🧾 What This Document Is

This is Sow Good Inc.'s 10-K Annual Report for the fiscal year ended December 31, 2025. It's a comprehensive filing required by the SEC that gives investors the full story of the company's business, financial condition, and risks. Think of it as the company's official, detailed "year-in-review" textbook.

🏢 What The Company Does

👉 In simple terms, Sow Good is a U.S. company that pioneered freeze-dried candy. They used to make and sell crunchy, intensely flavored treats like gummies and hard candy. However, a major shift happened at the end of 2025.

The Big Change: On December 30, 2025, Sow Good sold its manufacturing assets (like its special freeze-drying machines) to a related company called Trea Grove, LLC. It then signed an exclusive deal where Trea Grove is now the sole worldwide distributor of Sow Good's remaining candy inventory.

New Model: Sow Good is no longer a manufacturer. It's now a brand-focused, "capital-light" company. It earns a 10% commission on sales made by its distributor, Trea Grove. Its main job is managing the "Sow Good" brand while its board looks for new strategic directions.

💰 Financial Highlights

The year was defined by a massive transition, making the numbers dramatic.

• Revenue: $0.0 million from continuing operations. Why? Because the company exited its manufacturing/sales business. All historical sales are now reported under "discontinued operations."
• Net Loss from Continuing Operations: ~$6.8 million for 2025 (compared to a loss of ~$11.8 million in 2024).
• Big One-Time Hit: A loss of $33.8 million was recorded from discontinued operations in 2025. This largely reflects the sale of its manufacturing assets for $1.5 million when their book value was about $10.8 million.
• Lifeline Cash: The company raised $3 million in December 2025 by selling Series AA preferred stock to investors. It expects another $3 million from selling Series AAA preferred stock in March 2026. This cash is keeping the lights on.

🚀 Key Moves & Strategic Shift

These are the transformative actions that define Sow Good's current state.

1. Sale of Manufacturing Assets: Sold to Trea Grove, LLC (controlled by the founders) for $1.5 million. This ended Sow Good's capital-intensive manufacturing operations.
2. Exclusive Distribution Agreement: Signed with Trea Grove through July 31, 2026. Sow Good gets 10% of gross receipts from sales. The distributor handles everything from manufacturing to shipping.
3. Pursuing Strategic Alternatives: Management is actively evaluating what to do next—whether to grow the candy brand in adjacent categories or pivot to entirely different industries. This is a company searching for its next chapter.
4. Private Funding: Secured $3 million (with $3 million more expected) through a private placement of convertible preferred stock to fund operations and debt paydown during this transition.

⚠️ Significant Risk Factors

This section is crucial and paints a picture of a company facing serious challenges.

• Limited Operating History in New Model: The commission-based brand model is brand new. There's no track record.
• Category Decline: The freeze-dried candy market itself saw a significant decline in sales in late 2025, which hurt Sow Good severely.
• Reliance on a Single Distributor: The entire business now depends on Trea Grove (a related party) for manufacturing, distribution, and ultimately, generating the sales Sow Good gets its commission from.
• Need for More Capital: The company expects to continue losing money and may need more funding, which could dilute existing shareholders or add debt.
• Key Person Dependency: Success heavily depends on the founders, Ira and Claudia Goldfarb, who also run the distributor, Trea Grove.

🔮 What's Next

The path forward is highly uncertain. The company's stated priorities are:

1. Operate as a lean, asset-light business during the Distribution Agreement term.
2. Support and grow the Sow Good brand through marketing and consumer engagement.
3. Expand distribution through its partner, Trea Grove.
4. Most importantly: The board and management are evaluating strategic alternatives. This is corporate-speak for exploring all options, which could include finding a new business to acquire, merging with another company, or other fundamental changes.

🌍 Industry Context

Sow Good's story is a cautionary tale in the volatile snack food market. They rode the wave of a trendy new category (freeze-dried candy) but were crushed when larger competitors (like Mars and Hershey) entered the space and the category hype faded rapidly. Their pivot from a manufacturer to a brand licensor is a survival move in a highly competitive landscape dominated by giants with more resources.

📇 Key Contacts & People

• Ira Goldfarb: Co-Founder, key figure in Trea Grove, LLC (the distributor/buyer).
• Claudia Goldfarb: Co-Founder.
• Brett Goldfarb, Bradley Berman, Edward Shensky, David Lazar, Brendon Fischer: Listed as related parties or directors.
• Company Address: 1440 N Union Bower Rd, Irving, Texas 75061
• Phone: (214) 623-6055

🧠 The Analogy

Sow Good is like a restaurant that owned its building and made its own special recipes. After a tough year with fewer customers, it sold its kitchen equipment and lease to the owner's other company. Now, it’s just a brand name on the menu at that other company's restaurant, waiting for a small cut of each dish sold while the owners figure out if they should open a new type of business altogether.

🧩 Final Takeaway

Sow Good is a company in radical transition. It abandoned its core manufacturing business due to a collapsing market and now exists primarily as a brand waiting for commission checks from a related-party distributor. With losses mounting and its future strategy unclear, its survival depends on the success of its distribution partner and the board's ability to find a new, viable direction. Investors are betting on a successful transformation, not an ongoing operating business.