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.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.

Current wording

Our e-commerce channel consists of (i) our Direct-to-consumer ("DTC") business, which includes sales throughlairdsuperfood.comandpickybars.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 approximately 88% of DTC sales for the three and nine months ended September 30, 2025 and 2024.

Previous wording

For the three and six months ended June 30, 2025, the e-commerce channel made up 52% and 53% of our net sales, respectively, compared to 61% and 60%, respectively, for the three and six months ended June 30, 2024. For the three and six months ended June 30, 2025, the wholesale channel made up 48% and 47% of our net sales, respectively, compared to 39% and 40% for the three and six months ended June 30, 2024. We expect that, over time, our wholesale channel will overtake our e-commerce channel as a percentage of net sales, as we continue to execute our strategy to expand our retail distribution footprint.

Current wording

For the three and nine months ended September 30, 2025, the e-commerce channel made up 47% and 51% of our net sales, respectively, compared to 58% and 59%, respectively, for the three and nine months ended September 30, 2024. For the three and nine months ended September 30, 2025, the wholesale channel made up 53% and 49% of our net sales, respectively, compared to 42% and 41% for the three and nine months ended September 30, 2024. We expect that, over time, our wholesale channel will overtake our e-commerce channel as a percentage of net sales, as we continue to execute our strategy to expand our retail distribution footprint. As our business continues to shift toward wholesale, quarter-to-quarter variability may increase due to the timing of larger orders from key customers, however, long-term, we remain confident in the underlying demand trends in this channel.

Previous 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.

Current wording

Net sales increased to $12.9 million for the three months ended September 30, 2025 ("Q3 2025"), from $11.8 million for the three months ended September 30, 2024 ("Q3 2024"). Wholesale net sales in Q3 2025 increased by 39% compared to Q3 2024 driven primarily by distribution expansion. E-commerce channel sales for Q3 2025 decreased by 11% compared to Q3 2024, primarily due to softness in the direct-to-consumer platform resulting from lower new-customer acquisition, partially offset by growth in sales on Amazon.com.

Previous wording

Net sales increased to $23.6 million for the six months ended June 30, 2025 ("YTD 2025"), from $19.9 million for the six months ended June 30, 2024 ("YTD 2024"). Wholesale net sales in YTD 2025 increased by 41% compared to YTD 2024, driven by velocity growth and distribution expansion in grocery and club stores. E-commerce channel sales for YTD 2025 increased by 4% compared to YTD 2024, driven by growth in subscription and repeat customer revenue.

Current wording

Net sales increased to $36.5 million for the nine months ended September 30, 2025 ("YTD 2025"), from $31.7 million for the nine months ended September 30, 2024 ("YTD 2024"). Wholesale net sales in YTD 2025 increased by 40% compared to YTD 2024, driven by velocity growth and distribution expansion. E-commerce channel sales for YTD 2025 were relatively flat compared to YTD 2024.

Previous wording

The increase in cost of goods sold during Q2 2025 was driven primarily by the growth in gross sales volume, as well as commodity cost inflation.

Current wording

The increase in cost of goods sold during Q3 2025 was driven primarily by the growth in gross sales volume and commodity cost inflation, as well as the non-recurrence of a supplier settlement benefit recorded in the prior year period.

Previous 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.

Current wording

The increase in net sales during YTD 2025 was driven by distribution expansion in grocery and club stores, and 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 were relatively flat year-over-year, with softness in the DTC channel due to lower new customer sales partially offset by growth in sales on Amazon.com.

Previous wording

The increase in cost of goods sold during YTD 2025 was driven by growth in sales volume, as well as higher commodity costs.

Current wording

The increase in cost of goods sold during YTD 2025 was driven by growth in sales volume, channel mix, and higher commodity costs, as well as the non-recurrence of a supplier settlement benefit recorded in the prior year period.

Previous wording

The increase in gross profit in Q2 2025 compared to the prior year period was driven by increased sales volume. Gross margin contracted by 1.9 points to 39.9% in Q2 2025 from 41.8% in the prior year period, due to channel mix and commodity cost inflation.

Current wording

The increase in gross profit in YTD 2025 compared to the prior year period was driven by increased sales volume. Gross margin contracted 2.3 points to 39.3% in YTD 2025 compared to 41.7% in the prior year period, which was due to the non-recurrence of the supplier settlement benefit recorded in the prior year period, as well as channel mix and commodity cost inflation.

Previous wording

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

Current wording

The increase in general and administrative expenses during YTD 2025 was primarily driven by impairment charges, partially offset by decreased personnel costs and professional fees.

Previous wording

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

Current wording

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

Previous 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.

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 continue to sell down this forward-purchased inventory during the balance of 2025 and into 2026, we expect our cash balance to normalize and further increase by the end of the 2025 fiscal year.

Previous 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.

Current wording

As of September 30, 2025, we had an accumulated deficit of $109.6 million, which includes operating losses of $1.6 million and $1.7 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 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.

Current wording

As of September 30, 2025 and December 31, 2024, we had $5.3 million and $8.5 million, respectively, of cash-on-hand, and total net working capital of $12.4 million and $12.0 million, respectively, for the same periods. As of September 30, 2025, we had access to up to $1.3 million of advances under our 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 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.

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 have experienced some commodity cost volatility, and anticipate that there could be increased supply chain challenges and consumer and economic uncertainty due to rapid changes in global trade policies in the future. 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 September 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.

Previous wording

We may take advantage of these provisions until the end of the fiscal year in which the fifth anniversary of our IPO occurs, or such earlier time when we no longer qualify as an emerging growth company. We will cease to be an emerging growth company on the earlier of (1) the last day of the fiscal year (a) in which we have more than $1.235 billion in annual gross revenue or (b) in which we have more than $700 million in market value of our capital stock held by non-affiliates, or (2) the date on which we issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all these reduced burdens.

Current wording

We may take advantage of these provisions until the end of the fiscal year in which the fifth anniversary of our IPO occurs (i.e., December 31, 2025), or such earlier time when we no longer qualify as an emerging growth company. We will cease to be an emerging growth company on the earlier of (1) the last day of the fiscal year (a) in which we have more than $1.235 billion in annual gross revenue or (b) in which we have more than $700 million in market value of our capital stock held by non-affiliates, or (2) the date on which we issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all these reduced burdens.