % Hydration and beverage enhancing supplements 5,320,039 16 % 4,877,067 14 % Harvest snacks and other food items 6,879,643 20 % 7,191,316 20 % Coffee, tea, and hot chocolate products 8,017,121 23 % 6,648,576 19 % Other 435,423 1 % 1,805,914 5 % Gross sales 41,033,392 120 % 40,323,302 113 % Shipping income 899,921 3 % 1,099,358 3 % Returns and discounts (7,709,115 ) (23 )% (5,594,268 ) (16 )% Sales, net $ 34,224,198 100 % $ 35,828,392 100 % Coffee creamers include sales of powdered and liquid coffee creamers.
We are driving those trends through a trusted, authentic brand platform. 5 Table of Contents Our gross sales by product category are reflected below: Year Ended December 31, 2024 2023 $ % of Total $ % of Total Coffee creamers $ 23,088,363 53 % $ 20,425,029 60 % Coffee, tea, and hot chocolate products 11,184,525 26 % 7,968,956 23 % Hydration and beverage enhancing products 9,207,964 21 % 5,320,039 16 % Harvest snacks and other food items 6,215,989 14 % 6,883,980 20 % Other 172,788 0 % 435,388 1 % Gross sales 49,869,629 114 % 41,033,392 120 % Shipping income 506,732 1 % 899,921 3 % Discounts and promotional activity (7,081,224 ) (15 )% (7,709,115 ) (23 )% Sales, net $ 43,295,137 100 % $ 34,224,198 100 % Coffee Creamers Laird Superfood sells powdered and liquid coffee creamers.
ITEM 1. BUSINESS. When used in this Annual Report on Form 10-K, the terms "Laird Superfood", the "Company", "we", "our", and "us" refer to Laird Superfood, Inc. Overview Laird Superfood is focused on manufacturing and marketing clean, plant-based, and functional foods.
ITEM 1. BUSINESS. When used in this Annual Report on Form 10-K, the terms “Laird Superfood,” the “Company,” “we,” “our,” and “us” refer to Laird Superfood, Inc. and its wholly owned subsidiary, Picky Bars, LLC, on a consolidated basis.
Food Labeling Regulations The Company is subject to certain requirements relating to food labeling under the FDCA and corresponding FDA regulations as well as the Fair Packaging and Labeling Act enacted in 1967 and corresponding FTC regulations.
The Company is subject to certain requirements relating to food and dietary supplement labeling under the FDCA and corresponding FDA regulations as well as corresponding state laws and regulations. Labeling for our products must also comply with the Bioengineered Food Disclosure Standard and NOP standards required by the USDA.
Our Hydrate platform primarily competes against hydration enhancing sports drinks and other powdered electrolyte mixes. The dominant competitors in the $12.9 billion sports drink market are Gatorade, owned by PepsiCo, and PowerAde, owned by The Coca-Cola Company. Hydrate also competes within the $2 billion coconut water market, which is highly fragmented relative to the sports drink market.
The dominant competitors in the sports drink market, which Mordor Intelligence sized at $12.6 billion in 2024, are Gatorade, owned by PepsiCo, and PowerAde, owned by The Coca-Cola Company.
In addition, the Federal Communications Commission (“FCC”) monitors claims made by companies, particularly with celebrity spokespeople.
In addition, the Federal Communications Commission (“FCC”) monitors claims made by companies, particularly with celebrity spokespeople, including health claims about products. Our importers, packers, distributors, and suppliers are also subject to various laws and regulations relating to, among others, food safety, environmental protection, and worker health and safety matters.
Our net sales by distribution channel are reflected below: Year Ended December 31, 2023 2022 $ % of Total $ % of Total E-commerce $ 19,443,885 57 % $ 22,313,241 62 % Wholesale 14,780,313 43 % 13,515,151 38 % Sales, net $ 34,224,198 100 % $ 35,828,392 100 % 9 Table of Contents E-commerce Our e-commerce business consists of lairdsuperfood.com , pickybars.com , and Amazon.com .
Our net sales by distribution channel are reflected below: Year Ended December 31, 2024 2023 $ % of Total $ % of Total E-commerce $ 25,642,366 59 % $ 19,443,885 57 % Wholesale 17,652,771 41 % 14,780,313 43 % Sales, net $ 43,295,137 100 % $ 34,224,198 100 % During fiscal year 2024, the majority of our business was conducted through our e-commerce channel, although we expect sales from the wholesale channel to increase as a percentage of our total business as we continue to expand our presence in physical retail stores and our retail distribution and product assortment grows.
Each of these products is differentiated against its respective competitors due to a focus on whole foods that the body recognizes instead of long ingredient lists. Beverage Enhancing Supplements Our beverage enhancing supplement line consists of Prebiotic Daily Greens and Antioxidant Daily Reds, Performance Mushrooms and other mushroom botanical blends, Morning Jumpstart, and protein powders.
Our beverage enhancing products are plant-based, minimally processed, and contain recognizable ingredients. Prebiotic Daily Greens and Antioxidant Daily Reds were carefully designed to fill nutrient gaps that many Americans face. These products are differentiated from the large group of competitors due to their short ingredient lists, focus on whole foods that the body recognizes, superior taste, and value.
Removed
Recent Developments Redomestication On December 31, 2023 (the “Effective Date”), we changed our state of incorporation from the state of Delaware to the state of Nevada (the “Redomestication”) by means of a plan of conversion, as described in our definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission on October 10, 2023.
Added
Overview Laird Superfood creates clean, functional, and sustainability-conscious products, many of which incorporate adaptogens, which may be beneficial in reducing stress, improving energy levels, enhancing mental performance, mood regulation, and immune system support.
Removed
As of the Effective Date: ● our domicile changed from the state of Delaware to the state of Nevada; and ● the affairs of the Company ceased to be governed by the Delaware General Corporation Law and the Company’s then existing certificate of incorporation and bylaws, and instead became governed by the Nevada Revised Statutes and the Company's new articles of incorporation and bylaws.
Added
We strive to create products that are amongst the cleanest, most minimally processed in the industry, and we intend to lead by example as the tides continue to shift in our direction. We participate in what the United States (“U.S.”). Census Bureau estimates to be an $730 billion grocery market as of 2024.
Removed
The Redomestication was previously submitted to a vote of, and was approved by, the Company's stockholders at our Annual Meeting of Stockholders held on November 28, 2023.
Added
Additionally, per Grandview Research, the North American Functional Mushroom Supplement Market was valued at $540 million in 2023 and projected to grow at a 15% compound annual growth rate (“CAGR”) between 2024 and 2030. Functional mushrooms are a key ingredient in the Laird Superfood portfolio as the we strive to bring their potential benefits to food.
Removed
The Redomestication did not result in any change in the business, physical location, management, assets, liabilities or net worth of the Company, nor did it result in any change in location of the Company’s current employees, including management.
Added
A large opportunity also exists in out-of-home venues, including hotels, airports, universities, among others, and we are accelerating the pursuit of distribution in these incremental outlets. Our goal is to make our products available wherever our customers choose to shop.
Removed
The Redomestication did not affect any of the Company’s material contracts with any third parties, and the Company’s rights and obligations under those material contractual arrangements continue to be the rights and obligations of the Company after the Redomestication. The daily business operations of the Company will continue as they have been conducted prior to the Redomestication.
Added
Our Products Our goal is to bring our clean, functional, and sustainability-conscious products into our customers’ “Daily Ritual,” formulated with the goal of providing sustained energy and nutrition throughout the day.
Removed
The consolidated financial condition and results of operations of the Company immediately after consummation of the Redomestication remains the same as immediately before the Redomestication.
Added
Our hydration and beverage enhancing products include sales of “Hydrate” coconut waters and our supplement lines. Harvest snacks and other food items primarily include protein and energy bars, oatmeal, and granola.
Removed
Product quality issue In the first quarter of 2023, prior to the issuance of our consolidated financial statements for the year ended December 31, 2022, we discovered a product quality issue with coconut milk powder from one of our suppliers and immediately initiated a voluntary product withdrawal and contacted all impacted wholesale customers and e-commerce consumers to aggressively pull back as much as of the affected product as possible.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Our present and future funding requirements will depend on many factors, including: • our ability to achieve revenue growth and further improve gross margins; • the cost of expanding our operations and offerings, including our sales and marketing efforts; • the effect of competing market developments; and The various ways we could raise additional capital carry potential risks.
Our present and future funding requirements will depend on many factors, including: • our ability to achieve revenue growth and further improve gross margins; • the cost of expanding our operations and offerings, including our sales and marketing efforts; and • the effect of competing market developments. The various ways we could raise additional capital carry potential risks.
Reece to maintain and increase brand recognition. Customers may be drawn to our products because of their involvement in our Company as celebrities. If Mr. Hamilton or Ms. Reece’s image, reputation or popularity is materially and adversely affected, this could negatively affect the marketability and sales of our products and the Company.
Reece to maintain and increase brand recognition. Customers may be drawn to our products because of their involvement in our Company as celebrities. If Mr. Hamilton or Ms. Reece’s image, reputation or popularity is materially and adversely affected, this could negatively affect the marketability and sales of our products and the Company. Mr. Hamilton and Ms.
For example, our directors or executive officers could inadvertently fail to disclose a new relationship or arrangement causing us to fail to make a required related party transaction disclosure. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.
For example, our directors or executive officers could inadvertently fail to disclose a new relationship or arrangement causing us to fail to disclose a required related party transaction disclosure. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.
For example, in the first quarter of 2023, we discovered a product quality issue with coconut milk powder from one of our suppliers and immediately initiated a voluntary product withdrawal and contacted all impacted wholesaler customers and e-commerce customers to aggressively pull back as much of the affected product as possible.
For example, in the first quarter of 2023, we discovered a sensory product quality issue with coconut milk powder from one of our suppliers and immediately initiated a voluntary product withdrawal. We contacted all impacted wholesaler customers and e-commerce customers to aggressively pull back as much of the affected product as possible.
