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SOWG Sow Good Inc

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Share Name Share Symbol Market Type
Sow Good Inc NASDAQ:SOWG NASDAQ Common Stock
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 2.20 2.14 3.20 0 09:00:00

Form 8-K - Current report

14/08/2024 10:12pm

Edgar (US Regulatory)


0001490161false00014901612024-08-142024-08-14

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 14, 2024

SOW GOOD INC.

(Exact name of registrant as specified in its charter)

Delaware

000-53952

27-2345075

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

1440 N Union Bower Rd

Irving, TX 75061

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (214) 623-6055

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(g) of the Act:

Title of each Class

Trading Symbol

Name of each exchange on which registered

Common Stock

SOWG

The Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 


 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

On August 14, 2024, Sow Good Inc. (the “Company”) issued a press release announcing financial results for the year and three-months ended June 30, 2024. The press release contains forward-looking statements regarding the Company, and includes cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated.

 

The press release issued August 14, 2024 is furnished herewith as Exhibit 99.1. The information in this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that Section, nor shall such information be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as otherwise stated in such filing.

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.

Description

99.1

 

Press Release issued by Sow Good Inc., dated August 14, 2024

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SOW GOOD INC.

By:

/s/ Claudia Goldfarb

Claudia Goldfarb

Chief Executive Officer

Date: August 14, 2024

 

 


Exhibit 99.1

img245980089_0.jpg 

 

 

Sow Good Reports Strong Second Quarter 2024 Results

- Q2 Revenue Increased 37% Sequentially to $15.6 Million, Driving Net Income of $3.3 Million or $0.29 per Diluted Share -

IRVING, TEXAS, August 14, 2024 Sow Good Inc. (Nasdaq: SOWG) (“Sow Good” or “the Company”), a trailblazer in the freeze-dried dried candy and treat industry, is reporting financial and operating results for the second quarter ended June 30, 2024.

“The momentum in our business continued to accelerate in the second quarter,” said Claudia Goldfarb, CEO of Sow Good. “Q2 revenue grew sequentially by an impressive 37%, driving net income to a remarkable $3.3 million or $0.29 per share. Adjusted EBITDA was also up substantially to $6.2 million compared to $(2.1) million in Q2 last year. This exceptional performance is a testament to our innovative and disruptive products, coupled with our enhanced production capacity and strong retail launches. "

“We reached several critical milestones in Q2 that are setting the stage for our long-term success as a public company. Highlights include our Nasdaq listing, an underwritten public offering that generated $12.8 million in proceeds net of underwriting costs, and our addition of a state-of-the-art 324,000 square foot production and distribution facility, poised to significantly boost our production capabilities once fully operational."

"Despite a slower start to the third quarter due to seasonal factors and a deliberate pause in shipping to protect product quality during extreme heat, we are poised to drive extraordinary growth through three bold strategic objectives. First, we are aggressively expanding our in-house production capacity, ensuring that we not only meet but exceed the strong demand for our products. Second, we are fortifying and diversifying our distribution partnerships, positioning ourselves to seamlessly navigate any market fluctuations while amplifying our market reach. Third, we are revolutionizing the candy category with groundbreaking treats that continue to redefine consumer expectations.

 

"At the heart of this strategy is our unwavering commitment to owning and controlling our product manufacturing—from sourcing the finest raw materials through the freeze-drying process. To propel these ambitions, we launched a pivotal initiative in the second quarter to bring chew candy production in-house. This strategic move sets us apart from competitors who rely on external, overseas suppliers and costly branded candies. By producing our own candies, optimized specifically for freeze-drying, we are eliminating supply chain vulnerabilities and crafting a product that is unparalleled in quality and innovation. This initiative is a game-changing advantage that will widen our competitive moat and solidify our leadership in the industry.

 

"Given the stellar results we’ve already achieved and the vast opportunities that lie ahead, we are more confident than ever that 2024 will continue to be a transformative year for creating significant shareholder value. We are not just aiming for growth; we are engineering a future where we dominate the market and redefine industry standards."

Second Quarter 2024 Highlights vs. Same Year-Ago Quarter

Revenue in the second quarter of 2024 increased significantly to $15.6 million compared to $1.3 million for the same period in 2023 and increased 37% compared to the first quarter of 2024. The increase was driven by the Company’s pivot to selling freeze dried candy in the prior year period, as well as the growing market for freeze dried candy. The increase also reflects the benefits of the Company’s expanded production capacity.

 

 


Exhibit 99.1

Gross profit in the second quarter of 2024 increased significantly to $9.0 million compared to $(1.6) million for the same period in 2023. Gross margin was 57.6% in the second quarter of 2024, up considerably from 40.6% in the first quarter of 2024. The sequential margin expansion was driven by strong revenue growth but also raw material cost improvements, favorable product mix and price optimization.

Operating expenses in the second quarter of 2024 were $4.1 million compared to $0.9 million for the same period in 2023. The increase was primarily driven by higher compensation and professional services expenses as Sow Good scaled its business and invested in system and process improvements as well as executed on its Nasdaq listing and underwritten public offering.

Net income in the second quarter of 2024 increased substantially to $3.3 million, or $0.29 per diluted share, compared to a net loss of $(3.3) million, or $(0.68) per diluted share, for the same period in 2023. The improvement reflects the higher level of gross profit generated during the quarter.

Adjusted EBITDA (a non-GAAP financial measure defined and reconciled herein) in the second quarter of 2024 improved to $6.2 million compared to $(2.1) million for the same period in 2023. For a reconciliation of Adjusted EBITDA to the nearest comparable GAAP metric, net income, please see the tables below.

Cash and cash equivalents were $14.4 million at June 30, 2024, compared to $2.4 million at December 31, 2023. The Company received proceeds of $12.8 million, net of underwriting costs from an underwritten public offering of common stock in May of 2024.

Conference Call

Sow Good will conduct a conference call tomorrow at 10:00 A.M. Eastern time to discuss its results for the second quarter ended June 30, 2024.

Date: Thursday, August 15, 2024

Time: 10:00 a.m. Eastern time

Registration Link: https://register.vevent.com/register/BI872fa16af1de41499069a97407c5405c

To access the call by phone, please register via the registration link above and you will be provided with dial-in instructions and details. If you have any difficulty connecting with the conference call, please contact Gateway Group at 1-949-574-3860.

The conference call will be broadcast live and available for replay here and on the Company’s website at Sowginc.com.

About Sow Good Inc.

Sow Good Inc. is a trailblazing U.S.-based freeze dried candy and snack manufacturer dedicated to providing consumers with innovative and explosively flavorful freeze dried treats. Sow Good has harnessed the power of our proprietary freeze-drying technology and product-specialized manufacturing facility to transform traditional candy into a novel and exciting everyday confectionaries subcategory that we call freeze dried candy. Sow Good is dedicated to building a company that creates good experiences for our customers and growth for our investors and employees through our core pillars: (i) innovation; (ii) scalability; (iii) manufacturing excellence; (iv) meaningful employment opportunities; and (v) food quality standards.

 


Exhibit 99.1

Non-GAAP Financial Measures

This press release contains “non-GAAP financial measures” that are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with GAAP. Specifically, we make use of the non-GAAP financial measure “Adjusted EBITDA.” Adjusted EBITDA has been presented in this press release as a supplemental measure of financial performance that is not required by, or presented in accordance with, GAAP. Adjusted EBITDA is a supplemental measure of our performance that is not required by or presented in accordance with GAAP. We define Adjusted EBITDA as net income (loss) before depreciation, interest expense, net and income tax benefit, adjusted to eliminate loss on early extinguishment of debt and stock-based compensation. The most directly comparable GAAP measure is net income (loss). Adjusted EBITDA is not recognized terms under GAAP and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash provided by operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. In addition, in evaluating Adjusted EBITDA, you should be aware that in the future, we may incur expenses similar to the adjustments in the presentation of Adjusted EBITDA. The presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Because not all companies use identical calculations, the presentations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company.

