MDWerks, Inc.
For the period ended Jun 30, 2025. Filed Aug 13, 2025.
View on SEC.govAbout this filing
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.
Jun 30, 2025 · Filed Aug 13, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-13.
0001641172-25-010009
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-13.
0001641172-25-023536
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 47 previous paragraphs and 56 current paragraphs.
28 unchanged; 12 reworded; 12 added; 6 removed; 1 previous and 4 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 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 (12)
Current report
Whiskey-as-a-Service
Current report
Among our accomplishments to start the year, we successfully launched our “Whiskey-as-a-Service” (“WaaS”) business model, signing new contracts with two companies for the construction and deployment of our proprietary Spirits Rapid Aging Systems (“SRAS”) at their facilities. We also began aging tanker loads of distillate for one of these customers to fill immediate demand for aged spirits.
Current report
The first unit is scheduled to be installed at the facilities of one of the largest distilleries in the U.S. in the fourth quarter of 2025 and we expect to deliver a second SRAS unit to this customer in the first quarter of 2026. Additionally, we anticipate deploying the third SRAS unit at the facilities of a U.S. broker of bulk spirits in the first half of 2026. Under both agreements, RFS will assemble the SRAS units and provide ongoing machine servicing and maintenance, thereby is entitled to receive recurring monthly license payments from the customers for use of the SRAS units. We are currently building units, and an additional unit to be deployed on our premises during the third quarter of 2025 to quintuple existing production capacity at our Two Trees facility. We are also currently providing aging services for tanker loads of single malt at our facility while the customer’s SRAS units are under construction.
Current report
These contracts not only validate the economic and sustainability benefits of our SRAS units but also are expected to provide us with attractive recurring revenue streams through licensing agreements and ancillary fees for ongoing machine servicing and maintenance. Our upfront investment in these units will begin to pay off as they go live later this year, providing us with new recurring cash flow streams.
Current report
Leveraging patented energy wave technology, our SRAS units swiftly, sustainably and cost-effectively mature spirits to create high quality final product with traditional flavor profiles. We see excellent potential for multiple additional SRAS deployments by both customers within the next twelve months as well as by other third parties.
Current report
Building on the momentum of our first two WaaS contracts, we signed a separate new agreement with an international spirits investment fund (the “Fund”) providing the Fund with limited exclusivity for the deployment of our SRAS units in three countries outside of the United States. To retain exclusivity, the Fund is required to deploy at least one SRAS unit annually in each of the three countries. We will provide updates as new orders take hold in these countries.
Current report
Two Trees Beverage Company – NewUplifting Spirits Product Line
Current report
In July 2025, our award-winning subsidiary, Two Trees Beverage Company, launchedUplifting Spirits, a new product line focused on supporting community and charitable causes, debuting withLand of the Sky, a limited-edition straight bourbon whiskey aiding Hurricane Helene relief efforts. We are proud of this initiative and pleased to donate ten percent ofLand of the Sky sales to relief efforts, including aiding Western North Carolina, where many of our teammates call home.
Current report
RF Specialties, LLC – Molecular Sawdust Drying Machine Update
Current report
Subsequtn to June 30, 2025, we completed testing and deployed our first Molecular Sawdust Drying System, which utilizes a proprietary molecular energy wave technology to adjust the moisture content of sawdust for production of wood pellets, an alternative green energy source.
Current report
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Current report
Revenue. Revenue for the six months ended June 30, 2025 was $934,539 compared to $956,554 for the six months ended June 30, 2024. The $186,489 decrease in revenue for Two Trees Distilling was primarily attributable to decreased liquor sale volumes in the current period primarily from lower bulk alcohol sales, partially offset by new revenues from the aging services that began in May 2025. The increase in revenue in our RF Specialties division is from progress made on the molecular sawdust drying system contract, which neared completion during the current period.
Removed paragraphs (6)
Previous report
RF Specialties, Inc. Acquisition
Previous report
On January 19, 2023, we entered into an Exchange Agreement (the “Exchange Agreement”) with RF Specialties, LLC (“RFS”) and Keith Mort, as the sole member of RFS. Pursuant to the terms of the Exchange Agreement, we agreed to acquire from Mr. Mort, and Mr. Mort agreed to sell to us, 100% of the equity interests and membership interests of RFS, in exchange for the issuance to Mr. Mort of 7,500,000 shares of our common stock (the “Exchange”). Immediately following the Exchange, RFS became our wholly owned subsidiary.
Previous report
Two Trees Acquisition
Previous report
On February 13, 2023, we entered into a Merger Agreement (the “Merger Agreement”) with MD-TT Merger Sub, Inc., a wholly owned subsidiary (“Merger Sub”) and Two Trees Beverage Co. (“Two Trees”). In consideration of the Merger Agreement, at the effective time of the Merger, each of the holders of Two Trees stock, subject to certain exceptions set forth in the Merger Agreement, has the right to convert all of the shares of Two Trees stock into a total of 60,000,000 shares of our common stock, which was apportioned between the Two Trees stockholders, pro rata, based on the number of shares of Two Trees stock held by each of the Two Trees stockholders as of the closing of the Merger (the “Merger Consideration”). Immediately following the Exchange, Two Trees became our wholly owned subsidiary.
Previous report
Two New Contracts
Previous report
Two Trees entered into two contracts with two spirit companies for the deployment and license of our proprietary Spirits Rapid Aging System (“SRAS”). The first contract is for the building and deployment of SRAS at the customer’s facilities within the next three months, with the potential for additional SRAS deployments in the next 12 months. The second contract is for the building and deployment of SRAS at the customer’s facilities within the next six to nine months, with the potential for additional SRAS deployments in the next 12 months. Under both agreements, RFS will assemble the SRAS units and provide ongoing machine servicing and maintenance, thereby is entitled to receive recurring monthly license payments from the customers for use of the SRAS units.
Reworded paragraphs (12)
Previous wording
RFS is an innovative company pushing the boundaries of sustainable Radio Frequency applications. For over 13 years RFS has addressed companies’ most pressing challenges by implementing automated Radio Frequency Technology in a sustainable way reducing energy costs and increasing speed to market when compared to traditional methods. By bringing radio frequency applications to market, RFS has successfully elevated a wide range of industries including structural engineering, food & beverage, and manufacturing.
Current wording
Our wholly owned subsidiary, RFS, is a technology company pioneering the development of innovative energy wave solutions for industrial and other commercial enterprises. Our expertise in radio wave technologies and microwave technologies has led to multiple breakthroughs with applications both industrial and commercial. . For over 13 years RFS has addressed companies’ most pressing challenges by implementing automated Radio Frequency Technology in a sustainable way reducing energy costs and increasing speed to market when compared to traditional methods. By bringing radio frequency applications to market, RFS has successfully elevated a wide range of industries including structural engineering, food & beverage, and manufacturing.
Previous wording
Our wholly owned subsidiary, RFS, is a technology company pioneering the development of innovative energy wave solutions for industrial and other commercial enterprises. Our expertise in radio wave technologies and microwave technologies has led to multiple breakthroughs with applications both industrial and commercial. Our patented energy wave technology introduces a revolutionary approach to industrial processes by specific molecular targeting, which can be applied at precise and multiple locations in a system in ways that conventional single point heat sources cannot, resulting in improved efficiency, higher quality, and reduced processing time.
Current wording
Our patented energy wave technology introduces a revolutionary approach to industrial processes by specific molecular targeting, which can be applied at precise and multiple locations in a system in ways that conventional single point heat sources cannot, resulting in improved efficiency, higher quality, and reduced processing time.
