What changed in this filing

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Item 1A. Risk Factors

2026-03-31 compared with 2025-04-01 · 208 added, 136 removed, 764 unchanged (31% of the section changed)

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have experienced recurring losses from operations and negative cash flows from operating activities.

We incurred a net loss of

$9.9 million for the year ended December 31, 2024.

Our accumulated deficit increased to $92.9 million

as of December 31, 2024 compared to the prior year’s deficit of $83.1 million.

We incurred a net loss of $1.8 million

for the year ended December 31, 2025.

Our accumulated deficit increased to $94.7 million as of December 31, 2025 compared to the prior

year’s deficit of $92.9 million.

may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our financial

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or other key supplies could negatively affect us.

depend on a limited number of significant customers for a substantial portion of our revenue.

significant portion of our revenues is derived from a limited number of customers.

For the year ended December 31, 2025, our two largest

customers accounted for approximately 31.2% and 4.1% of our total revenues, respectively, and in the aggregate represented approximately

35.3% of our total revenues.

For the year ended December 31, 2024, our two largest customers accounted for approximately 18.8% and 5.8%

of our total revenues, respectively, and in the aggregate represented approximately 24.6% of our total revenues.

This level of customer

concentration may increase the volatility of our revenues and operating results.

Our relationships with these customers are generally

governed by contracts;

however, such agreements may be subject to termination, non-renewal, or renegotiation on relatively short notice

or upon the occurrence of certain events.

In addition, these customers may reduce, delay, or cancel orders, seek to renegotiate pricing

or other terms, or shift their business to competitors for a variety of reasons, including changes in their own business strategies,

financial condition, or industry dynamics.

The loss of, or a significant reduction in purchases by, any of our significant customers,

or a deterioration in our relationships with such customers, could materially and adversely affect our business, financial condition,

and results of operations.

Additionally, our dependence on a limited number of customers may limit our ability to increase prices or

negotiate favorable terms, which could adversely impact our margins.

We may not be able to replace any lost revenue from these customers

on comparable terms or within a reasonable period of time, if at all.

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

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in costs of energy and increased regulations may have an adverse impact on our gross margin.

the past few years, volatility in the global oil markets has resulted in high fuel prices, which many shipping companies have passed

on to their customers by way of higher base pricing and increased fuel surcharges.

If fuel prices increase, we expect to experience higher

shipping rates and fuel surcharges, as well as energy surcharges on our raw materials.

It is hard to predict what will happen in the

fuel markets.

Due to the price sensitivity of our products, we may not be able to pass such increases on to our customers.

business relies on third-party transportation providers and logistics networks to deliver our products and materials.

As a result, our

cost structure is exposed to fluctuations in oil prices, which directly impact fuel costs, including diesel and gasoline, and, in turn,

freight and shipping rates.

Volatility in global oil markets, driven by factors such as geopolitical tensions, supply constraints, production

decisions by oil-producing countries, and macroeconomic conditions, can result in significant and unpredictable increases in fuel prices.

These increases are typically passed through to us by our transportation providers in the form of higher freight rates, fuel surcharges,

and accessorial charges.

Sustained increases in oil prices could materially increase our cost of goods sold and operating expenses, adversely

affecting our gross margins and profitability.

In addition, higher transportation costs may reduce demand for our products if we are

unable to pass through such cost increases to customers, or if doing so makes our products less competitive.

Our ability to mitigate

the impact of higher fuel and freight costs may be limited.

While we may seek to offset such increases through pricing actions, operational

efficiencies, supply chain optimization, or contractual arrangements, these measures may not be sufficient or timely, and competitive

or contractual constraints may limit our ability to fully recover increased costs.

Accordingly, increases in oil prices and related transportation

costs could have a material adverse effect on our business, financial condition, and results of operations.

Recently, the war in Iran

has significantly increased these fuel prices and it is likely these substantial increases will either need to be passed along to our

customers or result in lower margins for our business.

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

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suppliers on short notice.

If we have to replace a flavor supplier, we could experience disruptions in our ability to deliver products

to our customers, which could have a material adverse effect on our results of operations.

