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U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1933

For the transition period from ________ to _________

Commission file number 001-42037

SOW GOOD INC.

(Exact name of registrant as specified in its charter)


Delaware	27-2345075
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1440 N Union Bower Rd, Irving, Texas	75061
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (214) 623-6055

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange On Which Registered
Common stock, par value $0.001 per share	SOWG	The Nasdaq Capital Market

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of voting stock held by non-affiliates of the registrant was approximately $ 4,574,447 as of June 30, 2025 (computed by reference to the last sale price of a share of the registrant’s Common Stock on that date as reported by The Nasdaq Capital Market).

There were 13,328,469 shares outstanding of the registrant’s common stock as of March 26, 2026.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

We are including the following discussion to inform our existing and potential security holders generally of some of the risks and uncertainties that can affect our company and to take advantage of the “safe harbor” protection for forward-looking statements that applicable federal securities law affords.

From time to time, our management or persons acting on our behalf may make forward-looking statements to inform existing and potential security holders about our company. All statements other than statements of historical facts included in this report regarding our financial position, business strategy, plans and objectives of management for future operations and industry conditions are forward-looking statements. When used in this report, forward-looking statements are generally accompanied by terms or phrases such as “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “target,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” “may” or other words and similar expressions that convey the uncertainty of future events or outcomes. Items making assumptions regarding actual or potential future sales, market size, collaborations, trends or operating results also constitute such forward-looking statements.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward-looking statements include the following:

•

our ability to provide shareholder value through strategic alternatives, including potential partnerships, acquisitions and corporate transactions;

•

our ability to obtain the benefits of our recent private placement and strategic asset sale;

•

the consummation of the second tranche of our recent private placement;

•

the continued market for freeze-dried candy;

•

our ability to compete successfully in the highly competitive industry in which we operate;

•

our ability to maintain and enhance our brand;

•

our ability to successfully implement our growth strategies related to launching new products;

•

our ability to successfully enter new markets internationally;

•

the effectiveness and efficiency of our marketing programs;

•

our ability to manage current operations and to manage future growth effectively;

•

our future operating performance;

•

our ability to attract new customers or retain existing customers;

•

our ability to protect and maintain our intellectual property;

•

the government regulations to which we are subject;

•

our ability to maintain adequate liquidity to meet our financial obligations;

•

failure to obtain sufficient sales and distributions for our freeze dried product offerings;

•

the potential for supply chain disruption and delay;

•

the potential for transportation, labor, and raw material cost increases; and

•

other risks and uncertainties set forth under “Risk Factors.”

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. We have based these forward-looking statements and statements of belief on our current expectations and assumptions about future events as of the date of this report. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. Accordingly, results actually achieved may differ materially from expected results in these statements.

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Forward-looking statements speak only as of the date they are made. You should consider carefully the statements in “Item 1A. Risk Factors” and other sections of this report, which describe factors that could cause our actual results to differ from those set forth in the forward-looking statements.

Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, other than as may be required by applicable law or regulation. Readers are urged to carefully review and consider the various disclosures made by us in our reports filed with the United States Securities and Exchange Commission (the “SEC”) which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected.

NOTE REGARDING INDUSTRY AND MARKET DATA

This Annual Report contains market data and industry statistics and forecasts that are based on independent industry publications and other publicly available information. Although we believe these sources are reliable, we do not guarantee the accuracy or completeness of this information and we have not independently verified this information. In addition, the market and industry data and forecasts included in this report may involve estimates, assumptions and other risks and uncertainties and are subject to change based on various factors, including those discussed in Part I, “Item 1A. Risk Factors,” contained in this Annual Report. Accordingly, investors should not place undue reliance on this information.

Unless otherwise indicated, “the Company,” “we,” “our,” “us” and “Sow Good” are used in this report to refer to the businesses of Sow Good Inc. and its consolidated subsidiaries.

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PART 1

ITEM 1	Business	1
ITEM 1A	Risk Factors	7
ITEM 1B	Unresolved Staff Comments	22
ITEM 1C	Cybersecurity	22
ITEM 2	Properties	23
ITEM 3	Legal Proceedings	23
ITEM 4	Mine Safety Disclosures	23

PART II

ITEM 5	Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	24
ITEM 6	Selected Financial Data	25
ITEM 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
ITEM 7A	Quantitative and Qualitative Disclosures About Market Risk	32
ITEM 8	Financial Statements and Supplementary Data	34
ITEM 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	50
ITEM 9A	Controls and Procedures	50
ITEM 9B	Other Information	51

PART III

ITEM 10	Directors, Executive Officers, and Corporate Governance	52
ITEM 11	Executive Compensation	58
ITEM 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	66
ITEM 13	Certain Relationships and Related Transactions, and Director Independence	67
ITEM 14	Principal Accounting Fees and Services	71

PART IV

ITEM 15	Exhibits, Financial Statement Schedules	73
ITEM 16	Form 10-K Summary	76
	SIGNATURES	77

iii

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PART I

ITEM 1. BUSINESS

Overview

Sow Good Inc. is a U.S.-based consumer packaged goods company that pioneered the freeze dried candy category. 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.

Recent Strategic Transactions

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.

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”). 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. 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. 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).

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.

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. 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. 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.

Our Market Opportunity

We believe the candy category is stagnant, repetitive, and in need of revitalization to reengage and captivate consumers seeking innovative ways to satisfy their sweet cravings. We see our market opportunity existing at the intersection of two categories: the burgeoning freeze dried candy category and the non-chocolate confections 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. For these reasons, the Company has transitioned to a

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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.

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. 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. In addition, we use premium packaging materials to communicate the high-quality nature of our products and differentiate ourselves from competitive offerings.

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. 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.

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.

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. 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.

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. 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.

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.

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. 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. 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. Products are offered in a variety of flavor profiles, shapes, and pack sizes.

Supply Chain and Manufacturing

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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.

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.

Quality Control

We expect our manufacturing partners to operate in compliance with applicable FDA, USDA, and other regulatory requirements and to maintain food safety and quality certifications appropriate for the products manufactured. Our distribution partner is responsible for overseeing quality assurance processes, while we provide brand-level input regarding product standards and consumer expectations.

Sales Channels and Product Distribution

Sow Good-branded products are sold to retailers and distributors through our distribution partner. We do not sell products directly to retailers or consumers and do not maintain an e-commerce fulfillment operation. Products are distributed across conventional grocery, natural and specialty grocery, club, and convenience store channels, as well as other retail formats, depending on distribution partner relationships and market opportunities.

Sales and Marketing

We maintain a lean internal team focused on partner coordination. Our role is to support distribution efforts.

Competition

Sow Good competes in the freeze-dried candy and snack categories and, more broadly, within the packaged snack food market. Competition includes large multinational food companies, regional brands, and smaller specialty snack producers. Competitive factors include brand recognition, product differentiation, quality, price, innovation, distribution reach, and marketing effectiveness.

Culture, Employees and Human Capital Resources

As of December 31, 2025, we had a small team of employees primarily focused on executive management, finance, and partner coordination. We believe our culture emphasizes accountability and disciplined execution. Our human capital strategy is centered on retaining a lean, highly skilled workforce aligned with our asset-light business model.

We maintain TikTok, Instagram, and Facebook accounts under the username @thisissowgood. Our social media presence allows us to directly connect with our audience and field customer service requests.

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. Some of these competitors may have greater financial and other resources, longer operating histories, a broader assortment of product offerings, products that are well-accepted in the marketplace, more established relationships with retailers, and greater brand visibility among consumers.

Within the conventional packaged food category, our competitors include, but are not limited to, Nestlé S.A., The Hershey Company, Mars Inc., PepsiCo, Inc., Van Drunen Farms, Mondelēz International, Haribo. Within the freeze dried candy category, we believe our primary direct competitors are both larger companies, like Mars, Inc. or the Hershey Company, and smaller or local companies that have significantly lower production capacity, distribution and/or branding, and includes such firms such as Crazy Candy and Trendy Treats.

We believe the principal competitive factors for our business are taste, product quality, brand recognition and loyalty, price, convenience, product variety and innovation, customer service, access to retailer shelf-space, effectiveness of marketing and promotional activity, and the ability to respond to evolving customer preferences. 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.

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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 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. 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.

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. 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. 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.

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.

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. 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. 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. 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. We treat the confidential aspects of our brand strategy, product concepts, marketing plans, and commercial relationships as proprietary and take reasonable measures to maintain their confidentiality.

We no longer rely on proprietary manufacturing processes, equipment designs, or production-related trade secrets as part of our business model. Manufacturing 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. 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

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The regulatory environment surrounding information security and privacy is demanding, with the frequent imposition of new and changing requirements across our business. Various federal, state, and foreign legislative and regulatory bodies may expand current laws or regulations, enact new laws or regulations, or issue revised rules or guidance regarding privacy, data protection, information security, and consumer protection. We must comply with increasingly complex and rigorous laws and regulations regarding privacy and the collection, storage, use, processing, transfer, transmission, disclosure, and protection of personal and other data, which require us, among other things, to maintain reasonable and appropriate data security measures and to provide timely notice to individuals and regulators in the event that such personal information is compromised.

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. We have established and maintain an information security program, which is aligned with applicable standards and regulations, including Payment Card Industry Data Security Standard (“PCI-DSS”). In November 2020, California voters passed the California Privacy Rights Act (“CPRA”), which became fully effective on January 1, 2023. The CPRA imposed additional data privacy compliance requirements on companies covered by the legislation, including the expansion of consumers’ rights with respect to certain sensitive personal information. The CPRA also established a new regulatory agency dedicated to enforcing the requirements of the California Consumer Privacy Act (“CCPA”) and CPRA. The effects of the CCPA and CPRA may require us to continue to materially modify our data processing practices and policies and to incur substantial compliance-related costs and expenses. We must also comply with laws on advertising, including the Telephone Consumer Protection Act (“TCPA”) the Telemarketing Sales Rule, and Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM Act”).

Our team of professionals works to identify and mitigate risks, implement best practices, and continue to evaluate ways to improve our information security. These steps include data encryption in transit and at rest, network security, limiting and authorizing access controls, and multi-factor authentication for access to systems with data. We also employ regular system monitoring, logging, and alerting to retain and analyze the security state of our corporate and production infrastructure. In addition, we take appropriate steps to help ensure that appropriate security measures are maintained by the third-party vendors we use, including by conducting security reviews.

