What changed in this filing

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Item 1. Financial Statements

2021-08-16 compared with 2021-05-13 · 481 added, 632 removed, 596 unchanged (65% of the section changed)

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Cash and cash equivalents

Accounts receivable

Investment in Allied Esports Entertainment, Inc.

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Preferred stock, $ 0.001 par value, 20,000,000 shares authorized, no shares issued and outstanding

Common stock, $0.001 par value, 500,000,000 shares authorized, 3,939,439 and 2,742,890 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

Common stock, $ 0.001 par value, 500,000,000 shares authorized, 3,978,194 and

2,742,890 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

Common stock payable, consisting of 11,585 and 535,729 shares at March 31, 2021 and December 31, 2020, respectively

Common stock payable, consisting of 593,260 and 535,729 shares at June 30, 2021 and December 31, 2020,

Accumulated deficit

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For the Three Months

Ended March 31,

For the Six Months

Ended June 30,

Cost of goods sold

Operating expenses:

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Net operating loss

( 1,459,793 )

( 2,610,653 )

Other income (expense):

Interest expense, including $13,795 of warrants issued as a debt discount for the three months ending March 31, 2020

Interest expense, including $ 363,645 of warrants issued as a debt discount for the three and six months

ending June 30, 2020, respectively

Gain on early extinguishment of debt

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( 1,065,715 )

Weighted average common shares outstanding - basic and fully diluted

Net loss per common share –

basic and fully diluted

Net income (loss)

$ ( 1,557,794 )

$ ( 2,365,671 )

$ ( 1,928,797 )

Weighted average common shares outstanding - basic

Weighted average common shares outstanding - fully diluted

Net loss per common share - basic

Net loss per common share - fully diluted

See accompanying notes to unaudited condensed financial statements.

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STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

For the Three Months Ended June 30, 2020

Additional Paid-in

Total Stockholders'

Balance, March 31, 2020

$ ( 34,002,978 )

Common stock options granted to employees and directors for services

Common stock warrants granted to employees and directors for personal guaranty on debt

Net income for the three months ended June 30, 2020

Balance, June 30, 2020

$ ( 33,286,196 )

For the Three Months Ended June 30, 2021

Stockholders'

Balance, March 31, 2021

$ ( 37,486,215 )

Common stock sales for cash to officers and directors

Common stock sales for cash

Common stock issued to officers and directors for services

Common stock issued to employees and consultants for services

Common stock options granted to officers and directors for services

Common stock options granted to employees for services

Net loss for the three months ended June 30, 2021

( 1,557,794 )

Balance, June 30, 2021

$ ( 39,044,009 )

For the Six Months Ended June 30, 2020

Stockholders'

Balance, December 31, 2019

$ ( 31,357,399 )

Common stock options granted to employees and directors

Common stock warrants granted to employees and directors

for personal guaranty on debt

Net loss attributable to Sow Good Inc.

Balance, March 31, 2020

Common stock options granted to employees and directors for services

Common stock warrants granted to employees and directors for personal guaranty on debt

Net loss for the six months ended June 30, 2020

( 1,928,797 )

Balance, June 30, 2020

$ ( 33,286,196 )

For the Six Months Ended June 30, 2021

Stockholders'

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$ ( 36,678,338 )

Common stock issued on subscriptions payable for the

purchase of S-FDF, LLC assets

Common stock issued on subscriptions payable for the purchase of S-FDF, LLC assets

( 1,853,600 )

Common stock sales for cash to officers and directors

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Common stock issued to officers and directors for services

Common stock options granted to officers and directors

Common stock issued to employees and consultants for services

Common stock options granted to officers and directors for services

Common stock options granted to employees for services

Net loss attributable to Sow Good Inc.

Balance, March 31, 2021

Net loss for the six months ended June 30, 2021

( 2,365,671 )

Balance, June 30, 2021

$ ( 39,044,009 )

See accompanying notes to unaudited condensed financial statements.

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CONDENSED STATEMENTS OF CASH FLOWS

For the Three Months

Ended March 31,

For the Six Months

Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

$ ( 2,365,671 )

$ ( 1,928,797 )

Adjustments to reconcile net loss to net cash used in operating activities:

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Common stock issued to officers and directors for services

Common stock issued to consultants for services

Amortization of stock options

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Decrease (increase) in current assets:

Accounts receivable, related party

Accounts receivable

Prepaid expenses

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Net cash used in operating activities

( 2,764,841 )

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds received from sale of investment in Allied Esports Entertainment, Inc.

Purchase of property and equipment

Cash paid for construction in progress

Net cash used in investing activities

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

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Repayments on notes payable

Proceeds received from the sale of common stock

Proceeds received from the sale of common stock and subscriptions payable

Net cash provided by financing activities

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Financial Statements

Note 1 –

Organization and Nature of Business

Note 1 – Organization and Nature of Business

Effective January 21, 2021, we changed our name

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to Sow Good Inc.

(“SOWG,”

“Sow Good,”

or the “Company”).

common stock is traded on the OTCQB under the trading symbol “SOWG”.

(“SOWG,” “Sow Good,” or the “Company”).

common stock is traded on the OTCQB under the trading symbol “SOWG”.

At that time, o ur

common stock started to be quoted on the OTCQB under the trading symbol “SOWG”, from the former trading symbol “ANFC”.

Prior to April 2, 2012, the Company name was Ante5, Inc., which became an independent company in April 2010.

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proceeds were used to sponsor a special purpose acquisition company, discussed below, with the remainder for general corporate purposes.

10, 2017, the Company’s sponsored special purpose acquisition company, Black Ridge Acquisition Corp.

(“BRAC”), completed

10, 2017, the Company’s sponsored special purpose acquisition company, Black Ridge Acquisition Corp.

(“BRAC”), completed

an IPO raising $ 138,000,000 of gross proceeds (including proceeds from the exercise of an over-allotment option by the underwriters on

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combination with one or more businesses or entities.

BRAC’s efforts to identify a prospective target business were not limited to

a particular industry or geographic region.

Following the IPO and over-allotment, BROG owned 22 % of the outstanding common stock of BRAC

and managed BRAC’s operations via a management services agreement.

On December 19, 2018, BRAC entered into a business combination

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In connection with the closing of the Asset Purchase

Agreement, the Company acquired approximately $2.2 million in cash and certain assets and agreements related to the Seller’s

Agreement, the Company acquired approximately $ 2.2 million in cash and certain assets and agreements related to the Seller’s

freeze-dried fruits and vegetables business for human consumption and entered into certain employment and registration rights agreements.

As of May 6, 2021, the Company still owned 177,479

shares of Allied Esports Entertainment, Inc.

AESE), the surviving entity after BRAC’s business combination (“Sponsor

Shares”), with a fair market value of $425,950.

On May 5, 2021, we announced the launch of our

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The smoothie lineup offers a mix of both new and familiar flavors:

Açaí

of Relief (açaí, blueberry);

Mint to Be (banana, coconut, mint);

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Cool Beans (edamame);

and What’s Apple’n

Smoothies are $7.50 each and packaged snacks are $5.25 per bag.

In addition, we completed the build-out

of our production facility in March, and have finalized products and packaging, while delivering samples to potential B2B customers.

first freeze drier successfully completed its production testing in March 2021.

The company is now producing its own freeze-dried fruits

and vegetables from individual quick freeze (IQF) raw materials.

Freeze dried food production also continues to be supplemented by our

relationships with co-manufacturing partners.

SOW GOOD INC.

Notes to Condensed

Financial Statements

Note 2 –

Basis of Presentation and Significant

On July 23, 2021, we launched six new gluten-free

granola products under the Sow Good brand.

Sow Good’s granola products are made with health-conscious ingredients such as freeze-dried

fruit, almonds, hemp hearts, and coconut oil.

Granola products are initially being sold direct-to-consumer and will later be targeted

to the business-to-business segment.

Our unique food products are targeting the large, and growing, freeze-dried food products market.

The global freeze-dried food products market is estimated by Technavio to total nearly $60B in 2020, with the United States representing

almost 30% of the total.

Technavio further projects market growth to continue at over 8% per year through 2024.

With the extensive freeze-dried

manufacturing and food product-focused business development experience of our senior management team, we believe we are well positioned

to lead the Company's growth and development in the freeze-dried food industry.

Note 2 – Basis of Presentation and Significant

Accounting Policies

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The Company discloses the fair value of certain

assets and liabilities in accordance with ASC 820 –

Fair Value Measurement (“ASC 820”).

assets and liabilities in accordance with ASC 820 – Fair Value Measurement (“ASC 820”).

Under FASB ASC 820-10-05,

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This Statement reaffirms that fair value is the relevant measurement attribute.

The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein.

amounts of cash, accounts payable and accrued expenses reported on the balance sheets are estimated by management to approximate fair

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and the Securities Investor Protection Corporation (SIPC) up to $250,000 and $500,000, respectively, under current regulations.

had $1,647,593 of cash in excess of FIDC and SIPC insured limits at March 31, 2021, and has not experienced any losses in such accounts.

SOW GOOD INC.

Notes to Condensed

Financial Statements

had $ 2,968,617 of cash in excess of FIDC and SIPC insured limits at June 30, 2021, and has not experienced any losses in such accounts.

Property and Equipment

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of cost or estimated net recoverable amount.

The cost of property, plant and equipment is depreciated using the straight-line method based

on the lesser of the estimated useful lives of the assets or the lease term based on the following life expectancy:

The cost of property, plant and equipment is depreciated using the straight-line method

based on the lesser of the estimated useful lives of the assets or the lease term based on the following life expectancy:

Schedule of estimated useful lives of assets

3 years, or over the life of the agreement

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Depreciation expense was $ 65,052 and $ 650 for

the three months ended March 31, 2021 and 2020, respectively.

the six months ended June 30, 2021 and 2020, respectively.

of Long-Lived Assets

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of the following:

Schedule of inventory

Finished goods

Raw materials

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Packaging materials

Total Inventory

No reserve for obsolete inventories has been recognized,

and we have not yet commenced production.

SOW GOOD INC.

Notes to Condensed

Financial Statements

and we have not yet commenced significant production.

The Company evaluates goodwill on an annual basis

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fair values of its reporting units using a combination of the income, or discounted cash flows, approach and the market approach, which

utilizes comparable companies’

If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, an

utilizes comparable companies’ data.

If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, an

impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

The Company’s evaluation of goodwill completed during the year resulted in no impairment losses.

Revenue Recognition

The Company will recognize revenue in accordance

with ASC 606 —

Revenue from Contracts with Customers (“ASC 606”).

Under ASC 606, the Company will recognize revenue

The Company recognizes revenue in accordance with

ASC 606 — Revenue from Contracts with Customers (“ASC” 606”).