Furthermore, if we cannot replicate our most popular flavors with alternative supplies this may result in

a loss of customers who turn to our competitors’ beverage and have a negative impact on our brand loyalty in the long term.

we have to replace a flavor supplier, we could experience disruptions in our ability to deliver products to our customers, or products

favored by our customers, which could have a material adverse effect on our results of operations.

we are unable to attract and retain key personnel, our efficiency and operations would be adversely affected;

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our brands, goodwill and overall image, could have a material adverse impact on our business.

depend upon licensed intellectual property to generate some our revenues.

significant portion of our net revenue is derived from products and services associated with licensed intellectual property.

to generate revenue from these licensed properties is dependent on the continuation of our licensing agreements and our ongoing compliance

with the terms and conditions of those agreements.

These agreements are generally subject to fixed terms and may be terminated by the

licensor under certain circumstances, including, but not limited to, our failure to satisfy contractual obligations such as minimum royalty

payments, performance thresholds, or quality standards.

In addition, licensors may elect not to renew these agreements upon expiration

or may seek to renegotiate terms that are less favorable to us.

If any of our key license agreements were to be terminated, not renewed,

or materially modified on unfavorable terms, we could lose the right to use the associated intellectual property.

Because a substantial

portion of our revenue is concentrated in these licensed properties, the loss of one or more significant licenses could have a material

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

For the year ended December 31, 2025, approximately 39%

of our total net revenue was attributable to products utilizing one or more licensed properties, including the licensed property, Fallout.

Such an event could result in a decline in revenue, inventory write-downs, and increased costs associated with transitioning to alternative

products or brands.

Furthermore, our reliance on licensed properties subjects us to risks associated with the licensors’ reputation,

brand strength, and ability to maintain consumer demand.

Any negative publicity, reputational harm, or decline in the popularity of a

licensed property could adversely affect sales of our products associated with that property and, in turn, our operating results.

may not be able to replace licensed properties with alternative intellectual property or develop proprietary brands that achieve comparable

levels of market acceptance, and any such efforts may require significant time and investment without assurance of success.

we encounter product recalls or other product quality issues, our business may suffer.

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or legal proceedings could expose us to significant liabilities and damage our reputation.

March 25, 2024, our indirect wholly owned subsidiary, Mary Jones Michigan LLC, received a Notice of Claims for arbitration from Core

Manufacturing, LLC (“Core”), who claimed that the Company was in breach of its commitments under the agreement between the

Company and Core.

Core is seeking, amongst other damages, the enforcement of the break-up fee provision in such agreement, which they

calculate to be $7,220,357.

In February 2025, a confidential settlement agreement was entered into

between all the parties to the Litigation Matters, which has resulted in the settlement and/or dismissal of both Litigation Matters.

may also become party to other litigation claims and legal proceedings.

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addition, our operating results may fluctuate due to a number of other factors including, but not limited to:

ability to maintain, develop and expand distribution channels for current and new products, develop favorable arrangements with third

party distributors of our products and minimize or reduce issues associated with engaging new distributors and retailers, including,

but not limited to, transition costs and expenses and down time resulting from the initial deployment of our products in each new

distributor’s network;

decisions by distributors, grocery store chains, specialty chain stores, club stores, mass merchandisers and other customers to discontinue

carrying all or any of our products that they are carrying at any time;

ability to maintain, develop and expand our direct-to-retail sales channels and national retail accounts, as well as our “MyJones”

ability to manage our resources to sufficiently support general operating activities, promotion allowances and slotting fees, promotion

and selling activities, and capital expansion, and our ability to sustain profitability;

ability to meet the competitive response by much larger, well-funded and established companies currently operating in the beverage

industry, as we introduce new competitive products;

products and pricing pressures and our ability to gain or maintain share of sales in the marketplace as a result of actions by competitors.

