INNOVATIVE FOOD HOLDINGS INC

September 30, 2025

(Unaudited)

1. NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim consolidated financial statements include those of Innovative Food Holdings, Inc. and all of its wholly-owned subsidiaries (collectively, “we,” “our,” “us” or the “Company”) and have been prepared in accordance with generally accepted accounting principles pursuant to Regulation S-X of the Securities and Exchange Commission and with the instructions to Form 10-Q. Certain information and footnote disclosures normally included in audited consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Accordingly, these interim financial statements should be read in conjunction with the Company’s audited financial statements and related notes as contained in Form 10-K for the year ended December 31, 2024. In the opinion of management, the interim unaudited consolidated financial statements reflect all adjustments, including normal recurring adjustments, necessary for fair presentation of the interim periods presented. The results of the operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results of operations to be expected for the full year.

Business Activity

We provide difficult-to-find specialty foods primarily to both Professional Chefs through our relationships with producers, growers, makers and distributors of these products worldwide. The distribution of these products primarily originates from our two warehouses and those of our drop ship partners, and is driven by our proprietary technology platform. In addition, we provide value-added services through our team of food specialists and Chef Advisors who offer customer support, menu ideas, and preparation guidance.

Restructuring

During the fourth quarter of 2023, we made the decision to focus more on our Business to Business (B2B) activities and less on our Direct to Consumer (“D2C”) products. Our subsidiaries GROW and Oasis were sold effective December 29, 2023; Haley Food Group, Inc. (“Haley”) was sold effective February 26, 2024, and the activities of P Innovations (“Plantbelly”) were abandoned; the igourmet platform and its D2C components were sold effective August 6, 2024. We continue to operate the B2B component, which remains part of our continuing operations. On October 8, 2024, we sold substantially all of the assets of Mouth. See Note 2.

Pursuant to the guidance of Accounts Standards Codification (“ASC”) 205-20,Presentation of Financial Statements–Discontinued Operations, the accounts of our discontinued entities GROW, Oasis, Haley, Plantbelly, and Mouth have been included in “ Loss from discontinued operations” in our consolidated statements of operations. Additionally, the assets and liabilities of these entities have been presented as discontinued operations in our consolidated balance sheets. On December 29, 2023, the Company completed the sales of its Grow and Oasis subsidiaries; on February 26, 2024, the Company completed the sale of its Haley subsidiary (see Note 4) and the activities of P Innovations (“Plantbelly”) were abandoned; and on October 8, 2024, the Company completed the sale of substantially all of the assets of Mouth. The only remaining discontinued operations on the Company’s balance sheet at December 31, 2024 is cash in the amount of $49,315 held by Mouth. During the third quarter of fiscal 2025, the Company committed to a strategic exit of its retail specialty cheese business, which served as the primary component of its national distribution platform. Accordingly, results for this business for all prior periods presented have been retrospectively reclassified to discontinued operations in accordance with ASC 205-20. In connection with this decision, the Company also elected to discontinue its related logistics operations and specialty cheese cutting activities.

Reclassifications

Certain amounts presented in the financial statements of the prior period have been reclassified to conform with the current period presentation of discontinued operations. See Note 2.

Use of Estimates

The preparation of these unaudited consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate these estimates, including those related to revenue recognition and concentration of credit risk. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Accounts subject to estimate and judgements are allowances for credit losses, allowances for slow moving & obsolete inventory, income taxes, intangible assets, operating and finance right of use assets and liabilities, and equity-based instruments. Actual results may differ from these estimates under different assumptions or conditions.

Concentrations of Credit Risk

Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents and trade receivables. The Company places its cash and temporary cash in investments with credit quality institutions. At times, such investments may be in excess of applicable government mandated insurance limit. As of September 30, 2025 and December 31, 2024, the Company’s largest customer, U.S. Foods, Inc. and its affiliates, accounted for approximately 16% and 11% of accounts receivable, respectively; Sam’s Club, represented 1% and 23% of accounts receivable, respectively; and Gate Gourmet, the leading global provider of airline catering solutions and provisioning services for airlines, represented 23% and 21% of accounts receivable, respectively.

The Company maintains cash balances in excess of Federal Deposit Insurance Corporation limits. At September 30, 2025 and December 31, 2024, the total cash in excess of these limits was $0 and $1,016,918, respectively.

Accounts Receivable

The Company provides an allowance for credit losses equal to the estimated uncollectible amounts pursuant to the guidance of Accounting Standards Update (“ASU”) 2016-13,Financial Instruments–Credit Losses (Topic 326) as codified in ASC 326,Financial Instruments–Credit Losses. The Company utilizes a current and expected credit loss (CECL) impairment model. The Company’s estimate is based on historical collection experience and a review of the current status of trade accounts receivable. It is reasonably possible that the Company’s estimate of the allowance for credit losses will change. Accounts receivable are presented net of an allowance for credit losses of $40,002 at September 30, 2025 and December 31, 2024.

Inventory

Inventory is valued at the lower of cost or net realizable value, and is determined by the average cost method. The Company adjusts inventory based upon bi-weekly cycle counts and upon the expiration date of food products. In addition, the Company records a provision for excess, obsolete, and slow-moving inventory. This provision reduces the carrying value of inventory to its net realizable value.

Leases

The Company accounts for leases in accordance with Financial Accounting Standards Board (“FASB”) ASC 842,Leases. The Company determines if an arrangement is a lease at inception. Operating lease right-of-use assets (“ROU assets”) and short-term and long-term lease liabilities are included on the face of the consolidated balance sheet.