These provisions include the following: • authorizing the issuance of "blank check" preferred stock that could be issued by our board of directors to defend against a takeover attempt; • providing that vacancies on our board of directors, including newly created directorships, may be filled only by a majority vote of directors then in office rather than by shareholders; • advance notice procedures, which may apply for shareholders to nominate candidates for election as directors or to bring matters before an annual meeting of shareholders; • no authorization of cumulative voting, which limits the ability of minority shareholders to elect director candidates; • certain amendments to our articles of incorporation require the approval of two-thirds of the then outstanding voting power of our capital stock; • our amended and restated certificate of incorporation requires the approval of two-thirds of the then outstanding voting power of our capital stock for shareholders to adopt, amend, alter, or repeal our bylaws, or to adopt any provision inconsistent with our bylaws; • a prohibition on shareholder action by written consent, which means that our shareholders will only be able to take action at a meeting of shareholders; and • preventing shareholders from calling special meetings.
These provisions include the following: • authorizing the issuance of "blank check" preferred stock that could be issued by our board of directors (the "Board") to defend against a takeover attempt; • providing that vacancies on our Board, including newly created directorships, may be filled only by a majority vote of directors then in office rather than by shareholders; • advance notice procedures, which may apply for shareholders to nominate candidates for election as directors or to bring matters before an annual meeting of shareholders; • no authorization of cumulative voting, which limits the ability of minority shareholders to elect director candidates; • certain amendments to our articles of incorporation require the approval of two-thirds of the then outstanding voting power of our capital stock; • our articles of incorporation requires the approval of two-thirds of the then outstanding voting power of our capital stock for shareholders to adopt, amend, alter, or repeal our bylaws, or to adopt any provision inconsistent with our bylaws; • a prohibition on shareholder action by written consent, which means that our shareholders will only be able to take action at a meeting of shareholders; and • preventing shareholders from calling special meetings.
Under certain circumstances, we have in the past been, and may be required to recall or withdraw products, suspend production of our products or cease operations, which may lead to a material adverse effect on our business.
Under certain circumstances we have in the past been, and may be required in the future, to recall or withdraw products, suspend production of our products, or cease operations, which may lead to a material adverse effect on our business.
The loss of, or business disruption at, one or more of these retailers or distributors or a negative change in our relationship with Costco or Amazon.com or a disruption to Amazon.com as a sales channel could have a material adverse effect on our business.
The loss of, or business disruption at, one or more of these retailers or distributors or a negative change in our relationship with Costco or Amazon or a disruption to Amazon as a sales channel could have a material adverse effect on our business.
We sell a substantial portion of our products through retailers such as Costco, through distributors such as United Natural Foods, Inc. and KeHE Distributors, and online through Amazon.com , and we depend on these third parties to sell our products to consumers.
We sell a substantial portion of our products through retailers such as Costco, through distributors such as United Natural Foods, Inc. and KeHE Distributors, and online through Amazon, and we depend on these third parties to sell our products to consumers.
We may continue to incur losses for the foreseeable future. We are an early-stage company. We were formed and commenced operations in June 2015. We face all the risks faced by newer companies, including significant competition from existing and emerging competitors, many of which are established and have greater access to capital than we do.
We may continue to incur losses for the foreseeable future. We are an early-stage company. We were formed and commenced operations in June 2015. We face all the risks faced by young companies, including significant competition from existing and emerging competitors, many of which are established and have greater access to capital than we do.
In addition, as a new business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors. We will need to transition from an early-stage company to a company capable of supporting larger scale commercial activities. If we are not successful in such a transition, our business, results and financial condition will be harmed.
In addition, as a newer business, we may encounter unforeseen expenses, difficulties, complications, delays, and other known and unknown factors. We will need to transition from an early-stage company to a company capable of supporting larger scale commercial activities. If we are not successful in such a transition, our business, results, and financial condition will be harmed.
Our articles of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for substantially all disputes between us and our shareholders, which could limit our shareholders ’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Our articles of incorporation provide that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for substantially all disputes between us and our shareholders, which could limit our shareholders ’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our common stock to decline. 27 Table of Contents We are an “ emerging growth company, ” and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.
These provisions may delay or prevent someone from acquiring or merging with us, which may cause the market price of our common stock to decline. 29 Table of Contents We are an “ emerging growth company, ” and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.
If we raise funds through collaborations and licensing arrangements, we might be required to relinquish significant rights or grant licenses on terms that are not favorable to us. 15 Table of Contents Our limited operating history may make it difficult to assess our future viability.
If we raise funds through collaborations and licensing arrangements, we might be required to relinquish significant rights or grant licenses on terms that are not favorable to us. 13 Table of Contents Our limited operating history may make it difficult to assess our future viability.
Regulatory changes could result in restrictions on our ability to carry on or expand our operations, higher than anticipated costs or lower than anticipated sales.
Overall, regulatory changes could result in restrictions on our ability to carry on or expand our operations, higher than anticipated costs or lower than anticipated sales.
If we fail to compete successfully in this market, our business, financial condition, and results of operations would be materially and adversely affected. 17 Table of Contents We may not be able to successfully implement our growth strategy for our brand on a timely basis or at all.
If we fail to compete successfully in this market, our business, financial condition, and results of operations would be materially and adversely affected. 15 Table of Contents We may not be able to successfully implement our growth strategy for our brand on a timely basis or at all.
If any of the risks and uncertainties described below or elsewhere in this Annual Report on Form 10-K occur, the Company ’ s business, financial condition, or results of operations could be materially adversely affected. Risks Relating to Our Limited Operating History, Financial Position and Capital Needs We are an early-stage company and have incurred significant losses since our inception.
If any of the risks and uncertainties described below or elsewhere in this Form 10-K occur, the Company ’ s business, financial condition, or results of operations could be materially adversely affected. Risks Relating to Our Limited Operating History, Financial Position and Capital Needs We are an early-stage company and have incurred significant losses since our inception.
We could lose our “organic” certification if a facility becomes contaminated with non-organic ingredients, if we do not use raw materials that are certified organic, or if key ingredients used in our products are no longer allowed to be used in food certified as “organic.” The loss of our “organic” certifications could materially and adversely affect our business, financial condition or results of operations.
We could lose our “organic” certification if a facility becomes contaminated with non-organic ingredients, if we do not use raw materials that are certified organic, or if key ingredients used in our products are no longer allowed to be used in food certified as “organic.” The loss of our “organic” certifications and subsequent ineligibility period could materially and adversely affect our business, financial condition, or results of operations.
If we cannot maintain sufficient and satisfactory production, warehousing and distribution capacity through third-party agreements, we may be unable to meet customer demand and/or our manufacturing, distribution and warehousing costs may increase, which could negatively affect our business.
If we cannot maintain sufficient and satisfactory production, warehousing, and distribution capacity though third-party agreements, we may be unable to meet customer demand and/or our manufacturing, distribution, and warehousing costs may increase, which could negatively affect our business.
In particular, if natural, organic, and functional food and beverage competitors seek to gain or retain market share by reducing prices, we would likely be forced to reduce our prices on similar product offerings in order to remain competitive, which may result in a decrease in our market share, net sales and profitability and may require a change in our operating strategies.
For example, if natural, organic, and functional food and beverage competitors seek to gain or retain market share by reducing prices, we would likely be forced to reduce our prices on similar product offerings in order to remain competitive, which may result in a decrease in our market share, net sales and profitability and may require a change in our operating strategies.
Increased compliance costs associated with operating in California and other states could adversely affect our business, financial condition and results of operations. Risks Relating to the Ownership of Our Common Stock The market price of our common stock may be highly volatile, and you may not be able to resell your shares at or above the price you purchased them.
Increased compliance costs associated with operating in California and other states could adversely affect our business, financial condition and results of operations. 27 Table of Contents Risks Relating to the Ownership of Our Common Stock The market price of our common stock may be highly volatile, and you may not be able to resell your shares at or above the price you purchased them.
A delisting of our common stock from the NYSE American may materially impair our stockholders’ ability to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock.
A delisting of our common stock from the NYSE American may materially impair our shareholders’ ability to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock.
All of these activities are subject to the uncertainties associated with international business operations, including: • difficulties with foreign and geographically dispersed operations; • having to comply with various U.S. and international laws; • changes and uncertainties relating to foreign rules and regulations; • tariffs, export or import restrictions, restrictions on remittances abroad, imposition of duties or taxes that limit our ability to import necessary materials; • limitations on our ability to enter into cost-effective arrangements with distributors, or at all; • fluctuations in foreign currency exchange rates; • imposition of limitations on production, sale or export in foreign countries, including due to pandemic or quarantine; • imposition of limitations on or increase of withholding and other taxes on remittances and other payments by foreign processors or joint ventures; • imposition of differing labor laws and standards; • economic, political, environmental, health-related or social instability in foreign countries and regions (such as in Sri Lanka in 2022 and Peru in 2023); • an inability, or reduced ability, to protect our intellectual property; • availability of government subsidies or other incentives that benefit competitors in their local markets that are not available to us; • difficulties in enforcing contracts and legal decisions; • less developed infrastructure. 18 Table of Contents If we expand into other target markets, we cannot assure you that our expansion plans will be realized, or if realized, be successful.
All of these activities are subject to the uncertainties associated with international business operations, including: • difficulties with foreign and geographically dispersed operations; • having to comply with various U.S. and international laws; • changes and uncertainties relating to foreign rules and regulations; • tariffs, export or import restrictions, restrictions on remittances abroad, imposition of duties or taxes that limit our ability to import necessary materials; • limitations on our ability to enter into cost-effective arrangements with distributors, or at all; • fluctuations in foreign currency exchange rates; • imposition of limitations on production, sale or export in foreign countries, including due to pandemic or quarantine; • imposition of limitations on or increase of withholding and other taxes on remittances and other payments by foreign processors or joint ventures; • imposition of differing labor laws and standards; • economic, political, environmental, health-related, or social instability in foreign countries and regions (such as in Southeast Asia in 2022 and South America in 2023); • an inability, or reduced ability, to protect our intellectual property; • availability of government subsidies or other incentives that benefit competitors in their local markets that are not available to us; • difficulties in enforcing contracts and legal decisions; and • less developed infrastructure. 16 Table of Contents If we expand into other target markets, we cannot assure you that our expansion plans will be realized, or if realized, be successful.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause the price and trading volume for our common stock to decline. We may not be able to maintain a listing of our common stock on the NYSE American.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause the price and trading volume for our common stock to decline. 28 Table of Contents We may not be able to maintain a listing of our common stock on the NYSE American.