Our ability to maintain,

develop and expand distribution channels for current and new products, develop favorable arrangements with third party distributors

of our products and minimize or reduce issues associated with engaging new distributors and retailers, including, but not limited

to, transition costs and expenses and down time resulting from the initial deployment of our products in each new distributor’s

Unilateral decisions by

distributors, grocery store chains, specialty chain stores, club stores, mass merchandisers and other customers to discontinue carrying

all or any of our products that they are carrying at any time;

Our ability to maintain,

develop and expand our direct-to-retail sales channels and national retail accounts, as well as our “MyJones” business;

Our ability to manage our

resources to sufficiently support general operating activities, promotion allowances and slotting fees, promotion and selling activities,

and capital expansion, and our ability to sustain profitability;

Our ability to meet the

competitive response by much larger, well-funded and established companies currently operating in the beverage industry, as we introduce

new competitive products;

Competitive products and

pricing pressures and our ability to gain or maintain share of sales in the marketplace as a result of actions by competitors.

to these and other factors, our results of operations have fluctuated from period to period and may continue to do so in the future,

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This exposure to foreign currency risk could significantly affect our revenues and profitability from our Canadian

operations and could result in significant fluctuations to our periodic consolidated statements of operations and consolidated balance sheets.

operations and could result in significant fluctuations to our periodic consolidated statements of operations and consolidated balance

2026, the U.S.

dollar’s strength fluctuated significantly in comparison to the Canadian dollar.

on the Noon buying rates in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal

Reserve Bank of New York, a s of March 28 , 2025, the Canadian dollar exchange rate

dollar was equal to $0.6989 compared to $0.6944 as of December 31, 2024 and

$0.7575 as of December 31, 2023.

Based on the Noon buying rates

in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York,

as of March 30, 2026, the Canadian dollar exchange rate for one U.S.

dollar was equal to $0.71813 compared to $0.730197 as of December

31, 2025 and $0.6944 as of December 31, 2024.

We cannot predict future changes in these exchange rates.

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A number of other factors may also impact our future effective tax rate including:

jurisdictions in which profits are determined to be earned and taxed;

resolution of issues arising from tax audits with various tax authorities;

in valuation of our deferred tax assets and liabilities;

in expenses not deductible for tax purposes, including write-offs of acquired intangibles and impairment of goodwill in connection

with acquisitions;

in availability of tax credits, tax holidays, and tax deductions;

in share-based compensation;

in tax laws or the interpretation of such tax laws and changes in generally accepted accounting principles.

the jurisdictions in which

profits are determined to be earned and taxed;

the resolution of issues

arising from tax audits with various tax authorities;

changes in valuation of

our deferred tax assets and liabilities;

increases in expenses not

deductible for tax purposes, including write-offs of acquired intangibles and impairment of goodwill in connection with acquisitions;

changes in availability

of tax credits, tax holidays, and tax deductions;

changes in share-based

compensation;

changes in tax laws or

the interpretation of such tax laws and changes in generally accepted accounting principles.

material increase in the taxes we owe could materially impact our financial results and results of operations.

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of the percentage ownership of our shareholders and could cause the trading price of our common stock to decline.

Factors Relating to our Cannabis Business in Canada

plans to expand our cannabis operations may not be successful, which would have an adverse impact on our business, financial condition

and results of operations.

strategy for growth in the cannabis industry is dependent on, among other things, our ability to partner with local licensed cannabis

manufacturers to launch and market THC/CBD-infused and/or cannabis-infused beverages, tinctures, edibles and other products in various

Although we intend to devote significant financial and other resources to expand our business to the production of cannabis-containing

beverages and related products, these efforts may not be commercially successful or achieve the desired results.

Our financial results

and our ability to maintain or improve our competitive position will depend on our ability to effectively gauge the direction of the

cannabis industry and successfully identify, develop, market and sell new or improved products and services in this changing marketplace.

Our inability to successfully implement our cannabis strategy could have a material adverse effect on our business, financial condition

and results of operations.

The cannabis industry is an evolving industry and we must anticipate and respond to changes.

cannabis industry is not yet well-developed, and many aspects of this industry’s development and evolution cannot be accurately

While we have attempted to identify any risks specific to the cannabis industry that would be applicable to our planned cannabis

operations, you should carefully consider that there are other risks that cannot be foreseen or are not described in this report, which

could materially and adversely affect the development of our cannabis business and our future financial performance.

We expect that the

cannabis market and our business will evolve in ways that are difficult to predict.

Our long-term success will depend on our ability

to successfully adjust our strategy to meet the changing market dynamics.

