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What changed in Sow Good Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Sow Good Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+292 added−423 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-27)

Top changes in Sow Good Inc.'s 2025 10-K

292 paragraphs added · 423 removed · 157 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWhile there is no active litigation involving any of our trademarks or other intellectual property rights, we may be required to enforce or defend our intellectual property rights against third parties in the future.
Biggest changeManufacturing and production activities are performed by third-party partners, and we rely on contractual protections to safeguard our intellectual property and brand standards in those arrangements. While there is no active litigation involving our intellectual property, we may be required from time to time to enforce or defend our rights.
At that time of the acquisition of Black Ridge Oil & Gas, Inc., the Company’s common stock began to be quoted on the OTCQB under the trading symbol “SOWG,” from the former trading symbol “ANFC.” Prior to April 2, 2012, Black Ridge Oil & Gas was known as Ante5, Inc., a publicly traded company since July 1, 2010.
At the time of the acquisition of Black Ridge Oil & Gas, Inc., the Company’s common stock began to be quoted on the OTCQB under the trading symbol “SOWG,” from the former trading symbol “ANFC.” Prior to April 2, 2012, Black Ridge Oil & Gas was known as Ante5, Inc., a publicly traded company since July 1, 2010.
Effective February 15, 2024, Sow Good Inc. reincorporated to the State of Delaware from the State of Nevada under the name Sow Good Inc. pursuant to a plan of conversion. On May 2, 2024, trading of the Company’s common stock commenced on the Nasdaq Capital Market stock exchange. Our principal executive offices are located at 1440 N.
Effective February 15, 2024, Sow Good Inc. reincorporated in the State of Delaware from the State of Nevada under the name Sow Good Inc. pursuant to a plan of conversion. On May 2, 2024, trading of the Company’s common stock commenced on the Nasdaq Capital Market. Our principal executive offices are located at 1440 N.
The principal purposes of our equity incentive plans are to attract, retain and motivate selected 6 Table of Contents employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance bonus awards. Office Locations We do not own any real property.
The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance bonus awards. Office Locations We do not own any real property.
Earning and maintaining the trust of our customers, consumers, supply chain partners, employees, and securityholders is critical to the success and growth of our business, and we take significant measures to protect the privacy and security of their personal data and 7 Table of Contents to comply with applicable laws.
Earning and maintaining the trust of our customers, consumers, supply chain partners, employees, and securityholders is critical to the success and growth of our business, and we take significant measures to protect the privacy and security of their personal data and to comply with applicable laws.
Union Bower Road, Irving, Texas 75061, and our telephone number is (214) 623-6055. Our website addresses are www.thisissowgood.com and www.sowginc.com . Information contained on, or that can be accessed through, our websites are not incorporated by reference into this report, and you should not consider information on our websites to be part of this report.
Union Bower Road, Irving, Texas 75061, and our telephone number is (214) 623-6055. Our website addresses are www.thisissowgood.com and www.sowginc.com. Information contained on, or accessible through, our websites is not incorporated by reference into this report, and you should not consider information on our websites to be part of this report.
Further, we must comply with additional laws impacting our advertising, including the TCPA, the Telemarketing Sales Rule, and the CAN-SPAM Act. In addition to federal regulatory requirements in the United States, certain states impose their own manufacturing and labeling requirements.
Further, we must comply with additional laws impacting our advertising, including the TCPA, the Telemarketing Sales Rule, and the CAN-SPAM Act. 5 Table of Contents In addition to federal regulatory requirements in the United States, certain states impose their own manufacturing and labeling requirements.
Electronic filings with the SEC are also available on the SEC internet website at www.sec.gov. 10 Table of Contents
Electronic filings with the SEC are also available on the SEC internet website at www.sec.gov. 6 Table of Contents
Consequently, we are subject to heightened risk of legal claims, government investigations, or other regulatory enforcement actions. Legal Proceedings From time to time, we may be involved in various disputes and litigation matters that arise in the ordinary course of business. We are not currently engaged in any material legal proceedings. 9 Table of Contents Corporate Information Sow Good Inc.
Consequently, we are subject to heightened risk of legal claims, government investigations, or other regulatory enforcement actions. Legal Proceedings From time to time, we may be involved in various disputes and litigation matters that arise in the ordinary course of business. We are not currently engaged in any material legal proceedings. C orporate Information Sow Good Inc.
Currently, none of our employees are covered by collective bargaining agreements. To date, we have never experienced an organized work stoppage, strike or labor dispute. Our human resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees.
As of December 31, 2025, we had 8 full-time employees. Currently, none of our employees are covered by collective bargaining agreements. To date, we have never experienced an organized work stoppage, strike or labor dispute. Our human resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees.
(a business that participated in the acquisition and development of oil and gas leases and acquired by the Company on October 1, 2020), the Company was initially focused on the production of freeze dried fruits and vegetables, a business later expanded to include freeze dried candy and other snacks.
(a business that participated in the acquisition and development of oil and gas leases and was acquired by the Company on October 1, 2020), the Company initially focused on the production of freeze-dried fruits and vegetables, later expanding into freeze-dried candy and other snacks prior to transitioning to its current asset-light operating model.
For additional information regarding these and other risks related to our intellectual property portfolio and their potential effect on us, refer to the section entitled “ Risk Factors - Risks Related to Our Intellectual Property, Information Technology, and Privacy .” Security, Privacy and Data Protection The regulatory environment surrounding information security and privacy is demanding, with the frequent imposition of new and changing requirements across our business.
For additional information regarding risks related to our intellectual property portfolio, see “Risk Factors—Risks Related to Our Intellectual Property, Information Technology, and Privacy.” Security, Privacy and Data Protection 4 Table of Contents The regulatory environment surrounding information security and privacy is demanding, with the frequent imposition of new and changing requirements across our business.
We believe that our company culture has been and will continue to be a key contributor to the fulfillment of this commitment. Our culture enables us to foster the creativity, teamwork, focus, and innovation we need to support our growth. As of December 31, 2024, we had 86 full-time employees.
We strive for nothing short of excellence because that is what our customers, employees, and environment deserve. We believe that our company culture has been and will continue to be a key contributor to the fulfillment of this commitment. Our culture enables us to foster the creativity, teamwork, focus, and innovation we need to support our growth.
While we believe we can compete favorably with respect to each of these factors, there is no guarantee that we will be able to compete effectively against our current or future competitors, particularly those with greater financial and market resources.
While we believe we can compete favorably with respect to each of these factors, there is no guarantee that we will be able to compete effectively against our current or future competitors, particularly those with greater financial and market resources. 3 Table of Contents Culture, Employees and Human Capital Resources Sow Good firmly believes that we can all plant positive seeds to sow a better version of ourselves, our communities, and our world.
We are currently subject to international laws and regulations where we manufacture our products, and to the extent we commence selling and distributing our products internationally, we will become subject to additional laws and regulations. 8 Table of Contents We are also subject to labor and employment laws, laws governing advertising, privacy laws, safety regulations, and other laws, including consumer protection regulations that regulate retailers or govern the promotion and sale of merchandise.
We are also subject to labor and employment laws, laws governing advertising, privacy laws, safety regulations, and other laws, including consumer protection regulations that regulate retailers or govern the promotion and sale of merchandise.
Our Competition Our brands primarily operate within the freeze dried candy and non-chocolate confections categories, but we also compete within the larger conventional packaged food category. The categories and markets we operate in are highly competitive and comprised of a diverse set of participants that include global multinational, national, regional, and local firms offering branded and/or private label products.
The categories and markets we operate in are highly competitive and comprised of a diverse set of participants that include global multinational, national, regional, and local firms offering branded and/or private label products.
(“SOWG,” “Sow Good,” “us,” “our,” “we,” or the “Company”) is a U.S.-based freeze dried candy and snack manufacturer. Formerly Black Ridge Oil & Gas, Inc.
(“SOWG,” “Sow Good,” “us,” “our,” “we,” or the “Company”) is a U.S.-based brand owner and commission-based distributor of freeze-dried candy and snack products.
Our principal executive office and manufacturing facility is located in Irving, Texas, where we lease approximately 20,945 square feet of space under a lease agreement with an entity owned entirely by Ira Goldfarb that expires in September 2025, subject to two options to extend the term of the lease for successive five-year periods.
Prior to December 30, 2025, our principal executive office and manufacturing facility was located in Irving, Texas, where we leased approximately 20,945 square feet of space under a lease agreement with an entity owned entirely by Ira Goldfarb, a related party. On December 31, 2025, concurrently with the sale of our manufacturing assets, the Company exited that lease.
We believe that we are only as excellent as our employees, which is why we provide a living wage, an energizing working environment, full benefits, and stock options to every employee. We strive for nothing short of excellence because that is what our customers, employees, and environment deserve.
We plant our seeds by coming into work each day dedicated to creating delicious treats that enrich the lives of our customers, partners and employees. We believe that we are only as excellent as our employees, which is why we provide a living wage, an energizing working environment, full benefits, and stock options to every employee.
In particular, we believe that our trademarks are valuable assets that reinforce the distinctiveness of our brand to consumers, are critical to maintaining and improving our competitive position, and are an important aspect of building brand equity. As such, we consider our “Sow Good” name and our “Sow Good” logo trademarks to be among our most valuable intellectual property assets.
We believe our trademarks and trade dress are valuable assets that reinforce the distinctiveness of the Sow Good brand, support consumer recognition, and contribute to building long-term brand equity. We consider the “Sow Good” name and the “Sow Good” logo, together with related product and packaging marks, to be among our most important intellectual property assets.
Accordingly, our products are marketed and sold uniformly under the registered trademark “Sow Good.” We expect to continue to invest in our trademark portfolio as we introduce new products and seek to build and protect our brand. As of December 31, 2024, we owned two U.S. trademark registrations and had six pending U.S. trademark applications.
Our products are marketed and sold under the Sow Good brand pursuant to our contractual arrangements with our distribution and manufacturing partner. As of December 31, 2025, we owned two U.S. trademark registrations and had six pending U.S. trademark applications. We also own the registered domain names www.thisissowgood.com and www.sowginc.com.
In addition to our principal executive office and food manufacturing facility, we lease approximately 51,264 square feet and 9,900 square feet at two separate warehouse facilities located in Irving, Texas, and 324,000 rentable square feet in Dallas, Texas which we use to receive, store, package, and distribute our products, as well as for office and administrative purposes.
As of December 31, 2025, we lease a 9,900 square feet warehouse facility located in Dallas, Texas which we use to receive, store, package, and distribute our products. We believe that these facilities are sufficient to meet our current needs.
ITEM 1. BU SINESS Overview Sow Good is a trailblazing U.S.-based freeze dried candy and snack manufacturer dedicated to providing consumers with innovative and explosively flavorful freeze dried treats.
ITEM 1. BU SINESS Overview Sow Good Inc. is a U.S.-based consumer packaged goods company that pioneered the freeze dried candy category.
Trademarks and Other Intellectual Property To establish and protect our proprietary rights, we rely on a combination of copyright, trademark, trade dress, and trade secret laws, as well as confidentiality agreements and other contractual restrictions. We do not own any registered patents. Our intellectual property is a strategically important component of our business.
Trademarks and Other Intellectual Property Our intellectual property consists primarily of trademarks, trade names, trade dress, copyrights, domain names, and related brand assets associated with the Sow Good brand. We do not own any registered patents. Our intellectual property is a strategically important component of our business and is central to our brand-focused, asset-light operating model.
Further, we have two registered domain names, www.thisissowgood.com and www.sowginc.com . The information contained on or accessed through our websites does not constitute part of this report. We also rely on unpatented proprietary expertise, recipes, and formulations, as well as other trade secrets and copyright protection, to maintain and improve our competitive position.
The information contained on or accessed through our websites does not constitute part of this report. In addition to registered intellectual property, we rely on proprietary brand concepts, product concepts, packaging designs, marketing content, and other creative materials that are protected, where applicable, by copyright and trade secret laws.
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Sow Good has harnessed the power of our proprietary freeze drying technology and product-specialized manufacturing facility to transform traditional candy into a novel and exciting everyday confectioneries subcategory that we call freeze dried candy.
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Since commencing commercial sales in the first quarter of 2023, Sow Good developed and scaled a proprietary freeze drying manufacturing operation dedicated to transforming traditional candy and snacks into novel, intensely flavorful treats it markets under the "hyper dried, hyper crunchy, hyper flavorful" brand positioning.
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We began commercializing our freeze dried candy products in the first quarter of 2023, and as of December 31, 2024, we have twenty-one stock keeping units (“SKUs”) in our Sow Good Candy line of treats and three SKUs in our Sow Good Crunch Cream line, which consists of freeze dried ice cream bars and sandwiches.
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Recent Strategic Transactions On December 30, 2025, the Company sold substantially all of its manufacturing assets, including six proprietary freeze drying machines and other property and equipment with an aggregate net book value of approximately $10,793,563, to Trea Grove, LLC, ("Trea Grove"), a related party, for total consideration of $1.5 million.
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We sell our treats using an omnichannel strategy primarily focused on the wholesale and retail channels with less than 2% of sales coming from e-commerce as of December 31, 2024. As of December 31, 2024, our treats are offered for sale in approximately 3,000 brick-and-mortar retail outlets in the United States.
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Concurrently, the Company entered into an exclusive Distribution Agreement with Trea Grove, pursuant to which Trea Grove serves as the exclusive worldwide distributor of Sow Good's remaining finished goods inventory, with the Company receiving 10% of gross receipts from customer sales. The Distribution Agreement has a term through July 31, 2026.
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We have custom-built a 20,945 square foot freeze drying facility in Irving, Texas.
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As a result of these transactions, the Company no longer operates manufacturing facilities and has transitioned to a capital-light model for the duration of the Distribution Agreement. The Company's board and management are evaluating strategic alternatives for the business going forward.
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Freeze drying removes up to 99% of moisture from a product in its frozen state by applying a small amount of heat in an extremely low air pressure, near outer space-like environment, through the use of massive vacuum chambers, resulting in moisture being removed from the product at the speed of sound.