While we do request that public persons who we engage as paid advertisers, or provide samples of product to, disclose their relationship with us prior to sharing on social media or other endorsement, we cannot ensure all recipients comply with this request and we do not regularly monitor what they post on social media.
While we do request that public persons who we engage as paid advertisers, or provide samples of product to, disclose their relationship with us prior to sharing on social media or other endorsement, we cannot ensure all recipients comply with this request and we cannot completely monitor what they post on social media.
As a public company, and particularly after we are no longer an “emerging growth company,” we will incur significant legal, accounting and other expenses that we did not incur as a private company.
As a public company, and particularly after we are no longer an “emerging growth company,” we may incur significant legal, accounting, and other expenses that we did not incur as a private company.
These provisions are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of our company to first negotiate with our Boad.
These provisions are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of our company to first negotiate with our Board.
We believe that our ability to compete successfully in this market depends upon many factors both within and beyond our control, including: • the size and composition of our customer base; • the number of products that we feature on our websites; • the quality and responsiveness of customer service; • our selling and marketing efforts; • the quality and price of the products that we offer; • the convenience of the shopping experience that we provide; • rapid changes affecting global, national, and regional economies; • our ability to manage our third-party manufacturing and logistics partners; and • our reputation and brand strength.
We believe that our ability to compete successfully in this market depends upon many factors both within and beyond our control, including: • the size and composition of our customer base; • the number of products that we feature on our websites; • the quality and responsiveness of customer service; • our selling and marketing efforts; • the quality and price of the products that we offer; • the convenience of the shopping experience that we provide; • rapid changes affecting global, national, and regional economies; • unpredictable changes in the relevant legal and regulatory landscapes; • our ability to manage our third-party manufacturing and logistics partners; and • our reputation and brand strength.
Even if a product liability claim is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our products caused illness or physical harm could cause consumers to lose confidence in the safety and quality of our products.
Even if a product liability claim is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our products caused loss, illness, or physical harm could cause consumers to lose confidence in the safety and quality of our products or accuracy of our marketing.
This could cause our expenses to increase or could limit the amount of product that we can manufacture and sell. Adverse weather conditions, fires, natural disasters, crop disease, pests and other natural conditions can impose significant costs and losses on our business.
This could cause our expenses to increase or could limit the amount of product that we can manufacture and sell. 19 Table of Contents Adverse weather conditions, fires, natural disasters, crop disease, pests and other natural conditions can impose significant costs and losses on our business.
Reece, or our products or packaging on social or digital media could seriously damage our brands and reputation. 21 Table of Contents We rely on retailers and distributors for a substantial portion of our sales, and our failure to maintain and further develop our sales channels could harm our business.
Reece, or our products or packaging on social or digital media could seriously damage our brands and reputation. We rely on retailers and distributors for a substantial portion of our sales, and our failure to maintain and further develop our sales channels could harm our business.
These factors can increase costs, decrease revenues and lead to additional charges to earnings, which may have a material adverse effect on our business, results of operations and financial condition. 20 Table of Contents Climate change may negatively affect our business and operations.
These factors can increase costs, decrease revenues and lead to additional charges to earnings, which may have a material adverse effect on our business, results of operations, and financial condition. Climate change may negatively affect our business and operations.
This may be due to, among other reasons, problems with our suppliers’ and vendors’ businesses, finances, labor relations, ability to export materials, international shipping delays, product quality issues, costs, production, crop yields, insurance, and reputation, as well as disease outbreaks or pandemics such as the COVID-19 pandemic, acts of war, terrorism, natural disasters, fires, earthquakes, flooding or other catastrophic occurrences.
This may be due to, among other reasons, problems with our suppliers’ and vendors’ businesses, finances, labor relations, ability to export materials, international shipping delays, product quality issues, costs, production, crop yields, insurance, and reputation, as well as disease outbreaks or pandemics, acts of war, terrorism, natural disasters, fires, earthquakes, flooding or other catastrophic occurrences.
To the extent our customer acquisition costs increase, or our lifetime customer values decrease, our margins and results of operations will be harmed. Our customers generally are not obligated to continue purchasing products from us.
To the extent our customer acquisition costs increase, or our lifetime customer values decrease, our margins and results of operations will be harmed. 22 Table of Contents Our customers generally are not obligated to continue purchasing products from us.
Moreover, claims or liabilities of this type might not be covered by our insurance or by any rights of indemnity or contribution that we may have against others.
Moreover, claims or liabilities of this type might not be covered by our insurance or by any rights of indemnity or contribution that we may have against others, including our co-manufacturers.
Despite becoming a Nevada corporation as of December 31, 2023, our articles of incorporation retain the provision that provides that the Court of Chancery of the State of Delaware is the exclusive forum for: • any derivative action or proceeding brought on our behalf; • any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers or other employees to us or our shareholders; • any action asserting a claim against us, or our directors, officers or employees arising pursuant to any provision of the Delaware General Corporation Law or our articles of incorporation or bylaws; and • any action asserting a claim against us, or our directors, officers or employees governed by the internal affairs doctrine.
Despite being a Nevada corporation, our articles of incorporation include a provision that provides that the Court of Chancery of the State of Delaware is the exclusive forum for: • any derivative action or proceeding brought on our behalf; • any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers, or other employees to us or our shareholders; • any action asserting a claim against us, or our directors, officers or employees arising pursuant to any provision of the Delaware General Corporation Law or our articles of incorporation or bylaws; and • any action asserting a claim against us, or our directors, officers or employees governed by the internal affairs doctrine.
While we are subject to governmental inspection and regulations and believe our facilities and those of our co-packers and suppliers comply in all material respects with all applicable laws and regulations, if the consumption of any of our products causes, or is alleged to have caused, a health-related illness (such as listeria) or death to a consumer, we may become subject to claims or lawsuits relating to such matters.
While we are subject to governmental inspection and regulations and believe our facilities and those of our co-packers and suppliers comply in all material respects with all applicable laws and regulations, if the purchase or consumption of any of our products is alleged to have caused a legally recognizable injury (including financial loss), a health-related illness (such as listeria) or death to a consumer, we may become subject to claims or lawsuits relating to such matters.
Our future results of operations may be adversely affected by volatile commodity costs. Many aspects of our business could be directly affected by volatile commodity costs. Agricultural commodities and raw materials, including coconut milk powder, organic coconut sugar, organic extra virgin coconut oil, and freeze-dried coconut water.
Many aspects of our business could be directly affected by volatile commodity costs. Agricultural commodities and raw materials, including coconut milk powder, organic coconut sugar, organic extra virgin coconut oil, and freeze-dried coconut water.
We are an “emerging growth company,” as defined in the JOBS Act. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies.
We are an “emerging growth company,” as defined in the Jumpstart our Business Startups Act of 2012 (the "JOBS Act"). For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies.
Our sales and results of operations will be negatively affected if we fail to implement our growth strategy or if we invest resources in a growth strategy that ultimately proves unsuccessful. Our Laird Superfood products are new, and our industry is rapidly evolving.
Our sales and results of operations will be negatively affected if we fail to implement our growth strategy or if we invest resources in a growth strategy that ultimately proves unsuccessful. Our Laird Superfood products are new, and our industry is rapidly evolving. Laird Superfood is in the early stages of commercializing some products and we are constantly innovating.
For example, we can lose our “organic” certification if a manufacturing plant becomes contaminated with non-organic materials, or if it is not properly cleaned after a production run. In addition, all raw materials must be certified organic.
For example, we can lose our “organic” certification if a manufacturing plant becomes contaminated with non-organic materials, if it is not adequately cleaned after a production run, or we mislabel a product as “organic.” In addition, all raw materials must be certified organic.
We are reliant on Laird Hamilton and Gabrielle Reece to develop new products and market our brand. Many of the Company’s current products and planned future products are based on the lifestyle of Mr. Hamilton and Ms. Reece. Pursuant to the License and Preservation Agreement, dated May 26, 2020, by and among Mr. Hamilton, Ms. Reece and the Company, Mr.
We rely on our founders, Laird Hamilton and Gabrielle Reece. Many of the Company’s current products and planned future products are based on the lifestyle of Mr. Hamilton and Ms. Reece. Pursuant to the License and Preservation Agreement, dated May 26, 2020, by and among Mr. Hamilton, Ms. Reece and the Company, Mr. Hamilton and Ms.
The premium organic and natural food industry is sensitive to national and regional economic conditions and the demand for the products that we distribute may be adversely affected from time to time by economic downturns that impact consumer spending, including discretionary spending.
Economic downturns could limit consumer demand for our products and negatively affect our sales and profitability. The premium organic and natural food industry is sensitive to national and regional economic conditions and the demand for the products that we distribute may be adversely affected from time to time by economic downturns that impact consumer spending, including discretionary spending.
Additionally, because approximately 67% of our inventory is concentrated in one geographical location by co-manufacturing and third-party logistics partners, adverse weather or natural disasters, including fires, earthquakes, winter storms, droughts, or volcanic events could result in significant costs and meaningfully reduce our capacity to fulfill orders and maintain normal business operations.
Additionally, as of December 31, 2024, because approximately 71% of our inventory was concentrated in one geographical area by co-manufacturing and third-party logistics partners, adverse weather, or natural disasters, including fires, earthquakes, winter storms, droughts, or volcanic events could result in significant costs and meaningfully reduce our capacity to fulfill orders and maintain normal business operations.
In the event that our supply from our current suppliers is interrupted, our operations may be interrupted resulting in lost revenue, added costs such as, without limitation, shipping costs, and distribution delays that could harm our business and customer relationships until we are able to identify and enter into an agreement with one or more alternative suppliers.