If we are unable to successfully adapt to changes in the cannabis

industry, our operations could be adversely affected.

Relating to Regulation and Compliance

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to and involvement in our activities may result in federal civil and/or criminal prosecution, including forfeiture of his or her entire

Uncertainty For Hemp Derived Beverage Business

regulators have not yet implemented a comprehensive regulatory framework governing intoxicating hemp products.

Future rulemaking by the

FDA or DEA could impose restrictions that significantly affect the market.

Congress periodically revisits hemp policy through farm bill

Future amendments could:

redefine hemp using total THC rather than Delta-9 THC;

impose milligram limits per product;

restrict intoxicating cannabinoids.

Such changes could materially impact the HD9 industry.

State regulatory regimes vary widely.

legal in one state may be prohibited in another, requiring companies to maintain complex multi-state compliance programs.

Companies may

face enforcement actions related to:

inaccurate labeling;

unapproved health claims;

synthetic cannabinoid production;

and sales to minors.

hemp-derived cannabinoid industry has seen increasing litigation involving consumer product liability;

labeling disputes;

and regulatory

interpretation.

The HD9 regulatory environment continues to evolve rapidly.

Congress is periodically proposing legislation that would

regulate intoxicating hemp products more strictly.

The FDA has indicated that a new regulatory approach may be necessary to manage hemp-derived

cannabinoids in consumer products.

States continue to pass legislation regulating intoxicating hemp products, often focusing on product

potency limits;

youth access restrictions;

and testing requirements.

operate in highly regulated industries where the regulatory environments are rapidly developing and we may not always succeed in complying

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to suspend declaring or paying dividends without advance notice and for an indefinite period of time.

rescheduling of U.S.

Schedule I cannabis to Schedule III would have an uncertain impact on our business.

August 2023, the U.S.

Department of Health and Human Services recommended that the DEA move marijuana from Schedule I to Schedule III

under the CSA and on May 16, 2024, the DEA issued a proposed rule to reclassify marijuana from its current classification as a Schedule

I drug to a Schedule III drug.

There can be no assurance that the proposed DEA rule will go into effect in its present form or at all,

and the impacts of any such adoption on our business and competitive position are unclear.

For example, rescheduling marijuana from Schedule

I to Schedule III may be accompanied by additional regulatory obligations as prerequisite to participate in the U.S.

market, and it may

provide a greater benefit to the businesses of our competitors than our business, including by providing favorable tax treatment to their

The rescheduling of marijuana from Schedule I to Schedule III could result in significant volatility in the market for

our common stock.

To the extent that market speculation results in an increase in the price of our common stock, the price of our common

stock could decline significantly thereafter if the DEA fails to act on the recommendation or investor optimism fades.

Factors Related to Our Common Stock

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market price of our common stock may be subject to wide fluctuations in response to a variety of factors, including the following:

variations in our operating results;

issuance of new securities;

● announcements

about Company developments and initiatives;

to meet or exceed financial projections we provide to the public;

to meet or exceed the estimates and projections of the investment community;

in the market valuations of companies similar to ours;

● announcements

of significant acquisitions, strategic collaborations, joint ventures or capital commitments

by us or our competitors;

or departures of key personnel;

of our common stock by us or our shareholders in the future;

volume of our common stock;

in analysts’ estimates affecting our Company, our competitors and/or our industry;

in the accounting methods used in or otherwise affecting our industry;

● fluctuations

in interest rates and the availability of capital in the capital markets;

or loss of significant customers, manufacturers, distributors or other business partners;

involving us;

trends relating to the beverage industry;

by governmental agencies;

economic, industry and market conditions;

epidemics and outbreaks or other natural or manmade disasters which could significantly disrupt

our operations;

other factors described in this “Risk Factors” section;

and circumstances beyond our control.

quarterly variations in

our operating results;

our issuance of new securities;

announcements about Company

developments and initiatives;

failure to meet or exceed

financial projections we provide to the public;

failure to meet or exceed

the estimates and projections of the investment community;

changes in the market valuations

of companies similar to ours;

announcements of significant

acquisitions, strategic collaborations, joint ventures or capital commitments by us or our competitors;

additions or departures

of key personnel;

sales of our common stock

by us or our shareholders in the future;

trading volume of our common

changes in analysts’

estimates affecting our Company, our competitors and/or our industry;

changes in the accounting

methods used in or otherwise affecting our industry;

fluctuations in interest

rates and the availability of capital in the capital markets;

addition or loss of significant

customers, manufacturers, distributors or other business partners;

litigation involving us;

general trends relating

to the beverage industry;

actions by governmental

general economic, industry

and market conditions;

health epidemics and outbreaks

or other natural or manmade disasters which could significantly disrupt our operations;

the other factors described

in this “Risk Factors” section;

events and circumstances

beyond our control.

of these factors may result in large and sudden changes in the volume and price at which our common stock will trade.

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for investors, including the following:

market price of our common stock may experience rapid and substantial increases or decreases

unrelated to our actual or expected operating performance, financial condition or prospects,

which may make it more difficult for prospective investors to assess the rapidly changing

value of our common stock;

our future market capitalization reflects trading dynamics unrelated to our actual or expected

operating performance, financial performance or prospects, purchasers of our common stock

could incur substantial losses as prices decline once the level of market volatility has

the future market price of our common stock declines, investors may be unable to resell their

shares at or above the price at which they acquired them.

the market price of our

common stock may experience rapid and substantial increases or decreases unrelated to our actual or expected operating performance,

financial condition or prospects, which may make it more difficult for prospective investors to assess the rapidly changing value

of our common stock;

if our future market capitalization

reflects trading dynamics unrelated to our actual or expected operating performance, financial performance or prospects, purchasers

of our common stock could incur substantial losses as prices decline once the level of market volatility has abated;

if the future market price

of our common stock declines, investors may be unable to resell their shares at or above the price at which they acquired them.

cannot assure you that the market of our common stock will not fluctuate or decline significantly in the future, in which case you could

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The financial markets and the global economy may also be adversely

affected by the current or anticipated impact of military conflict, including the conflict between Russia and Ukraine, terrorism or other

geopolitical events.

Sanctions imposed by the United States and other countries in response to such conflicts, including the one in Ukraine,

may also adversely impact the financial markets and the global economy, and any economic countermeasures by the affected countries or

others could exacerbate market and economic instability.

There can be no assurance that future credit and financial market instability

and a deterioration in confidence in economic conditions will not occur.

Our general business strategy may be adversely affected by any

such economic downturn, liquidity shortages, volatile business environment or continued unpredictable and unstable market conditions.

If the equity and credit markets deteriorate, or if adverse developments are experienced by financial institutions, it may cause short-term

liquidity risk and also make any necessary debt or equity financing more difficult, more costly and more dilutive.

Failure to secure

any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial

performance and stock price and could require us to delay or abandon our business plans.

In addition, there is a risk that one or more

of our current customers, distributors, manufacturers, financial institutions or other third parties with whom we do business may be

adversely affected by the foregoing risks, which may have an adverse effect on our business.

affected by the current or anticipated impact of military conflict, including the conflict between Russia and Ukraine, the United States,

Isreal and Iran, terrorism or other geopolitical events.

Sanctions imposed by the United States and other countries in response to such

conflicts, including the one in Ukraine and in Iran, may also adversely impact the financial markets and the global economy, and any

economic countermeasures by the affected countries or others could exacerbate market and economic instability.

There can be no assurance

that future credit and financial market instability and a deterioration in confidence in economic conditions will not occur.

business strategy may be adversely affected by any such economic downturn, liquidity shortages, volatile business environment or continued

unpredictable and unstable market conditions.

If the equity and credit markets deteriorate, or if adverse developments are experienced

by financial institutions, it may cause short-term liquidity risk and also make any necessary debt or equity financing more difficult,

more costly and more dilutive.

Failure to secure any necessary financing in a timely manner and on favorable terms could have a material

adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon our business plans.

In addition, there is a risk that one or more of our current customers, distributors, manufacturers, financial institutions or other

third parties with whom we do business may be adversely affected by the foregoing risks, which may have an adverse effect on our business.

do not intend to pay any cash dividends on our shares of common stock in the near future, so our shareholders will not be able to receive

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors