What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-13 · 62 added, 68 removed, 106 unchanged (55% of the section changed)

27 unchanged sentences

of Operations

of Operation for the Three Months Ended June 30, 2025 as Compared to the Three Months Ended June 30, 2024

of Operation for the Three Months Ended September 30, 2025 as Compared to the Three Months Ended September 30, 2024

and cost of revenue

increased $594,000, or 16%, to $4,231,000 in 2025 as compared to $3,637,000 in 2024.

have been able to expand our capacity on a limited basis at our existing smoothie bottle manufacturer and have been developing an

additional manufacturer relationship since the fourth quarter of 2024, after the candidate we contracted with in July 2024 was

unable to produce product due to insufficient labor and inadequate equipment, and a second candidate was in production trials and

only able to package product made at other locations until new equipment that had been ordered arrived and was installed.

expanded capacity to become available in the second half of 2025, subject to the risks and uncertainties associated with

early-stage production activities, which, along with other contracting and investing activities, including

additional capacity from new bottling equipment installed at an existing manufacturer of smoothie cartons, are expected to offset the

loss of our existing manufacturer in February 2026

increased as a result of growth in our Twist & Go products and the introduction of Pop & Go in the fourth quarter of 2024.

have been able to expand our capacity on a limited basis at our existing smoothie bottle manufacturer and have been developing an additional

manufacturer relationship since the fourth quarter of 2024.

With the acquisition of Arps, we expect expanded capacity to become available

in the fourth quarter of 2025, subject to the risks and uncertainties associated with early-stage production activities.

of revenue increased $302,000, or 13%, to $2,679,000 in 2025 as compared to $2,377,000 in 2024.

Cost of revenue increased at a higher rate

compared to revenue due to trial costs at our new manufacturer and elevated costs to supply product in a sub-optimal manner while the

production process at a new manufacturer is under development.

Cost of revenue increased at a lower

rate compared to revenue due to the non-recurrence in 2025 of manufacturing relocation expenses incurred in 2024, partially offset

by inventory costs.

gross profit was $1,552,000 (37%) and $1,260,000 (35%) for 2025 and 2024, respectively.

1 unchanged sentence

profit was $1,386,000 in 2024 (38%).

The reduction in gross margin is a result of product mix and new manufacturer trial and development

The reduction in gross margin is a result of product mix and inventory costs, partially offset by

the non-recurrence of manufacturing relocation costs.

marketing and distribution expense

operations were primarily directed towards increasing sales and expanding our distribution network.

Three months ended

Three months ended September 30,

Sales and marketing

Storage and outbound freight

operations in 2025 were primarily directed towards increasing sales and expanding our distribution network.

marketing and distribution expense increased approximately $51,000 (9%) from approximately $583,000 in 2024 to $634,000 in 2025.

marketing and distribution expense decreased approximately $49,000 (5%) from approximately $990,000 in 2024 to $941,000 in 2025.

and marketing expense decreased approximately $60,000 (12%) from approximately $510,000 in 2024 to $450,000 in 2025.

and outbound freight expense increased approximately $59,000 (27%) from approximately $217,000 in 2024 to $276,000 in 2025, primarily

because our product mix was more heavily weighted toward categories with less concentrated distribution.

and outbound freight expense increased approximately $11,000 (2%) from approximately $480,000 in 2024 to $491,000 in 2025, a slower pace

than the 16% increase in revenue, primarily due to efficiencies resulting from larger average shipments.

and administrative expense

Three months ended

Three months ended September 30,

Personnel costs

3 unchanged sentences

Other general and administrative expenses

and administrative expenses decreased approximately $192,000 (22%) from approximately $865,000 in 2024 to $673,000 in 2025.

and administrative expenses increased approximately $139,000 (20%) from approximately $705,000 in 2024 to $844,000 in 2025.

cost represents the cost of employees including salaries, bonuses, employee benefits and employment taxes.

2 unchanged sentences

The decrease in personnel cost resulted from a decreased

compensation decreased by approximately $75,000 from $214,000 in 2024 to $139,000 in 2025 as a result of lower expected attainment under

our performance stock unit program and a reduction in the size of our board of directors.

professional and consulting fees decreased by approximately $29,000 (49%) from $59,000 in 2024 to $30,000 in 2025 due to funding the

Schrieber litigation through non-recourse litigation funding starting in Q3, 2024.

general and administrative expenses decreased by approximately $53,000 (23%) due to the non-recurrence of recruitment costs incurred

in the second quarter of 2024.

had net losses of approximately $880,000 and $1,011,000 for the three-month periods ended June 30, 2025 and 2024, respectively.

in net loss of approximately $131,000 was primarily due to the reduction in general and administrative expense, partially offset by

increased storage and freight costs.

Gross profit was relatively flat, as the 3.6 percentage point reduction in gross margin offset the

increase in revenue.

We expect our gross margin to normalize in the second half of 2025 as new co-manufacturers are operating at full

capacity and capability, improving our supply and cost structure.

of Operation for the Six Months Ended June 30, 2025 as Compared to the Six Months Ended June 30, 2024

compensation decreased by approximately $16,000 from $179,000 in 2024 to $163,000 in 2025 as a result of a reduction in the size of our

board of directors.

professional and consulting fees increased by approximately $86,000 (239%) from $36,000 in 2024 to $122,000 in 2025 due to costs incurred

in association with the Arps acquisition.

and development decreased by approximately $19,000 (37%) from $52,000 in 2024 to $33,000 in 2025 due to a decrease in development activities

following the introduction of our Pop & Go product, and a decrease in co-manufacturer development activities in anticipation of our

acquisition of Arps.

general and administrative expenses increased by approximately $129,000 (102%) due to costs incurred in association with the acquisition

had net losses of approximately $290,000 and $513,000 for the three-month periods ending September 30, 2025 and 2024, respectively.

decrease in net loss of approximately $223,000 was primarily due to the increase in revenue and gross margin, and the reduction in operating

expense exclusive of Arps acquisition expenses.

of Operation for the Nine months Ended September 30, 2025 as Compared to the Nine months Ended September 30, 2024

and cost of revenue

5 unchanged sentences

gross profit was $2,958,000 (34%) and $2,938,000 (37%) for 2025 and 2024, respectively.

Excluding production relocation costs, our

gross profit was $1,729,000 in 2024 (40.3%).

The reduction in gross margin is a result of product mix and new manufacturer trial and

development costs.

Excluding production relocation costs, our gross

profit was $3,114,000 in 2024 (39%).

The reduction in gross margin is a result of product mix and new manufacturer trial and development

marketing and distribution expense

Six months ended

Nine months ended June 30,

Sales and marketing

2 unchanged sentences

and marketing expense increased approximately $36,000 (3%) from approximately $1,206,000 in 2024 to $1,242,000 in 2025.

The increase is

a result of personnel costs and broker commissions.

is a result of broker commissions on increased revenue.

Additionally, sample expense increased as a result of the launch of our Pop &

and outbound freight expense increased approximately $96,000 (9%) from approximately $1,061,000 in 2024 to $1,157,000 in 2025, primarily

because our product mix was more heavily weighted toward categories with less concentrated distribution.

Additionally, shortages of Twist

& Go bottles resulted in freight inefficiencies in an effort to mitigate late deliveries to the extent possible.

because of the 11% increase in revenue, offset by shipping efficiencies.

and administrative expense

Six months ended

Nine months ended June 30,

Personnel costs

5 unchanged sentences

cost increased by approximately $20,000 (2%) from approximately $916,000 in 2024 to $936,000 in 2025.

The increase in personnel cost

resulted from increased head count, and the non-recurrence of settling paid time off obligations in stock in 2024.

compensation decreased by approximately $235,000 from $696,000 in 2024 to $461,000 in 2025 as a result of lower expected attainment under

1 unchanged sentence

professional and consulting fees decreased by approximately $17,000 (7%) from $250,000 in 2024 to $233,000 in 2025 due to funding the

Schrieber litigation through non-recourse litigation funding starting in Q3, 2024.

general and administrative expenses decreased by approximately $37,000 (11%) due to due to the non-recurrence of recruitment costs incurred

in the second quarter of 2024, partially offset by $46,000 in business development costs.

had net losses of approximately $1,641,000 and $1,460,000 for the six-month periods ended June 30, 2025 and 2024, respectively.

revenue increased 6%, the increase in net loss of approximately $181,000 was primarily the result of an 8.2 percentage point decrease

in gross margin and a 14% increase in selling, marketing and distribution cost, partially offset by lower general and administrative

We expect our gross margin to normalize in the second half of 2025 as new co-manufacturers are operating at full capacity and

capability, improving our supply and cost structure.

Schrieber litigation through non-recourse litigation funding starting in Q3 2024, partially offset by Arps acquisition costs incurred

and development decreased by approximately $17,000 (17%) from $99,000 in 2024 to $82,000 in 2025 due to a decrease in development activities

following the introduction of our Pop & Go product, and a decrease in co-manufacturer development activities in anticipation of our

acquisition of Arps.

general and administrative expenses increased by approximately $90,000 (19%) due to costs associated with the acquisition of Arps, partially

offset by the non-recurrence of recruitment costs incurred in the second quarter of 2024.

had net losses of approximately $1,931,000 and $1,973,000 for the nine-month periods ended September 30, 2025 and 2024, respectively,

an improvement of $42,000.

While revenue increased 11% and operating expenses were reduced by $63,000, these improvements were partially

offset by the 3.4 percentage point decrease in gross margin and a $41,000 increase in interest expense.

and Capital Resources

16 unchanged sentences

shares of common stock at a price of $2.85 per share in a registered direct offering.

the six months ended June 30, 2025, we used $1,575,000 in operations.

Our net loss adjusted for non-cash operating expenses was a loss

of $1,184,000, while changes in current assets and liabilities used $391,000 primarily because of an investment of $342,000 in inventory

and decreases of $364,000 in accounts payable and accrued expenses, partially offset by an decrease in accounts receivable of $278,000.

The changes reflect the build of inventory in an effort to minimize the impact of production capacity constraints and the collection

of receivables from higher revenue volume at the education channel’s seasonal low point.

of June 30, 2025, we had working capital of $2,101,000 compared with $606,000 at December 31, 2024, both excluding disputed accounts

the nine months ended September 30, 2025, we used $2,173,000 in operations.

Our net loss adjusted for non-cash operating expenses was

a loss of $1,297,000, while changes in current assets and liabilities used $876,000.

The increase in revenue resulted in a $1,660,000

increase in accounts receivable, while we reduced our investment in inventory by $426,000.

The changes reflect the education channel’s

seasonal revenue peak, and the draw down of inventory built over the summer school break to minimize the impact of production capacity

Additionally, accounts payable increased by $529,000 due to timing of material purchases and amounts due for Arps acquisition

costs incurred.

of September 30, 2025, we had working capital of $1,626,000 compared with $606,000 at December 31, 2024, both excluding disputed accounts

payable of $499,000 resulting from our dispute with the Manufacturer.

The increase in working capital is primarily due to capital raised

in the six months ended June 30, 2025 through the sale of common stock, partially offset by losses incurred in the six months ended June

in the nine months ended September 30, 2025 through the sale of common stock, partially offset by losses incurred in the nine months

ended September 30, 2025.

liquidity needs will depend on how quickly we are able to profitably ramp up sales, as well as our ability to control and reduce variable

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis