INNOVATIVE FOOD HOLDINGS INC 10-K

ITEM 8. Financial Statements and Supplementary Data CBIZ CPAs P.C. 500 W. Monroe Street Suite 2000 Chicago, IL 60661 P: 312.632.5000 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors of Innovative Food Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of Innovative Food Holdings, Inc. (the “Company”) as of December 31, 2025, the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2025, and the related notes to the consolidated financial statements (collectively referred to as the “financial statements”). In our opinion, based on our audit, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. CBIZ CPAs P.C. We have served as the Company’s auditor since 2025. Chicago, Illinois March 31, 2026 F- 1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders’ and Board of Directors Innovative Food Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Innovative Food Holdings, Inc. and Subsidiaries (the Company) as of December 31, 2024 and the related consolidated statements of operations, stockholders’ equity and cash flows for the year ended December 31, 2024 and the related consolidated notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. We did not identify any critical audit matters that need to be communicated. We have served as the Company’s auditor since 2022 Coral Springs, Florida March 20, 2025 except for Note 3 which is dated March 27, 2026 ASSURANCE DIMENSIONS, LLC also d/b/a McNAMARA and ASSOCIATES, LLC TAMPA BAY : 4920 W Cypress Street, Suite 102 | Tampa, FL 33607 | Office: 813.443.5048 | Fax: 813.443.5053 JACKSONVILLE : 7800 Belfort Parkway, Suite 290 | Jacksonville, FL 32256 | Office: 888.410.2323 | Fax: 813.443.5053 ORLANDO: 1800 Pembrook Drive, Suite 300 | Orlando, FL 32810 | Office: 888.410.2323 | Fax: 813.443.5053 SOUTH FLORIDA : 3111 N. University Drive, Suite 621 | Coral Springs, FL 33065 | Office: 754.800.3400 | Fax: 813.443.5053 www.assurancedimensions.com “Assurance Dimensions” is the brand name under which Assurance Dimensions, LLC including its subsidiary McNamara and Associates, LLC (referred together as “AD LLC”) and AbitOs Advisors, LLC (“AbitOs Advisors”) , provide professional services. AD LLC and AbitOs Advisors practice as an alternative practice structure in accordance with the AICPA Code of Professional Conduct and applicable laws, regulations, and professional standards. AD LLC is a licensed independent CPA firm that provides attest services to its clients, and AbitOs Advisors provide tax and business consulting services to their clients. AbitOs Advisors , and its subsidiary entities are not licensed CPA firms. F- 2 Table of Contents Innovative Food Holdings, Inc. Consolidated Balance Sheets December 31, December 31, 2025 2024 ASSETS Current assets Cash and cash equivalents $ 927,468 $ 1,278,088 Cash, restricted 507,517 859,781 Accounts receivable, net 5,300,190 5,862,445 Inventory, net 3,473,604 3,508,488 Other current assets 144,143 235,125 Assets held for sale – discontinued operations 6,144,793 5,941,933 Other current assets - discontinued operations 281,699 6,204,514 Total current assets 16,779,414 23,890,374 Property and equipment, net 1,273,310 1,271,811 Right of use assets - operating leases, net 512,389 705,476 Right of use assets - finance leases, net 205,340 83,348 Amortizable intangible assets, net 338,059 424,372 Indefinite-lived intangible assets 217,000 217,000 Other noncurrent assets 40,000 - Non-current assets - discontinued operations 215,509 753,992 Total assets $ 19,581,021 $ 27,346,373 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable and accrued liabilities $ 3,035,799 $ 4,436,042 Accrued separation costs - related parties, current 109,236 334,532 Accrued interest - 18,866 Stock appreciation rights liability 16,143 1,353,150 Notes payable, current portion 66,026 82,191 Lease liability - operating leases, current 285,534 239,660 Lease liability - finance leases, current 48,866 60,519 Contingent liability, current - 54,430 Current liabilities - discontinued operations 8,877,624 2,834,800 Total current liabilities 12,439,228 9,414,190 Note payable non-current, net of discount 216,947 282,793 Accrued separation costs - related parties, non-current 400,000 457,692 Lease liability - operating leases, non-current 234,963 467,569 Lease liability - finance leases, non-current 52,683 139,591 Noncurrent liabilities - discontinued operations - 8,409,881 Total liabilities 13,343,821 19,171,716 Commitments & Contingencies (see Note 23) - - Stockholders’ equity Common stock: $ 0.0001 par value; 500,000,000 shares authorized; 57,493,776 and 56,009,032 shares issued, and 54,649,479 and 53,164,735 shares outstanding at December 31, 2025 and 2024, respectively 5,746 5,598 Common stock to be issued 0 and 738,032 shares at December 31, 2025 and 2024, respectively - 74 Additional paid-in capital 45,647,902 45,520,121 Treasury stock: 2,644,297 shares outstanding at December 31, 2025 and 2024 ( 1,141,372 ) ( 1,141,372 ) Accumulated deficit ( 38,275,076 ) ( 36,209,764 ) Total stockholders’ equity 6,237,200 8,174,657 Total liabilities and stockholders’ equity $ 19,581,021 $ 27,346,373 See notes to consolidated financial statements. F- 3 Table of Contents Innovative Food Holdings, Inc. Consolidated Statements of Operations For the For the Year Ended Year Ended December 31, December 31, 2025 2024 Revenue $ 60,678,166 $ 59,448,427 Cost of goods sold 45,049,103 44,427,644 Gross margin 15,629,063 15,020,783 Selling, general and administrative expenses 12,993,435 13,748,613 Total operating expenses 12,993,435 13,748,613 Operating income (loss) 2,635,628 1,272,170 Other income (expense): Interest income (expense), net ( 30,306 ) 41,530 Gain on sale of assets - 2,816,616 Gain on sale of subsidiary - 21,126 Other leasing income 2,512 - Total other income (expense) ( 27,794 ) 2,879,272 Net income before taxes 2,607,834 4,151,442 Income tax expense 80,787 - Net income from continuing operations $ 2,527,047 $ 4,151,442 Net income (loss) from discontinued operations $ ( 4,592,359 ) $ ( 1,539,928 ) Consolidated net income (loss) ( 2,065,312 ) $ 2,611,514 Net income per share from continuing operations - basic $ 0.046 $ 0.082 Net income per share from continuing operations - diluted $ 0.046 $ 0.081 Net income (loss) per share from discontinued operations - basic $ ( 0.084 ) $ ( 0.030 ) Net income (loss) per share from discontinued operations - diluted $ ( 0.084 ) $ ( 0.030 ) Weighted average shares outstanding - basic 54,582,651 50,563,992 Weighted average shares outstanding - diluted 54,582,651 51,315,879 See notes to consolidated financial statements. F- 4 Table of Contents Innovative Food Holdings, Inc. Consolidated Statement of Changes in Stockholders’ Equity For the Years Ended December 31, 2025 and 2024 Common Stock Common Stock to be issued Additional Paid-in Treasury Stock Accumulated Amount Value Amount Value Capital Amount Value Deficit Total Balance - January 1, 2024 52,538,100 $ 5,251 - $ - $ 42,762,811 2,623,171 $ ( 1,141,370 ) $ ( 38,821,278 ) $ 2,805,414 Shares returned to treasury from sale of subsidiary - - - - ( 21,124 ) 21,126 ( 2 ) - ( 21,126 ) Fair value of shares under compensation plan - - - - 437,339 - - - 437,339 Shares earned under compensation plans 2,029,513 203 738,032 74 ( 203 ) - - - 74 Shares withheld for taxes under compensation plans ( 613,969 ) ( 61 ) - - ( 908,497 ) - - - ( 908,558 ) Shares issue for cashless exercise of options 24,138 2 - - ( 2 ) - - - - Shares sold for cash in private placement offering 2,031,250 203 - - 3,249,797 - - - 3,250,000 Net income - - - - - - - 2,611,514 2,611,514 Balance - December 31, 2024 56,009,032 $ 5,598 738,032 $ 74 $ 45,520,121 2,644,297 $ ( 1,141,372 ) $ ( 36,209,764 ) $ 8,174,657 Balance - January 1, 2025 56,009,032 5,598 738,032 74 45,520,121 2,644,297 ( 1,141,372 ) ( 36,209,764 ) 8,174,657 Fair value of shares under compensation plan - - - - 404,032 - - - 404,032 Shares earned under compensation plans 1,400,718 140 ( 738,032 ) ( 74 ) ( 66 ) - - - - Shares issued in cashless conversion of options 84,026 8 - - ( 8 ) - - - - Amount paid for taxes under compensation plans - - - - ( 276,177 ) - - - ( 276,177 ) Net income - - - - - - - ( 2,065,312 ) ( 2,065,312 ) Balance - December 31, 2025 57,493,776 $ 5,746 - $ - $ 45,647,902 2,644,297 $ ( 1,141,372 ) $ ( 38,275,076 ) $ 6,237,200 See notes to consolidated financial statements. F- 5 Table of Contents Innovative Food Holdings, Inc. Consolidated Statements of Cash Flows For the For the Year Ended Year Ended December 31, December 31, 2025 2024 Cash flows used in operating activities: Net income (loss) $ ( 2,065,312 ) $ 2,611,514 Adjustments to reconcile net income (loss) to net cash used in operating activities: (Gain) loss on disposition of assets 106,591 ( 2,816,616 ) Gain on sale of subsidiaries - ( 21,126 ) Depreciation and amortization 377,550 273,084 Amortization of right of use asset 253,041 54,609 Amortization of discount on notes payable 31,046 5,136 Stock based compensation 404,032 437,339 Gain on derecognition of note payable and accrued interest ( 39,154 ) - Change in value of stock appreciation rights ( 1,337,007 ) 1,098,130 Inventory valuation adjustment associated with facility closure 1,486,893 - Provision for credit losses 124,831 4,599 Changes in assets and liabilities: Accounts receivable, net 3,417,539 ( 3,826,006 ) Inventory, net 1,329,991 ( 1,977,195 ) Other current assets ( 64,730 ) 41,002 Accounts payable and accrued liabilities ( 3,515,394 ) ( 850,125 ) Accrued separation costs - related parties ( 282,988 ) ( 462,713 ) Deferred revenue ( 7,600 ) ( 790,769 ) Operating lease liability ( 246,686 ) ( 52,856 ) Net cash used in operating activities ( 27,357 ) ( 6,271,993 ) Cash flows from investing activities: Cash paid for acquisition of Golden Organics - ( 1,231,379 ) Cash received in acquisition of Loco Foods - 42,000 Cash paid for purchase of property and equipment ( 242,322 ) ( 316,567 ) Cash received from disposition of equipment 54,500 - Cash received from disposition of building, net of loan payoff - 2,101,185 Cash received from disposition of intangible assets, net of costs - 617,000 Net cash provided by (used in) investing activities ( 187,822 ) 1,212,239 Cash flows from financing activities: Cash received from sale of common stock, net of costs - 3,250,000 Payment for taxes related to net share settlement of equity awards, net ( 276,177 ) ( 908,484 ) Principal payments on debt ( 180,143 ) ( 95,546 ) Principal payments on financing leases ( 188,684 ) ( 228,356 ) Cash received from line of credit 500,000 - Principal payments on line of credit ( 500,000 ) - Net cash provided by (used in) financing activities ( 645,004 ) 2,017,614 Decrease in cash, cash equivalents, and restricted cash ( 860,183 ) ( 3,042,140 ) Cash, cash equivalents, and restricted cash at beginning of period 2,380,195 5,422,335 Cash, cash equivalents, and restricted cash at end of period - continuing operations $ 1,434,985 $ 2,137,869 Cash, cash equivalents, and restricted cash at end of period - discontinued operations $ 85,027 $ 242,326 Cash, cash equivalents, and restricted cash at end of period $ 1,520,012 $ 2,380,195 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 816,086 $ 896,709 Taxes $ 80,787 $ - Non-cash investing and financing activities: Reclassify fixed assets as held for sale $ - $ 5,941,933 Principal and accrued interest paid from escrow to Maple Mark Bank $ - $ 353,815 Issuance of common stock under compensation plans $ 140 $ - Issuance of common stock from common stock to be issued $ 74 $ - Issuance of stock for cashless exercise of options $ 8 $ 2 Capitalized interest on financing lease $ 2,845 $ - See notes to consolidated financial statements. F- 6 Table of Contents INNOVATIVE FOOD HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For The Years Ended December 31, 2025 and 2024 1. NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying audited consolidated financial statements include those of Innovative Food Holdings, Inc. and all of its wholly-owned subsidiaries (collectively, the “Company”) and have been prepared in accordance