ROU assets represent the right of use to an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. For lease agreements with terms less than 12 months, the Company has elected the short-term lease measurement and recognition exemption, and it recognizes such lease payments on a straight-line basis over the lease term.

Revenue Recognition

The Company recognizes revenue upon product delivery. All of our products are shipped either same day or overnight or through longer shipping terms to the customer and the customer takes title to product and assumes risk and ownership of the product when it is delivered. Shipping charges to customers are included in revenues.

For revenue from product sales (i.e., specialty foodservice and e-commerce), the Company recognizes revenue in accordance with FASB ASC Topic 606,Revenue from Contracts with Customers. A five-step analysis must be met as outlined in Topic 606: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

Warehouse and logistics services revenues are primarily comprised of inventory management, order fulfilment and warehousing services. Warehouse and logistics services revenues are recognized at the point in time when the services are rendered to the customer.

Disaggregation of Revenue

The following table represents a disaggregation of revenue for the three and nine months ended September 30, 2025 and 2024:

Cost of Goods Sold

We have included in cost of goods sold all costs which are directly related to the generation of revenue. These costs include primarily the cost of food and raw materials, packing and handling, shipping, and delivery costs.

We have also included all payroll costs as cost of goods sold in our leasing and logistics services business.

Basic and Diluted Earnings Per Share

Basic net earnings per share is based on the weighted average number of shares outstanding during the period, while fully-diluted net earnings per share is based on the weighted average number of shares of common stock and potentially dilutive securities assumed to be outstanding during the period using the treasury stock method. Potentially dilutive securities consist of options and warrants to purchase common stock and shares issuable under executive compensation plan. Basic and diluted net loss per share is computed based on the weighted average number of shares of common stock outstanding during the period.

The Company uses the treasury stock method to calculate the impact of outstanding stock options and warrants. Stock options and warrants for which the exercise price exceeds the average market price over the period have an anti-dilutive effect on earnings per common share and, accordingly, are excluded from the calculation.

Dilutive Shares at September 30, 2025:

Stock Options

None.

Restricted Stock Awards

At September 30, 2025, there were 300,000 unvested restricted stock awards remaining from grants in a prior year. Those 300,000 restricted stock awards will vest as follows:125,000 restricted stock awards will vest contingent upon the attainment of a stock price of $2.00 per share for 20 straight trading days, and an additional 175,000 restricted stock awards will vest contingent upon the attainment of a stock price of $3.00 per share for 20 straight trading days. The fair value of these RSUs at the date of the grants will be charged to operations upon vesting. At September 30, 2025, none of these RSU were vested. There was no charge to operations for these RSUs during the three and nine months ended September 30, 2025.

Stock-based Compensation

At September 30, 2025, there were a total of 350,735 shares of common stock potentially issuable to the Company’s executive officers pursuant to compensation plans and contingent upon the achievement of certain performance goals; see Notes 14 and 17. These shares have vested and are included in basic shares outstanding and fully-diluted earnings per share for the three and nine months ended September 30, 2025. During the three and nine months ended September 30, 2025, the amount of $158,713 and $361,115, respectively, was charged to stock-based compensation. See Notes 14 and 17.

Computation of basic and diluted EPS:

There are no potentially issuable shares not included in basic earnings per share, and no difference between EPS and fully-diluted EPS for the three and nine months ended September 30, 2025.

Dilutive shares at September 30, 2024:

Stock Options

The following table summarizes the options outstanding and the related prices for the options to purchase shares of the Company’s common stock issued by the Company at September 30, 2024:

Restricted Stock Awards

At September 30, 2024, there are 300,000 unvested restricted stock awards remaining from grants in a prior year. Those 300,000 restricted stock awards will vest as follows:125,000 restricted stock awards will vest contingent upon the attainment of a stock price of $2.00 per share for 20 straight trading days, and an additional 175,000 restricted stock awards will vest contingent upon the attainment of a stock price of $3.00 per share for 20 straight trading days. The fair value of these RSUs at the date of the grants will be charged to operations upon vesting. At September 30, 2024, none of these RSU were vested. There was no charge to operations for these RSUs during the three and nine months ended September 30, 2024.

Stock-based Compensation

At September 30, 2024, there were a total of 2,494,990 shares of common stock potentially issuable to the Company’s executive officers pursuant to compensation plans and contingent upon the achievement of certain performance goals; see Notes 14 and 17. Of these,644,320 shares have vested and are included in fully-diluted shares outstanding during the nine months ended September 30, 2024;2,490,990 have not vested, and are excluded from the calculation of fully-diluted shares outstanding during the nine months ended September 30, 2024. During the three and nine months ended September 30, 2024, the amounts of $105,269 and $313,773, respectively, were charged to stock-based compensation.

New Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses (DISE)” which requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact ASU 2024-03 will have on its consolidated financial statements.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as expensing of U.S. research expenditures and eligible capital expenditures, the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The impacts of the OBBBA are reflected in our results for the quarter ended September 30, 2025, and there was no impact to our income tax expense or effective income tax rate.

In July 2025, the FASB issued ASU 2025-05, which provides a practical expedient for estimating expected credit losses on short term receivables and contract assets from revenue transactions. The guidance permits a simplified loss rate approach based on historical write off experience and current conditions. The Company is evaluating the standard and its potential effect on the allowance for doubtful accounts and its consolidated financial statements.