Government Regulation

The food industry is highly regulated. We and our suppliers are subject to extensive laws and regulations in the United States by federal, state, and local government authorities, or by federal, state, and local government authorities in other jurisdictions where they are located. These laws and regulations apply to many aspects of our business, including the manufacture, packaging, labeling, distribution, advertising, sale, quality, and safety of our products, as well as the health and safety of our employees and the protection of the environment.

Our business is subject to extensive regulation by the FDA and the U.S. Federal Trade Commission (“FTC”), and other federal, state, and local authorities in the United States, and any other jurisdictions in which we may manufacture or sell our products. Specifically, in the United States, we and our products are subject to the requirements of the FDA and regulations promulgated thereby. This comprehensive regulatory program governs the manufacturing, nutritional value, composition and ingredients, packaging, labeling, and safety of food. Under this program, the FDA requires that facilities that manufacture food products comply with a range of requirements, including hazard analysis and preventative controls regulations, GMPs, and supplier verification requirements. Our processing facilities are subject to periodic inspection by foreign, federal, state, and local authorities. For example, our Irving, Texas facility is subject to periodic inspections by the FDA and Occupational Safety and Health Administration to evaluate compliance with certain applicable requirements. We seek to comply with applicable laws and regulations through a combination of employing internal experience and expert personnel to monitor quality-assurance compliance, and we contract with third-party laboratories that conduct analyses of new products to establish nutrition labeling information and to help identify certain potential contaminants before distribution.

The FDA’s Foreign Supplier Verification Program requires that the U.S. owner or consignee of imported food take steps to verify that the foreign supplier of imported food is manufacturing the food in accordance with FDA requirements, that the importer understand what hazards the foreign supplier is controlling and how those hazards are controlled, and that this oversight program is documented. The regulation is being implemented using a tiered series of compliance dates based on the size of the U.S. importer and the foreign supplier. We have developed a program that we believe is in compliance with this regulation and are monitoring its ongoing implementation.

The FDA also requires that certain nutrition and product information appear on our product labels and, more generally, that our labels and labeling be truthful and not misleading. Similarly, the FTC requires that our marketing and advertising be truthful, not misleading, and not deceptive to consumers. We are also restricted from making certain types of claims about our products, including nutrient content claims, health claims, and claims regarding the effects of our products on any structure or function of the body, whether express or implied, unless we satisfy certain regulatory requirements and our representations are not misleading. Further, we must comply with additional laws impacting our advertising, including the TCPA, the Telemarketing Sales Rule, and the CAN-SPAM Act.

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In addition to federal regulatory requirements in the United States, certain states impose their own manufacturing and labeling requirements. For example, every state in which our products are manufactured requires facility registration with the relevant state food safety agency, and those facilities are subject to state inspection as well as federal inspection. Further, states can impose state-specific labeling requirements, such as Proposition 65 in California.

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.

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 operations, and those of our suppliers and any potential co-manufacturers, are also subject to various laws and regulations relating to environmental protection and worker health and safety matters.

Although we have implemented policies and procedures designed to comply with existing laws and regulations, we operate in a highly regulated environment with constantly evolving legal and regulatory frameworks. 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.

Corporate Information

Sow Good 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. Following the sale of substantially all manufacturing and operating assets and the entry into a long-term Distribution Agreement, the Company no longer manufactures products and instead earns a fixed percentage of distributor gross receipts from sales of Sow Good-branded products.

Formerly Black Ridge Oil & Gas, Inc. (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.

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 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. 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.

Available Information – Reports to Security Holders

Our website addresses are www.thisissowgood.com and www.sowginc.com. We make available on our www.sowginc.com website, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports after we electronically file those materials with, or furnish those materials to, the SEC, along with certain other materials. Electronic filings with the SEC are also available on the SEC internet website at www.sec.gov.

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ITEM 1A. RISK FACTORS

Summary Risk Factors

The risk factors described below are a summary of the principal risk factors associated with an investment in the Company. These are not the only risks we face. You should carefully consider these risk factors, together with the risk factors set forth in Item 1A of this Annual Report on Form 10-K and the other reports and documents filed by us with the SEC.

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We have a limited operating history in our current form and have incurred significant operating losses. As a result of continuing investments to support our brand and distribution strategy, we may not achieve or sustain profitability.

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The retail food and non-chocolate confectionary and freeze dried candy segments are highly competitive. If our competitors are more successful or offer better value to consumers, our business could decline.

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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.

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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.

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Any damage to our reputation or brand image could adversely affect our business or financial results.

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Fluctuations in various food and supply, transportation and shipping costs could adversely affect our operating results.

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We may not be able to protect our intellectual property and proprietary technology adequately, which may impact our commercial success.

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Food safety concerns and concerns about the health risk of our products may have an adverse effect on our business.

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Failure to manage inventory at optimal levels could adversely affect our business, financial condition and results of operations.

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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.

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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.

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The market price of our common stock is, and is likely to continue to be, highly volatile and subject to wide fluctuations.

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We have never paid dividends on our common stock and we do not intend to pay dividends for the foreseeable future.

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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.

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The concentration of our stock ownership limits our stockholders’ ability to influence corporate matters.

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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.

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A worsening of economic conditions or a decrease in consumer spending may adversely impact our ability to implement our business strategy.

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Risks Related to Our Operating History, Financial Position and Capital Needs

Sow Good commenced commercial sales of Sow Good-branded products in 2021 and expanded into freeze-dried candy and other snack categories in 2023. As a result of continued and accelerating declines of both our sales and the sales within the freeze dried candy category more broadly, in December 2025, we sold substantially all manufacturing and operating assets and entered into a long-term Distribution Agreement pursuant to which we transitioned to a commission-based, asset-light business model to pursue strategic alternatives. Under this model, we no longer manufacture products or own inventory and instead earn a fixed percentage of distributor gross receipts from sales of Sow Good-branded products.

Because this business model is relatively new, we have a limited operating history in our current form upon which to evaluate our performance, forecast future results, or assess the long-term sustainability of our operations. Our historical financial results were generated under a materially different vertically integrated manufacturing model and are not necessarily indicative of future results. This lack of operating history increases the uncertainty associated with our ability to accurately forecast revenues, expenses, cash flows, and working capital needs and to effectively plan our business.

Our future success depends on a number of factors, including the continued existence of the freeze dried candy category, our ability to find strategic alternatives in adjacent categories or other industries, our ability to build and maintain brand awareness, support product innovation, expand distribution through our distribution partner, and maintain productive relationships with third-party manufacturers and distributors. We must also effectively manage a lean corporate infrastructure while meeting the reporting, compliance, and governance obligations associated with being a public company. Our strategic priorities may need to evolve over time, and we may not be successful in adapting our strategy to changing market conditions, consumer preferences, or competitive dynamics.

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. Even if we succeed in increasing gross receipts generated by sales of Sow Good-branded products, we may not be able to generate commission revenue in amounts sufficient to offset our operating expenses.

We cannot assure that we will achieve profitability in the foreseeable future whether through the continued sale of freeze dried candy or through strategic alternatives, or, if achieved, that we will be able to sustain profitability. Failure to do so could materially and adversely affect our business, financial condition, results of operations, and the trading price of our common stock.

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. We have devoted substantially all our financial resources and efforts to developing our products, workforce, and manufacturing capabilities. Our long-term growth and success are dependent upon the freeze dried candy category’s return to growth, our ability to find strategic alternatives, 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. 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.

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. The amount of additional capital we may require, the timing of our capital needs and the availability of financing to fund those needs will depend on a number of factors, including our strategic initiatives and operating plans, the performance of our business and the market conditions for debt or equity financing. Although we believe various debt and equity financing alternatives will be available to us to support our working capital needs, financing arrangements on acceptable terms may not be available to us when needed. Additionally, these alternatives may require significant cash payments for interest and other costs or could be highly dilutive to our existing stockholders. Any such financing alternatives may not provide us with sufficient funds to meet our long-term capital requirements.

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:

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provide for additional capacity;

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increase our sales and marketing efforts and address competitive developments;

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provide for supply and inventory costs;

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fund development and marketing efforts of any future products or additional features to then-current products;

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acquire, license or invest in new technologies;

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acquire or invest in complementary businesses or assets; and

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finance capital expenditures and general and administrative expenses.

Our present and future funding requirements will depend on many factors, including:

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the health of the freeze dried candy category;

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our ability to achieve revenue growth and improve gross margins;

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the cost of expanding our operations and offerings, including our sales and marketing efforts;

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the effect of competing market developments; and

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costs related to international expansion.

The various ways we could raise additional capital carry potential risks. If we raise funds by issuing equity securities, dilution to our stockholders could result. Any equity securities issued also could provide for rights, preferences, or privileges senior to those of holders of shares of our common stock. If we raise funds by issuing debt securities, those debt securities would have rights, preferences, and privileges senior to those of holders of shares of our common stock. The terms of any debt securities issued or borrowings made pursuant to a credit agreement could impose significant restrictions on our operations. 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 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. In addition, we do not maintain key person life insurance policies on any of our employees. 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. This may also adversely affect our ability to execute our business strategy.

Our prior rapid growth has not been indicative of our future growth, and our limited operating history may make it difficult to assess our future viability.

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. We experienced significant declines in revenue during the third and fourth quarters of 2024 and throughout 2025 as we experience the impact of external competition and, in late 2025, the significant reduction in sales within the freeze dried candy category. For the year ended December 31, 2025, we reported $0.0 million of revenue from continuing operations as we exited the manufacturing and direct-sales business and transitioned to a commission-based distribution model in connection with the sale of substantially all operating assets and entry into a long-term Distribution Agreement.

Results of operations for the years ended December 31, 2025 and 2024 have been reclassified on our Statement of Operations as either a gain or loss on discontinued operations, net of tax. For the years ended December 31, 2025 and 2024, we reclassified a loss of $33.8 million and a gain of $8.1 million, respectively to discontinued operations.

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Our historical revenue growth rates have not been indicative of future results. We initially saw a rapid rise in sales alongside the growth of the freeze dried candy category. However, those sales plummeted with the entry of larger candy companies into the freeze dried candy category and the subsequent substantial decline of the freeze dried candy category more broadly. Under our current business model, we expect future revenues to consist solely of commission revenue based on a fixed percentage of distributor gross receipts from sales of Sow Good-branded products, while we pursue strategic alternatives. If product sales through our distribution partner increase, we expect our commission revenue to increase accordingly; however, the absolute level and growth rate of such revenue will depend on factors outside of our direct control, including the performance and execution of our distribution partner and broader market conditions.

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. 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.

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. Such endeavors may also involve significant risks and uncertainties, including distraction of management from current operations, greater than expected liabilities and expenses, inadequate return on capital, exposure to additional regulations and reliance on the performance of third-parties, any of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Risks Related to Our Business and Industry

We operate in a very competitive environment that is characterized by competition from a number of other retailers in the market in which we operate. 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.

Increased competition could hurt our business. The freeze dried candy category is fragmented and has seen a significant decline in sales during the fourth quarter of 2025, but remains very competitive. 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. 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. 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.

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, a related party, for total consideration of $1.5 million. 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. 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. This may be due to, among other reasons, problems with our suppliers’ and vendors’ businesses, finances, labor relations, ability to export or import materials, product quality issues, costs, production, insurance and reputation, as well as disease outbreaks or pandemics such as the COVID-19 pandemic, acts of war, terrorism, natural disasters, fires, earthquakes, flooding or other catastrophic occurrences. 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. Failure to find a suitable replacement,

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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.

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. 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. While we have not had supply chain disruptions to date, and believe that additional sources for our products' raw material and packaging, can be found. 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.

We have experienced a decline in revenues from the loss of significant customers which has adversely affected our results of operations and financial condition.

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. Certain of our significant customers entered into exclusivity agreements in 2024 with larger new market entrants that have significantly reduced our shelf space and revenue. If other customers enter into exclusivity arrangements with our competitors, or other factors occur limiting our shelf space with significant customers, our revenue will be further reduced. In addition, the freeze dried candy category has seen significant declines in sales, which has led to, and could further lead to, the loss of key customers.

Our business is focused in part on the development, manufacture, marketing, and sale of freeze dried treats. 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. 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. 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.

A key component of our business strategy involves maintaining the value and enhancing the visibility of our “Sow Good” brand. 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. Any negative publicity, regardless of its accuracy, could materially adversely affect our business. Brand value is often based on perceptions of subjective qualities, and any incident that erodes the loyalty of our customers, suppliers, or consumers, could significantly reduce the value of our brand and harm our business.

Any damage to our reputation or brand image could adversely affect our business or financial results.

Maintaining a good reputation is critical to our business. Our reputation or brand image has been affected by our product melting problems in 2024 and could be in the future adversely impacted by, among other things, any failure to maintain high ethical, social and environmental sustainability practices for our operations, the views of management and other stakeholders, our impact on the environment, public pressure from investors or policy groups to change our policies, consumer perceptions of our advertising campaigns, sponsorship arrangements or marketing programs, including opportunities we choose to forego due to management philosophy, consumer perceptions of our use of social media, or consumer perceptions of statements made by us, our employees and executives, agents or other third-parties. Negative publicity, including as a result of the social or political views of our management, employees, customers or vendors, or misconduct by our consumers, customers, vendors or employees, can also spread rapidly through social media. Should we not respond in a timely and appropriate manner to address negative publicity, our brand and reputation may be significantly harmed. 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.

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Fluctuations in various food and supply, transportation and shipping costs could adversely affect our operating results.

Supplies and prices of the ingredients that we are going to use to may be affected by a variety of factors, such as weather conditions (including the effects of climate change), natural disasters, seasonal fluctuations, demand, politics and economics in the production areas. 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. 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. 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. 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. 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. 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.

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. 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. 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.

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. 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. 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.

We cannot assure you that the steps we have taken to protect our intellectual property rights are adequate, that our intellectual property rights can be successfully defended and asserted in the future, or that third parties will not infringe upon or misappropriate any such rights. In addition, our trademark rights and related registrations may be challenged in the future and could be canceled or narrowed. Failure to protect our trademark rights could prevent us in the future from challenging third parties who use names and logos similar to our trademarks, which may in turn cause consumer confusion or negatively affect customers’ or consumers’ perception of our brand and products. In addition, if we do not keep our trade secrets confidential, others may produce products with our recipes or formulations. Moreover, intellectual property disputes and proceedings and infringement claims may result in a significant distraction for management and significant expense, which may not be recoverable regardless of whether we are successful. 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.

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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. 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. 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. 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. Results of any such litigation are difficult to predict and may require us to stop commercializing or using our products, obtain licenses, modify our products while we develop non-infringing substitutes, or incur substantial damages, settlement costs, or face a temporary or permanent injunction prohibiting us from marketing or providing the affected products. If we require a third-party license, it may not be available on reasonable terms or at all, and we may have to pay substantial royalties, upfront fees, or grant cross-licenses to intellectual property rights for our products and solutions. We may also have to redesign our products so they do not infringe third-party intellectual property rights, which may not be possible or may require substantial monetary expenditures and time, during which our products may not be available for commercialization or use. Even if we have an agreement to indemnify us against such costs, the indemnifying party may be unable to uphold its contractual obligations. If we cannot or do not obtain a third-party license to the infringed intellectual property, license the intellectual property on reasonable terms, or obtain similar intellectual property from another source, our revenue and earnings could be adversely impacted.

Further, some third parties may be able to sustain the costs of complex litigation more effectively than we can because they have substantially greater resources. And even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock. Moreover, any uncertainties resulting from the initiation and continuation of any legal proceedings could have a material adverse effect on our ability to raise the funds necessary to continue our operations. Assertions by third parties that we violate their intellectual property rights could therefore have a material adverse effect on our business, financial condition, and results of operations.

Food safety concerns and concerns about the health risk of our products may have an adverse effect on our business.

Food safety is a top priority for us, and we dedicate substantial resources to ensure that our customers enjoy safe and high-quality treats. However, foodborne illnesses and other food safety issues have occurred in the retail food industry in the past and could occur in the future. Also, our reliance on third-party food suppliers, distributors and food delivery aggregators increases the risk that foodborne illness incidents could be caused by factors outside of our control. A failure or perceived failure to meet our quality or safety standards, including product adulteration, contamination, or tampering, or allegations of mislabeling, whether actual or perceived, could occur in our operations, distributors or suppliers. 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. The occurrence of health-related illnesses or other incidents related to the consumption of our products, including allergies, excessive consumption or death to a consumer, could also adversely affect the price and availability of affected ingredients, resulting in higher costs, disruptions in supply and a reduction in our sales.

Noncompliance with applicable food product quality and safety regulations can result in enforcement action by applicable regulatory agencies, including product recalls, market withdrawals, product seizures, warning letters, injunctions, or criminal or civil liability. Such incidents could also expose us to product liability, negligence or other lawsuits, including consumer class action lawsuits. Any claims brought against us may exceed or be outside the scope of our existing or future insurance policy coverage or limits. Any judgment against us that is more than our policy limits or not covered by our policies or not subject to insurance would have to be paid by us, which would affect our results of operations and financial condition. Moreover, negative publicity also could be generated from false, unfounded or nominal liability claims or limited recalls. The occurrence of foodborne illnesses or food safety issues could also adversely affect the price and availability of affected ingredients, which could result in disruptions in our supply chain, significantly increase costs and/or lower margins for us.

In addition, there is increasing consumer awareness of, and increased media coverage on, the alleged adverse health impacts of consumption of various food products globally. Our products contain fats, sugar and other compounds and allergens, the health effects of which are the subject of public scrutiny, including the suggestion that excessive consumption of sugar and other compounds can lead to a variety of adverse health effects. An unfavorable report on the health effects of certain compounds present in our products, or negative publicity or litigation arising from other health risks such as obesity, could significantly reduce the demand for our products. Additionally, there may be new laws and regulations that could impact the ingredients and nutritional content of our product offerings, or laws and

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regulations requiring us to disclose the nutritional content of our product offerings or otherwise restrict sales of our treats. A decrease in consumer traffic as a result of these health concerns, laws or regulations or negative publicity could materially and adversely affect our business.

Product liability exposure may subject us to significant liability.

We may face an inherent business risk of exposure to product liability and other claims and lawsuits in the event that the development or use of our technology or prospective products is alleged to have resulted in adverse effects. The sale of products for human use and consumption involves the risk of injury or illness to consumers. 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. In addition, customers may stop placing or cancel orders for such products as a result of such events.

Even if a situation does not necessitate a recall or market withdrawal, product liability claims might be asserted against us. While we are subject to governmental inspection and regulations and believe our facilities and those of our co-manufacturers and suppliers comply in all material respects with all applicable laws and regulations, if the consumption of any of our products causes, or is alleged to have caused, a health-related illness or death to a consumer, we may become subject to claims or lawsuits relating to such matters. Even if a product liability claim is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our products caused illness or physical harm could cause consumers to lose confidence in the safety and quality of our products. Moreover, claims or liabilities of this type might not be covered by our insurance or by any rights of indemnity or contribution that we may have against others. Although we maintain product liability and product recall insurance in an amount that we believe to be consistent with market practice, we cannot be sure that we will not incur claims or liabilities for which we are not insured or that exceed the amount of our insurance coverage. A product liability judgment against us or a product recall could have a material adverse effect on our business, financial condition, results of operations or liquidity.

We have no control over our products once purchased by consumers. Accordingly, consumers may store or prepare our products in a manner that is inconsistent with our directions or store our products for longer than approved periods of time, which may adversely affect the quality and safety of our products.

Although we believe our insurance coverage to be adequate and consistent with industry practice, we may not have sufficient insurance coverage, and we may not be able to obtain sufficient coverage at a reasonable cost. An inability to obtain product liability insurance at acceptable cost or to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of our products. Further, any claim under our insurance policies may be subject to certain exceptions, may not be honored fully, in a timely manner, or at all, and we may not have purchased sufficient insurance to cover all losses incurred. If we were to incur substantial liabilities or if our business operations were interrupted for a substantial period, we could incur costs and suffer losses. Inventory, equipment, and business interruption losses may not be covered by our insurance policies. Additionally, insurance coverage may not be available to us at commercially acceptable premiums in the future, or at all.

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.

Most of our customers are retailers or distributors that buy from us under purchase orders, and we generally do not have long-term agreements with or commitments from these customers for the purchase of products. We cannot provide assurance that our customers will maintain or increase their sales volumes or orders for the products supplied by us or that we will be able to maintain or add to our existing customer base. 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 ability to adequately store, maintain, and deliver our products is critical to our business. Keeping our food products at specific temperatures and humidity levels maintains food safety and quality. For example, in 2024, our products suffered a melting issue during shipment that resulted in a loss of sales and additional costs related to remediation. In the event of extended power outages, labor disruptions, natural disasters or other catastrophic occurrences, including extreme heat, failures of the refrigeration systems in our third-party delivery trucks, or other circumstances, our inability to store inventory at appropriate temperatures and low humidity could result in significant product inventory losses, as well as increased risk of food-borne illnesses and other food safety incidents. 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,

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which could result in negative publicity and harm to our brand and reputation. Any failure to adequately store, maintain, or transport our products could negatively impact the safety, quality and merchantability of our products and the experience of our customers. The occurrence of any of these risks could materially adversely affect our business, reputation, financial condition, and operating results.

Failure to manage inventory at optimal levels could adversely affect our business, financial condition and results of operations.

We are required to manage a large volume of inventory of products effectively for our business. We depend on our forecasts for the anticipated demand for our products to make procurement plans and manage our inventory. 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. In addition, when we launch a new product with new components or raw material, it may be difficult to establish relationships, determine appropriate raw material and product selection, and accurately forecast market demand for such product. We cannot assure you that we will be able to maintain proper inventory levels for our business at all times, and any such failure may have a material and adverse effect on our business, financial condition and results of operations.

Inventory levels in excess of distributor and/or consumer demand may result in inventory write-downs or an increase in inventory holding costs and a potential negative effect on our liquidity. As we plan to continue expanding our product offerings, we expect to include more products in our inventory, which will make it more challenging for us to manage our inventory effectively and will put more pressure on our storing system. If we fail to manage our inventory effectively, we may be subject to a heightened risk of inventory obsolescence, a decline in inventory values, and significant inventory write-downs or write-offs. For example, with the loss of certain significant customers and the reduction in sales related to the heat related product damage in late 2024, our inventory levels based on our growth rate at the beginning of 2024 increased significantly, resulting in write-downs and negatively impacted our financial position. In addition, we may be required to lower sale prices in order to reduce inventory level, which may lead to lower gross margins. High inventory levels may also require us to commit substantial capital resources, preventing us from using that capital for other important purposes. Any of the above may materially and adversely affect our results of operations and financial condition.

Conversely, if we underestimate distributor or consumer demand, or if our supplier fails to provide products to us in a timely manner, we may experience inventory shortages, which may, in turn, require us to purchase our products at higher costs, result in unfulfilled product orders, leading to a negative impact on our financial condition and our relationships with distributors or consumers. Under-stocking can lead to missed sales opportunities, while over-stocking could result in inventory depreciation and decreased shelf space for products that are in higher demand. These results could adversely affect our business, financial condition and results of operations.

Our continued success depends in part on our systems, applications, and software continuing to operate to meet our business demands. We rely on information technology systems and infrastructure for substantially all aspects of our business operations. We use mobile applications, social networking, and other online activities to connect with our customers, consumers, suppliers, and employees. Our business involves the storage and transmission of confidential information and intellectual property, including information pertaining to customers, consumers, vendors, distributors, and suppliers, and employees. We also may maintain financial and strategic information about us and our business partners. Further, as we pursue new initiatives that enhance our operations and cost structure, potentially including acquisitions, we may also be required to expand and improve our information technologies, resulting in a larger technological presence and corresponding exposure to cybersecurity risk. Like all technology and information systems, such use gives rise to cybersecurity risks, including security incidents, espionage, system disruption through material errors, failures, vulnerabilities, or bugs, particularly when new features or capabilities are released, theft, and inadvertent release of information. Our technology and information systems may be subject to computer viruses or malicious code, break-ins, phishing impersonation attacks, attempts to overload our servers with denial-of-service or other attacks, ransomware, and similar incidents or disruptions from unauthorized access or use of our computer systems, as well as unintentional incidents causing data leakage, any of which could lead to interruptions, delays, or website or mobile app shutdowns. Electronic security attacks designed to gain access to personal, sensitive, or confidential data are constantly evolving, and such attacks continue to grow in sophistication. If we fail to assess and identify cybersecurity risks associated with new initiatives or acquisitions, we may become increasingly vulnerable to such risks.

While we have implemented measures designed to prevent security incidents and cyber attacks, our preventative measures and incident response efforts may not be effective. The theft, destruction, loss, misappropriation, misuse, or release of sensitive or confidential information or intellectual property, or interference with our information technology systems or the technology systems of third parties on which we rely, could result in business disruption, negative publicity, reputational harm, violation of privacy laws, loss of customers, and liability, all of which could have a material adverse effect on our business, operating results, and financial condition. Additionally, as a

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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. Moreover, we could incur significant costs in notifying affected persons and entities and otherwise complying with the multitude of laws and regulations relating to the unauthorized access to, or acquisition, use, or disclosure of personal information.

Further, our operations depend on the continuing and efficient operation of our information technology, communications systems and infrastructure, and on cloud-based platforms, including platforms operated by vendors. 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. The occurrence of a natural or intentional disaster, any decision to close a facility we are using without adequate notice, or particularly an unanticipated problem at a cloud- based virtual server facility, could result in harmful interruptions in our service, resulting in adverse effects to our business. Although we have invested in the protection of data and information technology, there can be no assurances that our efforts will protect us against significant breakdowns, breaches in our systems, or other cyber incidents that could have a material adverse effect on our reputation, business, operations, or financial condition of the company.

Our collection, use, and disclosure of information, including personal information, is subject to federal, state and foreign privacy and security regulations and binding industry standards; new or changed regulations could impose significant costs to our operation and failure to comply with those regulations or to adequately secure the information we hold could result in significant liability or reputational harm.

We are subject to numerous federal, state and local rules and regulations relating to the collection, processing, storing, sharing, disclosure, use, and security of personal information and other data. We also are or may in the future be subject to contractual obligations to protect data. We strive to comply with applicable laws, contractual obligations, and our own policies pertaining to the processing of personal information. Nevertheless, such laws, regulations, and other obligations may require us to change our business practices and may negatively impact our ability to expand our business and pursue business opportunities. We may incur significant expenses to comply with the laws, regulations, and other obligations that apply to us. Additionally, the privacy- and data protection-related laws, rules, and regulations applicable to us may be interpreted and applied in new ways or in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. Further, new laws, rules, and regulations could be enacted with which we are not familiar or with which our practices do not comply.

Several U.S. jurisdictions have passed omnibus privacy laws that apply to us now or may apply in the future as we grow and expand, and other jurisdictions are considering imposing additional restrictions. Examples include the California Consumer Privacy Act (the “CCPA”), as amended by the California Privacy Rights Act (collectively, “CPRA”). Since the passage of the CCPA, more than ten (10) U.S. states have enacted omnibus privacy laws, which will go into effect at varying dates through 2026. The CCPA and other state omnibus laws provide consumers with substantial rights over their personal information, impose notice obligations on companies, and require companies to implement programs to manage such rights. As Company operates in the business-to-business space, Company will not be directly subject to the majority of the enacted state omnibus privacy laws. Nonetheless, to the extent that certain of these laws are applicable to us, and to the extent that other states enact laws in the future that are or may be applicable to us, we will need to expend resources to evaluate such regulations and implement compliance solutions. If we engage in email marketing or certain telemarketing activities, we will be subject to issue-specific laws pertaining to the use of information, including laws on marketing and advertising, such as the Telephone Consumer Protection Act and the Telemarketing Sales Rule and the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, and their state counterparts.

Further, if our operations bring us into the scope of non-U.S. privacy and data protection regulations, we may be subject to additional privacy and data protection regulations, which may require us to spend resources to comply with such programs and expose us to risk for any actual or perceived failure to comply.

We also are or may be subject to binding industry standards, including the Payment Card Industry Data Security Standard (“PCI-DSS”), due to our acceptance of payment cards. If we or our payment processors fail to comply with the PCI-DSS, we may incur significant fines or liability and lose access to major payment card systems. Industry groups may in the future adopt additional self-regulatory standards by which we are legally or contractually bound.

Compliance with these and any other applicable privacy and data security laws and regulations is a rigorous and time-intensive process, and we may be required to put in place additional mechanisms ensuring compliance with the new data protection rules. Any failure or perceived failure by us to comply with privacy or data protection laws, policies, or industry standards or any security incident that results in the unauthorized release of personal information may result in governmental enforcement actions and investigations, fines and penalties, litigation and/or adverse publicity, including by consumer advocacy groups, and could cause our customers to lose trust in us, which could have an adverse effect on our reputation and business. 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,

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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.

Risks Related to the Regulatory Environment

Our operations are subject to extensive 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. Specifically, for products manufactured or sold in the U.S., we are subject to the requirements of the Federal Food, Drug, and Cosmetic Act (“FDCA”) and regulations promulgated thereunder by the FDA. This comprehensive regulatory program governs, among other things, the manufacturing, ingredients, packaging, labeling, and safety of food. Under this program, the FDA requires that facilities that manufacture food products comply with a range of requirements, including hazard analysis and preventative controls regulations, current good manufacturing practices (“GMPs”), and supplier verification requirements. If our products are not manufactured, processed, packaged and labeled in conformity with our specifications and the strict regulatory requirements of the FDA or other regulatory authorities, we may be subject to adverse inspectional findings or enforcement actions, which could materially impact our ability to market our products or result in a recall of our product, that have already been distributed. If the FDA or another regulatory authority determines that we or our suppliers or other business partners have not complied with applicable regulatory requirements, our business may be adversely impacted.

We seek to comply with applicable laws and regulations through expert personnel with experience to ensure quality-assurance compliance and contracting with third-party laboratories that conduct analyses of new products to establish nutrition labeling information and to help identify certain potential contaminants before distribution. Our existing compliance structures may be insufficient to address the current or changing regulatory environment. This may result in gaps in compliance coverage or the omission of necessary new compliance activity. The failure to comply with applicable laws and regulations, or maintain permits, licenses, or registrations relating to our or their operations, could subject us to civil remedies or penalties, including fines, injunctions, product recalls, warning letters, or restrictions on the marketing or manufacturing of products, as well as potential criminal sanctions, any of which could result in increased operating costs and reputational harm. 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.

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. 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.

Risks Related to Ownership of Our Common Stock

If we fail to comply with the continued listing requirements of Nasdaq, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted.

