INNOVATIVE FOOD HOLDINGS INC

March 31, 2026

(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, the “Company”) and have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) pursuant to Regulation S-X of the Securities and Exchange Commission (the “SEC”) and with the instructions to Form 10-Q. Certain information and footnote disclosures normally included in audited consolidated financial statements prepared in accordance with U.S. GAAP 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 its Annual Report on Form 10-K for the year ended December 31, 2025. 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 months ended March 31, 2026 are not necessarily indicative of the results of operations to be expected for the full year.

Business Activity

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

Discontinued Operations

The Company relied on the guidance of Accounting Standards Codification (“ASC”) 205-20,Presentation of Financial Statements–*Discontinued Operations,*in presenting the results of its discontinued operations. 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, including igourmet, along with the Company’s logistics subsidiaries (Logistics Innovations LLC (“LII”) and Innovative Food Properties LLC (“IFP”)). During the year ended December 31, 2025, the accounts of the following entities are included in net loss from discontinued operations and in the discontinued operations sections of the Company’s balance sheet: IFP, LII, and the activity of igourmet directly related to its cheese business. See Note 3.

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 3. In addition, restricted cash has been included with unrestricted cash in the cash totals in the statement of cash flows.

Use of Estimates

The preparation of these unaudited consolidated financial statements requires the Company 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, the Company evaluates these estimates, including those related to revenue recognition and concentration of credit risk. The Company bases its 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 allowance for credit losses, allowance for slow moving and obsolete inventory, income taxes, contingent liabilities, 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. The Company believes its estimates have not been materially inaccurate in past years, and its assumptions are not likely to change in the foreseeable future.

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 accounts receivable. 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 March 31, 2026 and December 31, 2025, trade receivables from the Company’s largest customer accounted for approximately 23% and 18%, respectively, of total trade receivables.

The Company maintains cash balances in excess of Federal Deposit Insurance Corporation limits. At March 31, 2026 and December 31, 2025, the total cash in excess of these limits was $0 and $261,808, 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. Under ASC 326, 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 $247,272 and $218,319 at March 31, 2026 and December 31, 2025, respectively.

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 and Finance lease right-of-use (“ROU”) assets and current and noncurrent 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. For finance leases, the Company recognizes the amortization of the ROU asset over the shorter of the lease term or useful life of the underlying asset. Interest accretion on the finance lease liabilities is recorded as interest expense. 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 the Company’s 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.

Warehouse and logistics services revenue is 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. Warehouse rental services are recognized over the period the service is provided.

Disaggregation of Revenue

The following table represents a disaggregation of revenue for the three months ended March 31, 2026 and 2025:

Cost of Goods Sold

The Company has 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. The Company has also included all payroll costs as cost of goods sold in its warehouse and logistics services business.

Basic and Diluted Earnings Per Share (“EPS”)

Basic net EPS is based on the weighted average number of shares outstanding during the period, while fully-diluted net EPS 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 restricted stock awards (“RSAs”).

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 March 31, 2026:

Stock Options

None.

Restricted Stock Awards

At March 31, 2026, there were 300,000 unvested RSAs remaining from grants in a prior year. Those 300,000 RSAs will vest as follows:125,000 RSAs 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 RSAs will vest contingent upon the attainment of a stock price of $3.00 per share for 20 straight trading days. At March 31, 2026, none of these RSAs vested as conditions were not satisfied. Accordingly, there was no charge for these RSAs during the three months ended March 31, 2026, and 2025.

The Company also has in place Executive Stock Plans for its executive team. See Note 16.

When shares are granted under the Company’s Executive Stock Plans, the Company withholds the number of shares required to satisfy income tax withholding requirements on the award, calculated at the market value of the Company’s stock on the date the award is granted.

Stock-based Compensation

During the three months ended March 31, 2026, the Company charged the amount of $23,874 to operations in connection with Executive Stock Plans. See Note 16 for additional information.

At March 31, 2026, there were no shares of common stock which have vested and are issuable pursuant to Executive Stock Plans.

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 months ended March 31, 2026.

Dilutive Shares at March 31, 2025:

Stock Options

None.

Restricted Stock Awards

At March 31, 2025, there were 300,000 unvested RSAs remaining from grants in a prior year. Those 300,000 RSAs will vest as follows:125,000 RSAs 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 RSAs 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 RSAs at the date of the grants will be charged to operations upon vesting. At March 31, 2025, none of these RSA’s were vested. There was no charge to operations for these RSAs during the three months ended March 31, 2025.

Stock-based Compensation

At March 31, 2025, there were a total of 1,142,989 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 Note 16). Of these,798,891 shares have vested and are included in fully-diluted shares outstanding during the three months ended March 31, 2025;344,098 have not vested, and are excluded from the calculation of fully-diluted shares outstanding during the three months ended March 31, 2025. During the three months ended March 31, 2025, the amount of $101,201 was charged to stock-based compensation. See Note 16.

Computation of basic and diluted EPS:

The Company recorded a net loss for the three months ended March 31, 2025, and all of potentially issuable shares are anti-dilutive. There is no difference between EPS and fully-diluted EPS for the three months ended March 31, 2025.

Recently Adopted Accounting Pronouncements

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 the Company’s results for the three months ended March 31, 2026, and there was no impact to its income tax expense or effective income tax rate.

In July 2025, the FASB issued 2025-05,Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets, which allows companies to elect a practical expedient to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on these assets. The Company adopted ASU 2025-05 effective January 1, 2026, on a prospective basis. The adoption of this accounting standard did not have a material impact on the Company’s financial condition, results of operations, or cash flows.

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 evaluating standard and its potential effect on its consolidated financial statements and segment disclosures.

2. REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

As previously reported in the Annual Report on Form 10-K for the year ended December 31, 2025, the Company revised amounts reported in previously issued financial statements for the periods presented in this Quarterly Report on Form 10-Q related to immaterial errors. The errors relate to certain costs directly related to the revenue generation and cost of goods sold. The costs were not properly categorized in prior periods, which led to an overstatement of revenue and a corresponding overstatement of cost of goods sold. There was no effect to consolidated net income (loss) in any of the revised periods.

The Company evaluated the aggregate effects of the errors to its previously issued financial statements in accordance with SEC Staff Accounting Bulletins No. 99 and No. 108 and, based upon quantitative and qualitative factors, determined that the errors were not material to the previously issued financial statements and disclosures included in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025.

The following tables present the effects of the aforementioned revisions on the Company’s consolidated statements of operations for the quarterly period ended March 31, 2025.

3. DISCONTINUED OPERATIONS

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 has sold 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 subsidiaries (LII and 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 items related to discontinued operations in the statement of cash flows:

4. SALE OF ASSETS

On March 6, 2026, the Company closed the sale of its warehouse and office facility in Mountaintop, Pennsylvania. A gain in the amount of $2,764,063 was recorded on this transaction. The following table presents components of the sale and gain:

In connection with this transaction, the Company’s term loan with Maple Mark Bank was paid off and a loss on the early extinguishment of debt of $608,539 was recorded.

5. ACCOUNTS RECEIVABLE

At March 31, 2026 and December 31, 2025, accounts receivable consisted of:

During the three months ended March 31, 2026 and 2025, the Company charged the amount of $8,199 and $9,381 to provision for credit losses, respectively.

6. INVENTORY

Inventory consists primarily of specialty food products. At March 31, 2026 and December 31, 2025, inventory consisted of the following:

7. PROPERTY AND EQUIPMENT

A summary of property and equipment at March 31, 2026 and December 31, 2025 is as follows:

Depreciation expense for property and equipment amounted to $38,751 and $50,171 for the three months ended March 31, 2026 and 2025, respectively. Depreciation expense for property and equipment is recorded in selling, general & administrative expenses on the Company’s statement of operations. During the three months ended March 31, 2026 and 2025, the Company acquired property and equipment in the amount of $31,183 and $163,366, respectively.

8. PROPERTY AND EQUIPMENT CLASSIFIED AS HELD FOR SALE

Assets held for sale include the net book value of property and equipment the Company plans to sell within the next year. Long lived assets that meet the criteria are held for sale and reported at the lower of their carrying value or fair value less estimated cost to sell.

As of December 31, 2025, the Company classified the land and building located at 220 Oak Hill Road, Mountain Top, Pennsylvania, as held for sale. During the year ended December 31, 2025, the Company classified certain leasehold improvements at the Mountain Top property as held for sale. This property was sold during the three months ended March 31, 2026. See Note 4 for additional information.

The net book value of these assets consisted of the following at December 31, 2025:

9. RIGHT OF USE 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 March 31, 2026 and 2025 was entirely comprised of operating leases and amounted to $75,877 and $70,866, respectively.

The Company’s ROU asset amortization for the three months ended March 31, 2026 and 2025 was $68,896 and $61,469, 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 March 31, 2026 and December 31, 2025. The weighted-average remaining lease term of operating leases was 1.68 and 2.16 years at March 31, 2026 and December 31, 2025, 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 for the year ended December 31:

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 March 31, 2026 and 2025 was $5,954 and $24,915, respectively.

The weighted-average interest rate for financing leases was 5.4% and 5.77% at March 31, 2026 and December 31, 2025, respectively. The weighted-average remaining lease term of financing leases was .92 and 2.80 years at March 31, 2026 and December 31, 2025, respectively.

Financing lease liabilities are summarized below:

There was no accrued interest on financing leases at March 31, 2026 and December 31, 2025.

Aggregate maturities of lease liabilities – financing leases:

11. INTANGIBLE ASSETS

The Company acquired certain indefinite intangible assets pursuant to the acquisitions of Artisan Specialty Foods, Inc. (“Artisan”) and Golden Organics, Inc. (“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 March 31, 2026 and December 31, 2025:

Total amortization expense for the three months ended March 31, 2026 and 2025 was $21,579 and $21,578, respectively.

Remaining amortization expense for intangible assets as of March 31, 2026 is as follows:

Indefinite-lived Intangible Assets

Indefinite-lived intangible assets consist of $217,000 of indefinite intangible assets held by Artisan.

12. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at March 31, 2026 and December 31, 2025 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 Chief Executive Officer (“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. During the three months ended March 31, 2026 and 2025, the Company paid cash in the amount of $64,477 and $83,333, respectively, to Mr. Klepfish in connection with the SK Agreements.

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. Bennett will resign from his position as the CEO of the Company, effective October 3, 2025. Pursuant to the Bennett Separation Agreement, the Company shall (i) pay Mr. Bennett 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. During the three months ended March 31, 2026, the Company paid cash in the amount of $16,428 and COBRA payments in the amount of $8,572 under the Bennett Separation Agreement.

The following table represents the amounts accrued, paid, and outstanding on these agreements as of March 31, 2026:

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 former Chief Operating Officer (“COO”). 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 months ended March 31, 2026 and 2025, Smallwood SARs decreased in fair value in the amount $15,410 and $60,595, respectively; these amounts were charged to non-cash compensation. At March 31, 2026 and December 31, 2025, the Smallwood SARs had a fair value of $733 and $16,143, respectively.

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

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

The price of the Company’s common stock on the date of the grant of the Smallwood SARs was $0.41. The exercise prices at the dates of the grants were $1.50 and $2.00.

15. NOTES PAYABLE

Aggregate maturities of notes payable as of March 31, 2026 are as follows:

For the period ended December 31,

16. EQUITY

Common Stock

As of March 31, 2026, total number of shares of common stock issued and total number of shares of common stock outstanding was 57,493,776 and 54,649,479, respectively. As of December 31, 2025, total number of shares of common stock issued and total number of shares of common stock outstanding was 57,493,776 and 54,649,479, respectively. At March 31, 2026 and December 31, 2025, a total of 2,844,297 shares of common stock were deemed issued but not outstanding.

For the three months ended March 31, 2026, the Company did not issue any common stock.

Below is the common stock activity for the three months ended March 31, 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.

Executive Stock Plans

Predecessor CEO Stock Plan

The stock plan with Mr. Bennett (the “Predecessor CEO Stock Plan”) had a fair value of $660,541 at inception (see “Stock Plan Valuation” section below). This amount is being amortized over the 34-month life of the plan. During the years ended December 31, 2025 and 2024, $232,361 and $233,132 of this amount was charged to operations, respectively.

During the year ended December 31, 2025, the price targets of $1.80 and $2.00 were achieved, and Mr. Bennett became eligible to receive an additional total of 487,566 shares. A total of 1,018,231 shares were issued to Mr. Bennett, net of 444,468 shares withheld for taxes; at December 31, 2025, there areno further shares due to Mr. Bennett pursuant to the Predecessor CEO Stock Plan.

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 CEO of the Company effective October 1, 2025. During the year ended December 31, 2025, the Company charged the unamortized portion of the value of the Predecessor CEO Stock Plan in the amount of $115,795 to compensation expense and additional paid-in capital

There are no shares unvested under the Predecessor CEO Stock Plan at March 31, 2026 or December 31, 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 COO Stock Plan had a fair value of $199,951 at inception (see “Valuation of Executive Stock Plans” section below). This amount is being amortized over the 31.5-month life of the plan. During the three months ended March 31, 2026 and 2025, $0 and $19,043 of this amount was charged to operations, respectively.

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. These shares were issued during the year ended December 31, 2025. On December 31, 2025, a total of 147,471 unvested shares were forfeited under the COO Stock Plan.

Successor CEO Stock Plan

On October 3, 2025, the Company entered into an employment agreement with Gary Schubert pursuant to which he will serve as the Company’s Chief Executive Officer (the “CEO Employment Agreement”). The CEO Employment Agreement provides for the grant of 1,350,000 shares of the Company’s common stock, subject to a vesting schedule, no later than March 31, 2026 (the “Successor CEO Stock Plan”). As of March 31, 2026, such shares had not yet been granted. The Company and Mr. Schubert are working collaboratively and in good faith to finalize the applicable vesting schedule, performance criteria and related grant documentation, with the objective of completing the grant process by June 30, 2026. The parties have not entered into an amendment to the CEO Employment Agreement, and no waiver of any rights or obligations thereunder has been made. As of the date of this filing, there are no disputes between the Company and Mr. Schubert regarding the Successor CEO Stock Grant, and Mr. Schubert has not delivered any notice of resignation for Good Reason under the CEO Employment Agreement. In the event Mr. Schubert were to deliver such a notice, the CEO Employment Agreement provides the Company with a 60-calendar-day period to cure the circumstances giving rise to such notice, as provided therein. The CEO Employment Agreement and Successor CEO Stock Plan replaced Mr. Schubert’s executive compensation plan that was in place during his role as the Company’s Chief Financial Officer.

Prior CFO Stock Plan

On December 29, 2023, the Company entered into an employment agreement with Gary Schubert to become the Company’s Chief Financial Officer effective January 1, 2024. Pursuant to this agreement, Mr. Schubert was provided with an incentive compensation plan (the “Prior 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 Prior CFO Stock Plan had a fair value of $238,747 at inception (see “Valuation of Executive Stock Plans” section below). This amount is being amortized over the 30-month life of the plan. During the three months ended March 31, 2026 and 2025, $23,874 and $23,875 of this amount was charged to operations, respectively.

On March 10, 2025, the price target of $2.04 per share under the Prior CFO Stock Plan was achieved and 65,542 shares of common stock vested. These shares were issued during the year ended December 31, 2025. On October 3, 2025, a total of 196,627 unvested shares were forfeited under the Prior CFO Stock Plan.

Valuation of Executive Stock Plans

The Company relied upon the guidance of Statement of Financial Account Standards No. 718 Compensation – Stock Compensation (“ASC 718”) in accounting for the Predecessor CEO Stock Plan, the COO Stock Plan, and the Prior CFO Stock Plan (collectively, the Executive Stock Plans). A Monte Carlo market-based performance stock awards model was used in valuing the Executive Stock Plans, with the following assumptions:

Options

For the three months ended March 31, 2026, there was no stock options activity.

Below is the stock option activity for the three months ended March 31, 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.

As of March 31, 2026 and 2025, there were no options outstanding.

17. SEGMENTS

The Company’s Chief Operating Decision Maker (“CODM”) is the CEO, Gary Schubert, and he has determined that the Company operates inone reportable segment: the delivery of specialty foods. This determination was made based upon the characteristics of the Company’s business and the information used by the CODM in order monitor the business and allocate resources.

The CODM uses consolidated revenue, gross margin percentage and net income to monitor results. The CODM also uses revenue by category to monitor the growth of the business in each of the Company’s target markets.

The following table presents the Company’s segment results:

18. RELATED PARTY TRANSACTIONS

Payments to Prior Executive Officers under Separation Agreements

For the three months ended March 31, 2026

The Company paid cash in the amount of $64,477 to Mr. Klepfish, its prior CEO, in connection with the SK Agreements.

The Company paid cash in the amount of $25,000 to Mr. Bennett, its prior CEO, in connection with the Bennet Separation Agreement.

For the three months ended March 31, 2025

The Company paid cash in the amount of $83,333 to Mr. Klepfish, its prior CEO, in connection with the SK Agreements.

19. MAJOR CUSTOMERS

During the three months ended March 31, 2026 and 2025, U.S. Foods, Inc. and its affiliates accounted for approximately 40% and 41% of total consolidated sales, respectively. Gate Gourmet accounted for approximately 15% and 19% of total consolidated sales during the three months ended March 31, 2026 and 2025, respectively.

Discontinued operations: Sams Club accounted for approximately 0% and 19% of total consolidated sales in 2026 and 2025, respectively. Sales to Sams Club related entirely to the discontinued Pennsylvania distribution operations and are not expected to continue in future periods.

20. 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 the Company’s financial position or its business and the outcome of these matters cannot be ultimately predicted.