Sow Good Inc.

Previous wording

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.

Current wording

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 Quarterly Report on Form 10-Q and our audited financial statements and the notes to those statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. 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. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q titled “Risk Factors.” The information included herein represents our estimates and assumptions as of the date of this filing. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Factors that might cause or contribute to actual results or performance being materially different from those expressed or implied by such forward-looking statements include, but are not limited to, those set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q and in Item 1A. Risk Factors in the 2024 Annual Report on 10-K.

Previous wording

Sow Good is a trailblazing U.S.-based freeze dried candy and snack manufacturer dedicated to providing consumers with innovative and explosively flavorful freeze dried treats. Sow Good has harnessed the power of our proprietary freeze drying technology and product-specialized manufacturing facility to transform traditional candy into a novel and exciting everyday confectioneries subcategory that we call freeze dried candy. We began commercializing our freeze dried candy products in the first quarter of 2023, and as of March 31, 2025, we have twenty-one stock keeping units (“SKUs”) in our Sow Good Candy line of treats and three SKUs in our Sow Good Crunch Cream line, which consists of freeze dried ice cream bars and sandwiches. We sell our treats using an omnichannel strategy primarily focused on the wholesale and retail channels with less than 2% of sales coming from e-commerce as of March 31, 2025. As of March 31, 2025, our treats are offered for sale in approximately 3,000 brick-and-mortar retail outlets in the United States.

Current wording

Sow Good is a trailblazing U.S.-based freeze dried candy and snack manufacturer dedicated to providing consumers with innovative and explosively flavorful freeze dried treats. Sow Good has harnessed the power of our proprietary freeze drying technology and product-specialized manufacturing facility to transform traditional candy into a novel and exciting everyday confectioneries subcategory that we call freeze dried candy. We began commercializing our freeze dried candy products in the first quarter of 2023, and as of June 30, 2025, we have twenty-one stock keeping units (“SKUs”) and eight holiday SKUs in our Sow Good Candy line of treats and three SKUs in our Sow Good Crunch Cream line, which consists of freeze dried ice cream bars and sandwiches. We sell our treats using an omnichannel strategy primarily focused on the wholesale and retail channels with less than 2% of sales coming from e-commerce as of June 30, 2025. As of June 30, 2025, our treats are offered for sale in approximately 5,000 brick-and-mortar retail outlets in the United States.

Previous wording

We have built six bespoke freeze driers using proprietary technology tailored specifically to our products which allows us to freeze dry up to 24 million units of freeze dried candy per year, creating a truly state-of-the-art facility in Irving, Texas. We have six additional freeze driers, which we can have operational by the end of 2025, as needed.

Current wording

We have built six bespoke freeze driers using proprietary technology tailored specifically to our products which allows us to freeze dry up to 24 million units of freeze dried candy per year, creating a truly state-of-the-art facility in Irving, Texas. We have six additional freeze driers, which we can have operational, as needed.

Previous wording

Our products are sold in retailers nationwide from convenience and grocery stores to big-box retailers, such as Five Below, Misfits Market/Imperfect Foods, TJX Canada, Hy-Vee, Cracker Barrel, 7/11, H-E-B, Kroger and Albertsons. In addition, we sell a substantial portion of our products through distributors such as Redstone Foods, CB Distributors and Lipari Foods. We believe there is a significant growth opportunity in increasing our shelf presence, SKU portfolio, and number of stores with our existing customers. We aim to have the ability to increase the availability of our products to these customers in current locations and distribution to more of their stores, while also broadening our SKU portfolio offerings. Bolstering our distribution and sales force will be a key growth driver for Sow Good so more of our products are available wherever our consumers choose to shop, whether it be a retail store, convenience store, or directly online. To further support our retail launches with existing customers and strengthen our brand name, we provide our product displays with distinctive designs and product highlights to enhance our visibility in current stores and educate new consumers on the value of freeze dried treats. We believe this strategy will capture the attention of new consumers, further educate and attract current consumers, and ultimately, increase sales for our retailers.

