What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-13 compared with 2025-05-01 · 92 added, 44 removed, 82 unchanged (62% of the section changed)

27 unchanged sentences

of Operations

of Operation for the Three Months Ended March 31, 2025 as Compared to the Three Months Ended March 31, 2024

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

and cost of revenue

increased $161,000, or 11%, to $1,625,000 in 2025 as compared to $1,464,000 in 2024.

Our revenue in 2025 benefited from increased sales

of our bottled Twist & Go smoothies.

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 successfully

produce product at scale.

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

associated with pre-production activities.

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

of revenue increased $164,000, or 17%, to $1,119,000 in 2025 as compared to $955,000 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 our new manufacturer is under development.

The increase was partially offset by the non-recurrence of costs

to relocate our single-serve manufacturing line, which amounted to $45,000 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.

gross profit was $506,000 (31.1%) and $509,000 (34.8%) for 2025 and 2024, respectively.

1 unchanged sentence

profit was $514,000 in 2024 (35.1%).

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

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

marketing and distribution expense

March 31, 2025

March 31, 2024

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

Three months ended

Sales and marketing

2 unchanged sentences

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

and marketing expense increased approximately $103,000 (31%) from approximately $330,000 in 2024 to $433,000 in 2025.

The increase is

a result of higher personnel costs and broker commissions due to expansion of the broker network, as well as an increase in sample expense

due to the introduction of our Pop & Go freeze pops.

and outbound freight expense increased approximately $27,000 (7%) from approximately $364,000 in 2024 to $391,000 in 2024, slightly higher

than the 4% rate of increase in revenue primarily because of freight inefficiencies resulting from supply constraints.

and marketing expense decreased approximately $8,000 (2%) from approximately $366,000 in 2024 to $358,000 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 administrative expense

March 31, 2025

March 31, 2024

Three months ended

Personnel costs

5 unchanged sentences

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

Personnel cost increased by

Personnel cost decreased by

approximately $49,000 (14%) from approximately $341,000 in 2024 to $292,000 in 2025.

The increase in personnel cost resulted from increased

head count, and acceleration of employer payroll taxes due to vesting of stock-based compensation.

compensation decreased by approximately $145,000 (48%) from $303,000 in 2024 to $158,000 in 2025 as a result of lower expected attainment

under our performance stock unit program.

professional and consulting fees decreased by approximately $76,000 (48%) from $157,000 in 2024 to $81,000 in 2025 due to a reduction

in dispute related legal costs that are paid through non-recourse litigation financing that was arranged in May 2024.

general and administrative expenses increased by approximately $14,000 (14%) due to increased information technology costs.

had net losses of approximately $761,000 and $449,000 for the three-month periods ending March 31, 2025 and 2024, respectively.

in net loss of approximately $312,000 was primarily due to the 10.7 percentage point reduction in gross margin, from 41.4% to 30.7%,

resulting in a reduction in gross profit of $270,000.

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.

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

and cost of revenue

increased $262,000, or 6%, to $4,555,000 in 2025 as compared to $4,293,000 in 2024.

of revenue increased $535,000, or 20%, to $3,149,000 in 2025 as compared to $2,614,000 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.

gross profit was $1,406,000 (30.9%) and $1,679,000 (39.1%) 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.

marketing and distribution expense

Six months ended

Sales and marketing

Storage and outbound freight

marketing and distribution expense increased approximately $179,000 (14%) from approximately $1,279,000 in 2024 to $1,458,000 in 2025.

and marketing expense increased approximately $93,000 (13%) from approximately $698,000 in 2024 to $791,000 in 2025.

The increase is

a result of personnel costs and broker commissions.

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

and outbound freight expense increased approximately $86,000 (15%) from approximately $581,000 in 2024 to $667,000 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.

and administrative expense

Six months ended

Personnel costs

Stock based compensation

Legal, professional and consulting fees

Research and development

Other general and administrative expenses

and administrative expenses decreased approximately $297,000 (17%) from approximately $1,717,000 in 2024 to $1,420,000 in 2025.

cost increased by approximately $62,000 (10%) from approximately $603,000 in 2024 to $665,000 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 $220,000 from $517,000 in 2024 to $297,000 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 $104,000 (48%) from $215,000 in 2024 to $111,000 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.

and Capital Resources

16 unchanged sentences

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

the three months ended March 31, 2025, we used $506,000 in operations.

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 $525,000, while changes in current assets and liabilities generated $19,000 primarily because of a reduction of $372,000 in inventory

and increases in accounts payable and accrued expense of $222,000 and $218,000, respectively, partially offset by an increase in accounts

receivable of $670,000.

of March 31, 2025, we had working capital of $2,848,000 compared with $606,000 at December 31, 2024, both excluding disputed accounts

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

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

The increase in working capital is primarily due to capital raised

in the three months ended March 31, 2025 through the sale of common stock, partially offset by losses incurred in the three months ended

March 31, 2025.

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

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