with generally accepted accounting principles. All intercompany transactions have been eliminated in consolidation. In the opinion of management, the audited consolidated financial statements reflect all adjustments, including normal recurring adjustments, necessary for fair presentation of the interim periods presented. Business Activity The Company provides difficult-to-find specialty foods primarily to both Professional Chefs and Home Gourmets through the Company’s relationships with producers, growers, makers and distributors of these products worldwide. The distribution of these products primarily originates from the Company’s two unified warehouses and those of its drop ship partners, and is driven by its proprietary technology platform. In addition, the Company provides value-added services through its team of food specialists and Chef Advisors who offer customer support, menu ideas, and preparation guidance. Discontinued Operations The Company relied on the guidance of Accounts Standards Codification (“ASC”) 205-20, Presentation of Financial Statements – Discontinued Operations, in presenting the results of our discontinued operations. On February 26, 2024, the Company completed the sale of its Haley subsidiary (see Note 5), and the activities of P Innovations (“Plantbelly”) were abandoned; and on October 8, 2024, the Company completed the sale of substantially all of the assets of Mouth. During the year ended December 31, 2024, the accounts of the following entities are included in net loss from discontinued operations: GROW, Oasis, Haley, P Innovations, and Mouth. The only remaining assets and liabilities on the Company’s balance sheet at December 31, 2024 related to discontinued operations is cash in the amount of $ 49,315 held by Mouth. During the third quarter of fiscal 2025, the Company committed to a strategic exit of its retail specialty cheese business, which served as the primary component of its national distribution platform. Accordingly, results for this business for all prior periods presented have been retrospectively reclassified to discontinued operations in accordance with ASC 205-20. In connection with this decision, the Company also elected to discontinue its related logistics operations and specialty cheese cutting activities, including igourmet, along with the Company’s logistics subsidiary (LII/IFP). During the year ended December 31, 2025, the accounts of the following entities are included in net loss from discontinued operations and in the discontinued operations sections of our balance sheet: IFP, LII, and the activity of igourmet directly related to our cheese business. See Note 3. Use of Estimates The preparation of these consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates these estimates, including those related to revenue recognition and concentration of credit risk. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Accounts subject to estimate and judgements are allowance for credit losses, allowance for slow moving and obsolete inventory, income taxes, contingent liabilities, operating and finance right of use assets and liabilities, and equity-based instruments. Actual results may differ from these estimates under different assumptions or conditions. The Company believes its estimates have not been materially inaccurate in past years, and its assumptions are not likely to change in the foreseeable future. F- 7 Table of Contents Reclassifications Certain amounts presented in the financial statements of the prior period have been reclassified to conform with the current period presentation of discontinued operations. See Note 3. In addition, restricted cash has been included with unrestricted cash in the cash totals in the statement of cash flows. Revenue Recognition The Company recognizes revenue from product sales upon product delivery. All of its products are shipped either same day or overnight or through longer shipping terms to the customer and the customer takes title to product and assumes risk and ownership of the product when it is delivered. Shipping charges to customers and sales taxes collectible from customers, if any, are included in revenues. For revenue from product sales (i.e., specialty foodservice and e-commerce), the Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606 “ Revenue from Contracts with Customers ”. A five-step analysis must be met as outlined in Topic 606: (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations, and (v) recognize revenue when (or as) performance obligations are satisfied. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. Warehouse and logistic services revenue is primarily comprised of inventory management, order fulfilment and warehousing services. Warehouse and logistics services revenues are recognized at the point in time when the services are rendered to the customer. Warehouse rental services are recognized over the period the service is provided. Disaggregation of Revenue The following table represents a disaggregation of revenue by sales for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Digital Channels $ 32,499,215 $ 35,020,760 National Distribution 12,926,000 12,337,767 Local Distribution 15,252,951 12,089,900 Total $ 60,678,166 $ 59,448,427 Cost of Goods Sold The Company has included in cost of goods sold all costs which are directly related to the generation of revenue. These costs include primarily the cost of food and raw materials, packing and handling, shipping, and delivery costs. The Company has also included all payroll costs as cost of goods sold in its warehouse and logistics services business. Selling, General, and Administrative Expenses The Company has included in selling, general, and administrative expenses all other costs which support its operations, but which are not includable as a cost of sales. These include primarily payroll, facility costs such as rent and utilities, selling expenses such as commissions and advertising, amortization of intangible assets, depreciation, and other administrative costs including professional fees and costs associated with non-cash stock compensation. Advertising costs are expensed as incurred. Cash and Cash Equivalents Cash equivalents include all highly liquid debt instruments with original maturities of three months or less which are not securing any corporate obligations. Restricted Cash Restricted cash consists of cash that is contractually restricted as to withdrawal or usage. The Company’s restricted cash primarily relates to cash held by MapleMark Bank for the purpose of funding capital acquisitions. F- 8 Table of Contents Concentrations of Credit Risk Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash, cash equivalents and trade accounts receivable. The Company places its cash and temporary cash in investments with credit quality institutions. At times, such investments may be in excess of applicable government mandated insurance limit. At December 31, 2025 and 2024, trade receivables from the Company’s largest customer amounted to 18 % and 10 %, respectively, of total trade receivables. During the year ended December 31, 2025 and 2024, sales from the Company’s largest customer amounted to 42 % and 52 % of total sales, respectively. The Company maintains cash balances in excess of Federal Deposit Insurance Corporation limits. At December 31, 2025 and 2024, the total cash in excess of these limits was $ 261,808 and $ 1,016,918 , respectively. Accounts Receivable The Company provides an allowance for credit losses equal to the estimated uncollectible amounts pursuant to the guidance of Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326) as codified in ASC 326, Financial Instruments – Credit Losses. Under ASC 326, the Company utilizes a current and expected credit loss (CECL) impairment model. The Company’s estimate is based on historical collection experience and a review of the current status of trade accounts receivable. It is reasonably possible that the Company’s estimate of the allowance for credit losses will change. Accounts receivable are presented net of an allowance for credit losses of $ 218,319 and $ 40,002 at December 31, 2025, and 2024, respectively. Assets Held for Sale Assets held for sale include the net book value of property and equipment that the Company plans to sell within the next year. Long-lived assets that meet the held for sale criteria are held for sale and reported at the lower of their carrying value or fair value, less estimated costs to sell. If the determination is made that the Company no longer expects to sell an asset within the next year, the asset is reclassified out of assets held for sale. Property and Equipment Property and equipment are valued at cost. Depreciation is provided over the estimated useful lives using the straight-line method. Leasehold improvements are depreciated on a straight-line basis over the lesser of the lease term or useful life. The estimated service lives of property and equipment are as follows: Computer and Office Equipment 3 years Warehouse Equipment 5 - 10 years Furniture and Fixtures 5 years Vehicles 5 years Buildings 30 years Leasehold Improvements Term of lease Inventory Inventory is valued at the lower of cost or net realizable value, and is determined by the average cost method. The Company adjusts inventory based upon bi-weekly cycle counts and upon the expiration date of food products. In addition, the Company records a provision for excess, obsolete, and slow-moving inventory. This provision reduces the carrying value of inventory to its net realizable value. Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with ASC 740. The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The components of the deferred tax assets and liabilities are classified as current and non-current based on their characteristics. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. The Company accounts for uncertain tax positions in accordance with ASC 740. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.The Company classifies interest and penalties related to unrecognized tax benefits as a component of income tax expense in the accompanying statements of operations. F- 9 Table of Contents Fair Value of Financial Instruments The carrying amount of the Company’s cash and cash equivalents, accounts receivable, notes payable, line of credit, accounts payable and accrued expenses, none of which is held for trading, approximates their estimated fair values due to the short-term maturities of those financial instruments. The Company adopted ASC 820-10, “Fair Value Measurements”, which provides a framework for measuring fair value under GAAP. ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820-10 requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. Long-Lived Assets The Company reviews its property and equipment and any identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted operating cash flow expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. Basic and Diluted Income Per Share Basic net earnings per share is based on the weighted average number of shares outstanding during the period, while fully diluted net earnings per share is based on the weighted average number of shares of common stock and potentially dilutive securities assumed to be outstanding during the period using the treasury stock method. Potentially dilutive securities consist of stock options and restricted stock awards (“RSAs”). Stock options and RSAs for which the exercise or vesting price exceeds the average market price over the period have an anti-dilutive effect on earnings per common share and, accordingly, are excluded from the calculation. Year Ended December 31, 2025 December 31, 2024 Numerator: Income from continuing operations $ 2,527,047 $ 4,151,442 Denominator: Weighted average shares outstanding - basic 54,582,651 50,563,992 Dilutive effect of stock issuable under compensation plan - 751,887 Weighted average shares outstanding - diluted 54,582,651 51,315,879 Income per share from continuing operations - basic $ 0.046 $ 0.082 Income per share from continuing operations - diluted $ 0.046 $ 0.081 Dilutive shares at December 31, 2025: Stock Options All stock options outstanding at December 31, 2024 have been exercised or expired as of December 31, 2025. Restricted Stock Awards The Company measures stock-based compensation cost at fair value on the date of grant for all share-based awards and recognizes compensation expense over the service period that the awards are expected to vest. The Company has elected to recognize compensation cost for graded-vesting awards subject only to a service condition over the requisite service period of the entire award. For performance awards, the Company begins recognizing expense in the period in which vesting becomes probable. The Company accounts for forfeitures as they occur. At December 31, 2025, there were 300,000 unvested RSAs remaining from grants in a prior year. Those 300,000 RSAs will vest as follows: 125,000 RSAS will vest contingent upon the attainment of a stock price of $2.00 per share for 20 straight trading days , and an additional 175,000 RSAs will vest contingent upon the attainment of a stock price of $3.00 per share for 20 straight trading days. The fair value of these RSAs at the date of the grants will be charged to operations upon vesting. At December 31, 2025, none of these RSAs were vested. There was no charge to operations for these RSAs during the year ended December 31, 2025. F- 10 Table of Contents The Company also has in place share-based incentive plans for its executive team (the “Executive Stock Plans”). See Note 19. When shares are granted under the Company’s Executive Stock Plans, the Company withholds the number of shares required to satisfy income tax withholding requirements on the award, calculated at the market value of the Company’s stock on the date the award is granted. Stock-based Compensation During the year ended December 31, 2025, the Company charged the amount of $ 404,032 to operations in connection with Executive Stock Plans. See Note 19. At December 31, 2025, there were no shares of common stock which have vested and are issuable pursuant to Executive Stock Plans. Dilutive shares at December 31, 2024: Stock Options The following table summarizes the options outstanding and the related prices for the options to purchase shares of the Company’s common stock issued by the Company at December 31, 2024: Weighted Average Remaining Exercise Number Contractual Price of Options Life (years) $ 1.00 50,000 1.50 1.25 130,000 1.50 1.75 130,000 0.99 $ 1.42 310,000 1.41 Restricted Stock Awards At December 31, 2024, there were 300,000 unvested RSAs remaining from grants in a prior year. Those 300,000 RSAs will vest as follows: 125,000 RSA stock awards will vest contingent upon the attainment of a stock price of $2.00 per share for 20 straight trading days , and an additional 175,000 RSAs will vest contingent upon the attainment of a stock price of $3.00 per share for 20 straight trading days. The Company also has in place Executive Stock Plans for its executive team. See Note 19. When shares are granted under the Company’s Executive Stock Plans, the Company withholds the number of shares required to satisfy income tax withholding requirements on the award, calculated at the market value of the Company’s stock on the date the award is granted. Stock-based Compensation During the year ended December 31, 2024, the Company charged the amount of $ 404,804 to operations in connection with the Executive Stock Plans. See Note 19. At December 31, 2024, there were a total of 1,450,314 shares of common stock which have vested and are issuable pursuant to the Executive Stock Plans. Leases The Company accounts for leases in accordance with FASB ASC 842, “Leases”. The Company determines if an arrangement is a lease at inception. Operating and Finance lease right-of-use (“ROU”) assets and current and noncurrent lease liabilities are included on the face of the consolidated balance sheet. F- 11 Table of Contents ROU assets represent the right of use to an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. For finance leases, the Company recognizes the amortization of the ROU asset over the shorter of the lease term or useful life of the underlying asset. Interest accretion on the finance lease liabilities is recorded as interest expense. As most of the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which are accounted for as a single lease component. For lease agreements with terms less than 12 months, the Company has elected the short-term lease measurement and recognition exemption, and it recognizes such lease payments on a straight-line basis over the lease term. Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740)”. This update requires public business entities to annually disclose specific categories within the income tax rate reconciliation, and provide additional information for reconciling items that meet a certain quantitative threshold. Additionally, the amendments in this update require entities to disclose certain information about income taxes paid, income tax disaggregation, disclosures around unrecognized tax benefits, and the removal of disclosures related to temporary differences surrounding deferred tax liabilities to enhance the transparency and decision usefulness of income tax disclosures. This update is effective for fiscal years beginning after December 15, 2024 and early adoption is permitted. The Company adopted this update prospectively as of January 1, 2025 (see Note 22). On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as expensing of U.S. research expenditures and eligible capital expenditures, the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The impacts of the OBBBA are reflected in our results for the year ended December 31, 2025, and there was no impact to our income tax expense or effective income tax rate. New Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses (DISE)” which requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the standard and its potential effect on its consolidated financial statements and segment disclosures. In July 2025, the FASB issued ASU 2025-05, which provides a practical expedient for estimating expected credit losses on short term receivables and contract assets from revenue transactions. The guidance permits a simplified loss rate approach based on historical write-off experience and current conditions. The Company is evaluating the standard and its potential effect on the allowance for credit losses and its consolidated financial statements. 2. REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS We have revised amounts reported in previously issued financial statements for the periods presented in this Annual Report on Form 10-K related to immaterial errors. The errors relate to certain costs directly related to the revenue generation and cost of goods sold. The costs were not properly categorized in prior periods, which led to an overstatement of revenue and a corresponding overstatement of cost of goods sold. There was no effect to consolidated net income (loss) in any of the revised periods. We evaluated the aggregate effects of the errors to our previously issued financial statements in accordance with SEC Staff Accounting Bulletins No. 99 and No. 108 and, based upon quantitative and qualitative factors, determined that the errors were not material to the previously issued financial statements and disclosures included in our Annual Reports on Form 10-K for the year ended December 31, 2024 and for any quarterly periods included therein or through our Quarterly Report on Form 10-Q for the quarterly periods ended September 30, 2025, June 30, 2025, and March 31, 2025. F- 12 Table of Contents The following tables present the effects of the aforementioned revisions on our consolidated statements of operations for the quarterly periods ended September 30, 2025, June 30, 2025, and March 31, 2025 and the year ended December 31, 2024 and for the quarterly periods included therein. Three months ended Nine months ended September 30, 2025 (Unaudited) September 30, 2025 (Unaudited) As Reported Adjustments As Adjusted As Reported Adjustments As Revised Revenue $ 16,423,716 $ ( 684,948 ) $ 15,738,768 $ 49,247,466 $ ( 1,906,863 ) $ 47,340,603 Cost of goods sold $ 12,567,437 $ ( 684,948 ) $ 11,882,489 $ 37,192,111 $ ( 1,906,863 ) $ 35,285,248 Three months ended Six months ended June 30, 2025 (Unaudited) June 30, 2025 (Unaudited) As Reported Adjustments As Adjusted As Reported Adjustments As Revised Revenue $ 21,103,134 $ ( 642,097 ) $ 20,461,037 $ 40,651,700 $ ( 1,221,915 ) $ 39,429,785 Cost of goods sold $ 16,669,281 $ ( 642,097 ) $ 16,027,184 $ 31,732,040 $ ( 1,221,915 ) $ 30,510,125 Three months ended March 31, 2025 (Unaudited) As Reported Adjustments As Revised Revenue $ 19,548,566 $ ( 579,818 ) $ 18,968,748 Cost of goods sold $ 15,062,759 $ ( 579,818 ) $ 14,482,941 Year Ended December 31, 2024 As Reported Adjustments As Revised Revenue $ 62,519,394 $ ( 3,070,967 ) $ 59,448,427 Cost of goods sold $ 47,498,611 $ ( 3,070,967 ) $ 44,427,644 Three months ended Nine months ended September 30, 2024 (Unaudited) September 30, 2024 (Unaudited) As Reported Adjustments As Revised As Reported Adjustments As Revised Revenue $ 17,009,771 $ ( 767,608 ) $ 16,242,163 $ 49,398,874 $ ( 2,352,630 ) $ 47,046,244 Cost of goods sold $ 12,725,537 $ ( 767,608 ) $ 11,957,929 $ 37,312,903 $ ( 2,352,630 ) $ 34,960,273 Three months ended Six months ended June 30, 2024 (Unaudited) June 30, 2024 (Unaudited) As Reported Adjustments As Revised As Reported Adjustments As Revised Revenue $ 16,658,990 $ ( 742,892 ) $ 15,916,098 $ 32,389,103 $ ( 1,585,022 ) $ 30,804,081 Cost of goods sold $ 12,691,567 $ ( 742,892 ) $ 11,948,675 $ 24,587,366 $ ( 1,585,022 ) $ 23,002,344 Three months ended March 31, 2024 (Unaudited) As Reported Adjustments As Revised Revenue $ 15,730,113 $ ( 842,130 ) $ 14,887,983 Cost of goods sold $ 11,895,799 $ ( 842,130 ) $ 11,053,669 3. DISCONTINUED OPERATIONS On February 26, 2024, the Company completed the sale of its Haley subsidiary (see Note 5), and the activities of P Innovations (“Plantbelly”) were abandoned; and on October 8, 2024, the Company completed the sale of substantially all of the assets of Mouth. During the year ended December 31, 2024, the accounts of the following entities are included in net loss from discontinued operations: GROW, Oasis, Haley, P Innovations, and Mouth. The only remaining assets and liabilities on the Company’s balance sheet at December 31, 2024 related to discontinued operations is cash in the amount of $ 49,315 held by Mouth. During the third quarter of fiscal 2025, the Company committed to a strategic exit of its retail specialty cheese business, which served as the primary component of its national distribution platform. Accordingly, results for this business for all prior periods presented have been retrospectively reclassified to discontinued operations in accordance with ASC 205-20. In connection with this decision, the Company also elected to discontinue its related logistics operations and specialty cheese cutting activities, including igourmet, along with the Company’s logistics subsidiary (LII/IFP). During the year ended December 31, 2025, the accounts of the following entities are included in net loss from discontinued operations and in the discontinued operations sections of our balance sheet: IFP, LII, and the activity of igourmet directly related to our cheese business. F- 13 Table of Contents Accordingly, the operating results and related assets and liabilities of the retail specialty cheese business, including igourmet, along with the Company’s logistics subsidiary (LII / IFP) and specialty cheese cutting operations, have been reclassified to discontinued operations for all periods presented. The following information presents the major classes of line item of assets and liabilities included as part of discontinued operations in the consolidated balance sheets: December 31, December 31, 2025 2024 Current assets - discontinued operations: Cash $ 85,027 $ 242,326 Accounts receivable 196,672 3,180,188 Inventory - 2,782,000 Assets held for sale 