Under ASC 606, the Company recognizes revenue

from the sale of its freeze-dried food products once operations commence, in accordance with a five-step

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Basic and Diluted Earnings (Loss) Per Share

Basic earnings (loss) per share (“EPS”)

are computed by dividing net income (the numerator) by the weighted average number of common shares outstanding for the period (the denominator).

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common shares outstanding relating to stock options, warrants and restricted stock is computed using the treasury stock method.

three months ended March 31, 2021 and 2020, potential dilutive securities had an anti-dilutive effect and were excluded from the calculation

The reconciliation of the denominators used to

calculate basic EPS and diluted EPS for the three and six months ended June 30, 2021 and 2020 are as follows:

Schedule of Earnings Per Share, Basic and Diluted

Three Months Ended June 30,

Six Months Ended June 30,

Weighted average common shares outstanding – basic

Potentially dilutive common shares:

Common stock warrants

Weighted average common shares outstanding – diluted

For the three months ended June 30, 2021, and

the six months ended June 30, 2021 and 2020, potential dilutive securities had an anti-dilutive effect and were not included in the calculation

of diluted net loss per common share.

Stock options and warrants excluded from the calculation of diluted EPS because their effect was

anti-dilutive were 765,144 and 378,871 as of June 30, 2021 and 2020, respectively.

Stock-Based Compensation

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The measurement date of the fair value of the equity instrument issued

is the earlier of the date on which the counterparty’s performance is complete or the date at which a commitment for performance

by the counterparty to earn the equity instruments is reached because of sufficiently large disincentives for nonperformance.

compensation was $ 709,215 and $ 70,943 , consisting entirely of expenses related to common stock and options issued for services for the

three months ended March 31, 2021 and 2020, respectively, using the Black-Scholes options pricing model and an effective term of 6 to

6.5 years based on the weighted average of the vesting periods and the stated term of the option grants and the discount rate on 5 to

six months ended June 30, 2021 and 2020, respectively, using the Black-Scholes options pricing model and an effective term of 6 to 6.5

years based on the weighted average of the vesting periods and the stated term of the option grants and the discount rate on 5 to 7 year

Treasury securities at the grant date.

In addition, $13,795 of expenses related to the amortization of warrants issued in

consideration of personal guarantees provided for debt financing for the three months ended March 31, 2020.

SOW GOOD INC.

Notes to Condensed

Financial Statements

In addition, $ 377,440 of expenses related to the amortization of warrants issued in consideration

of personal guarantees provided for debt financing for the six months ended June 30, 2020.

The Company recognizes deferred tax assets and

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Tax Cuts and Jobs

Act of 2017 (“Tax Reform”) was signed into law.

As a result of Tax Reform, the U.S.

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Staff Accounting Bulletin No.

118 (“SAB 118”) to address the application of GAAP in situations when a registrant does not

have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete the accounting

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Uncertain Tax Positions

In accordance with ASC 740, “Income Taxes”

(“ASC 740”), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that

In accordance with ASC 740, “Income Taxes”

(“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 capable of withstanding examination by the taxing authorities based on the technical merits of the position.

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Various taxing authorities can periodically audit

the Company’s income tax returns.

These audits include questions regarding the Company’s tax filing positions, including the

the Company’s income tax returns.

These audits include questions regarding the Company’s tax filing positions, including the

timing and amount of deductions and the allocation of income to various tax jurisdictions.

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not yet undergone an examination by any taxing authorities.

The assessment of the Company’s tax position

relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions.

The assessment of the Company’s tax position

relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions.

Recent Accounting Pronouncements

From time to time, new

accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") that are adopted by the Company as

of the specified effective date.

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August 2020, the FASB issued ASU No.

2020-06, Debt–Debt with Conversion and Other Options (Subtopic 470-20) and

Derivatives and Hedging–Contracts in Entity’s Own Equity (Subtopic 815-40) :

2020-06, Debt–Debt with Conversion and Other Options (Subtopic 470-20) and

Derivatives and Hedging–Contracts in Entity’s Own Equity (Subtopic 815-40) :

Accounting for Convertible Instruments

and Contracts in an Entity’s Own Equity (ASU 2020-06), which simplifies the accounting for convertible instruments by reducing

the number of accounting models available for convertible debt instruments.

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with early adoption permitted.

The adoption of ASU 2020-06 is not expected to have a material impact on the Company’s financial

statements or related disclosures.

SOW GOOD INC.

Notes to Condensed

Financial Statements

May 2020, the SEC adopted final rules that amend the financial statement requirements for significant business acquisitions and

2020 , the SEC adopted final rules that amend the financial statement requirements for significant business acquisitions and

dispositions.

Among other changes, the final rules modify the significance tests and improve the disclosure requirements for

acquired or to be acquired businesses and related pro forma financial information, the periods those financial statements must

cover, and the form and content of the pro forma financial information.

The final rules do not modify requirements

for the acquisition and disposition of significant amounts of assets that do not constitute a business.

rules were effective January 1, 2021.

The Company has considered these final rules and updated its disclosures, as

2019, the FASB issued ASU 2019-12 –

Income Taxes (“Topic 740”

Simplifying the Accounting

for Income Taxes .

The amendments in ASU 2019-12 are part of an initiative to reduce complexity in accounting standards and

simplify the accounting for income taxes by removing certain exceptions from Topic 740 and making minor improvements to the

codification.

