Sow Good Inc.
For the period ended Sep 30, 2025. Filed Nov 14, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 14, 2025
SOWG$2.26+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0000950170-25-108449
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0001193125-25-281675
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 94 previous paragraphs and 103 current paragraphs.
59 unchanged; 31 reworded; 13 added; 4 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Cost of goods sold for the three months ended September 30, 2025 were $10.5 million, compared to $3.0 million for the three months ended September 30, 2024, an increase of $7.5 million, or 250%. The increase was primarily due to charges to inventory to reserve for finished goods and materials associated with SKUs that the Company no longer intends to produce or sell, as well as the related write-down of overhead allocated to this inventory.
Current report
Impairment of long-lived assets
Current report
During the three months ended September 30, 2025, the Company recognized impairment charges of $24.7 thousand related to the derecognition of the Rock Quarry lease and the write-off of certain associated leasehold improvements. No impairment charges were recorded during the three months ended September 30, 2024.
Current report
Gain on termination of leases
Current report
During the three months ended September 30, 2025, the Company recognized a noncash gain of $1.8 million on the derecognition of the Rock Quarry and Mockingbird leases. No gain or loss on lease exits were recorded during the three months ended September 30, 2024.
Current report
Comparison of the nine months ended September 30, 2025 and September 30, 2024
Current report
Cost of goods sold for the nine months ended September 30, 2025 were $13.9 million, or 235% of sales compared to $16.4 million, or 54% of sales for the nine months ended September 30, 2024, a decrease of $2.6 million. The increase of cost of goods sold as a percent of sales was primarily due to charges to inventory to reserve for finished goods and materials associated with SKUs that the Company no longer intends to produce or sell, as well as the related write-down of overhead allocated to this inventory.
Current report
Impairment of long-lived assets
Current report
During the nine months ended September 30, 2025, the Company recognized impairment charges of $24.7 thousand related to the derecognition of the Rock Quarry lease and the write-off of certain associated leasehold improvements. No impairment charges were recorded during the nine months ended September 30, 2024.
Current report
Interest
Current report
Gain on termination of leases
Current report
During the three months ended September 30, 2025, the Company recognized a noncash gain of $1.8 million on the derecognition of the Rock Quarry and Mockingbird leases. No gain or loss on lease exits were recorded during the three months ended September 30, 2024.
Current report
On July 1, 2023, the Company entered into a lease for additional warehouse space in Irving, Texas, of approximately 9,000 feet under a 37-month lease at a rate of $8,456 per month, with approximately a 4% annual escalation of lease payments. The facility lease contains provisions requiring payment of property taxes, utilities, insurance, maintenance and other occupancy costs applicable to the leased premise. As the Company’s leases do not provide implicit discount rates, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate for the lease at the time of commencement was 8%.
Removed paragraphs (4)
Previous report
Cost of goods sold for the three months ended June 30, 2025 were $1.99 million, compared to $6.6 million for the three months ended June 30, 2024, a decrease of $4.7 million, or 70%. The decrease in cost of goods sold is primarily related to the decline in revenue.
Previous report
Comparison of the six months ended June 30, 2025 and June 30, 2024
Previous report
Cost of goods sold for the six months ended June 30, 2025 were $3.4 million, compared to $13.4 million for the six months ended June 30, 2024, a decrease of $10.1 million , or 75%. The decrease in cost of goods sold is primarily related to the decline in revenue. Cost of goods sold increased as a percentage of revenues due to higher occupancy costs compared to the prior year period.
Previous report
On January 19, 2024, the Company entered into a sublease agreement (the “Sublease Agreement”) with Papsa Merx S. de R.S. de C.V., a corporation registered in Mexico City, Mexico (the “Sublessor”). Pursuant to the terms of the Sublease Agreement, the Company will sublease approximately 141 rentable square meters at Av. Roble 660, Valle del Campestre, 66265 San Pedro Garza García Municipality, Nuevo León, 66269 (the “Premises”) for a term of approximately seventeen months (the “Term”), which the Company intends to use as office space. The Term of the Lease Agreement will commence on February 1, 2024. The Sublease Agreement provides for rent payments at fixed price of $5.25 thousand per month plus the corresponding Value Added Tax for the duration of the Term. The Company is also responsible for operating expenses of the Premises, which includes a maintenance fee, electricity and internet services. The Company is required to provide a deposit of guarantee in the amount of $5.25 thousand in connection with the Sublease Agreement. The Sublease Agreement does not have a renewal period.