In the event that our supply from our current suppliers is interrupted, our operations may be interrupted resulting in lost revenue, added costs such as, without limitation, shipping costs, and distribution delays that could harm our business and customer relationships until we are able to identify and enter into an agreement with one or more alternative suppliers. 20 Table of Contents Our future results of operations may be adversely affected by volatile commodity costs.
If a court were to find the exclusive forum provision contained in our articles of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business. 28 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS. None.
If a court were to find the exclusive forum provision contained in our articles of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business.
These agencies regulate, among other things, with respect to our products and operations: • design, development and manufacturing; • testing, labeling, content and language of instructions for use and storage; • product safety; • marketing, sales and distribution; • record keeping procedures; • advertising and promotion; • recalls and corrective actions; and • product import and export.
These agencies regulate, among other things, with respect to our products and operations: • design, development and manufacturing; • testing, labeling, content, and language of instructions for use and storage; • product safety and ingredients; • marketing, sales, and distribution; • record keeping procedures; • advertising and promotion; • recalls and corrective actions; and • product import and export. 24 Table of Contents These laws and regulations affect various aspects of our business.
Products that we sell carry claims as to their origin, ingredients or health benefits, including, by way of example, the use of the term “natural”, “functional”, or “healthy”, or similar synonyms or implied statements relating to such benefits.
Products that we sell carry claims as to their origin, ingredients, or health benefits, including, by way of example, the use of the term “natural,” “functional,” or “healthy,” or similar synonyms or implied statements relating to such benefits.
Although we significantly decreased our operating expenses in 2023 compared to the prior-year period, over time our operating expenses may increase as we hire additional employees; support our strategic and other customer relationships; innovate and commercialize products; build our brand, expand our marketing channels and drive consumer adoption of our products; increase our customer base, supplier network and co-manufacturing partners and review geographic expansion.
Over time our operating expenses may increase as we hire additional employees, support our strategic and other customer relationships, innovate and commercialize products, build our brand, expand our marketing channels, drive consumer adoption of our products, increase our customer base, supplier network, and co-manufacturing partners and review geographic expansion.
These exclusive forum provisions may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage these types of lawsuits.
This exclusive forum provision does not apply to claims under the Exchange Act. These exclusive forum provisions may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage these types of lawsuits.
In addition, an increase in the value of the U.S. dollar relative to foreign currencies could require us to reduce our selling price or risk making our products less competitive in international markets. The Company has not historically hedged foreign exchange risks. We may be unable to adequately protect our brand and our other intellectual property rights.
In addition, an increase in the value of the U.S. dollar relative to foreign currencies could require us to reduce our selling price or risk making our products less competitive in international markets. The Company has not historically hedged foreign exchange risks.
Similarly, while we currently maintain insurance that is intended to cover security and information system incidents, the insurance may not cover all or any of the losses, types of claims, damages to our brand, or damages to our reputation due to the specific facts and circumstances surrounding the event, and such insurance may not remain available on advantageous terms or at all. 23 Table of Contents Economic downturns could limit consumer demand for our products and negatively affect our sales and profitability.
Similarly, while we currently maintain insurance that is intended to cover security and information system incidents, the insurance may not cover all or any of the losses, types of claims, damages to our brand, or damages to our reputation due to the specific facts and circumstances surrounding the event, and such insurance may not remain available on advantageous terms or at all.
These laws and regulations affect various aspects of our business. For example, certain food ingredient products manufactured by Laird Superfood are regulated under the United States Federal Food, Drug, and Cosmetic Act (“FDCA”), as administered by the FDA.
For example, certain food ingredient products manufactured by Laird Superfood are regulated under the United States Federal Food, Drug, and Cosmetic Act (“FDCA”), as administered by the FDA.
The resulting uncertainty has led to consumer confusion, distrust and legal challenges. Plaintiffs have commenced legal actions against several food companies that market “natural” products, asserting false, misleading and deceptive advertising and labeling claims, including claims related to genetically modified ingredients.
The resulting uncertainty has led to consumer confusion, distrust, and legal challenges. Plaintiffs have commenced legal actions against several food companies that market “natural” products, asserting false, misleading, and deceptive advertising and labeling claims, including claims related to genetically modified ingredients, preservatives, allegedly synthetic ingredients, contaminants such as heavy metals or microplastics, environmental impact, and other claims.
However, this status cannot be determined until actual formulations and uses are finalized. As a result, we may be adversely affected if the FDA determines that our food ingredient products do not meet the criteria for generally recognized as safe. The regulations to which we are subject are complex and have tended to become more stringent over time.
However, this status cannot be determined for some ingredients until actual formulations and uses are finalized. As a result, we may be adversely affected if the FDA determines that our food ingredient products do not meet the criteria for generally recognized as safe.
Consequently, any predictions about our future success or viability may not be as accurate as they could be if we had a longer operating history or had previously achieved profitability. We may be unable to manage our future growth effectively, which could make it difficult to execute our business strategy.
Consequently, considering our limited operating history, any predictions about our future success or viability may not be accurate. We may be unable to manage our future growth effectively, which could make it difficult to execute our business strategy.
However, we may be unable to discover or determine the extent of any infringement, misappropriation or other violation of our intellectual property rights and other proprietary rights. In addition, despite our efforts, we may be unable to prevent third parties from infringing upon, misappropriating or otherwise violating our intellectual property rights and other proprietary rights.
In addition, despite our efforts, we may be unable to prevent third parties from infringing upon, misappropriating or otherwise violating our intellectual property rights and other proprietary rights.
In addition to any regulatory costs, if the Company were required to change its name, there would likely be, or could be, among other results, a negative effect on the Company’s branding and customer perception. Our reputation could suffer from real or perceived issues involving the labeling or marketing of our products.
In addition to any regulatory costs, if the Company were required to change its name, there would likely be, or could be, among other results, a negative effect on the Company’s branding and customer perception. 25 Table of Contents Regulatory enforcement concerning marketing and labeling of food or dietary supplement products could adversely affect our business and reputation.
In addition to the federal regulatory issues listed above, there are a growing number of state regulations that might impair our ability to operate and avoid interruption.
We may face scrutiny from evolving state regulations concerning health, safety, our supply chain, and marketing. In addition to the federal regulatory issues listed above, there are a growing number of state regulations that might impair our ability to operate and avoid interruption.
We might be required to spend significant resources to monitor and protect our intellectual property rights. For example, we may initiate claims or litigation against others for infringement, misappropriation or violation of our intellectual property rights or other proprietary rights or to establish the validity of such rights.
For example, we may initiate claims or litigation against others for infringement, misappropriation or violation of our intellectual property rights or other proprietary rights or to establish the validity of such rights. However, we may be unable to discover or determine the extent of any infringement, misappropriation or other violation of our intellectual property rights and other proprietary rights.
Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel.
Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.
Our patent and trademark applications may never be granted. To date, the Company has not applied for patent protection on any of its technology. The process of obtaining patent protection is expensive and time-consuming, and we may be unable to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.
The process of obtaining patent protection is expensive and time-consuming, and we may be unable to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.
We may not be able to sustain free cashflow positive operations in other future periods or be profitable in the future. In 2023 and 2022, we incurred net losses of $10.2 and $40.3 million respectively.
While we are confident in our strategy, we may not be able to sustain free cashflow positive operations in future periods or be profitable in the future. In 2024 and 2023, we incurred operating losses of $2.2 and $10.7 million, respectively.
Hamilton and Ms. Reece granted us a limited, exclusive license to use their respective images, signatures, voices and names (other than those owned by the Company), rights of publicity and common law and statutory rights to the foregoing.
Reece granted us a limited, exclusive license to use their respective images, signatures, voices and names (other than those owned by the Company), rights of publicity and common law and statutory rights to the foregoing. Any use of the licensed property that is in accordance with the historical standard of use and is not objected to by Mr.
Our information technology systems may be vulnerable to a variety of interruptions, as a result of our enterprise platform or due to events beyond our control, including, but not limited to, natural disasters, terrorist attacks, telecommunications failures, computer viruses, hackers, cyber-attacks, and other security issues.
Furthermore, a significant portion of the communications between, and storage of personal data of, our personnel, customers, and suppliers depend on information technology, including social media platforms. 23 Table of Contents Our information technology systems may be vulnerable to a variety of interruptions, as a result of our enterprise platform or due to events beyond our control, including, but not limited to, natural disasters, terrorist attacks, telecommunications failures, computer viruses, hackers, cyber-attacks, and other security issues.
We have a history of losses, and we may be unable to sustain profitability and positive cash flows from operating activities. Although we achieved profitability and positive cash flow from operations during the three months ended December 31, 2023, we have experienced losses in every period since the company’s inception.
We have a history of losses, and we may be unable to sustain profitability and positive cash flows from operating activities. Although we achieved positive cash flow during the year ended December 31, 2024, we have not achieved consistent profitability, and in the past, we have experienced significant operating losses.
The failure to comply with applicable regulations could jeopardize our ability to sell our products and result in enforcement actions and third-party lawsuits such as: • warning letters; • fines; • injunctions; • civil penalties and civil lawsuits; • termination of distribution; • recalls or seizures of products; • delays in the introduction of products into the market; and • total or partial suspension of production. 24 Table of Contents Any of these sanctions could result in higher than anticipated costs or lower than anticipated sales and harm our reputation, business, financial condition and results of operations.
The failure to comply with applicable regulations could jeopardize our ability to sell our products and result in enforcement actions and third-party lawsuits such as: • warning letters; • fines; • injunctions; • civil penalties and civil lawsuits; • termination or disruption of manufacture and distribution; • voluntary or mandatory recalls or seizures of products; • delays in the introduction of products into the market; and • total or partial suspension of production.
Any of these events could adversely affect our reputation and brand and decrease our sales, which would have a material adverse effect on our business, financial condition and results of operations.
Any of these events could adversely affect our reputation and brand and decrease our sales, which would have a material adverse effect on our business, financial condition and results of operations. In December 2024, FDA promulgated a revised definition of “healthy” when used as an implied nutrient content claim.
In addition, our articles of incorporation provides that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, unless we consent in writing to the selection of an alternative forum. This exclusive forum provision does not apply to claims under the Exchange Act.
This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction. 30 Table of Contents In addition, our articles of incorporation provide that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933, as amended (the "Securities Act"), unless we consent in writing to the selection of an alternative forum.
Any new use of the licensed property shall satisfy the historical standard of use and shall be primarily directed to the advertising, promotion or marketing of the Company’s products and services. If Mr. Hamilton or Ms.
Hamilton or Ms. Reece within 30 days of the first intra-company disclosure of a bona-fide intent to make such use is deemed approved. Any new use of the licensed property shall satisfy the historical standard of use and shall be primarily directed to the advertising, promotion or marketing of the Company’s products and services. If Mr. Hamilton or Ms.
Moreover, the steps we take to protect our intellectual property may not adequately protect our rights or prevent third parties from infringing or misappropriating our proprietary rights, and we may be unable to broadly enforce all our trademarks. Any of our patents, trademarks or other intellectual property rights may be challenged by others or invalidated through administrative process or litigation.
The protection of our intellectual property rights may require the expenditure of significant financial, managerial, and operational resources. Moreover, the steps we take to protect our intellectual property may not adequately protect our rights or prevent third parties from infringing or misappropriating our proprietary rights, and we may be unable to broadly enforce all our trademarks.
There is, however, no assurance that quality natural and organic products will continue to be available to meet our specific and growing needs.
Although we work with multiple suppliers for each of our key raw materials, there is no assurance that quality natural and organic products will continue to be available to meet our specific and growing needs.
These conflicts of interest may result in the loss of business opportunities, which may materially and adversely affect our prospects, business advantage, financial condition and results of operations. If the reputation of our brand erodes significantly, it could have a material impact on our results of operations. Our financial success is directly dependent on the consumer perception of our brand.
If the reputation of our brand erodes significantly, it could have a material impact on our results of operations. Our financial success is directly dependent on the consumer perception of our brand.
We may need additional funding in order to grow our business. To date, we have financed our operations through our initial public offering, private placements of our common and preferred stock and borrowings under loan agreements. We have devoted substantially all our financial resources and efforts to developing our products, workforce, building awareness of our brand, and growing retail distribution.
We may need additional funding in order to grow our business. We have historically financed our operations through our initial public offering, private placements of our common and preferred stock, borrowings under loan agreements, and, recently, through our core operating activities.
We regard our brand, customer lists, trademarks, domain names, trade secrets and similar intellectual property as critical to our success. We may rely on trademark, copyright and patent law, trade secret protection, agreements and other methods with our employees and others to protect our proprietary rights.
We may be unable to adequately protect our brand and our other intellectual property rights. We regard our brand, customer lists, trademarks, domain names, trade secrets and similar intellectual property as critical to our success.
As a result, our future business prospects could deteriorate due to regulatory constraints, and our profitability could be impaired by our obligation to provide such indemnification to our employees. The FDA may also take issue with the name “Laird Superfood” or any derivative name, as “superfood” is, to our knowledge, still undefined by regulatory agencies.
The FDA may also take issue with the name “Laird Superfood” or any derivative name, as “superfood” is, to our knowledge, still undefined by regulatory agencies.
Even if a situation does not necessitate a recall or market withdrawal, product liability claims might be asserted against us.
We implemented a robust sensory testing program to prevent future quality issues. 18 Table of Contents Even if a situation does not necessitate a recall or market withdrawal, product liability claims might be asserted against us.
These efforts may prove more expensive than we anticipate, and we may not succeed in increasing our revenues and margins sufficiently to offset the anticipated higher expenses. Accordingly, we may not be able to successfully implement our long-term growth strategies or achieve or sustain profitability, and we may incur significant losses for the foreseeable future.
These efforts may prove more expensive than we anticipate, and we may not succeed in increasing our revenues and margins sufficiently to offset the anticipated higher expenses.
Competition in the food and beverage retail industry, especially Internet-based competition, is strong and presents an ongoing threat to the success of our business. The food and beverage retail industry is very competitive.
Competition in the food and beverage retail industry, especially Internet-based competition, is strong and presents an ongoing threat to the success of our business. The food and beverage industry is very competitive both online and in wholesale markets. We compete with larger retailers with longer histories, greater brand recognition, more resources, and numerous natural and organic producers.
Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud. We are subject to the periodic reporting requirements of the Exchange Act.
Accordingly, we may not be able to successfully implement our long-term growth strategies or achieve or sustain profitability, and we may incur significant losses for the foreseeable future. 14 Table of Contents Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud. We are subject to the periodic reporting requirements of the Exchange Act.
If we do not maintain our relationship with existing retailers and distributors or develop relationships with new retailers and distributors, the growth of our business may be adversely affected, and our business may be harmed.
If we do not maintain our relationship with existing retailers and distributors or develop relationships with new retailers and distributors, the growth of our business may be adversely affected, and our business may be harmed. 21 Table of Contents We are not the exclusive seller of our products into e-commerce channels, such as Amazon, and face competition in that channel from resellers of our products.

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Item 2. Properties

Properties — owned and leased real estate

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ITEM 2. PROPERTIES. We sublease our corporate headquarters at 5303 Spine Road, Suite 204, Boulder, Colorado, 80301. The term of the lease extends through July 1, 2027. We believe our leased space is adequate for our current needs and that suitable additional or substitute space would be available if needed.
ITEM 2. PROPERTIES. We currently do not own any real property. We sublease our corporate headquarters at 5303 Spine Road, Suite 204, Boulder, Colorado, 80301. The term of the lease extends through July 1, 2027.
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We believe our leased space is adequate for our current needs and that suitable additional or substitute space would be available if needed. 31 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Any future determination as to the declaration and payment of dividends, if any, will be at the discretion of our board of directors, subject to compliance with contractual restrictions and covenants in the agreements governing our current and future indebtedness.
Any future determination as to the declaration and payment of dividends, if any, will be at the discretion of our Board, subject to compliance with contractual restrictions and covenants in the agreements governing our current and future indebtedness.
Any such determination will also depend upon our business prospects, results of operations, financial condition, cash requirements and availability and other factors that our board of directors may deem relevant.
Any such determination will also depend upon our business prospects, results of operations, financial condition, cash requirements and availability and other factors that our Board may deem relevant.
Holders As of March 5, 2024, there were 54 holders of record of our common stock. This number does not include beneficial owners whose shares are held by nominees in street name.
Holders As of February 26, 2025, there were 42 holders of record of our common stock. This number does not include beneficial owners whose shares are held by nominees in street name.
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock began trading on the NYSE American Market under the symbol “LSF” on September 23, 2020. Prior to that date, there was no public trading market for our common stock.
ITEM 5. MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock is traded on the NYSE American Market under the symbol “LSF.” The closing price of our common stock as reported by the NYSE American Market on February 21, 2025, was $7.27.
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Recent Sales of Unregistered Securities There were no sales of unregistered securities during the year ended December 31, 2024 that were not previously reported on a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.
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Issuer Purchases of Equity Securities We did not repurchase any of our equity securities during the fourth quarter of the fiscal year ended December 31, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K.
ITEM 7. MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K (this "Form 10-K").
Long-lived assets and definite life intangible assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Examples include a significant adverse change in the extent or manner in which we use the asset, a change in its physical condition, or an unexpected change in financial performance.
Impairment of Long-Lived Assets Long-lived assets and definite life intangible assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Examples include a significant adverse change in the extent or manner in which we use the asset, a change in its physical condition, or an unexpected change in financial performance.
Operating Expenses Our operating expenses consist of general and administrative, research and product development, and sales and marketing expenses, including non-production personnel costs. Income Taxes Due to our history of operating losses and expectation of future operating losses, we do not expect any significant income tax expenses and benefits for the foreseeable future.
Operating Expenses Our operating expenses consist of general and administrative, research and product development, and sales and marketing expenses, including non-production personnel costs. Income Taxes Due to our history of operating losses and expectation of future operating losses, we do not expect any significant federal income tax expenses and benefits for the foreseeable future.
Critical Accounting Estimates The preparation of consolidated financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“GAAP”) and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported.
Critical Accounting Estimates The preparation of consolidated financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported.
While there is inherent uncertainty in the estimated fair value of the awards, management believes that the expectations and assumptions are reasonable. Recent Accounting Pronouncements See Recently Issued Accounting Pronouncements in Note 1 to our audited consolidated financial statements included elsewhere in this Form 10-K for additional information. 37 Table of Contents
While there is inherent uncertainty in the estimated fair value of the awards, management believes that the expectations and assumptions are reasonable. Recent Accounting Pronouncements See "Recently Issued Accounting Pronouncements" in Note 1 to our audited consolidated financial statements included elsewhere in this Form 10-K for additional information. 40 Table of Contents
In the future, we may raise funds by issuing debt or equity securities, or securities convertible into or exchangeable for our common stock. Such financing and other potential financing may result in dilution to stockholders, reduction in the market price of our common stock, imposition of debt covenants and repayment obligations, or other restrictions that may adversely affect our business.
In the future, we may raise funds by issuing debt or equity securities, or securities convertible into or exchangeable for our common stock. Such financing and other potential financing may result in dilution to shareholders, reduction in the market price of our common stock, imposition of debt covenants and repayment obligations, or other restrictions that may adversely affect our business.
While we expect to continue to invest in these activities as part of the strategic expansion of sales volume, we will continue to reduce our marketing investments to reflect strategic shifts in spending and to improve the efficacy of future customer acquisition costs.
While we expect to continue to invest in these activities as part of the strategic expansion of sales volume, we will continue to optimize our marketing investments to reflect strategic shifts in spending and to improve the efficacy of future customer acquisition costs.
Ability to Acquire and Retain Customers at a Reasonable Cost We believe an ability to consistently acquire and retain customers at a reasonable cost relative to projected life-time value will be a key factor affecting future performance.