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Additionally, on December 31, 2025, the Company entered into a Securities Purchase Agreement for the private placement of two tranches of convertible preferred stock (the “Private Placement”).
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This process of removing moisture from the product, which can take up to twenty-four hours, concentrates its flavor, creating a “hyper dried, hyper crunchy, and hyper flavorful” snackable treat. Our freeze drying process and expertise allow us to easily expand our manufacturing into other freeze dried snacks, such as yogurt snacks.
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The Company completed the sale of the first tranche by issuing 1,500,000 Series AA Convertible Non-Redeemable Preferred Stock, par value $0.001 per share, of the Company (the “Series AA Preferred Stock”) with proceeds to the Company of $3,000,000, which were used to pay down debt, reduce headcount, and for operational purposes.
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Our commitment to providing the most flavorful and crunchy treats extends into the product packaging process, where our employees are dedicated to hand-packaging our treats through our precision packaging process in vigilantly managed low humidity conditions to protect our treats from reintroduction to moisture.
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Pursuant to the Securities Purchase Agreement, the Company expects to consummate the sale of the second tranche with the issuance of 1,500,000 Series AAA Convertible Redeemable Preferred Stock, par value $0.001 per share, of the Company (the “Series AAA Preferred Stock”) for additional proceeds of $3,000,000 in March 2026.
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We have built six bespoke freeze driers using proprietary technology tailored specifically to our products which allows us to freeze dry up to 24 million units of freeze dried candy per year, creating a truly state-of-the-art facility in Irving, Texas. We have six additional freeze driers, which we can have operational by the end of 2025, as needed.
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The terms of the Series AAA Preferred Stock are substantially similar to the terms of the Series AA Preferred Stock, except that the Series AAA Preferred Stock are redeemable at a price of $200 per share, and each share of Series AA Preferred Stock is initially convertible into 14 shares of Common Stock where each share of Series AAA Preferred Stock is initially convertible into 250 shares of Common Stock (subject to adjustment as provided in the Series AAA certificate of designations).
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Sow Good, co-founded by Claudia and Ira Goldfarb, brings over a decade of manufacturing expertise to the consumer packaged goods (“CPG”) sector, specializing in advanced freeze-drying technology. With experience across pet, baby, and candy products, they have a proven track record of transforming niche trends into everyday consumer staples.
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Products Sow Good sells freeze-dried candy and snack products through a distributor. The freeze drying process removes up to 99% of moisture from products in their frozen state through the application of low heat in a near-vacuum environment, concentrating flavor and producing a uniquely crunchy texture with a long shelf life and natural preservation characteristics.
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Leveraging our proprietary technology, Sow Good delivers innovative, high-quality products with a long shelf life and natural preservation. Beyond product innovation, they are committed to job creation and positive community impact, making Sow Good a forward-thinking force in the industry.
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Facilities Prior to the December 30, 2025 asset sale, the Company operated a custom-built 20,945 square foot freeze drying facility located at 1440 N. Union Bower Road, Irving, Texas, which was leased under a related party lease with Mr. Goldfarb, and housed six bespoke, proprietary freeze dryers capable of producing up to 24 million units of freeze dried candy annually.
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Our products are sold in retailers nationwide from convenience and grocery stores to big-box retailers, such as Five Below, Misfits Market/Imperfect Foods, TJX Canada, Hy-Vee, Cracker Barrel, 7/11, H-E-B, Kroger and Albertsons. In addition, we sell a substantial portion of our products through distributors such as Redstone Foods, CB Distributors and Lipari Foods.
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The manufacturing equipment were among the assets transferred to Trea Grove, LLC as part of the asset sale, and the lease was exited. Sow Good maintains an approximately 10,000 square foot warehouse for remaining inventory, leased through July 2026. Founders and Background Sow Good was co-founded by Claudia Goldfarb and Ira Goldfarb. Mr. Goldfarb and Mrs.
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We believe there is a significant growth opportunity in increasing our shelf presence, SKU portfolio, and number of stores with our existing customers. We aim to have the ability to increase the availability of our products to these customers in current locations and distribution to more of their stores, while also broadening our SKU portfolio offerings.
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Goldfarb are also the Managing Members of Trea Grove, LLC, the buyer in the December 2025 asset sale and the Company's exclusive distributor. See "Related Party Transactions" for a full description of those arrangements.
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Bolstering our distribution and sales force will be a key growth driver for Sow Good so more of our products are available wherever our consumers choose to shop, whether it be a retail store, convenience store, or directly online.
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While we observed the freeze dried candy category experience a significant rise in popularity during 2024 and the first half of 2025, we have observed market data showing a significant decline in sales in the freeze dried candy category toward the end of 2025.
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To further support our retail launches with existing customers and strengthen our brand name, we provide our product displays with distinctive designs and product highlights to enhance our visibility in current stores and educate new consumers on the value of freeze dried treats.
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For these reasons, the Company has transitioned to a 1 Table of Contents capital-light model for the duration of the Distribution Agreement. The Company's board and management are evaluating strategic alternatives for the business going forward.
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We believe this strategy will capture the attention of new consumers, further educate and attract current consumers, and ultimately, increase sales for our retailers. Our omnichannel distribution strategy has three key components: retailers, e-commerce, and distributors.
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Our Growth Strategy Following the sale of substantially all manufacturing and operating assets and the entry into a long-term Distribution Agreement, Sow Good Inc. now operates as a commission-based distribution and brand-focused company. We do not manufacture products.
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In aggregate, this omnichannel strategy provides us with a diverse set of consumers and customer partners, which may lead to a larger total addressable market opportunity than is normally available to products sold only in grocery stores, along with an opportunity to develop a direct relationship with our customers at our website, www.thisissowgood.com and our social medial pages.
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Our business model is centered on developing and supporting the Sow Good brand, driving consumer demand, and earning a fixed percentage of distributor gross receipts from sales of Sow Good-branded products.
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We believe the nascent freeze dried candy market is poised for exponential growth given increasing consumer preferences for novel and distinctive candy products. In addition, we view adjacent snack categories where freeze drying is an established manufacturing method as providing additional growth opportunities.
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Our growth strategy is focused on three primary elements: (i) maintaining a lean, asset-light operating structure while we pursue strategic alternatives; (ii) strengthening brand awareness and consumer engagement; and (iii) expanding distribution through our distribution partner.
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Our Competitive Strengths 1 Table of Contents We believe we are well-positioned competitively to become the leader in the developing freeze dried candy market and adjacent freeze dried snack categories due to our distinctive branding, manufacturing expertise and ability to innovate.
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Maintain an Asset-Light Operating Structure While We Pursue Strategic Alternatives Our current business model is asset-light and does not require ownership of manufacturing facilities, production equipment, or inventory. We believe this structure provides flexibility, scalability, and reduced capital requirements relative to a vertically integrated manufacturing model, while allowing management to focus on pursuing strategic alternatives.
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We further support our brand efforts through our informative and user-friendly direct-to-consumer website and growing social media presence, where consumers have notably taken to posting unpaid, authentic reviews. Our strong brand presentation has been instrumental in securing coveted shelf space upon our launch of our freeze dried snacks.
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Given the substantial decline in sales experienced by the freeze dried candy category, and with the benefit of the proceeds from the Private Placement, our management is reviewing strategic alternatives to create shareholder value in adjacent categories as well as other industries.
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Manufacturing Expertise Sow Good spent over two years and over $10.0 million dollars to develop a state of the art manufacturing facility and freeze drying equipment calibrated specifically for our products prior to the commercial launch of our freeze dried treats.
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Strengthen Brand Awareness and Consumer Engagement We believe brand recognition and consumer loyalty are critical drivers of long-term value. We seek to build a trusted brand associated with novel, high-quality freeze-dried treats that consistently deliver a differentiated sensory experience.
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Manufacturing our treats requires careful handling so as to protect the integrity of their crunch factor, a characteristic of freeze dried candy. These treats are fragile and can easily crumble into unusable product if not handled appropriately.
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Our efforts are focused on increasing brand visibility across digital channels, social media platforms, and retail environments, as well as supporting marketing initiatives that drive consumer trial and repeat purchases.
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In addition, subtle changes during the freeze drying process can result in dramatic variations in product quality and yield, which makes it very difficult to consistently manufacture freeze dried treats with optimal crunch and flavor at scale successfully.
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We work collaboratively with our distribution partner to support retail launches, merchandising initiatives, and promotional campaigns designed to increase shelf presence, improve sell-through velocity, and expand consumer awareness of the Sow Good brand.
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We have overcome these hurdles and achieved scale manufacturing of freeze dried treats by utilizing proprietary technology to custom build six large-scale freeze driers and by developing manufacturing processes that are tailored specifically for each of our products to ensure maximum flavor, crunch, and consistency.
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Expand Distribution Through Our Distribution Partner Under the Distribution Agreement, our distribution partner is responsible for sales, order fulfillment, warehousing, logistics, and customer relationships with retailers and distributors. Our role is to support and influence distribution expansion through brand development, product strategy, and marketing support.
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We believe the technical knowledge and expertise required to build a freeze drier facility matching our current capacity poses a substantial barrier to entry for competitors in the freeze dried snack space.
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Growth in distribution footprint and sell-through directly increases gross receipts earned by our distribution partner, from which we earn a fixed commission. Our Products Sow Good operates as a brand owner and brand steward of freeze-dried snack products marketed under the Sow Good name. Product manufacturing, packaging, and distribution are performed by third parties under contractual arrangements.
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Moreover, our primary manufacturing facility located in Irving, Texas is a Safe Quality Food (“SQF”) II-certified facility, with a 97 score on our most recent food safety audit, which exemplifies our commitment to maintaining the highest standards in food safety, pathogen prevention, and allergen protocols. Innovative Product-Development Process Innovation is at the heart of our company.
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Current product categories include freeze-dried candy marketed under the Sow Good Candy brand, as well as other freeze-dried snack concepts under development. Sow Good Candy – Freeze-Dried Candy Sow Good Candy consists of freeze-dried versions of familiar gummy, chewy, and hard candies transformed into crunchy snack formats with concentrated flavor and expanded texture.
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We are vigilantly monitoring emerging confectionary trends online and in retail and identifying niche markets, turning them into category staples as evidenced by our successful launch of our Crunch Cream line.
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Products are offered in a variety of flavor profiles, shapes, and pack sizes. Supply Chain and Manufacturing 2 Table of Contents Sow Good does not manufacture products and does not own or operate production facilities. Manufacturing, packaging, and sourcing of raw materials are performed by third-party partners engaged by our distribution partner.
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We also have highly communicative retail relationships in which retailers inform us of new candy trends they detect in their stores, informing our next freeze dried snack development and launches. We utilize a test kitchen that is integrated with our in-house manufacturing capability and expertise to swiftly test, develop, and launch new products without sacrificing quality.
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We rely on our distribution partner to manage relationships with manufacturers and suppliers, maintain appropriate quality standards, and ensure compliance with applicable food safety and regulatory requirements. We work collaboratively with our partners to support product specifications, quality expectations, and brand standards.
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For example, we launched our Crunch Cream line within nine weeks of ideation. By integrating our strong insight on industry trends with our agility, adaptability, and proficiency in new product development, we can take a product from inception to production in just a few months while maintaining our high food quality standards.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf our competitors are more successful or offer better value to consumers, our business could decline. • We rely on a small number of suppliers to provide our raw materials for certain of our treats, and our supply chain may be interrupted and prevent us from obtaining the necessary materials we need to operate. • Consumer preferences for our products, or for freeze dried candy generally could change rapidly, and, if we are unable to respond quickly to new trends, our business may be adversely affected. • Any damage to our reputation or brand image could adversely affect our business or financial results. • Fluctuations in various food and supply, transportation and shipping costs could adversely affect our operating results. • We may not be able to protect our intellectual property and proprietary technology adequately, which may impact our commercial success. • Food safety concerns and concerns about the health risk of our products may have an adverse effect on our business. • Our ability to maintain and expand our distribution network and attract consumers, customers, distributors, retailers and brokers will depend on a number of factors, some of which are outside our control. • Our success depends in part on the effectiveness of our digital marketing strategy and the expansion of our social media presence, but there are risks associated with these efforts. • Failure to manage inventory at optimal levels could adversely affect our business, financial condition and results of operations. • Information security events, or real or perceived errors, failures, or bugs in our systems; other technology disruptions; or failure to comply with laws and regulations relating to information security could negatively impact our business, our reputation and our relationships with customers. • Our international sales and operations, including our planned business development activities outside of the United States, subject us to additional risks and challenges that can adversely affect our business, results of operations and financial condition. • Our operations are subject to regulation by the FDA and other federal, state, and local authorities in the U.S., and in any other jurisdictions in which we may sell our products, and there is no assurance that we will be in compliance with all laws and regulations. • The market price of our common stock is, and is likely to continue to be, highly volatile and subject to wide fluctuations. • We have never paid dividends on our common stock and we do not intend to pay dividends for the foreseeable future. 11 Table of Contents • We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors. • The concentration of our stock ownership limits our stockholders’ ability to influence corporate matters. • Our business depends substantially on the continuing efforts of our senior management and other key personnel, including Ira and Claudia Goldfarb, our Executive Chairman and the Chief Executive Officer, respectively, and our business may be severely disrupted if we lose their services. • A worsening of economic conditions or a decrease in consumer spending may adversely impact our ability to implement our business strategy. • The failure to successfully integrate newly acquired products or businesses could negatively impact our profitability.
Biggest changeIf our competitors are more successful or offer better value to consumers, our business could decline. • We rely on Trea Grove, a sole supplier, for the manufacture and distribution of our treats, and our supply chain may be interrupted and prevent us from obtaining the necessary materials we need to operate. • Consumer preferences for our products, or for freeze dried candy generally have changed and could change rapidly, and, if we are unable to respond quickly to new trends, our business may be adversely affected. • Any damage to our reputation or brand image could adversely affect our business or financial results. • Fluctuations in various food and supply, transportation and shipping costs could adversely affect our operating results. • We may not be able to protect our intellectual property and proprietary technology adequately, which may impact our commercial success. • Food safety concerns and concerns about the health risk of our products may have an adverse effect on our business. • Failure to manage inventory at optimal levels could adversely affect our business, financial condition and results of operations. • Information security events, or real or perceived errors, failures, or bugs in our systems; other technology disruptions; or failure to comply with laws and regulations relating to information security could negatively impact our business, our reputation and our relationships with customers. • Our operations are subject to regulation by the FDA and other federal, state, and local authorities in the U.S., and in any other jurisdictions in which we may sell our products, and there is no assurance that we will be in compliance with all laws and regulations. • The market price of our common stock is, and is likely to continue to be, highly volatile and subject to wide fluctuations. • We have never paid dividends on our common stock and we do not intend to pay dividends for the foreseeable future. • We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors. • The concentration of our stock ownership limits our stockholders’ ability to influence corporate matters. • Our business depends substantially on the continuing efforts of our Distributors and their key personnel, including Ira and Claudia Goldfarb, and our business may be severely disrupted if we lose their services. • A worsening of economic conditions or a decrease in consumer spending may adversely impact our ability to implement our business strategy. 7 Table of Contents Risks Related to Our Operating History, Financial Position and Capital Needs We have a limited operating history in our current form and have incurred significant operating losses.
Factors that may cause fluctuations in our quarterly results include, but are not limited to: • our inability to retain our existing customers, and expand sales of our products to our existing customers; • our ability to attract new customers and consumers to our brand, the type and amount of products purchased, and the cost of acquisition; • the mix of our products sold during the period, and the gross margins associated with those sales; • changes in our pricing policies, or those of our competitors; • the amount and timing of discounts, rebates, or promotional activity; • the amount and timing of costs and operating expenses related to the expansion of manufacturing capacity, distribution channels, production capabilities, and operational infrastructure; 27 Table of Contents • the amount and timing of costs and operating expenses associated with developing and commercializing new products; • the amount and timing of costs and operating expenses related to the acquisition of businesses, assets, technologies, or intellectual property rights; • the timing and impact of any security breaches, service outages or other performance problems with our technology infrastructure and software solutions; • the timing and costs associated with legal or regulatory actions; • changes in the competitive dynamics of our industry, including consolidation among customers, suppliers, or competitors; • loss of our executive officers or other key employees; • trends and conditions impacting the consumer packaged goods industry, and the freeze dried goods category in particular; • the impacts and disruptions caused by the COVID-19 pandemic, or any other pandemics, epidemics, disease outbreak, or similar widespread public health concern on our business and operating results, or incidence of disease; and • general economic, political, social, and market conditions.
Factors that may cause fluctuations in our quarterly results include, but are not limited to: 19 Table of Contents • changes in the market for freeze dried candy; • our inability to retain our existing customers, and expand sales of our products to our existing customers; • our ability to attract new customers and consumers to our brand, the type and amount of products purchased, and the cost of acquisition; • the mix of our products sold during the period, and the gross margins associated with those sales; • changes in our pricing policies, or those of our competitors; • the amount and timing of discounts, rebates, or promotional activity; • the amount and timing of costs and operating expenses related to the expansion of manufacturing capacity, distribution channels, production capabilities, and operational infrastructure; • the amount and timing of costs and operating expenses associated with developing and commercializing new products; • the amount and timing of costs and operating expenses related to the acquisition of businesses, assets, technologies, or intellectual property rights; • the timing and impact of any security breaches, service outages or other performance problems with our technology infrastructure and software solutions; • the timing and costs associated with legal or regulatory actions; • changes in the competitive dynamics of our industry, including consolidation among customers, suppliers, or competitors; • loss of our executive officers or other key employees; • trends and conditions impacting the consumer packaged goods industry, and the freeze dried goods category in particular; • the impacts and disruptions caused by the COVID-19 pandemic, or any other pandemics, epidemics, disease outbreak, or similar widespread public health concern on our business and operating results, or incidence of disease; and • general economic, political, social, and market conditions.
A significant shift in consumer demand away from our products, or towards competitive products, could limit our product sales, reduce our market share, and negatively impact our brand reputation, any of which could adversely affect our business, operating results, and financial condition. If we fail to grow the value and enhance the visibility of our brand, our business could suffer.
A continued shift in consumer demand away from our products, or towards competitive products, could limit our product sales, reduce our market share, and negatively impact our brand reputation, any of which could adversely affect our business, operating results, and financial condition. If we fail to grow the value and enhance the visibility of our brand, our business could suffer.
We may consider raising additional capital in the future to expand our business, to pursue strategic investments, to take advantage of financing opportunities or for other reasons, including to: • provide for additional capacity; • increase our sales and marketing efforts and address competitive developments; • provide for supply and inventory costs; • fund development and marketing efforts of any future products or additional features to then-current products; • acquire, license or invest in new technologies; • acquire or invest in complementary businesses or assets; and • finance capital expenditures and general and administrative expenses.
We may consider raising additional capital in the future to expand our business, to pursue strategic investments, to take advantage of financing opportunities or for other reasons, including to: • provide for additional capacity; 8 Table of Contents • increase our sales and marketing efforts and address competitive developments; • provide for supply and inventory costs; • fund development and marketing efforts of any future products or additional features to then-current products; • acquire, license or invest in new technologies; • acquire or invest in complementary businesses or assets; and • finance capital expenditures and general and administrative expenses.
Our forecast for demand, however, may 21 Table of Contents not accurately reflect the actual market demands, which depends on a number of factors including, without limitation, launches of new products, changes in product life cycles and pricing, product defects, changes in consumer spending patterns, supplier back orders and other supplier-related issues, distributors’ and retailers’ procurement plans, as well as the volatile economic environment in the markets where we sell our products.
Our forecast for demand, however, may not accurately reflect the actual market demands, which depends on a number of factors including, without limitation, launches of new products, changes in product life cycles and pricing, product defects, changes in consumer spending patterns, supplier back orders and other supplier-related issues, distributors’ and retailers’ procurement plans, as well as the volatile economic environment in the markets where we sell our products.
Consumer preferences, and therefore demand for our products, could change rapidly as a result of a number of factors, including consumer demand for specific nutritional content, dietary habits, or restrictions, including perceptions regarding food quality, concerns regarding the health effects of certain ingredients or macronutrient ratios, shifts in preferences for product attributes, laws and regulations governing product claims, brand reputation and loyalty, and product pricing.
Consumer preferences, and therefore demand for our products have changed, and could further change rapidly as a result of a number of factors, including consumer demand for specific nutritional content, dietary habits, or restrictions, including perceptions regarding food quality, concerns regarding the health effects of certain ingredients or macronutrient ratios, shifts in preferences for product attributes, laws and regulations governing product claims, brand reputation and loyalty, and product pricing.
If one or more of our senior executives is unable or unwilling to continue to work for us in the present position, we may have to spend a considerable amount of time and resources searching, recruiting, and integrating a replacement into our operations, which 28 Table of Contents would substantially divert management’s attention from our business and severely disrupt our business.
If one or more of our senior executives is unable or unwilling to continue to work for us in the present position, we may have to spend a considerable amount of time and resources searching, recruiting, and integrating a replacement into our operations, which would substantially divert management’s attention from our business and severely disrupt our business.
Consequently, almost any deviation from subjective or objective requirements of the FDCA, or applicable state or local laws, leaves us vulnerable to a variety of administrative actions, enforcement actions, and/or civil and criminal penalties. Failure to comply with laws and regulations could materially adversely affect our business, operating results, and financial condition.
Most state and local laws operate similarly. Consequently, almost any deviation from subjective or objective requirements of the FDCA, or applicable state or local laws, leaves us vulnerable to a variety of administrative actions, enforcement actions, and/or civil and criminal penalties. Failure to comply with laws and regulations could materially adversely affect our business, operating results, and financial condition.
Consequently, any predictions you make 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. If we are unable to successfully manage new product launches, our business and financial results could be adversely affected.
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 sustained profitability. If we are unable to successfully manage new product launches, our business and financial results could be adversely affected.
Such injuries may result from inadvertent mislabeling, tampering by unauthorized third parties or product contamination or spoilage. Under certain circumstances, we may be required to recall 19 Table of Contents or withdraw products, suspend production of our products, or cease operations, which may lead to a material adverse effect on our business.
Such injuries may result from inadvertent mislabeling, tampering by unauthorized third parties or product contamination or spoilage. Under certain circumstances, we 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.
The results of legal proceedings are inherently uncertain, and adverse judgments or settlements in some of these proceedings may result in adverse monetary damages, penalties, or injunctive relief against us, which could have a material 29 Table of Contents adverse effect on our operating results, financial condition, and liquidity.
The results of legal proceedings are inherently uncertain, and adverse judgments or settlements in some of these proceedings may result in adverse monetary damages, penalties, or injunctive relief against us, which could have a material adverse effect on our operating results, financial condition, and liquidity.
Damage to our reputation or brand image or loss of consumer confidence in our products could adversely affect our business and financial results as well as require additional resources to rebuild or repair our reputation. Fluctuations in various food and supply, transportation and shipping costs could adversely affect our operating results.
Damage to our reputation or brand image or loss of consumer confidence in our products could adversely affect our business and financial results as well as require additional resources to rebuild or repair our reputation. 11 Table of Contents Fluctuations in various food and supply, transportation and shipping costs could adversely affect our operating results.
If for any reason our suppliers or vendors became unable or unwilling to continue to provide services to us, this would likely lead to an interruption in our ability to import our products until we found another source that could provide these services.
If for any reason our suppliers or vendors became unable or unwilling to continue to provide services to Trea Grove, this would likely lead to an interruption in our ability to import our products until we found another source that could provide these services.
Our results of operations and financial condition have been and could continue to be adversely affected by the loss of significant customers or any significant reduction in revenue volumes from our significant customers, which has occurred in the past and could occur 15 Table of Contents in the future.
Our results of operations and financial condition have been and could continue to be adversely affected by the loss of significant customers or any significant reduction in revenue volumes from our significant customers, which has occurred in the past and could occur in the future.
The market price of our common stock is likely to continue to be highly volatile and could be subject to wide fluctuations in response to a number of factors, some of which are beyond our control, including but not limited to: • dilution caused by our issuance of additional shares of common stock and other forms of equity securities, which we expect to make in connection with future capital financings to fund our operations and growth, to attract and retain valuable personnel and in connection with future strategic partnerships with other companies; • quarterly variations in our revenues and operating expenses as we commence our production and sales; • changes in the valuation of similarly situated companies, both in our industry and in other industries sales; • challenges associated with timely SEC filings; • changes in analysts’ estimates affecting our company, our competitors and/or our industry; • changes in the accounting methods used in or otherwise affecting our industry; • additions and departures of key personnel; • fluctuations in interest rates and the availability of capital in the capital markets; • significant sales of our common stock following the registration of shares; • any guidance we may provide to the public, any changes in this guidance, or our failure to meet this guidance; • announcements of new products by us or our competitors, and competition from new or existing products; • addition or loss of significant customers, suppliers or other business partners; • new laws or regulations applicable to our business or products, or changes to the interpretation of existing laws or regulations; • announcements of significant acquisitions, strategic partnerships, or joint ventures by us or our competitors; • outcome of litigation, regulatory matters, enforcement actions, or other disputes that may arise; and • general economic, industry, and market conditions.
The market price of our common stock is likely to continue to be highly volatile and could be subject to wide fluctuations in response to a number of factors, some of which are beyond our control, including but not limited to: • market reception to potential strategic alternative announcements; • dilution caused by our issuance of additional shares of common stock and other forms of equity securities including those issued in, or deliverable upon conversion of the securities issued in, the Private Placement, which we expect to make in connection with future capital financings to fund our operations and growth, to attract and retain valuable personnel and in connection with future strategic partnerships with other companies; • quarterly variations in our revenues and operating expenses as we commence our production and sales; • changes in the valuation of similarly situated companies, both in our industry and in other industries sales; • challenges associated with timely SEC filings; • changes in analysts’ estimates affecting our company, our competitors and/or our industry; • changes in the accounting methods used in or otherwise affecting our industry; • additions and departures of key personnel; • fluctuations in interest rates and the availability of capital in the capital markets; • significant sales of our common stock following the registration of shares; • any guidance we may provide to the public, any changes in this guidance, or our failure to meet this guidance; • announcements of new products by us or our competitors, and competition from new or existing products; • addition or loss of significant customers, suppliers or other business partners; • new laws or regulations applicable to our business or products, or changes to the interpretation of existing laws or regulations; • announcements of significant acquisitions, strategic partnerships, or joint ventures by us or our competitors; 18 Table of Contents • outcome of litigation, regulatory matters, enforcement actions, or other disputes that may arise; and • general economic, industry, and market conditions.
Regardless of whether claims that we are infringing patents or other intellectual property rights have merit, such claims can be time-consuming, divert management’s attention 18 Table of Contents and financial resources, and can be costly to evaluate and defend.
Regardless of whether claims that we are infringing patents or other intellectual property rights have merit, such claims can be time-consuming, divert management’s attention and financial resources, and can be costly to evaluate and defend.
Any of these systems and infrastructure are vulnerable to damage or interruption from earthquakes, vandalism, sabotage, terrorist attacks, floods, fires, power outages, 22 Table of Contents telecommunications failures, computer viruses or other deliberate attempts to harm the systems.
Any of these systems and infrastructure are vulnerable to damage or interruption from earthquakes, vandalism, sabotage, terrorist attacks, floods, fires, power outages, telecommunications failures, computer viruses or other deliberate attempts to harm the systems.
Improper handling or storage of food by a customer, without any involvement or fault of ours or our retail customers, could result in food-borne illnesses, which could result in negative publicity and harm to our brand and reputation.
