Laird Superfood, Inc.

Previous wording

Our e-commerce channel consists of (i) our Direct-to-consumer ("DTC") business, which includes sales throughlairdsuperfood.com andpickybars.com, and (ii) Amazon. For the three months ended March 31, 2025 and 2024, the e-commerce channel made up 53% and 59% of our net sales, respectively.Lairdsuperfood.com andpickybars.com offer an authentic brand experience for our consumers that drive engagement through educational content. These platforms also provide us with direct consumer feedback for future product development. We view our proprietary database of customers ordering directly from our website as a strategic asset as it enhances our ability to develop long-term relationships with these customers. We believe the content on our websites allows Laird Superfood to educate our consumers on the benefits of our products and ingredients, while providing a positive customer experience. We believe this experience leads to higher retention rates among repeat customers and subscribers, as evidenced by the fact that repeat customers and subscribers account for over 75% of DTC sales for the three months ended March 31, 2025 and 2024.

Current wording

Our e-commerce channel consists of (i) our Direct-to-consumer ("DTC") business, which includes sales throughlairdsuperfood.com andpickybars.com, and (ii)Amazon.com.Lairdsuperfood.com andpickybars.com offer an authentic brand experience for our consumers that drive engagement through educational content. These platforms also provide us with direct consumer feedback for future product development. We view our proprietary database of customers ordering directly from our website as a strategic asset, as it enhances our ability to develop long-term relationships with these customers. We believe the content on our websites allows Laird Superfood to educate our consumers on the benefits of our products and ingredients, while providing a positive customer experience. We believe this experience leads to higher retention rates among repeat customers and subscribers, as evidenced by the fact that repeat customers and subscribers accounted for over 80% of DTC sales for the three and six months ended June 30, 2025 and 2024.

Previous wording

For Q1 2025 and Q1 2024, wholesale channel sales made up 47% and 41% of our net sales, respectively. Laird Superfood products are sold through various retail outlets, including conventional, natural and specialty grocery, club, and food service locations. The diversity of our retail outlets represents a strong competitive advantage for Laird Superfood and provides us with a larger total addressable market than would be considered normal for a food brand that is singularly focused on the grocery market.

Current wording

Our wholesale channel consists of products sold through various retail outlets, including natural, specialty, and conventional grocery stores, club stores, and food service locations. We believe the diversity of our retail outlets represents a strong competitive advantage for Laird Superfood and provides us with a larger total addressable market than would be considered normal for a food brand that is singularly focused on the grocery market.

Previous wording

Net sales increased to $11.7 million for the three months ended March 31, 2025 ("Q1 2025"), from $9.9 million for the three months ended March 31, 2024 ("Q1 2024"). Wholesale net sales in Q1 2025 increased by 35% compared to the Q1 2024 driven by velocity improvement and distribution expansion in grocery and club stores. E-commerce channel sales for the Q1 2025 increased by 6% compared to Q1 2024, driven by growth in subscription revenue, and repeat customer purchases, and higher average order values.

Current wording

Net sales increased to $12.0 million for the three months ended June 30, 2025 ("Q2 2025"), from $10.0 million for the three months ended June 30, 2024 ("Q2 2024"). Wholesale net sales in Q2 2025 increased by 47% compared to Q2 2024 driven by distribution expansion in grocery and club stores. E-commerce channel sales for Q2 2025 increased by 2% compared to Q2 2024, driven by growth in subscription revenue.

Previous wording

We are continuously growing our customer base through our e-commerce channels, as well as by expanding our presence in our wholesale channel through a variety of physical retail outlets and geographical regions. We typically attract new customers in our e-commerce channel through our direct websites,lairdsuperfood.comandpickybars.com, and through Amazon. We also seek to attract new e-commerce customers through paid and unpaid social media, search, display, and traditional media. Our products are also sold through a growing number of retail outlets. Customers in our wholesale channel include grocery chains, natural food outlets, club stores, and food service customers. Attracting new customers in physical retail outlets depends on, among other things, paid promotions through retailers, display, and traditional media. We believe an ability to consistently attract and retain customers at a reasonable cost relative to projected life-time value will be a key factor affecting future performance.

Current wording

We are continuously growing our customer base through our e-commerce channels, as well as by expanding our presence in our wholesale channel through a variety of physical retail outlets and geographical regions. We typically attract new customers in our e-commerce channel through our direct websites,lairdsuperfood.comandpickybars.com, and throughAmazon.com. We also seek to attract new e-commerce customers through paid and unpaid social media, search, display, and traditional media. Our products are also sold through a growing number of retail outlets. Customers in our wholesale channel include grocery chains, natural food outlets, club stores, and food service customers. Attracting new customers in physical retail outlets depends on, among other things, paid promotions through retailers, display, and traditional media. We believe an ability to consistently attract and retain customers at a reasonable cost relative to projected life-time value will be a key factor affecting future performance.

Previous wording

We sell our products through two channels: wholesale and e-commerce. Through our wholesale channel, we sell our products indirectly to consumers through a broad set of retail outlets. Through our e-commerce channel, we derive revenue from the sale of our products directly to consumers through our direct websites,lairdsuperfood.com andpickybars.com, as well as third-party e-commerce platforms such as Amazon.

Current wording

We sell our products through two channels: wholesale and e-commerce. Through our wholesale channel, we sell our products to distributors and retail outlets which, in turn, sell to end consumers. Through our e-commerce channel, we derive revenue from the sale of our products directly to consumers through our direct websites,lairdsuperfood.com andpickybars.com, as well as third-party e-commerce platforms such asAmazon.com.

Previous wording

Cost of goods sold includes the cost of raw materials and packaging, co-packing tolling fees, inbound and outbound freight costs, indirect labor, third party labor to store and ship our products, and overhead costs incurred in the storage and distribution of products sold in the period.

Current wording

Cost of goods sold includes the cost of raw materials and packaging, co-packing tolling fees, inbound and outbound freight costs, import duties and tariffs, indirect labor, third party labor to store and ship our products, and overhead costs incurred in the storage and distribution of products sold in the period.

Previous wording

The following table sets forth our results of operations for the periods indicated, and the percentage increase or decrease between those periods:

Current wording

For the periods indicated, the following table sets forth results of operations and the increase or decrease therewith:

Previous wording

The increase in general and administrative expenses during Q1 2025 was primarily driven by stock-based compensation and other personnel costs.

Current wording

The increase in general and administrative expenses during Q2 2025 was primarily driven by stock-based compensation and other personnel costs, partially offset by broad cost reduction measures.

Previous wording

The slight decrease in sales and marketing expenses during Q1 2025 was driven by planned reductions in marketing and advertising spend as we improve our media efficiency, which was offset in part by increased selling costs due to increased sales volume.

Current wording

The increase in sales and marketing expenses during Q2 2025 was driven by marketing and advertising costs, as well as increased selling costs due to increased sales volume.

Previous wording

The increase in net sales during Q1 2025 was primarily driven by velocity improvements and distribution gains in grocery and club stores, partially offset by increased promotional trade spend, to support a 35% increase in wholesale channel sales year-over-year. E-commerce channel sales increased by 6% year-over-year, which was fueled by stronger Amazon performance.

Current wording

The increase in net sales during YTD 2025 was driven by distribution expansion in grocery and club stores, as well as velocity growth in our key categories, partially offset by increased promotional trade spend to support a 40% increase in wholesale channel sales year-over-year. E-commerce channel sales increased by 4% year-over-year, which was fueled by subscription and repeat customer revenue growth, including fromAmazon.com.

Previous wording

The increase in gross profit in Q1 2025 compared to the prior year period was driven by increased sales volume. Gross margin expanded to 41.9% in Q1 2025 from 40.0% in the prior year period.

Current wording

The increase in gross profit in YTD 2025 compared to the prior year period was driven by increased sales volume. Gross margin was nearly flat at 40.9% in YTD 2025 compared to 40.9% in the prior year period.

Previous wording

The following table shows a summary of our cash flows for the three months ended March 31, 2025 and 2024:

Current wording

The following table shows a summary of our cash flows for the six months ended June 30, 2025 and 2024:

Previous wording

Cash used in operating activities for Q1 2025 was driven by strategic investment into working capital to meet higher demand for our products and to address the out-of-stocks experienced at the end of 2024 and, to a lesser degree, in Q1 2025.

Current wording

The increase in cash used in operating activities for YTD 2025 was driven by strategic investment into working capital. This investment was made (i) to meet higher demand for our products, (ii) to address the out-of-stocks experienced at the end of 2024, and (iii) to forward purchase inventory in anticipation of potential tariffs on the import of raw materials that we source outside of the United States, particularly in Southeast Asia. As we sell down this forward-purchased inventory during the back half of 2025 and into 2026, we expect our cash balance to normalize and increase by the end of the 2025 fiscal year. In addition, during Q2 2025, our accounts receivable balance was elevated due to temporary delays from one of our customers which resulted in a shift in payments received from Q2 2025 to Q3 2025. We expect our accounts receivable balance to normalize during Q3 2025.

Previous wording

Cash used in investing activities for Q1 2025 consisted of purchases of long-lived capital assets.

Current wording

Cash used in investing activities for YTD 2025 consisted of purchases of long-lived capital assets.