Our common stock is currently listed for trading on Nasdaq. We must satisfy Nasdaq’s continued listing requirements. A delisting of our common stock from Nasdaq could materially reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities.

We have in the past, and may in the future, be unable to comply with certain of the listing standards that we are required to meet to maintain the listing of our common shares on Nasdaq. For example, on May 14, 2025, we received a letter from the Staff indicating that, based upon the closing bid price of our common stock for the 30 consecutive business days, we did not meet the minimum bid price of $1.00 per share required for continued listing on Nasdaq pursuant to the Minimum Bid Price Rule. The letter also indicated that we will be provided with a compliance period of 180 calendar days, or until November 10, 2025, in which to regain compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A). On November 11, 2025, Nasdaq subsequently issued a letter providing us with an additional 180 day compliance period, or until May 11, 2026 to regain compliance.

In order to regain compliance with the Minimum Bid Price Rule, our common stock must maintain a minimum closing bid price of $1.00 for at least ten consecutive business days during the Minimum Bid Price Compliance Period. However, if it appears to Nasdaq that

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we will be unable to cure the deficiency, Nasdaq will provide notice that our common stock will be subject to delisting. There can be no assurance that the Nasdaq staff would grant our request for continued listing subsequent to any delisting notification. In the event of such a notification, we may appeal the Staff’s determination to delist its securities.

There is no assurance that we will regain compliance with the Minimum Bid Price Requirement or maintain compliance with the minimum listing requirements with all applicable requirements for continued listing on Nasdaq. If our common stock were delisted from Nasdaq, trading of our common stock would most likely take place on an over-the-counter market established for unlisted securities, such as the OTCQB or the Pink Market maintained by OTC Markets Group Inc. An investor would likely find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our common stock on an over-the-counter market, and many investors would likely not buy or sell our common stock due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or other reasons. In addition, as a delisted security, our common stock would be subject to SEC rules as a “penny stock,” which impose additional disclosure requirements on broker-dealers. The regulations relating to penny stocks, coupled with the typically higher cost per trade to the investor of penny stocks due to factors such as broker commissions generally representing a higher percentage of the price of a penny stock than of a higher-priced stock, would further limit the ability of investors to trade in our common stock. In addition, delisting could harm our ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities. For these reasons and others, delisting would adversely affect the liquidity, trading volume and price of our common stock, causing the value of an investment in us to decrease and having an adverse effect on our business, financial condition and results of operations, including our ability to attract and retain qualified employees and to raise capital.

The market price of our common stock has been, and is likely to continue to be, highly volatile and subject to wide fluctuations.

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;

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outcome of litigation, regulatory matters, enforcement actions, or other disputes that may arise; and

•

general economic, industry, and market conditions.

These and other factors are largely beyond our control, and the impact of these risks, singly or in the aggregate, may result in material adverse changes to the market price of our common stock and our results of operations and financial condition.

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.

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 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 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. 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.

Future sales and issuances of our common stock, or securities convertible into or exercisable for our common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause the trading price of our common stock to decline.

In the future, we may sell shares of our common stock, or securities convertible into or exercisable for our common stock, in one or more transactions at prices and in a manner we determine from time to time. For example, we issued 1,500,000 shares of Series AA Preferred Stock in the Private Placement, and we intend to consummate the sale of 1,500,000 shares of our Series AAA Preferred Stock in March 2026. 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. If we sell shares of our common stock, or securities convertible into or exercisable for our common stock, in subsequent transactions, or if shares of our common stock are issued pursuant to our equity incentive plans, investors may be materially diluted. In addition, new investors in such subsequent transactions could receive securities with rights senior to those of holders of our common stock.

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.

We are a “smaller reporting company” under applicable SEC rules, meaning that the market value of our common stock held by non-affiliates is less than $700.0 million and our annual revenue was less than $100.0 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250.0 million, or (ii) our annual revenue was less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates was less than $700.0 million. As a smaller reporting company, we have chosen to present only the two most recent years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations disclosure in this Annual Report on Form 10-K, and we have taken advantage of reduced disclosure obligations regarding executive compensation.

Our quarterly operating results have fluctuated and may in the future fluctuate significantly, period-to-period comparisons of our results may not be meaningful, and these fluctuations may cause the price of our common stock to decline.

Our quarterly results, including our revenues, operating expenses, operating margins, and profitability, may fluctuate significantly in the future, and period-to-period comparisons of our results may not be meaningful. Accordingly, the results of any one quarter should not be viewed as a prediction or indication of our future performance. In addition, our quarterly results may not fully reflect the underlying performance of our business.

Factors that may cause fluctuations in our quarterly results include, but are not limited to:

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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;

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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;

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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;

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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.

Fluctuations in quarterly results, or for any other period, may negatively impact the value of our common stock, regardless of whether they impact or reflect the overall performance of our business. If our quarterly results, or results for any other period, fall below the expectations of investors or any securities analysts who follow our stock, or below any guidance we may provide, the trading price of our common stock could decline substantially.

Risks Related to Accounting and Tax Matters

Changes in tax laws or regulations that are applied adversely to us in the various tax jurisdictions to which we are subject could increase the costs of our products and harm our operating results.

New income, sales, use, or other tax laws, statutes, rules, regulations, or ordinances could be enacted at any time. Those enactments could harm our business, operating results, and financial condition. Further, existing tax laws, statutes, rules, regulations, or ordinances could be interpreted, changed, modified, or applied adversely to us. These events could require us to pay additional tax amounts on a prospective or retroactive basis, as well as require us to pay fines, and penalties, and interest for past amounts deemed to be due, any of which would harm our operating results.

Changes in existing financial accounting standards or practices may require us to restate our reported financial results or harm our operating results.

GAAP is subject to interpretation by the Financial Accounting Standards Board, the SEC and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect

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on our reported financial results and could affect the reporting of transactions completed before the announcement of a change. Adoption of such new standards and any difficulties in the implementation of changes in accounting principles, including the ability to modify our accounting systems, could cause us to fail to meet our financial reporting obligations, which could lead to regulatory enforcement actions, cause investors to lose confidence in our financial reports, and result in a decline in the trading price of our common stock.

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. There is no certainty regarding economic conditions in the United States, and credit and financial markets and confidence in economic conditions could deteriorate at any time. Accordingly, we may experience declines in revenue during economic turmoil or during periods of uncertainty. In addition, sustained periods of inflation may result in a decline in the amount of discretionary spending and otherwise hamper our gross margins. Future economic conditions such as employment levels, business conditions, housing starts, interest rates, inflation rates, energy and fuel costs and tax rates could reduce consumer spending or change consumer purchasing habits. Any material decline in the amount of discretionary spending, leading cost-conscious consumers to be more selective in food products purchased, could have a material adverse effect on our revenue, results of operations, business and financial condition.

Global climate change, severe weather patterns and natural disasters may negatively affect our business, operating results, financial condition, cash flows and prospects.

We are subject to risks associated with the long-term effects of climate change on the global economy and on our industry in particular. Extreme weather and natural disasters that occur around the globe, such as drought, extreme heat and heat waves, wildfires, storms, changes in ocean currents and flooding, could make it more difficult and costly for us to manufacture and deliver our products to our customers, obtain raw materials from our suppliers, or perform other critical corporate functions.

Adverse weather conditions and natural disasters could increase our costs of storing and transporting our inventory or disrupt production schedules. Our manufacturing operations also could be adversely affected by reduced water availability resulting from droughts or other interruptions from acute and chronic physical climate events due to climate change, including droughts, heat waves, freezing temperatures, changing precipitation patterns and heat stress. There is a global concern that carbon dioxide and other greenhouse gases in the atmosphere may have an adverse effect on global temperatures, weather patterns and the frequency and severity of natural disasters. The impact of a natural disaster such as an earthquake, tsunami, tornado, flood, wildfire, drought or other natural disaster or severe weather event at any of our facilities on our overall operations is difficult to predict, but such a natural disaster or severe weather event could seriously disrupt our entire business and lead to substantial losses.

The failure to successfully integrate newly acquired products or businesses could negatively impact our profitability.

From time to time, we may consider opportunities to acquire other products or businesses that may expand the breadth of our markets or customer base. The success of future acquisitions will be dependent upon our ability to effectively integrate the acquired products and operations into our business. Integration can be complex, expensive and time-consuming. The failure to successfully integrate acquired products or businesses in a timely and cost-effective manner could materially adversely affect our business, prospects, results of operations and financial condition. The diversion of our management’s attention and any difficulties encountered in any integration process could also have a material adverse effect on our ability to manage our business. In addition, the integration process could result in the loss of key employees, the disruption of ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, any of which could adversely affect our ability to maintain the appeal of our brand and our relationships with customers, employees or other third parties or our ability to achieve the anticipated benefits of such acquisitions and could harm our financial performance. We do not know if we will be able to identify acquisitions we deem suitable, whether we will be able to successfully complete any such acquisitions on favorable terms or at all, or whether we will be able to successfully integrate any acquired products or businesses. Additionally, an additional risk inherent in any acquisition is that we fail to realize a positive return on our investment.

Claims, legal proceedings, and other disputes could divert our management’s attention, have a negative impact on our reputation, expose us to significant liabilities, and make it more difficult to obtain insurance coverage.

From time to time, we may be party to various claims, legal proceedings, and other disputes. We evaluate these matters to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential losses. Based on these assessments and estimates, we may establish reserves, as appropriate. 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.

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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. 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. Any legal proceedings or other disputes, even if fully indemnified or insured, could have a negative impact on our reputation, and make it more difficult to compete effectively or to obtain adequate insurance in the future.

Further, while we maintain insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions and caps on amounts recoverable. Even if we believe a claim is covered by insurance, insurers may dispute our entitlement to recovery for a variety of potential reasons, which may affect the timing and amount of our recovery.

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

Risk Management and Strategy:

The Company has processes for assessing, identifying, and managing material risks from cybersecurity threats. The Company has designed and implemented a cybersecurity incident response plan and related processes, which is overseen by an internal information technology specialist. Cybersecurity threats are identified and escalated to a member of management pursuant to criteria set forth in these processes.

The audit committee of the board of directors (the “Audit Committee”) is responsible for establishing and monitoring the integrity and effectiveness of controls and other procedures, 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. The controls and procedures subject to the Audit Committee’s oversight include processes related to managing material risks from cybersecurity threats. Accordingly, the Company’s cybersecurity processes have been integrated into the Company’s overall processes.

Governance:

The Audit Committee operates under a written charter adopted by the Company’s board of directors. The Audit Committee oversees, among other things, a system of internal controls, including internal controls designed to assess, identify, and manage material risks from cybersecurity threats. The Audit Committee is also responsible for the adequacy and effectiveness of the Company’s internal controls, including those internal controls that are designed to assess, identify, and manage material risks from cybersecurity threats.

The Audit Committee is informed of material risks, if any, from cybersecurity threats pursuant to escalation criteria set forth in the Company’s disclosure controls and procedures. Further, at least once per quarter, a member of the Company’s Audit Committee reports material risks, if any, from cybersecurity threats to the Company’s board of directors.

The Company’s management team also assesses and manages material risks, if any, from cybersecurity threats.

The 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

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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 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.

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. 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. 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 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 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.

As of the date of this Annual Report on Form 10-K, the Company is not aware of any cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations or financial condition. For additional information concerning risks related to cybersecurity, see Item 1A. Risk Factors.

ITEM 2. PROPERTIES

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. 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.

ITEM 3. LEGAL PROCEEDINGS

From time to time in the ordinary course of business, we are a party to various types of legal proceedings. We do not believe that these proceedings, individually or in the aggregate, will have a material adverse effect on our financial position, results of operations or cash flows.

ITEM 4. MINE SAFETY DISCLOSURES

None.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON 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.

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. During periods for which the shares were traded on the OTC Markets, the following quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.


	High		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.

Dividend Policy

Since the inception of the Company, we have not declared or paid, and do not anticipate declaring or paying in the foreseeable future, any cash dividends on our common stock. Any future determination to declare and pay cash dividends will be at the discretion of our board of directors in accordance with applicable laws and will depend on, among other things, our financial condition, results of operations, cash requirements, contractual restrictions and such other factors as our Board of Directors deems relevant. Our ability to pay dividends in the future may also be limited by covenants of any future outstanding indebtedness we incur.

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.

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 (. 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. 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. 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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6% to 8%. 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. 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. 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. 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. 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. 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.

ITEM 6. SELECTED FINANCIAL DATA.

Not applicable.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of financial condition and results of operations should be read in conjunction with our consolidated historical financial statements and the notes to those statements that appear elsewhere in this report. Certain statements in the discussion contain forward-looking statements based upon current expectations that involve risks and uncertainties, such as plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors.

Overview and Outlook

Recent Strategic Transactions

On December 30, 2025, the Company completed a series of strategic transactions that fundamentally changed the nature of its operations. 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. 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. 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.

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. 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.

A Distinctive and Trusted Brand Name

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Key Factors Affecting our Performance

Our future success is dependent upon many factors. 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. 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.

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. 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. 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. We have become aware of certain of our competitors using their status in the market and marketing spend to limit our current and future customers from purchasing our products or reducing our shelf space. This caused the loss of significant customers with resulted in a significant reduction in revenue and an increase in our inventory. Our ability to keep our current customers, or grow our SKU portfolio on their shelves, and continue to expand our sales with new customers will depend on our competitors’ ability to leverage their market status and financial resources to limit our access to consumers and our ability to compete with these larger competitors.

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. 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. 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.

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.

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.

We expect our general and administrative expenses will increase as our business grows.

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.

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Interest Income

Interest income consists primarily of the interest on short-term U.S Treasury Bonds.

Provision for Income Taxes

The Company recognized federal income tax of $0 for the twelve months ended December 31, 2025 and 2024, respectively. 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.

Segment Overview

Our chief operating decision makers, who are our Chief Executive Officer and our Executive Chairman, review financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance, as well as for strategic operational decisions and managing the organization. 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.

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. 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. 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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Cost of Goods Sold

As a result of the transactions described above, the Company no longer manufactures or sells products directly and therefore does not incur cost of goods sold in its continuing operations. All costs associated with the manufacturing and sale of freeze dried candy, including inventory write-downs, production costs, and related overhead previously included in cost of goods sold, have been reclassified to discontinued operations for all periods presented. These costs include charges recorded to write down finished goods and raw materials inventory associated with SKUs the Company no longer intends to produce or sell, as well as related overhead allocations associated with the discontinued manufacturing operations.

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. 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. 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.

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%). The decrease was primarily driven by the absence of professional service costs related to the 2024 underwritten public offering and reduced services as a result of scaling down activities during the twelve months ended December 31, 2025.

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.

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.

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. The decrease in interest expense compared to the prior year was primarily attributable to a reduction in the average outstanding balance of notes payable during the period. Certain interest expense related to discontinued operations was been included in gain (loss) on discontinued operations for all periods presented.

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. The 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.

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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. 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.


	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. 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. 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 factors raise substantial doubt about our ability to continue as a going concern. See Note 3 – “Going Concern” of the notes to consolidated financial statements in this Annual Report on Form 10-K for additional information.

Indebtedness

Promissory Notes and Warrants

On April 28, 2025, the Company restructured its outstanding current debt through the issuance of Convertible Notes in a dollar-for-dollar exchange. On April 28, 2025, the Company entered into an exchange agreement (the “Exchange Agreement”) with related party holders 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 6% to 8%. 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. 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. 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. 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. 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

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Company. 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.


	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 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.

Net cash used in investing activities of the continuing operation was $0 for twelve months ended December 31, 2025, and the twelve months ended December 31, 2024. 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 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. Cash used by discontinued operations was $943,868 during the twelve month period ended December 31, 2025. This cash was used to pay down related party long term convertible notes payable. Cash provided by financing activities of discontinued operations was $16.7 million for the twelve month period ended December 31, 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. In addition, another $1.6 million was used to repay borrowings during 2024.

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Contractual Obligations and Commitments

On July 1, 2023, the Company entered into a lease for additional warehouse space in Irving, Texas, of approximately 9,000 feet under a 37-month lease at a rate of $8,456 per month, with approximately a 4% annual escalation of lease payments. The facility lease contains provisions requiring payment of property taxes, utilities, insurance, maintenance and other occupancy costs applicable to the leased premise. As the Company’s leases do not provide implicit discount rates, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate for the lease at the time of commencement was 8%.

On May 22, 2024, the Company entered into an industrial lease (the “Lease”) with USCIF Pinnacle Building B LLC, a Delaware limited liability company. Pursuant to the terms of the Lease, the Company will lease approximately 324,000 rentable square feet from the Lessor at 4024 Rock Quarry Road, Dallas, Texas for a term of approximately 62 months, which the Company intends to use as industrial and manufacturing space. The term of the Lease commenced on May 22, 2024. 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. Effective September 30, 2025, the Company agreed with Pinnacle to exit the facility on January 31, 2026. As a result of reducing the lease term by 42 months, the company reduced the related right-of-use asset by $10,397,922 and the lease liability by $11,829,536, resulting in a noncash gain $1,427,649, which is included in the loss from discontinued operations for the year ended December 31, 2025.

On October 26, 2023, the Company entered into a lease agreement (the “2023 Lease Agreement”) with Prologis, Inc., a Maryland corporation. 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. The 2023 Lease Agreement provides for base rent payments starting at approximately $42.5 thousand per month (taking into consideration an initial phase-in of the base rent obligation) in the first year of the Initial Term, and increase each year, up to approximately $51.7 thousand per month during the last year of the Initial Term. 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. As a result of reducing the lease term by 39 months, the company derecognized the related right-of-use asset $2,325,675 and the lease liability of $2,673,619, resulting in a noncash gain of $347,853, which is included in the loss from discontinued operations for the year ended December 31, 2025.

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. 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. Concurrently with the Asset Sale entered into on December 30, 2025, the company exited this lease and derecognized the related right-of-use asset $1,040,742 and the lease liability of $1,171,490, resulting in a noncash gain of $120,773, which is included in the loss from discontinued operations for the year ended December 31, 2025.

Off-Balance Sheet Arrangements

None.

Critical Accounting Policies and Estimates

The preparation of the Company’s financial statements requires management to make judgments and estimates due to uncertainties affecting the application of accounting policies. Different conditions or assumptions could lead to different reported amounts. The Company bases its estimates on historical experience and other reasonable assumptions. 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.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Commodity Price Risk

We do not expect any significant effects from commodity price risk outside of inherent inflationary risks.

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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.

Foreign 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.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA OF SOW GOOD INC.

SOW GOOD INC.

FINANCIAL STATEMENTS

FOR THE YEARS ENDED December 31, 2025 and 2024

CONTENTS


Report of Independent Registered Public Accounting Firm (PCAOB ID 1013)	F-1

Balance Sheets as of December 31, 2025 and 2024	F-3

Statements of Operations for the years ended December 31, 2025 and 2024	F-4

Statement of Stockholders’ (Deficit) Equity for the years ended December 31, 2025 and 2024	F-5

Statements of Cash Flows for the years ended December 31, 2025 and 2024	F-6

Notes to the Financial Statements	F-7

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Report of Independent Registered Public Accounting Firm

Stockholders and Board of Directors

Sow Good, Inc.

Irving, TX

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Sow Good, Inc. (“the Company”) as of December 31, 2025 and 2024, the related statements of operations, stockholders’ (deficit) equity, and cash flows for the years ended December 31, 2025 and 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for the years ended December 31, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Uncertainty – See Also Critical Audit Matters Section Below

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses from operations, has a capital deficiency and does not have an established source of revenues sufficient to cover its operating costs, which raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Discontinued Operations

As further discussed in Note 4 to the financial statements, on December 30, 2025, the Company sold substantially all of its manufacturing and operating assets to its former Executive Chairman and former Chief Executive Officer and exited its legacy business and no longer manufactures products. Accordingly, the results of the former manufacturing business have been classified as discontinued operations for all periods presented.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also includes evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinion on the critical audit matters or on the accounts or disclosures to which it relates.

Going Concern – Refer to Note 3 to the Financial Statements

F-1

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Critical Audit Matter Description

As described further in Note 3 to the financial statements, the Company has suffered recurring losses from operations, has capital deficiency and does not have an established source of revenues sufficient to cover its operating costs. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish its business plan and eventually attain profitable operations. Accordingly, the Company has determined that these factors raise substantial doubt as to the Company’s ability to continue as a going concern for a period of one year from the issuance of these financial statements. Management intends to continue to fund its business by way of public or private offerings of the Company’s stock or through loans from private investors, in order satisfy the Company’s obligations as they come due for at least one year from the financial statement issuance date. However, the Company has not concluded that these plans alleviate the substantial doubt related to its ability to continue as a going concern.