Improper handling or storage of food by a customer, without any involvement or fault of ours or our retail customers, could result in food-borne illnesses, 14 Table of Contents which could result in negative publicity and harm to our brand and reputation.
Failure to find a suitable replacement, even on a temporary basis, would have a material adverse effect on our ability to meet our production targets, make it difficult to grow and would have an adverse effect on our results of operations.
Failure to find a suitable replacement, 10 Table of Contents even on a temporary basis, would have a material adverse effect on our ability to meet our production targets, make it difficult to grow and would have an adverse effect on our results of operations.
Additionally, there may be new laws and regulations that could impact the ingredients and nutritional content of our product offerings, or laws and regulations requiring us to disclose the nutritional content of our product offerings or otherwise restrict sales of our treats.
Additionally, there may be new laws and regulations that could impact the ingredients and nutritional content of our product offerings, or laws and 13 Table of Contents regulations requiring us to disclose the nutritional content of our product offerings or otherwise restrict sales of our treats.
Due to the highly competitive nature of our product sector, we expect and intend to continue to introduce new products and evolve existing products to better match consumer demand. The success of new and evolved products depends on a number of factors, including timely and successful development and consumer acceptance.
Due to the highly competitive nature of our product sector and the overall reduction of sales therein, we expect and intend to continue to introduce new products and evolve existing products to better match consumer demand. The success of new and evolved products depends on a number of factors, including timely and successful development and consumer acceptance.
Additionally, as a result of a security incident, we could be subject to demands, claims, and litigation by private parties and investigations, related actions, and penalties by regulatory authorities.
Additionally, as a 15 Table of Contents result of a security incident, we could be subject to demands, claims, and litigation by private parties and investigations, related actions, and penalties by regulatory authorities.
A change in these principles or interpretations could have a significant effect on our reported financial results and could affect the reporting of transactions completed before the announcement of a change.
A change in these principles or interpretations could have a significant effect 20 Table of Contents on our reported financial results and could affect the reporting of transactions completed before the announcement of a change.
This could result in time consuming and expensive production interruptions, negative publicity, the destruction of product inventory, the discontinuation of sales or our relationships with such distributors or suppliers, lost sales due to the unavailability of product for a period of time and higher-than-anticipated rates of returns of goods.
This could result in time consuming and expensive production interruptions at Trea Grove (our sole supplier), negative publicity, the destruction of product inventory, the discontinuation of sales or our relationships with such distributors or suppliers, lost sales due to the unavailability of product for a period of time and higher-than-anticipated rates of returns of goods.
Our present and future funding requirements will depend on many factors, including: • our ability to achieve revenue growth and improve gross margins; • the cost of expanding our operations and offerings, including our sales and marketing efforts; • the effect of competing market developments; and • costs related to international expansion.
Our present and future funding requirements will depend on many factors, including: • the health of the freeze dried candy category; • our ability to achieve revenue growth and improve gross margins; • the cost of expanding our operations and offerings, including our sales and marketing efforts; • the effect of competing market developments; and • costs related to international expansion.
This may also adversely affect our ability to execute our business strategy. A worsening of economic conditions or a decrease in consumer spending may adversely impact our ability to implement our business strategy. Our success depends to a significant extent on discretionary consumer spending, which is influenced by general economic conditions and the availability of discretionary income.
General Risks A worsening of economic conditions or a decrease in consumer spending may adversely impact our ability to implement our business strategy. Our success depends to a significant extent on discretionary consumer spending, which is influenced by general economic conditions and the availability of discretionary income.
Our ability to maintain, position and enhance our brand will depend on a number of factors, including the market acceptance of our current and future product offerings, the nutritional content of our products, food quality and safety, quality assurance, our advertising and marketing efforts, and our ability to build relationships with customers and consumers.
Our ability to maintain, position and enhance our brand will depend on a number of factors, including continued viability of the freeze dried candy category, the market acceptance of our current and future product offerings, the nutritional content of our products, food quality and safety, quality assurance, our advertising and marketing efforts, and our ability to build relationships with customers and consumers.
Such failures could have a material adverse effect on our financial condition and operations. If the third parties we work with violate applicable laws, contractual obligations or suffer a security incident, such violations may also put us in breach of our obligations under privacy laws and regulations and/or could in turn have a material adverse effect on our business.
If the third parties we work with violate applicable laws, contractual obligations or suffer a security incident, 16 Table of Contents such violations may also put us in breach of our obligations under privacy laws and regulations and/or could in turn have a material adverse effect on our business.
As a result of this concentration in our supply chain, our business and operations would be negatively affected if any of our key suppliers were to experience significant disruption affecting the price, quality, availability or timely delivery of their products.
As a result of this concentration in the supply chain for our products, our freeze-dried candy business and related operations would be negatively affected if any of these key suppliers of Trea Grove were to experience significant disruption affecting the price, quality, availability or timely delivery of their products.
Overall, we may not be able to avoid significant product liability exposure. A product liability claim could hurt our financial performance. Even if we ultimately avoid financial liability for this type of exposure, we may incur significant costs in defending ourselves that could hurt our financial performance and condition.
Overall, we may not be able to avoid significant product liability exposure. A product liability claim could hurt our financial performance. Even if we ultimately avoid financial liability for this type of exposure, we may incur significant costs in defending ourselves that could hurt our financial performance and condition. Our customers are not obligated to continue purchasing products from us.
Further, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the trading prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies.
Further, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the trading prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations may negatively impact the trading price of our common stock.
Risks Related to Ownership of Our Common Stock The market price of our common stock is, and is likely to continue to be, highly volatile and subject to wide fluctuations.
The market price of our common stock has been, and is likely to continue to be, highly volatile and subject to wide fluctuations.
Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, investors should rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment in our common stock.
Accordingly, investors should rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment in our common stock.
During the year ended December 31, 2024, three key suppliers, Shandong Richfield Foodstuffs Co LTD, Albanese and Jiangsu Shengifan Foodstuff accounted for approximately 77% of our total raw material and packaging purchases. Additionally, we do not have any contractual obligations for the continued supply of raw material and packaging from these key suppliers.
During the year ended December 31, 2025, three key suppliers, Shandong Richfield Foodstuffs Co LTD, Albanese and Jiangsu Shengifan Foodstuff accounted for approximately 77% of our total raw material and packaging purchases for our products. Additionally, neither of Trea Grove, no the Company has any contractual obligations for the continued supply of raw material and packaging from these key suppliers.
We can provide no assurance that we will be able to continue to compete successfully in any of our markets. Our inability to continue to compete successfully in any of our markets could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations.
Our inability to continue to compete successfully in any of our markets could have a material adverse effect on our business, prospects, liquidity, financial condition, and results of operations.
Such claims may be made by competitors seeking to obtain a competitive advantage or by other parties. It may also be necessary for us to initiate litigation to defend ourselves in order to determine the scope, enforceability, and validity of third-party intellectual property or proprietary rights, or to establish our respective rights.
It may also be necessary for us to initiate litigation to defend ourselves in order to determine the scope, enforceability, and validity of third-party intellectual property or proprietary rights, or to establish our respective rights.
While we have not had supply chain disruptions to date, and believe that we can quickly find additional sources for our raw material and packaging, in the event that our supply from our current suppliers is interrupted, our operations may be interrupted in the interim 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 one or more alternative suppliers.
In the event that our supply from current suppliers is interrupted, our operations may be interrupted in the interim 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 one or more alternative suppliers.
Such proceedings may be protracted with no certainty of success, and an adverse outcome could subject us to liability, force us to cease use of certain trademarks or other intellectual property, or force us to enter into licenses with others. Third parties may initiate legal proceedings alleging that we are infringing or otherwise violating their intellectual property rights.
Such proceedings may be protracted with no certainty of success, and an adverse outcome could subject us to liability, force us to cease use of certain trademarks or other intellectual property, or force us to enter into licenses with others.
General Risks Our business depends substantially on the continuing efforts of our senior management and other key personnel, including Ira and Claudia Goldfarb, our Executive Chairman and the Chief Executive Officer, respectively, and our business may be severely disrupted if we lose their services .
Our business depends substantially on the continuing efforts of our Distributors and their key personnel, including Ira and Claudia Goldfarb, and our business may be severely disrupted if we lose their services .
Such inflationary pressures could be passed on to the customer and 17 Table of Contents could cause the price of our products to increase, which may impact the attractiveness of our freeze dried treats relative to other candy or snack options with cost sensitive consumers.
Such inflationary pressures could be passed on to the customer and could cause the price of our products to increase, which may impact the attractiveness of our freeze dried treats relative to other candy or snack options with cost sensitive consumers. We are also subject to a reduction in our profitability due to increased labor costs.
We may need additional funding in order to fund our existing commercial operations, commercialize new products and grow our business. To date, we have financed our operations through private placements of our equity, equity-linked and debt securities. We have devoted substantially all our financial resources and efforts to developing our products, workforce, and manufacturing capabilities.
We may need additional funding in order to fund our existing commercial operations, commercialize new products and grow our business. To date, we have financed our operations through the sale of securities including public offerings and private placements of our equity, equity-linked and debt securities.
In addition, we have not historically obtained confidentiality agreements or invention assignment agreements from all employees and consultants, which could impact our ability to protect our intellectual property and proprietary technology.
As a result, we may not be able to prevent others from using similar processes, which could adversely affect our business. In addition, we have not historically obtained confidentiality agreements or invention assignment agreements from all employees and consultants, which could impact our ability to protect our intellectual property and proprietary technology.
These assessments and estimates are based on the information available to management at the time and involve a significant amount of management judgment. Actual outcomes or losses may differ materially from our assessments and estimates. Even when not merited, the defense of legal proceedings may divert our management’s attention, and we may incur significant expenses in defending these matters.
Actual outcomes or losses may differ materially from our assessments and estimates. 21 Table of Contents Even when not merited, the defense of legal proceedings may divert our management’s attention, and we may incur significant expenses in defending these matters.
Our revenues grew from approximately $88.4 thousand for the year ended December 31, 2021 to approximately $428.1 thousand for the year ended December 31, 2022 and approximately $16.1 million for the year ended December 31, 2023, and $32.0 million for the year ended December 31, 2024.
Our revenues grew from approximately $88.4 thousand for the year ended December 31, 2021 to approximately $428.1 thousand for the year ended December 31, 2022 and approximately $16.1 million for the year ended December 31, 2023, reflecting the ramp of our former vertically integrated manufacturing and direct-sales model.
Our inability to obtain additional capital could have a material adverse effect on our ability to fully implement our business plan as described herein and grow our business, to a greater extent than we can with our existing financial resources. 12 Table of Contents If our available cash balances, net proceeds from anticipated offerings/or anticipated cash flow from operations are insufficient to satisfy our liquidity requirements because of lower demand for our products or due to other risks described herein, we may seek to sell common stock or other securities, enter into an additional credit facility or seek another form of third-party funding, including debt financing.
If our available cash balances, net proceeds from anticipated offerings/or anticipated cash flow from operations are insufficient to satisfy our liquidity requirements because of lower demand for our products or due to other risks described herein, we may seek to sell common stock or other securities, enter into an additional credit facility or seek another form of third-party funding, including debt financing.
If we raise additional 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. Our prior rapid growth may not be indicative of our future growth, and our limited operating history may make it difficult to assess our future viability.
If we raise additional 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.
We compete with large national and regional food retail companies, some of which have greater financial and operational resources than us, and with smaller local retailers, some of which may have lower administrative costs than us.
We compete with large national and regional food retail companies, some of which have greater financial and operational resources than us, and with smaller local retailers, some of which may have lower administrative costs than us. We are at a competitive disadvantage relative to certain of our large national and regional competitors whose operations are more geographically diversified than ours.
In addition, changes to laws, regulations, or policies applicable to foods could leave us vulnerable to adverse governmental action and materially adversely affect our business, operating results, and financial condition. 25 Table of Contents Even inadvertent, non-negligent or unknowing violations of federal, state, or local regulatory requirements could expose us to adverse governmental action and materially adversely affect our business, operating results, and financial condition.
In addition, changes to laws, regulations, or policies applicable to foods could leave us vulnerable to adverse governmental action and materially adversely affect our business, operating results, and financial condition.
Our long-term growth and success are dependent upon our ability ultimately to expand our manufacturing capacity and generate cash from operating activities. There is no assurance that we will be able to generate sufficient cash from operations or access the capital we need to grow our business.
There is no assurance that we will be able to generate sufficient cash from operations or access the capital we need to grow our business.
While we believe we have a strong brand reputation, a key component of our growth strategy involves growing the value and enhancing the visibility of our “Sow Good” brand.
A key component of our business strategy involves maintaining the value and enhancing the visibility of our “Sow Good” brand.
We are also subject to a reduction in our profitability due to increased labor costs for our employees. As we look to expand our distribution and market, we may not be able to increase our sales prices to absorb these costs. We cannot provide assurances that we will be able to maintain profitability consistent with our goals.
As we look to expand our distribution and market, we may not be able to increase our sales prices to absorb these costs. We cannot provide assurances that we will be able to maintain profitability consistent with our goals. In addition, our products use significant quantities of cardboard, film, and plastic to package our products.
In addition, our costs are affected by general inflationary pressures related to transportation and shipping costs, particularly to the extent we have additional retail sales and smaller order quantities.
We cannot assure you that we or Trea Grove will be able to secure the candy supply for our treats. In addition, the profitability of our products are affected by general inflationary pressures related to transportation and shipping costs, particularly to the extent we have additional retail sales and smaller order quantities.
Since the initial commercialization of our freeze dried candy treats in March 2023, we have not yet demonstrated the ability to sustain rapid growth over a long period of time or achieve profitability at scale.
In addition, we may face increased competition from current or new competitors that may reduce our market share and thereby limit our growth. Since the initial commercialization of our freeze dried candy treats in March 2023, we have not yet demonstrated the ability to sustain growth over a long period of time or maintain profitability.
There is, however, no assurance that quality ingredients will continue to be available to meet our specific and growing needs.
We rely on Trea Grove to meet our high-quality standards and supply products in a timely and efficient manner. There is, however, no assurance that quality ingredients will continue to be available to Trea Grove to meet our specific and growing needs.
We have never declared or paid any dividends on our common stock and do not intend to pay any dividends in the foreseeable future. We anticipate that we will retain all of our future earnings if any, to service debt, fund growth, develop our business, fund working capital needs, and for general corporate purposes.
We anticipate that we will retain all of our future earnings if any, to service debt, fund growth, develop our business, fund working capital needs, and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors and in accordance with applicable state law.
Intellectual property disputes can be costly to defend and may cause our business, operating results, and financial condition to suffer. Whether merited or not, we may face allegations that we or parties indemnified by us have infringed or otherwise violated the patents, trademarks, copyrights, or other intellectual property rights of third parties.
Whether merited or not, we may face allegations that we or parties indemnified by us have infringed or otherwise violated the patents, trademarks, copyrights, or other intellectual property rights of third parties. Such claims may be made by competitors seeking to obtain a competitive advantage or by other parties.
Our future success heavily depends on the continued service of our senior management and other key employees, especially the continued contributions of Ira and Claudia Goldfarb, our Executive Chairman and Chief Executive Officer, respectively, whose knowledge, leadership and technical expertise would be difficult to replace.
Our future success heavily depends on the continued service of our Distributor and their key employees, especially the continued contributions of Ira and Claudia Goldfarb, whose knowledge, leadership and technical expertise would be difficult to replace. Our executive officers or key personnel could terminate their employment with us at any time without penalty.
We have experienced a reduction in revenue due to the entrant of a significant competitor in 2024. New competitors may easily enter the freeze dried candy market on which we are focused. The competitors may offer an equivalent or superior product to that of the Company.
New competitors may easily enter the freeze dried candy market on which we are focused. The competitors may offer an equivalent or superior product to that of the Company. We expect the number of companies offering products and services in our market segment to increase.
As a result of continuing investments to expand our business, we may not achieve or sustain profitability. • Our rapid growth may not be indicative of our future growth, and our limited operating history may make it difficult to assess our future viability. • We may be unable to manage our future growth effectively, which could make it difficult to execute our business strategy. • The retail food and non-chocolate confectionary and freeze dried candy segments are highly competitive.
As a result of continuing investments to support our brand and distribution strategy, we may not achieve or sustain profitability. • The retail food and non-chocolate confectionary and freeze dried candy segments are highly competitive.
Our continued success depends in part upon our ability to protect and preserve our intellectual property. Our confidentiality agreements with our employees, consultants, independent contractors and suppliers generally require that all information made known to them be kept strictly confidential. Nevertheless, trade secrets are difficult to protect.
Our confidentiality agreements with our employees, consultants, independent contractors and suppliers generally require that all information made known to them be kept strictly confidential. Nevertheless, trade secrets are difficult to protect. Our confidentiality agreements may not effectively prevent disclosure of our proprietary information and may not provide an adequate remedy in the event of unauthorized disclosure of such information.
We expect the number of companies offering products and services in our market segment to increase. If we are unable to compete effectively in our markets, our business could decline disproportionately to our competitors, and our results of operations and financial condition could be adversely affected.
If we are unable to compete effectively in our markets, our business could decline disproportionately to our competitors, and our results of operations and financial condition could be adversely affected. We can provide no assurance that we will be able to continue to compete successfully in any of our markets.
Decreases in our customers’ sales volumes or orders for products supplied by us may have a material adverse effect on our business, financial condition or results of operations. If we face labor shortages or increased labor costs, our results of operations and our growth could be adversely affected. Labor is a significant component of the cost of operating our business.
Decreases in our customers’ sales volumes or orders for products supplied by us may have a material adverse effect on our business, financial condition or results of operations. Any failure to adequately store, maintain and deliver our products could materially adversely affect our business, reputation, financial condition, and operating results.
Our commercial success depends on our ability to develop and commercialize our products without infringing the intellectual property or proprietary rights of third parties. However, from time to time, we may be subject to legal proceedings and claims in the ordinary course of business with respect to intellectual property.
Third parties may initiate legal proceedings alleging that we are infringing or otherwise violating their intellectual property rights. 12 Table of Contents Our commercial success depends on our ability to develop and commercialize our products without infringing the intellectual property or proprietary rights of third parties.
If we fail to compete successfully in this market, our business, financial condition, and results of operations would be materially and adversely affected. 16 Table of Contents Consumer preferences for our products, or for freeze dried candy generally could change rapidly, and, if we are unable to respond quickly to new trends, our business may be adversely affected.
Consumer preferences for our products, or for freeze dried candy generally have changed and could change rapidly, and, if we are unable to respond quickly to new trends, our business may be adversely affected. Our business is focused in part on the development, manufacture, marketing, and sale of freeze dried treats.
Our executive officers or key personnel could terminate their employment with us at any time without penalty. In addition, we do not maintain key person life insurance policies on any of our employees.
In addition, we do not maintain key person life insurance policies on any of our employees.
We rely on a small number of suppliers to provide our raw materials for certain of our treats, and our supply chain may be interrupted and prevent us from obtaining the necessary materials we need to operate. We rely on suppliers and vendors to meet our high-quality standards and supply products in a timely and efficient manner.
We rely on Trea Grove, a sole supplier, for the manufacture and distribution of our treats, and our supply chain may be interrupted and prevent us from obtaining the necessary materials we need to operate.
Further, some of our manufacturing know-how and process had been implemented by or with our prior co-manufacturers. As a result, we may not be able to prevent others from using similar processes, which could adversely affect our business.
In addition, others may independently discover our trade secrets, in which case we would not be able to assert trade secret rights against such parties. Further, some of our manufacturing know-how and process had been implemented by or with our prior co-manufacturers.
The FDCA, which governs the shipment of foods in interstate commerce, generally does not distinguish between intentional and unknowing, non-negligent violations of the law’s requirements. Most state and local laws operate similarly.
Even inadvertent, non-negligent or unknowing violations of federal, state, or local regulatory requirements could expose us to adverse governmental action and materially adversely affect our business, operating results, and financial condition. The FDCA, which governs the shipment of foods in interstate commerce, generally does not distinguish between intentional and unknowing, non-negligent violations of the law’s requirements.
Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could harm our business. We have never paid dividends on our common stock and we do not intend to pay dividends for the foreseeable future.
We have never paid dividends on our common stock and we do not intend to pay dividends for the foreseeable future. We have never declared or paid any dividends on our common stock and do not intend to pay any dividends in the foreseeable future.
We also expect to issue additional shares of our common stock to directors, officers, employees, and consultants pursuant to our equity incentive plans.
The conversion of the Series AA Preferred Stock and/or the Series AAA Preferred Stock would result in substantial dilution to the percentage of ownership a holder of our common stock holds prior to any such conversion. We also expect to issue additional shares of our common stock to directors, officers, employees, and consultants pursuant to our equity incentive plans.
In addition, we purchase and use significant quantities of cardboard, film, and plastic to package our products. The costs of these products may also fluctuate based on a number of factors beyond our control, including changes in the competitive environment, availability of substitute materials, and macroeconomic conditions.
The costs of these products may also fluctuate based on a number of factors beyond our control, including changes in the competitive environment, availability of substitute materials, and macroeconomic conditions. Such cost increases could adversely affect our operating results. We may not be able to protect our intellectual property and proprietary technology adequately, which may impact our commercial success.
These broad market and industry fluctuations may negatively impact the trading price of our common stock. 26 Table of Contents In the past, companies that have experienced volatility in the trading of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future.
In the past, companies that have experienced volatility in the trading of their securities have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could harm our business.
We rely on a combination of copyrights, trademarks, trade dress, trade secrets, and trademarks laws, as well as confidentiality agreements and other contractual restrictions, to protect our intellectual property. However, these legal means afford only limited protection and may not adequately protect our intellectual property or permit us to gain or keep any competitive advantage.
However, these legal means afford only limited protection and may not adequately protect our intellectual property or permit us to gain or keep any competitive advantage. Our trademarks, including our Sow Good logo, are valuable assets that reinforce our brand and consumers’ favorable perception of our products.
Further, freeze dried candy as a market entrant is in its nascent stage and may not see wide-spread acceptance.
Further, freeze dried candy as a market entrant is in its nascent stage and has not seen wide-spread acceptance. On the contrary, the freeze dried candy category has seen a significant decline in sales recently which has further negatively impacted our results of operations and financial condition.
In addition, the price of candy, which is currently our main ingredient in our products, can be volatile. The candy of the quality we seek tends to trade on a negotiated basis, depending on supply and demand at the time of the purchase.
The candy of the quality our productions require tends to trade on a negotiated basis, depending on supply and demand at the time of the purchase. An increase in pricing of any candy that we are going to use in our products could have a significant adverse effect on the profitability of our products.
Our trademarks, including our Sow Good logo, are valuable assets that reinforce our brand and consumers’ favorable perception of our products. We also rely on unpatented proprietary expertise, recipes and formulations, and other trade secrets and copyright protection to develop and maintain our competitive position.
We also rely on unpatented proprietary expertise, recipes and formulations, and other trade secrets and copyright protection to develop and maintain our competitive position. Our continued success depends in part upon our ability to protect and preserve our intellectual property.
These factors subject us to shortages or interruptions in product supplies, which could adversely affect our revenue and profits. We rely on our suppliers to meet our quality standards and to supply ingredients and other products in a timely and safe manner, and in accordance with our product specifications.
These factors subject us to shortages or interruptions in product supplies, which could adversely affect our revenue and profits. The price of candy, which is currently our main ingredient in our products, can be volatile.
We may not be able to protect our intellectual property and proprietary technology adequately, which may impact our commercial success. We believe that our intellectual property and proprietary technology has substantial value and has contributed significantly to the success of our business.
We believe that our intellectual property has substantial value and has contributed significantly to the success of our business. We rely on a combination of copyrights, trademarks, trade dress, trade secrets, and trademarks laws, as well as confidentiality agreements and other contractual restrictions, to protect our intellectual property.
Any failure by us to anticipate or respond adequately to such changes could have a material adverse effect on our financial condition, operating results, liquidity, cash flow and our operational performance.
Such failures could have a material adverse effect on our financial condition and operations.
In the years ended December 31, 2024 and December 31, 2023, we incurred net losses of approximately $3.6 million and $3.1 million, respectively.
In the years ended December 31, 2025 and December 31, 2024, we incurred net losses from continuing operations of approximately $6.8 million and $11.8 million, respectively. We expect to continue to incur operating losses in the near term as we pursue strategic alternatives, invest in brand development, marketing, product support, personnel, and public company infrastructure.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+1 added−0 removed9 unchanged
Biggest changeThe Audit Committee is responsible for establishing and monitoring the integrity and effectiveness of controls and other procedures, including controls and procedures related to managing material risks from cybersecurity threats, which are designed to ensure that (1) all information required to be disclosed is recorded, processed, summarized, and reported accurately and on a timely basis, and (2) all such information is accumulated and communicated to management and the Company’s board of directors, as appropriate, to allow for timely decisions regarding such disclosures. 30 Table of Contents The Company’s Information Technology Manager oversees the Company’s incident response plan and related processes designed to assess and manage material risks, if any, from cybersecurity threats.
Biggest changeThe Audit Committee is responsible for establishing and monitoring the integrity and effectiveness of controls and other procedures, including controls and procedures related to managing material risks from cybersecurity threats, which are designed to ensure 22 Table of Contents that (1) all information required to be disclosed is recorded, processed, summarized, and reported accurately and on a timely basis, and (2) all such information is accumulated and communicated to management and the Company’s board of directors, as appropriate, to allow for timely decisions regarding such disclosures.
The Company’s Information Technology Manager or a delegate thereof also prepares a report for the Audit Committee and the Company’s board of directors concerning material risks, if any, from cybersecurity threats at least once per quarter, and more often to the extent necessary pursuant to the escalation criteria set forth in the Company’s processes described herein.
The Company’s Information Technology Consultant or a delegate thereof also prepares a report for the Audit Committee and the Company’s board of directors concerning material risks, if any, from cybersecurity threats at least once per quarter, and more often to the extent necessary pursuant to the escalation criteria set forth in the Company’s processes described herein.
Further, the Company’s Information Technology Manager is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents pursuant to reports prepared by consultants, auditors, and other third parties retained by the Company, if necessary, to investigate cybersecurity incidents.
Further, the Company’s Information Technology Consultant is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents pursuant to reports prepared by consultants, auditors, and other third parties retained by the Company, if necessary, to investigate cybersecurity incidents.
The Company's Information Technology Manager is also informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents pursuant to notification criteria set forth in the Company’s contracts with third-party service providers.
The Company’s Information Technology Consultant is also informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents pursuant to notification criteria set forth in the Company’s contracts with third-party service providers.
The Company’s Information Technology Manager informs the Audit Committee of cybersecurity incidents that may be material pursuant to escalation criteria set forth in the Company’s incident response plan and related processes.
The Company’s Information Technology Consultant informs the Audit Committee of cybersecurity incidents that may be material pursuant to escalation criteria set forth in the Company’s incident response plan and related processes.
The Information Technology Manager also coordinates with any consultants, auditors and other third parties to assess and manage material risks, if any, from cybersecurity threats. The Company’s Information Technology Manager is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents pursuant to criteria set forth in the Company’s incident response plan and related processes.
The Company’s Information Technology Consultant is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents pursuant to criteria set forth in the Company’s incident response plan and related processes.
Added
The Company’s has hired an Information Technology Consultant who oversees the Company’s incident response plan and related processes designed to assess and manage material risks, if any, from cybersecurity threats. The Information Technology Manager also coordinates with any consultants, auditors and other third parties to assess and manage material risks, if any, from cybersecurity threats.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−3 removed0 unchanged
Biggest changeOur principal executive office and manufacturing facility is located in Irving, Texas, where we lease approximately 20,945 square feet of space under a lease agreement with an entity owned entirely by Ira Goldfarb that expires in September 2025, subject to two options to extend the term of the lease for successive five-year periods.