Previous wording
Two Trees produces a variety of aged alcoholic beverages using an innovative rapid-aging system. This scalable technology results in all-natural, high-quality products, efficiently produced, with a reduced environmental impact. Our products are nearly indistinguishable from those that are traditionally aged. Two Trees created a proprietary process that mirrors and accelerates the natural aging process that occurs when alcohol is aged in wooden barrels over time. The true art of our craft spirits lives within the balance between the grain selection, local water, and the full-bodied flavors from our toasted wood chip varieties. Our wood chips are selected to pair with specific grains and toasted to just the right char, bringing rich flavor profiles to life with a hint of smoke.
Current wording
Our wholly-owned subsidiary, Two Trees Beverage Company, utilizes our Spirits Rapid Aging System, validating the use of our patented energy wave technology within the premium craft spirits industry. Our proprietary and patented molecular targeting system swiftly and sustainably transforms distillate to maturity, delivering traditional flavors in a fraction of the time with greatly reduced environmental impact and cost. Precision engineered to match traditional aging flavors and aromas, it has been used to produce over 50 SKUs and many award-winning products. Two Trees produces a variety of aged alcoholic beverages using an innovative rapid-aging system. This scalable technology results in all-natural, high-quality products, efficiently produced, with a reduced environmental impact. Our products are nearly indistinguishable from those that are traditionally aged. The true art of our craft spirits lives within the balance between the grain selection, local water, and the full-bodied flavors from our toasted wood chip varieties. Our wood chips are selected to pair with specific grains and toasted to just the right char, bringing rich flavor profiles to life with a hint of smoke.
Previous wording
Revenue. Revenue for the three months ended March 31, 2025 was $513,930 compared to $684,660 for the three months ended March 31, 2024. The $170,730 decrease in revenue was primarily attributable to decreased liquor sale volumes in the current period primarily from lower bulk alcohol sales, partially offset by an increase in product and services revenues from RF Specialties from progress made on its molecular sawdust drying system contract.
Current wording
Revenue. Revenue for the three months ended June 30, 2025 was $420,609 compared to $271,894 for the three months ended June 30, 2024. The $148,715 increase in revenue was primarily attributable to increased liquor sale volumes in the current period and new revenues from performing aging services for a customer, and an increase in product and services revenues from RF Specialties from progress made on its molecular sawdust drying system contract.
Previous wording
Total Other Expenses. Total other expense was $11,565 for the three months ended March 31, 2025 compared to $2,758 for the three months ended March 31, 2024. Other expense for the three months ended March 31, 2025 primarily consisted of interest expense of $11,765 and interest income of $200. Other income for the three months ended March 31, 2024 consisted of $5,600 offset by interest expense of $2,842.
Current wording
Total Other Expenses. Total other expense was $12,380 for the three months ended June 30, 2025 compared to $62,557 for the three months ended June 30, 2024. Other expense for the three months ended June 30, 2025 primarily consisted of interest expense of $12,380. Other expense for the three months ended June 30, 2024 primarily consisted of $57,700 of losses on disposal of assets, interest expense of $6,757 and interest income of $1,900.
Previous wording
Cost of Sales. Cost of sales for the three months ended March 31, 2025 was $381,398 compared to $389,841 for three months ended March 31, 2024. Cost of sales for the Company’s Two Trees Distilling operations was $168,715 in 2025 compared to $287,679 in 2024, with the decline driven by volume decreases described above. The Company’s RF Specialties business incurred costs of sales of $212,683 in 2025 compared to $102,162 in 2024. The increase is due to the costs associated with the molecular sawdust drying module contract ongoing since November 2024.
Current wording
Cost of Sales. Cost of sales for the six months ended June 30, 2025 was $918,848 compared to $733,249 for six months ended June 30, 2024. Cost of sales for the Company’s Two Trees Distilling operations was $389,353 in 2025 compared to $457,308 in 2024, with the decrease driven by volume decreases described above. The Company’s RF Specialties business incurred costs of sales of $693,951 in 2025 compared to $275,941 in 2024. The increase is due to the costs associated with the molecular sawdust drying module contract ongoing since November 2024.