2. DISCONTINUED OPERATIONS

During the fourth quarter of fiscal 2023, in connection with an analysis of the Company’s sales mix and profitability by service offering, management made the strategic decision to focus on the Company’s B2B service offering and to allocate fewer resources to and in some cases to sell certain of the Company’s subsidiaries involved in its D2C service offerings. Pursuant to this strategy, on December 29, 2023, the Company completed the sales of its Grow and Oasis subsidiaries; on February 26, 2024, the Company completed the sale of its Haley subsidiary (see Note 4), and the activities of P Innovations (“Plantbelly”) were abandoned; on October 8, 2024, the Company sold substantially all of the assets of Mouth.

During the third quarter of fiscal 2025, the Company committed to a strategic exit of its retail specialty cheese business, which served as the primary component of its national distribution platform. In connection with this decision, the Company also elected to discontinue its related logistics operations and specialty cheese cutting activities. As part of this exit, the Company is in the process of selling the associated Pennsylvania production and distribution facility.

Accordingly, the operating results and related assets and liabilities of the retail specialty cheese business, including igourmet, along with the Company’s logistics subsidiary (LII / IFP) and specialty cheese cutting operations, have been reclassified to discontinued operations for all periods presented.

The following information presents the major classes of line item of assets and liabilities included as part of discontinued operations in the consolidated balance sheets:

The following information presents the major classes of line items constituting the after-tax loss from discontinued operations in the consolidated statements of operations:

The following information presents the significant operating and investing noncash items in the discontinued operations of the statement of cash flows:

3. SALE OF ASSETS

On February 14, 2024, the Company sold its property located at 28411 Race Track Road, Bonita Springs, Florida, for net cash proceeds of $2,101,185, net of the payoff of principal and interest in the amount of $356,215 on Maple Mark Term Loan 2. A gain in the amount of $1,807,516 was recorded on this transaction.

4. SALE OF SUBSIDIARY

On February 26, 2024, the Company sold 100% of the equity interests in Haley for the return of 21,126 shares of the Company’s common stock held by the buyer. Haley had no assets or liabilities at the time of the sale. The Company valued the 21,126 shares of common stock at the market price on the date of the acquisition of $1.00 per sale and recorded a gain in the amount of $21,126 on this transaction.

5. ACCOUNTS RECEIVABLE

At September 30, 2025 and December 31, 2024, accounts receivable consists of:

During the three and nine months ended September 30, 2025, the Company charged the amount of $33,521 and $61,831 to provision for credit losses, respectively. During the three and nine months ended September 30, 2024, the Company charged the amount of $4,812 and $40,667 to provision for credit losses, respectively.

6. INVENTORY

Inventory consists primarily of specialty food products. At September 30, 2025 and December 31, 2024, inventory consisted of the following:

7. PROPERTY AND EQUIPMENT

A summary of property and equipment at September 30, 2025 and December 31, 2024 is as follows:

Depreciation expense for property and equipment amounted to $50,171 and $22,636 for the three months ended September 30, 2025 and 2024, respectively, and $147,480 and $76,765 for the nine months ended September 30, 2025 and 2024, respectively. Depreciation expense for property and equipment is recorded in selling, general & administrative expenses on the Company’s statement of operations. During the nine months ended September 30, 2025 and 2024, the Company acquired property and equipment in the amount of $229,278 and $309,262, respectively.

9. RIGHT OF USE (“ROU”) ASSETS AND LEASE LIABILITIES–OPERATING LEASES

The Company has operating leases for offices, warehouses, vehicles, and office equipment. The Company’s leases have remaining lease terms of 1 year to 3 years, some of which include options to extend.

The Company’s lease expense for the three months ended September 30, 2025 and 2024 was entirely comprised of operating leases and amounted to $69,857 and $4,633, respectively. The Company’s lease expense for the nine months ended September 30, 2025 and 2024 was entirely comprised of operating leases and amounted to $212,239 and $9,266, respectively.

The Company’s ROU asset amortization for the three months ended September 30, 2025 and 2024 was $60,454 and $4,175, respectively. The Company’s ROU asset amortization for the nine months ended September 30, 2025 and 2024 was $184,426 and $12,740, respectively. The difference between the lease expense and the associated ROU asset amortization consists of interest.

The weighted-average discount rate for operating leases was 7.00% at September 30, 2025 and December 31, 2024. The weighted-average remaining lease term of operating leases was 2.17 and 2.85 years at September 30, 2025 and December 31, 2024, respectively.

Right of use assets – operating leases are summarized below:

Operating lease liabilities are summarized below:

Maturity analysis under these lease agreements are as follows:

10. RIGHT OF USE ASSETS–FINANCING LEASES

The Company has financing leases for vehicles and warehouse equipment. Right of use asset – financing leases are summarized below:

Depreciation expense related to right of use assets for the three months ended September 30, 2025 and 2024 was $5,954 and $5,954, respectively. Depreciation expense related to right of use assets for the nine months ended September 30, 2025 and 2024 was $17,862 and $17,862, respectively.

The weighted-average interest rate for financing leases was 5.44% at September 30, 2025 and 5.83 % at December 31, 2024. The weighted-average remaining lease term of financing leases was 2.82 and 2.80 years at September 30, 2025 and December 31, 2024, respectively.

Financing lease liabilities are summarized below:

There was no accrued interest on financing leases at September 30, 2025 and December 31, 2024.

Aggregate maturities of lease liabilities:

11. INTANGIBLE ASSETS

The Company acquired certain indefinite intangible assets pursuant to the acquisitions of Artisan and Golden Organics. These assets include trade names and customer lists.

Other Amortizable Intangible Assets

The following table represents the balances of other amortizable intangible assets as of September 30, 2025 and December 31, 2024:

Total amortization expense for the three months ended September 30, 2025 and 2024 was $21,578 and $0, respectively. Total amortization expense for the nine months ended September 30, 2025 and 2024 was $64,735 and $0, respectively.

Remaining amortization expense for intangible assets as of September 30, 2025 is as follows:

Other Infinite Intangible Assets

Other non-amortizable intangible assets consist of $217,000 of indefinite intangible assets held by Artisan.

The Company acquired certain intangible assets pursuant to the acquisitions through Artisan. The following is the net book value of these assets:

12. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at September 30, 2025 and December 31, 2024 are as follows:

13. ACCRUED SEPARATION COSTS–RELATED PARTIES

On February 3, 2023, the Company entered into a Severance Note, an Agreement and General Release, and a Side Letter thereto (the “SK Agreements”) with Sam Klepfish, its prior CEO and a previous board member. The SK Agreements provide, among other things, for Mr. Kelpfish’s resignation from all positions with the Company and its subsidiaries on February 28, 2023, except that Mr. Klepfish will remain a director and member of the board of the Company, confidentiality and non-disparagement conditions, nomination of Mr. Klepfish for future election to the board of directors at least through the 2024 general meeting of shareholders based on certain minimum stock ownership and Board Observer rights when Mr. Klepfish is no longer a director but maintains certain minimum agreed upon stock ownership. The payment terms are $250,000 upon effectiveness and an additional $1,000,000 payable in weekly payments of $6,410.26 from March 8, 2023 through March 6, 2026. The $250,000 was paid into an escrow account, and was released to Mr. Klepfish on his separation date. The $1,000,000 portion is in the form of an unsecured, non-interest bearing-note payable to Mr. Klepfish. The SK Agreements also called for the delivery of 400,000 shares of the Company’s common stock valued at $168,000 based upon the closing price of the Company’s common stock on Mr. Klepfish’s separation date of February 28, 2023, which were delivered to Mr. Klepfish on April 26, 2023; in addition, for delivery on June 1, 2027 of additional shares of the Company’s common stock equal to the greater of (i) the number of shares with an aggregate fair market value of $400,000 on such date, or (ii)266,666 shares. The Company also agreed to pay a total of $1,199 of the Consolidated Omnibus Reconciliation Act (“COBRA”) insurance costs on behalf of Mr. Klepfish over eighteen months. The total amount initially accrued in connection with the SK Agreements was $1,819,199.

On February 28, 2023, the Company entered into a separation agreement (the “Wiernasz Separation Agreement”) with Justin Wiernasz, a former director and previous Director of Strategic Acquisitions. Pursuant to the Wiernasz Separation Agreement, the Company agreed to a payment of $100,000 in cash as follows: $33,333 upon execution of the agreement, $33,333 on March 15, 2023, and $33,334 on April 15, 2023. The Company also agreed to make the COBRA insurance payments on behalf of Mr. Wiernasz in the amount of $2,548 per month for twelve months with a maximum of $26,451. The total amount initially accrued in connection with the Wiernasz Separation Agreement was $126,451.

On February 6, 2024, the Company entered into a separation agreement (the “Tang Separation Agreement”) with Richard Tang, its former Chief Financial Officer, effective as of December 31, 2023. Pursuant to the Tang Separation Agreement, the Company has agreed to pay to Mr. Tang, in equal installments over a five-month period, the gross sum of $113,918. In addition, Mr. Tang was reimbursed the amount of $4,000 for legal expenses connected with the review of the Tang Separation Agreement. The severance payment were made in the following installments: (i) $25,890 paid the week of March 4, 2024; (ii) $5,178 paid each successive week for seventeen weeks beginning the week of March 11, 2024, until the severance payment was completed. In addition, the Company reimbursed Tang’s group health insurance premiums under COBRA in the amount of $14,495.

On October 4, 2025, the Company entered into a separation agreement and general release (the “Bennett Separation Agreement”) with Bill Bennett, pursuant to which Mr. Benett will resign from his position as the Chief Executive Officer of the Company, effective October 3, 2025. Pursuant to the Bennett Separation Agreement, the Company shall (i) pay Mr. Benett a severance payments consisting of salary continuation through December 31, 2025, in the total gross amount of $115,501, payable in installments on the Company’s regular payroll dates; and (ii) reimbursement of Mr. Bennett’s group health insurance premiums for the period from November 1, 2025 through September 30, 2026 in the total gross amount of $31,515. See Note 22. At September 30, 2025, the Company had not made any payments under the Bennett Separation Agreement.

During the three months ended September 30, 2025 and 2024, the Company paid cash in the amount of $55,556 and $83,333, respectively, to Mr. Klepfish in connection with the SK Agreements. During the nine months ended September 30, 2025 and 2024, the Company paid cash in the amount of $222,222 and $250,000, respectively, to Mr. Klepfish in connection with the SK Agreements.

During the nine months ended September 30, 2025 and 2024, the Company made COBRA payments on behalf of Mr. Wiernasz in the amount of $0 and $967, respectively.

During the three months ended September 30, 2025 and 2024, the Company made the following payments in connection with the Tang Separation Agreement: The Company paid cash to Mr. Tang in the amount of $0 and $5,178, respectively; and COBRA payments on behalf of Mr. Tang in the amount of $0 and $2,956, respectively.

During the nine months ended September 30, 2025 and 2024, the Company made the following payments in connection with the Tang Separation Agreement: The Company paid cash to Mr. Tang in the amount of $0 and $113,918, respectively; and COBRA payments on behalf of Mr. Tang in the amount of $0 and $14,495, respectively.

The following table represents the amounts accrued, paid, and outstanding on these agreements as of September 30, 2025:

14. STOCK APPRECIATION RIGHTS LIABILITY

Effective May 15, 2023, the Company issued 1,500,000 stock appreciation rights (the “Smallwood SARs”) to Brady Smallwood, its Chief Operating Officer (“COO”). See Note 17. The Smallwood SARs were valued utilizing the Black-Scholes valuation model, and had an aggregate fair value of $9,794 upon issuance; this amount was charged to operations and credited to stock appreciation rights liability. The Smallwood SARs are revalued each quarter, and any gain or loss in the fair value is charged to non-cash compensation expense. See Note 17 for calculation method and significant assumptions used in the valuation model.

The change in valuation of the Smallwood SARs is summarized in the table below:

15. LINE OF CREDIT

16. NOTES PAYABLE

There was a total of $0 and $18,866 accrued interest on notes payable at September 30, 2025 and December 31, 2024, respectively.

Aggregate maturities of notes payable as of September 30, 2025 are as follows:

For the period ended December 31,

17. EQUITY

Common Stock

As of September 30, 2025, total number of shares of common stock issued and outstanding was 57,279,246 and 54,434,949, respectively. As of December 31, 2024, total number of shares of common stock issued and outstanding was 56,009,032 and 53,164,735, respectively. At September 30, 2025 and December 31, 2024, a total of 2,844,297 shares of common stock were deemed issued but not outstanding. At September 30, 2025 and December 31, 2024, an additional 350,735 and 738,032 shares, respectively, were classified as common stock to be issued. These shares represent shares of common stock vested under the Company’s executive stock compensation plans, and are in the process of being administratively issued.

For the nine months ended September 30, 2025:

On January 9, 2025, the Company issued 60,000 shares of common stock pursuant to the cashless exercise of options held by an ex-employee to purchase 130,000 shares of common stock at a price of $1.25 per share and an additional 130,000 shares of common stock at a price of $1.75 per share. There was no gain or loss recorded on this transaction.

On January 13, 2025, the Company issued 24,026 shares of common stock pursuant to the cashless exercise of options held by an ex-employee to purchase 50,000 shares of common stock at a price of $1.00 per share. There was no gain or loss recorded on this transaction.

On March 14, 2025, the Company issued the following shares of common stock to its executive officers pursuant to executive compensation plans:530,665 shares were issued to its CEO;133,632 shares were issued to its COO; and 73,735 shares were issued to its CFO. These shares were classified as shares to be issued on the Company’s balance sheet at December 31, 2024. There was no gain or loss recorded on this transaction.

On June 2, 2025, the Company issued 273,026 shares of common stock to its CEO pursuant to an executive compensation plan. There was no gain or loss recorded on this transaction.

On June 3, 2025, the Company issued 92,168 shares of common stock to its CFO pursuant to an executive compensation plan. There was no gain or loss recorded on this transaction.

On July 3, 2025, the Company issued 82,952 shares of common stock to its CFO pursuant to an executive compensation plan. There was no gain or loss recorded on this transaction.

For the nine months ended September 30, 2024:

On May 30, 2024, the Company issued a net amount of 24,138 shares of common stock pursuant to the cashless exercise of 50,000 options at an exercise price of $0.60 per shares. There was no gain or loss on this transaction because the shares were issued at the fair value of $1.16 per share.

On July 9, 2024, the Company issued a total of 1,415,544 shares of common stock pursuant to the Company’s executive stock option plans. These shares were recorded at the aggregate par value of $1,415; there was no gain or loss recorded on these transactions as the shares were issued pursuant to the terms of the compensation plans.

Common Stock Received from Sale of Subsidiary

On February 26, 2024, the Company sold 100% of the equity interests in Haley for the return of 21,126 shares of the Company’s common stock held by the buyer. (see Note 3). The Company Haley had no assets or liabilities at the time of the sale; the Company valued the 21,126 shares of common stock at the market price on the date of the acquisition of $1.00 per sale and recorded a gain in the amount of $21,126 on this transaction.

Share based executive compensation plans

CEO Stock Plan

On February 3, 2023, the Company entered into an employment agreement with Bill Bennett to become the Company’s CEO. On November 3, 2023, the Company recognized that the hiring of Mr. Bennett was protracted, and the original employment agreement calculated the number of shares of common stock to be granted in connection with the CEO Stock Plan on the basis of the number of shares of common stock outstanding as of October 2022, which did not take into consideration the number of shares that were issued to a departing executive and to certain other employees of the Company thereafter. Accordingly, the number of shares issuable to Mr. Bennett at each price target was adjusted, effective as of the original date of the plan. Pursuant to this agreement, Mr. Bennett was provided with an incentive compensation plan (the “CEO Stock Plan”) whereby Mr. Bennett would be granted shares of the Company’s common stock upon the common stock meeting certain price points at various 60-day volume weighted prices, as described below:

The fair value of the CEO Stock Plan was determined via a Monte Carlo market-based performance stock awards model to be $660,541. This amount will be recorded as a charge to compensation expense and additional paid-in capital on a straight-line basis over 34 months.

