Financial Performance - Cadrenal reported a net loss of $3.0 million for Q4 2025, a decrease from $4.2 million in Q4 2024, reflecting a 29% improvement year-over-year[5] - General and administrative expenses for Q4 2025 were $2.4 million, compared to $2.7 million in Q4 2024, a decrease of approximately 11%[5] - Total operating expenses for the year ended December 31, 2025, were $13.5 million, an increase from $11.0 million in 2024, representing a 23% rise[15] - The company’s accumulated deficit increased to $38.96 million as of December 31, 2025, compared to $25.72 million at the end of 2024[13] - The company had cash and cash equivalents of $4.0 million as of December 31, 2025, down from $10.0 million at the end of 2024[6] Research and Development - Research and development expenses for Q4 2025 were $0.7 million, down from $1.5 million in Q4 2024, indicating a 53% reduction[5] - CAD-1005 demonstrated a greater than 25% absolute reduction in thrombotic events compared to placebo in a Phase 2 study[4] - The End-of-Phase 2 meeting with the FDA on March 26, 2026, clarified the regulatory path for the planned Phase 3 trial of CAD-1005[4] - CAD-1005 is positioned as the only selective 12-LOX inhibitor in clinical development, supported by Orphan Drug and Fast Track designations from the FDA[4] - The company continues to explore longer-term opportunities across its broader 12-LOX platform, including potential applications in obesity and type 2 diabetes[4]

Production and Content Development - Kartoon Studios operates Mainframe Studios, producing over 1,200 television episodes, 70 movies, and 3 feature films, enhancing its animation production capabilities[23]. - The company is developing the "Hundred Acre Wood's Winnie and Friends" series, set to premiere in Fall 2026, featuring a multi-phase rollout and a global consumer products program[30]. - Mainframe Studios is producing "SuperKitties" Seasons 2, 3, and 4, with 27 episodes of Season 3 delivered and a fourth season greenlit for production[31]. - The company has expanded Kartoon Channel! Worldwide to over 61 territories, increasing its distribution footprint across Europe, the Middle East, Africa, and Asia[38]. - The company aims to create positive social impacts through its content, focusing on themes of diversity and inclusion in children's media[65]. Revenue Sources and Financial Performance - Total revenue for the year ended December 31, 2025, was $39,353,000, representing a 21% increase from $32,591,000 in 2024[160]. - Production services revenue increased by 50% to $26,832,000 in 2025, up from $17,850,000 in 2024, due to several projects progressing into advanced production stages[161]. - Content distribution revenue decreased by 17% to $7,982,000 in 2025, primarily due to a $2.2 million decline in revenue from Frederator's creator network on YouTube[162]. - Licensing and royalties revenue increased by 30% to $387,000 in 2025, driven by higher earnings from existing license deals and new agreements related to Stan Lee Universe, LLC assets[163]. - Media advisory and advertising services revenue decreased by 14% to $4,152,000 in 2025, impacted by lower renewal activity and media purchases due to legislative uncertainty[164]. Customer Concentration and Risks - Four customers accounted for 81.9% of total revenue in 2025, compared to 75.7% in 2024, indicating a high customer concentration risk[46]. - Four customers accounted for 81.9% of total consolidated revenue for the year ended December 31, 2025, indicating a high dependency on a small number of clients[87]. - The company faces competition from larger entities such as The Walt Disney Company and Nickelodeon Studios, which may impact its market position and profitability[89]. Financial Position and Capital Requirements - As of December 31, 2025, the company had an accumulated deficit of $763.8 million and total stockholders' equity of $27.5 million[75]. - The company had total current assets of $35.8 million, including cash of $2.9 million and marketable securities of $4.0 million, against total current liabilities of $33.5 million[75]. - The company has material cash requirements totaling approximately $31.1 million over the next five years, with about $20.9 million due within one year[188]. - The company plans to utilize its liquidity to fund its material cash requirements[189]. Operational Challenges and Risks - The