6,144,793 5,941,933 Total current assets - discontinued operations $ 6,426,492 $ 12,146,447 Noncurrent assets - discontinued operations: ROU assets – financing leases, net $ 215,509 $ 440,925 Property and equipment, net - 313,067 Total noncurrent assets - discontinued operations $ 215,509 $ 753,992 Current liabilities - discontinued operations: Accounts payable and accrued liabilities $ 40,884 $ 2,217,580 Deferred revenue 342,000 349,600 Accrued interest 64,084 72,481 Lease Liability - 87,278 Notes payable, net 8,430,656 107,861 Total current liabilities - discontinued operations $ 8,877,624 $ 2,834,800 Noncurrent liabilities - discontinued operations: Notes payable, net $ - $ 8,409,881 Total noncurrent liabilities - discontinued operations $ - $ 8,409,881 The following information presents the major classes of line items constituting the after-tax loss from discontinued operations in the consolidated statements of operations: Year Ended December 31, December 31, 2025 2024 Revenue $ 10,061,776 $ 9,924,585 Cost of goods sold 11,057,349 8,039,204 Gross margin ( 995,573 ) 1,885,381 Selling, general, and administrative expenses 2,680,924 2,695,273 Other expense 915,862 730,036 Loss from discontinued operations, net of tax $ ( 4,592,359 ) $ ( 1,539,928 ) F- 14 Table of Contents The following information presents the major classes of line items constituting significant operating, investing and financing cash flow activities in the consolidated statements of cash flow relating to discontinued operations: Year Ended December 31, December 31, 2025 2024 Operating activities: Adjustments to reconcile net loss to cash Net cash provided by (used in) operating activities Inventory valuation adjustment associated with facility closure $ 1,486,893 $ - Loss on disposition of assets 106,591 834,463 Depreciation and amortization 123,838 158,218 Changes in assets and liabilities: Accounts receivable, net 2,983,516 ( 3,170,397 ) Inventory, net 1,295,107 ( 2,771,015 ) Accounts payable and accrued liabilities ( 2,176,696 ) ( 1,965,888 ) Investing activities: Cash paid for purchase of property and equipment ( 101,977 ) ( 199,838 ) Cash received from disposition of equipment 54,500 - Financing activities: Principal payments on notes payable ( 87,278 ) ( 114,359 ) Principal payments on financing lease ( 77,473 ) ( 85,536 ) 4. SALE OF ASSETS On February 14, 2024, the Company sold its property located at 28411 Race Track Road, Bonita Springs, Florida, for net cash proceeds of $ 2,101,185 , net of the payoff of principal and interest in the amount of $ 356,215 on Maple Mark Term Loan 2. A gain in the amount of $ 1,807,516 was recorded on this transaction. On August 30, 2024, the Company sold certain intangible assets of igourmet including but not limited to copyrights, trademarks, tradenames, and customer lists for net cash proceeds of $ 617,000 . The buyer also assumed certain liabilities in the net amount of $ 309,463 . A gain in the amount of $ 834,463 was recorded on this transaction. On October 8, 2024, we sold substantially all of the assets of Mouth including copyrights, trademarks, tradenames, and customer lists; these assets were fully amortized at the time of the sale. In addition, the buyer assumed the liability for deferred revenue in the amount of $ 174,637 . A gain in the amount of $ 174,637 was recorded on this transaction. 5. SALE OF SUBSIDIARY On February 26, 2024, the Company sold 100 % of the equity interests in Haley for the return of 21,126 shares of the Company’s common stock held by the buyer. Haley had no assets or liabilities at the time of the sale. The Company valued the 21,126 shares of common stock at the market price on the date of the acquisition of $ 1.00 per share and recorded a gain in the amount of $ 21,126 on this transaction. F- 15 Table of Contents 6. ACQUISITIONS Golden Organics, Inc. On October 14, 2024, the Company entered into an asset purchase agreement (the “GO APA”) with Golden Organics, Inc., a wholesaler of bulk organic and other related food products. Pursuant to the GO APA, the Company acquired substantially all the properties, business, and assets of Golden Organics, Inc. for an aggregate purchase price of $ 1,580,000 , subject to net accounts receivable and accounts payable adjustments. The Company accounted for the GO APA pursuant to the guidance of ASC 805 – Accounting for Business Combinations (“ASC 805”). The $ 1,580,000 purchase price consisted of a cash payment of $ 1,230,000 at closing and a promissory note in the amount of $ 350,000 bearing interest at the rate of 6 % per annum and payable in 60 equal monthly installments. At December 31, 2024, the Company had made cash payments in the aggregate amount of $ 1,231,379 on the GO APA and recorded ROU operating assets and liabilities of $ 731,566 ; intangible assets of $ 198,593 ; property and equipment of $ 131,250 ; accounts receivable of $ 611,132 ; inventory of $ 1,102,536 , and other current assets of $ 84,000 ; accounts payable of $ 546,132 ; and note payable of $ 350,000 . LoCo Foods On December 20, 2024, the Company through its subsidiary, Golden Organics, Inc., entered into an asset purchase agreement (the “LoCo APA”) with LoCo Food Distribution LLC, a Colorado limited liability company (“LoCo”), a wholesaler of food related products, and Elizabeth G. Mozer and Benjamin Mozer (each an “Owner,” collectively, the “Owners” and together with LoCo, collectively, the “Seller Parties”). The Company accounted for the LoCo APA pursuant to the guidance of ASC 805. Pursuant to the LoCo APA, the Company acquired substantially all of LoCo’s properties, business, and assets used and/or useful in the operation of LoCo’s business of sourcing and wholesaling food products, and agreed to assume certain liabilities of LoCo for an aggregate purchase price of $ 304,269 , which is payable to LoCo’s lenders for all outstanding and unpaid indebtedness of LoCo. The Company also entered into an earnout agreement with LoCo in the amount of $ 54,430 , payable by Golden Organics to the Owners based upon twelve month revenue and earnings targets. At December 31, 2024, the Company had recorded the following assets and liabilities pursuant to the LoCo APA: Cash received of $ 42,000 ; intangible assets of $ 232,972 ; property and equipment of $ 252,000 ; accounts payable and accrued liabilities of $ 1,008,590 ; and contingent liability payable of $ 54,430 . During the year ended December 31, 2025, the Company released the liability as the targets were not met. 7. ACCOUNTS RECEIVABLE At December 31, 2025 and 2024, accounts receivable consisted of: 2025 2024 Accounts receivable from customers $ 5,518,509 $ 5,902,447 Allowance for credit losses ( 218,319 ) ( 40,002 ) Accounts receivable, net $ 5,300,190 $ 5,862,445 During the years ended December 31, 2025 and 2024, the Company charged the amount of $ 106,010 and $ 4,599 , respectively, to bad debt expense. 8. INVENTORY Inventory consists of specialty food products. At December 31, 2025 and 2024, inventory consisted of the following: 2025 2024 Finished goods inventory $ 3,473,604 $ 3,508,488 F- 16 Table of Contents 9 . PROPERTY AND EQUIPMENT A summary of property and equipment at December 31, 2025 and 2024 is as follows: December 31, 2025 December 31, 2024 Land $ 208,140 $ 208,140 Building and leasehold improvements 951,101 833,712 Computer and Office Equipment 262,769 218,439 Warehouse Equipment 451,432 449,186 Furniture and Fixtures 694,715 694,843 Vehicles 286,509 286,509 Total before accumulated depreciation 2,854,666 2,690,829 Less: accumulated depreciation ( 1,581,356 ) ( 1,419,018 ) Total $ 1,273,310 $ 1,271,811 Depreciation expense for property and equipment amounted to $ 167,413 and $ 173,021 for the years ended December 31, 2025 and 2024, respectively, which is recorded in selling, general and administrating expenses on the Company’s statement of operations. 10. PROPERTY AND EQUIPMENT CLASSIFIED AS HELD FOR SALE Assets held for sale include the net book value of property and equipment the Company plans to sell within the next year. Long lived assets that meet the criteria are held for sale and reported at the lower of their carrying value or fair value less estimated cost to sell. As of December 31, 2025, the Company classified the land and building located at 220 Oak Hill Road, Mountain Top, Pennsylvania, as held for sale. During the year ended December 31, 2025, the Company classified certain leasehold improvements at the Mountain Top property as held for sale. The net book value of these assets consisted of the following at December 31, 2025 and 2024: December 31, December 31, 2025 2024 Equipment $ 202,860 $ - Land 871,372 871,372 Building 5,070,561 5,070,561 Total $ 6,144,793 $ 5,941,933 11. RIGHT OF USE ASSETS AND LEASE LIABILITIES – OPERATING LEASES The Company has operating leases for offices, warehouses, vehicles, and office equipment. The Company’s leases have remaining lease terms of 1 year to 3 years, some of which include options to extend. The Company’s lease expense for the years ended December 31, 2025 and 2024 was entirely comprised of operating leases and amounted to $ 280,616 and $ 62,686 , respectively. The Company’s ROU asset amortization for the years ended December 31, 2025 and 2024 was $ 253,041 and $ 54,609 , respectively. The difference between the lease expense and the associated ROU asset amortization consists of interest. F- 17 Table of Contents The weighted-average discount rate of the operating leases was 7.00 % and 7.00 % at December 31, 2025 and 2024, respectively. The lease rates were estimated based upon the Company’s incremental borrowing rate at the time of the inception of the leases. The weighted-average lease term of the operating leases was 2.16 years and 2.85 years at December 31, 2025 and 2024, respectively. Right of use assets – operating leases are summarized below: December 31, 2025 December 31, 2024 Building $ 411,060 $ 565,931 Vehicles 101,329 128,158 Warehouse equipment - 7,950 Office equipment - 3,437 Right of use assets, net $ 512,389 $ 705,476 Operating lease liabilities are summarized below: December 31, 2025 December 31, 2024 Building $ 419,168 $ 567,684 Vehicles 101,329 128,158 Warehouse equipment - 7,950 Office equipment - 3,437 Lease liability $ 520,497 $ 707,229 Less: current portion ( 285,534 ) ( 239,660 ) Lease liability, non-current $ 234,963 $ 467,569 Maturity analysis under these lease agreements are as follows for the year ended December 31: 2026 $ 313,062 2027 201,164 2028 34,950 2029 8,736 Total $ 557,912 Less: Present value discount ( 37,415 ) Lease liability $ 520,497 During the year ended December 31, 2025, the Company recorded an increase in the right of use asset and operating lease liability in the amount of $ 59,954 on the building lease associated with the acquisition of Golden Organics. During the year ended December 31, 2024, the Company recorded an operating lease of a building in the amount of $ 599,116 and an operating lease of vehicles in the amount of $ 132,451 in connection with the acquisition of Golden Organics. 12. RIGHT OF USE ASSETS – FINANCING LEASES The Company has financing leases for vehicles and warehouse equipment. Right of use asset – financing leases are summarized below: December 31, 2025 December 31, 2024 Vehicles $ 404,858 $ 214,405 Warehouse equipment 200,097 - Total before accumulated depreciation 604,955 214,405 Less: accumulated depreciation ( 399,615 ) ( 131,057 ) Total $ 205,340 $ 83,348 F- 18 Table of Contents Depreciation expense on right of use assets for the years ended December 31, 2025 and 2024 was $ 31,637 and $ 92,870 , respectively. During the year ended December 31, 2024, the Company recorded right of use assets and lease liabilities in the amount of $ 180,740 related to warehouse equipment. There were no additions to right of use assets and lease liabilities – financing leases during the year ended December 31, 2025. The weighted-average interest rate of the financing leases was 5.77 % and 5.83 % at December 31, 2025 and 2024, respectively. The lease rates were estimated based upon the Company’s incremental borrowing rate at the time of the inception of the leases. The weighted-average lease term of the financing leases was 2 . years and 2.80 years December 31, 2025 and 2024, respectively. Financing lease liabilities are summarized below: December 31, 2025 December 31, 2024 Financing lease obligation under a lease agreement for a truck dated March 31, 2020 in the original amount of $ 152,548 payable in eighty-four monthly installments of $2,188 including interest at the rate of 5.44 %. During the year ended December 31, 2025, the Company made principal and interest payments on this lease obligation in the amounts of $ 23,933 and $ 2,324 , respectively. During the year ended December 31, 2024, the Company made principal and interest payments on this lease obligation in the amount of $ 22,669 and $ 3,588 , respectively. $ 29,616 $ 53,549 Financing lease obligation under a lease agreement for a truck dated August 23, 2019 in the original amount of $ 80,413 payable in eighty-four monthly installments of $1,148 including interest at the rate of 5.0 %. During the year ended December 31, 2025, the Company made principal and interest payments on this lease obligation in the amounts of $ 13,025 and $ 751 , respectively. During the year ended December 31, 2024, the Company made principal and interest payments on this lease obligation in the amount of $ 12,293 and $ 1,385 , respectively. $ 7,904 $ 20,929 Financing lease obligation under a lease agreement for warehouse equipment dated September 12, 2024 in the original amount of $ 180,740 payable in sixty monthly payments in the minimum amount of $2,846 including interest at the rate of 6.01 %. The amount of the monthly payments is based upon the amount of supplies and materials the Company purchases from the lessor each month. During the year ended December 31, 2025, the Company made principal and interest payments on this lease obligation in the amounts of $ 64,030 and $ 1,580 , respectively, and capitalized interest in the amount of $ 2,845 . During the year ended December 31, 2024, the Company made principal and interest payments on this lease obligation in the amounts of $ 55,108 and $ 2,154 , respectively. $ 64,029 125,632 Total $ 101,549 $ 200,110 Current portion $ 48,866 $ 60,519 Long-term maturities 52,683 139,591 Total $ 101,549 $ 200,110 Aggregate maturities of lease liabilities – financing leases as of December 31, 2025 are as follows: For the period ended December 31, 2026 $ 48,866 2027 21,009 2028 17,692 2029 13,982 2030 - Total $ 101,549 F- 19 Table of Contents 13. INTANGIBLE ASSETS The Company acquired certain intangible assets pursuant to the acquisitions of Artisan and Golden Organics. These assets include trade names and customer lists. Amortizable Intangible Assets The following table represents the balances of other amortizable intangible assets as of December 31, 2025 and 2024: December 31, 2025 Accumulated Gross Amortization Net Customer Lists $ 431,565 $ 93,506 $ 338,059 December 31, 2024 Accumulated Gross Amortization Net Customer Lists $ 431,565 $ 7,193 $ 424,372 Total amortization expense for the years ended December 31, 2025 and 2024 was $ 86,313 and $ 7,193 , respectively. Remaining amortization expense for intangible assets as of December 31, 2025 is as follows: For the period ended December 31, 2026 $ 86,313 2027 86,313 2028 86,313 2029 79,120 2030 - $ 338,059 Indefinite-lived Intangible Assets Indefinite-lived intangible assets consist of Trade Names in the amount of $ 217,000 held by Artisan. 14. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Accounts payable and accrued liabilities at December 31, 2025 and 2024 are as follows: December 31, 2025 December 31, 2024 Trade payables and accrued liabilities $ 2,956,240 $ 4,087,343 Accrued payroll and commissions 79,559 348,699 Total $ 3,035,799 $ 4,436,042 F- 20 Table of Contents 15. ACCRUED SEPARATION COSTS – RELATED PARTIES On February 3, 2023, the Company entered into a Severance Note, an Agreement and General Release, and a Side Letter thereto (the “SK Agreements”) with Sam Klepfish its prior CEO and a previous board member. The SK Agreements provide, among other things, for Mr. Kelpfish’s resignation from all positions with the Company and its subsidiaries on February 28, 2023, except that Mr. Klepfish will remain a director and member of the board of the Company, confidentiality and non-disparagement conditions, nomination of Mr. Klepfish for future election to the board of directors at least through the 2024 general meeting of shareholders based on certain minimum stock ownership and Board Observer rights when Mr. Klepfish is no longer a director but maintains certain minimum agreed upon stock ownership. The payment terms are $ 250,000 upon effectiveness and an additional $ 1,000,000 payable in weekly payments of $ 6,410.26 from March 8, 2023 through March 6, 2026. The $250,000 was paid into an escrow account, and was released to Mr. Klepfish on his separation date. The $1,000,000 portion is in the form of an unsecured, non interest-bearing note payable to Mr. Klepfish. The SK Agreements also call for the delivery of 400,000 shares of the Company’s common stock valued at $ 168,000 based upon the closing price of the Company’s common stock on Mr. Klepfish’s separation date of February 28, 2023, which were delivered to Mr. Klepfish on April 26, 2023; in addition, for delivery on June 1, 2027 of additional shares of the Company’s common stock equal to the greater of (i) the number of shares with an aggregate fair market value of $ 400,000 on such date, or (ii) 266,666 shares. The Company also agreed to pay a total of $ 1,199 of Consolidated Omnibus Reconciliation Act (“COBRA”) insurance costs on behalf of Mr. Klepfish over eighteen months. The total amount accrued in connection with the SK Agreements was $ 1,819,199 . On February 6, 2024, the Company entered into a separation agreement with Richard Tang, its Chief Financial Officer (the “Tang Separation Agreement”) effective as of December 31, 2023. Pursuant to the Tang Separation Agreement, the Company will pay to Mr. Tang, in equal installments over a five-month period, the gross sum of $ 113,918 . In addition, Mr. Tang may submit for reimbursement up to $ 4,000 of legal expenses connected with the review of this separation agreement. The severance payment will be made in the following installments: (i) $ 25,890 to be paid the week of March 4, 2024; (ii) $ 5,178 to be paid each successive week for seventeen weeks beginning the week of March 11, 2024, until the Severance Payment is completed. In addition, if Mr. Tang timely elects to continue his group health insurance benefits under the Consolidated Omnibus Reconciliation Act (“COBRA”), the Company will reimburse Mr. Tang’s group health insurance premiums (“COBRA Premiums”) for the lesser of: (a) the period of time Employee is eligible to continue his group health insurance benefits under COBRA and (b) the five-month period immediately following the Separation Date. Reimbursements will be paid within thirty days of when Mr. Tang submits a request for reimbursement and supporting documentation. On October 4, 2025, the Company entered into a separation agreement and general release (the “Bennett Separation Agreement”) with Bill Bennett, pursuant to which Mr. Bennett will resign from his position as the Chief Executive Officer of the Company, effective October 3, 2025. Pursuant to the Bennett Separation Agreement, the Company shall (i) pay Mr. Bennett severance payments consisting of salary continuation and bonus payable through December 31, 2025, in the total gross amount of $ 115,501 , payable in installments on the Company’s regular payroll dates; and (ii) reimbursement of Mr. Bennett’s group health insurance premiums for the period from November 1, 2025 through September 30, 2026 in the total gross amount of $ 31,515 . During the year ended December 31, 2025, the Company paid cash in the amount of $ 115,501 and Cobra payments in the amount of $ 9,322 under the Bennett Separation Agreement. During the years ended December 31, 2025 and 2024, the Company paid cash in the amount of $ 332,165 and $ 333,333 , respectively, to Mr. Klepfish in connection with the SK Agreements. During the years ended December 31, 2025 and 2024, the Company made the following payments in connection with the Wiernasz Separation Agreement: The Company made Cobra payments on behalf of Mr. Wiernasz in the amount of $ 0 and $ 967 , respectively. During the years ended December 31, 2025 and 2024, the Company made the following payments in connection with the Tang Separation Agreement: The Company made cash payments to Mr. Tang in the amount of $ 0 and $ 113,918 , respectively, and Cobra payments on behalf of Mr. Tang in the amount of $ 0 and $ 14,495 , respectively. F- 21 Table of Contents The following table represents the amounts accrued, paid, and outstanding on these agreements as of December 31, 2025: Total Paid / Issued Balance Current Non-current Mr. Klepfish: Cash – through March 6, 2026 $ 1,000,000 $ ( 941,140 ) $ 58,860 $ 58,860 $ - Cash – upon agreement execution 250,000 ( 250,000 ) - - - Stock – June 1, 2027 400,000 - 400,000 - 400,000 Stock – Issued in April 2023 168,000 ( 168,000 ) - - - Cobra – over eighteen months 1,199 - 1,199 1,199 - Total – Mr. Klepfish $ 1,819,199 $ ( 1,359,140 ) $ 460,059 $ 60,059 $ 400,000 Mr. Tang: Cash – over seventeen weeks $ 113,918 $ ( 113,918 ) $ - $ - $ - Cobra – over five months 14,495 ( 14,495 ) - - - Total – Mr. Tang $ 128,413 $ ( 128,413 ) $ - $ - $ - Mr. Bennett: Cash – installments through December 31, 2025 $ 142,485 $ ( 110,170 ) $ 32,315 $ 32,315 $ - Cobra – installments through September 30, 2026 31,515 ( 14,653 ) 16,862 16,862 - Total – Mr. Bennett $ 174,000 $ ( 124,823 ) $ 49,177 $ 49,177 $ - Total Company $ 2,121,612 $ ( 1,612,376 ) $ 509,236 $ 109,236 $ 400,000 16. STOCK APPRECIATION RIGHTS LIABILITY Effective May 15, 2023, the Company issued 1,500,000 stock appreciation rights (the “Smallwood SARs”) to Brady Smallwood, its Chief Operating Officer. The Smallwood SARs were valued utilizing the Black-Scholes valuation model, and had an aggregate fair value of $ 9,794 upon issuance; this amount was charged to operations and credited to stock appreciation rights liability. The Smallwood SARs are revalued each quarter, and any gain or loss in the fair value is charged to non-cash compensation expense. At December 31, 2025, the Smallwood SARs had a fair value of $ 16,143 ; the decrease in fair value in the amount of $ 1,337,007 was charged to selling, general and administrative expenses on the Company’s statement of operations during the year ended December 31, 2025. The change in valuation of the Smallwood SARs is summarized in the table below: SAR Liability December 31, 2023 -fair value $ 255,020 (Gain) Loss on revaluation 1,098,130 December 31, 2024 - fair value $ 1,353,150 (Gain) Loss on revaluation ( 1,337,007 ) December 31, 2025 - fair value $ 16,143 The following assumption were utilized in the valuation of the Smallwood SARs: December 31, 2025 2024 Black-Scholes model variables: Volatility 77.84 - 205.63 % 86.58 - 131.55 % Dividends 0.0 % 0.0 % Risk-free interest rates 3.48 - 4.10 % 3.66 - 4.71 % Term (years) 1.00 - 2.00 2.00 - 2.75 The price of the Company’s common stock on the date of the grant of the SARs was $ 0.41 . The exercise prices at the date of the grant were $ 1.50 and $ 2.00 . F- 22 Table of Contents 17. LINE OF CREDIT December 31, 2025 December 31, 2024 On June 6, 2022, the Company entered into a revolving credit facility with MapleMark (the “MapleMark Revolver”) which expired on August 25, 2025. The amount available under the MapleMark Revolver was $ 1,500,000 . Principal and interest payments due under the MapleMark Revolver were payable monthly. Amounts due under the MapleMark Revolver bore interest at the greater of (a) the Base Rate (the rate of interest per annum quoted in the “Money Rates” section of The Wall Street Journal from time to time and designated as the “Prime Rate”) plus 0.25% per annum and (b) 5.50% per annum. During the year ended December 31, 2025, the Company borrowed the amount of $ 500,000 under the MapleMark Revolver, and repaid the amount of $ 500,000 . During the year ended December 31, 2025, the Company paid interest in the amount of $ 1,804 on the MapleMark Revolver. During the year ended December 31, 2024, the Company did not draw on the MapleMark Revolved and no interest was incurred. $ - $ - 18. NOTES PAYABLE December 31, 2025 December 31, 2024 A note payable in the amount of $ 20,000 . The note was due in January 2006 and the Company accrued interest on this note at 1.9 % through September 30, 2025. During the years ended December 31, 2025 and 2024, the Company accrued interest on this note in the amount of $ 288 and $ 378 , respectively. December 31, 2024, accrued interest on this note was $ 18,860 . At September 30, 2025, this note had been outstanding without any claim or correspondence for an extended duration. After consideration of all available information, the Company concluded that the obligation is no longer required to be recognized. Accordingly, the liability was derecognized and a gain in the amount of $ 39,154 was recorded during the year ended December 31, 2025. At September 30, 2025, this note had been outstanding without any claim or correspondence for an extended duration. After consideration of all available information, the Company concluded that the obligation is no longer required to be recognized. Accordingly, the liability was derecognized and a gain in the amount of $39,154 was recorded during the year ended December 31, 2025. $ - $ 20,000 A note payable in the amount of $ 350,000 issued in connection with the GO Acquisition (the “GO Note”). The GO Note is payable in 60 equal monthly instalments of $6,766 and bears interest at the rate of 6.0 %. During the year ended December 31, 2025, the Company made interest payments on the GO note in the amount of $ 20,138 . During the year ended December 31, 2025, the Company made principal payments on the GO note in the amount of $ 62,011 . 282,973 344,984 Total $ 282,973 $ 364,984 Current portion $ 66,026 $ 82,191 Long-term maturities, net of discount 216,947 282,793 Total $ 282,973 $ 364,984 Accrued interest on notes payable was $ 0 and $ 91,347 at December 31, 2025 and 2024, respectively. F- 23 Table of Contents Aggregate maturities of notes payable as of December 31, 2025 are as follows: For the period ended December 31, 2026 $ 66,026 2027 70,099 2028 74,422 2029 72,426 Thereafter - Total $ 282,973 19. EQUITY Common Stock As of December 31, 2025, total number of shares of common stock issued and outstanding was 57,493,776 and 54,649,479 , respectively. As of December 31, 2024, total number of shares of common stock issued and outstanding was 56,009,032 and 53,164,735 , respectively. At December 31, 2025 and 2024, a total of 2,844,297 shares of common stock were deemed issued but not outstanding. At December 31, 2025 and 2024, an additional 0 and 738,032 shares, respectively, were classified as common stock to be issued. These shares represent shares of common stock vested under the Company’s Executive Stock Plans, and are in the process of being administratively issued. For the year ended December 31, 2025: On January 9, 2025, the Company issued 60,000 shares of common stock pursuant to the cashless exercise of options held by an ex-employee to purchase 130,000 shares of common stock at a price of $ 1.25 per share and an additional 130,000 shares of common stock at a price of $ 1.75 per share. There was no gain or loss recorded on this transaction. On January 13, 2025, the Company issued 24,026 shares of common stock pursuant to the cashless exercise of options held by an ex-employee to purchase 50,000 shares of common stock at a price of $ 1.00 per share. There was no gain or loss recorded on this transaction. On February 26, 2025, the Company issued the following shares of common stock to its executive officers pursuant to executive compensation plans: 530,665 shares were issued to its Bill Bennett, predecessor CEO; 133,632 shares were issued to Brady Smallwood, COO; and 73,735 shares were issued to its Gary Schubert, successor CEO, pursuant to the Prior CFO Stock Plan. These shares were classified as shares to be issued on the Company’s balance sheet at December 31, 2024. There was no gain or loss recorded on this transaction. On June 2, 2025, the Company issued 273,026 shares of common stock to Bill Bennett, predecessor CEO pursuant to an executive compensation plan. There was no gain or loss recorded on this transaction. On June 3, 2025, the Company issued 92,168 shares of common stock to Gary Schubert, successor CEO pursuant to the Prior CFO Stock Plan. There was no gain or loss recorded on this transaction. On July 3, 2025, the Company issued 82,952 shares of common stock to Brady Smallwood, COO pursuant to an executive compensation plan. There was no gain or loss recorded on this transaction. Effective December 31, 2025, the Company issued 214,530 shares of common stock to Bill Bennett, its predecessor CEO pursuant to an executive compensation plan. There was no gain or loss recorded on this transaction. On December 31, 2025, the Company reduced the number of shares to be issued by 136,205 due to a reduction in the estimate in the number of shares to be withheld for the payment of income taxes pursuant to the Executive Stock Plans. Of this amount, 64,518 were due to Brady Smallwood under the COO Stock Plan, and 71,687 were due to Gary Schubert under the Prior CFO Stock Plan. There were no remaining shares to be issued as of December 31, 2025. F- 24 Table of Contents For the year ended December 31, 2024: On February 26, 2024, the Company sold 100 % of the equity interests in Haley for the return of 21,126 shares of the Company’s common stock held by the buyer (see Note 5). Haley had no assets or liabilities at the time of the sale; the Company valued the 21,126 shares of common stock at the market price on the date of the acquisition of $ 1.00 per share and recorded a gain in the amount of $ 21,126 on this transaction. On May 30, 2024, the Company issued a net amount of 24,138 shares of common stock pursuant to the cashless exercise of 50,000 options by a previous CFO at an exercise price of $ 0.60 per shares. There was no gain or loss on this transaction because the shares were issued at the fair value of $ 1.16 per share. On July 9, 2024, the Company issued a total of 1,415,544 shares of common stock pursuant to the Company’s Executive Stock Plans. These shares were recorded at the aggregate par value of $ 142 ; there was no gain or loss recorded on these transactions as the shares were issued pursuant to the terms of the compensation plans. On November 29, 2024, pursuant to a private placement, the Company sold 1,906,250 shares of common stock and on December 4, 2024 the Company sold an additional 125,000 shares of common stock (a total of 2,031,250 shares) at a price of $ 1.60 per share for total proceeds of $ 3,250,000 . On December 31, 2024, the Company issued the following shares pursuant to Executive Stock Plans: 517,429 shares of common stock were issued to its predecessor CEO, net of 455,991 shares withheld for the payment of taxes in the amount of $ 664,431 ; 133,631 shares of common stock were issued to Mr. Smallwood, net of 112,151 shares withheld for the payment of taxes in the amount of $ 163,763 ; and 73,735 shares were issued to its successor CEO pursuant to the Prior CFO Stock Plan, net of 57,350 shares withheld for the payment of taxes in the amount of $ 80,290 . On February 15, 2024, the Company issued 150,000 shares of common stock to a previous director for options previously exercised. These shares were recorded as issued on the Company’s balance sheet effective December 31, 2023. Stock Appreciation Rights Effective May 15, 2023, the Company issued 1,500,000 stock appreciation rights (the “Smallwood SARs”) to Brady Smallwood, its Chief Operating Officer. The Smallwood SARs vest upon issuance, and expire on December 31, 2026; 750,000 of the Smallwood SARs are priced at $ 1.50 per share, and 750,000 are priced at $ 2.00 per share. It is the Company’s intention to settle the Smallwood SARs in cash. The Smallwood SARs were valued utilizing the Black-Scholes valuation model, and had an aggregate fair value of $ 9,794 upon issuance. This amount was charged to non-cash compensation and credited to a current liability on the Company’s balance sheet. The Smallwood SARs will be revalued each reporting period and any change in value will be charged to compensation expense. At December 31, 2024, the Smallwood SARs had a fair value of $ 1,353,150 ; the increase in value during the year ended December 31, 2024 in the amount of $ 1,098,130 was charged to compensation expense. At December 31, 2025, the Smallwood SARs had a fair value of $ 16,143 ; the decrease in fair value in the amount $ 1,337,007 was charged to non-cash compensation during the year ended December 31, 2025. See Note 16. F- 25 Table of Contents Executive Stock Plans Predecessor CEO Stock Plan On February 3, 2023, the Company entered into an employment agreement with Bill Bennett to become the Company’s then CEO. Pursuant to this agreement, Mr. Bennett was provided with an incentive compensation plan (the “Predecessor CEO Stock Plan”) whereby Mr. Bennett would be granted shares of the Company’s common stock upon the common stock meeting certain price points at various 60-day volume weighted prices, as described below: Number of Shares Granted - Lower of: Stock Number of Shares Issued Maximum Price and Outstanding on Number of Target Grant Date Multiplied by: Shares $ 0.60 2.00 % 975,133 $ 0.80 1.50 % 731,350 $ 1.00 1.00 % 487,567 $ 1.20 0.75 % 365,675 $ 1.40 0.75 % 365,675 $ 1.60 0.50 % 243,783 $ 1.80 0.50 % 243,783 $ 2.00 0.50 % 243,783 The Predecessor CEO Stock Plan had a fair value of $ 660,541 at inception (see “Stock Plan Valuation” section below). This amount is being amortized over the 34-month life of the plan. During the years ended December 31, 2025 and 2024, $ 232,361 and $ 233,132 of this amount was charged to operations, respectively. During the year ended December 31, 2024, the price targets of $0.80, $1.00, $1.20, $1.40, and $1.60 were achieved , and Mr. Bennett became eligible to receive an additional total of 2,194,050 shares. A total of 1,218,917 shares were issued to Mr. Bennett, and an additional 530,665 shares were recorded as to be issued to Mr. Bennett, net of 444,468 shares withheld for taxes; at December 31, 2024, 487,566 shares were unearned. During the year ended December 31, 2025, the price targets of $ 1.80 and $ 2.00 were achieved, and Mr. Bennett became eligible to receive an additional total of 487,566 shares. A total of 1,018,231 shares were issued to Mr. Bennett, net of 444,468 shares withheld for taxes; at December 31, 2025, there are no further shares due to Mr. Bennett pursuant to the Predecessor CEO Stock Plan. On October 4, 2025, the Company entered into a separation agreement and general release with Mr. Bennett, pursuant to which Mr. Bennett resigned from his position as the Chief Executive Officer of the Company effective October 1, 2025. During the year ended December 31, 2025, the Company charged the unamortized portion of the value of the Predecessor CEO Stock Plan in the amount of $ 115,795 to compensation expense and additional paid-in capital There are no shares unvested under the Predecessor CEO Stock Plan at December 31, 2025. F- 26 Table of Contents COO Stock Plan On April 14, 2023, the Company entered into an employment agreement with Brady Smallwood to become the Company’s COO effective May 15, 2023. Pursuant to this agreement, Mr. Smallwood was provided with an incentive compensation plan (the “COO Stock Plan”) whereby Mr. Smallwood would be granted shares of the Company’s common stock upon the common stock meeting certain price points at various 60-day volume weighted prices, as described below: Number of Shares Granted - Lower of: Stock Number of Shares Issued Maximum Price and Outstanding on Number of Target Grant Date Multiplied by: Shares $ 0.87 0.40 % 196,627 $ 1.16 0.30 % 147,470 $ 1.45 0.20 % 98,313 $ 1.74 0.15 % 73,735 $ 2.03 0.15 % 73,735 $ 2.32 0.10 % 49,157 $ 2.61 0.10 % 49,157 $ 2.90 0.10 % 49,157 The COO Stock Plan had a fair value of $ 199,951 at inception (see “Stock Plan Valuation” section below). This amount is being amortized over the 31.5-month life of the plan. During the years ended December 31, 2025 and 2024, $ 76,172 and $ 76,172 of this amount was charged to operations, respectively. During the year ended December 31, 2024, the price targets of $ 0.87 , $ 1.16 , and $ 1.45 were achieved, and Mr. Smallwood became eligible to receive a total of 442,410 shares. During the year ended December 31, 2024, a total of 196,627 shares were issued to Mr. Smallwood, and 245,783 shares were recorded as to be issued. During the year ended December 31, 2025, the price targets of $ 1.74 and $ 2.03 were achieved, and Mr. Smallwood became eligible to receive an additional 147,470 shares. During the year ended December 31, 2025, a total of 225,811 shares were issued to Mr. Smallwood, net of 176,669 shares withheld for taxes. At December31, 2025, a total of 147,471 shares remain unvested under the COO Stock Plan. There are no shares due to Mr. Smallwood at December 31, 2025. Successor CEO Stock Plan On October 3, 2025, the Company entered into an employment agreement with Gary Schubert pursuant to which he will serve as the Company’s Chief Executive Officer (the “CEO Employment Agreement”). The CEO Employment Agreement provides for the grant of 1,350,000 shares of the Company (the “Successor CEO Stock Plan”) common stock, subject to a vesting schedule, no later than March 31, 2026. These shares had not been granted as of December 31, 2025. The CEO Employment Agreement and Successor CEO Stock Plan replaced Mr. Schubert’s executive compensation plan that was in place during his role as the Company’s CFO (the “Prior CFO Stock Plan”. F- 27 Table of Contents Prior CFO Stock Plan On December 29, 2023, the Company entered into an employment agreement with Gary Schubert to become the Company’s CFO effective January 1, 2024. Pursuant to this agreement, Mr. Schubert was provided with an incentive compensation plan (the “Prior CFO Stock Plan”) whereby Mr. Schubert would be granted shares of the Company’s common stock upon the common stock meeting certain price points at various 60-day volume weighted prices, as described below: Number of Shares Granted - Lower of: Stock Number of Shares Issued Maximum Price and Outstanding on Number of Target Grant Date Multiplied by: Shares $ 1.23 0.40 % 131,085 $ 1.63 0.30 % 98,313 $ 2.04 0.20 % 65,542 $ 2.45 0.15 % 49,157 $ 2.86 0.15 % 49,157 $ 3.27 0.10 % 32,771 $ 3.68 0.10 % 32,771 $ 4.08 0.10 % 32,771 The Prior CFO Stock Plan had a fair value of $ 238,747 at inception (see “Stock Plan Valuation” section below). This amount will be amortized over the 30-month life of the plan beginning January 1, 2024. During the year ended December 31, 2025 and 2024, $ 95,499 and $ 95,500 of this amount was charged to operations, respectively. During the year ended December 31, 2024, the price targets of $ 1.23 and $ 1.63 were achieved, and Mr. Schubert became eligible to receive a total of 229,398 shares; 131,085 of these shares were approved for issuance and 98,313 were recorded as shares to be issued. During the year ended December 31, 2025, the price target of $ 2.04 was achieved, and Mr. Schubert became eligible to receive an additional 65,542 shares. During the year ended December 31, 2025, a total of 165,903 shares were issued to Mr. Schubert, net of 129,037 shares withheld for taxes. At December 31, 2025, a total of 196,627 shares remain unvested under the Prior CFO Stock Plan. There are no shares due to Mr. Schubert at December 31, 2025. Valuation of Executive Stock Plans The Company relied upon the guidance of Statement of Financial Account Standards No. 718 Compensation – Stock Compensation (“ASC 718”) in accounting for the Predecessor CEO Stock Plan, the COO Stock Plan, and the Prior CFO Stock Plan (collectively, the Executive Stock Plans). A Monte Carlo market-based performance stock awards model was used in valuing the Executive Stock Plans, with the following assumptions: ● The stock price for each trading day would fluctuate with an estimated projected volatility using a normal distribution. The stock price of the underlying instrument is modeled such that it follows a geometric Brownian motion with constant drift and volatility. ● The Company would award the stock upon triggering the thresholds. ● Annual attrition or forfeiture rates (i.e., pre–vesting forfeiture assumption) are assumed to be zero given the Holder’s position with the Company. ● No Projected capital events were included in the adjustments to the shares issued and outstanding in the projected simulations. ● Awards/Payouts were discounted at the risk–free rate. The Executive Stock Plans were not valued during the year ended December 31, 2025 and 2024. Stock Options For the year ended December 31, 2025: On January 9, 2025, the Company issued 60,000 shares of common stock pursuant to the cashless exercise of options held by an ex-employee to purchase 130,000 shares of common stock at a price of $ 1.25 per share and an additional 130,000 shares of common stock at a price of $ 1.75 per share. There was no gain or loss recorded on this transaction. F- 28 Table of Contents On January 13, 2025, the Company issued 24,026 shares of common stock pursuant to the cashless exercise of options held by an ex-employee to purchase 50,000 shares of common stock at a price of $ 1.00 per share. There was no gain or loss recorded on this transaction. For the year ended December 31, 2024: The Company issued 130,000 options with an exercise price of $ 1.25 per share and a grant date fair value of $ 20,847 to an employee. These options vested upon issuance and will expire on June 30, 2026. The Company issued 130,000 options with an exercise price of $ 1.75 per share and a grant date fair value of $ 11,688 to an employee. These options vested upon issuance and will expire on June 30, 2026. Transactions involving stock options are summarized as follows: Number of Shares Weighted Average Exercise Price Options outstanding at December 31, 2023 350,000 $ 0.93 Granted 260,000 1.50 Exercised ( 50,000 ) 0.60 Cancelled / Expired ( 250,000 ) 0.46 Options outstanding at December 31, 2024 310,000 $ 1.42 Granted - - Exercised ( 310,000 ) 1.42 Cancelled / Expired -- -- Options outstanding at December 31, 2025 -- $ -- Aggregate intrinsic value of options outstanding and exercisable at December 31, 2025 and 2024 was $ 0 and $ 111,800 , respectively. Aggregate intrinsic value represents the difference between the Company’s closing stock price on the last trading day of the fiscal period, which was $ 0.43 and $ 1.78 as of December 31, 2025 and 2024, respectively, and the exercise price multiplied by the number of options outstanding. During the years ended December 31, 2025 and 2024, the Company charged $ 0 and $ 32,535 , respectively, to operations related to recognized stock-based compensation expense for stock options. The exercise price at grant dates in relation to the market price during 2025 and 2024 are as follows: 2025 2024 Exercise price lower than market price - - Exercise price equal to market price - - Exercise price exceeded market price $ $ 1.25 - 1.75 As of December 31, 2025, and 2024, there were no non-vested options outstanding. Accounting for stock options The Company valued stock options using the Black-Scholes valuation model utilizing the following variables: December 31, 2024 Volatility 69.96 % Dividends 0.0 % Risk-free interest rates 4.64 % Term (years) 2.36 F- 29 Table of Contents 20. SEGMENTS The CODM has determined that the Company operates in one reportable segment: the delivery of specialty foods. This determination was made based upon the characteristics of our business and the information used by the CODM in order to monitor the business and allocate resources. The analysis of the Company’s segments is determined by the Chief Operating Decision Maker (“CODM”). The Company’s CODM is Gary Schubert, CEO. The CODM uses consolidated revenue, gross margin percentage and net income to monitor results. The CODM also uses revenue by category to monitor the growth of the business in each of our target markets. The following table presents our segment results: December 31, December 31, 2025 2024 Amount % Amount % $ Change % Change Revenue: Digital Channels $ 32,499,215 53.6 % $ 35,020,760 58.9 % $ ( 2,521,545 ) - 7.2 % National distribution $ 12,926,000 21.3 % $ 12,337,767 20.8 % $ 588,233 4.8 % Local distribution $ 15,252,951 25.1 % $ 12,089,900 20.3 % $ 3,163,051 26,2 % Total revenue $ 60,678,166 100.0 % $ 59,448,427 100.0 % $ 1,229,739 2.1 % Cost of sales $ 45,049,103 74.2 % $ 44,427,644 74.7 % $ 621,459 1.4 % Gross margin $ 15,629,063 25.8 % $ 15,020,783 25.3 % $ 608,280 4.0 % Cash OpEx: Payroll & related costs $ 9,370,719 15.4 % $ 8,609,501 14.5 % $ 761,218 8.8 % Computer and IT $ 461,261 0.8 % $ 392,615 0.7 % $ 68,646 17.5 % Office, facility, vehicles $ 1,385,106 2.3 % $ 614,653 1.0 % $ 770,453 125.3 % Insurance $ 527,020 0.9 % $ 607,872 1.0 % $ ( 80,852 ) - 13.3 % Travel & entertainment $ 146,664 0.2 % $ 198,741 0.3 % $ ( 52,077 ) - 26.2 % Advertising & marketing $ 31,409 0.1 % $ 3,957 0.0 % $ 27,452 693.8 % Banking and credit card processing $ 16,437 0.0 % $ 10,785 0.0 % $ 5,652 52.4 % Professional fees $ 1,405,306 2.3 % $ 1,514,790 2.6 % $ ( 109,484 ) - 7.2 % $ 13,343,922 22.0 % $ 11,952,914 20.1 % $ 1,391,008 11.6 % Non-cash OpEx: Credit loss expense $ 106,010 0.2 % $ 4,599 0.0 % $ 101,411 2205.1 % Share based compensation $ ( 932,975 ) - 1.6 % $ 1,529,413 2.6 % $ ( 2,462,388 ) - 161.0 % Depreciation & amortization $ 253,726 0.4 % $ 114,866 0.2 % $ 138,860 120.9 % Taxes & fees $ 222,752 0.4 % $ 146,821 0.2 % $ 75,931 51.7 % $ ( 350,487 ) - 0.6 % $ 1,795,699 3.0 % $ ( 2,146,186 ) - 119.5 % Non-Operating (Income) Expense: Interest expense $ 30,306 0.0 % $ ( 41,530 ) - 0.1 % $ 71,836 173.0 % (Gain) loss on sale of subsidiaries $ - 0.0 % $ ( 21,126 ) 0.0 % $ 21,126 - 100.0 % (Gain) loss on sale of assets $ - 0.0 % $ ( 2,816,616 ) - 4.7 % $ 2,816,616 - 100.0 % Other (income) expense $ ( 2,512 ) 0.0 % $ - 0.0 % $ ( 2,512 ) Total other (income) expense $ 27,794 0.0 % $ ( 2,879,272 ) - 4.8 % $ 2,907,066 - 101.0 % Income tax expense 80,787 0.1 % - 0.0 % 80,787 Net income (loss) from continuing operations $ 2,527,047 4.3 % $ 4,151,442 7.0 % $ ( 1,624,395 ) - 37.2 % Other segment disclosures: Segment assets $ 19,581,021 $ 27,346,373 Expenditures for segment assets $ 242,322 $ 316,567 F- 30 Table of Contents 21. RELATED PARTY TRANSACTIONS Appointment of Chief Executive Officer On October 3, 2025, the Company entered into the CEO Employment Agreement whereby Gary Schubert resigned from his current position of Chief Financial Officer of the Company and was appointed as the Chief Executive Officer of the Company and a member of the Company’s Board of Directors. Pursuant to the Schubert Agreement, Mr. Schubert is entitled to (i) an annual base salary of $ 400,000 , beginning on January 1, 2026, subject to a 3 % annual increase, (ii) a stock grant of 1,350,000 shares of common stock of the Company, subject to a vesting schedule, by March 31, 2026, and (iii) an annual cash incentive with a target (attainable upon achievement of certain performance goals) of not less than $137,500 with a cap of the lower of (a) $400,000 and (b) 8% of the Company’s adjusted free cash flow over the previous calendar year, beginning in calendar year 2026. Resignation of Predecessor CEO On October 4, 2025, the Company entered into a separation agreement and general release (the “Separation Agreement”) with Bill Bennett, pursuant to which Mr. Bennett resigned from his position as the Chief Executive Officer and Board Member of the Company, effective October 3, 2025. Pursuant to the Separation Agreement, the Company shall (i) pay Mr. Bennett a severance payment in installments for a total gross amount of $ 115,501 for the period of October 4, 2025, through and including December 