Reworded paragraphs (31)
Previous wording
Sow Good is a trailblazing U.S.-based freeze dried candy and snack manufacturer dedicated to providing consumers with innovative and explosively flavorful freeze dried treats. Sow Good has harnessed the power of our proprietary freeze drying technology and product-specialized manufacturing facility to transform traditional candy into a novel and exciting everyday confectioneries subcategory that we call freeze dried candy. We began commercializing our freeze dried candy products in the first quarter of 2023, and as of June 30, 2025, we have twenty-one stock keeping units (“SKUs”) and eight holiday SKUs in our Sow Good Candy line of treats and three SKUs in our Sow Good Crunch Cream line, which consists of freeze dried ice cream bars and sandwiches. We sell our treats using an omnichannel strategy primarily focused on the wholesale and retail channels with less than 2% of sales coming from e-commerce as of June 30, 2025. As of June 30, 2025, our treats are offered for sale in approximately 5,000 brick-and-mortar retail outlets in the United States.
Current wording
Sow Good is a trailblazing U.S.-based freeze dried candy and snack manufacturer dedicated to providing consumers with innovative and explosively flavorful freeze dried treats. Sow Good has harnessed the power of our proprietary freeze drying technology and product-specialized manufacturing facility to transform traditional candy into a novel and exciting everyday confectioneries subcategory that we call freeze dried candy. We began commercializing our freeze dried candy products in the first quarter of 2023, and as of September 30, 2025, we have fifteen stock keeping units (“SKUs”) in our Sow Good Candy line of treats. We sell our treats using an omnichannel strategy primarily focused on the wholesale and retail channels with less than 2% of sales coming from e-commerce as of September 30, 2025. As of September 30, 2025, our treats are offered for sale in approximately 5,000 brick-and-mortar retail outlets in the United States.
Previous wording
The Company recognized a federal income tax expense of $0 and $257,918, for the six months ended June 30, 2025 and 2024, respectively. The Company’s effective tax rates for the three months ended June 30, 2025 and 2024 differed from the federal statutory tax rate of 21% primarily due to a valuation allowance for the Company’s deferred tax assets and permanent differences.
Current wording
The Company recognized a federal income tax expense of $0 and $195,603, for the nine months ended September 30, 2025 and 2024, respectively. The Company’s effective tax rates for the three months ended September 30, 2025 and 2024 differed from the federal statutory tax rate of 21% primarily due to a valuation allowance for the Company’s deferred tax assets and permanent differences.
Previous wording
Our chief operating decision makers, who are our Chief Executive Officer and our Executive Chairman, review financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance, as well as for strategic operational decisions and managing the organization. For each of the six months ended June 30, 2025 and 2024, we have determined that we have one operating segment and one reportable segment.
Current wording
Our chief operating decision makers, who are our Chief Executive Officer and our Executive Chairman, review financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance, as well as for strategic operational decisions and managing the organization. For each of the nine months ended September 30, 2025 and 2024, we have determined that we have one operating segment and one reportable segment.
Previous wording
Sales of freeze dried candy for the three months ended June 30, 2025 were $1.86 million, compared to $15.6 million for the three months ended June 30, 2024, a decrease of $13.8 million, or 88%, driven by significantly reduced demand due in large part to increased competitive and market pressure by large competitors.
Current wording
Sales of freeze dried candy for the three months ended September 30, 2025 were $1.6 million, compared to $3.6 million for the three months ended September 30, 2024, a decrease of $2.0 million, or (56%), driven by significantly reduced demand due in large part to increased competitive and market pressure by large competitors.
Previous wording
Gross profit for the three months ended June 30, 2025 was $(0.1) million compared to gross profit of $9.0 million for the three months ended June 30, 2024, a decrease of $9.1 million, or 101%. Gross profit decreased over the comparative period due to a decrease in revenues of $13.8 million, partially offset by a decrease in the cost of goods sold of $4.7 million.
Current wording
Gross profit for the three months ended September 30, 2025 was $(8.9) million compared to gross profit of $0.6 million for the three months ended September 30, 2024, a decrease of $(9.5) million, or (1709%). Gross profit decreased over the comparative period due to a decrease in revenues of $2.0 million, coupled with an increase in the cost of goods sold of $7.5 million, largely due to inventory reserve charges.
Previous wording
Our gross margin loss was (7%) during the three months ended June 30, 2025, compared to a gross margin profit of 58% for the three months ended June 30, 2024. Our gross margin decreased due to lower sales, and increased cost of goods sold as a percentage of revenues, due to the allocation increased overhead costs over less revenues.
Current wording
Our gross margin loss was (576%) during the three months ended September 30, 2025, compared to a gross margin profit of 16% for the three months ended September 30, 2024. Our gross margin decreased due to lower sales and increased cost of goods sold as a percentage of revenues due to inventory reserve charges.
Previous wording
Salaries and benefits for the three months ended June 30, 2025 were $1.9 million, compared to $2.1 million for the three months ended June 30, 2024, a decrease of $408.0 thousand, or 9%. The decrease in salaries and benefits was mainly due to a decrease in bonus compensation of approximately $450,000 compared to the prior year period. Salaries and benefits included stock-based compensation expense of $1.1 million for both of the three-month periods ended June 30, 2025, and 2024. Stock-based compensation consists of stock options expense for employees and officers of the Company.
Current wording
Salaries and benefits for the three months ended September 30, 2025 were $1.8 million, compared to $1.9 million for the three months ended September 30, 2024, a decrease of $49.0 thousand, or (3%). The decrease in salaries and benefits was mainly due to headcount reductions in the third quarter. Salaries and benefits included stock option amortization expense of $1.3 million for both of the three-month periods ended September 30, 2025, and 2024. Stock-based compensation also includes amortization of shares granted to officers in lieu of cash of $104,554 for the three months ended September 30, 2025.
Previous wording
Professional services were $258.2 thousand for the three months ended June 30, 2025, compared to $594.3 thousand for the three months ended June 30, 2024, a decrease of $336. thousand, or 57%. The decrease was primarily due to decreased legal service expenses compared to the prior year period.
Current wording
Professional services were $97.6 thousand for the three months ended September 30, 2025, compared to $320.3 thousand for the three months ended September 30, 2024, a decrease of $222.7 thousand, or (70%). The decrease was primarily due to decreased legal service expenses compared to the prior year period.
Previous wording
Other general and administrative expenses for the six months ended June 30, 2025 were $3.1 million, compared to $2.3 million for the six months ended June 30, 2024, an increase of $848.6 thousand or 37%, primarily due to increased facilities costs related to the company’s new facility, to the extent they are not allocated to inventory.
Current wording
Other general and administrative expenses for the three months ended September 30, 2025 were $1.7 million, compared to $1.6 million for the three months ended September 30, 2024, an increase of $104.7 thousand, or 7% primarily due to increased facilities costs, such as property tax, utilities, and rent expense.
Previous wording
Depreciation of property and equipment for the three months ended June 30, 2025 and 2024, respectively, was $266.3 thousand and $167.4 thousand, of which $257.7 thousand and $162.4 thousand was allocated to cost of goods sold, which resulted in net depreciation expense of $8.6 thousand and $4.9 thousand, respectively.
Current wording
Depreciation of property and equipment for the three months ended September 30, 2025 and 2024, respectively, was $268.3 thousand and $216.2 thousand, of which $259.7 thousand and $207.6 thousand was allocated to cost of goods sold, which resulted in net depreciation expense of $8.6 thousand and $8.6 thousand, respectively.
Previous wording
In the three months ended June 30, 2025, other expense of $113.2 thousand consisted of interest expense derived from notes payable and the amortization of warrants issued as a debt discount, net of interest income on cash deposits. During the period ended June 30, 2024, other income consisted of interest expense of $1.7 million. Interest expense decreased due to decreased amortization on notes payable discounts as notes get closer to maturity.
Current wording
In the three months ended September 30, 2025, other expense of $93.3 thousand consisted of interest expense derived from notes payable and the amortization of warrants issued as a debt discount, net of interest income on cash deposits. During the period ended September 30, 2024, other income consisted of interest expense of $185.6 thousand. Interest expense decreased due to decreased amortization on notes payable discounts as notes get closer to maturity.
Previous wording
Pretax net loss for the three months ended June 30, 2025 was $4.2 million, compared to pretax net income of $3.59 million during the three months ended June 30, 2024, decrease in earnings of $7.8 million, or 217%. The transition to pretax net loss from pretax net income was primarily due the decrease in gross profit of $9.1 million, or 101% partially offset by decreased operating expenses of $177.8 thousand or 4%.
Current wording
Pretax net loss for the three months ended September 30, 2025 was $10.9 million, compared to pretax net income of $3.44 million during the three months ended September 30, 2024, decrease in earnings of $7.5 million, or (1006%). The increase was primarily due the decrease in gross profit of $(9.5) million, or (1709%) partially offset by a gain on the exit of leases $1.8 million, and decreased operating expenses of $142.4 thousand or 100%.
Previous wording
The Company maintains a full valuation allowance related to our net deferred tax assets, primarily due to our historical net loss position. For the periods ended June 30, 2025 and 2024, the Company recognized federal income tax provisions of $0 and $257.9 thousand, respectively.
Current wording
The Company maintains a full valuation allowance related to our net deferred tax assets, primarily due to our historical net loss position. For the periods ended September 30, 2025 and 2024, the Company recognized federal income tax provisions of $0 and $195.6 thousand, respectively.
Previous wording
Sales of freeze dried candy for the six months ended June 30, 2025 were $4.3 million, compared to $27.1 million for the six months ended June 30, 2024, a decrease of $22.7 million or 84%, driven by significantly reduced demand due in large part to increased competitive and market pressure by large competitors.
Current wording
Sales of freeze dried candy for the nine months ended September 30, 2025 were $5.9 million, compared to $30.6 million for the nine months ended September 30, 2024, a decrease of $24.7 million or (81%), driven by significantly reduced demand due in large part to increased competitive and market pressure by large competitors.
Previous wording
Gross profit for the six months ended June 30, 2025 was $973.0 thousand compared to gross profit of $13.6 million for the six months ended June 30, 2024, a decrease of $12.7 million, or 93%. Gross profit decreased over the comparative period due to decreased revenues of $22.7 million partially offset by lower cost of goods sold of $10.1 million.
Current wording
Gross loss for the nine months ended September 30, 2025 was $(8.9) million compared to gross profit of $14.2 million for the nine months ended September 30, 2024, a decrease of -$22.2 million, or (156%). Gross profit decreased over the comparative period due to decreased revenues of $24.7 million partially offset by lower cost of goods sold of $2.6 million.
Previous wording
Our gross profit margin was 22.5% during the six months ended June 30, 2025, compared to 50.40% for the six months ended June 30, 2024. Our gross profit margin decreased as sales decreased while overhead costs included in cost of goods sold increased over the prior year period.
Current wording
Our gross profit margin was (135.5)% during the nine months ended September 30, 2025, compared to 46.37% for the nine months ended September 30, 2024. Our gross profit margin decreased as sales decreased while allocated overhead costs and inventory reserves increased over the prior year period.
Previous wording
Salaries and benefits for the three months ended June 30, 2025 were $3.9 million, compared to $4.5 million for the six months ended June 30, 2024, a decrease of $599.9 thousand, or 13%. The decrease in salaries and benefits was mainly due to a decrease in bonus compensation of approximately $850,000 and headcount reductions. Salaries and benefits included stock-based compensation expense of $2.5 million for both of the six-month periods ending June 30, 2025, and 2024. Stock-based compensation consists of stock options expense for employees and officers of the Company and share grants awarded to certain executives of the Company in lieu of salary, which are being amortized over the service period.
Current wording
Salaries and benefits for the nine months ended September 30, 2025 were $5.7 million, compared to $6.4 million for the nine months ended September 30, 2024, a decrease of $648.9 thousand, or (10%). The decrease in salaries and benefits was mainly due to a decrease in bonus compensation of approximately $850,000 and headcount reductions. Salaries and benefits included stock-based compensation expense of $3.8 million for both of the six-month periods ending September 30, 2025, and 2024. Stock-based compensation consists of stock options expense for employees and officers of the Company and share grants awarded to certain executives of the Company in lieu of salary, which are being amortized over the service period.
Previous wording
Professional services were $450.6 thousand for the six months ended June 30, 2025, compared to $1.1 million for the six months ended June 30, 2024, a decrease of $611.6 thousand, or 58%. The decrease was primarily due to heightened legal service expenses related to the public offering of common stock and Nasdaq listing in the prior year period.
Current wording
Professional services were $548.1 thousand for the nine months ended September 30, 2025, compared to $1.4 million for the nine months ended September 30, 2024, a decrease of $834.3 thousand, or (60%). The decrease was primarily due to heightened legal service expenses related to the public offering of common stock and Nasdaq listing in the prior year period.
Previous wording
Other general and administrative expenses for the three months ended June 30, 2025 were $1.7 million, compared to $1.4 million for the three months ended June 30, 2024, an increase of $346.4 thousand, or 25%, primarily due to increased facilities costs related to the company’s new facility, to the extent they are not allocated to inventory.
Current wording
Other general and administrative expenses for the nine months ended September 30, 2025 were $4.8 million, compared to $3.9 million for the nine months ended September 30, 2024, an increase of $953.3 thousand or 25%, primarily due to increased facilities costs related to the company’s new facility, to the extent they are not allocated to inventory.
Previous wording
Depreciation of property and equipment for the six months ended June 30, 2025 and 2024, respectively, was $518.7 thousand and $371.7 thousand, of which $501.5 thousand and $357.3 thousand was allocated to cost of goods sold, which resulted in net depreciation expense of $17.2 thousand and $14.5 thousand, respectively.
Current wording
Depreciation of property and equipment for the nine months ended September 30, 2025 and 2024, respectively, was $787.0 thousand and $587.9 thousand, of which $501.5 thousand and $564.8 thousand was allocated to cost of goods sold, which resulted in net depreciation expense of $25.8 thousand and $23.1 thousand, respectively.
Previous wording
In the six months ended June 30, 2025, other expense of $268.5 thousand consisted of interest expense derived from notes payable and the amortization of warrants issued as a debt discount, net of interest income on cash deposits. During the six months ended June 30, 2024, other income consisted of interest expense of $1.7 million. Interest expense decreased due to decreased amortization on notes payable discounts as a $5.2 million of debt was paid down during the second quarter of 2024.
Current wording
In the nine months ended September 30, 2025, other expense consisted of net interest expense of $361.7 thousand derived from notes payable and the amortization of warrants issued as a debt discount, net of interest income on cash deposits. During the nine months ended September 30, 2024, other income consisted of net interest expense of $1.2 million and $696.5 thousand loss on the early extinguishment of debt. Interest expense decreased due to decreased amortization on notes payable discounts as a $5.2 million of debt was paid down during the second quarter of 2024.
Previous wording
Pretax net loss for the six months ended June 30, 2025 was $6.8 million, compared to pretax net income of $4.1 million during the six months ended June 30, 2024, a decrease in earnings of $10.9 million or 265%. The transition to pretax net loss from pretax net income was primarily due the decrease in gross profit of $12.7 million, or 93%, while operating expenses decreased $360.1 thousand, or 5%.
Current wording
Pretax net loss for the nine months ended September 30, 2025 was $17.7 million, compared to pretax net income of $0.7 million during the nine months ended September 30, 2024, a decrease in earnings of $18.4 million or (2775%). The transition to pretax net loss from pretax net income was primarily due the decrease in gross profit of -$22.2 million, or (156%), while operating expenses decreased $502.5 thousand, or 100%.
Previous wording
The Company maintains a full valuation allowance related to our net deferred tax assets, primarily due to our historical net loss position. For the periods ended June 30, 2025 and 2024, the Company recognized federal income tax provisions of $0 and $257.9 thousand, respectively.
Current wording
The Company maintains a full valuation allowance related to our net deferred tax assets, primarily due to our historical net loss position. For the periods ended September 30, 2025 and 2024, the Company recognized federal income tax provisions of $0 and $195.6 thousand, respectively.
Previous wording
As of June 30, 2025, we had working capital of $17.4 million, compared to working capital of $17.7 million as of December 31, 2024. The decreased working capital is mainly attributable a decrease in cash of $2.8 million, partially offset by a decrease in current notes payable as a result of the Notes Exchange. As of June 30, 2025, our balance of cash and cash equivalents was $959.4 thousand, compared to $3.7 million at December 31, 2024. We expect to continue to incur significant capital expenditures related to the development and operation of our freeze dried candy business. Our ability to resume our production levels and distribution capabilities and further increase the value of our brands is in part dependent on our success in deploying additional capital. Our plan for satisfying our cash requirements for the next twelve months is through cash on hand, however we will require additional financing in the form of equity or debt which may not be available on favorable terms, or at all. We may not have sufficient funds to sustain our operations for the next twelve months. These factors raise substantial doubt about our ability to continue as a going concern. See Note 3 – “Going Concern” of the notes to consolidated financial statements in this Quarterly Report on Form 10-Q for additional information.
Current wording
As of September 30, 2025, we had working capital of $9.1 million, compared to working capital of $17.7 million as of December 31, 2024. The decreased working capital is mainly attributable a decrease in cash of $3.3 million and decreased inventory of $8.8 million. As of September 30, 2025, our balance of cash and cash equivalents was $387.3 thousand, compared to $3.7 million at December 31, 2024. We expect to continue to incur significant capital expenditures related to the development and operation of our freeze dried candy business. Our ability to resume our production levels and distribution capabilities and further increase the value of our brands is in part dependent on our success in deploying additional capital. Our plan for satisfying our cash requirements for the next twelve months is through cash on hand, however we will require additional financing in the form of equity or debt which may not be available on favorable terms, or at all. We may not have sufficient funds to sustain our operations for the next twelve months. These factors raise substantial doubt about our ability to continue as a going concern. See Note 3 – “Going Concern” of the notes to consolidated financial statements in this Quarterly Report on Form 10-Q for additional information.
Previous wording
The following table summarizes our cash flows during the six months ended June 30, 2025 and 2024, respectively.
Current wording
The following table summarizes our cash flows during the nine months ended September 30, 2025 and 2024, respectively.
Previous wording
Net cash used in operating activities was $2.0 million for the six months ended June 30, 2025, compared to $0.9 million of cash used in operating activities six months ended June 30, 2024. The increase in cash used in operating activities was primarily due to increases in inventory and accounts receivable.
Current wording
Net cash used in operating activities was $3.3 million for the nine months ended September 30, 2025, compared to $6.1 million of cash used in operating activities nine months ended September 30, 2024. The decrease in cash used in operating activities was primarily due to decreases in the level of cash spent on inventory and reduced accounts receivable due to lower sales.
Previous wording
Net cash used in investing activities was $108.0 thousand for the six months ended June 30, 2025, compared to $630.3 thousand for the six months ended June 30, 2024, a decrease of $522.5 thousand. Cash used in investing activities was primarily used to build out additional freezers and to improve our office space.
Current wording
Net cash used in investing activities was $1.1 thousand for the nine months ended September 30, 2025, compared to $4.5 million for the nine months ended September 30, 2024, a decrease of $4.5 million. Cash used in investing activities during 2024 was primarily used to build out additional freezers and to improve office space.
Previous wording
Net cash provided by financing activities was $0 and $15.1 million for the six months ended June 30, 2025 and 2024, respectively. Net cash provided by financing activities for the six months ended June 30, 2024 consisted of net proceeds of $3.7 million from private placement offerings to accredited investors and related parties from the issuance of 515,597 shares at $7.25 per share on March 28, 2024.
Current wording
Net cash provided by financing activities was $0 and $15.1 million for the nine months ended September 30, 2025 and 2024, respectively. Net cash provided by financing activities for the nine months ended September 30, 2024 consisted of $12.0 million of net proceeds from a public offering of 1,380,000 shares at a price of $10.00 per share completed on May 9, 2024, and net proceeds of $3.7 million from private placement offerings to accredited investors and related parties from the issuance of 515,597 shares at $7.25 per share on March 28, 2024. Proceeds from warrant and options exercises totaled $5.7 million during the nine months ended September 30, 2024, which was used to pay down notes payable totaling approximately $6.2 million nine months ended September 30, 2024.
Previous wording
The Company is a party to a real property lease for its 20,945 square foot facility at 1440 N. Union Bower Rd., Irving, TX 75061, under which an entity owned entirely by Ira Goldfarb. The lease term is through September 15, 2025, with two five-year options to extend, at a monthly lease term of $10.0 thousand, with approximately a 3% annual escalation of lease payments commencing September 15, 2021.