Previous wording

Cash used in financing activities for Q1 2025 consisted of payroll taxes paid related to net issuances of stock awards, offset in part by stock option exercises.

Current wording

Cash used in financing activities for YTD 2025 consisted of payroll taxes paid related to net issuances of stock awards, offset in part by stock option exercises.

Previous wording

As of March 31, 2025, we had an accumulated deficit of $108.3 million, which includes operating losses of $0.2 million and $1.1 million for Q1 2025 and Q1 2024, respectively. While we may incur additional operating losses as we execute our strategy to invest in the growth of our business, we believe that the strategic business transformation that we have undertaken over the last two years is reflected in our significant gross margin expansion, optimized investments in trade and marketing, lower selling, general, and administrative spending, and reduced cash burn over that period. We will continue to seek opportunities to optimize spending, expand gross margins, and free up cash flow through efficient working capital management. We have historically financed our operations and capital expenditures through private placements of our common stock, our initial public offering, our prior lines of credit, term loans, and, for the first time in fiscal year 2024, from our core operating activities. Our historical uses of cash have primarily consisted of cash used in operating activities and working capital needs.

Current wording

As of June 30, 2025, we had an accumulated deficit of $108.6 million, which includes operating losses of $0.6 million and $1.4 million for YTD 2025 and YTD 2024, respectively. We may incur additional operating losses as we execute our strategy to invest in the growth of our business, reinvesting any incremental profit into future top-line sales growth while holding cash reserves largely flat. We will continue to seek opportunities to optimize spending, expand gross margins, and free up cash flow through efficient working capital management. We have historically financed our operations and capital expenditures through private placements of our common stock, our initial public offering, our prior lines of credit, term loans, and from our core operating activities. Our historical uses of cash have primarily consisted of cash used in operating activities and working capital needs.

Previous wording

As of March 31, 2025 and December 31, 2024, we had $7.2 million and $8.5 million, respectively, of cash-on-hand, and total net working capital of $12.2 million and $12.0 million for the same periods. As of March 31, 2025, we had access to up to $1.7 million of advances under the Factoring Agreement, of which none had been utilized as of the date of this report. We have no significant unused sources of liquid assets outside of our working capital.

Current wording

As of June 30, 2025 and December 31, 2024, we had $4.2 million and $8.5 million, respectively, of cash-on-hand, and total net working capital of $12.3 million and $12.0 million, respectively, for the same periods. As of June 30, 2025, we had access to up to $1.8 million of advances under the Factoring Agreement, of which none had been utilized as of the date of this report. We have no significant unused sources of liquid assets outside of our working capital.

Previous wording

We continue to monitor macroeconomic trends and uncertainties such inflation of commodity costs, the effects of recently announced tariffs, and the potential imposition of modified or additional tariffs, which may have adverse effects on net sales and margins. As a result of the tariffs announced by the U.S. presidential administration, and potential tariff modifications or the imposition of tariffs or export controls by other countries, we anticipate increased supply chain challenges, commodity cost volatility, and consumer and economic uncertainty due to rapid changes in global trade policies. Based on preliminary analysis of the potential effects of the announced tariffs and these other factors, we do not expect these factors to result in a material negative effect on our net sales or profitability for the remainder of fiscal year 2025. However, we are continuing to evaluate these factors and their potential effects as well as our ability to potentially offset all or a portion of cost increases through pricing actions and cost savings efforts for fiscal year 2026 planning. Economic pressures on customers and consumers, including the challenges of high inflation and the effects of increased tariffs, may negatively affect our net sales and profitability in the future.

Current wording

We continue to monitor macroeconomic trends and uncertainties such inflation of commodity costs, the effects of tariffs, and the potential imposition of modified or additional tariffs, which may have adverse effects on net sales and margins. As a result of the tariffs announced by the U.S. presidential administration, and potential tariff modifications or the imposition of tariffs or export controls by other countries, we anticipate increased supply chain challenges, commodity cost volatility, and consumer and economic uncertainty due to rapid changes in global trade policies. Based on preliminary analysis of the potential effects of the announced tariffs and these other factors, we do not expect these factors to result in a material negative effect on our net sales or profitability for the remainder of fiscal year 2025. To date, we have elected to acquire additional inventory in advance of anticipated future tariff implementations, which has impacted our cash balances as of June 30, 2025, but which is not expected to meaningfully impact our cash balances for the balance of the 2025 fiscal year. However, we are continuing to evaluate these factors and their potential effects as well as our ability to potentially offset all or a portion of cost increases through pricing actions and cost savings efforts for fiscal year 2026 planning. Economic pressures on customers and consumers, including the challenges of high inflation and the effects of increased tariffs, may negatively affect our net sales and profitability in the future.