We believe an ability to consistently attract and retain customers at a reasonable cost relative to projected life-time value will be a key factor affecting future performance.
Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “ Risk Factors ” and “ Cautionary Note Regarding Forward-Looking Statements ” included elsewhere in this Annual Report on Form 10-K.
Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “ Risk Factors ” and “ Cautionary Note Regarding Forward-Looking Statements ” included elsewhere in this Form 10-K.
Recent and expected working and other capital requirements, in addition to the above matters, also include the items described below: • The Company has lease arrangements for corporate office space.
Recent and expected working and other capital requirements, in addition to the above matters, also include the items described below: • The Company has a lease arrangement for corporate office space.
Ability to Manage Co-Manufacturer and Third-Party Logistics Relationships Substantially all of our production and logistics are handled by third parties, and our performance is highly dependent on the ability of these partners to produce and deliver our products timely, to our standards, and at a reasonable cost.
Ability to Manage Co-Manufacturer and Third-Party Logistics Relationships Our production and logistics are executed by third parties, and our performance is highly dependent on the ability of these partners to produce and deliver our products timely, to our standards, and at a reasonable cost.
Ability to Manage Our Global Supply Chain Our ability to grow and meet future demand will be affected by our ability to properly plan for and source inventory from a variety of suppliers located inside and outside the United States.
Ability to Manage Our Global Supply Chain Our ability to grow and meet future demand will be affected by our ability to adequately plan for and source inventory from a variety of suppliers located inside and outside the United States. We may encounter difficulties in sourcing products.
Components of Results of Operations Sales, net We sell our products indirectly to consumers through a broad set of retail outlets. We also derive revenue from the sale of our products directly to consumers through our direct websites, lairdsuperfood.com and pickybars.com , as well as third-party e-commerce channels such as Amazon.com .
Through our wholesale channel, we sell our products indirectly to consumers through a broad set of retail outlets. Through our e-commerce channel, we derive revenue from the sale of our products directly to consumers through our direct websites, lairdsuperfood.com and pickybars.com , as well as third-party e-commerce platforms such as Amazon.
For assets held for sale, we compare the carrying value of the disposal group to fair value. The impairment is the excess of the carrying value over the fair value of the asset. Stock Incentive Plan Compensation cost relating to share-based payment transactions is measured based on the grant date fair value of the equity or liability instruments issued.
The impairment is the excess of the carrying value over the fair value of the asset. 39 Table of Contents Stock Incentive Plan Compensation cost relating to share-based payment transactions is measured based on the grant date fair value of the equity or liability instruments issued.
As of December 31, 2023, the Company had fixed lease obligations of $0.4 million, of which $0.1 million is payable within the next twelve months. • As of December 31, 2023, $4.4 million of current liabilities were accrued related to short term operating activities and personnel costs. • Advertising and marketing expenditures were $7.5 million in 2023 and $10.7 million in 2022.
As of December 31, 2024, the Company had fixed lease obligations of $0.2 million, of which $0.1 million is payable within the next twelve months. • As of December 31, 2024, $5.8 million of current liabilities were accrued related to short-term operating activities and personnel costs, excluding the current lease obligation mentioned above. • Advertising and marketing expenditures were $6.7 million in FY2024 and $7.9 million in FY2023.
Ability to Expand Gross Margins Our overall profitability will be impacted by our ability to expand gross margins through effective sourcing of raw materials, controlling input and shipping costs, controlling the impacts of inflationary market factors, as well as managing co-packer relationships.
Our pace of growth will be partially affected by the cadence and magnitude of new product launches over time. 34 Table of Contents Ability to Expand Gross Margins Our overall profitability will be impacted by our ability to expand gross margins through effective sourcing of raw materials, controlling input and shipping costs, controlling the impacts of inflationary market factors, as well as managing co-packer relationships.
Ability to Expand Our Product Lines Our goal is to expand our product lines over time to increase our growth opportunity and reduce product-specific risks through diversification into multiple products, each designed around daily use. Our pace of growth will be partially affected by the cadence and magnitude of new product launches over time.
Ability to Expand Our Product Lines Our goal is to expand our product lines over time to increase our growth opportunity and reduce product-specific risks through diversification into multiple products, each designed around daily use.
Key Factors Affecting our Performance We believe that our future performance will depend on many factors, including the following: Ability to Grow Our Customer Base in both E-commerce and Traditional Wholesale Distribution Channels We are currently seeking to grow our customer base through both paid and organic e-commerce channels, as well as by expanding our presence in a variety of physical retail distribution channels and geographical regions.
Key Factors Affecting our Future Performance Ability to Grow Our Customer Base in both E-commerce and Traditional Wholesale Distribution Channels at a Reasonable Cost We are continuously growing our customer base through both paid and organic e-commerce channels, as well as by expanding our presence in our wholesale channel through a variety of physical retail outlets and geographical regions.
In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. However, we may be unable to raise additional funds or enter into such other arrangements when needed, on favorable terms, or at all.
In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.
Cost of Goods Sold Cost of goods sold includes material, packaging, co-packing fees, inbound and outbound freight costs, labor, and overhead costs incurred in the storage and distribution of products sold in the period. Material costs include the cost of products purchased.
Cost of Goods Sold Cost of goods sold includes the cost of raw materials and packaging, co-packing tolling fees, inbound and outbound freight costs, indirect labor, third party labor to store and ship our products, and overhead costs incurred in the storage and distribution of products sold in the period.
E-commerce customer acquisitions typically occur at our direct websites, lairdsuperfood.com and pickybars.com , and through Amazon.com . Our e-commerce customer acquisition program includes paid and unpaid social media, search, display and traditional media. Our products are also sold through a growing number of retail channels.
We typically attract new customers in our e-commerce channel through our direct websites, lairdsuperfood.com and pickybars.com , and through Amazon. We also seek to attract new e-commerce customers through paid and unpaid social media, search, display and traditional media. Our products are also sold through a growing number of retail outlets.
Cash used in FY2023 related to taxes withheld on stock issuances. Cash provided by investing activities in FY2022 primarily related to stock option exercises. 35 Table of Contents Liquidity and Capital Resources As of December 31, 2023, we had incurred accumulated net losses of $106.3 million, including operating losses of $10.7 million and $40.4 million for FY2023 and FY2022, respectively.
Cash used in FY2023 related to taxes withheld on net settlement of stock issuances. 37 Table of Contents Liquidity and Capital Resources As of December 31, 2024, we had incurred accumulated net losses of $108.1 million, including operating losses of $2.2 million and $10.7 million for FY2024 and FY2023, respectively.
Laird Superfood’s long-term goal is to build the first scale-level and widely recognized brand that authentically focuses on natural ingredients, nutritional density and functionality, allowing the Company to maximize penetration of a multi-billion-dollar opportunity in the grocery market.
Our long-term goal is to build and scale a widely recognized brand that authentically focuses on natural ingredients, nutritional density, and functionality, which we believe will allow us to maximize penetration of a multi-billion-dollar opportunity in the grocery market. We generate revenue through two channels: e-commerce and wholesale.
Wholesale customers include grocery chains, natural food outlets, club stores, and food service customers which include coffee shops, gyms, restaurants, hospitality venues and corporate dining services, among others. Customer acquisition in physical retail channels depends on, among other things, paid promotions through retailers, display and traditional media.
Customers in our wholesale channel include grocery chains, natural food outlets, club stores, and food service customers. Attracting new customers in physical retail outlets depends on, among other things, paid promotions through retailers, display, and traditional media.
Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. 36 Table of Contents Revenue Recognition We recognize revenue for the sale of our product at the point in time when our performance obligation has been satisfied and control of the product has transferred to our customer, which generally occurs upon shipment or delivery to a customer based on terms of the sale.
Revenue Recognition We recognize revenue for the sale of our product at the point in time when our performance obligation has been satisfied and control of the product has transferred to our customer, which generally occurs upon shipment or delivery to a customer based on terms of the sale.
We believe this experience leads to higher retention rates among repeat users and subscribers, as evidenced by repeat users and subscribers accounting for over three-quarters of direct-to-consumer sales for the years ended December 31, 2023 and 2022. For the years ended December 31, 2023 and 2022, wholesale made up 43% and 38% of our net sales, respectively.
We believe this experience leads to higher retention rates among repeat customers and subscribers, as evidenced by the fact that repeat customers and subscribers account for over 75% of DTC sales for the years ended December 31, 2024 and 2023.
Net sales decreased to $34.2 million for the year ended December 31, 2023, from $35.8 million for the year ended December 31, 2022. Wholesale net sales 2023 increased by 9% compared to 2022 driven by sales growth in Club and distribution expansion in grocery as well as product velocities improvement behind updated packaging launch in Q2 of 2023.
Net sales increased to $43.3 million for the year ended December 31, 2024, from $34.2 million for the year ended December 31, 2023. Wholesale net sales 2024 increased by 19% compared to 2023 driven by velocity improvement and distribution expansion in grocery, as well as more efficient promotional spend.
We view our proprietary database of customers ordering directly from our website as a strategic asset, as it enhances our ability to develop a long-term relationship with these customers. Content on our websites allows Laird Superfood to educate consumers on the benefits of our products and ingredients, while providing a positive customer experience.
We believe the content on our websites allows Laird Superfood to educate our consumers on the benefits of our products and ingredients, while providing a positive customer experience.
Ability to Drive Repeat Usage of Our Products We accrue substantial economic value from repeat users of our products who consistently re-order our products. The pace of our growth will be affected by the repeat usage dynamics of existing and newly acquired customers.
Ability to Drive Repeat Usage of Our Products Repeat customers who consistently re-order our products are critical to our business. The pace of our growth will be affected by our ability to maintain and establish long-term relationships with existing and new customers to drive repeat orders.
We may encounter difficulties in sourcing products. 32 Table of Contents Ability to Optimize Key Components of Working Capital Our ability to reduce cash burn in the near-term and eventually generate positive cash flow will be partially impacted by our ability to effectively manage all the key working capital components that could influence our cash conversion cycle.
