What changed in this filing

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Item 1. Business

2024-03-21 compared with 2023-03-31 · 49 added, 87 removed, 62 unchanged (69% of the section changed)

We (or “IVFH”(or the “Company”) were initially formed in June 1979 as Alpha Solarco Inc., a Colorado corporation.

We were initially formed in June 1979 as Alpha Solarco Inc., a Colorado corporation.

From June 1979 through February 2003, we were either inactive or involved in discontinued business ventures.

We changed our name to Fiber Application Systems Technology, Ltd in February 2003.

In January 2004, we changed our state of incorporation by merging into Innovative Food Holdings, Inc., a Florida corporation formed for that purpose.

As a result of the merger, we changed our name to Innovative Food Holdings, Inc.

In January 2004, we also acquired Food Innovations, Inc.

(“FII” or “Food Innovations”), a Florida corporation.

On May 18, 2012, the Company executed a Stock Purchase Agreement to acquire all of the issued and outstanding shares of Artisan Specialty Foods, Inc., an Illinois corporation (“Artisan”).

On November 2, 2012, the Company entered into an asset purchase agreement whereby we acquired all existing assets of The Haley Group, LLC.

On June 30, 2014, pursuant to a purchase agreement, the Company purchased 100% of the membership interest of Organic Food Brokers, LLC, a Colorado limited liability company (“OFB”).

On August 15, 2014, pursuant to a merger agreement, the Company acquired The Fresh Diet, Inc.

Effective February 23, 2016, the Company closed a transaction to sell 90% of its ownership in FD.

There are no continuing cash inflows or outflows to or from FD.

Pursuant to an Asset Purchase Agreement dated as of January 1, 2017 the Company’s wholly-owned subsidiary, Oasis Sales Corp.

(“Oasis”), purchased substantially all of the assets of Oasis Sales and Marketing, LLC.

Effective January 24, 2018, pursuant to an asset acquisition agreement, our wholly-owned subsidiary, Innovative Gourmet LLC (“Innovative Gourmet”, “igourmet”), acquired substantially all of the assets and certain liabilities of igourmet LLC and igourmet NY LLC, privately-held New York limited liability companies located in West Pittston, Pennsylvania (collectively, “Sellers”) engaged in the sale, marketing, and distribution of specialty food and specialty food items through www.igourmet.com, online marketplaces, additional direct-to-consumer platforms, distribution to foodservice, retail stores and other wholesale accounts, pursuant to the terms of an Asset Purchase Agreement.

Effective July 6, 2018, pursuant to an asset purchase agreement between Mouth Foods, Inc.

(“Mouth”) and our wholly-owned subsidiary M Innovations LLC (“M Innovations”) (the “MFI APA”), the Company acquired certain assets of Mouth from MFI (assignment for the benefit of creditors), LLC, in connection with a Delaware assignment proceeding.

Mouth, a privately held New York company operating out of Brooklyn, was an expert curator and online retailer of high quality specialty foods from small-batch makers in the US.

Effective July 23, 2019, through our subsidiary P Innovations LLC, we acquired certain assets of GBC Sub, Inc.

(d/b/a The GiftBox) (“GiftBox”) (the “GiftBox Asset Purchase Agreement”).

GiftBox, a privately held Nevada corporation controlled by David Polinsky, a director of the Company, was in the business of subscription-based ecommerce.

The consideration for the assets purchased was a nominal amount of cash.

In January 2004, we changed our state of incorporation by merging into Innovative Food Holdings, Inc.

(“IVFH”), a Florida corporation formed for that purpose.

Our Operations

Our business is currently conducted by our wholly owned subsidiaries, some of which are non-operating, Artisan Specialty Foods, Inc.

(“Artisan”), Food Innovations, Inc.

(“FII”), Food New Media Group, Inc.

(“FNM”), Organic Food Brokers, LLC (“OFB”), Gourmet Foodservice Group, Inc.

(“GFG”), Gourmet Foodservice Group Warehouse, Inc.

(“GFW”), Gourmeting, Inc.

(“Gourmeting”), Haley Food Group, Inc.

(“Haley”), Oasis Sales Corp.

(“Oasis”), 4 The Gourmet, Inc.

(d/b/a For The Gourmet, Inc.), (“Gourmet”), Innovative Food Properties LLC (“IFP”), Innovative Gourmet, LLC (“Innovative Gourmet” or “igourmet”), Food Funding, LLC (“Food Funding”), Logistics Innovations, LLC (“L Innovations”), M Innovations, LLC (“M Innovations” or “Mouth”), P Innovations, LLC (“P Innovations”), MI Foods, LLC (“MIF”), M Foods Innovations, LLC (“M Foods”), PlantBelly, LLC (“PlantBelly”), Innovative Foods, Inc.

(“IFI”), Innovative Gourmet Partnerships, LLC (“IGP”) and Plant Innovations, Inc.

(“Plant Innovations”), and collectively with IVFH and its other subsidiaries, the “Company” or “IVFH” have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission.

All material intercompany transactions have been eliminated upon consolidation of these entities.

Overall, our business activities are focused around the creation and growth of platforms which provides distribution or the enabling of distribution of high quality, unique specialty food and food related products ranging from specialty foodservice products to Consumer-Packaged Goods (“CPG”) products through a variety of sales channels ranging from national partnership based and regionally based foodservice related sales channels to e-commerce sales channels offering products both direct to consumers (“D2C”) and direct to business (“B2B”).

In our business model, we receive orders from our customers and then work closely with our suppliers and our warehouse facilities to have the orders fulfilled.

In order to maintain freshness and quality, we carefully select our suppliers based upon, among other factors, their quality, uniqueness, reliability and access to overnight courier services.

The Company’s new management is reviewing the Company’s operations with a view to increasing sales levels, profit margins, and overall profitability.

FII, through its relationship with the producers, growers, and makers of thousands of unique specialty foodservice products and through its relationship with US Foods, Inc.

Foods” or “USF”), has been in the business of providing premium restaurants, within 24 – 72 hours, with the freshest origin-specific perishable, and healthcare products shipped directly from our network of vendors and from our warehouses.

Our customers include restaurants, hotels, country clubs, national chain accounts, casinos, hospitals and catering houses.

For The Gourmet has been in the business of providing specialty food via e-commerce through its own website at www.forthegourmet.com and through other ecommerce channels, with unique specialty gourmet food products shipped directly from our network of vendors and from our warehouses within 24 – 72 hours.

GFG is focused on expanding the Company’s program offerings to additional customers.

Artisan is a supplier of over 1,500 unique specialty foodservice products to over 500 customers such as chefs, restaurants, etc.

in the Greater Chicago area and serves as a national fulfillment center for certain of the Company’s other subsidiaries.

IFP was formed to hold the Company’s real estate holdings including the recently acquired facility in PA.

P Innovations’ focus is to leverage acquired assets to expand the Company’s subscription-based e-commerce business activities.

Plant Innovations is focused on plant-based D2C brands and online retail within the e-commerce space.

L Innovations provides 3rd party warehouse and fulfillment services, out of its first location at the Company’s Mountaintop, Pennsylvania facility.

Haley is a dedicated foodservice consulting and advisory firm that works closely with companies to access private label and manufacturers’ private label food service opportunities with the intent of helping them launch and commercialize new products in the broadline foodservice industry and assists in the enabling of the distribution of products via national broadline food distributors.

OFB and Oasis function as outsourced national sales and brand management teams for emerging organic and specialty food CPG companies of a variety of sizes and business stages and provides emerging and unique CPG specialty food brands with distribution and shelf placement access in all of the major metro markets in the food retail industry.

igourmet has been in the business of providing D2C specialty food via e-commerce through its own website at www.igourmet.com and through other channels including www.amazon.com, and www.walmart.com.

In addition, igourmet.com offers a line of B2B specialty foodservice items.

Products are primarily shipped directly from igourmet.com’s approximately 100,000 square feet warehouse in Pennsylvania via igourmet.com owned trucks and via third party carrier directly to thousands of customers nationwide.

Mouth (www.mouth.com) is an online retailer of specialty foods, monthly subscription boxes and curated gift boxes to thousands of consumers and corporate customers nationwide.

Mouth sources high quality specialty foods mainly crafted in the US by independent and small batch makers, and expertly curates them into standout food gifts for both consumers and corporate customers.

Mouth also has launched a private label brand, including several award-winning products.

Innovative Food Holdings (IVFH) builds dynamic scalable businesses by selling specialty foods that are difficult to find through traditional channels.

Our expertise is forging close relationships with the producers, growers, makers and distributors of specialty products, then carefully selecting our suppliers based on their quality, uniqueness and reliability.

The IVFH team is adept at evaluating and certifying the food safety and supply chain capabilities of small batch producers who don’t typically sell through broad-based sales channels.

We seek out the freshest, most unique, origin-specific gourmet cheese, meat, produce, and premium ingredients available, and distribute them directly from our robust network of vendors and warehouses within 24 – 72 hours of an order being placed.

We also source, package, and brand a meaningful segment of these products ourselves, enabling us to better control the assortment, offer more flexibility and variety to our customers, and capture additional margin.

We leverage this unique, premium assortment to serve the needs of Professional Chefs in settings such as restaurants, hotels, country clubs, national chain accounts, casinos, hospitals and catering houses.

We provide these premium customers with products that can’t typically be found through their broadline distributor’s warehouse assortment.

We distribute these products directly to Professional Chefs in Chicago through our subsidiary, Artisan Specialty Foods, Inc., and nationally through our e-commerce businesses on Amazon.com and our own website.

We also drop ship specialty foods to Professional Chefs nationally through the websites of broadline distributors, such as US Foods, Inc.

Between this variety of sales channels, IVFH is able to serve our Professional Chef customers wherever they are located.

We service our customers from two warehouses:

a 200K square foot facility in Mountain Top, Pennsylvania (an important industry distribution hub for the Northeast), and a 28K square foot facility in the greater Chicago area.

We have the capabilities to pack and ship frozen, refrigerated, and ambient products, enabling us to sell a broad range of specialty foods.

We also have GFSI/SQF certifications, allowing compatibility with the highest standards of food handling supply chains in the world, and the quality and food safety that our premium customers expect from us.

These warehouses have the ability to ship packages and pallets of all sizes through overnight shipping.

We also leverage our own fleet of trucks to deliver directly to our Professional Chef customers within our reach.

Our proprietary technology platform underpins our entire business, driving transparency and efficiency up and down the supply chain.

Orders flow in real time, whether to our warehouses or to our vendor partners, to allow for fast handling and fulfillment.

Our picking is enabled by efficient scan-based, handheld devices, ensuring order and inventory accuracy.

Our warehouse management software optimizes pick routes for common items and order types, recommends a box size, and calculates the appropriate amount of packaging and ice required based on forecasted temperatures along the delivery route.

We have built a team consisting of passionate, committed, and food-obsessed people:

our average tenure (outside of seasonal workers) across the company is over five years.

Our merchandising team has deep connections within the specialty food space around the globe.

Our Chef Advisors, as ex-chefs themselves, go beyond customer service to offer our Professional Chefs customer support, menu ideas, and preparation guidance.

We distribute over 7,000 perishable and specialty food and food related products, including origin-specific seafood, domestic and imported meats, exotic game and poultry, artisanal cheeses, freshly prepared meals, caviar, wild and cultivated mushrooms, micro-greens, organic farmed and manufactured food products, estate-bottled olive oils and aged vinegars and expertly curated food gift baskets, gift boxes and a full of line of food subscription based offerings.

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Customer Service and Logistics

Our foodservice focused, live chef-driven customer service department is generally available by telephone Monday through Thursday, from 8 a.m.

and on Friday from 8 a.m.

to 5 p.m., Florida time.

Our consumer-focused multi-lingual, customer care specialists are available by live chat and telephone Monday through Thursday, from 9 a.m.

to 7:00 pm (ET), and on Friday from 9:00 am to 5 pm (ET).

Our team is available and can be contacted 7 days a week via email and on social media platforms.

The customer service departments are made up of a team of chefs and culinary experts, including a team of culinary trained chefs, who are full-time employees of the Company, and who are experienced in all aspects of perishable and specialty products.

Our foodservice focused, live chef-driven customer service department is generally available by telephone, email, and on social media platforms.

The customer service departments are made up of a team of chefs and culinary experts who are experienced in all aspects of perishable and specialty products.

By employing chefs and culinary experts to handle customer service, we are able to provide our customers with extensive information about our products, including:

Flavor profile and eating qualities

Flavor profile and ingredient qualities

Recipe and usage ideas

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Our logistics manager works directly with our suppliers on an ongoing basis, to ensure that the appropriate packaging and shipping specifications are in place at all times.

At the beginning of March 2020, as early signs were beginning to emerge that Covid-19 might potentially be a significant issue in the United states, we initiated additional preventative safety measures in our facilities and we continued adding additional preventative safety measures including protective gear for employees, temperature testing, ongoing onsite team of cleaning and sanitizing specialists, social distancing, special no contact package handling protocols.

While we continue to assess and modify as appropriate, measures targeted towards the safety of our employees and the safety of our facilities and our products, as of December 31, 2022, we have returned to our pre-COVID-19 protocols.

Relationship with U.S.

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Growth Strategy

To drive growth within the specialty food space, we intend to focus our efforts in demand driven active sales channels and leverage our ability to offer our products across multiple selling channels including to professional chefs within the restaurant channel as well as directly to consumers at home via ecommerce.

We expect to continue offering unique and premium quality products as well as new product introduction and innovation to our customers and potential customers.

In addition, we plan on continuing to value and strive for a high level of personalized customer service.

We anticipate attempting to grow our business through:

Introduction of new products, suppliers, and food trends to customers across all of our sales channels.

Increased ecommerce conversion rates by improving the shopping experience on our website.

Growth in the number of unique visitors to our various ecommerce sites.

Maximize sales of current product catalog to our existing customers and potential new customers.

Expansion of availability of branded products and new brands which are consistent with the changing demands of customers in the U.S.

Leveraging igourmet.com and mouth.com toward further expansion of our sales and distribution channels either organically or through acquisition.

Leveraging our platforms to partner, build and/or acquire both foodservice brands and other consumer oriented entities and consumer brands such as D2C digitally native brands including stand alone brands and online retailer brands.

In addition to attempting to grow our current business, we believe that there are lateral opportunities in the food industry and related markets.

We may consider the possibility of acquiring specialty food manufacturers, specialty food distributors, small specialty food brands especially digitally native D2C brands, or e-commerce retailers and other business.

We anticipate that, given our current cash flow levels, any acquisition could potentially involve the issuance of additional shares of our common stock or third party financing, which may not be available on acceptable terms.

No acquisition will be consummated without thorough due diligence.

No assurance can be given that we will be able to identify and successfully conclude negotiations with any potential target.

The Company’s new management is reviewing the Company’s operations with a view to increasing sales levels, profit margins, and overall profitability.

While we face intense competition in the marketing of our products and services, it is our belief that there are few companies offering a platform similar to ours, which include expansive backend and front end capabilities in both ecommerce and foodservice in addition there are few companies offering a broad range of customer service oriented, quality, chef driven products and specialty gourmet products, for nationwide delivery from same day, depending on market location to 72 hours.

Our primary competition is from local purveyors that supply a limited local market and have a limited range of products and from the other specialty gourmet distributors and specialty food retail stores or ecommerce stores, and from the national, regional or local expansion of specialty and non-specialty food distributers and food stores and food focused ecommerce sites.

Our long term strategy is still taking shape, but there are three clear elements at this point in our evolution to a profitable, growing business model.

First, at our heart, we focused on growing a direct-to-chef specialty foodservice platform.

It's a straightforward business, generates strong cash flow, and has great growth potential.

In contrast, direct-to-consumer e-commerce is not a business we will focus on.

We are in the process of ramping it down, and any remaining business will focus only on items we already carry in our foodservice channels, and which we can sell profitably, with no capital.

Second, our core drop ship business (where we don't touch the inventory) needs to diversify with more partners and into additional sales channels.

We have a strong relationship with US Foods, but the company will benefit from having additional large partners.

We have started this journey with the $10 million business we've built with Gate Gourmet.

Other areas of focus include onboarding additional broadline distributors, additional airline caterers, Club channel partners, Amazon.com, etc.

Sales channel diversification will continue to be a focus for us.

Third, our specialty food distribution business (where we own the inventory, warehouses, and trucks) has opportunity for growth.

Today, this business is called Artisan Specialty Foods, and only serves Chicago.

It has doubled in size since we purchased it a decade ago, and done so with very little incremental investment.

Growth opportunities in specialty distribution exist both in Chicago through category and customer expansion, as well as through M&A in new markets.

While we face intense competition in the marketing of our products and services, it is our belief that there are few companies offering a platform similar to ours, offering a broad range of unique, high quality, chef driven specialty products, for nationwide delivery as soon as the next day.

Our primary competition is from local purveyors that supply a limited local market and have a limited range of products.

In addition, many purveyors are well established, have reputations for success in the development and marketing of these types of products and services and have significantly greater financial, marketing, distribution, personnel and other resources.

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We currently employ 92 full-time employees, including 8 chefs and 3 executive officers.

Our employee base has reduced with the sale of non-core business operations and the decision to ramp down our direct-to-customer operations.

We believe that our relations with our employees are satisfactory.

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How to Contact Us

Our executive offices are located at 28411 Race Track Rd., Bonita Springs, Florida 34135;

Our executive offices are located at 9696 Bonita Beach Rd., Ste.

208, Bonita Springs, Florida 34135;

our Internet address is www.ivfh.com;

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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 1. Business