What changed in this filing

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Item 1. Financial Statements

2025-08-13 compared with 2025-05-01 · 119 added, 97 removed, 295 unchanged (42% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

March 31, 2025

December 31, 2024

Current assets:

23 unchanged sentences

23,000,000 shares authorized;

15,920,047 and 14,746,172 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

15,940,261 and 14,746,172 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

Additional paid in capital

4 unchanged sentences

Total liabilities and stockholders’ equity

the accompanying notes to the condensed consolidated financial statements

See the accompanying notes to the condensed consolidated financial statements

Food Group Inc.

Consolidated Statements of Operations

the three months ended March 31, 2025 and 2024

the three and six months ended June 30, 2025 and 2024

For the three

months ended June 30,

Cost of revenue

5 unchanged sentences

Loss from operations

( 1,005,000 )

( 1,606,000 )

( 1,450,000 )

Interest expense

1 unchanged sentence

$ ( 1,011,000 )

$ ( 1,641,000 )

$ ( 1,460,000 )

Per share information - basic and fully diluted:

1 unchanged sentence

Net loss per share

the accompanying notes to the condensed consolidated financial statements

See the accompanying notes to the condensed consolidated financial statements

Food Group Inc.

Statements of Cash Flows

the three months ended March 31, 2025 and 2024

Consolidated Statements of Cash Flows

the six months ended June 30, 2025 and 2024

$ ( 1,641,000 )

12 unchanged sentences

Net cash used in operating activities

( 1,575,000 )

( 1,549,000 )

Investing activities

11 unchanged sentences

Net increase (decrease) in cash

( 1,508,000 )

Cash, beginning of period

5 unchanged sentences

Cash paid for interest

the accompanying notes to the condensed consolidated financial statements

See the accompanying notes to the condensed consolidated financial statements

Food Group Inc.

6 unchanged sentences

of Presentation

accompanying condensed consolidated financial statements are unaudited, except for the condensed balance sheet as of December 31, 2024.

These unaudited interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally

accepted in the United States of America (“GAAP”) and applicable rules and regulations of the U.S.

Securities and Exchange

Commission (“SEC”) regarding interim financial reporting.

Certain information and footnote disclosures normally included

in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements

for the fiscal year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on March

In management’s opinion, the unaudited interim condensed consolidated financial statements reflect all adjustments, which

are of a normal and recurring nature, that are necessary for a fair presentation of financial results for the interim periods presented.

Operating results for any quarter are not necessarily indicative of the results for the full fiscal year.

accompanying condensed consolidated financial statements are unaudited.

These unaudited interim condensed consolidated financial statements

have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and

applicable rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”) regarding interim financial reporting.

Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been

condensed or omitted pursuant to such rules and regulations.

Accordingly, these interim condensed consolidated financial statements should

be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 2024 included in the

Company’s Annual Report on Form 10-K, as filed with the SEC on March 27, 2025.

In management’s opinion, the unaudited interim

condensed consolidated financial statements reflect all adjustments, which are of a normal and recurring nature, that are necessary for

a fair presentation of financial results for the interim periods presented.

Operating results for any quarter are not necessarily indicative

of the results for the full fiscal year.

of Consolidation

14 unchanged sentences

Schedule of Contract Manufacturers Percentage of Finished Goods

For the three months ended March 31,

For the three

months ended June 30,

Manufacturer A

1 unchanged sentence

Other Manufacturers

Manufacturer A has notified the Company that it will

cease supplying the Twist & Go smoothie bottles in February 2026.

Manufacturer B, which currently makes Twist & Go smoothie cartons,

is currently installing bottling equipment which is expected to be operational in January 2026 with approximately 400% additional capacity

over Manufacturer A.

The Company continues to explore other arrangements to further secure its supply.

of Significant Accounting Policies

2 unchanged sentences

related notes.

Company’s financial instruments consist of cash, accounts receivable, accounts payable, the line of credit and financing agreements.

The carrying value of the Company’s financial instruments approximates their fair value.

Company’s financial instruments consist of cash, accounts receivable and accounts payable.

The carrying value of the Company’s

financial instruments approximates their fair value.

Receivable and Allowances

6 unchanged sentences

losses are recorded as general and administrative expenses on our condensed consolidated statements of operations.

As of March 31, 2025

As of June 30, 2025

and December 31, 2024, there was no allowance for credit losses.

There was no credit loss expense for the three months ended March 31,

2025 and 2024.

There was no credit loss expense for the three and six months ended

June 30, 2025 and 2024.

accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized when a customer obtains ownership of promised goods.

1 unchanged sentence

The Company applies the following five steps:

the contract with a customer

Identify the contract with a customer

contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s

1 unchanged sentence

for goods or services that are transferred is probable.

For the Company, the contract is the approved sales order, which may also

be supplemented by other agreements that formalize various terms and conditions with customers.

the performance obligation in the contract

For the Company, the contract is the approved sales order, which may also be

supplemented by other agreements that formalize various terms and conditions with customers.

Identify the performance obligation in the contract

obligations promised in a contract are identified based on the goods or services that will be transferred to the customer.

Company, this consists of the delivery of frozen beverages, which provide immediate benefit to the customer.

the transaction price

transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods

and is generally stated on the approved sales order.

For the Company,

this consists of the delivery of frozen beverages, which provide immediate benefit to the customer.

Determine the transaction price

transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods and

is generally stated on the approved sales order.

Variable consideration, which typically includes rebates or discounts, are estimated

2 unchanged sentences

based on management’s assessment of historical and projected trends.

the transaction price to performance obligations in the contract

Allocate the transaction price to performance obligations

in the contract

the Company’s contracts contain a single performance obligation, delivery of frozen beverages, the transaction price is allocated

to that single performance obligation.

revenue when or as the Company satisfies a performance obligation

Company recognizes revenue from the sale of frozen beverages when title and risk of loss passes and the customer accepts the goods,

which generally occurs at the time of delivery to a customer warehouse.

Customer sales incentives such as volume-based rebates or

discounts are treated as a reduction of sales at the time the sale is recognized.

Shipping and handling costs are treated as fulfilment

costs and presented in distribution, selling and administrative costs.

Recognize revenue when or as the Company satisfies a performance

Company recognizes revenue from the sale of frozen beverages when title and risk of loss passes and the customer accepts the goods, which

generally occurs at the time of delivery to a customer warehouse.

Customer sales incentives such as volume-based rebates or discounts

are treated as a reduction of sales at the time the sale is recognized.

Shipping and handling costs are treated as fulfilment costs and

presented in distribution, selling and administrative costs.

that are received before performance obligations are recorded are shown as current liabilities.

Company evaluated the requirement to disaggregate revenue and concluded that substantially all of its revenue comes from a single

product, frozen beverages.

The Company evaluated the requirement to disaggregate revenue and concluded that substantially all of its revenue comes from a single product, frozen beverages.

and Shipping Costs

and outbound freight costs are included in selling, marketing and distribution expense.

For the three months ending March 31, 2025 and

For the three months ending June 30, 2025 and

2024, storage and outbound freight totaled approximately $ 276,000 and $ 217,000 , respectively.

For the six months ended June 30, 2025

and 2024, storage and outbound freight totaled approximately $ 667,000 and $ 581,000 , respectively.

and Development

1 unchanged sentence

The Company incurred approximately

$ 18,000 and $ 30,000 in research and development expense for the three months ended March 31, 2025 and 2024, respectively.

the three months ended March 31, 2025 and 2024, common stock equivalents have not been included in the calculation of net loss per share

as their effect is anti-dilutive as a result of losses incurred.

$ 31,000 and $ 17,000 in research and development expense for the three months ended June 30, 2025 and 2024, respectively, and $ 49,000

and $ 47,000 for the six months ended June 30, 2025 and 2024, respectively.

the three and six months ended June 30, 2025 and 2024 common stock equivalents have not been included in the calculation of net loss

per share as their effect is anti-dilutive as a result of losses incurred.

Pronouncements

4 unchanged sentences

Schedule of Inventory

March 31, 2025

December 31, 2024

Raw materials and packaging

4 unchanged sentences

Schedule of Property and Equipment, Net

March 31, 2025

December 31, 2024

Manufacturing equipment

6 unchanged sentences

Property and equipment, net of depreciation

expense related to these assets was approximately $ 53,000 and $ 59,000 for the three-months periods ending March 31, 2025 and 2024, respectively.

Depreciation expense in cost of revenue was $ 7,000 for each of the three-month periods ending March 31, 2025 and 2024.

expense related to these assets was approximately $ 54,000 and $ 56,000 for the three months ended June 30, 2025 and 2024, respectively,

and $ 107,000 and $ 113,000 for the six months ended June 30, 2025 and 2024, respectively.

Depreciation expense in cost of revenue was

$ 9,000 and $ 6,000 for the three months ended June 30, 2025 and 2024, respectively, and $ 16,000 and $ 13,000 for the six months ended June

30, 2025 and 2024, respectively.

Commitments and Contingencies

1 unchanged sentence

amendments through September 30, 2025 .

The Company’s periodic lease cost was approximately $ 20,000 for each of the three-month

periods ending March 31, 2025 and 2024.

The Company’s periodic lease cost was approximately $ 20,000 for each of the three months

ended June 30, 2025 and 2024 and $ 40,000 for each of the six months ended June 30, 2025 and 2024.

Company’s products are produced to its specifications through several contract manufacturers.

44 unchanged sentences

notice is given or received.

As of March 31, 2025, there were no borrowings under the Facility.

As of June 30, 2025, there were no borrowings under the Facility.

Unamortized deferred financing cost amounted

to $ 7,000 and are included in prepaid expenses and other current assets on the accompanying March 31, 2025 consolidated balance sheet.

to $ 3,000 and are included in prepaid expenses and other current assets on the accompanying June 30, 2025 consolidated balance sheet.

2024, the Company entered into financing agreements to purchase equipment and software as a service, with imputed or stated interest

of 15 - 19 %.

Amounts due under the agreements are as follows as of March 31, 2025:

due under the agreements are as follows as of June 30, 2025:

Schedule of Financing Agreements

4 unchanged sentences

Financing agreements

Financing agreements non current

July 2023 to March 2024, the Company executed subscription agreements for substantially all of a $ 2,000,000 privately placed convertible

16 unchanged sentences

Stockholders’ Equity

following are changes in stockholders’ equity for the three months ended March 31, 2024 and 2025:

following are changes in stockholders’ equity for the six months ended June 30, 2024 and 2025:

Schedule of Changes in Stockholders’ Equity

6 unchanged sentences

Registered issuance of common stock, shares

Balance March 31, 2024

( 1,460,000 )

Balance June 30, 2024

$ ( 62,256,000 )

Balance December 31, 2024

4 unchanged sentences

Registered issuance of common stock

Balance March 31, 2025

( 1,641,000 )

Balance June 30, 2025

$ ( 65,262,000 )

February 5, 2025, the Company entered into securities purchase agreements with several investors, pursuant to which the Company sold

an aggregate of 1,052,793 shares of common stock at a price of $ 2.85 per share in a registered direct offering.

the three months ended March 31, 2025, 121,076 warrants at a weighted average exercise price of $ 3.51 per share expired.

warrants outstanding as of March 31, 2025.

are no warrants outstanding as of June 30, 2025.

Incentive Plan

of March 31, 2025, the Company has $ 409,000 of total unrecognized share-based compensation expense relative to unvested options, stock

of June 30, 2025, the Company has $ 867,000 of total unrecognized share-based compensation expense relative to unvested options, stock

awards and stock units, which is expected to be recognized over the remaining weighted average period of 2.2 years.

following is a summary of stock option activity for the three months ended March 31, 2025:

Summary of Stock Options Activity

following is a summary of stock option activity for the six months ended June 30, 2025:

Schedule of Stock Options Activity

average exercise

2 unchanged sentences

Outstanding on December 31, 2024

Outstanding on March 31, 2025

Exercisable, March 31, 2025

Outstanding on June 30, 2025

Exercisable, June 30, 2025

fair value of the options issued was calculated using the Black-Scholes option pricing model, based on the following:

Summary of Fair Value of Options Using Black-Sholes Option Pricing Model

Schedule of Fair Value of Options Using Black-Sholes Option Pricing Model

Expected term (in years)

3 unchanged sentences

Weighted average grant date fair value per share

following is a summary of restricted stock award and restricted stock unit activity for the three months ended March 31, 2025:

following is a summary of restricted stock award and restricted stock unit activity for the six months ended June 30, 2025:

Schedule of Restricted Stock Award and Restricted Stock Unit Activity

Number of shares

Weighted average

grant date fair value

average grant date

Unvested at January 1, 2025

Unvested at March 31, 2025

Company issues performance share units (“PSUs”) that represent shares potentially issuable based upon Company and individual

performance in the years of issuance.

following table summarizes the activity for the Company’s unvested PSUs for the three months ended March 31, 2025:

Unvested at June 30, 2025

2023 and 2024, the Company issued performance share units (“PSUs”) that represented shares potentially issuable based upon

Company and individual performance in the years of issuance.

following table summarizes the activity for the Company’s unvested PSUs for the six months ended June 30, 2025:

Schedule of Performance Stock Unit Activity

Number of shares

Weighted average

grant date fair value

average grant

Unvested January 1, 2025

Unvested at March 31, 2025

Unvested at June 30, 2025

740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of evidence, it is more than likely

2 unchanged sentences

valuation allowance on all tax assets.

As of March 31, 2025, the estimated effective tax rate for 2025 was zero .

As of June 30, 2025, the estimated effective tax rate for 2025 was zero .

are open statutes of limitations for taxing authorities in federal and state jurisdictions to audit our tax returns from 2019 through

1 unchanged sentence

Our policy is to account for income tax related interest and penalties in income tax expense in the statement of

the three months ending March 31, 2025 and 2024, the Company did not incur any interest and penalties associated with tax positions.

As of March 31, 2025, the Company did not have any significant unrecognized uncertain tax positions.

the three months ending March 31, 2025, the Company used cash in operations of $ 506,000 .

As of March 31, 2025, the Company had $ 1,872,000

the three and six months ended June 30, 2025 and 2024, the Company did not incur any interest and penalties associated with tax positions.

As of June 30, 2025, the Company did not have any significant unrecognized uncertain tax positions.

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

As of June 30, 2025, the Company had $ 2,101,000 of working

capital, including $ 712,000 in cash.

Company has a history of operating losses and negative cash flow, which are expected to improve with growth.

6 unchanged sentences

a receivables-based line of credit in August 2024 of $ 1,500,000 ,

outstanding borrowing as of March 31, 2025.

outstanding borrowing as of June 30, 2025.

Management expects that the cash cycle will shorten as additional contracted capacity

improves production volume and efficiency in 2025.

Additionally, in May 2024, the Company obtained non-recourse litigation financing

to allow vigorous pursuit of the complaint against the Manufacturer without further expense to the Company.

Finally, as described in

Note 6, the Company raised $ 3,000,000

improves production volume and efficiency in the second half of 2025.

Additionally, in May 2024, the Company obtained non-recourse

litigation financing to allow vigorous pursuit of the complaint against the Manufacturer without further expense to the Company.

Finally, as described in Note 6, the Company raised $ 3,000,000

through the sale of the Company’s common stock in February 2025.

financial position at March 31, 2025 and historical results raise substantial doubt about the Company’s ability to continue as

a going concern.

financial position at June 30, 2025 and historical results raise substantial doubt about the Company’s ability to continue as a

going concern.

As described, the Company has completed steps to mitigate dispute related issues and raise capital.

2 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 1. Financial Statements