We present this non-GAAP measure because we believe it assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes Adjusted EBITDA is useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate, and capital investments. Management uses Adjusted EBITDA to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation, and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone provide.

There are a number of limitations related to the use of Adjusted EBITDA rather than net income (loss), which is the most directly comparable financial measure calculated and presented in accordance with GAAP. Some of these limitations are:

Adjusted EBITDA excludes stock-based compensation expense as it has recently been, and will continue to be for the foreseeable future, a significant recurring non-cash expense for our business;

Adjusted EBITDA excludes depreciation and amortization expense and, although this is a non-cash expense, the assets being depreciated and amortized may have to be replaced in the future;

Adjusted EBITDA does not reflect the cash requirements necessary to service interest on our debt which affects the cash available to us;

Adjusted EBITDA does not reflect the monies earned from our investments since it does not reflect our core operations;

Adjusted EBITDA does not reflect change in fair value of financial instruments since it does not reflect our core operations and is a non-cash expense;

Adjusted EBITDA does not reflect income tax expense that affects cash available to us; and

 


Exhibit 99.1

the expenses and other items that we exclude in our calculations of Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from Adjusted EBITDA when they report their operating results.

In addition, other companies may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.

Forward-Looking Statements

This press release contains forward-looking statements. Statements other than statements of historical facts contained in this press release may be forward-looking statements. Statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding the offering, expected growth, and future capital expenditures, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “target,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” “may” or other words and similar expressions that convey the uncertainty of future events or outcomes. Forward-looking statements contained in this press release include, but are not limited to statements about: (a) our ability to compete successfully in the highly competitive industry in which we operate; (b) our ability to maintain and enhance our brand; (c) our ability to successfully implement our growth strategies related to launching new products; (d) the effectiveness and efficiency of our marketing programs; (e) our ability to manage current operations and to manage future growth effectively; (f) our future operating performance; (g) our ability to attract new customers or retain existing customers; (h) our ability to protect and maintain our intellectual property; (i) the government regulations to which we are subject; (j) our ability to maintain adequate liquidity to meet our financial obligations; (k) failure to obtain sufficient sales and distributions for our freeze dried product offerings; (l) the potential for supply chain disruption and delay; (m) the potential for transportation, labor, and raw material cost increases or disruptions (including as a result of seasonal factors); and (n) such other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission, including the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2023 and our most recent Quarterly Reports on Form 10-Q. All information provided in this release is as of the date hereof and we undertakes no duty to update this information except as required by law.

Sow Good Investor Inquiries:

Cody Slach

Gateway Group, Inc.

1-949-574-3860

SOWG@gateway-grp.com

Sow Good Media Inquiries:

Sow Good, Inc.

1-214-623-6055

pr@sowginc.com

 

 


Exhibit 99.1

 

SOW GOOD INC.

CONDENSED BALANCE SHEETS

 

 

 

June 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

ASSETS

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

14,373,035

 

 

$

2,410,037

 

Accounts receivable, net

 

 

6,197,037

 

 

 

2,578,259

 

Inventory

 

 

10,319,489

 

 

 

4,123,246

 

Prepaid inventory

 

 

1,150,132

 

 

 

563,131

 

Prepaid expenses

 

 

170,081

 

 

 

563,164

 

Total current assets

 

 

32,209,774

 

 

 

10,237,837

 

 

 

 

 

 

 

 

Property and equipment:

 

 

 

 

 

 

Construction in progress

 

 

1,886,721

 

 

 

1,522,465

 

Property and equipment

 

 

8,151,216

 

 

 

6,287,422

 

Less accumulated depreciation

 

 

(1,334,386

)

 

 

(967,602

)

Total property and equipment, net

 

 

8,703,551

 

 

 

6,842,285

 

 

 

 

 

 

 

 

Security deposit

 

 

1,357,956

 

 

 

346,616

 

Right-of-use asset

 

 

17,918,843

 

 

 

4,061,820

 

Total assets

 

$

60,190,124

 

 

$

21,488,558

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

1,781,925

 

 

$

853,535

 

Accrued interest

 

 

330,894

 

 

 

860,693

 

Accrued expenses

 

 

1,378,807

 

 

 

648,947

 

Income tax payable - current

 

 

257,918

 

 

 

-

 

Current portion of operating lease liabilities

 

 

1,701,079

 

 

 

550,941

 

Current maturities of notes payable, related parties, net of $47,053 and $431,854 of debt discounts at June 30, 2024 and December 31, 2023, respectively

 

 

632,084

 

 

 

2,543,146

 

Current maturities of notes payable, net of $38,558 and $86,062 of debt discounts as of June 30, 2024 and December 31, 2023, respectively

 

 

200,692

 

 

 

313,938

 

Total current liabilities

 

 

6,283,399

 

 

 

5,771,200

 

 

 

 

 

 

 

 

Operating lease liabilities

 

 

16,783,997

 

 

 

3,671,729

 

Notes payable, related parties, net of $542,918 and $1,448,858 of debt discounts as of June 30, 2024 and December 31, 2023, respectively

 

 

1,957,082

 

 

 

4,171,142

 

Notes payable, net of $0 and $135,962 of debt discounts as of June 30, 2024 and December 31, 2023, respectively

 

 

150,000

 

 

 

594,038

 

 

 

 

 

 

 

 

Total liabilities

 

 

25,174,478

 

 

 

14,208,109

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value, 20,000,000 shares authorized, no shares issued and outstanding

 

 

-

 

 

-

 

Common stock, $0.001 par value, 500,000,000 shares authorized, 10,245,388 and 6,029,371 shares issued and outstanding as of June 30, 2024 and December 31, 2023

 

 

10,245

 

 

 

6,029

 

Additional paid-in capital

 

 

89,899,666

 

 

 

66,014,415

 

Accumulated deficit

 

 

(54,894,265

)

 

 

(58,739,995

)

Total stockholders' equity

 

 

35,015,646

 

 

 

7,280,449

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

60,190,124

 

 

$

21,488,558

 

 

 

 

 


Exhibit 99.1

 

SOW GOOD INC.

CONDENSED STATEMENTS OF OPERATIONS

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Revenues

 

$

15,648,046

 

 

$

1,315,346

 

 

$

27,054,369

 

 

$

1,514,277

 

Cost of goods sold

 

 

6,640,917

 

 

 

2,896,259

 

 

 

13,417,798

 

 

 

2,980,262

 

Gross profit

 

 

9,007,129

 

 

 

(1,580,913

)

 

 

13,636,571

 

 

 

(1,465,985

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

 

2,123,572

 

 

 

319,608

 

 

 

4,474,130

 

 

 

831,197

 

Professional services

 

 

594,278

 

 

 

63,330

 

 

 

1,062,104

 

 

 

109,535

 

Other general and administrative expenses

 

 

1,399,244

 

 

 

500,381

 

 

 

2,271,507

 

 

 

884,491

 

Total general and administrative expenses

 

 

4,117,094

 

 

 

883,319

 

 

 

7,807,741

 

 

 

1,825,223

 

Depreciation and amortization

 

 

4,939

 

 

 

9,159

 

 

 

14,477

 

 

 

85,377

 

Total operating expenses

 

 

4,122,033

 

 

 

892,478

 

 

 

7,822,218

 

 

 

1,910,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating income (loss)

 

 

4,885,096

 

 

 

(2,473,391

)

 

 

5,814,353

 

 

 

(3,376,585

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

4,130

 

 

 

-

 

 

 

4,130

 

 

 

-

 

Interest expense

 

 

(599,664

)

 

 

(847,509

)

 

 

(1,018,333

)

 

 

(1,345,845

)

Loss on early extinguishment of debt

 

 

(696,502

)

 

 

-

 

 

 

(696,502

)

 

 

-

 

Total other income (expense)

 

 

(1,292,036

)

 

 

(847,509

)

 

 

(1,710,705

)

 

 

(1,345,845

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income tax

 

 

3,593,060

 

 

 

(3,320,900

)

 

 

4,103,648

 

 

 

(4,722,430

)

Provision for income tax

 

 

(257,918

)

 

 

-

 

 

 

(257,918

)

 

 

-

 

Net income (loss)

 

$

3,335,142

 

 

$

(3,320,900

)

 

$

3,845,730

 

 

$

(4,722,430

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - basic

 

 

9,624,999

 

 

 

4,854,208

 

 

 

7,845,382

 

 

 

4,850,815

 

Net income (loss) per common share - basic

 

$

0.35

 

 

$

(0.68

)

 

$

0.49

 

 

$

(0.97

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding - diluted

 

 

11,385,708

 

 

 

4,854,208

 

 

 

9,408,247

 

 

 

4,850,815

 

Net income (loss) per common share - diluted

 

$

0.29

 

 

$

(0.68

)

 

$

0.41

 

 

$

(0.97

)

 

 

 

 


Exhibit 99.1

SOW GOOD INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

 

 

 

For the Three Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

Balance, March 31, 2024

 

 

6,575,562

 

 

 

6,576

 

 

 

71,123,634

 

 

 

(58,229,407

)

 

 

12,900,803

 

Common stock issued in public offering, net of offering costs

 

 

1,380,000

 

 

 

1,380

 

 

 

11,973,596

 

 

 

 

 

11,974,976

 

Common stock issued in private placement offering

 

 

 

 

 

-

 

 

 

-

 

 

 

 

 

-

 

Common stock issued to directors for services

 

 

617

 

 

 

1

 

 

 

9,476

 

 

 

-

 

 

 

9,477

 

Proceeds from exercise of stock options and warrants

 

 

2,289,209

 

 

 

2,288

 

 

 

5,670,680

 

 

 

 

 

5,672,968

 

Common stock options granted to directors and advisors for services

 

 

 

 

 

 

28,962

 

 

 

 

 

28,962

 

Common stock options granted to officers and employees for services

 

 

 

 

 

 

1,093,318

 

 

 

 

 

1,093,318

 

Net income for the three months ended June 30, 2024

 

 

 

 

 

 

 

 

3,335,142

 

 

 

3,335,142

 

Balance, June 30, 2024

 

 

10,245,388

 

 

$

10,245

 

 

$

89,899,666

 

 

$

(54,894,265

)

 

$

35,015,646

 

 

 

 

For the Three Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

Balance, March 31, 2023

 

 

4,847,384

 

 

$

4,847

 

 

$

59,484,859

 

 

$

(57,081,092

)

 

$

2,408,614

 

Common stock issued to directors for services

 

 

20,699

 

 

 

21

 

 

 

125,208

 

 

 

 

 

125,229

 

Common stock options granted to directors and advisors for services

 

 

 

 

 

 

28,975

 

 

 

 

 

28,975

 

Common stock options granted to officers and employees for services

 

 

 

 

 

 

102,866

 

 

 

 

 

102,866

 

Common stock warrants granted to related party note holders pursuant to debt financing

 

 

 

 

 

 

1,075,904

 

 

 

 

 

1,075,904

 

Common stock warrants granted to note holders pursuant to debt financing

 

 

 

 

 

 

374,153

 

 

 

 

 

374,153

 

Net loss for the three months ended June 30, 2023

 

 

 

 

 

 

 

 

(3,320,900

)

 

 

(3,320,900

)

Balance, June 30, 2023

 

 

4,868,083

 

 

$

4,868

 

 

$

61,191,965

 

 

$

(60,401,992

)

 

$

794,841

 

 

 

 

For the Six Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

Balance, December 31, 2023

 

 

6,029,371

 

 

$

6,029

 

 

$

66,014,415

 

 

$

(58,739,995

)

 

$

7,280,449

 

Common stock issued in public offering, net of offering costs

 

 

1,380,000

 

 

 

1,380

 

 

 

11,973,596

 

 

 

 

 

11,974,976

 

Common stock issued in private placement offering

 

 

515,597

 

 

 

516

 

 

 

3,737,484

 

 

 

 

 

3,738,000

 

Common stock issued to directors for services

 

 

31,211

 

 

 

32

 

 

 

295,616

 

 

 

 

 

295,648

 

Proceeds from exercise of stock options and warrants

 

 

2,289,209

 

 

 

2,288

 

 

 

5,670,680

 

 

 

 

 

5,672,968

 

Common stock options granted to directors and advisors for services

 

 

 

 

 

 

57,608

 

 

 

 

 

57,608

 

Common stock options granted to officers and employees for services

 

 

 

 

 

 

2,150,267

 

 

 

 

 

2,150,267

 

Net income for the six months ended June 30, 2024

 

 

 

 

 

 

 

 

3,845,730

 

 

 

3,845,730

 

Balance, June 30, 2024

 

 

10,245,388

 

 

$

10,245

 

 

$

89,899,666

 

 

$

(54,894,265

)

 

$

35,015,646

 

 

 

For the Six Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

Balance, December 31, 2022

 

 

4,847,384

 

 

$

4,847

 

 

$

58,485,602

 

 

$

(55,679,562

)

 

$

2,810,887

 

Common stock issued to directors for services

 

 

20,699

 

 

 

21

 

 

 

125,208

 

 

 

 

 

125,229

 

Common stock options granted to directors and advisors for services

 

 

 

 

 

 

57,633

 

 

 

 

 

57,633

 

Common stock options granted to officers and employees for services

 

 

 

 

 

 

201,044

 

 

 

 

 

201,044

 

Common stock warrants granted to related party note holders pursuant to debt financing

 

 

 

 

 

 

1,948,325

 

 

 

 

 

1,948,325

 

Common stock warrants granted to note holders pursuant to debt financing

 

 

 

 

 

 

374,153

 

 

 

 

 

374,153

 

Net loss for the three months ended June 30, 2023

 

 

 

 

 

 

 

 

(4,722,430

)

 

 

(4,722,430

)

Balance, June 30, 2023

 

 

4,868,083

 

 

$

4,868

 

 

$

61,191,965

 

 

$

(60,401,992

)

 

$

794,841

 

 

 


Exhibit 99.1

SOW GOOD INC.

CONDENSED STATEMENTS OF CASH FLOWS

 

 

For the Six Months Ended

 

 

 

June 30,

 

 

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net income (loss)

 

$

3,845,730

 

 

$

(4,722,430

)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

 

 

Bad debts expense

 

 

20,760

 

 

 

185,485

 

Depreciation and amortization

 

 

366,784

 

 

 

155,416

 

Non-cash amortization of right-of-use asset and liability

 

 

405,383

 

 

 

9,556

 

Common stock issued to directors for services

 

 

295,648

 

 

 

125,229

 

Amortization of stock options

 

 

2,207,875

 

 

 

258,677

 

Amortization of stock warrants issued as a debt discount

 

 

777,704

 

 

 

1,054,822

 

Loss on early extinguishment of debt

 

 

696,502

 

 

 

-

 

Decrease (increase) in current assets:

 

 

 

 

 

 

Accounts receivable

 

 

(3,639,538

)

 

 

(721,135

)

Prepaid expenses

 

 

393,083

 

 

 

17,849

 

Inventory

 

 

(6,783,244

)

 

 

1,053,910

 

Security deposits

 

 

(1,011,340

)

 

 

(34,765

)

Increase (decrease) in current liabilities:

 

 

 

 

 

 

Accounts payable

 

 

928,390

 

 

 

(76,257

)

Income tax payable

 

 

257,918

 

 

 

-

 

Accrued interest

 

 

(431,049

)

 

 

265,338

 

Accrued expenses

 

 

729,860

 

 

 

7,045

 

Net cash provided by (used in) operating activities

 

 

(939,534

)

 

 

(2,421,260

)

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

Purchase of property and equipment

 

 

(1,863,794

)

 

 

(362,180

)

Cash paid for construction in progress

 

 

(364,256

)

 

 

-

 

Net cash used in investing activities

 

 

(2,228,050

)

 

 

(362,180

)

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

Proceeds from common stock offerings, net of offering costs of $859,024

 

 

15,712,976

 

 

 

-

 

Proceeds from the exercise of warrants and options

 

 

373,855

 

 

 

-

 

Proceeds received from notes payable, related parties

 

 

-

 

 

 

2,400,000

 

Proceeds received from notes payable

 

 

-

 

 

 

400,000

 

Repayments of borrowings

 

 

(956,249

)

 

 

-

 

Net cash provided by financing activities

 

 

15,130,582

 

 

 

2,800,000

 

 

 

 

 

 

 

 

NET CHANGE IN CASH AND CASH EQUIVALENTS

 

 

11,962,998

 

 

 

16,560

 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

 

2,410,037

 

 

 

276,464

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

14,373,035

 

 

$

293,024

 

 

 

 

 

 

 

 

SUPPLEMENTAL INFORMATION:

 

 

 

 

 

 

Interest paid

 

$

770,428

 

 

$

25,685

 

Interest received

 

$

4,130

 

 

 

-

 

Income taxes paid

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

Non-cash exercise of warrants

 

$

5,299,113

 

 

 

-

 

Repayment of interest

 

$

(98,750

)

 

 

-

 

Repayments of borrowings

 

$

(5,200,363

)

 

 

-

 

Reclassification of construction in progress to property and equipment

 

$

1,651,305

 

 

 

-

 

Value of debt discounts attributable to warrants

 

 

-

 

 

$

2,322,478

 

 

 

 


Exhibit 99.1

 

 

SOW GOOD INC.

RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

3,335,142

 

 

$

(3,320,900

)

 

$

3,845,730

 

 

$

(4,722,430

)

Depreciation and amortization

 

 

199,789

 

 

 

79,198

 

 

 

366,784

 

 

 

155,416

 

Interest expense, net

 

 

595,534

 

 

 

847,509

 

 

 

1,014,203

 

 

 

1,345,845

 

Provision for income tax

 

 

257,918

 

 

 

-

 

 

 

257,918

 

 

 

-

 

EBITDA

 

 

4,388,383

 

 

 

(2,394,193

)

 

 

5,484,635

 

 

 

(3,221,169

)

Share-based payments

 

 

1,131,757

 

 

 

257,070

 

 

 

2,503,523

 

 

 

383,906

 

Loss on early extinguishment of debt

 

 

696,502

 

 

 

-

 

 

 

696,502

 

 

 

-

 

Adjusted EBITDA

 

$

6,216,642

 

 

$

(2,137,123

)

 

$

8,684,660

 

 

$

(2,837,263

)

 

 


v3.24.2.u1
Document and Entity Information
Aug. 14, 2024
Cover [Abstract]  
Entity Registrant Name SOW GOOD INC.
Document Type 8-K
Document Period End Date Aug. 14, 2024
Entity Incorporation, State or Country Code DE
Entity File Number 000-53952
Entity Tax Identification Number 27-2345075
Entity Address, Address Line One 1440 N Union Bower Rd
Entity Address, City or Town Irving
Entity Address, State or Province TX
Entity Address, Postal Zip Code 75061
City Area Code 214
Local Phone Number 623-6055
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(g) Security Common Stock
Trading Symbol SOWG
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001490161

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