Sow Good (SOWG) risk factors, FY2025 10-K

Sow Good's FY2025 10-K, filed Mar 31, 2026, lists 43 risk factors in 6 groups. Against the prior year's 54: 5 new, 16 dropped, 16 substantially reworded.

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Risk factors listed
436 groups
New this year
5vs 54 last year
Dropped
16since the prior 10-K
Substantially reworded
16of those kept
Section length
13k wordsItem 1A

What the changes say

  • Sow Good transitioned to an asset-light business model in December 2025, selling manufacturing assets and relying on sole supplier Trea Grove.

What changed since the prior 10-K

New

  • New

    We rely on Trea Grove, a sole supplier, for the manufacture and distribution of our treats, and our supply chain may be interrupted and prevent us from obtaining the necessary materials we need to operate

    We rely on sole supplier Trea Grove for manufacturing and distribution, creating severe supply chain interruption risks.

  • New

    Information security events, or real or perceived errors, failures, or bugs in our systems; other technology disruptions; or failure to comply with laws and regulations relating to information security could negatively impact our business, our reputation and our relationships with customers

    Information security failures, FDA regulatory compliance issues, stock volatility, and being a smaller reporting company present ongoing risks.

  • NewRisks Related to Our Operating History, Financial Position and Capital Needs

    We have a limited operating history in our current form and have incurred significant operating losses. As a result of continuing investments to support our brand and distribution strategy, we may not achieve or sustain profitability

    Due to falling sales in freeze-dried candy, we sold our manufacturing assets in December 2025 and shifted to an asset-light, commission-based model with limited operating history.

  • NewRisks Related to Our Business and Industry

    even on a temporary basis, would have a material adverse effect on our ability to meet our production targets, make it difficult to grow and would have an adverse effect on our results of operations

    Three key suppliers accounted for 77% of raw material and packaging purchases in 2025 without contractual supply obligations.

  • NewRisks Related to Ownership of Our Common Stock

    If we fail to comply with the continued listing requirements of Nasdaq, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impacted

    Failure to maintain Nasdaq listing requirements, such as the $1.00 minimum bid price, could result in delisting and reduced stock liquidity.

Dropped

  • Dropped

    We may be unable to manage our future growth effectively, which could make it difficult to execute our business strategy

    Inability to manage future growth effectively.

  • Dropped

    The retail food and non-chocolate confectionary and freeze dried candy segments are highly competitive. If our competitors are more successful or offer better value to consumers, our business could decline

    Competition in retail food, non-chocolate confectionary, and freeze dried candy segments.

  • Dropped

    Our international sales and operations, including our planned business development activities outside of the United States, subject us to additional risks and challenges that can adversely affect our business, results of operations and financial condition

  • DroppedRisks Related to Our Operating History, Financial Position and Capital Needs

    effectively source key raw materials

    Risks from international sales and operations.

  • DroppedRisks Related to Our Operating History, Financial Position and Capital Needs

    incorporate effectively the components of any business that we may acquire in our effort to achieve growth

  • DroppedRisks Related to Our Operating History, Financial Position and Capital Needs

    successfully hire, train and motivate additional employees, including additional personnel for our production, sales and marketing efforts and our finance and accounting functions

  • DroppedRisks Related to Our Business and Industry

    We rely on a small number of suppliers to provide our raw materials for certain of our treats, and our supply chain may be interrupted and prevent us from obtaining the necessary materials we need to operate

  • DroppedRisks Related to Our Business and Industry

    The challenges of competing with other non-chocolate confectionary businesses may result in reductions in our revenue and operating margins

  • DroppedRisks Related to Our Business and Industry

    our reputation and brand strength

  • DroppedRisks Related to Our Business and Industry

    or withdraw products, suspend production of our products, or cease operations, which may lead to a material adverse effect on our business. In addition, customers may stop placing or cancel orders for such products as a result of such events

  • DroppedRisks Related to Our Business and Industry

    Our ability to maintain and expand our distribution network and attract consumers, customers, distributors, retailers and brokers will depend on a number of factors, some of which are outside our control

    Challenges in effectively sourcing key raw materials.

  • DroppedRisks Related to Our Business and Industry

    our ability to deliver products in the quantity and at the time ordered by consumers, distributors, retailers and brokers

  • DroppedRisks Related to Our Business and Industry

    If we face labor shortages or increased labor costs, our results of operations and our growth could be adversely affected

    Difficulties incorporating acquired businesses.

  • DroppedRisks Related to Our Business and Industry

    Our success depends in part on the effectiveness of our digital marketing strategy and the expansion of our social media presence, but there are risks associated with these efforts

    Issues hiring, training, and motivating additional employees.

  • DroppedRisks Related to Our Business and Industry

    compliance with the laws of numerous foreign taxing jurisdictions, including withholding tax obligations, and overlapping of different tax regimes

  • DroppedGeneral Risks

    adverse effect on our operating results, financial condition, and liquidity. Any legal proceedings or other disputes, even if fully indemnified or insured, could have a negative impact on our reputation, and make it more difficult to compete effectively or to obtain adequate insurance in the future

    Reliance on a small number of raw material suppliers.

Reworded

  • 100% rewritten

    We have a limited operating history in our current form and have incurred significant operating losses. As a result of continuing investments to support our brand and distribution strategy, we may not achieve or sustain profitability

    Replaced detailed asset purchase history with a risk warning about high competition in retail food and freeze-dried candy segments.

    Was: We have a limited operating history in our current form and have incurred significant operating losses. As a result of continuing investments to expand our business, we may not achieve or sustain profitability

  • 100% rewrittenRisks Related to Our Business and Industry

    Food safety concerns and concerns about the health risk of our products may have an adverse effect on our business

    Expanded food safety risks to specifically highlight third-party food suppliers, delivery aggregators, and contamination risks.

  • 94% rewrittenRisks Related to Our Operating History, Financial Position and Capital Needs

    Our prior rapid growth has not been indicative of our future growth, and our limited operating history may make it difficult to assess our future viability

    Updated revenue figures and explicitly linked recent revenue declines to external competition and the 2025 drop in freeze-dried candy demand.

    Was: Our prior rapid growth may not be indicative of our future growth, and our limited operating history may make it difficult to assess our future viability

  • 77% rewrittenRisks Related to Our Business and Industry

    Product liability exposure may subject us to significant liability

    Clarified product liability exposures regarding recalls, production suspensions, and order cancellations.

  • 71% rewrittenRisks Related to Our Business and Industry

    Further, if our operations bring us into the scope of non-U.S. privacy and data protection regulations, we may be subject to additional privacy and data protection regulations, which may require us to spend resources to comply with such programs and expose us to risk for any actual or perceived failure to comply

    Retained PCI-DSS and privacy data protection compliance risks with minor phrasing refinements.

  • 67% rewrittenRisks Related to Our Operating History, Financial Position and Capital Needs

    If we are unable to successfully manage new product launches, our business and financial results could be adversely affected

    Added overall reduction of sales in the product sector as a factor impacting new product launches.

  • 61% rewrittenRisks Related to Our Business and Industry

    The retail food and non-chocolate confectionary and freeze dried candy segments are highly competitive. If our competitors are more successful or offer better value to consumers, our business could decline

    Noted a significant decline in freeze-dried candy sales during the fourth quarter of 2025.

  • 60% rewrittenRisks Related to Our Business and Industry

    Fluctuations in various food and supply, transportation and shipping costs could adversely affect our operating results

    Added specific risks regarding volatile candy ingredient pricing and secure candy supply for Trea Grove.

  • 55% rewritten

    The concentration of our stock ownership limits our stockholders’ ability to influence corporate matters

  • 51% rewrittenRisks Related to Our Business and Industry

    Third parties may initiate legal proceedings alleging that we are infringing or otherwise violating their intellectual property rights

  • 45% rewrittenRisks Related to Ownership of Our Common Stock

    Future sales and issuances of our common stock, or securities convertible into or exercisable for our common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause the trading price of our common stock to decline

  • 44% rewrittenGeneral Risks

    Claims, legal proceedings, and other disputes could divert our management ’ s attention, have a negative impact on our reputation, expose us to significant liabilities, and make it more difficult to obtain insurance coverage

  • 39% rewrittenRisks Related to Our Business and Industry

    Consumer preferences for our products, or for freeze dried candy generally have changed and could change rapidly, and, if we are unable to respond quickly to new trends, our business may be adversely affected

    Was: Consumer preferences for our products, or for freeze dried candy generally could change rapidly, and, if we are unable to respond quickly to new trends, our business may be adversely affected

  • 31% rewrittenRisks Related to Our Operating History, Financial Position and Capital Needs

    finance capital expenditures and general and administrative expenses

  • 28% rewrittenRisks Related to Our Business and Industry

    If we fail to grow the value and enhance the visibility of our brand, our business could suffer

  • 22% rewrittenRisks Related to Our Business and Industry

    We have experienced a decline in revenues from the loss of significant customers which has adversely affected our results of operations and financial condition

All 43 risk factors

Headings as the filing states them, in filing order.

Other

  1. 01We have a limited operating history in our current form and have incurred significant operating losses. As a result of continuing investments to support our brand and distribution strategy, we may not achieve or sustain profitability100% rewritten
  2. 02We rely on Trea Grove, a sole supplier, for the manufacture and distribution of our treats, and our supply chain may be interrupted and prevent us from obtaining the necessary materials we need to operateNew
  3. 03Information security events, or real or perceived errors, failures, or bugs in our systems; other technology disruptions; or failure to comply with laws and regulations relating to information security could negatively impact our business, our reputation and our relationships with customersNew
  4. 04The concentration of our stock ownership limits our stockholders’ ability to influence corporate matters55% rewritten

Risks Related to Our Operating History, Financial Position and Capital Needs

  1. 05We have a limited operating history in our current form and have incurred significant operating losses. As a result of continuing investments to support our brand and distribution strategy, we may not achieve or sustain profitabilityNew
  2. 06We may need additional funding in order to fund our existing commercial operations, commercialize new products and grow our business
  3. 07finance capital expenditures and general and administrative expenses31% rewritten
  4. 08costs related to international expansion
  5. 09Our business depends substantially on the continuing efforts of our Distributors and their key personnel, including Ira and Claudia Goldfarb, and our business may be severely disrupted if we lose their services
  6. 10Our prior rapid growth has not been indicative of our future growth, and our limited operating history may make it difficult to assess our future viability94% rewritten
  7. 11If we are unable to successfully manage new product launches, our business and financial results could be adversely affected67% rewritten

Risks Related to Our Business and Industry

  1. 12The retail food and non-chocolate confectionary and freeze dried candy segments are highly competitive. If our competitors are more successful or offer better value to consumers, our business could decline61% rewritten
  2. 13even on a temporary basis, would have a material adverse effect on our ability to meet our production targets, make it difficult to grow and would have an adverse effect on our results of operationsNew
  3. 14We have experienced a decline in revenues from the loss of significant customers which has adversely affected our results of operations and financial condition22% rewritten
  4. 15Consumer preferences for our products, or for freeze dried candy generally have changed and could change rapidly, and, if we are unable to respond quickly to new trends, our business may be adversely affected39% rewritten
  5. 16If we fail to grow the value and enhance the visibility of our brand, our business could suffer28% rewritten
  6. 17Any damage to our reputation or brand image could adversely affect our business or financial results
  7. 18Fluctuations in various food and supply, transportation and shipping costs could adversely affect our operating results60% rewritten
  8. 19We may not be able to protect our intellectual property and proprietary technology adequately, which may impact our commercial success
  9. 20Third parties may initiate legal proceedings alleging that we are infringing or otherwise violating their intellectual property rights51% rewritten
  10. 21Food safety concerns and concerns about the health risk of our products may have an adverse effect on our business100% rewritten
  11. 22Product liability exposure may subject us to significant liability77% rewritten
  12. 23We have no control over our products once purchased by consumers. Accordingly, consumers may store or prepare our products in a manner that is inconsistent with our directions or store our products for longer than approved periods of time, which may adversely affect the quality and safety of our products
  13. 24Our customers are not obligated to continue purchasing products from us
  14. 25Any failure to adequately store, maintain and deliver our products could materially adversely affect our business, reputation, financial condition, and operating results
  15. 26Further, if our operations bring us into the scope of non-U.S. privacy and data protection regulations, we may be subject to additional privacy and data protection regulations, which may require us to spend resources to comply with such programs and expose us to risk for any actual or perceived failure to comply71% rewritten

Risks Related to the Regulatory Environment

  1. 27Our operations are subject to regulation by the FDA and other federal, state, and local authorities in the U.S., and in any other jurisdictions in which we may sell our products, and there is no assurance that we will be in compliance with all laws and regulations
  2. 28Even inadvertent, non-negligent or unknowing violations of federal, state, or local regulatory requirements could expose us to adverse governmental action and materially adversely affect our business, operating results, and financial condition

Risks Related to Ownership of Our Common Stock

  1. 29If we fail to comply with the continued listing requirements of Nasdaq, our common stock may be delisted and the price of our common stock and our ability to access the capital markets could be negatively impactedNew
  2. 30The market price of our common stock has been, and is likely to continue to be, highly volatile and subject to wide fluctuations
  3. 31These and other factors are largely beyond our control, and the impact of these risks, singly or in the aggregate, may result in material adverse changes to the market price of our common stock and our results of operations and financial condition
  4. 32We have never paid dividends on our common stock and we do not intend to pay dividends for the foreseeable future
  5. 33Future sales and issuances of our common stock, or securities convertible into or exercisable for our common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause the trading price of our common stock to decline45% rewritten
  6. 34We are a “ smaller reporting company, ” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors
  7. 35Our quarterly operating results have fluctuated and may in the future fluctuate significantly, period-to-period comparisons of our results may not be meaningful, and these fluctuations may cause the price of our common stock to decline
  8. 36general economic, political, social, and market conditions

Risks Related to Accounting and Tax Matters

  1. 37Changes in tax laws or regulations that are applied adversely to us in the various tax jurisdictions to which we are subject could increase the costs of our products and harm our operating results
  2. 38Changes in existing financial accounting standards or practices may require us to restate our reported financial results or harm our operating results

General Risks

  1. 39A worsening of economic conditions or a decrease in consumer spending may adversely impact our ability to implement our business strategy
  2. 40Global climate change, severe weather patterns and natural disasters may negatively affect our business, operating results, financial condition, cash flows and prospects
  3. 41The failure to successfully integrate newly acquired products or businesses could negatively impact our profitability
  4. 42Claims, legal proceedings, and other disputes could divert our management ’ s attention, have a negative impact on our reputation, expose us to significant liabilities, and make it more difficult to obtain insurance coverage44% rewritten
  5. 43Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud

Other Sow Good 10-Ks

  • FY2024 10-K risk factors
    54 risks

    Sow Good faces severe revenue volatility and reliance on key retailers like Five Below and Kroger for its freeze-dried candy. Operations depend heavily on founders Ira and Claudia Goldfarb and a concentrated raw material supply chain. Product melting issues and quality control risks directly threatened 2024 results and brand reputation.

    Filed Mar 27, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.