ASU 2019-12 and its related amendments are effective for public entities for fiscal years, and interim periods

within those fiscal years, beginning after December 15, 2020 .

The provisions of this update did not have a material impact

on the Company’s financial position or results of operations.

Among other changes, the final rules modify the significance tests and improve the disclosure requirements for acquired

or to be acquired businesses and related pro forma financial information, the periods those financial statements must cover, and the form

and content of the pro forma financial information.

The final rules do not modify requirements for the acquisition and

disposition of significant amounts of assets that do not constitute a business.

The final rules were effective January 1,

The Company has considered these final rules and updated its disclosures, as applicable.

2019, the FASB issued ASU 2019-12 – Income Taxes (“Topic 740” ):

Simplifying the

Accounting for Income Taxes .

The amendments in ASU 2019 - 12 are part of an initiative to reduce complexity in accounting

standards and simplify the accounting for income taxes by removing certain exceptions from Topic 740 and making minor improvements

to the codification.

ASU 2019 - 12 and its related amendments are effective for public entities for fiscal years,

and interim periods within those fiscal years, beginning after December 15, 2020 .

The provisions of this update did not have

a material impact on the Company’s financial position or results of operations.

No other new accounting pronouncements, issued

or effective during the period ended March 31, 2021, have had or are expected to have a significant impact on the Company’s financial

Note 3 –

Going Concern

As shown in the accompanying financial statements,

as of March 31, 2021, the Company has incurred recurring losses from operations resulting in an accumulated deficit of $37,486,215, and

had cash and liquid securities on hand of $3,057,253.

As of March 31, 2021, the Company’s cash on hand may not be sufficient to

sustain operations.

These factors raise substantial doubt about the Company’s ability to continue as a going concern.

is currently seeking additional sources of capital to fund short term operations.

The Company intends to sell its AESE shares to continue

as a going concern, however, there can be no assurance the share price will be sufficient to sustain operations, therefore the Company

may be dependent upon its ability to secure equity and/or debt financing and there are also no assurances that the Company will be successful;

therefore, without sufficient financing it would be unlikely for the Company to continue as a going concern.

or effective during the period ended June 30, 2021, have had or are expected to have a significant impact on the Company’s financial

Note 3 – Going Concern

As shown in the accompanying financial

statements, as of June 30, 2021, the Company has incurred recurring losses from operations resulting in an accumulated deficit of

$ 39,044,009 ,

and had cash on hand of $ 3,754,381 .

are too early in our development stage to project revenue with a necessary level of certainty;

therefore, we may not have sufficient

funds to sustain our operations for the next twelve months and we may need to raise additional cash to fund our operations.

factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company has commenced sales

and continues to develop its operations, and the Company raised an additional $ 564,661

from sale of common stock in July, as noted in our subsequent events footnote.

In the event sales do not materialize at the expected

rates, management would seek additional financing or would attempt to conserve cash by further reducing expenses.

There can be no assurance

that we will be successful in achieving these objectives.

The financial statements do not include any adjustments

that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern.

The financial

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additional capital.

As of May 6th 2021, the Company had $1,862,434 of cash on hand and shares in AESE stock with a fair market value of

Note 4 –

Business Combination, S-FDF

1, 2020, the Company completed its acquisition of S-FDF, LLC (the "Seller"), a Texas limited liability company, pursuant to

Note 4 – Business Combination, S-FDF

1, 2020, the Company completed its acquisition of S-FDF, LLC (the "Seller"), a Texas limited liability company, pursuant to

an Asset Purchase Agreement, between the Company and the Seller, dated June 9, 2020, as subsequently amended effective October 1,

In connection with the closing of the Asset Purchase Agreement, the Company acquired approximately $ 2.2 million in cash and

certain assets and agreements related to the Seller’s freeze-dried fruits and vegetables business for human consumption and entered

into certain employment and registration rights agreements.

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The Seller transferred the Purchased Assets to the Company in exchange for the issuance of 1,120,000 shares

of the Company’s common stock to the Seller.

The number of Seller Shares to be issued was subject to adjustment, as specified in

the Asset Purchase Agreement, as amended, based on the extent to which the amount of cash proceeds held by the Company, as derived from

the sale of the Company’s holdings of Allied Esports Entertainment Inc.

("AESE") Shares, were less than $5 million

the sale of the Company’s holdings of Allied Esports Entertainment Inc.

("AESE") Shares, were less than $5 million

or greater than $6 million on the date specified in the Asset Purchase Agreement, which resulted in the issuance of an additional

500,973 Seller Shares that were issued on January 4, 2021.

The combined issuances represented approximately 46% of the Company’s

The combined issuances represented approximately 46 % of the Company’s

issued and outstanding common stock, on a fully diluted basis.

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business combination.

SOW GOOD INC.

Notes to Condensed

Financial Statements

to its obligations under the Asset Purchase Agreement, on the Closing Date the Company, (a) created three new seats on the Company’s

Board of Directors and appointed the Seller’s principals, Ira Goldfarb and Claudia Goldfarb, and a third person designated by the

to its obligations under the Asset Purchase Agreement, on the Closing Date the Company, (a) created three new seats on the Company’s

Board of Directors and appointed the Seller’s principals, Ira Goldfarb and Claudia Goldfarb, and a third person designated by the

Goldfarbs, Greg Creed, as directors, (b) entered into employment agreements with Ira Goldfarb and Claudia Goldfarb, (c) delivered a registration

rights agreement with respect to the Seller Shares and any shares of common stock delivered as part of the employment compensation for

Ira Goldfarb or Claudia Goldfarb, and (d) amended the Company’s 2020 Stock Incentive Plan to increase the number of shares of common

stock reserved thereunder.

At closing, the Company also assumed the Seller’s obligations under a real property lease for its facility

in Irving, Texas under which an entity owned entirely by Ira Goldfarb is the landlord.

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to the purchase method of accounting, the Company recognized the identifiable assets acquired and liabilities assumed as follows:

Schedule of recognized identified assets and liabilities assumed

October 1, 2020

Consideration:

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Consideration paid in excess of fair value (Goodwill) (1)

(1)The consideration paid in excess of the net

fair value of assets acquired and liabilities assumed was recognized as goodwill.

The book value of the net assets acquired was determined

to represent the fair market value, and no additional intangible assets were evidenced.

SOW GOOD INC.

Notes to Condensed

Financial Statements

The consideration paid in excess of the net fair value of

assets acquired and liabilities assumed was recognized as goodwill.

The book value of the net assets acquired was determined to

represent the fair market value, and no additional intangible assets were evidenced.

Pro Forma Results

The following table sets forth the unaudited pro

forma results of the Company as if the acquisition of S-FDF, LLC was effective on the first day of each of the periods presented.

combined results are not necessarily indicative of the results that may have been achieved had the companies always been combined.

For the Three Months Ended March 31,

The following table sets forth the unaudited

pro forma results of the Company as if the acquisition of S-FDF, LLC was effective on the first day of each of the periods presented.

These combined results are not necessarily indicative of the results that may have been achieved had the companies always been combined.

Schedule of unaudited pro forma

For the Six Months Ended June 30,

Net operating loss

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$ ( 863,082 )

Weighted average common shares outstanding –

basic and fully diluted

Net loss per common share –

basic and fully diluted

(2) S-FDF, LLC was formed on May 4, 2020, therefore pro forma operation for the three months ended March 31, 2020 are identical to the Company’s actual results, other than the basic and fully diluted net income per share amounts.

Note 5 –

Related Party

$ ( 2,365,671 )

$ ( 1,928,797 )

Weighted average common shares outstanding – basic and fully diluted

Net loss per common share – basic and fully diluted

S-FDF, LLC was formed on May 4, 2020, therefore pro

forma operation for the six months ended June 30, 2020 are identical to the Company’s actual results, other than the basic and

fully diluted net income per share amounts .

Note 5 – Related Party

Issuance of Shares in Completion of Acquisition

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On December 31, 2020, the final number of shares to be issued to S-FDF, LLC was determined to be 500,973 shares and a common stock payable

was recognized in the amount of $1,853,600, the fair value of the common stock based on the closing price of the Company’s common

was recognized in the amount of $ 1,853,600 , the fair value of the common stock based on the closing price of the Company’s common

stock on the date of grant.

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Common Stock Payable Awarded to Officers

On March 31, 2021,

On June 30, 2021,

the Company awarded 5,541 and 6,044 shares of common stock to Claudia and Ira Goldfarb , respectively, for services earned during

March 31, 2021.

June 30, 2021.

The aggregate fair value of the shares was $ 25,156 and $ 27,440 for Claudia and Ira,

respectively, based on the closing price of the Company’s common stock on the date of grant .

The shares were subsequently

issued on April 6, 2021, in satisfaction of the outstanding common stock payable.

issued on July 7, 2021, in satisfaction of the outstanding common stock payable.

Issuance of Shares for Services

On May 31, 2021,

the Company issued 5,541 and 6,044 shares to Claudia and Ira Goldfarb , respectively ,

for their services for May 2021.

The aggregate fair value of the shares was $ 26,320 and $ 28,709 for Claudia and Ira, respectively, based

on the closing price of the Company’s common stock on the date of grant.

On April 30, 2021,

the Company issued 5,541 and 6,044 shares to Claudia and Ira Goldfarb , respectively ,

for their services for April 2021.

The aggregate fair value of the shares was $ 31,307 and $ 34,148 for Claudia and Ira, respectively, based

on the closing price of the Company’s common stock on the date of grant.

On March 31, 2021,

the Company awarded 5,541 and 6,044 shares of common stock to Claudia and Ira Goldfarb , respectively, for their services for March

The aggregate fair value of the shares was $ 34,853 and $ 38,016 for Claudia and Ira, respectively,

based on the closing price of the Company’s common stock on the date of grant .

The shares were subsequently issued on April

6, 2021, in satisfaction of the outstanding common stock payable.

On February 28, 2021,

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The aggregate fair value of the shares was $ 38,787 and $ 42,308 for Claudia and Ira, respectively,

based on the closing price of the Company’s common stock on the date of grant.

On January 31, 2021,

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The aggregate fair value of the shares was $ 29,035 and $ 31,671 for Claudia and Ira, respectively,

based on the closing price of the Company’s common stock on the date of grant.

SOW GOOD INC.

Notes to Condensed

Financial Statements

based on the closing price of the Company’s common stock on the date of grant.

On January 27, 2021,

upon Benjamin Oehler’s resignation, the Company a ppointed Chris Ludeman as a member of the Board of Directors of the Company,

and appointed him to the Company’s Audit Committee as Chairperson.

upon Benjamin Oehler’s resignation, the Company a ppointed Chris Ludeman as a member of the Board of Directors of the Company,

and appointed him to the Company’s Audit Committee as Chairperson.