On October 4, 2025, the Company entered into a separation agreement and general release with Mr. Bennett, pursuant to which Mr. Bennett resigned from his position as the Chief Executive Officer of the Company effective October 1, 2025. See Note 22. During the three months ended September 30, 2025, the Company charged the unamortized portion of the value of the CEO Stock Plan I the amount of $115,795 to compensation expense and additional paid-in capital. During the three and nine months ended September 30, 2025, the amount of $115,795 and $232,361, respectively, were charged to operations pursuant to the CEO Stock Plan. During the three months and nine months ended September 30, 2024, the amounts of $58,283 and $174,849, respectively, were charged to operations pursuant to the CEO Stock Plan.

On January 31, 2025, the price target of $1.80 per share under the CEO Stock Plan was achieved and 243,783 shares of common stock vested, and on March 3, 2025, the price target of $2.00 per share under the CEO Stock Plan was achieved and 243,783 shares of common stock vested. The total number of shares vested for achievement of the $1.80 and $2.00 price targets was 487,566. On June 2, 2025,273,036 shares of common stock were issued in partial satisfaction of this obligation; an additional 214,530 shares are classified as common stock to be issued on the Company’s balance sheet at September 30, 2025.

On July 30, 2024, the price target of $1.20 per share under the CEO Stock Plan was achieved and 365,675 shares of common stock vested; on October 7, 2024, the price target of $1.40 per share under the CEO Stock Plan was achieved and 365,675 shares of common stock vested; on December 16, 2024, the price target of $1.60 per share under the CEO Stock Plan was achieved and 243,783 shares of common stock vested. The total number of shares vested at for achievement of the $1.20, $1.40, and $1.60 price targets was 975,133. On February 6, 2025, a total of 530,665 shares of common stock were issued in satisfaction of this obligation, net of 444,468 shares withheld for taxes.

On May 28, 2024,487,567 shares of common stock vested pursuant to the achievement of the $1.00 price target of the CEO Stock Plan. These shares were issued on July 9, 2024.

On March 19, 2024,731,350 shares of common stock vested pursuant to the achievement of the $0.80 price target of the CEO Stock Plan. These shares were issued on July 9, 2024.

On November 7, 2023, the Company issued 678,302 shares of common stock, net of 296,831 shares withheld for income tax purposes, to its Chief Executive Officer pursuant the achievement of the $0.60 price target in the CEO Stock Plan.

There are no shares unvested under the CEO Stock Plan at September 30, 2025.

COO Stock Plan

On April 14, 2023, the Company entered into an employment agreement with Brady Smallwood to become the Company’s COO, effective May 15, 2023. Pursuant to this agreement, Mr. Smallwood was provided with an incentive compensation plan (the “COO Stock Plan”) whereby Mr. Smallwood would be granted shares of the Company’s common stock upon the common stock meeting certain price points at various 60-day volume weighted prices, as described below:

The fair value of the COO Stock Plan was determined via a Monte Carlo market-based performance stock awards model to be $199,951. This amount will be recorded as a charge to compensation expense and additional paid-in capital on a straight-line basis over 31.5 months. During the three and nine months ended September 30, 2025, the amount of $19,043 and $57,129, respectively, was charged to operations pursuant to the COO Stock Plan. During the three and nine months ended September 30, 2024, the amounts of $19,043 and $57,129, respectively, were charged to operations pursuant to the COO Stock Plan.

On April 17, 2024,196,627 shares of common stock vested pursuant to the achievement of the $0.87 price target of the COO Stock Plan. These shares were issued on July 9, 2024.

On July 25, 2024, the price target of $1.16 per share under the COO Stock Plan was achieved and 147,470 shares of common stock vested pursuant to this plan; on November 13, 2024, the price target of $1.45 per share under the COO Stock Plan was achieved, and 98,313 shares of common stock vested. On March 14, 2025,133,632 shares of common stock were issued in satisfaction of these obligations, net of 112,151 shares withheld for taxes.

On January 14, 2025, the price target of $1.74 per share under the COO Stock Plan was achieved and 73,735 shares of common stock vested; and on March 7, 2025, the price target of $2.03 per share under the COO Stock Plan was achieved, and 73,735 shares of common stock vested. The total number of shares vested for achievement of the $1.74 and $2.03 price targets was 147,470.

At September 30, 2025, a total of 147,470 shares of common stock remain unvested under the COO Stock Plan, and an additional 55,503 shares are classified as common stock to be issued on the Company’s balance sheet.

CFO Stock Plan

On December 29, 2023, the Company entered into an employment agreement with Gary Schubert to become the Company’s CFO effective January 1, 2024. Pursuant to this agreement, Mr. Schubert was provided with an incentive compensation plan (the “CFO Stock Plan”) whereby Mr. Schubert would be granted shares of the Company’s common stock upon the common stock meeting certain price points at various 60-day volume weighted prices, as described below:

The fair value of the CFO Stock Plan was determined via a Monte Carlo market-based performance stock awards model to be $238,747 at inception (see “Stock Plan Valuation” section below). This amount will be recorded as a charge to compensation expense and additional paid-in capital on a straight-line basis over the 30-month life of the plan beginning January 1, 2024. During the three and nine months ended September 30, 2025, the amount of $23,875 and $71,625, respectively, was charged to operations pursuant to the CFO Stock Plan. During the three and nine months ended September 30, 2024, the amounts of $23,875 and $71,625, respectively, were charged to operations pursuant to the CFO Stock Plan.

On July 31, 2024, the price target of $1.23 per share under the CFO Stock Plan was achieved and 131,085 shares of common stock vested pursuant to this plan. On February 6, 2025,73,735 shares of common stock were issued in satisfaction of this obligation, net of 57,350 shares withheld for taxes.

On December 27, 2024, the price target of $1.63 per share under the CFO Stock Plan was achieved and 98,313 shares of common stock vested; and on March 10, 2025, the price target of $2.04 per share under the CFO Stock Plan was achieved and 65,542 shares of common stock vested. The total number of shares vested for achievement of the $1.63 and $2.04 price targets was 163,855; on June 3, 2025,92,168 of these shares were issued.

On July 3, 2025,82,952 shares, which were previously earned, were issued from common stock to be issued pursuant to the CFO stock plan.

At September 30, 2025, a total of 196,627 shares of common stock remain unvested under the CFO Stock Plan, and an additional 80,903 shares are classified as common stock to be issued on the Company’s balance sheet.

On October 3, 2025, the Company entered into an executive employment agreement (the “Schubert Agreement”) with Gary Schubert, pursuant to which Mr. Schubert shall resign from his current position of Chief Financial Officer of the Company and shall be appointed as the Chief Executive Officer of the Company and a member of the Company’s Board of Directors (the “Board”), effective October 3, 2025. See Note 22.

Stock Appreciation Rights

Effective May 15, 2023, the Company issued 1,500,000 stock appreciation rights (the “Smallwood SARs”) to Brady Smallwood, its COO. The Smallwood SARs vest upon issuance, and expire on December 31, 2026;750,000 of the Smallwood SARs are priced at $1.50 per share, and 750,000 are priced at $2.00 per share. It is the Company’s intention to settle the Smallwood SARs in cash if the stock price exceeds the $1.50 and $2.00 per share price prior to the expiration date. The Smallwood SARs were valued utilizing the Black-Scholes valuation model, and had an aggregate fair value of $9,794 upon issuance; this amount was charged to operations and credited to stock appreciation rights liability. The Smallwood SARs are revalued each quarter, and any gain or loss in the fair value is charged to non-cash compensation expense.

During the three and nine months ended September 30, 2025, Smallwood SARs decreased in fair value in the amount $849,835 and $1,077,098, respectively; these amounts were charged to non-cash compensation. During the three and nine months ended September 30, 2024, the Smallwood SARs decreased in fair value and increased in fair value in the amount $55,587 and $476,161, respectively; these amounts were charged to non-cash compensation. At September 30, 2025 and December 31, 2024, the Smallwood SARs had a fair value of $276,052 and 1,353,150, respectively.

The Smallwood SARs were valued using the Black-Scholes valuation model utilizing the following variables:

Options

Transactions involving stock options are summarized as follows:

On January 9, 2025, the Company issued 60,000 shares of common stock pursuant to the cashless exercise of options held by an ex-employee to purchase 130,000 shares of common stock at a price of $1.25 per share and an additional 130,000 shares of common stock at a price of $1.75 per share. There was no gain or loss recorded on this transaction.

On January 13, 2025, the Company issued 24,026 shares of common stock pursuant to the cashless exercise of options held by an ex-employee to purchase 50,000 shares of common stock at a price of $1.00 per share. There was no gain or loss recorded on this transaction.

During the three months ended September 30, 2025 and 2024, the Company charged the amount of $0 and $2,034, respectively, to operations for the vesting of stock options. During the nine months ended September 30, 2025 and 2024, the Company charged the amount of $0 and $4,068, respectively, to operations for the vesting of stock options.

18. SEGMENTS

The Company’s Chief Operating Decision Maker (“CODM”) has determined that the Company operates inone reportable segment: the delivery of specialty foods. This determination was made based upon the characteristics of our business and the information used by the CODM in order monitor the business and allocate resources. The single segment utilizes multiple sales channels.

During the three and nine months ended September 30, 2025, the Company’s CODM was a group consisting of our executive management team: Gary Schubert, CEO and Brady Smallwood, COO.

The CODM uses net income to monitor budget versus actual results. The CODM also uses revenue by category to monitor the growth of the business in each of our target markets.

The following table presents our segment results by sales channel:

19. RELATED PARTY TRANSACTIONS

Payments to Prior Executive Officers under Separation Agreements

Nine months ended September 30, 2025:

During the three and nine months ended September 30, 2025, the Company paid cash in the amount of $55,556 and $222,222, respectively, to Mr. Klepfish, its prior CEO, in connection with the SK Agreements.

Nine months ended September 30, 2024:

During the three and nine months ended September 30, 2024, the Company paid cash in the amount of $83,333 and $250,000, respectively, to Mr. Klepfish.

During the three and nine months ended September 30, 2024, the Company made the following payments in connection with the Wiernasz Separation Agreement: The Company made COBRA payments on behalf of Mr. Weirnasz in the amount of $0 and $967, respectively.

During the three and nine months ended September 30, 2024, the Company made the following payments in connection with the Tang Separation Agreement: The Company paid cash to Mr. Tang in the amount of $5,178 and $113,918, respectively, and COBRA payments on behalf of Mr. Tang in the amount of $2,956 and $14,495, respectively.