31, 2025, and (ii) reimburse Mr. Bennett for his group health insurance premiums for the period from November 1, 2025 through September 30, 2026, subject to the terms and conditions of the Separation Agreement. Mr. Bennett has agreed to provide consultancy services to the Company as a consultant and independent contractor from January 1, 2026 until March 31, 2026 for $ 25,000 , which is to be paid in installments. Payments to Prior Executive Officers under Separation Agreements For the year ended December 31, 2025 The Company made the following payments in connection with the SK Agreements: The Company paid cash in the amount of $ 332,165 to Mr. Klepfish. The Company made the following payments in connection with the Bennett Separation Agreement: The Company paid cash in the amount of $ 124,823 to Mr. Bennett. For the year ended December 31, 2024 The Company made the following payments in connection with the SK Agreements: The Company paid cash in the amount of $ 333,333 to Mr. Klepfish. The Company made the following payments in connection with the Wiernasz Separation Agreement: The Company made Cobra payments on behalf of Mr. Wiernasz in the amount of $ 967 . The Company made the following payments in connection with the Tang Separation Agreement: The Company made cash payments to Mr. Tang in the amount of $ 113,918 , and Cobra payments on behalf of Mr. Tang in the amount of $ 14,495 . F- 31 Table of Contents 22. INCOME TAXES The components of income before provision for income taxes are as follows: Years Ended December 31, 2025 2024 Domestic $ ( 1,984,525 ) $ 2,611,514 Foreign - - Total $ ( 1,984,525 ) $ 2,611,514 The components of the provision for income taxes are as follows: Years Ended December 31, 2025 2024 Current income tax expense (benefit) Federal $ - $ - Foreign - - State and local 80,787 - Total current income tax expense 80,787 - Deferred income tax expense (benefit) Federal - - Foreign - - State and local - - Total deferred income tax expense - - Total income tax expense $ 80,787 $ - The following table shows the principal reasons for the difference between the effective income tax rate and the statutory federal income tax rate: 2025 Years Ended December 31, Amount Percent U.S. federal statutory tax rate $ ( 416,750 ) 21.00 % State and local income taxes, net of federal income tax effect (1) 63,823 - 3.22 % Changes in valuation allowances 597,415 - 30.19 % Nontaxable or nondeductible items Stock Options ( 313,131 ) 15.82 % Officer Compensation Limitation 147,070 - 7.43 % Other 2,360 - 0.06 % Effective income tax rate $ 80,787 - 4.08 % (1) The states that contribute to the majority (greater than 50%) of the tax effect in this category include California for 2025. F- 32 Table of Contents Prior to the adoption of ASU 2023-09, the provision (benefit) for income taxes differs from the amount of income tax determined by applying the applicable statutory income tax rate of 27.6 % for the year ended December 31, 2024, to the loss before taxes as a result of the following differences: 2024 Income (loss) before income taxes $ 2,611,514 Statutory tax rate, net 27.6 % Total tax (benefit) at statutory rate 721,000 Permanent difference 5,000 Other adjustments 112,000 Changes in valuation allowance ( 838,000 ) Income tax expense $ - The effective income tax rate for 2025 was - 4.08 % and 0 % in 2024. The decrease in the effective income tax rate was primarily due to nondeductible stock compensation expense and changes in the valuation allowance. Significant components of deferred tax assets and liabilities are as follows: At December 31, 2025 2024 Deferred tax assets Intangible assets $ 23,358 $ 476,000 Net operating loss carryforward 4,863,473 3,875,000 Lease liabilities 122,106 - Disallowed interest expense 330,934 - Capitalized inventory costs 269,625 - Property, plant and equipment - 282,000 Stock compensation 43,664 422,000 Allowance for doubtful accounts 25,216 - Other 909 11,000 5,679,285 5,066,000 Valuation allowances ( 5,091,498 ) ( 5,066,000 ) Total deferred tax assets 587,787 - Deferred tax liabilities Property, plant and equipment ( 59,622 ) - Accounting method change ( 407,961 ) - Lease right-of-use assets ( 120,204 ) - Total deferred tax liabilities ( 587,787 ) - Net deferred tax liability $ - $ - The amounts of cash taxes paid are as follows: Years Ended December 31, 2025 Federal $ - State 51,622 Foreign - Income taxes, net of amounts refunded 51,622 F- 33 Table of Contents The company currently only operates within the United States, and there are no undistributed earnings. At December 31, 2025, the Company has a net operating loss for income tax purposes of $ 21,256,747 , of which $ 5,877,191 will begin to expire in 2036 and $ 15,379,556 may be carried forward indefinitely. At December 31, 2025, there were no material uncertain tax positions. In assessing the potential for realization of deferred tax assets, consisting primarily of net operating loss, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized upon the generation of future taxable income during the periods in which those temporary differences become deductible. There is a valuation allowance of $ 5,091,498 and $ 5,066,000 as of December 31, 2025 and 2024, respectively. During 2025, the valuation allowance increased by $ 25,498 . The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. U.S. and state jurisdictions have statutes of limitations that generally range from 3 to 4 years. The Company is not currently under examination. 23. COMMITMENTS AND CONTINGENT LIABILITIES Litigation From time to time, the Company has become and may become involved in certain lawsuits and legal proceedings which arise in the ordinary course of business, or as the result of current or previous investments, or current or previous subsidiaries, or current or previous employees, or current or previous directors, or as a result of acquisitions and dispositions or other corporate activities. The Company intends to vigorously defend its positions. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our financial position or our business and the outcome of these matters cannot be ultimately predicted. 24. MAJOR CUSTOMERS The Company’s largest customer, U.S. Foods, Inc. and its affiliates, accounted for approximately 36 % and 52 % of total consolidated sales in each of the years ended December 31, 2025 and 2024, respectively. In addition, Gate Gourmet, the leading global provider of airline catering solutions and provisioning services for airlines, in partnership with igourmet, represented 14 % and 16 % of total consolidated sales for the year ended December 31, 2025 and 2024, respectively. Discontinued Operations: Sams Club accounted for approximately 12 % and 8 % of total consolidated sales in each of the years ended December 31, 2025 and 2024, respectively. Sales to Sams Club related entirely to the discontinued Pennsylvania distribution operations and are not expected to continue in future periods. 25. FAIR VALUE MEASUREMENTS Our short-term financial instruments, including cash, accounts payable and other liabilities, consist primarily of instruments without extended maturities, the fair value of which, based on management’s estimates, reasonably approximate their book value. The fair value of the Company’s stock options is determined using option pricing models. As a result of the adoption of ASC 815-40, the Company is required to disclose the fair value measurements required by ASC 820, “Fair Value Measurements and Disclosures.” Hierarchical levels, defined by ASC 820 are directly related to the amount of subjectivity associated with the inputs to fair valuations of these liabilities are as follows: Level 1 Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2 Inputs other than Level 1 inputs that are either directly or indirectly observable; and Level 3 Unobservable inputs, for which little or no market data exist, therefore requiring an entity to develop its own assumptions. F- 34 Table of Contents The following summarizes the Company’s derivative financial liabilities that are recorded at fair value on a recurring basis at December 31, 2025 and 2024. December 31, 2025 Level 1 Level 2 Level 3 Total Stock Appreciation Rights $ 16,143 $ - $ - $ 16,143 December 31, 2024 Level 1 Level 2 Level 3 Total Stock Appreciation Rights $ 1,353,150 $ - $ - $ 1,353,150 26. SUBSEQUENT EVENTS Appointment of Executive Vice President On January 6, 2026, the Company entered into an employment with Argie Liarakos (the “Liarakos Agreement” whereby which Mr. Liarakos was appointed as Executive Vice President of Commercial Operations and Execution of the Company. Pursuant to the Liarakos Agreement, Mr. Liarakos will receive an annual base salary of $ 260,000 as well as certain performance-based incentives, including an equity grant of 150,000 shares of common stock. Sale of Facility The Company, through its subsidiary Innovative Properties, entered into an Agreement of Purchase and Sale, dated as of July 28, 2025, as amended on September 11, 2025, September 29, 2025 and November 13, 2025, with Mountaintop Holdings, pursuant to which the Company agreed to sell to Mountaintop Holdings the real property located at 220 Oak Hill Road in Mountaintop, Pennsylvania, together with certain associated property. The total purchase price was $ 9,225,000 , which includes deposits already paid and held in escrow. The purchaser inspection and due diligence period has been completed and passed. No gain or loss has been recorded as of the date of these financial statements. The sale closed on March 6, 2026, at which time Innovative Properties received gross proceeds of $ 9.225 million. In connection with the closing, the debt associated with the property was repaid and extinguished. F- 35 Table of Contents ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure On April 28, 2025, in conjunction with its exit from providing audit services to publicly traded companies, Assurance Dimensions, LLC (“Assurance Dimensions”) resigned from its role as the independent registered public accounting firm for the Company. During the fiscal years ended December 31, 2024 and December 31, 2023 and the subsequent interim period through April 28, 2025, (i) there were no disagreements within the meaning of Item 304(a)(1)(iv) of Regulation S-K, between the Company and Assurance Dimensions on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, any of which that, if not resolved to Assurance Dimensions’ satisfaction, would have caused Assurance Dimensions to make reference to the subject matter of any such disagreement in connection with its reports for such years and interim period, and (ii) there were no reportable events within the meaning of Item 304(a)(1)(v) of Regulation S-K. Following Assurance Dimensions’ sale of its publicly traded companies business to Stephano Slack LLC (“Stephano Slack”), on April 28, 2025, the Company engaged Stephano Slack as its successor audit firm to review the Company’s quarterly reports on Form 10-Q for the quarterly periods ending March 31, 2025 and June 30, 2025 (the “Interim Periods”). In connection with the change in audit firms, the Company initiated a request for proposal (“RFP”) process to evaluate various registered public accounting firms for its ongoing audit needs. Following the completion of the RFP process, the Company dismissed Stephano Slack as its independent registered public accounting firm effective as of September 17, 2025. During the Interim Periods and through September 17, 2025, (i) there were no disagreements within the meaning of Item 304(a)(1)(iv) of Regulation S-K, between the Company and Stephano Slack on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, any of which that, if not resolved to Stephano Slack’s satisfaction, would have caused Stephano Slack to make reference to the subject matter of any such disagreement in connection with its reviews, and (ii) there were no reportable events within the meaning of Item 304(a)(1)(v) of Regulation S-K. On September 22, 2025, the Company engaged CBIZ CPAs P.C. (“CBIZ”) as its new independent registered public accounting firm.