company’s ability to continue as a going concern is dependent on generating revenue and raising additional capital, with substantial doubt about its ability to do so for at least one year[75]. - The company faces risks related to international operations, including legal, regulatory, economic, and political challenges, which could hinder its growth strategy[97]. - The company experienced a cybersecurity incident on December 13, 2024, involving unauthorized access due to leaked credentials, which could harm its business and reputation[105]. - The company is subject to potential litigation costs and management distractions from disputes with licensors, consumers, and employees, which could disrupt operations[107]. Tax and Regulatory Environment - The company is subject to various federal and state regulations, including those related to children's privacy and online distribution[47][50]. - The company is subject to income taxes in Canada, the U.S., and foreign jurisdictions, with potential changes in tax laws affecting future effective tax rates[115]. - The company evaluates deferred tax assets and liabilities based on enacted tax rates and future taxable income, with potential impacts from legislative changes[220]. Intellectual Property and Brand Management - Licensing and merchandising activities are a key revenue source, with multiple licensees and products in development, focusing on the Stan Lee IP portfolio and "Hundred Acre Wood" property[35]. - The company controls rights associated with Stan Lee, including all rights in the name, image, and likeness of the late comic book icon[54]. - The company holds 15 registered trademarks in the United States and additional registrations in other jurisdictions, enhancing its brand protection[55]. Stock and Shareholder Information - As of March 31, 2026, approximately 53,898,226 shares of common stock are outstanding and freely trading, with 41,622,504 warrants and 969,130 shares underlying options granted[125]. - The company does not expect to pay dividends on common stock in the foreseeable future, limiting returns to stock price appreciation[123]. - The company has never declared or paid cash dividends and does not anticipate doing so in the foreseeable future[141]. Internal Controls and Governance - The company identified material weaknesses in internal controls in the past, which have been remediated, but failure to maintain adequate controls could lead to inaccurate financial reporting[126]. - The company is classified as a "smaller reporting company," allowing it to take advantage of reduced disclosure obligations under the Securities Exchange Act[67].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number: 001-37950 KARTOON STUDIOS, INC. (Exact name of registrant as specified in its charter) Nevada 20-4118216 (St ...

Research and Development - Research and development expenses were approximately $7.8 million and $11.6 million for the years ended December 31, 2025 and 2024, respectively, indicating a decrease of 32% year-over-year [103]. - The company is engaged in clinical trials for IMNN-001, which is a key focus of its research and development efforts [103]. - The company collaborates with various research institutions, including the NIH, to support its research initiatives [103]. - Clinical trials are conducted in three phases, with Phase III trials involving a significantly larger patient population to evaluate safety and efficacy [110]. - The company must comply with extensive regulations governing the development and marketing of pharmaceutical products, which can impact timelines and costs [105]. - The FDA may require additional testing for safety and efficacy before granting approval, which can further delay the process [113]. - The company relies on proprietary know-how and experience in product development, protected through proprietary information agreements [179]. Regulatory Approvals - The FDA granted Fast Track designation for IMNN-001 for the treatment of ovarian cancer in January 2021, which may expedite the development and review process [119]. - The company has received orphan drug designation for IMNN-001 for the treatment of ovarian cancer, which provides potential exclusivity for seven years upon approval [124]. - The regulatory approval process requires substantial time and financial resources, with no assurance that any product will receive approval [113]. - The FDA has specific performance goals for reviewing NDAs and BLAs, aiming to complete most standard reviews within ten months and priority reviews within six months [114]. - The FDA provides a five-year non-patent data exclusivity period for new drugs, with ANDA applications allowed after four years under certain conditions [126]. - The Biologics Price Competition and Innovation Act allows for an abbreviated approval pathway for biosimilars, requiring demonstration of high similarity to reference products [127]. - Biosimilar applications cannot be accepted until four years post-licensure, with a 12-year approval timeline for biosimilars [128]. - The EU's centralized procedure for marketing authorization can take over a year, with specific timelines for evaluation and potential accelerated processes for public health needs [154]. Manufacturing and Compliance - Manufacturing establishments must comply with cGMP, requiring significant investment in quality control and production processes [130]. - The company uses contract manufacturing organizations (CMOs) to manufacture drug candidates under cGMP conditions [160]. - The company operates a cGMP clinical-scale manufacturing facility in Huntsville, Alabama, but does not own facilities for final production, relying on third-party contract manufacturing organizations [158]. - Post-approval requirements include compliance with cGMP, adverse reaction reporting, and potential additional clinical trials mandated by the FDA [129]. - The FDA accepts foreign clinical studies as support for regulatory applications if they adhere to good clinical practices and can be validated [131]. Market and Competition - The company faces significant competition from larger pharmaceutical and biotechnology companies with greater financial resources and experience [163]. - The company intends to market its drug candidates through strategic alliances and distribution agreements if marketing approval is received [160]. - The company relies on third-party payors for reimbursement of healthcare costs, with significant variability in coverage and reimbursement rates across different payors [140]. - The company must conduct pharmacoeconomic studies to demonstrate medical necessity and cost-effectiveness to secure coverage and reimbursement [141]. Legislative and Economic Factors - Legislative changes may significantly impact FDA regulations governing product testing, approval, and marketing, creating uncertainty for the company [133]. - Increasingly stringent state privacy laws, such as the California Consumer Privacy Act, may elevate potential liabilities and affect business operations [138]. - The Inflation Reduction Act of 2022 (IRA) mandates manufacturers to pay rebates for Medicare drugs if price increases exceed inflation, and introduces price negotiation for high-cost drugs starting in 2026 [143]. - The IRA's provisions may significantly impact the pharmaceutical industry, potentially reducing prices and reimbursement rates for approved products [144]. - Legislative changes in the U.S. and abroad may continue to affect healthcare costs and reimbursement methodologies, increasing scrutiny on drug pricing [148]. - The company may be subject to penalties under the IRA for non-compliance, which could further impact its financial condition [144]. Employment and Insurance - The company currently employs 20 full-time employees as of March 30, 2026 [180]. - The company has product liability insurance limited to $10 million per incident [161]. Intellectual Property - The company owns five patents related to TheraPlas technology, with expiration dates ranging from 2025 to 2028 [170]. - The company has filed three patent applications for PlaCCine technology between 2021 and 2023, but has paused all intellectual property activity for this technology due to the competitive landscape [171].

Exhibit 99.1 LAS VEGAS, NV — March 31, 2026 — TON Strategy Company ("TON Strategy" or the "Company") (Nasdaq: TONX), a digital asset treasury company dedicated to holding Toncoin ($TON), today reported financial results for the full year ended December 31, 2025 and provided an update on its TON treasury operations. Fourth Quarter and Recent Operational Highlights Financial Results for the Full Year 2025 TON Strategy Company Reports Full Year 2025 Financial Results The Company's financial results for 2025 re ...

Business Operations and Strategy - SPAR Group operates primarily in the U.S. and Canada, having exited international markets including Mexico, Brazil, South Africa, China, Japan, and India during 2024[20]. - The company focuses on enhancing sales and profit for clients through services such as merchandising, marketing, and retail transformation[22]. - SPAR Group's business strategy prioritizes three areas: growing the core business, introducing or acquiring new services, and investing in technology[29]. - The company aims to expand its services to existing clients while actively pursuing new business opportunities through proposals and marketing efforts[30]. - SPAR Group recognizes the importance of technology, particularly its SPARView platform, to optimize merchandising and marketing services[32]. - The company provides five principal types of services: Merchandising, Marketing and Category Management, Remodel and Retail Transformation, Assembly and Installation, and Fulfillment and Distribution[36]. - Business Analytics and Insights services are utilized to deliver actionable insights that drive efficiency, sales, and customer satisfaction[43]. - The merchandising and marketing services industry is expected to continue growing, driven by the need for retailers to remain relevant and efficient in a digital landscape[26]. Client and Revenue Information - The Company had two clients that represented over 10% of its revenue for the year ended December 31, 2025, with Client 1 contributing 16.8% (approximately $22.8 million) and Client 2 contributing 10.8% (approximately $14.7 million)[46]. - The Company has a significant number of long-tenured clients, which allows it to invest resources in understanding their businesses and meeting future needs[30]. - Consolidated net revenues for the year ended December 31, 2025, were $136.1 million, a decrease of $27.5 million or 16.8% compared to $163.6 million in 2024, primarily due to the sale of international operations[132]. - U.S. net revenues increased to $122.1 million in 2025 from $117.5 million in 2024, reflecting a growth of $4.6 million or 3.9% driven by continued growth in the U.S. market[133]. Financial Performance - The Company reported a loss from continuing operations of approximately $24.6 million for the year ended December 31, 2025, compared to a loss of $1.8 million for the year ended December 31, 2024[129]. - Consolidated EBITDA loss was approximately $16.5 million for the year ended December 31, 2025, compared to income of $3.6 million for the year ended December 31, 2024[129]. - Consolidated Adjusted EBITDA for the year ended December 31, 2025, was approximately $(8.6) million, down from $6.65 million in 2024[129]. - The cost of revenue was 84.1% of net revenue in 2025, up from 79.5% in 2024, attributed to significant growth in lower-margin remodel business[135]. - Selling, general and administrative expenses (SG&A) were approximately $32.2 million or 23.7% of net revenue in 2025, compared to $33.9 million or 20.7% in 2024[138]. - The company recorded an income tax expense of $4.1 million in 2025, with an effective tax rate of (19.8%), compared to $0.1 million and (8.7%) in 2024[146]. - The net loss attributable to SPAR Group, Inc. was $24.6 million in 2025, representing an 18.1% loss margin, compared to a net loss of $3.2 million or 2.0% in 2024[131]. Operational Structure and Workforce - SPAR Group's operational structure includes 100% ownership of its entities in the U.S. and Canada, with headquarters in Charlotte, North Carolina[35]. - As of December 31, 2025, the Company's labor force totaled approximately 4,522, including 190 full-time and 975 part-time employees in the U.S. and 55 full-time and 1 part-time employee in Canada[49]. - The Company relies significantly on independent contractors for field services, with approximately 2,779 field specialists in the U.S. and 522 in Canada provided by an Independent Field Vendor[49]. Market Conditions and Risks - The markets in which the Company operates are cyclical and subject to economic downturns, which could adversely affect revenues[57]. - The Company has experienced fluctuations in quarterly operating results and cash flow due to various factors, including the number of active client projects and client delays[61]. - A significant decrease in the need for in-store merchandising could materially decrease the Company's revenues[65]. - The Company believes that the outsourcing of merchandising and marketing services will continue, but there is no assurance that this trend will persist[63]. Governance and Compliance - The Company identified material weaknesses in internal controls as of December 31, 2024, which resulted in errors in financial reporting[81]. - Remediation efforts for identified material weaknesses were completed by December 31, 2025, but future weaknesses cannot be ruled out[82]. - The Company has implemented a new enterprise resource planning system as part of its remediation plan for internal controls[176]. - The company has established a charter for the Audit Committee, emphasizing governance and oversight in financial reporting[198]. - The independent registered accounting firm, BDO USA, P.C., is responsible for forming an opinion on the company's consolidated financial statements, ensuring transparency and reliability[195]. Stock and Financial Instruments - SGRP Common Stock price fluctuated between $0.768 and $2.04 per share during the year ended December 31, 2025[76]. - Majority Stockholders own approximately 46.2% of SGRP Common Stock, which may influence corporate governance and stock price[88]. - The Company is currently under a Nasdaq notice regarding a potential delisting due to failing to maintain a minimum bid price of $1.00 over 30 consecutive business days[114]. - If SGRP Common Stock is delisted from NASDAQ, it may be traded over-the-counter, potentially increasing transaction costs and affecting market liquidity[80]. - The Company has never declared or paid cash dividends on SGRP Shares and does not anticipate doing so in the foreseeable future[115]. Cash Flow and Liquidity - Net cash used in operating activities increased to $18.4 million for the year ended December 31, 2025, compared to $0.7 million for 2024, primarily due to lower operating income and unfavorable changes in working capital[165]. - Net cash used in investing activities was $1.1 million for the year ended December 31, 2025, a significant decrease from cash provided by investing activities of $9.9 million in 2024, mainly due to costs associated with software development and new corporate headquarters[166]. - Net cash provided by financing activities was $4.5 million for the year ended December 31, 2025, compared to cash used of $1.7 million in 2024, driven by borrowings under lines of credit and sale of treasury shares[167]. - The company experienced a net decrease in cash and cash equivalents of approximately $15.0 million for the year ended December 31, 2025, attributed to lower operating income and unfavorable working capital changes[168]. - The company was in compliance with all financial covenants under its U.S. and Canada credit facilities for the year ended December 31, 2025[164]. Audit and Financial Reporting - Audit fees for the year ended December 31, 2025, totaled $886,000, an increase from $782,000 in 2024, reflecting the company's ongoing financial reporting needs[191]. - Audit-related fees included services for the audit of the Corporation's 401(k) plan, reflecting the company's commitment to compliance and oversight[193]. - Tax fees encompassed all professional services related to tax compliance, planning, and advice, excluding those tied to the audit of financial statements[193]. - The consolidated statements of operations and comprehensive loss for the years ended December 31, 2025, and 2024 are detailed in the financial statements[195]. Strategic Initiatives and Agreements - The company is actively involved in mergers and acquisitions, as evidenced by the Agreement and Plan of Merger dated August 30, 2024[196]. - The company has established several joint ventures in Brazil and China to strengthen its market presence, including a joint venture agreement dated September 13, 2016, in Brazil[10.48]. - SPAR Group, Inc. has entered into multiple consulting agreements to enhance global sales and market expansion, including a notable agreement with Thenablers, Ltd. effective February 1, 2022[10.25]. - The company has executed a change of control severance agreement with Antonio Calisto Pato, effective February 28, 2023, reflecting strategic personnel adjustments[10.28]. - SPAR Group, Inc. has made amendments to its change of control severance agreements, ensuring alignment with current corporate governance standards[10.29]. - The company has entered into a securities pledge and escrow agreement securing the Richard Justus Note, indicating a structured approach to financial obligations[10.58]. - SPAR Group, Inc. has engaged in a sale of shares agreement dated February 7, 2024, to facilitate strategic divestitures and enhance operational focus[10.56]. - The company has established a corporate guaranty dated April 10, 2019, to support its financial arrangements with North Mill, demonstrating commitment to financial stability[10.64]. - SPAR Group, Inc. has a comprehensive loan and security agreement with North Mill Capital, LLC, indicating a structured financing approach to support its operations[10.65]. - The company has undergone multiple modification agreements with North Mill Capital, LLC, with the latest being the Seventh Modification Agreement dated March 28, 2024[206]. Corporate Governance and Ethics - The company’s financial documents include certifications from the Chief Executive Officer and Chief Financial Officer as per the Sarbanes-Oxley Act of 2002[211]. - SPAR Group's Code of Ethical Conduct was amended and restated as of March 15, 2018, reflecting the company's commitment to ethical governance[207]. - The company has a history of mutual release agreements among key executives, indicating a focus on internal governance and conflict resolution[207]. - The company has established a policy regarding personal securities transactions to ensure compliance with securities regulations[208]. - The company’s financial reporting includes XBRL information, which is furnished but not filed, indicating a commitment to transparency in financial disclosures[209].