Ability to Optimize Key Components of Working Capital Our ability to maintain positive cash flows will be partially impacted by our ability to effectively manage all the key working capital components that could influence our cash conversion cycle. Components of Results of Operations Sales, net We sell our products through two channels: wholesale and e-commerce.
E-commerce channel sales for 2023 decreased 13% year over year driven by significant planned reductions in marketing media spend across both DTC and Amazon.com, as well as out-of-stock issues related to the product quality withdrawal issue in Q1 of 2023 as we rebuilt our inventory.
E-commerce channel sales for 2024 increased by 32% year over year driven by growth in subscription revenue and repeat consumer purchases, higher average order values, and the prior year impact of out-of-stock issues related to the product quality withdrawal issue in Q1 of 2023 as we rebuilt our inventory throughout 2023.
Segment Information We have one operating segment and one reportable segment, as our Chief Executive Officer reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance.
However, we may be unable to raise additional funds or enter into such other arrangements when needed, on favorable terms, or at all. 38 Table of Contents Segment Information We have one operating segment and one reportable segment, for which our Chief Operating Decision Maker, our Chief Executive Officer, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance.
For the years ended December 31, 2023 and 2022, the e-commerce business made up 57% and 62% of our net sales, respectively. Lairdsuperfood.com and pickybars.com are platforms that provide an authentic brand experience for our customers that drives engagement and provides feedback for future product development.
Our e-commerce channel consists of (i) our Direct-to-consumer ("DTC") business, which includes sales through lairdsuperfood.com and pickybars.com , and (ii) Amazon. For the years ended December 31, 2024 and 2023, the e-commerce channel made up 59% and 57% of our net sales, respectively. Lairdsuperfood.com and pickybars.com offer an authentic brand experience for our consumers that drive engagement through educational content.
Additionally, our current business plan is to continue to utilize inventory management to reduce working capital. We have historically financed our operations and capital expenditures through private placements of our common stock, our initial public offering, our lines of credit, and term loans.
We have historically financed our operations and capital expenditures through private placements of our common stock, our initial public offering, our prior lines of credit, term loans, and, for the first time in FY2024, from our core operating activities. Our historical uses of cash have primarily consisted of cash used in operating activities and working capital needs.
The increase was primarily driven by rising interest rates in 2023, and due to 2022 other income being offset by $0.2 million of realized losses on sales of available-for-sale securities. 34 Table of Contents Comparison of the years ended FY2023 and FY2022 Cash Flows The following table shows a summary of our cash flows for the periods presented: Year Ended December 31, 2023 2022 Cash flows from operating activities $ (10,765,881 ) $ (14,312,439 ) Cash flows from investing activities 690,307 8,970,740 Cash flows from financing activities (27,422 ) 102,267 Net change in cash, cash equivalents, and restricted cash $ (10,102,996 ) $ (5,239,432 ) Cash Flows used in Operating Activities Cash used in operating activities was $10.8 million for FY2023 as compared to $14.3 million for FY2022.
Cash Flows The following table shows a summary of our cash flows for the periods presented: Year Ended December 31, Cash flows provided by (used in): 2024 2023 Operating activities $ 865,502 $ (10,765,881 ) Investing activities (24,776 ) 690,307 Financing activities (33,380 ) (27,422 ) Net change in cash, cash equivalents, and restricted cash $ 807,346 $ (10,102,996 ) Cash Flows from Operating Activities Positive cash flows from operating activities in FY2024 were the result of strategic cost reduction efforts over the last two years which enabled us to reduce our net loss from $10.2 million in FY2023 to $1.8 million in FY2024.
Laird Superfood products are sold through a diverse set of retail channels, including conventional, natural and specialty grocery, and club. The diversity of our retail channel represents a strong competitive advantage for Laird Superfood and provides us with a larger total addressable market than would be considered normal for a food brand that is singularly focused on the grocery market.
The diversity of our retail outlets represents a strong competitive advantage for Laird Superfood and provides us with a larger total addressable market than would be considered normal for a food brand that is singularly focused on the grocery market. 33 Table of Contents Recent Developments On May 4, 2024, we entered into to an accounts receivable factoring agreement (the “Factoring Agreement”) with Alterna Capital Solutions LLC (the “Purchaser”), pursuant to which we agreed to sell certain trade accounts receivable (the “Purchased Accounts”) to the Purchaser from time to time.
Other Income Year Ended December 31, $ % 2023 2022 Change Change Other income $ 551,064 $ 47,088 $ 503,976 1070 % Other income is composed of interest income and expense, rental income, income and losses related to investment securities available-for-sale, and other non-operating gains and losses.
Sales and marketing expense in FY2024 decreased from FY2023 primarily due to improved efficiencies in media spending and lower personnel costs. Year Ended December 31, $ Percent 2024 2023 Change Change Other income $ 413,255 $ 551,064 $ (137,809 ) (25 )% Other income is composed of interest income and expense, rental income, and other non-operating gains and losses.
The cash inflow in FY2023 was primarily related to the sales of equipment. The cash inflow in FY2022 was primarily related to the sales of land, equipment, and available-for-sale securities. Cash Flows from Financing Activities Cash used in financing activities was $27.4 thousand in FY2023 compared to cash provided of $102.3 thousand in FY2022.
Cash Flows from Investing Activities Cash used in investing activities consisted of purchases of property, plant, and equipment in FY2024. Cash provided by investing activities in FY2023 was primarily related to the sales of equipment in connection with the closure of our manufacturing facilities in Sisters, Oregon at the beginning of FY2023.
Removed
Overview Laird Superfood is an emerging consumer products platform focused on manufacturing and marketing highly differentiated plant-based and functional foods. The core pillars of the Laird Superfood platform are currently Superfood Creamer coffee creamers, Functional and organic roasted and instant coffees, teas, and hot chocolate, Hydrate hydration products and beverage enhancing supplements, and Harvest snacks and other food items.
Added
Overview Laird Superfood creates clean, functional, and sustainability-conscious products, many of which incorporate adaptogens which may be beneficial in reducing stress, improving energy levels, enhancing mental performance, mood regulation, and immune system support.
Removed
This was in part offset by strategic investment in trade spend to drive growth in that channel.
Added
Our primary products include (i) coffee creamers, (ii) hydration and beverage enhancing products, (iii) harvest snacks and other food items, and (iv) coffee, tea, and hot chocolate products.
Removed
These issues were fully resolved in the second half of the year enabling e-commerce growth of 10% in the fourth quarter of 2023 compared to the same period last year. Our e-commerce business is two-pronged and consists of direct-to-consumer sales ( lairdsuperfood.com and pickybars.com ) and use of third-party platforms, such as Amazon.com .
Added
These platforms also provide us with direct consumer feedback for future product development. We view our proprietary database of customers ordering directly from our website as a strategic asset as it enhances our ability to develop long-term relationships with these customers.
Removed
Recent Developments Redomestication On December 31, 2023 (the “Effective Date”), we changed our state of incorporation from the state of Delaware to the state of Nevada (the “Redomestication”) by means of a plan of conversion, as described in our definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission on October 10, 2023.
Added
For the years ended December 31, 2024 and 2023, wholesale channel sales made up 41% and 43% of our net sales, respectively. Laird Superfood products are sold through various retail outlets, including conventional, natural and specialty grocery, and club.
Removed
As of the Effective Date: ● our domicile changed from the state of Delaware to the state of Nevada; and ● the affairs of the Company ceased to be governed by the Delaware General Corporation Law and the Company’s then existing certificate of incorporation and bylaws, and instead became governed by the Nevada Revised Statutes and the Company's new articles of incorporation and bylaws.
Added
The Factoring Agreement provides for the Company to have access to up to $2.0 million (the “Maximum Amount”) on a revolving basis, measured by the aggregate amount advanced for the unpaid balance of all Purchased Accounts from time to time.
Removed
The Redomestication was previously submitted to a vote of, and was approved by, the Company's stockholders at our Annual Meeting of Stockholders held on November 28, 2023.
Added
Upon receipt of the upfront purchase price for any Purchased Accounts, the Company will have sold and assigned all of its rights in such Purchased Accounts and all proceeds thereof.
Removed
The Redomestication did not result in any change in the business, physical location, management, assets, liabilities or net worth of the Company, nor did it result in any change in location of the Company’s current employees, including management.
Added
The upfront purchase price for a Purchased Account is up to 70% of the face amount thereof and the remaining portion is payable only if and when the Purchaser receives payment from account debtors exceeding the aggregate unadvanced face amount of the unpaid balance of all Purchased Accounts from time to time, plus all amounts due on accounts ineligible to be purchased, plus all accrued fees and expenses.
Removed
The Redomestication did not affect any of the Company’s material contracts with any third parties, and the Company’s rights and obligations under those material contractual arrangements continue to be the rights and obligations of the Company after the Redomestication. The daily business operations of the Company will continue as they have been conducted prior to the Redomestication.
Added
The proceeds from the Factoring Agreement will be used to fund general working capital needs.
Removed
The consolidated financial condition and results of operations of the Company immediately after consummation of the Redomestication remains the same as immediately before the Redomestication.
Added
Additionally, on September 15, 2023, we entered into a settlement agreement (the “2023 Settlement Agreement”) with a supplier (the “Supplier”) to recover losses incurred in connection with the product quality issue with coconut milk powder that we experienced in 2023, pursuant to which the Supplier was obligated to, among other things, pay the Company $50,000 and provide a discount to the Company on the sale of future products of up to $950,000.
Removed
Product quality issue In the first quarter of 2023, prior to the issuance of our consolidated financial statements for the year ended December 31, 2022, we discovered a product quality issue with coconut milk powder from one of our suppliers and immediately initiated a voluntary product withdrawal and contacted all impacted wholesale customers and e-commerce consumers to aggressively pull back as much as of the affected product as possible.
Added
On February 27, 2024, we filed a complaint against the Supplier in the District Court of Boulder, Colorado alleging that the Supplier breached the 2023 Settlement Agreement by failing to deliver acceptable coconut milk powder (the “Litigation”).
Removed
In connection with this withdrawal, we incurred costs associated with inventory obsolescence, quality testing, and remedial discounts and replacement orders of $0.5 million in the fourth quarter of 2022 and $0.4 million in the first quarter of 2023. In addition, we implemented a robust new sensory testing program to prevent future quality issues.
Added
As a result of the Litigation, on July 30, 2024, the Company entered into an additional settlement agreement with the Supplier, pursuant to which, among other things, the Supplier agreed to remit cash payment to us of approximately $500,000 (the “2024 Settlement Agreement”). As of December 31, 2024, we had collected this settlement in full.
Removed
In the third quarter of 2023, we reached settlement with the vendor to recapture these costs and have recovered $0.3 million to date. 31 Table of Contents Transition to variable cost third-party co-manufacturing business model We ceased in-house manufacturing and fulfillment activities at the end of 2022 and moved strategic raw material, packaging and finished goods inventory to co-manufacturer and third-party logistics partners, disposing of the remaining inventory, and terminating its leases of manufacturing facilities effective January 31, 2023, and eliminated substantially all production and fulfillment labor.
Added
We will continue to owe state and local income taxes. 35 Table of Contents Results of Operations Comparison of the years ended December 31, 2024 ( “ FY2024 ” ) and December 31, 2023 ( “ FY2023 ” ) The following table sets forth our results of operations for FY2024 and FY2023, and the percentage increase or decrease between the years presented: Year Ended December 31, $ Percent 2024 2023 Change Change Sales, net $ 43,295,137 $ 34,224,198 $ 9,070,939 27 % Cost of goods sold (25,607,556 ) (23,910,921 ) (1,696,635 ) 7 % Gross profit 17,687,581 10,313,277 7,374,304 72 % Gross margin 40.9 % 30.1 % General and administrative 9,299,009 9,793,360 (494,351 ) (5 )% Sales and marketing 10,561,664 11,218,903 (657,239 ) (6 )% Total operating expenses 19,860,673 21,012,263 (1,151,590 ) (5 )% Operating loss (2,173,092 ) (10,698,986 ) 8,525,894 (80 )% Other income 413,255 551,064 (137,809 ) (25 )% Loss before income taxes (1,759,837 ) (10,147,922 ) 8,388,085 (83 )% Income tax expense (60,324 ) (15,195 ) (45,129 ) 297 % Net loss $ (1,820,161 ) $ (10,163,117 ) $ 8,342,956 (82 )% Year Ended December 31, $ Percent 2024 2023 Change Change Sales, net $ 43,295,137 $ 34,224,198 $ 9,070,939 27 % The increase in net sales in FY2024 was led by e-commerce channel growth of 32% from FY2023, driven by improved subscription revenue and repeat consumer purchases, higher average order values, more efficient promotional strategies.
Removed
Manufacturing equipment, furniture, tools, and internal-use production software are being sold or abandoned and were impaired accordingly in the fourth quarter of 2022. This move was undertaken to transform our supply chain to a variable cost model to strengthen our margins and drastically reduce our overhead costs.
Added
Net sales from our wholesale channel likewise grew during FY2024 by 19% from FY2023, reflecting improved product velocities in retail outlets, distribution expansion, and more efficient promotional spend.
Removed
To accomplish this goal, we intend to balance advertising spend between e-commerce and wholesale channels, as well as balancing more targeted and measurable “direct response” marketing spend with advertising focused on increasing our long-term brand recognition, where success attribution is less directly measurable on a near-term basis.
Added
Year Ended December 31, $ Percent 2024 2023 Change Change Cost of goods sold $ (25,607,556 ) $ (23,910,921 ) $ (1,696,635 ) 7 % The increase in cost of goods sold in FY2024 was driven by growth in sales volume, offset by the full benefit realization of the transition to a variable cost third-party co-manufacturing business model, lower raw material costs due to a shift to the direct procurement of key raw materials, as well as recoveries of costs previously incurred in connection with the quality event that we experienced in FY2023 as a result of the 2023 Settlement Agreement.
Removed
In 2023, in addition to material and packaging costs, cost of goods sold consisted of co-packers' tolling fees, third party labor to store and ship our products, indirect labor costs, and inbound and outbound freight. In 2022, it also included wages and benefits for manufacturing, planning, and logistics personnel, depreciation, and facility costs.
Added
Year Ended December 31, $ Percent 2024 2023 Change Change Gross profit $ 17,687,581 $ 10,313,277 $ 7,374,304 72 % Gross margin expanded to 40.9% in FY2024 compared to 30.1% in FY2023.
Removed
Results of Operations Comparison of the years ended December 31, 2023 ( “ FY2023 ” ) and December 31, 2022 ( “ FY2022 ” ) The following table summarizes our results of operations: Year Ended December 31, $ % 2023 2022 Change Change Sales, net $ 34,224,198 $ 35,828,392 $ (1,604,194 ) (4 )% Cost of goods sold (23,910,921 ) (30,641,125 ) 6,730,204 (22 )% Gross profit 10,313,277 5,187,267 5,126,010 99 % Gross margin 30.1 % 14.5 % General and administrative 9,573,637 30,595,163 (21,021,526 ) (69 )% Research and product development 219,723 427,537 (207,814 ) (49 )% Sales and marketing 11,218,903 14,528,704 (3,309,801 ) (23 )% Total operating expenses 21,012,263 45,551,404 (24,539,141 ) (54 )% Operating loss (10,698,986 ) (40,364,137 ) 29,665,151 (73 )% Other income 551,064 47,088 503,976 1070 % Loss before income taxes (10,147,922 ) (40,317,049 ) 30,169,127 (75 )% Income tax expense (15,195 ) (20,269 ) 5,074 (25 )% Net loss $ (10,163,117 ) $ (40,337,318 ) $ 30,174,201 (75 )% Sales, Net Year Ended December 31, $ % 2023 2022 Change Change Sales, net $ 34,224,198 $ 35,828,392 $ (1,604,194 ) (4 )% Net Sales decreased to $34.2 million in FY2023, compared to $35.8 million in FY2022.
Added
The increase in gross profit and expansion of gross margin in FY2024 was driven by growth in sales volume, offset by the full benefit realization of the transition to a third-party co-manufacturing model, favorable product costs, settlement recoveries, and a reduction in trade discounts due to a pullback in inefficient trade spend. 36 Table of Contents Year Ended December 31, $ Percent 2024 2023 Change Change Operating expenses General and administrative $ 9,299,009 $ 9,793,360 $ (494,351 ) (5 )% Sales and marketing 10,561,664 11,218,903 (657,239 ) (6 )% Total operating expenses $ 19,860,673 $ 21,012,263 $ (1,151,590 ) (5 )% General and administrative expense in FY2024 decreased from FY2023 primarily due to a $0.5 million decrease in insurance expense.
Removed
The decrease was primarily due to a 13% decrease in our e-commerce channels driven planned reductions in media spending across both channels as well as out-of-stock issues on Amazon and our DTC business related to the product quality issue experienced in the first quarter of 2023. The decrease was partially offset by 9% growth in the Wholesale channel.
Added
The decrease in FY2024 as compared to FY2023 was primarily driven by declining interest rates on our interest-bearing cash accounts in FY2024. Year Ended December 31, $ Percent 2024 2023 Change Change Income tax expense $ (60,324 ) $ (15,195 ) $ (45,129 ) 297 % Income tax expense consists of state and local income taxes.
Removed
Overall Gross Sales volume increased by 2%. 33 Table of Contents Cost of Goods Sold Year Ended December 31, $ % 2023 2022 Change Change Cost of goods sold $ (23,910,921 ) $ (30,641,125 ) $ 6,730,204 (22 )% Cost of Goods Sold decreased to $23.9 million in FY2023 from $30.6 million in FY2022.
Added
We owed no federal income taxes during FY2024 or FY2023, and we do not expect to pay federal income taxes in the near future due to our federal net operating loss carryforwards.
Removed
The reduction was driven by the transition to a variable cost third-party co-manufacturing business model despite a 2% expansion of Gross Sales volume. Gross Profit Year Ended December 31, $ % 2023 2022 Change Change Gross profit $ 10,313,277 $ 5,187,267 $ 5,126,010 99 % Gross Profit increased to $10.3 million in FY2023 from $5.2 million in FY2022.
Added
Our $1.8 million net loss included expenses of $1.6 million related to stock-based compensation, which has increased in FY2024 compared to FY2023 as a result of our stock performance, and $1.0 million of other non-cash expenses including inventory obsolescence costs, and depreciation and amortization.
Removed
Gross Margin was 30.1% in FY2023 compared to 14.5% in FY2022. This improvement reflects the benefits of the transition to a variable cost third-party co-manufacturing business model and pricing action taken during the year, offset in part by elevated promotional spend.
Added
Cash Flows from Financing Activities Cash used in financing activities consisted of taxes withheld on net stock issuances, stock issuance costs incurred in connection with a Registration Statement on Form S-3 that was filed in FY2024, offset by cash collected from stock option exercises.
Removed
Operating Expenses Year Ended December 31, $ % 2023 2022 Change Change Operating expenses General and administrative $ 9,573,637 $ 30,595,163 $ (21,021,526 ) (69 )% Research and product development 219,723 427,537 (207,814 ) (49 )% Sales and marketing 11,218,903 14,528,704 (3,309,801 ) (23 )% Total operating expenses $ 21,012,263 $ 45,551,404 $ (24,539,141 ) (54 )% General and administrative expense decreased to $9.6 million in FY2023 from $30.6 million in FY2022, primarily due to FY2022 charges related to impairment of goodwill and long-lived acquisition intangible assets of $9.6 million, as well as $8.7 million of exit and disposal costs.
Added
While we may incur additional operating losses as we execute our strategy to invest in the growth of our business while maintaining our cash reserves, we believe that the strategic business transformation that we have undertaken over the last two years is reflected in our significant gross margin expansion, optimized investments in trade and marketing, lower selling, general, and administrative spending, and reduced cash burn.

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