What changed in this filing

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Item 1A. Risk Factors

2026-04-15 compared with 2025-03-27 · 187 added, 132 removed, 312 unchanged (51% of the section changed)

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actually occur, our business, prospects, financial condition or results of operations could be negatively affected.

in March 2020, the COVID-19 pandemic had a significant impact on the Company.

Specifically, our business was impacted by dining bans

targeted at restaurants to reduce the size of public gatherings.

Such bans precluded our single-serve products from being served at those

establishments and in some instances, resulted in abandoned product launches.

Furthermore, many school districts closed regular attendance

for a period of time thereby disrupting sales of product into that channel.

In 2022 and 2023, we experienced supply chain interruptions

and inflation for component and transportation costs.

We believe that the impact of the pandemic has substantially abated, but will continue

to monitor and assess developments.

Related to Our Business

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or otherwise respond to competitive pressures, could be significantly limited.

with a manufacturer have resulted in significant losses, as well as other negative impacts.

described more fully in Item 7, we experienced product quality issues with a contract manufacturer (the “Manufacturer”) that

provided approximately 52% of our products in the year ended December 31, 2022.

Complaints from customers led us to withdraw product

from the market and destroy existing inventory.

addition to the financial damage from the product withdrawal, we must obtain suitable replacement contract manufacturers and regain the

confidence of our customers and investing public, all while seeking a resolution with the Manufacturer.

These tasks have required substantial

amounts of personnel and capital resources in 2023 and 2024, including production trial and other start-up costs, with ongoing activities

expected in 2025.

may need additional financing in the future, which may not be available when needed or may be costly and dilutive.

may require additional financing to support our working capital needs in the future.

The amount of additional capital we may require,

the timing of our capital needs and the availability of financing to fund those needs will depend on a number of factors, including our

strategic initiatives and operating plans, the performance of our business and the market conditions for debt or equity financing.

Additionally,

the amount of capital required will depend on our ability to meet our case sales goals and otherwise successfully execute our operating

We believe it is imperative to meet these sales objectives in order to lessen our reliance on external financing in the future.

Although we believe various debt and equity financing alternatives will be available to us to support our working capital needs, financing

arrangements on acceptable terms may not be available to us when needed.

Additionally, these alternatives may require significant cash

payments for interest and other costs or could be highly dilutive to our existing shareholders.

Any such financing alternatives may not

provide us with sufficient funds to meet our long-term capital requirements.

If necessary, we may explore strategic transactions that

we consider to be in the best interest of the Company and our shareholders, which may include, without limitation, public or private

offerings of debt or equity securities, and other strategic alternatives;

however, these options may not ultimately be available or feasible.

worsening of economic conditions or a decrease in consumer spending may adversely impact our ability to implement our business strategy.

success depends largely on government funding of school nutrition programs, which is influenced by government policy, and to a lesser

extent on discretionary consumer spending, which is influenced by general economic conditions and the availability of discretionary income.

There is no certainty regarding economic conditions in the United States, and credit and financial markets and confidence in economic

conditions could deteriorate at any time.

Accordingly, we may experience declines in revenue during economic turmoil or during periods

of uncertainty including uncertainty resulting from war, terrorism or contagious disease.

challenges of competing with the many food services businesses may result in reductions in our revenue and operating margins.

compete with many well-established companies, food service and otherwise, on the basis of taste, quality and price of product offered,

customer service, and overall experience.

Our success depends, in part, upon the popularity of our products and our ability to develop

new menu items that appeal to consumers across all four day parts.

Shifts in consumer preferences away from our products, our inability

to develop new menu items that appeal to consumers across all day parts, or changes in our menu that eliminate items popular with some

consumers could harm our business.

We compete primarily with other food manufacturers that participate in the K-12 market.

competitors or potential competitors have substantially greater financial and other resources than we do, which may allow them to react

to changes in the market quicker than we can.

In addition, aggressive pricing by our competitors or the entrance of new competitors into

our markets, could reduce our revenue and operating margins.

We also compete with other employers in our markets for workers and may

become subject to higher labor costs as a result of such competition.

completed our first acquisition in the fourth quarter of 2025.

Growth by acquisitions involves risks, and we may not be able to effectively

integrate the business we acquired to achieve the objectives of the acquisition or implement the contract manufacturing agreement.

completed the acquisition of Arps Dairy in October 2025.

The Acquisition is subject to various risks and uncertainties and could have

a negative impact on our business, financial condition, and/or results of operations.

These risks include the inability to integrate

effectively the operations, products, and personnel of the acquired company which is located a significant distance from our existing

business, the inability to complete construction that was in progress on the New Facility at the time of the Acquisition within the anticipated

timeframe and budget, the inability to achieve anticipated cost savings or operating synergies, the management of risks associated with

manufacturing operations including product quality and safety, and the risk we may not be able to effectively manage our operations at

an increased scale of operations resulting from the Acquisition.

acquiring Arps Dairy, we are now exposed to operational risk in dairy processing.

a dairy processing plant involves significant operational, regulatory, and market-related risks.

The plant is highly dependent on a consistent

supply of raw milk, which may be affected by factors outside of our control.

In addition, dairy processing facilities must comply with

stringent food safety, environmental, and occupational health regulations;

failure to maintain compliance could result in fines, recalls,

suspension of operations, or reputational damage.

Equipment breakdowns, labor shortages, or disruptions in energy and water supply could

materially impact production capacity and increase costs.

Moreover, given the perishable nature of dairy products, disruptions in transportation

or refrigeration systems pose heightened risks of spoilage and product loss.

These factors, individually or in combination, may adversely

affect the plant’s operational performance, profitability, and long-term viability.

operations depend on the consistent availability and quality of raw milk.

supply and cost of raw milk are influenced by factors outside of our control, including seasonal fluctuations, weather conditions, feed

and fuel costs, disease outbreaks, and general agricultural market conditions.

Interruptions in raw milk supply or significant increases

in input costs could materially and adversely affect our ability to produce and sell dairy products, and could negatively impact our

operating results.

processing facilities are subject to extensive regulation.

dairy processing facility will need to comply with regulations by federal, state, and local authorities, including requirements related

to food safety, sanitation, labeling, environmental protection, and occupational health and safety.

Failure to comply with applicable

laws and regulations could result in fines, mandatory product recalls, product seizures, suspension of operations, reputational harm,

and liability for damages.

Compliance costs may also increase over time as regulations become more stringent.

Any such outcomes could

have a material adverse effect on our business and financial performance.

dairy processing operations are dependent on reliable performance of our equipment.

operations at Arps Dairy rely on specialized processing equipment, refrigeration systems, and a reliable supply of utilities such as

water and energy.

Equipment breakdowns, malfunctions, or prolonged utility outages could disrupt our production and distribution activities,

cause product spoilage, and increase operating costs.

Because dairy products are perishable, even brief disruptions in equipment or infrastructure

can result in significant product loss and revenue reduction.

require reliable and trained personnel for our dairy operations.

success depends on maintaining a trained and reliable workforce to operate our dairy processing facilities.

Labor shortages, increased

wage pressures, or work stoppages could impair our ability to operate efficiently.

In addition, recruiting and retaining qualified personnel

in rural or specialized markets may be difficult.

Labor-related challenges could increase costs, reduce production capacity, or negatively

impact product quality and safety.

is difficult to predict the timing and amount of our sales because our distributors and national accounts may not be required to place

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key supplies could negatively affect us.

within our supply chain, contract manufacturing or distribution channels could have an adverse effect on our business, financial condition

and results of operations.

an increasing portion of our sales is coming from school districts, our business is becoming more seasonal, which presents certain challenges

with respect to cash flow.

sales to school districts representing an increasing percentage of our total sales, we require a significant amount of working capital

to fund the production of inventory during the third calendar quarter.

Revenues from sales to school districts generally are reflected

in our first quarter and third quarter results.

We continue efforts to have less fluctuation with respect to working capital –

for example by developing a frozen juice pop product which we expect to be more popular during warmer months of the year – but

such efforts require time to be accepted in the marketplace.

with a manufacturer have resulted in significant losses, as well as other negative impacts.

described more fully in Item 7, we experienced product quality issues with a contract manufacturer (the “Manufacturer”) that

provided approximately 52% of our products in the year ended December 31, 2022.

Complaints from customers led us to withdraw product

from the market and destroy existing inventory.

addition to the financial damage from the product withdrawal, we were forced to obtain suitable replacement contract manufacturers and

regain the confidence of our customers and investing public, all while seeking a resolution with the Manufacturer.

These tasks required

substantial amounts of personnel and capital resources in 2023, 2024, and 2025, including production trial and other start-up costs.

within our supply chain, contract manufacturing or distribution channels has had and may continue to have an adverse effect on our business,

financial condition and results of operations.

ability, through our suppliers, business partners, contract manufacturers, independent distributors and retailers, to produce, transport,

distribute and sell products is critical to our success.

or disruption to our suppliers or to manufacturing or distribution capabilities due to weather, natural disaster, fire or explosion,

terrorism, pandemics such as COVD-19 and influenza, labor strikes or other reasons, could impair the manufacture, distribution and sale

of our products.

Many of these events are outside of our control.

Failure to take adequate steps to protect against or mitigate the likelihood

or potential impact of such events, or to effectively manage such events if they occur, could adversely affect our business, financial

condition and results of operations.

experience with the Manufacturer demonstrates how our reliance on a limited number of manufacturers and suppliers further increases this

the past, damage or disruption to our suppliers or to manufacturing or distribution capabilities due to weather, natural disaster, fire

or explosion, terrorism, pandemics such as COVD-19 and influenza, labor strikes or other reasons, has impaired the manufacture, distribution

and sale of our products.

Many of these events were outside of our control.

experience with the Manufacturer demonstrated how our reliance on a limited number of manufacturers and suppliers increased this risk.

Most of our suppliers and manufacturers produce similar products for other companies, and our products may represent a small portion

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can begin producing our products.

In 2023 and 2024 we did not have contracts in place to produce sufficient units to meet projected demand.

If one of our manufacturers fails to perform, we would be faced with a significant interruption in our supply chain.

If one of our manufacturers

or suppliers fails to perform or deliver products, for any reason, our sales and results of operations could be adversely affected.

if we are unable to meet our customers’ demands due to a disruption in our supply chain, we may lose that customer which could

adversely affect our business, financial condition and results of operations.

dependence on independent contract manufacturers could make management of our manufacturing and distribution efforts inefficient or unprofitable.

are expected to arrange for our contract manufacturing needs sufficiently in advance of anticipated requirements, which is customary

in the contract manufacturing industry for comparably sized companies.

Based on the cost structure and forecasted demand for the particular

geographic area where our contract manufacturers are located, we continually evaluate which of our contract manufacturers to use.

the extent demand for our products exceeds available inventory or the production capacity of our contract manufacturing arrangements,

or orders are not submitted on a timely basis, we will be unable to fulfill distributor orders on demand.

Conversely, we may produce

more product inventory than warranted by the actual demand for it, resulting in higher storage costs and the potential risk of inventory

Our failure to accurately predict and manage our contract manufacturing requirements and our inventory levels may impair relationships

with our independent distributors and key accounts, which, in turn, would likely have a material adverse effect on our ability to maintain

effective relationships with those distributors and key accounts.

At present, we must replace the Manufacturer with one or more new contract

manufacturers and/or arrange for increased production from our existing contract manufacturers, all of which require several months to

Starting in 2023 and continuing through the third quarter of 2025 we did not have contracts in place

to produce sufficient units to meet projected demand.

If one of our manufacturers failed to perform, we were faced with a significant

interruption in our supply chain.

If one of our manufacturers or suppliers failed to perform or deliver products, for any reason, our

sales and results of operations were adversely affected, and led to the possible loss of customers.

contract manufacturer that supplied 54% of our product in 2024 and 43% in 2025 (“Manufacturer A”) gave notice that it would

not renew our contract when it concluded in February 2026.

Additionally, in December 2025, our manufacturer that supplied 38% of our

product in 2024 and 40% in 2025 (“Manufacturer B”) discontinued manufacturing our products.

Acquisition is a significant step towards protecting against or mitigating the likelihood or potential impact of such events, and their

adverse effect on our business, financial condition and results of operations.

Since the Acquisition, Arps Dairy is now producing virtually

all of our product lines, manufacturing 18% of cases produced in the fourth quarter of 2025.

we do not adequately manage our inventory levels, our operating results could be adversely affected.

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they will not place orders for additional products, which would also unfavorably impact our sales and adversely affect our operating

need financing to complete the New Facility and may need additional financing in the future, which may not be available when needed or

may be costly and dilutive.

of the New Facility, including the installation of equipment and the buildout of production lines is required in the near term.

may require additional financing to support our capital expenditure and working capital needs in the future.

The amount of additional

capital we may require, the timing of our capital needs and the availability of financing to fund those needs will depend on a number

of factors, including our strategic initiatives and operating plans, the performance of our business and the market conditions for debt

or equity financing.

Additionally, the amount of capital required will depend on our ability to meet our case sales goals and otherwise

successfully execute our operating plan.

We believe it is imperative to meet these sales objectives in order to lessen our reliance on

external financing in the future.

Although we believe various debt and equity financing alternatives will be available to us to support

our capital expenditure and working capital needs, financing arrangements on acceptable terms may not be available to us when needed.

Additionally, these alternatives may require significant cash payments for interest and other costs or could be highly dilutive to our

existing shareholders.

Any such financing alternatives may not provide us with sufficient funds to meet our long-term capital requirements.

If necessary, we may explore strategic transactions that we consider to be in the best interest of the Company and our shareholders,

which may include, without limitation, public or private offerings of debt or equity securities, and other strategic alternatives;

these options may not ultimately be available or feasible.

to complete the New Facility within the projected budget and timeframe will likely impact negatively our projected new revenue and adjusted

EBITDA estimates.

ability to achieve our projected growth, including the timing of new revenue and adjusted EBITDA estimates, depends in large part on

the successful execution of the completion of the New Facility and installation of the production lines.

These projects involve significant

capital expenditures and are subject to numerous risks, many of which are outside of our control.

costs may exceed current estimates due to factors such as labor shortages, increased wage rates, supply chain disruptions, availability

and pricing of materials, changes in scope, contractor performance issues, or unforeseen site conditions.

In addition, delays or complications

in obtaining required zoning approvals, building permits, inspections, or other governmental approvals could adversely affect project

timelines and increase costs.

Project schedules may also be impacted by adverse weather conditions, labor availability, contractor capacity,

or logistical challenges, any of which could delay completion or commencement of operations.

If construction is delayed or costs exceed

budgeted amounts, we may be required to deploy additional capital, defer or modify other planned investments, or seek alternative financing

on less favorable terms.

material delays in project completion or cost overruns could postpone the realization of anticipated revenues, reduce near-term margins,

and negatively impact the Company’s projected or guided adjusted EBITDA.

There can be no assurance that current cost estimates,

construction schedules, or expected financial returns will be achieved, and any such variances could have a material adverse effect on

the Company’s financial condition, results of operations, and cash flows.

worsening of economic conditions or a decrease in consumer spending may adversely impact our ability to implement our business strategy.

success depends largely on government funding of school nutrition programs, which is influenced by government policy, and to a lesser

extent on discretionary consumer spending, which is influenced by general economic conditions and the availability of discretionary income.

There is no certainty regarding economic conditions in the United States, and credit and financial markets and confidence in economic

conditions could deteriorate at any time.

Accordingly, we may experience declines in revenue during economic turmoil or during periods

of uncertainty including uncertainty resulting from war, terrorism or contagious disease.

challenges of competing with the many food services businesses may result in reductions in our revenue and operating margins.

compete with many well-established companies, food service and otherwise, on the basis of taste, quality and price of product offered,

customer service, and overall experience.

Our success depends, in part, upon the popularity of our products and our ability to develop

new menu items that appeal to consumers across all four day parts.

Shifts in consumer preferences away from our products, our inability

to develop new menu items that appeal to consumers across all day parts, or changes in our menu that eliminate items popular with some

consumers could harm our business.

We compete primarily with other food manufacturers that participate in the K-12 market.

competitors or potential competitors have substantially greater financial and other resources than we do, which may allow them to react

to changes in the market more quickly than we can.

In addition, aggressive pricing by our competitors or the entrance of new competitors

into our markets, could reduce our revenue and operating margins.

We also compete with other employers in our markets for workers and

may become subject to higher labor costs as a result of such competition.

in costs of packaging, ingredients and contract manufacturing tolling fees may have an adverse impact on our gross margin.

costs such as paper and aluminum cans have experienced industry-wide price increases in the past and there is always the risk that the

Company’s contract manufacturers increase their toll rates based on increases in their fixed and variable costs.

If the Company

is unable to pass on these costs, the gross margin will be significantly impacted.

Company may be unable to pass on these costs, thereby significantly impacting the gross margin.

in various food and supply costs, particularly fruit and dairy, could adversely affect our operating results.

and prices of the various ingredients that we are going to use can be affected by a variety of factors, such as weather, seasonal fluctuations,

demand, politics and economics in the producing countries.

and prices of the various ingredients that are used in the manufacture of our products can be affected by a variety of factors, such

as weather, seasonal fluctuations, demand, politics and economics in the producing countries.

factors subject us to shortages or interruptions in product supplies, which could adversely affect our revenue and profits.

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be able to secure our fruit supply.

an increasing portion of our sales is coming from school districts, our business is becoming more seasonal, which presents certain challenges

with respect to cash flow.

sales to school districts representing an increasing percentage of our total sales, we require a significant amount of working capital

to fund the production of inventory during the third calendar quarter.

Revenues from sales to school districts generally are reflected

in our first quarter and third quarter results.

We continue efforts to have less fluctuation with respect to working capital –

for example by developing a frozen juice pop product which we expect to be more popular during warmer months of the year – but

such efforts require time to be accepted in the marketplace.

business depends substantially on the continuing efforts of our senior management and other key personnel, and our business may be severely

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Additionally,

continued geopolitical turmoil, including the ongoing wars in Ukraine and Israel, has heightened the risk of cyberattacks.

such as these materialize, the need for us to coordinate with various third-party service providers and for third-party service providers

to coordinate amongst themselves might increase challenges and costs to resolve related issues.

Our information security program includes

capabilities designed to evaluate and mitigate cyber risks arising from third-party service providers.

Cyber threats to externally hosted

technology and business services are beyond our control.

Additionally, new initiatives, such as those related to digital commerce and

direct sales, that increase the amount of confidential information that we process and maintain increase our potential exposure to a

cybersecurity breach.

Furthermore, the rapid evolution and increased adoption of artificial intelligence technologies may intensify our

cybersecurity risks.

If our controls, disaster recovery and business continuity plans or those of our third-party providers do not effectively

respond to or resolve the issues related to any such disruptions in a timely manner, our product sales, financial condition, results

of operations and stock price may be materially and adversely affected, and we might experience delays in reporting our financial results,

loss of intellectual property and damage to our reputation or brands.

continued geopolitical turmoil, including the ongoing wars in Ukraine and the Middle East, has heightened the risk of cyberattacks.

risks such as these materialize, the need for us to coordinate with various third-party service providers and for third-party service

providers to coordinate amongst themselves might increase challenges and costs to resolve related issues.

Our information security program

includes capabilities designed to evaluate and mitigate cyber risks arising from third-party service providers.

Cyber threats to externally

hosted technology and business services are beyond our control.

Additionally, new initiatives, such as those related to digital commerce

and direct sales, that increase the amount of confidential information that we process and maintain increase our potential exposure to

a cybersecurity breach.

Furthermore, the rapid evolution and increased adoption of artificial intelligence technologies may intensify

our cybersecurity risks.

If our controls, disaster recovery and business continuity plans or those of our third-party providers do not

effectively respond to or resolve the issues related to any such disruptions in a timely manner, our product sales, financial condition,

results of operations and stock price may be materially and adversely affected, and we might experience delays in reporting our financial

results, loss of intellectual property and damage to our reputation or brands.

Related to Ownership of Our Common Stock

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We have instead maintained compliance based on the $35,000,000 minimum market value requirement.

until we are able to achieve and maintain annual net income from continuing operations of $500,000, fluctuations in the market value

and until we are able to achieve and maintain annual net income from continuing operations of $500,000, fluctuations in the market value

of our listed securities may cause us to fail to meet Nasdaq listing standards and result in our common stock only being tradable in

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may experience dilution of their ownership interests because of future issuances of additional shares of our common stock.

may be required to seek financing through the issuance of equity or convertible securities to fund our operations.

recently obtained financing through the issuance of convertible debt securities and warrants to fund our operations.

We may also issue

additional shares of our common stock or other securities that are convertible into or exercisable for our common stock in

connection with hiring or retaining employees, future acquisitions or for other business purposes.

The future issuance of any such

additional shares of common stock will result in dilution to our shareholders and may create downward pressure on the trading price

of our common stock.

additional shares of our common stock or other securities that are convertible into or exercisable for our common stock in connection

with hiring or retaining employees, future acquisitions or for other business purposes.

The future issuance of any such additional shares

of common stock will result in dilution to our shareholders and may create downward pressure on the trading price of our common stock.

in our Company charter documents and under Delaware law could make an acquisition of our company, which may be beneficial to our stockholders,

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in a prescribed manner.

board of directors controls the majority of the outstanding shares of voting stock.

present, members of our board of directors and/or their affiliated entities control over 50% of the outstanding shares of voting stock,

and therefore have the power to control all matters requiring the approval of our stockholders, including the election of directors and

the approval of mergers and other significant corporate transactions.

board of directors controls a significant percentage of the outstanding shares of voting stock.

present, members of our board of directors and/or their affiliated entities control approximately 37% of the outstanding shares of voting

stock, and therefore have significant power to influence all matters requiring the approval of our stockholders, including the election

of directors and the approval of mergers and other significant corporate transactions.

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-K

Item 1A. Risk Factors