Biggest changeITEM 2. PRO PERTIES We do not own any real property. Prior to December 31, 2025, our principal executive office and manufacturing facility was located in Irving, Texas, where we leased approximately 20,945 square feet of space under a lease agreement with an entity owned entirely by Ira Goldfarb, a related party.
In addition to our principal executive office and food manufacturing facility, we lease approximately 51,264 square feet and 9,900 square feet at two separate warehouse facilities located in Irving, Texas, which we use to receive, store, package, and distribute our products, as well as for office and administrative purposes.
Concurrently with our Asset Sale, the Company exited the lease on December 31, 2025. The Company leases a 9,900 square foot warehouse facility located in Dallas, Texas, which we use to receive, store, package, and distribute our products, as well as for office and administrative purposes. We believe that this facility is sufficient to meet our current needs.
Removed
ITEM 2. PRO PERTIES We do not own any real property.
Removed
We also lease approximately 324,000 additional square feet for industrial and manufacturing space, in Dallas, Texas. The Company also subleases approximately 141 rentable square meters in Mexico City, Mexico, which the Company uses as office space. The term of the sublease is approximately seventeen months and does not have a renewal period.
Removed
We believe that these facilities are sufficient to meet our current needs. We intend to expand our facilities or add new facilities as we grow, and we believe that suitable additional space will be available as needed to accommodate expansion of our operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+12 added−18 removed4 unchanged
Biggest changeHigh Low Fiscal Year Ended December 31, 2024 First Quarter $ 10.50 $ 7.13 Second Quarter $ 23.68 $ 9.75 Third Quarter $ 23.56 $ 10.32 Fourth Quarter $ 11.50 $ 2.04 Fiscal Year Ended December 31, 2023 First Quarter $ 4.40 $ 2.00 Second Quarter $ 7.00 $ 3.50 Third Quarter $ 7.00 $ 3.75 Fourth Quarter $ 10.05 $ 6.19 As of March 25, 2025, there were approximately 346 record holders of our common stock, not including shares held in “street name” in brokerage accounts which is unknown, and 11,383,060 shares of common stock outstanding on record.
Biggest changeHigh Low Fiscal Year Ended December 31, 2025 First Quarter $ 4.12 $ 0.92 Second Quarter $ 1.12 $ 0.52 Third Quarter $ 2.12 $ 0.51 Fourth Quarter $ 1.01 $ 0.23 Fiscal Year Ended December 31, 2024 First Quarter $ 10.50 $ 7.13 Second Quarter $ 23.68 $ 9.75 Third Quarter $ 23.56 $ 10.32 Fourth Quarter $ 11.50 $ 2.04 As of March 26, 2026, there were approximately 331 record holders of our common stock, not including shares held in “street name” in brokerage accounts which is unknown, and 13,328,469 shares of common stock outstanding on record.
The following table sets forth, for the fiscal quarters indicated, the high and low bid information for our common stock, as reported on the The Nasdaq Capital Market or OTC Markets, as applicable.
The following table sets forth, for the fiscal quarters indicated, the high and low bid information for our common stock, as reported on The Nasdaq Capital Market or OTC Markets, as applicable.
Unregistered Issuance of Equity Securities The following issuances of our securities during the twelve months ended December 31, 2024 were exempt from the registration requirements of the Securities Act of 1933 pursuant to Section 4(a)(2) thereof and/or Rule 506 of Regulation D promulgated thereunder.
Unregistered Issuance of Equity Securities The following issuances of our securities during the twelve months ended December 31, 2025 were exempt from the registration requirements of the Securities Act of 1933 pursuant to Section 4(a)(2) thereof and/or Rule 506 of Regulation D promulgated thereunder.
MARKET FOR REGISTRANT ’ S COMMO N EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock On May 2, 2024, trading of the Company’s common stock commenced on the Nasdaq Capital Market stock exchange under the symbol “SOWG.” Prior to that, shares of our common stock traded on the over-the-counter market and were quoted on the OTCQB tier of the OTC Markets under the symbol “SOWG.” On March 25, 2025, the closing price of our common stock was $1.13.
MARKET FOR REGISTRANT ’ S COMMO N EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock On May 2, 2024, trading of the Company’s common stock commenced on the Nasdaq Capital Market stock exchange under the symbol “SOWG.” Prior to that, shares of our common stock traded on the over-the-counter market and were quoted on the OTCQB tier of the OTC Markets under the symbol “SOWG.” On March 26, 2026, the closing price of our common stock was $0.54.
Removed
The Company sold 12,374 shares of its common stock, par value $0.001 at a price of $2.05 per share to Claudia and Ira Goldfarb pursuant to a Stock Purchase Agreement, dated as of December 31, 2024.
Added
On December 31, 2025, the Company entered into a Securities Purchase Agreement with David Lazar for the private placement of two tranches of convertible preferred stock (.
Removed
On March 28, 2024, the Company raised $3,738,078 of capital from the sale of 515,597 newly issued shares of common stock at a share price of $7.25 in a private placement exempt from the registration requirements of the Securities Act of 1933 pursuant to Section 4(a)(2) thereof.
Added
The Company completed the sale of the first tranche by issuing 1,500,000 shares of Series AA Preferred Stock with proceeds to the Company of $3,000,000, which were used to pay down debt, reduce headcount, and for operational purposes.
Removed
Investors in the private placement included Sow Good’s Chief Executive Officer and Executive Chairman, in addition to certain other Sow Good board members, related parties, and accredited investors. The proceeds were used in funding incremental capital expenditures and general operating expenses.
Added
Pursuant to the Securities Purchase Agreement, the Company expects to consummate the sale of the second tranche with the issuance of 1,500,000 shares of Series AAA Preferred Stock for additional proceeds of $3,000,000 in March 2026.
Removed
On May 2, 2024, the Company priced its registered underwritten public offering of 1,200,000 shares of the Company’s common stock, par value $0.001 at a price of $10.00 per share.
Added
The terms of the Series AAA Preferred Stock are substantially similar to the terms of the Series AA Preferred Stock, except that the Series AAA Preferred Stock are redeemable at a price of $200 per share, and each share of Series AA Preferred Stock is initially convertible into 14 shares of Common Stock where each share of Series AAA Preferred Stock is initially convertible into 250 shares of Common Stock (subject to adjustment as provided in the Series AAA certificate of designations).
Removed
In addition, the Company granted the underwriters a 30-day overallotment option to purchase up to 180,000 additional shares of common stock and issued to the underwriters warrants to purchase 120,000 shares of Common Stock. On May 1, 2024, the Company received approval to list its common stock on the Nasdaq Capital Market stock exchange (“Nasdaq”).
Added
On April 28, 2025, the Company restructured its outstanding current debt through the issuance of Convertible Notes in a dollar-for-dollar exchange.
Removed
Trading on Nasdaq commenced on May 2, 2024. On May 9, 2024, the underwriters purchased all of the additional shares 32 Table of Contents pursuant to the full exercise of their overallotment option. Including proceeds from the additional shares, the proceeds from the public offering were approximately $11,974,976 net of offering expenses and underwriting discounts and commissions.
Added
On April 28, 2025, the Company entered into an exchange agreement (the “Exchange Agreement”) with Claudia and Ira Goldfarb and Lyle Berman for the exchange of the Company’s outstanding promissory notes (the “Outstanding Notes”) with an aggregate principal amount of $2.7 million, maturity dates ranging from April 8, 2025 to August 23, 2025 and interest rates ranging from 24 Table of Contents 6% to 8%.
Removed
The proceeds are currently anticipated to be used for general corporate purposes, which may include funding working and growth capital, the expansion of our sales and marketing function and the reduction of certain tranches of our indebtedness.
Added
Pursuant to the Exchange Agreement, holders exchanged their Outstanding Notes for new senior convertible promissory notes (the “Convertible Notes”) in an amount equal to $2.8 million, the aggregate principal amount of the Outstanding Notes, plus accrued and unpaid interest thereunder.
Removed
On April 15, 2024, the Company issued 2,186,250 shares of its common stock in connection with the exercise of warrants that were issued between December 2021 and May 2023 (the “Warrants”), with exercise prices varying from $2.21 to $2.60 (the “Warrant Exercise”). None of the Warrants were amended prior to or in connection with the Warrant Exercise.
Added
The Convertible Notes have a maturity date of April 30, 2030 and will pay interest semiannually in arrears on May 1 and November 1 beginning on November 1, 2025.
Removed
Each of the exercising holders of warrants (collectively, the “Holders”), received its warrants in connection with the incurrence by the Company of indebtedness pursuant to various tranches of promissory notes issued between December 2021 and May 2023 (collectively, the “Notes”). The Warrants were classified as permanent equity at inception.
Added
At the Company’s election, interest payable on an interest payment date may be added to the principal amount of the Convertible Note on the applicable interest payment date and will no longer be owed to holders of the Convertible Notes.
Removed
Due to a redemption feature in the Warrants allowing the Company to redeem the Warrants for $0.001 per Warrant if the daily volume weighted average price per share over thirty consecutive trading days is above $9.00, the Company received indications of intent to exercise Warrants from various Holders given the recent increase in trading price of the Company's common stock.
Added
The Convertible Notes are convertible at the election of the holders, in whole or in part, into shares of common stock based on a price per share equal to the average closing price of such common stock for the five trading days immediately prior to the execution of and entry into the Convertible Notes, with such conversion prices ranging from $0.62 to $0.63.
Removed
With authorization from the Company's Board of Directors, each of the Holders was provided an opportunity to, and agreed to, amend certain of such Holder’s Notes (the “Notes Amendment”) to allow for the partial prepayment of principal in an aggregate amount equal to the exercise price of such Holder’s Warrants.
Added
The Convertible Notes are senior in right of payment to all existing and future debt obligations of the Company and will be secured by all existing and future assets of the Company.
Removed
In addition to the Notes Amendment, certain of the Holders elected use a portion of the accrued but unpaid interest under such Holder’s Notes to pay the exercise price of the Warrants.
Added
The Convertible Notes are redeemable by the Company at any time upon ten days’ notice and at the option the holders for the principal amount thereof plus interest, beginning on January 1, 2026.
Removed
Certain of the Notes were repaid in full as a result of the Warrant Exercise and thereby did not need to be amended pursuant to the Notes Amendment (the Warrant Exercise, whether by partial or full repayment of principal, or by election to use a portion of accrued but unpaid interest under the Notes, together with the Notes Amendment, the “Warrant Exercise Transaction”).
Removed
As a result of the Warrant Exercise Transaction, excluding the impact of deferred debt costs, the Company’s debt was reduced by $5,200,362, accrued interest payable was reduced by $98,750, common equity was increased by $5,299,112 and the Company issued an aggregate of 2,186,250 shares of common stock.
Removed
During the twelve months ended December 31, 2024, the Company issued 50,459 shares of common stock upon the exercise of stock options by employees, directors, and consultants under its 2020 Stock Option Plan. The aggregate proceeds from the exercise of these options were approximately $163,854.
Removed
The proceeds were used for general corporate purposes, which include capital expenditures for the expansion of our production capacity, funding working and growth capital, the expansion of our sales and marketing function and the reduction of certain tranches of our indebtedness.
Removed
During the twelve months ended December 31, 2024, the Company issued 52,500 shares of common stock upon the exercise of warrants by directors, and consultants under issued in 2020 as compensation for personal guarantees of debt. The aggregate proceeds from the exercise of these warrants were approximately $210,000.
Removed
The proceeds were used for general corporate purposes, which include capital expenditures for the expansion of our production capacity, funding working and growth capital, the expansion of our sales and marketing function and the reduction of certain tranches of our indebtedness.

Item 7. Management's Discussion & Analysis

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

38 edited+44 added−68 removed8 unchanged
Biggest changeProvision for Income Taxes The Company maintains a full valuation allowance related to our net deferred tax assets, primarily due to our historical net loss position. For each of the twelve months ended December 31, 2024 and 2023, the Company recognized federal income tax expense of $123,579, and $0, respectively.
Biggest changeThe decreased net loss was due primarily to the decreased salaries and benefits of $3.3 million, decreased professional services of $956,375, and decreased other general and administrative costs of $531,112. 29 Table of Contents Provision for Income Taxes The Company maintains a full valuation allowance related to our net deferred tax assets, primarily due to our historical net loss position.
Pursuant to the terms of the 2023 Lease Agreement, beginning on November 1, 2023 the Company leases approximately 51,264 rentable square feet at Stemmons 10, 308 Mockingbird Lane, Dallas, TX 75247 for a term of approximately five years and two months, which the Company intends to use as warehousing and distribution space.
Pursuant to the terms of the 2023 Lease Agreement, beginning on November 1, 2023 the Company leases approximately 51,264 rentable square feet at Stemmons 10, 308 Mockingbird Lane, Dallas, TX 75247 for a term of approximately five years and two months (the “Initial Term”), which the Company intends to use as warehousing and distribution space.
These factors and trends in our business have driven 34 Table of Contents fluctuations in revenues over the periods presented and are expected to be key drivers of our results of operations and liquidity position for the foreseeable future.
These factors and trends in our business have driven fluctuations in revenues over the periods presented and are expected to be key drivers of our results of operations and liquidity position for the foreseeable future.
Interest Expense Interest expense consists primarily of the cash interest expense on outstanding debt and the amortization of the debt discount created upon the issuance of warrants in connection with debt. Interest Income Interest income consists primarily of the interest on short-term U.S Treasury Bonds.
Interest Expense Interest expense consists primarily of the cash interest expense on outstanding debt and the amortization of the debt discount created upon the issuance of warrants in connection with debt. 27 Table of Contents Interest Income Interest income consists primarily of the interest on short-term U.S Treasury Bonds.
The Lease provides for graduated rent payments starting at 40 Table of Contents $122,175 per month, and increasing up to $297,289.14 per month by the end of the Lease, plus taxes, insurance and common area maintenance costs. The Company is required to provide a security deposit in the amount of $1,000,000 in connection with the Lease.
The Lease provides for graduated rent payments starting at $122,175 per month, and increasing up to $297,289.14 per month by the end of the Lease, plus taxes, insurance and common area maintenance costs. The Company was required to provide a security deposit in the amount of $1,000,000 in connection with the Lease.
Customer acquisition in these channels depends on, among other things, our go-to-market function and our ability to meet the demand of customers who require large volumes of products.
Customer acquisition in these channels depends on, among other things, our go-to-market function and our ability to meet the demand of customers who require large volumes of products. Impact of inflation and other factors on our supply chain and operations.
Contractual Obligations and Commitments The Company is a party to a real property lease for its 20,945 square foot facility at 1440 N. Union Bower Rd., Irving, TX 75061, under which an entity owned entirely by Ira Goldfarb is the landlord.
The Company was party to a real property lease for its 20,945 square foot facility at 1440 N. Union Bower Rd., Irving, TX 75061, under which an entity owned entirely by Ira Goldfarb, a related party.
For each of the years ended December 31, 2024 and 2023, we have determined that we have one operating segment and one reportable segment. 36 Table of Contents Results of Operations for the Years Ended December 31, 2024 and December 31, 2023.
For each of the years ended December 31, 2025 and 2024, we have determined that we have one operating segment and one reportable segment. Results of Operations for the Years Ended December 31, 2025 and December 31, 2024.
Provision for Income Taxes The Company recognized federal income tax of $123.6 thousand, and $0, for the twelve months ended December 31, 2024 and 2023, respectively.
Provision for Income Taxes The Company recognized federal income tax of $0 for the twelve months ended December 31, 2025 and 2024, respectively.
Given the nascent state of the freeze dried candy segment and the number of potential retailer and wholesaler customers, we also believe there is a significant growth opportunity with customer acquisition in both the retail and wholesale channels, domestically and internationally.
In addition, we have expanded our market to two Middle East distributors. Given the nascent state of the freeze dried candy segment and the number of potential retailer and wholesaler customers, we also believe there is a significant growth opportunity with customer acquisition in both the retail and wholesale channels, domestically and internationally.
Key Factors Affecting our Performance We believe the growth of our business and our future success is dependent upon many factors. While the factors and trends described below present significant opportunities for us, they also pose important challenges that we must successfully address to enable us to sustain the growth of our business and improve our results of operations.
While the factors and trends described below present opportunities for us, they also pose significant challenges that we must successfully address to enable us to sustain and grow of our business and improve our results of operations.
Year Ended December 31, 2024 2023 Net cash used in operating activities $ (9,426,745 ) $ (4,845,640 ) Net cash used in investing activities (5,927,876 ) (2,266,635 ) Net cash provided by financing activities 16,668,024 9,245,848 Net change in cash and cash equivalents $ 1,313,403 $ 2,133,573 Net cash used in operating activities was $9.4 million for the twelve months ended December 31, 2024, compared to $4.8 million of cash used in operating activities twelve months ended December 31, 2023.
Year Ended December 31, 2025 2024 Net cash used in operating activities $ (4,305,127 ) $ (9,426,745 ) Net cash provided by investing activities - (5,927,876 ) Net cash provided by financing activities 2,056,132 16,668,024 Net change in cash and cash equivalents $ (2,248,995 ) $ 1,313,403 Net cash used in continuing operating activities was $4.3 million for the twelve months ended December 31, 2025, compared to $4.4 million of cash used in continuing operating activities twelve months ended December 31, 2024.
The issuance of shares related to warrant exercises provided $5.3 million, in exchange for $5.2 million in repayment of notes payable, and $98,750 of repayment of interest during the twelve months ended December 31, 2024. In addition, another $1.6 million was used to repay borrowings during 2024.
This cash was raised pursuant multiple private and public offerings, and the issuance of shares related to warrant exercises provided $5.3 million, in exchange for $5.2 million in repayment of notes payable, and $98,750 of repayment of interest during the twelve months ended December 31, 2024.
The 2023 Lease Agreement may be extended for a period of five years, at the option of the Company, at a rate to be based on a fair market rent rate determined at the time of the extension. Off-Balance Sheet Arrangements None.
The 2023 Lease Agreement may be extended for a period of five years, at the option of the Company, at a rate to be based on a fair market rent rate determined at the time of the extension. Effective September 30, 2025, the Company agreed with Prologis to exit the lease as of September 30, 2025.
The lease term is through September 15, 2025, with two five-year options to extend, at a monthly lease term of $10.0 thousand, with approximately a 3% annual escalation of lease payments commencing September 15, 2021. On May 22, 2024, the Company entered into an industrial lease with USCIF Pinnacle Building B LLC, a Delaware limited liability company.
The lease term is through September 15, 2025, with two five-year options to extend, at a monthly lease term of $10.0 thousand, with approximately a 3% annual escalation of lease payments commencing September 15, 2021.
Impact of inflation and other factors on our supply chain and operations. We expect supplies and prices of the ingredients that we are going to use to be affected by a variety of factors, such as weather, seasonal fluctuations, demand, politics and economics in the producing countries.
We expect supplies and prices of the ingredients that we are going to use to be affected by a variety of factors, such as war, weather, seasonal fluctuations, demand, politics and economics in the producing countries. These factors subject us to shortages or interruptions in product supplies, which could adversely affect our revenue and profits.
If actual results differ from these estimates, adjustments are recognized in the period they become known. Significant accounting policies are detailed in Note 2 of the Consolidated Financial Statements. Inventory Inventories are stated at the lower of cost or net realizable value and are adjusted for obsolescence, damage, and excess stock as necessary.
If actual results differ from these estimates, adjustments are recognized in the period they become known. Significant accounting policies are detailed in Note 2 of the Consolidated Financial Statements.
Salaries and benefits included amortization of stock options granted to employees and officers for the twelve months ended December 31, 2024 of $4.4 million, compared to $599.9 thousand for the twelve months ended December 31, 2023, an increase of $3.8 million, or 638%, mainly due to the amortization of performance shares granted December 15, 2023.
Salaries and benefits included amortization of stock options granted to employees and officers for the twelve months ended December 31, 2025 of $1.4 million, compared to $4.4 million for the twelve months ended December 31, 2024, decrease of $3.0 million, or -68%, mainly due to forfeitures of unvested stock options during the fourth quarter of 2025.
Professional services Professional services were $1.6 million for the twelve months ended December 31, 2024, compared to $688.0 thousand for the twelve months ended December 31, 2023, an increase of $901.3 thousand, or 131%.
Professional services Professional services were $838.7 thousand for the twelve months ended December 31, 2025, compared to $1.6 million for the twelve months ended December 31, 2024, a decrease of $750.6 thousand, or (47%).
Liquidity and Capital Resources The following table summarizes our total current assets, liabilities and working capital at December 31, 2024 and December 31, 2023.
For each of the twelve months ended December 31, 2025 and 2024, the Company recognized federal income tax expense of $0, and $0, respectively. Liquidity and Capital Resources The following table summarizes our total current assets, liabilities and working capital at December 31, 2025 and December 31, 2023.
Operating Expenses Our operating expenses consist of general and administrative expenses, which includes salaries and benefits expenses, professional services expenses and other general and administrative expenses. We expect our general and administrative expenses will increase as our business grows.
We expect our general and administrative expenses will increase as our business grows.
Ability to Compete Against Competitors with Greater Resources and Market Clout We operate in a highly competitive industry against competitors with significantly greater financial and other resources.
As a result of the slowdown in the market for freeze dried candy, the Company has transitioned to a capital-light model for the duration of the Distribution Agreement. Ability to Compete Against Competitors with Greater Resources and Market Clout We operate in a highly competitive industry against competitors with significantly greater financial and other resources.
Net loss Pretax net loss for the twelve months ended December 31, 2024 was $3.6 million, compared to a pretax net loss of $3.1 million during the twelve months ended December 31, 2023, an increased loss of $518.2 thousand.
Net loss on continuing operations Pretax net loss on continuing operations for the twelve months ended December 31, 2025 was $6.8 million, compared to a pretax net loss on continuing operations of $11.8 million during the twelve months ended December 31, 2024, a decreased loss of $5.0 million.
Ability to Grow Our Customer Base in Retail and Traditional Wholesale Distribution Channels We are currently growing our customer base in a variety of physical retail and traditional wholesale distribution channels.
Ability to Grow Our Customer Base in Retail and Traditional Wholesale Distribution Channels We are currently seeking to grow our customer base in a variety of physical retail and traditional wholesale distribution channels. Our products have launched in retailers nationwide from convenience and grocery stores to big-box retailers and distributors, such as Five Below, Albertsons and C&S Wholesale.
Our gross profit margin was 40.56% during the current period, compared to 20.4% during the comparative period. General and administrative expenses Salaries and benefits Salaries and benefits for the twelve months ended December 31, 2024 were $7.8 million, compared to $2.3 million for the twelve months ended December 31, 2023, an increase of $5.5 million, or 238%.
General and administrative expenses Salaries and benefits Salaries and benefits for the twelve months ended December 31, 2025 were $4.4 million, compared to $7.6 million for the twelve months ended December 31, 2024, a decrease of $3.2 million, or (42%), related to decreased headcount.
The increase in cash used in operating activities of $4.6 million was primarily due to increased inventory. Net cash used in investing activities was $5.93 million for twelve months ended December 31, 2024, compared to $2.3 million for the twelve months ended December 31, 2023, an increase of $3.7 million.
The decrease in cash used in continuing operating activities of $0.6 million was primarily due to cash provided by changes in working capital. Cash used by discontinued operations was $0.6 million twelve months ended December 31, 2025 compared to cash used by discontinued operations of $13.2 million for the twelve months ended December 31, 2024.
Salaries, payroll tax and benefits other than the amortization of stock options increased $1.69 million, or 98% over the comparative period, as a result of personnel growth.
Salaries, payroll tax and benefits other than the amortization of stock options decreased $0.4 million, or 13% over the comparative period, as a result of decreased headcount. Severance cost of $2.4 million incurred in the fourth quarter of 2025 was included in discontinued operations.
Depreciation Depreciation of property and equipment was $826.9 thousand and $459.4 thousand, of which and $795.3 thousand and $355.3 thousand was allocated to cost of goods sold, resulting in net depreciation expense of $31.6 thousand and $104.1 thousand for the twelve months ended December 31, 2024 and 2023, respectively.
Depreciation Depreciation of property and equipment was $33.1 thousand and $31.6 thousand for the twelve months ended December 31, 2025 and 2024, respectively.
During the twelve months ended December 31, 2024, and 2023, cash used in investing activities was primarily used for additional freezers, with three new freezers put into production during 2024 and two freezers put into production during 2023, respectively.
Cash used in investing activities of discontinued operations during the twelve months ended December 31, 2025 was $0, compared to $5.9 million for the twelve months ended December 31, 2024, which was primarily used for additional freezers.
Net cash provided by financing activities was $16.7 million and $9.2 million for the twelve months ended December 31, 2024 and 2023, respectively.
Net cash provided by financing activities for continuing operations was $3.0 million and $0 for the twelve months ended December 31, 2025 and 2024, respectively. Net cash provided by financing activities for the twelve months ended December 31, 2025 consisted of $3.0 million of proceeds from the sale of 1,500,000 convertible preferred shares at $2.00 per share.
As of December 31, 2024, our balance of cash and cash equivalents was $3.7 million, compared to $2.4 million at December 31, 2023. We expect to continue to incur significant capital expenditures related to the development and operation of our freeze dried treat business.
The decreased working capital is mainly attributable to decreases in inventory of approximately $20.4 million and cash of $2.2 million. As of December 31, 2025, our balance of cash and cash equivalents was $1.5 million, compared to $3.7 million at December 31, 2024.
The Company is required to provide a deposit of guarantee in the amount of $5.25 thousand in connection with the Sublease Agreement. The Sublease Agreement does not have a renewal period. On October 26, 2023, the Company entered into a lease agreement with Prologis, Inc., a Maryland corporation.
On October 26, 2023, the Company entered into a lease agreement (the “2023 Lease Agreement”) with Prologis, Inc., a Maryland corporation.
Our ability to scale production and distribution capabilities and further increase the value of our brands is largely dependent on our success in deploying additional capital. Our plan for satisfying our cash requirements for the next twelve months is through cash on hand and additional financing in the form of equity or debt as needed.
Our plan for satisfying our cash requirements for the next twelve months is through cash on hand, however we will require additional financing in the form of equity or debt which may not be available on favorable terms, or at all. We may not have sufficient funds to sustain our operations for the next twelve months.
These notes mature on April 8, 2025. Cash Flows The following table summarizes our cash flows during the twelve months ended December 31, 2024 and 2023, respectively.
The Convertible Notes are redeemable by the Company at any time upon ten days’ notice and at the option the holders for the principal amount thereof plus interest, beginning on January 1, 2026. Cash Flows The following table summarizes our cash flows during the twelve months ended December 31, 2025 and 2024, respectively.
The increase was primarily due to higher professional service expenses incurred in connection with the growth of the company and our underwritten public offering. 37 Table of Contents Other general and administrative expenses Other general and administrative expenses for the twelve months ended December 31, 2024 was $5.1 million, compared to $1.4 million for the twelve months ended December 31, 2023, an increase of $3.7 million, or 266%.
Other general and administrative expenses Other general and administrative expenses for the twelve months ended December 31, 2025 was $1.3 million, compared to $1.9 million for the twelve months ended December 31, 2024, a decrease of $531.1 thousand, or (29%). The decrease is primarily attributable to a decrease of $388,506 in travel and entertainment costs.
Overview and Outlook Sow Good is a trailblazing U.S.-based freeze dried candy and snack manufacturer dedicated to providing consumers with innovative and explosively flavorful freeze dried treats.