EX-99.1 2 meridian_ex991.htm PRESS RELEASE EXHIBIT 99.1 Meridian Holdings Reports Record Fourth Quarter Revenue of $49.6 Million and Record Full-Year 2025 Financial Revenue of $182.9 Million LAS VEGAS, NV - March 31, 2026 - Meridian Holdings Inc. (NASDAQ: MRDN) ("Meridian" or the "Company"), a global operator and licensor of online sports betting and gaming platforms, today announced its financial results for the fourth quarter and full-year ended December 31, 2025. This marks the Company's first earnings r ...

Financial Performance - The company reported nominal revenues and a net loss of $6,278,191 for the year ended December 31, 2025, compared to a net loss of $1,517,431 for the year ended December 31, 2024[20]. - The company has a working capital deficiency, raising substantial doubt about its ability to continue as a going concern[113]. - The company has identified material weaknesses in its internal controls over financial reporting, which could lead to inaccurate financial statements and negatively affect stock price[209]. - The company does not intend to pay dividends for the foreseeable future, opting to retain earnings for business operations and expansion[204]. Market Opportunities - The global phototherapy treatment market is projected to rise from approximately $1.9 billion in 2023 to around $3.23 billion by 2033, with a CAGR of about 5.2% during the forecast period[24]. - The Indian phototherapy treatment market is expected to grow at an estimated CAGR of approximately 7.8% as of 2023, driven by increasing prevalence of skin disorders and improved healthcare access[24]. - The global psoriasis treatment market was valued at approximately $34 billion in the 12 months ending June 2023, with the US accounting for about 78% of total sales and growing at a CAGR of approximately 18%[25]. - Management believes that the prevalence of psoriasis in India ranges from 0.44% to 2.8% of the population, indicating significant market opportunity[26]. - The global vitiligo treatment market was valued at around $538.90 million in 2024, projected to grow at a CAGR of 4.60% from 2025 to 2034, reaching approximately $807.70 million by 2034[27]. Product Development and Launches - The Hair Enzyme Booster (JW-700) was launched on Amazon on October 28, 2024, and is designed to enhance the efficacy of minoxidil by increasing necessary enzyme levels[33]. - CB-101, a treatment for atopic dermatitis, is planned for reformulation and expected to be available online in the US in Q2 2026[36]. - NoStingz, a sunscreen product, is planned for reformulation and will comply with FDA guidelines, though a launch timeline has not yet been established[37]. - The Hair Enzyme Booster (JW-700) is expected to launch in the US in Q4 2024 and is designed to enhance the efficacy of minoxidil[35]. - The Hair Enzyme Booster (JW-700) has undergone multiple clinical trials, demonstrating its potential efficacy in treating androgenetic alopecia[35]. Regulatory Compliance and Challenges - Regulatory compliance is critical, with products subject to FDA regulations for both OTC and cosmetic products, which include safety, labeling, and manufacturing standards[90][91]. - The Hair Enzyme Booster received CDSCO cosmetic labeling approval in June 2023, demonstrating compliance with Indian regulatory standards for cosmetics[97]. - Regulatory approvals are critical for the company's products, and delays or difficulties in clinical trials may hinder future commercialization[131]. - The company must develop and introduce new products to remain competitive, as the industry is subject to rapid change[125]. - The company does not have any products on the market that have been approved by the FDA for the treatment of disease, which limits its market potential[130]. Competition and Market Position - The company faces competition from larger firms with more resources, which may impact its ability to maintain market share and respond to regulatory changes[81][82]. - The company faces intense competition in the skin care and hair growth product markets, with competitors having greater financial and technical resources[117]. - The U.S. psoriasis market is dominated by biologics, with IL-23 inhibitors holding approximately 31% market share, followed by IL-17 inhibitors at 23%, TNF inhibitors at 23%, and ustekinumab at 13%[83]. Strategic Partnerships and Licensing - Caring Brands has licensed minoxidil products to Taisho, a company with $2.6 billion in revenue, with milestone payments of up to $200,000 and a 3% royalty[35]. - The Cosmofix/San Pellegrino license agreement grants exclusive rights to manufacture and distribute Photocil and Hair Enzyme Booster (JW-700) in India and 31 other territories, with an upfront fee of $20,000 and minimum annual royalties of $50,000 starting from the second year[63][75]. - The agreement with Taisho Pharmaceutical Co., Ltd. includes a $200,000 upfront payment and a 3% royalty on net sales for the Hair Enzyme Booster (JW-700) in Japan, with the first regulatory authorization milestone payment of $100,000 yet to be achieved[67]. Operational and Management Structure - The company has three full-time employees, including the CEO, operations manager, and executive chairman, indicating a lean operational structure[101]. - The company began providing most administrative services in-house during the year ended December 31, 2024, which may affect future performance as a separate publicly traded entity[167]. - The company has limited experience in managing public company operations, which may lead to additional costs and affect financial performance[198]. Risks and Uncertainties - The company may face challenges in manufacturing products in sufficient quantities or quality, which could hinder development and market demand[144]. - Delays in regulatory filings or adverse developments with regulatory authorities, such as the FDA, could significantly impact the company's financial condition[138]. - Adverse publicity regarding the company's products could significantly affect public perception and sales[128]. - The company may seek additional capital through various means, which could dilute existing stockholders' ownership and impose operational restrictions[172]. Market Strategy and Future Plans - The company plans to enhance its online presence and marketing strategies, with a focus on e-commerce before expanding into traditional retail channels[77]. - The company anticipates that each brand will have its own dedicated e-commerce website to enhance retail sales and brand-specific information[79]. - The company is exploring acquisition opportunities in the branded consumer products space, particularly OTC/cosmetic therapeutic brands that do not require additional FDA approval[78].

Financial Performance - Sow Good Inc. incurred net losses from continuing operations of approximately $6.8 million and $11.8 million for the years ended December 31, 2025, and December 31, 2024, respectively [90]. - Revenue increased from approximately $88.4 thousand in 2021 to approximately $16.1 million in 2023, but dropped to $0.0 million in 2025 due to a transition to a commission-based distribution model [98]. - A loss of $33.8 million was reported for discontinued operations in 2025, while a gain of $8.1 million was recorded in 2024 [99]. - The company has a limited operating history in its current form, increasing uncertainty in forecasting revenues and expenses [88]. - The company may need additional funding to support its operations and growth, with no assurance of generating sufficient cash from operations [92]. Business Model and Strategy - The company transitioned to a capital-light model, no longer operating manufacturing facilities, and is evaluating strategic alternatives for future growth [26][33]. - The company transitioned to a commission-based, asset-light business model, earning a fixed percentage of distributor gross receipts from sales of Sow Good-branded products [87]. - Sow Good commenced commercial sales of its products in 2021 and expanded into freeze-dried candy and other snack categories in 2023 [87]. - The company has invested in brand development and marketing initiatives to strengthen consumer engagement and brand awareness [38]. - Sow Good's future success depends on maintaining brand awareness, supporting product innovation, and expanding distribution through its partners [89]. Market and Competition - The freeze-dried candy category saw a significant rise in popularity during 2024 and early 2025, but experienced a decline in sales towards the end of 2025 [31]. - The freeze-dried candy category's sales have been declining, impacting the company's revenue and necessitating strategic alternatives [89]. - Increased competition from larger companies has adversely affected revenue and shelf space with significant customers [111]. - Consumer preferences for freeze-dried candy are changing rapidly, which could limit product sales and market share [112]. Intellectual Property and Compliance - Sow Good holds two U.S. trademark registrations and has six pending applications, emphasizing the importance of its intellectual property in brand recognition [64]. - The company faces potential challenges in protecting its intellectual property rights, which could lead to significant distractions and expenses if infringements occur [123]. - Legal proceedings related to intellectual property claims may divert management's attention and financial resources, impacting the company's operating results and financial condition [125]. - The company is subject to extensive regulation by the FDA and other authorities, which may impact its operations and compliance costs [72]. Operational Risks - Food safety is a top priority, and any incidents related to foodborne illnesses could lead to production interruptions, negative publicity, and increased costs [128]. - Noncompliance with food product quality and safety regulations could result in enforcement actions, including product recalls and potential liability claims, adversely affecting financial condition [129]. - The company may face significant product liability exposure, which could lead to recalls or lawsuits, negatively impacting financial performance and consumer confidence [133]. - Inventory management is critical; excess inventory levels may result in write-downs and negatively impact liquidity, especially following significant customer losses [143]. - Underestimating demand or supplier delays could lead to inventory shortages, resulting in missed sales opportunities and negatively affecting financial condition [144]. Cybersecurity and Data Protection - Cybersecurity risks are a growing concern, as the company relies heavily on information technology systems for operations, which could be vulnerable to attacks and disruptions [145]. - The company has implemented measures to prevent security incidents and cyber attacks, but effectiveness is uncertain, which could lead to business disruption and reputational harm [146]. - The company has established cybersecurity processes to manage risks, with oversight from the Audit Committee to ensure effective controls [190]. - As of the report date, the company is not aware of any cybersecurity threats that have materially affected its business strategy or financial condition [201]. Stock and Market Conditions - The market price of Sow Good's common stock is highly volatile and subject to wide fluctuations [86]. - The company has received a letter from Nasdaq indicating non-compliance with the minimum bid price of $1.00 per share, with a compliance period until May 11, 2026 [161]. - The market price of the company's common stock is expected to remain highly volatile, influenced by various factors including quarterly revenue variations and changes in analyst estimates [165]. - The company has never paid dividends on its common stock and does not intend to do so in the foreseeable future, relying on price appreciation for investor returns [169]. Funding and Capital Structure - The first tranche of a private placement raised $3 million by issuing 1.5 million Series AA Convertible Non-Redeemable Preferred Stock, with a second tranche expected to raise an additional $3 million in March 2026 [27]. - The company issued 1,500,000 shares of Series AA Preferred Stock for $3 million, which were used to pay down debt and for operational purposes [221]. - The company plans to issue an additional 1,500,000 shares of Series AAA Preferred Stock for another $3 million in March 2026 [221]. - The company qualifies as a "smaller reporting company" with a market value of common stock held by non-affiliates below $700 million and annual revenue under $100 million, potentially making its stock less attractive to investors [171]. Leadership and Governance - The company experienced a leadership transition, appointing David Lazar as CEO and Chairman of the Board [222].

Financial Risks - The company has a history of losses and anticipates future losses, which could affect its financial stability and growth prospects[22] - There are uncertainties regarding the ability to access financing from other sources, which may hinder the exploration and construction of the Project[22] - The company is facing risks related to delays in obtaining U.S. EXIM loan approvals, which could impact project financing and development timelines[22] Operational Challenges - Regulatory and legal challenges, including opposition to the Project, may impact operational timelines and costs[28] - Labor shortages and disruptions may impact the construction and operational phases of the Project[28] - The company relies on outside consultants for critical services, which poses risks to project execution and management[28] - The company is subject to industry-wide risks, including competition and availability of necessary resources for project development[28] Market Risks - Changes in gold and antimony commodity prices could significantly affect the company's revenue and profitability[28] - Future events and economic conditions may differ materially from current assumptions, affecting the company's performance[24] Project Updates - The company has updated its Technical Report Summary, focusing on permitting, exploration drilling, and financial analyses related to the Stibnite Gold Project[38]