How the Critical Audit Matter was Addressed in the Audit

We determined the Company’s ability to continue as a going concern is a critical audit matter due to the estimation and uncertainty regarding the Company’s available capital and the risk of bias in management’s judgments and assumptions in their determination. Our audit procedures related to the Company’s assertion on its ability to continue as a going concern included the following, among others:

• We performed testing procedures such as analytical procedures to identify conditions and events that indicate that there could be substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

• We reviewed and evaluated management's plans for dealing with adverse effects of these conditions and events.

• We inquired of Company management and reviewed company records to assess whether there are additional factors that contribute to the uncertainties disclosed.

/s/ Urish Popeck & Co., LLC

We have served as the Company's auditor since 2023.

Pittsburgh, Pennsylvania

March 31, 2026

F-2

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SOW GOOD INC.

BALANCE SHEETS


	December 31,			December 31,
	2025			2024
ASSETS
Current assets:
Cash and cash equivalents	$	1,474,445		$	3,723,440
Accounts receivable - related party		1,651,471			-
Other receivables		93,198			-
Inventory, net		22,871			-
Prepaid expenses		90,460			523,442
Current assets of discontinued operations		60,333			20,829,259
Total current assets		3,392,778			25,076,141


Property and equipment, net		21,667			128,900

Security deposit		283,972			300,370
Right-of-use asset		76,971			200,710
Assets of discontinued operation		-			28,989,610
Total assets	$	3,775,388		$	54,695,731

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

Current liabilities:
Accounts payable	$	1,297,851		$	1,368,006
Accrued interest		96,453			-
Accrued severance		2,442,500			-
Accrued expenses		584,186			976,153
Current portion of operating lease liabilities		78,171			125,987
Current maturities of Convertible notes payable, related parties, net of $518,530 and $0 of debt discounts as of December 31, 2025 and December 31, 2024, respectively		1,341,420			-
Current maturities of notes payable, related parties, net of $0 and $304,500 of debt discounts at December 31, 2025 and December 31, 2024, respectively		-			2,195,500
Current maturities of notes payable, net of $0 and $13,470 of debt discounts as of December 31, 2025 and December 31, 2024, respectively		-			225,780
Current liabilities related to discontinued operations		346,861			2,473,115
Total current liabilities		6,187,442			7,364,541

Operating lease liabilities		-			79,575
Notes payable		150,000			150,000
Liabilities of discontinued operation		-			15,113,553

Total liabilities		6,337,442			22,707,670

Commitments and contingencies

Stockholders' (deficit) equity:
Preferred stock, $0.001 par value, 20,000,000 shares authorized, no shares issued and outstanding		1,500			-
Common stock, $0.001 par value, 500,000,000 shares authorized, 12,223,599 and 11,300,624 shares issued and outstanding as of December 31, 2025 and December 31, 2024		12,224			11,300
Additional paid-in capital		100,507,939			94,418,972
Accumulated deficit		(103,083,717	)		(62,442,211	)
Total stockholders' (deficit) equity		(2,562,054	)		31,988,061

Total liabilities and stockholders' (deficit) equity	$	3,775,388		$	54,695,731

The accompanying notes are an integral part of these financial statements.

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SOW GOOD INC.

STATEMENTS OF OPERATIONS


	For the Year Ended
	December 31,
	2025			2024

Revenues	$	-		$	-

Operating expenses:
General and administrative expenses:
Salaries and benefits		4,410,288			7,614,215
Professional services		838,654			1,589,287
Other general and administrative expenses		1,323,667			1,854,779
Total general and administrative expenses		6,572,609			11,058,281
Depreciation and amortization		33,101			31,644
Total operating expenses		6,605,710			11,089,925

Net operating loss		(6,605,710	)		(11,089,925	)

Other expense:
Interest expense		(159,953	)		(741,204	)
Loss on impairment of long lived assets		(57,602	)		-
Total other expense		(217,555	)		(741,204	)

Loss from continuing operations before income tax		(6,823,265	)		(11,831,129	)
Income tax provision		-			-
Net loss from continuing operations		(6,823,265	)		(11,831,129	)
Income (loss) of discontinued operations, net of tax		(33,818,241	)		8,128,913
Net loss	$	(40,641,506	)	$	(3,702,216	)

Weighted average common shares outstanding - basic and diluted		11,838,442			9,238,233
Continuing loss per common share - basic and diluted	$	(0.58	)	$	(1.28	)
Discontinued income (loss), net of tax per common share - basic and diluted	$	(2.86	)	$	0.88
Net loss per common share - basic and diluted	$	(3.44	)	$	(0.40	)

The accompanying notes are an integral part of these financial statements.

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SOW GOOD INC.

STATEMENT OF STOCKHOLDERS' (DEFICIT) EQUITY


	For the Twelve Months Ended December 31, 2025
									Additional					Total
	Preferred Stock				Common Stock				Paid-in		Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity
Balance, December 31, 2024	–		$	-		11,300,624	$	11,300	$	94,418,972	$	(62,442,211	)	$	31,988,061
Series AA Convertible Non-Redeemable Preferred Stock		1,500,000		1,500	–		–			2,998,500	–				3,000,000
Common stock issued to directors for services	–		–			139,907		142		279,858	–				280,000
Common stock issued to officers for services	–		–			783,068		782		688,506	–				689,288
Common stock options granted to directors and advisors for services	–		–		–		–			17,581	–				17,581
Common stock options granted to officers and employees for services	–		–		–		–			1,410,364	–				1,410,364
Additional paid in capital from exchange of related party debt, net	–		–		–		–			694,158	–				694,158
Net loss for the twelve months ended December 31, 2025	–		–		–		–		–			(40,641,506	)		(40,641,506	)
Balance, December 31, 2025		1,500,000	$	1,500		12,223,599	$	12,224	$	100,507,939		(103,083,717	)	$	(2,562,054	)


	For the Twelve Months Ended December 31, 2024
								Additional					Total
	Preferred Stock			Common Stock				Paid-in		Accumulated			Stockholders'
	Shares	Amount		Shares		Amount		Capital		Deficit			Equity
Balance, December 31, 2023	–	$	-		6,029,371	$	6,029	$	66,014,415	$	(58,739,995	)	$	7,280,449
Common stock issued in public offering, net of offering costs	–	–			1,380,000		1,380		11,973,596	–				11,974,976
Common stock issued in at-the-market offering, net of offering costs	–	–			1,042,862		1,043		2,190,170	–				2,191,213
Common stock issued in private placement offering	–	–			515,597		516		3,737,484	–				3,738,000
Common stock issued pursuant to stock purchase agreement	–	–			12,374		12		25,354	–				25,366
Common stock issued to directors for services	–	–			31,211		32		295,616	–				295,648
Proceeds from the exercise of stock options and warrants	–	–			2,289,209		2,288		5,670,680	–				5,672,968
Common stock options granted to directors and advisors for services	–	–		–		–			86,892	–				86,892
Common stock options granted to officers and employees for services	–	–		–		–			4,424,765	–				4,424,765
Net loss for the twelve months ended December 31, 2024	–	–		–		–		–			(3,702,216	)		(3,702,216	)
Balance, December 31, 2024	–	$	-		11,300,624	$	11,300	$	94,418,972	$	(62,442,211	)	$	31,988,061

The accompanying notes are an integral part of these financial statements.

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SOW GOOD INC.

STATEMENTS OF CASH FLOWS


	For the Year Ended
	December 31,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) from continuing operations	$	(6,823,265	)	$	(11,831,129	)
Net (loss) income from discontinued operations		(33,818,241	)		8,128,913
Adjustments to reconcile net loss to net cash used in continuing operations:
Bad debts expense		26,895			187,363
Depreciation and amortization		33,101			31,644
Non-cash amortization of right-of-use asset and liability		123,721			114,281
Equity compensation		2,396,450			3,690,394
Amortization of debt discounts		81,210			500,821
Decrease (increase) in current assets:
Accounts receivable		128,250			1,930,749
Prepaid expenses		(90,460	)		180,524
Increase (decrease) in current liabilities:
Accounts payable		(70,155	)		514,471
Accrued interest		96,453			-
Accrued expenses		(230,122	)		327,205
Net cash (used in) continuing operations		(4,327,922	)		(4,353,677	)
Net cash (used in) discontinued operations		22,795			(5,073,068	)
Cash used in operations		(4,305,127	)	$	(9,426,745	)

CASH FLOWS FROM INVESTING ACTIVITIES
Fixed asset additions and disposals, net		-			-
Cash paid for construction in progress		-			-
Net cash (used in) investing - continuing operations		-			-
Net cash (used in) investing - discontinued operations		-			(5,927,876	)
Cash used in investing	$	-		$	(5,927,876	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from common stock offerings, net offering costs of $0 and $1,110,013, respectively		-			-
Proceeds from preferred stock offering		3,000,000			-
Net cash provided by financing activities - continuing operations		3,000,000			-
Net cash provided by financing activities - discontinued operations		(943,868	)		16,668,024
Net cash provided by financing activities	$	2,056,132		$	16,668,024



NET INCRASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(2,248,995	)		1,313,403
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		3,723,440			2,410,037
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,474,445		$	3,723,440

SUPPLEMENTAL INFORMATION:
Interest paid		10,234			667,293

NON-CASH INVESTING AND FINANCING ACTIVITIES DISCONTINUED OPERATIONS:
Interest received - discontinued operations		-			43,639
Income taxes paid - discontinued operations		-			130,000
Non-cash exercise of warrants		-			5,299,113
Retirement of Notes Payable, related party in non-cash debt exchange		(2,500,000	)		-
Issuance of Convertible Notes Payable, related party, including accrued interest of $64,568 in debt exchange		290,869			-
Repayment of interest		(138,162	)		98,750
Repayments of borrowings		(239,250	)		(5,200,363	)
Reclassification of construction in progress to property and equipment		682,469			3,269,332

The accompanying notes are an integral part of these financial statements.

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SOW GOOD INC.

Notes to Financial Statements

Note 1 – Organization and Nature of Business

Sow Good Inc. (“SOWG,” “Sow Good,” “us,” “our,” “we,” or the “Company”) is a U.S.-based company that, through a third-party distribution arrangement, participates in the commercialization of freeze-dried candy products. The Company historically operated as a manufacturer of freeze-dried consumer packaged goods, including candy, fruits, vegetables, and snack products.

Formerly Black Ridge Oil & Gas, Inc. (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 transitioned its focus to freeze-dried food products following the acquisition. 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, Inc. was known as Ante5, Inc., a publicly traded company since July 1, 2010. Effective February 15, 2024, Sow Good Inc. reincorporated in the State of Delaware from the State of Nevada pursuant to a plan of conversion. On May 2, 2024, trading of the Company’s common stock commenced on the Nasdaq Capital Market.

In May 2021, the Company announced the launch of its first direct-to-consumer freeze-dried consumer packaged goods (“CPG”) line of non-GMO products, including ready-to-make smoothies, gluten-free granola, and snacks. In the first quarter of 2023, the Company launched a freeze-dried candy product line and subsequently discontinued its smoothie, snack, and granola products. The Company expanded manufacturing capacity during 2023 and 2024 through the construction and installation of multiple freeze-dryers to support anticipated growth in candy production.

During December 2025, the Company completed a strategic shift away from direct manufacturing and product sales and entered into a distribution agreement pursuant to which a third-party distributor serves as the exclusive distributor of the Company’s freeze-dried candy products. Under this arrangement, the distributor is responsible for commercialization, sales, marketing, fulfillment, and customer relationships, and the Company earns a contractual percentage of distributor gross receipts. As a result of this strategic shift, the Company no longer operates a manufacturing business and does not directly sell products to customers.

As of December 31, 2025, the Company’s business consists primarily of earning commission-based revenue from its distribution arrangement related to freeze-dried candy products.

Note 2 – Summary of Significant Accounting Policies

These financial statements are presented in accordance with United States generally accepted accounting principles ("GAAP”) and stated in US dollars, have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC”). These statements reflect all adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. Except as otherwise disclosed, all such adjustments are of a normal recurring nature.

Segment Reporting

FASB ASC 280-10-50 requires annual and interim reporting for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and expenses, and about which separate financial information is regularly evaluated by the chief operating decision maker in deciding how to allocate resources. The Company operates as a single segment. For further details on segment reporting, refer to Note 15 – Segment Reporting.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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SOW GOOD INC.

Notes to Financial Statements

Reclassifications

Certain amounts in the prior period financial statements have been reclassified to conform with the current presentation.

Environmental Liabilities

The Company was formerly a direct owner of assets in the oil and gas industry. The oil and gas industry is subject, by its nature, to environmental hazards and clean-up costs. At this time, management knows of no substantial losses from environmental accidents or events which would have a material effect on the Company.

Cash and Cash Equivalents

Cash equivalents include money market accounts which have maturities of three months or less. Cash equivalents are stated at cost plus accrued interest, which approximates market value.

Cash in Excess of FDIC Insured Limits

The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation ("FDIC") and the Securities Investor Protection Corporation ("SIPC") up to $250,000 and $500,000, respectively, under current regulations. The Company had cash in excess of FDIC and SIPC insured limits of $1,189,975 at December 31, 2025. The Company had cash in excess of FDIC and SIPC insured limits of $1,837,840 at December 31, 2024. The Company has not experienced any losses in such accounts.

Accounts Receivable

Accounts receivable are carried at their estimated collectible amounts. Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. The Company had an allowance for doubtful accounts of $0, and $33,549 at December 31, 2025 and 2024.

The Company estimates its reserve based on historical loss information. The Company believes that historical loss information is a reasonable base on which to determine expected credit losses for trade receivables held at the reporting date because the composition of the trade receivables at the reporting date is consistent with that used in developing the historical credit-loss percentages. However, the Company will continue to monitor and adjust the historical loss rates to reflect the effects of current conditions and forecasted changes.

Accounts Receivable - Related Party

Related party receivables are $1,651,471 for the year ended December 31, 2025 and $0 for the year ended December 31, 2024. These receivables consisted of the $1,500,000 purchase price of the assets of Sow Good under the Asset Purchase Agreement, which was with Trea Grove, a company owned by Ira Goldfarb, and approximately $151,472 in withholding taxes due from Claudia and Ira Goldfarb related to fully vested shares granted as employee compensation.

Other Receivables

Other accounts receivable of $93,198 and $0 for the years ended December 31, 2025 and 2024 respectively, consisted primarily of a tax refund receivable from the State of Delaware for franchise taxes and interest receivable from investments, respectively.

Divestiture

On December 30, 2025, the Company entered into an Asset Purchase Agreement with Trea Grove LLC, an entity controlled by the Goldfarbs, a related party under common ownership (see Note 5 — Related Party Transactions). The Company evaluated the transferred set of assets, processes, and employees under ASC 805-10-55 and determined that the disposition of the manufacturing and omnichannel distribution business constituted a sale of a business. The transaction included the transfer of an assembled workforce, operational processes, manufacturing equipment, and leasehold improvements. In connection with the transaction, Trea Grove LLC

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SOW GOOD INC.

Notes to Financial Statements

also assumed the lease of the Union Bower facility, a facility owned by the Goldfarbs. Accordingly, the transaction was accounted for as a sale of a business and the loss on divestiture was recognized upon closing in accordance with ASC 810-40. The results of operations of the disposed business have been reclassified as discontinued operations for all periods presented in the accompanying consolidated financial statements in accordance with ASC 205-20.

The table below summarizes the components of the transaction and the resulting gain on divestiture recognized in the Consolidated Statements of Operations:


Cash received	$	1,500,000
Liabilities assumed by Trea Grove LLC		635,380
Less:
Assets sold:
Assets held for sale		(713,256	)
Construction in process - freeze dryers		(2,768,908	)
Freeze dryers, net		(6,744,473	)
Leasehold improvements, net		(1,459,067	)
Other property plant and equipment, net		(1,778,534	)
Accumulated depreciation		2,670,261
Net loss on disposition of assets		(8,658,598	)
Severance expense		(2,442,500	)
Deal costs		(230,742	)
Loss on sale of assets	$	(11,331,840	)

Inventory

On December 30 and December 31, 2025, the Company entered into an Asset Purchase Agreement and a Distribution Agreement, respectively. As a result of these transactions, the Company transitioned from operating as a manufacturer and omnichannel seller of freeze-dried candy to operating as a commission-based distribution agent, earning a fixed percentage of distributor gross receipts from sales of Sow Good-branded products. In addition, the Company retained certain SKUs to market independently of the Distribution Agreement.

Inventory is stated at the lower of average cost or net realizable value, with cost determined using the first-in, first-out (“FIFO”) method. The Company evaluates inventory for potential obsolescence and excess quantities on a periodic basis.

In connection with the exit of its manufacturing and omnichannel distribution business, the Company recorded an impairment and write-off of inventory of $13,737,675 during the year ended December 31, 2025. Because the impaired inventory related entirely to the former manufacturing and direct-sales business, the impairment expense has been included in loss from discontinued operations for all periods presented.

As of December 31, 2025, the Company retained approximately $22,871 of inventory related to certain SKUs that were not transferred in the Asset Purchase Agreement. This inventory has been recorded at the lower of cost or net realizable value. Based on our Distribution Agreement with the Distributor, the net realizable value for units the Company expects to sell through its Distributor is 10% of the expected selling price of the Distributor.

Property and Equipment

Property and equipment are stated at the lower of cost or estimated net recoverable amount. The cost of property, plant and equipment is depreciated using the straight-line method based on the lesser of the estimated useful lives of the assets or the lease term based on the following life expectancy:


Software		3 years, or over the life of the agreement
Website (years)		3
Office equipment (years)		5
Furniture and fixtures (years)		5
Machinery and equipment (years)		7 - 10
Leasehold improvements		Lease-term or useful life

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SOW GOOD INC.

Notes to Financial Statements

Construction in progress was included as assets sold under the Asset Purchase Agreement with Trea Grove on December 30, 2025. Construction in progress for the year ended December 31, 2024 was stated at cost and no depreciation expense was recorded on construction-in-progress until such time as the relevant assets were completed and put into use.

Repairs and maintenance expenditures are charged to operations as incurred. Major improvements and replacements, which extend the useful life of an asset, are capitalized and depreciated over the remaining estimated useful life of the asset. When assets are retired or sold, the cost and related accumulated depreciation and amortization are eliminated and any resulting gain or loss is reflected in operations.

Depreciation expense included in continuing operations was $33,101 and $31,644, for the twelve months ended December 31, 2025 and 2024, respectively. Depreciation related to the assets used in the manufacture and sale of freeze-dried candy was reclassified to cost of goods sold, and has been included in the loss on discontinued operations.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). Following the sale of substantially all manufacturing and operating assets and the entry into a long-term Distribution Agreement effective December 31, 2025, the Company no longer manufactures products or sells goods to customers. Instead, the Company operates as a commission-based distribution agent and earns a fixed percentage of distributor gross receipts from sales of Sow Good-branded products.

For the year ended December 31, 2025, the Company recognized no revenue from continuing operations, as the Distribution Agreement became effective at year end and no commission revenue was earned during the period. Revenue recognized in prior periods under the Company’s former manufacturing and direct-sales business model has been reclassified to loss from discontinued operations for all periods presented and is not comparable to revenue that may be recognized under the Company’s current commission-based distribution model.

Under ASC 606, the Company has concluded that it acts as an agent in these arrangements because it does not control the underlying products prior to transfer to end customers, does not have primary responsibility for fulfillment, and does not bear inventory or credit risk. Accordingly, for the units of inventory sold under the Distribution Agreement, the Company recognizes revenue on a net basis in an amount equal to the commission to which it is entitled.

The Company’s performance obligation under the Distribution Agreement is to provide ongoing brand support and access to the Sow Good brand to its distribution partner. This performance obligation is satisfied over time. Commission revenue is recognized in the period in which the related underlying product sales occur and the distributor’s gross receipts are generated, as this corresponds to when the Company’s right to consideration becomes fixed and determinable.

The Company does not record revenue related to gross product sales, shipping, or handling activities, that are performed by the Distributor and third-party manufacturers. The Company also does not record provisions for product returns, discounts, or allowances, for items which are sold by our Distributor.

Advertising Costs

Amounts related to the Company’s former manufacturing and direct-sales business model have been reclassified to loss from discontinued operations for all periods presented.

The Company did not recognize any advertising costs under our commission-based distribution model.

Sow Good Inc. 10-K