Overview and Outlook Sow Good Inc. is a U.S.-based consumer packaged goods company that pioneered the freeze dried candy category.
December 31, December 31, 2024 2023 Current Assets $ 25,076,140 $ 10,378,639 Current Liabilities $ 7,364,541 $ 5,771,200 Working Capital $ 17,711,599 $ 4,607,439 As of December 31, 2024, we had working capital of $17.7 million, compared to working capital of $4.6 million as of December 31, 2023.
December 31, December 31, 2025 2024 Current Assets $ 3,392,778 $ 25,076,141 Current Liabilities $ 6,187,442 $ 4,891,426 Working Capital $ (2,794,664 ) $ 20,184,715 As of December 31, 2025, we had working capital of $2.8 million, compared to working capital of $20.2 million as of December 31, 2024.
Other expense In the twelve months ended December 31, 2024, other expense was $2.0 million, consisting of $1.5 million of interest expense on our notes payable and $696.5 thousand of loss on early extinguishment of debt. During the comparative twelve months ended December 31, 2023, other expense was $1.8 million, consisting of interest expense on our notes payable.
Other expense Other expense consisted primarily of interest expense on notes payable of $156.6 thousand and $741.2 thousand for the twelve months ended December 31, 2025 and 2024, respectively, and $57.6 thousand of impairment expense on long lived assets for the twelve months ended December 31, 2025.
Removed
Sow Good has harnessed the power of our proprietary freeze drying technology and product-specialized manufacturing facility to transform traditional candy into a novel and exciting everyday confectioneries subcategory that we call freeze dried candy.
Added
Since commencing commercial sales in the first quarter of 2023, Sow Good developed and scaled a proprietary freeze drying manufacturing operation dedicated to transforming traditional candy and snacks into novel, intensely flavorful treats it markets under the "hyper dried, hyper crunchy, hyper flavorful" brand positioning.
Removed
We began commercializing our freeze dried candy products in the first quarter of 2023, and as of December 31, 2024, we have twenty-one stock keeping units (“SKUs”) in our Sow Good Candy line of treats and three SKUs in our Sow Good Crunch Cream line.
Added
Recent Strategic Transactions On December 30, 2025, the Company completed a series of strategic transactions that fundamentally changed the nature of its operations.
Removed
We sell our treats using an omnichannel strategy primarily focused on the wholesale and retail channels with less than 2% of sales coming from e-commerce as of December 31, 2024. As of December 31, 2024, our treats are offered for sale in approximately 3,000 brick-and-mortar retail outlets in the United States.
Added
The Company sold substantially all of its manufacturing assets — including six proprietary freeze drying machines and other property and equipment with an aggregate net book value of approximately $10 million — to Trea Grove, LLC, a related party, for total consideration of $1.5 million.
Removed
We have custom-built a 20,945 square foot freeze drying facility in Irving, Texas.
Added
Concurrently, the Company entered into an exclusive Distribution Agreement with Trea Grove, LLC, pursuant to which Trea Grove serves as the exclusive worldwide distributor of Sow Good's remaining finished goods inventory, with the Company receiving 10% of gross receipts from customer sales. The Distribution Agreement has a term through July 31, 2026.
Removed
Freeze drying removes up to 99% of moisture from a product in its frozen state by applying a small amount of heat in an extremely low air pressure, near outer space-like environment, through the use of massive vacuum chambers, resulting in moisture being removed from the product at the speed of sound.
Added
Additionally, the Company completed a $3.0 million convertible preferred stock offering, the proceeds of which were used to pay down debt and for operational purposes. As a result of these transactions, the Company no longer operates manufacturing facilities and has transitioned to a capital-light model for the duration of the Distribution Agreement.
Removed
This process of removing moisture from the product, which can take up to twenty-four hours, concentrates its flavor, creating a “hyper dried, hyper crunchy, and hyper flavorful” snackable treat. Our freeze drying process and expertise allow us to easily expand our manufacturing into other freeze dried snacks, such as yogurt snacks.
Added
The Company's board and management are evaluating strategic alternatives for the business going forward. On December 31, 2025, the Company entered into a Securities Purchase Agreement with David Lazar for the private placement of two tranches of convertible preferred stock (.
Removed
Our commitment to providing the most flavorful and crunchy treats extends into the product packaging process, where our employees are dedicated to hand-packaging our treats through our precision packaging process in vigilantly managed low humidity conditions to protect our treats from reintroduction to moisture.
Added
The Company completed the sale of the first tranche by issuing 1,500,000 shares of Series AA Preferred Stock with proceeds to the Company of $3,000,000, which were used to pay down debt, reduce headcount, and for operational purposes.
Removed
We have built six bespoke freeze driers using proprietary technology tailored specifically to our products which allows us to freeze dry up to 24 million units of freeze dried candy per year, creating a truly state-of-the-art facility in Irving, Texas. We also have six additional freeze driers, which we can have operational by the end of 2025, as needed.
Added
Pursuant to the Securities Purchase Agreement, the Company expects to consummate the sale of the second tranche with the issuance of 1,500,000 shares of Series AAA Preferred Stock for additional proceeds of $3,000,000 in March 2026.
Removed
Sow Good, co-founded by Claudia and Ira Goldfarb, brings over a decade of manufacturing expertise to the consumer packaged goods (“CPG”) sector, specializing in advanced freeze-drying technology. Leveraging our proprietary technology, Sow Good delivers innovative, high-quality products with a long shelf life and natural preservation.
Added
The terms of the Series AAA Preferred Stock are substantially similar to the terms of the Series AA Preferred Stock, except that the Series AAA Preferred Stock are redeemable at a price of $200 per share, and each share of Series AA Preferred Stock is initially convertible into 14 shares of Common Stock where each share of Series AAA Preferred Stock is initially convertible into 250 shares of Common Stock (subject to adjustment as provided in the Series AAA certificate of designations).
Removed
Beyond product innovation, we are committed to job creation and positive community impact, making Sow Good a forward-thinking force in the industry. Our products have launched in retailers nationwide from convenience and grocery stores to big-box retailers, such as Five Below, Misfits Market/Imperfect Foods, TJX Canada, Hy-Vee, Cracker Barrel, 7/11, H-E-B, Kroger and Albertsons.
Added
In connection with the Private Placement the Company experienced a leadership transition with (i) Claudia Goldfarb stepping down as Chief Executive Officer while remaining with the Company as Chief Operating Officer and a member of the Company’s board of directors (the “Board”), (ii) members of the Board Chris Ludeman and Joe Mueller resigning from the Board in connection with the private placement and strategic asset sale, (iii) David Lazar being appointed Chief Executive Officer and elected to the Board, serving as the Board’s Chairman and (iv) David Natan being elected to the Board and serving as Audit Committee Chairman following Mr.
Removed
In addition, we sell a substantial portion of our products through distributors such as Redstone Foods, CB Distributors and Lipari Foods. We believe there is a significant growth opportunity in increasing our shelf presence, SKU portfolio, and number of stores with our existing customers.
Added
Ludeman’s resignation. Products Sow Good offers freeze dried candy and snack products. The freeze drying process removes up to 99% of moisture from products in their frozen state through the application of low heat in a near-vacuum environment, concentrating flavor and producing a uniquely crunchy texture with a long shelf life and natural preservation characteristics.
Removed
As we scale production, we will have the ability to increase the availability of our products to these customers in current locations and distribution to more of their stores, while also broadening our SKU portfolio offerings.
Added
A Distinctive and Trusted Brand Name We believe we have a distinctive brand that consumers trust and helps distinguish our product on crowded retail shelves.
Removed
Bolstering our distribution and sales force will be a key growth driver for Sow Good so more of our products are available wherever our consumers choose to shop, whether it be a retail store, convenience store, or directly online.
Added
Since Sow Good’s inception, we have invested heavily to elevate the Sow Good brand by creating a distinctive and cohesive brand design that sparks consumer curiosity and a desire to sample additional flavors carried by Sow Good.
Removed
To further support our retail launches with existing customers and strengthen our brand name, we are also introducing our product displays with distinctive designs and product highlights to enhance our visibility in current stores and educate new consumers on the advantages of freeze dried treats.
Added
In addition, we use premium packaging materials to communicate the high-quality nature of our products and differentiate ourselves from competitive offerings. 26 Table of Contents Key Factors Affecting our Performance Our future success is dependent upon many factors.
Removed
We believe this strategy will capture the attention of new consumers, further educate and attract current consumers, and ultimately, increase sales for our retailers. Our omnichannel distribution strategy has three key components: retailers, e-commerce, and distributors.
Added
The State of the Freeze Dried Candy Category While we observed the freeze dried candy category experience a significant rise in popularity during 2024 and the first half of 2025, we have observed market data showing a significant decline in sales in the freeze dried candy category toward the end of 2025.
Removed
In aggregate, this omnichannel strategy provides us with a diverse set of consumers and customer partners, leading to a larger total addressable market opportunity than is normally available to products sold only in grocery stores, along with an opportunity to develop a direct relationship with our customers at our website, www.thisissowgood.com and our social medial pages.
Added
This decline could be the result of a number of factors, including the disjointed nature of freeze dried candy providers and the variance in quality, the arrival of large multinational market entrants and their desire to reduce competition in the space, or the exhaustion of consumer appetite of freeze dried candy.
Removed
Our products have launched in retailers nationwide from convenience and grocery stores to big-box retailers, such as Five Below, Misfits Market/Imperfect Foods, TJX Canada, Hy-Vee, Cracker Barrel, 7/11, H-E-B, Kroger and Albertsons. In addition, we sell a substantial portion of our products through distributors such as Redstone, CB Distributors and Lipari Foods.
Added
Components of Results of Operations Revenues We recognize revenues from the sales of our freeze dried treats. The Company recognizes revenues when orders are shipped to customers. Operating Expenses Our operating expenses consist of general and administrative expenses, which includes salaries and benefits expenses, professional services expenses and other general and administrative expenses.
Removed
Ability to Expand Our Product Line Our goal is to substantially expand our product line over time to increase our growth opportunity and reduce product-specific risks through SKU diversification into multiple products, including freeze dried products beyond our freeze dried treats, such as yogurt snacks and jerky.
Added
The Company’s effective tax rates for the twelve months ended December 31, 2025 and 2024 differed from the federal statutory tax rate of 21% primarily due to a valuation allowance for the Company’s deferred tax assets and permanent differences.
Removed
Our pace of growth will be partially affected by the cadence and magnitude of new product launches over time. We believe the commercialization of any new products will require us to hire additional employees within our product design and commercialization team, thereby increasing our marketing expense, as well as research and development costs within our administrative expense.
Added
The following table summarizes selected items from the statement of operations for the years ended December 31, 2025 and December 31, 2024: Year Ended December 31, Increase / 2025 2024 (Decrease) % Change Revenues $ - $ - $ - 0 % Cost of goods sold - - - 0 % Operating expenses: General and administrative expenses: Salaries and benefits 4,410,288 7,614,215 (3,203,927 ) (42 %) Professional services 838,654 1,589,287 (750,633 ) (47 %) Other general and administrative expenses 1,323,667 1,854,779 (531,112 ) (29 %) Total general and administrative expenses 6,572,609 11,058,281 (4,485,672 ) (41 %) Depreciation and amortization 33,101 31,644 1,457 5 % Total operating expenses 6,605,710 11,089,925 (4,484,215 ) (40 %) Net operating loss (6,605,710 ) (11,089,925 ) 4,484,215 (40 %) Other expense: Loss on impairment of long lived assets (57,602 ) Interest expense (159,953 ) (741,204 ) 581,251 (78 %) Total other expense (217,555 ) (741,204 ) 581,251 (78 %) Net loss before tax provision $ (6,823,265 ) $ (11,831,129 ) $ 5,007,864 (42 %) Revenues As a result of the Asset Sale Agreement and Distribution Agreement entered into on December 30 and December 31, 2025, respectively, the Company exited its manufacturing and omnichannel sales business for freeze dried candy and related products.
Removed
These factors subject us to shortages or interruptions in product supplies, which could adversely affect our revenue and profits. In addition, we may face limits on the ability to source some of the candy for our freeze dried candy products.
Added
Under the new business model, the Company operates as a commission-based distribution agent and earns a percentage of distributor gross receipts from sales of Sow Good-branded products.
Removed
Seasonality Because we are early in our lifecycle of growth, it is difficult to discern the exact magnitude of seasonality affecting our business from a demand standpoint.
Added
Because the prior manufacturing and product sales activities were discontinued as part of these transactions, all revenues associated with the sale of freeze dried candy and related products have been reclassified to loss from discontinued operations for all periods presented. Accordingly, the Company recognized no revenue from continuing operations for the twelve months ended December 31, 2025 and 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed0 unchanged
Biggest changeForeign Currency Risk We did not hold any significant cash balances in foreign jurisdictions as of December 31, 2024. However, we anticipate that as our foreign operations grow, we will hold more cash in foreign jurisdictions, and thereby expose ourselves to greater currency fluctuation risk than we currently experience. 42 Table of Contents
Biggest changeForeign Currency Risk We did not hold any significant cash balances in foreign jurisdictions as of December 31, 2025. However, we anticipate that as our foreign operations grow, we will hold more cash in foreign jurisdictions, and thereby expose ourselves to greater currency fluctuation risk than we currently experience. 33 Table of Contents
QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK Commodity Price Risk We do not expect any significant effects from commodity price risk outside of inherent inflationary risks. 41 Table of Contents Interest Rate Risk We are not a party to agreements that subject us to floating rates of interest and do not anticipate entering into any transactions that would expose us to any direct interest rate risk.
QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK Commodity Price Risk We do not expect any significant effects from commodity price risk outside of inherent inflationary risks. 32 Table of Contents Interest Rate Risk We are not a party to agreements that subject us to floating rates of interest and do not anticipate entering into any transactions that would expose us to any direct interest rate risk.

Other SOWG 10-K year-over-year comparisons