Current wording

Our products are sold in retailers nationwide from convenience and grocery stores to big-box retailers, such as Five Below, H-E-B, Kroger, Albertsons, and Ace Hardware. In addition, we sell a substantial portion of our products through distributors such as C&S Wholesale and Dutch Valley Food Distributors. In addition, we have expanded our market to two Middle East distributors, Sugary Trading and Festival Sweets. We believe there is a significant growth opportunity in increasing our shelf presence, SKU portfolio, and number of stores with our existing customers. We aim to have the ability to increase the availability of our products to these customers in current locations and distribution to more of their stores, while also broadening our SKU portfolio offerings. Bolstering our distribution and sales force will be a key growth driver for Sow Good so more of our products are available wherever our consumers choose to shop, whether it be a retail store, convenience store, or directly online. To further support our retail launches with existing customers and strengthen our brand name, we provide our product displays with distinctive designs and product highlights to enhance our visibility in current stores and educate new consumers on the value of freeze dried treats. We believe this strategy will capture the attention of new consumers, further educate and attract current consumers, and ultimately, increase sales for our retailers.

Previous wording

We believe the growth of our business and our future success is dependent upon many factors. While the factors and trends described below present significant opportunities for us, they also pose important challenges that we must successfully address to enable us to sustain the growth of our business and improve our results of operations. 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.

Current wording

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.

Previous wording

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.

Current wording

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 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.

Previous wording

Ability to Grow Our Customer Base in Retail and Traditional Wholesale Distribution Channels

Current wording

Ability to Retain and Grow Our Customer Base in Retail and Traditional Wholesale Distribution Channels

Previous wording

We are currently growing 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, such as Five Below, Misfits Market/Imperfect Foods, TJX Canada, Hy-Vee, Cracker Barrel, 7/11, H-E-B, Kroger and Albertsons. In addition, we sell a substantial portion of our products through distributors such as Redstone, CB Distributors and Lipari Foods. 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.

Current wording

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, such as Five Below, H-E-B, Kroger, Albertsons, and Ace Hardware. In addition, we sell a substantial portion of our products through distributors such as C&S Wholesale and Dutch Valley Food Distributors. 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.

Previous wording

Impact of Inflation and Other Factors on Our Supply Chain and Operations

Current wording

Impact of Inflation, Tariff and Trade Policies and Other Factors on Our Supply Chain and Operations

Previous wording

We expect supplies and prices of the ingredients that we are going to use to be affected by a variety of factors, such as weather, seasonal fluctuations, demand, politics and economics in the producing countries. These factors subject us to shortages or interruptions in product supplies, which could adversely affect our revenue and profits. In addition, we may face limits on the ability to source some of the candy for our freeze dried candy products.\

Current wording

We expect supplies and prices of the ingredients that we are going to use to be affected by a variety of factors, such as weather, seasonal fluctuations, demand, politics and macroeconomic trends, including tariff and trade policies. These factors subject us to shortages or interruptions in product supplies, which could adversely affect our revenue and profits. In addition, we may face limits on the ability to source some of the candy for our freeze dried candy products.

Previous wording

Because we are early in our lifecycle of growth, it is difficult to discern the exact magnitude of seasonality affecting our business from a demand standpoint. While evidence of any demand seasonality is currently difficult to assess because of our growth, we anticipate certain holiday cycles such as Halloween, Christmas, Easter and Valentine’s Day contributing to revenue fluctuations within a given year. In addition, candy purchasing in summer months may be reduced due to a variety of factors including greater levels of health consciousness during warm weather. Operationally, heat waves from July through October of 2024 presented challenges in transporting our freeze-dried treats in the summer months. These conditions led to reduced shipments, higher inventory levels, and a decline in revenue. Additionally, some candy transported via external distribution channels during the extreme summer heat melted, impacting its shelf performance. We worked to remove affected products from shelves and replace them promptly to support recovery in product velocity. In the short term, these measures have impacted our market reputation, sell-through rates, and operational results. As a result, we anticipate an annual temporary decrease in shipments of our treats during summer months, which we believe is consistent with the greater candy industry trend.

Current wording

Because we are early in our lifecycle as a public company, it is difficult to discern the exact magnitude of seasonality affecting our business from a demand standpoint. While evidence of any demand seasonality remains difficult to assess, we anticipate certain holiday cycles such as Halloween, Christmas, Easter and Valentine’s Day contributing to revenue fluctuations within a given year. In addition, candy purchasing in summer months may be reduced due to a variety of factors including greater levels of health consciousness during warm weather. Operationally, heat waves from July through October of 2024 presented challenges in transporting our freeze-dried treats in the summer months. These conditions led to reduced shipments, higher inventory levels, and a decline in revenue. Additionally, some candy transported via external distribution channels during the extreme summer heat melted, impacting its shelf performance. We worked to remove affected products from shelves and replace them promptly to support recovery in product velocity. In the short term, these measures have impacted our market reputation, sell-through rates, and operational results. As a result, we anticipate an annual temporary decrease in shipments of our treats during summer months.

Previous wording

The Company recognized a federal income tax expense of $0, for each of the three months ended March 31, 2025 and 2024. The Company’s effective tax rates for the three months ended March 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.

Current wording

The Company recognized a federal income tax expense of $0 and $257,918, for the six months ended June 30, 2025 and 2024, respectively. The Company’s effective tax rates for the three months ended June 30, 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.

Previous wording

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 three months ended March 31, 2025 and 2024, we have determined that we have one operating segment and one reportable segment.

Current wording

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 six months ended June 30, 2025 and 2024, we have determined that we have one operating segment and one reportable segment.

Previous wording

Sales of freeze dried candy for the three months ended March 31, 2025 were $2.5 million, compared to $11.4 million for the three months ended March 31, 2024, a decrease of $8.9 million, or 78%, driven by significantly reduced demand due in large part to increased competitive and market pressure by large competitors.

Current wording

Sales of freeze dried candy for the three months ended June 30, 2025 were $1.86 million, compared to $15.6 million for the three months ended June 30, 2024, a decrease of $13.8 million, or 88%, driven by significantly reduced demand due in large part to increased competitive and market pressure by large competitors.

Previous wording

Cost of goods sold for the three months ended March 31, 2025 were $1.37 million, compared to $6.8 million for the three months ended March 31, 2024, a decrease of $5.4 million, or 80%. The decrease in cost of goods sold is primarily related to the decline in revenue.

Current wording

Cost of goods sold for the three months ended June 30, 2025 were $1.99 million, compared to $6.6 million for the three months ended June 30, 2024, a decrease of $4.7 million, or 70%. The decrease in cost of goods sold is primarily related to the decline in revenue.

Previous wording

Our gross profit margin was 45% during the three months ended March 31, 2025, compared to 41% for the three months ended March 31, 2024. Our gross profit margin increased primarily due to lower cost of goods sold as a percentage of sales.

Current wording

Our gross margin loss was (7%) during the three months ended June 30, 2025, compared to a gross margin profit of 58% for the three months ended June 30, 2024. Our gross margin decreased due to lower sales, and increased cost of goods sold as a percentage of revenues, due to the allocation increased overhead costs over less revenues.

Previous wording

Salaries and benefits for the three months ended March 31, 2025 were $1.9 million, compared to $2.4 million for the three months ended March 31, 2024, a decrease of $408.0 thousand, or 17%. The decrease in salaries and benefits was mainly due to a decrease in bonus compensation of approximately $450,000 compared to the prior year period. Salaries and benefits included stock-based compensation expense of $1.1 million for both of the three-month periods ended March 31, 2025, and 2024. Stock-based compensation consists of stock options expense for employees and officers of the Company.

Current wording

Salaries and benefits for the three months ended June 30, 2025 were $1.9 million, compared to $2.1 million for the three months ended June 30, 2024, a decrease of $408.0 thousand, or 9%. The decrease in salaries and benefits was mainly due to a decrease in bonus compensation of approximately $450,000 compared to the prior year period. Salaries and benefits included stock-based compensation expense of $1.1 million for both of the three-month periods ended June 30, 2025, and 2024. Stock-based compensation consists of stock options expense for employees and officers of the Company.

Previous wording

Professional services were $192.3 thousand for the three months ended March 31, 2025, compared to $467.8 thousand for the three months ended March 31, 2024, a decrease of $275.5 thousand, or 59%. The decrease was primarily due to decreased legal service expenses compared to the prior year period.

Current wording

Professional services were $258.2 thousand for the three months ended June 30, 2025, compared to $594.3 thousand for the three months ended June 30, 2024, a decrease of $336. thousand, or 57%. The decrease was primarily due to decreased legal service expenses compared to the prior year period.

Previous wording

Other general and administrative expenses for the three months ended March 31, 2025 were $1.4 million, compared to $872.3 thousand for the three months ended March 31, 2024, an increase of $502.2 thousand, or 58%, primarily due to increased facilities costs related to the company’s new facility, to the extent they are not allocated to inventory.

Current wording

Other general and administrative expenses for the three months ended June 30, 2025 were $1.7 million, compared to $1.4 million for the three months ended June 30, 2024, an increase of $346.4 thousand, or 25%, primarily due to increased facilities costs related to the company’s new facility, to the extent they are not allocated to inventory.

Previous wording

Depreciation of property and equipment for the three months ended March 31, 2025 and 2024, respectively, was $252.5 thousand and $167.0 thousand, of which $243.9 thousand and $162.4 thousand was allocated to cost of goods sold, which resulted in net depreciation expense of $8.6 thousand and $9.5 thousand, respectively.

Current wording

Depreciation of property and equipment for the three months ended June 30, 2025 and 2024, respectively, was $266.3 thousand and $167.4 thousand, of which $257.7 thousand and $162.4 thousand was allocated to cost of goods sold, which resulted in net depreciation expense of $8.6 thousand and $4.9 thousand, respectively.

Previous wording

In the three months ended March 31, 2025, other expense of $182.6 thousand consisted of interest expense derived from notes payable and the amortization of warrants issued as a debt discount, net of interest income on cash deposits. During the period ended March 31, 2024, other income consisted of interest expense of $418.7 thousand. Interest expense decreased due to decreased amortization on notes payable discounts as notes get closer to maturity.

Current wording

In the three months ended June 30, 2025, other expense of $113.2 thousand consisted of interest expense derived from notes payable and the amortization of warrants issued as a debt discount, net of interest income on cash deposits. During the period ended June 30, 2024, other income consisted of interest expense of $1.7 million. Interest expense decreased due to decreased amortization on notes payable discounts as notes get closer to maturity.

Previous wording

Pretax net loss for the three months ended March 31, 2025 was $2.6 million, compared to pretax net income of $510.0 thousand during the three months ended March 31, 2024, decrease in earnings of $3.1 million, or 604%. The transition to pretax net loss from pretax net income was primarily due the decrease in gross profit of $3.5 million, or 76% partially offset by decreased operating expenses of $182.3 thousand or 5%.

Current wording

Pretax net loss for the three months ended June 30, 2025 was $4.2 million, compared to pretax net income of $3.59 million during the three months ended June 30, 2024, decrease in earnings of $7.8 million, or 217%. The transition to pretax net loss from pretax net income was primarily due the decrease in gross profit of $9.1 million, or 101% partially offset by decreased operating expenses of $177.8 thousand or 4%.

Previous wording

The Company maintains a full valuation allowance related to our net deferred tax assets, primarily due to our historical net loss position. For the periods ended March 31, 2025 and 2024, the Company recognized federal income tax provisions of $. thousand and $0, respectively.

Current wording

The Company maintains a full valuation allowance related to our net deferred tax assets, primarily due to our historical net loss position. For the periods ended June 30, 2025 and 2024, the Company recognized federal income tax provisions of $0 and $257.9 thousand, respectively.

Previous wording

Gross profit for the three months ended March 31, 2025 was $1.1 million compared to gross profit of $4.6 million for the three months ended March 31, 2024, a decrease of $3.5 million, or 76%. Gross profit decreased over the comparative period due to decreased revenues of $8.9 million partially offset by lower cost of goods sold of $5.4 million.

Current wording

Gross profit for the six months ended June 30, 2025 was $973.0 thousand compared to gross profit of $13.6 million for the six months ended June 30, 2024, a decrease of $12.7 million, or 93%. Gross profit decreased over the comparative period due to decreased revenues of $22.7 million partially offset by lower cost of goods sold of $10.1 million.

Previous wording

As of March 31, 2025, we had working capital of $17.9 million, compared to working capital of $17.7 million as of December 31, 2024. The increased working capital is mainly attributable increases in accounts receivable of $0.9 million, in inventory of $0.8 million, and a decrease in the current portion of our lease liability of $0.4 million, and accrued expenses of $0.2 million, offset by decreases in cash of $2.1 million. As of March 31, 2025, our balance of cash and cash equivalents was $1.6 million, compared to $3.7 million at December 31, 2024. We expect to continue to incur significant capital expenditures related to the development and operation of our freeze dried candy business. Our ability to resume our production levels and distribution capabilities and further increase the value of our brands is in part dependent on our success in deploying additional capital. Our plan for satisfying our cash requirements for the next twelve months is through cash on hand and additional financing in the form of equity or debt as needed.

Current wording

As of June 30, 2025, we had working capital of $17.4 million, compared to working capital of $17.7 million as of December 31, 2024. The decreased working capital is mainly attributable a decrease in cash of $2.8 million, partially offset by a decrease in current notes payable as a result of the Notes Exchange. As of June 30, 2025, our balance of cash and cash equivalents was $959.4 thousand, compared to $3.7 million at December 31, 2024. We expect to continue to incur significant capital expenditures related to the development and operation of our freeze dried candy business. Our ability to resume our production levels and distribution capabilities and further increase the value of our brands is in part dependent on our success in deploying additional capital. Our plan for satisfying our cash requirements for the next twelve months is through cash on hand, 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 Quarterly Report on Form 10-Q for additional information.

Previous wording

Subsequent to quarter-end, the Company restructured its outstanding current debt through the issuance of new 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 “New Notes”) in an amount equal to $2.8 million, the aggregate principal amount of the Outstanding Notes, plus accrued and unpaid interest thereunder. The New 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 New Note on the applicable interest payment date and will no longer be owed to holders of the New Notes. The New 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 New Notes, with such conversion prices ranging from $0.62 to $0.63. The New 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 New 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, 2025.

Current wording

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 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.

Previous wording

The following table summarizes our cash flows during the three months ended March 31, 2025 and 2024, respectively.

Current wording

The following table summarizes our cash flows during the six months ended June 30, 2025 and 2024, respectively.

Previous wording

Net cash used in operating activities was $2.0 million for the three months ended March 31, 2025, compared to $1.3 million of cash used in operating activities three months ended March 31, 2024. The increase in cash used in operating activities was primarily due to increases in inventory and accounts receivable.

Current wording

Net cash used in operating activities was $2.0 million for the six months ended June 30, 2025, compared to $0.9 million of cash used in operating activities six months ended June 30, 2024. The increase in cash used in operating activities was primarily due to increases in inventory and accounts receivable.

Previous wording

Net cash used in investing activities was $108.0 thousand for the three months ended March 31, 2025, compared to $630.3 thousand for the three months ended March 31, 2024, a decrease of $522.5 thousand. Cash used in investing activities was primarily used to build out additional freezers and to improve our office space.

Current wording

Net cash used in investing activities was $108.0 thousand for the six months ended June 30, 2025, compared to $630.3 thousand for the six months ended June 30, 2024, a decrease of $522.5 thousand. Cash used in investing activities was primarily used to build out additional freezers and to improve our office space.

Previous wording

Net cash provided by financing activities was $0 and $3.7 million for the three months ended March 31, 2025 and 2024, respectively. Net cash provided by financing activities for the three months ended March 31, 2024 consisted of net proceeds of $3.7 million from private placement offerings to accredited investors and related parties from the issuance of 515,597 shares at $7.25 per share on March 28, 2024.

Current wording

Net cash provided by financing activities was $0 and $15.1 million for the six months ended June 30, 2025 and 2024, respectively. Net cash provided by financing activities for the six months ended June 30, 2024 consisted of net proceeds of $3.7 million from private placement offerings to accredited investors and related parties from the issuance of 515,597 shares at $7.25 per share on March 28, 2024.