20. MAJOR CUSTOMERS

During the three months ended September 30, 2025 and 2024, U.S. Foods, Inc. and its affiliates accounted for approximately 36% and 41% of total consolidated sales, respectively. Gate Gourmet accounted for approximately 15% and 20% of total consolidated sales, respectively.

Discontinued operations: Sams Club accounted for approximately 18% and 0% of total consolidated sales in 2025 and 2024, respectively. Sales to Sams Club related entirely to the discontinued Pennsylvania distribution operations and are not expected to continue in future periods.

During the nine months ended September 30, 2025 and 2024, U.S. Foods, Inc. and its affiliates accounted for approximately 34% and 47% of total consolidated sales, respectively. Gate Gourmet accounted for approximately 15% and 18% of total consolidated sales, respectively.

Discontinued Operations: Sams Club accounted for approximately 18% and 0% of total consolidated sales in 2025 and 2024, respectively. Sales to Sams Club related entirely to the discontinued Pennsylvania distribution operations and are not expected to continue in future periods.

21. COMMITMENTS AND CONTINGENCIES

Litigation

From time to time, the Company has become and may become involved in certain lawsuits and legal proceedings which arise in the ordinary course of business, or as the result of current or previous investments, or current or previous subsidiaries, or current or previous employees, or current or previous directors, or as a result of acquisitions and dispositions or other corporate activities. The Company intends to vigorously defend its positions. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our financial position or our business and the outcome of these matters cannot be ultimately predicted.

22. SUBSEQUENT EVENTS

Appointment of CEO

On October 3, 2025, Innovative Food Holdings, Inc., entered into an executive employment agreement (the “Schubert Agreement”) with Gary Schubert, pursuant to which Mr. Schubert resigned from his current position of Chief Financial Officer of the Company and was appointed as the Chief Executive Officer of the Company and a member of the Board, effective October 3, 2025.

Pursuant to the Schubert Agreement, Mr. Schubert is entitled to (i) an annual base salary of $400,000, beginning on January 1, 2026, subject to a 3% annual increase, (ii) a stock grant of 1,350,000 shares of common stock of the Company, subject to a vesting schedule, by March 31, 2026, and (iii)an annual cash incentive with a target (attainable upon achievement of certain performance goals) of not less than $137,500 with a cap of the lower of (a) $400,000 and (b) 8% of the Company’s adjusted free cash flow over the previous calendar year, beginning in calendar year 2026.

Mr. Schubert’s employment with the Company shall terminate upon the first of the following: (i) December 31, 2028, provided that the Schubert Agreement will be automatically renewed for successive one-year terms unless the Board gives Mr. Schubert with a 90-day advance written notice of non-renewal; (ii) death; (iii) the termination due to disability upon not less than 30-day prior written notice by the Company to Mr. Schubert; (iv) the written notice by the Company to Mr. Schubert of a termination for cause; (v) the written notice by the Company to Mr. Schubert of an involuntary termination without cause; (vi) the written notice by Mr. Schubert to the Company of a resignation for good reason; and (vii) the not less than 30-day prior written notice by Mr. Schubert to the Company of a resignation without good reason.

There are no arrangements or understandings between the Company and Mr. Schubert pursuant to which Schubert was appointed and there is no family relationship between or among any director or executive officer of the Company or Mr. Schubert. There are no transactions, to which the Company is or was a participant and in which Mr. Schubert has a material interest subject to disclosure under Item 404(a) of Regulation S-K.

CEO Separation Agreement

On October 4, 2025, the Company entered into a separation agreement and general release (the “Bennett Separation Agreement”) with Bill Bennett, pursuant to which Mr. Benett will resign from his position as the Chief Executive Officer of the Company, effective October 3, 2025.

Pursuant to the Separation Agreement, the Company shall (i) pay Mr. Benett a severance payment in installments for a total gross amount of $115,500.97 for the period of October 4, 2025, through and including December 31, 2025, and (ii) reimburse Mr. Bennett for his group health insurance premiums for the period from November 1, 2025 through September 30, 2026, subject to the terms and conditions of the Separation Agreement.

Mr. Bennett has agreed to provide consultancy services to the Company as a consultant and independent contractor from January 1, 2025 until March 31, 2025 for $25,000, which is to be paid in installments.

Mr. Bennett also resigned as a member of the Board, effective October 3, 2025. Mr. Bennett’s resignation is not the result of any disagreement with the Company, the Board, or management, or any matter relating to the Company’s operations, policies or practices.

The foregoing descriptions of the Schubert Agreement and Separation Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the Schubert Agreement and Separation Agreement, which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and are incorporated herein by reference.

Sale of Facility

The Company, through its subsidiary Innovative Food Properties LLC, entered into an Agreement of Purchase and Sale, dated as of July 28, 2025 and amended on September 11, 2025, September 29, 2025 and November 13, 2025 (the “Sale Agreement”), with Mountaintop Holdings LLC (“Mountaintop Holdings”), pursuant to which the Company agreed to sell to Mountaintop Holdings the real property located at 220 Oak Hill Road in Mountaintop, Pennsylvania, together with certain associated property. The total purchase price specified in the agreement is$9,225,000, which includes deposits already paid and held in escrow. The purchaser inspection and due diligence period has been completed and passed. No gain or loss has been recorded as of the date of these financial statements. The sale of the properties under the Sale Agreement is expected to occur on January 12, 2026. If the closing has not occurred by January 12, 2026, Mountaintop Holdings may request a t30-day extension to such closing date by depositing $250,000 with the title company and an additional 30-day extension by depositing $100,000 with the title company.