Previous wording
Operating Expenses. We reported operating expenses of $750,321 consisting primarily of legal, accounting, payroll, and general business related expenses for the three months ended March 31, 2025 compared to $599,966 for the three months ended March 31, 2024. The $150,355 increase in operating expenses was primarily attributable to increased professional fees as the Company’s reporting obligations increased with the acquisitions, payroll costs from new officer and director contracts, increased stock-based compensation of $66,322 from those new contracts, partially offset by decreases in royalty expense from lower sales volumes. Operating expenses included depreciation and amortization expense of $72,607 and $77,930 for the three months ended March 31, 2025 and 2024, respectively.
Current wording
Operating Expenses. We reported operating expenses of $1,793,536 consisting primarily of legal, accounting, payroll, and general business related expenses for the six months ended June 30, 2025 compared to $1,230,010 for the six months ended June 30, 2024. The $563,526 increase in operating expenses was primarily attributable to increased payroll costs from new officer and director contracts, increased stock-based compensation of $106,095 from those new contracts and higher legal and other professional fees, partially offset by decreases in insurance costs. Operating expenses included depreciation and amortization expense of $151,195 and $153,094 for the six months ended June 30, 2025 and 2024, respectively.
Previous wording
As of March 31, 2025, and December 31, 2024, we had $593,175 and $11,159 of cash, respectively. We anticipate that our current cash and cash generated from financing activities will be insufficient to satisfy our liquidity requirements for the next 12 months. As of March 31, 2025, we have incurred operating losses since inception of $2,989,859. At March 31, 2025, we had working capital of $222,164.
Current wording
As of June 30, 2025, and December 31, 2024, we had $13,330 and $11,159 of cash, respectively. We anticipate that our current cash and cash generated from financing activities will be insufficient to satisfy our liquidity requirements for the next 12 months. As of June 30, 2025, we have incurred operating losses since inception of $4,326,751. At June 30, 2025, we had working capital deficit of $1,104,922.
Previous wording
We expect to incur marketing, professional, and administrative expenses as well expenses associated with maintaining our filings with the Commission. We will require additional funds during this time and will seek to raise the necessary additional capital. During the three months ended, we raised $1,584,000 in cash proceeds from the sale of common stock. If we are unable to obtain additional financing, we may be required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results. Additional funding may not be available on favorable terms, if at all. We intend to continue to fund our business by way of equity or debt financing and advances from related parties. Any inability to raise capital as needed would have a material adverse effect on our business, financial condition and results of operations.
Current wording
We expect to incur marketing, professional, and administrative expenses as well expenses associated with maintaining our filings with the Commission. We will require additional funds during this time and will seek to raise the necessary additional capital. During the six months ended June 30, 2025, we raised $1,649,000 in cash proceeds from the sale of common stock. We continue to need significant cash to execute our business plan, including funds needed to complete construction of the contracted SRAS units and expand our on-site production capacity. If we are unable to obtain additional financing, we may be required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results. Additional funding may not be available on favorable terms, if at all. We intend to continue to fund our business by way of equity or debt financing and advances from related parties. Any inability to raise capital as needed would have a material adverse effect on our business, financial condition and results of operations.
Previous wording
Cash Used in Operating Activities. Net cash used in operating activities for the three months ended March 31, 2025 and 2024 were $421,316 and $280,931. The increase was attributable to an increase in net loss compared to the prior year as a result of increased operating expenses associated with the new businesses as described above.
Current wording
Cash Used in Operating Activities. Net cash used in operating activities for the six months ended June 30, 2025 and 2024 was $831,152 and $458,335. The increase was attributable to an increase in net loss compared to the prior year as a result of increased operating expenses associated with the new businesses as described above.
Previous wording
Cash Used from Investing Activities. Cash used in investing activities for the three months ended March 31, 2025 and 2024 was $604,377 and $8,820, respectively, related to purchases of equipment in developing its SRAS machines for its customer, and a new system for the Company’s own use.
Current wording
Cash Used from Investing Activities. Cash used in investing activities for the six months ended June 30, 2025 and 2024 was $707,454 and $8,820, respectively, related to purchases of equipment in developing our SRAS units for its customer, and a new system to expand production capacity.
Previous wording
Cash Provided by Financing Activities. Net cash provided by financing activities for the three months ended March 31, 2025 and 2024 was $1,607,709 and $337,534, respectively. The cash provided by financing activities for the three months ended March 31, 2025 was attributable to proceeds from the sale of common stock of $1,434,000, including subscription payable of $150,000, proceeds from related party notes payable of $150,000, partially offset by repayments of notes payable of $126,291. The cash provided by financing activities for the three months ended March 31, 2024 was attributable to proceeds from subscriptions agreements of $390,000, proceeds from notes payable of $25,000, partially offset by repayments of notes payable of $77,466.
Current wording
Cash Provided by Financing Activities. Net cash provided by financing activities for the six months ended June 30, 2025 and 2024 was $1,540,777 and $399,694, respectively. The cash provided by financing activities for the six months ended June 30, 2025 was attributable to proceeds from the sale of common stock of $1,649,000, including subscription payable of $50,000, proceeds from related party notes payable of $150,000, partially offset by repayments of notes payable of $258,223. The cash provided by financing activities for the six months ended June 30, 2024 was attributable to proceeds from subscriptions agreements of $390,000, proceeds from notes payable of $125,000, partially offset by repayments of notes payable of $115,306.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Cost of Sales. Cost of sales for the three months ended June 30, 2025 was $701,906 compared to $343,408 for three months ended June 30, 2024. Cost of sales for the Company’s Two Trees Distilling operations was $220,638 in 2025 compared to $169,629 in 2024, with the increase driven by volume increases described above, and increased input costs. Our gross profit improved due to the our efforts to streamline costs and increase efficiency. The Company’s RF Specialties business incurred costs of sales of $481,268 in 2025 compared to $173,779 in 2024. The increase is due to the costs associated with the molecular sawdust drying module contract ongoing since November 2024 as the project nears completion.
Current report — wording carried from elsewhere
Operating Expenses. We reported operating expenses of $1,043,215 consisting primarily of legal, accounting, payroll, and general business related expenses for the three months ended June 30, 2025 compared to $630,044 for the three months ended June 30, 2024. The $413,171 increase in operating expenses was primarily attributable to increased payroll costs from new officer and director contracts, increased stock-based compensation of $39,774 from those new contracts, and increased travel costs as part of our efforts to increase brand awareness and drive revenue volume increases.. Operating expenses included depreciation and amortization expense of $78,588 and $75,164 for the three months ended June 30, 2025 and 2024, respectively.
Current report — wording carried from elsewhere
In February 2025, the Company executed contracts with two customers related to the lease of an aggregate of three SRAS that are expected to begin producing revenue to the Company in the second half of 2025. The Company began building the machines for these customers in the first quarter, and we expect to drive significant growth in revenue and gross profit in our Two Trees Distilling business from this new revenue stream going forward.
Current report — wording carried from elsewhere
Total Other Expenses. Total other expense was $23,945 for the six months ended June 30, 2025 compared to $59,799 for the six months ended June 30, 2024. Other expense for the six months ended June 30, 2025 primarily consisted of interest expense of $24,145, and interest income of $200. Other expense for the six months ended June 30, 2024 primarily consisted of $54,000 of losses on disposal of assets, interest expense of $9,599 and interest income of $3,800.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Our wholly-owned subsidiary, Two Trees Beverage Company, utilizes our Spirits Rapid Aging System, validating the use of our patented energy wave technology within the premium craft spirits industry. Our proprietary and patented molecular targeting system swiftly and sustainably transforms distillate to maturity, delivering traditional flavors in a fraction of the time with greatly reduced environmental impact and cost. Precision engineered to match traditional aging flavors and aromas, it has been used to produce over 50 SKUs and many award-winning products.