Current wording
The Company is a party to a real property lease for its 20,945 square foot facility at 1440 N. Union Bower Rd., Irving, TX 75061, under which an entity owned entirely by Ira Goldfarb. The lease term is through September 15, 2025, with two five-year options to extend, at a monthly lease term of $10.0 thousand, with approximately a 3% annual escalation of lease payments commencing September 15, 2021. The Company has elected to extend this lease.
Previous wording
On May 22, 2024, the Company entered into an industrial lease (the “Lease”) with USCIF Pinnacle Building B LLC, a Delaware limited liability company. Pursuant to the terms of the Lease, the Company will lease approximately 324,000 rentable square feet from the Lessor at 4024 Rock Quarry Road, Dallas, Texas for a term of approximately 62 months, which the Company intends to use as industrial and manufacturing space. The term of the Lease commenced on May 22, 2024. The Lease provides for graduated rent payments starting at $122,175 per month, and increasing up to $297,289.14 per month by the end of the Lease, plus taxes, insurance and common area maintenance costs. The Company is required to provide a security deposit in the amount of $1,000,000 in connection with the Lease. The Lease may be renewed upon the extension in writing between the Company and the Lessor for a period of up to 60 months.
Current wording
On May 22, 2024, the Company entered into an industrial lease (the “Lease”) with USCIF Pinnacle Building B LLC, a Delaware limited liability company. Pursuant to the terms of the Lease, the Company will lease approximately 324,000 rentable square feet from the Lessor at 4024 Rock Quarry Road, Dallas, Texas for a term of approximately 62 months, which the Company intends to use as industrial and manufacturing space. The term of the Lease commenced on May 22, 2024. The Lease provides for graduated rent payments starting at $122,175 per month, and increasing up to $297,289.14 per month by the end of the Lease, plus taxes, insurance and common area maintenance costs. The Company was required to provide a security deposit in the amount of $1,000,000 in connection with the Lease. Effective September 30, 2025, the Company agreed with Pinnacle to exit the facility on January 31, 2026. As a result of reducing the lease term by 42 months, the company reduced the related right-of-use asset by $10,397,922 and the lease liability by $11,829,536, resulting in a noncash gain $1,431,614.
Previous wording
On October 26, 2023, the Company entered into a lease agreement (the “2023 Lease Agreement”) with Prologis, Inc., a Maryland corporation. Pursuant to the terms of the 2023 Lease Agreement, beginning on November 1, 2023 the Company leases approximately 51,264 rentable square feet at Stemmons 10, 308 Mockingbird Lane, Dallas, TX 75247 for a term of approximately five years and two months (the “Initial Term”), which the Company intends to use as warehousing and distribution space. The 2023 Lease Agreement provides for base rent payments starting at approximately $42.5 thousand per month (taking into consideration an initial phase-in of the base rent obligation) in the first year of the Initial Term, and increase each year, up to approximately $51.7 thousand per month during the last year of the Initial Term. The 2023 Lease Agreement may be extended for a period of five years, at the option of the Company, at a rate to be based on a fair market rent rate determined at the time of the extension.
Current wording
On October 26, 2023, the Company entered into a lease agreement (the “2023 Lease Agreement”) with Prologis, Inc., a Maryland corporation. Pursuant to the terms of the 2023 Lease Agreement, beginning on November 1, 2023 the Company leases approximately 51,264 rentable square feet at Stemmons 10, 308 Mockingbird Lane, Dallas, TX 75247 for a term of approximately five years and two months (the “Initial Term”), which the Company intends to use as warehousing and distribution space. The 2023 Lease Agreement provides for base rent payments starting at approximately $42.5 thousand per month (taking into consideration an initial phase-in of the base rent obligation) in the first year of the Initial Term, and increase each year, up to approximately $51.7 thousand per month during the last year of the Initial Term. The 2023 Lease Agreement may be extended for a period of five years, at the option of the Company, at a rate to be based on a fair market rent rate determined at the time of the extension. Effective September 30, 2025, the Company agreed with Prologis to exit the lease as of September 30, 2025. As a result of reducing the lease term by 39 months, the company derecognized the related right-of-use asset $2,325,675 and the lease liability of $2,673,619, resulting in a noncash gain of $347,943.