Pursuant to his appointment, Mr.

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The aggregate fair value of the common stock was $40,000, based on the closing

price of the Company’s common stock on the date of grant.

On January 7, 2021,

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from October 2020 through December 31, 2020 in satisfaction of the outstanding common stock payable.

Common Stock Sold for Cash, Subscriptions Payable

On July 2, 2021, the Company entered into a Stock

Purchase Agreement with multiple accredited investors to sell and issue to the purchasers, thereunder, an aggregate of 714,701 shares

of the Company’s common stock at a price of $4.25 per Share.

Proceeds to the Company from the sale of the Shares were $ 3,036,797 ,

of which $2,472,136 was received on June 30, 2021, which was recognized as a subscription payable as the underlying 581,675 shares were

subsequently issued on July 9, 2021.

A total of 407,204 of these shares, or proceeds of $1,730,621 were purchased by officers and directors,

including 347,057 shares, or $1,474,996, received on June 30, 2021.

Common Stock Sold for Cash

On February 5, 2021, the Company entered into a Stock Purchase Agreement with multiple

accredited investors to sell and issue to the Purchasers an aggregate 631,250 shares of the Company’s common stock at a price of

$4.00 per share for total proceeds of $2,525,000.

A total of 225,000 of these shares, or proceeds of $900,000 were purchased by officers

and directors.

On February 5, 2021, the Company entered into

a Stock Purchase Agreement with multiple accredited investors to sell and issue to the purchasers an aggregate 631,250 shares of the Company’s

common stock at a price of $ 4.00 per share for total proceeds of $ 2,525,000 .

A total of 225,000 of these shares, or proceeds of $ 900,000

were purchased by officers and directors.

Options Granted

On January 27, 2021, Chris Ludeman was granted

options to purchase 24,151 shares of the Company’s common stock, having an exercise price of $6.25 per share, exercisable over a

ten-year term.

The options will vest in three equal annual installments beginning of January 27, 2022 and continuing on each of the two

anniversaries thereafter until fully vested.

The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of

198% and a call option value of $6.1794, was $149,239.

The options were expensed over the vesting period, resulting in $327 of stock-based

compensation expense during the three months ended March 31, 2021.

On January 4, 2021, Claudia and Ira Goldfarb were

each granted options to purchase 75,000 shares of the Company’s common stock, having an exercise price of $3.70 per share, exercisable

over a ten-year term.

The options will vest in three equal installments beginning of January 4, 2022 and continuing on each of the two

anniversaries thereafter until fully vested.

The aggregate estimated value using the Black-Scholes Pricing Model, based on a volatility

rate of 198% and a call option value of $3.9412, was $591,178.

The options were expensed over the vesting period, resulting in $46,430

of stock-based compensation expense during the three months ended March 31, 2021.

On April 22, 2021, Brad Burke was granted options

to purchase 27,500 shares of the Company’s common stock, having an exercise price of $ 5.50 per share, exercisable over a ten-year

The options will vest 60% on the third anniversary, and 20% each anniversary thereafter until fully vested.

The estimated value

using the Black-Scholes Pricing Model, based on a volatility rate of 193 % and a call option value of $5.4381, was $ 149,547 .

were expensed over the vesting period, resulting in $ 5,736 of stock-based compensation expense during the six months ended June 30, 2021.

On January 27, 2021, Chris Ludeman was

granted options to purchase 24,151

shares of the Company’s common stock, having an exercise price of $ 6.25

per share, exercisable over a ten-year 10 term.

The options will vest in three equal annual installments beginning of January 27,

2022 and continuing on each of the two anniversaries thereafter until fully vested.

The estimated value using the Black-Scholes

Pricing Model, based on a volatility rate of 198 % and a call option value of $6.1794, was $ 149,239 .

The options were expensed over

the vesting period, resulting in $ 7,769 of stock-based compensation expense during the six months ended June 30, 2021.

On January 4, 2021, Claudia and Ira Goldfarb

were each granted options to purchase 75,000

shares of the Company’s common stock, having an exercise price of $ 3.70

per share, exercisable over a ten-year 10 term.

The options will vest in three equal installments beginning of January 4, 2022 and

continuing on each of the two anniversaries thereafter until fully vested.

The aggregate estimated value using the Black-Scholes

Pricing Model, based on a volatility rate of 198 % and a call option value of $3.9412, was $ 591,178 .

The options were expensed over

the vesting period, resulting in $ 95,560 of stock-based compensation expense during the six months ended June 30, 2021.

Lease Agreement

Upon closing of the Asset Purchase Agreement,

the Company assumed the Seller’s obligations under a real property lease for its 20,945 square foot facility in Irving, Texas, under

which an entity owned entirely by Ira Goldfarb is the landlord.

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to extend, at a monthly lease term of $10,036, with approximately a 3% annual escalation of lease payments commencing September 15, 2021.

Note 6 –

Fair Value of Financial Instruments

Under FASB ASC 820-10-5, fair value is defined

as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants

at the measurement date (an exit price).

The standard outlines a valuation framework and creates a fair value hierarchy in order to increase

the consistency and comparability of fair value measurements and the related disclosures.

Under GAAP, certain assets and liabilities must

be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

SOW GOOD INC.

Notes to Condensed

Financial Statements

Note 6 – Fair Value of Financial Instruments

The Company discloses the fair value of certain

assets and liabilities in accordance with ASC 820 – Fair Value Measurement (“ASC 820”).

Under FASB ASC 820-10-5,

fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between

market participants at the measurement date (an exit price).

The standard outlines a valuation framework and creates a fair value hierarchy

in order to increase the consistency and comparability of fair value measurements and the related disclosures.

Under GAAP, certain assets

and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at

The Company has cash and cash equivalents and

a revolving credit facility that must be measured under the fair value standard.

The Company’s financial assets and liabilities

are measured using inputs from the three levels of the fair value hierarchy.

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The following schedule summarizes the valuation

of financial instruments at fair value on a recurring basis in the balance sheets as of March 31, 2021 and December 31, 2020:

Fair Value Measurements at March 31, 2021

of financial instruments at fair value on a recurring basis in the balance sheets as of June 30, 2021 and December 31, 2020:

Valuation of financial instruments at fair value

Fair Value Measurements at June 30, 2021

Cash and cash equivalents

Investment in Allied Esports Entertainment, Inc.

Notes payable

Total liabilities

$ ( 150,000 )

Fair Value Measurements at December 31, 2020

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Total liabilities

$ ( 262,925 )

There were no transfers of financial assets or

liabilities between Level 1 and Level 2 inputs for the three months ended March 31, 2021.

SOW GOOD INC.

Notes to Condensed

Financial Statements

Note 7 –

Prepaid Expenses

Prepaid expenses consists of the following:

liabilities between Level 1 and Level 2 inputs for the six months ended June 30, 2021.

Note 7 – Prepaid Expenses

Prepaid expenses consist of the following:

Schedule of prepaid expenses

Prepaid software licenses

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Total prepaid expenses

Note 8 –

Property and Equipment

Property and equipment at March 31, 2021 and December 31, 2020, consists

Note 8 – Property and Equipment

Property and equipment at June 30, 2021 and December 31, 2020, consists

of the following:

Property and equipment

Office equipment

Leasehold improvements

Construction in progress

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Total property and equipment, net

Construction in progress consists of costs incurred

Construction in progress consisted of costs incurred

to build out our manufacturing facility in Irving Texas, along with the construction of our freeze driers.

These costs will be capitalized

These costs have been capitalized

as Leasehold Improvements and Machinery, respectively, upon completion.

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The Company recognized depreciation expense of

$4,996 and $271 for the three-month periods ended March 31, 2021 and 2020, respectively.

SOW GOOD INC.

Notes to Condensed

Financial Statements

Note 9 –

Investment in Allied Esports

$ 65,052 and $ 650 for the six months ended June 30, 2021 and 2020, respectively.

Note 9 – Investment in Allied Esports

Entertainment, Inc.

Following the close of BRAC’s merger, the

Company retained 2,685,500 shares of AESE common stock with a value, based on the closing stock of $4.45 on the merger, of $ 11,950,475 ,

and tradeable warrants to purchase 505,000 shares of AESE (NASDAQ:

AESEW) (“Sponsor Warrants”), of which the Company still

owned 177,479 shares as of March 31, 2021, after selling 1,970,920 shares for total net proceeds of $3,108,067, selling warrants to purchase

505,000 Sponsor Warrants for total proceeds of $73,668, and distributing 537,101 Sponsor Shares to employees and directors under the 2018

Management Incentive Plan during 2020.

As of March 31, 2021, the market value of the

Company’s investment in AESE’s common stock was $511,140, based on the closing stock price of $2.88 per share, resulting in

losses on our investment in securities, as follows:

AESEW) (“Sponsor Warrants”).

The Company subsequently sold

2,148,399 shares for total net proceeds of $ 3,522,428 , sold warrants to purchase 505,000 Sponsor Warrants for total proceeds of $7 3,668 ,

and distributed 537,101 Sponsor Shares to employees and directors under the 2018 Management Incentive Plan.

As of June 30, 2021, the Company had completely

sold its investment in AESE’s common stock, resulting in gains (losses) on our investment in securities, as follows:

Schedule of unrealized loss on investment

Net gain (loss) on investment in Allied Esports Entertainment, Inc.

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Net gains and losses recognized on equity securities sold during the period

Unrealized gains (losses) recognized on equity securities still held at the end of the period

Gain on deferred compensation payable in shares of AESE

Unrealized loss recognized on equity securities still held at the end of the period

$ ( 1,084,831 )

Note 10 –

Note 10 – Leases

The Company leases its 20,945 square foot operating

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insurance, maintenance and other occupancy costs applicable to the leased premise.

As the Company’s leases do not provide implicit

discount rates, the Company uses an incremental borrowing rate based on the information available at the commencement date in determining

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The components of lease expense were as follows:

For the Three

Schedule of components of lease expense

Operating lease cost:

Fixed rent expense

SOW GOOD INC.

Notes to Condensed

Financial Statements

Supplemental balance sheet information related to leases was as follows:

Schedule of supplemental balance sheet information

Operating leases:

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Supplemental cash flow and other information related to leases was

For the Three Months Ended

Schedule of supplemental cash flow and other information

Cash paid for amounts included in the measurement of lease liabilities:

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The future minimum lease payments due under operating leases as of

March 31, 2021 was as follows:

June 30, 2021 was as follows:

Schedule of future minimum lease payments

Fiscal Year Ending

Minimum Lease

2021 (for the nine months remaining)

2021 (for the six months remaining)

Less effects of discounting

Lease liability recognized

SOW GOOD INC.

Notes to Condensed

Financial Statements

Note 11 –

Notes Payable

Notes payable consists of the following at March

Note 11 – Notes Payable

Notes payable consists of the following at June

30, 2021 and December 31, 2020, respectively:

On June 16, 2020, the Company entered into a loan authorization and loan agreement with the United States Small Business Administration (the “SBA”), as lender, pursuant to the SBA’s Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business (the “EIDL Loan Agreement”) encompassing a $150,000 Promissory Note issued to the SBA (the “EIDL Note”)(together with the EIDL Loan Agreement, the “EIDL Loan”), bearing interest at 3.75% per annum.

In connection with entering into the EIDL Loan, the Company also executed a security agreement, dated June 16, 2020, between the SBA and the Company (the “EIDL Security Agreement”) pursuant to which the EIDL Loan is secured by a security interest on all of the Company’s assets.

Schedule of notes payable

June 30, 2021

December 31, 2020

On June 16, 2020, the Company entered into a loan authorization and loan agreement with the United States Small Business Administration (the “SBA”), as lender, pursuant to the SBA’s Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business (the “EIDL Loan Agreement”) encompassing a $ 150,000 Promissory Note issued to the SBA (the “EIDL Note”)(together with the EIDL Loan Agreement, the “EIDL Loan”), bearing interest at 3.75% per annum .

Under the EIDL Note, the Company is required to pay principal and interest payments of $ 731 every month beginning June 16, 2021.

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The EIDL Note may be repaid at any time without penalty.

On April 24, 2020, the Company entered into a loan agreement with Kensington Bank (“Kensington”), as lender (the “Loan Agreement”) encompassing a $112,925 Promissory Note issued to Kensington (the “PPP Note”) pursuant to Payroll Protection Program established as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which provides loans to qualifying businesses and is administered by the U.S.

Small Business Administration (the “SBA”).

On April 24, 2020, the Company entered into a loan agreement with Kensington Bank (“Kensington”), as lender (the “Loan Agreement”) encompassing a $ 112,925 Promissory Note issued to Kensington (the “PPP Note”) pursuant to Payroll Protection Program established as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which provides loans to qualifying businesses and is administered by the U.S.

Small Business Administration (the “SBA”).

The PPP Note bears interest at 1.00% per annum , with interest payable monthly beginning November 24, 2020, and principal due in full on April 24, 2022 .

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Notes payable, less current maturities

The Company recognized $1,512 and $15,109 of interest

expense, consisting of $1,314 of interest and $13,795 of stock-based warrant expense pursuant to the amortization of the debt discounts,

during the three months ended March 31, 2021 and 2020, respectively.

SOW GOOD INC.

Notes to Condensed

Financial Statements

Note 12 –

Changes in Stockholders’

The Company recognized $ 2,734

and $ 382,761

of interest expense, consisting of $ 2,734 and $ 5,321

of interest and $ 0 and $ 377,440

of stock-based warrant expense pursuant to the amortization of the debt discounts, during the six months ended June 30, 2021 and

2020, respectively.

Note 12 – Changes in Stockholders’

Reverse Stock Split

On February 21, 2020, the Company effected a 1-for-300

reverse stock split (the “Reverse Stock Split”).

On February 21, 2020, the Company effected a 1-for-300 reverse stock split (the “Reverse Stock Split”).

No fractional shares were issued.

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to any stockholder who otherwise would have received a fractional share as a result of the Reverse Stock Split:

Stockholders owning 300 or more shares of Common Stock received (1) one share of Common Stock for every 300 shares owned and (2) cash in lieu of fractional shares upon the surrender of such stockholder’s shares;

Stockholders owning between 25 and 300 shares of Common Stock had their ownership of shares of Common Stock rounded up to one share;

Stockholders owning fewer than 25 shares of Common Stock received cash in lieu of fractional shares upon the surrender of such stockholders’

shares and no longer own shares of Common Stock.

Stockholders owning fewer than 25 shares of Common Stock received cash in lieu of fractional shares upon the surrender of such stockholders’ shares and no longer own shares of Common Stock.

Any cash payment in lieu of fractional shares

were based on the volume weighted average of the closing sales prices of the Company’s Common Stock on the OTCQB operated by

OTC Markets Group Inc.

(the “OTCQB”) during regular trading hours for the five consecutive trading days immediately preceding

the Effective Date, which was $0.018 per share prior to the effects of the reverse stock split.

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The Reverse Stock Split did not have any effect on

the stated par value of the common stock, or the Company’s authorized preferred stock.

Unless otherwise stated, all share and per

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of $ 0.001 par value common stock.

As of March 31, 2021, a total of 3,939,439 shares of common stock have been issued.

As of June 30, 2021, a total of 3,978,194 shares of common stock have been issued.

Issuance of Shares in Completion of Acquisition

4 unchanged sentences

On December 31, 2020, the final number of shares to be issued to S-FDF, LLC was determined to be 500,973 shares and a common stock payable

was recognized in the amount of $1,853,600, the fair value of the common stock based on the closing price of the Company’s common

was recognized in the amount of $ 1,853,600 , the fair value of the common stock based on the closing price of the Company’s common

stock on the date of grant.

1 unchanged sentence

Common Stock Payable Awarded to Officers

On March 31, 2021,

On June 30, 2021,

the Company awarded 5,541 and 6,044 shares of common stock to Claudia and Ira Goldfarb , respectively, for services earned during

March 31, 2021.

June 30, 2021.

The aggregate fair value of the shares was $ 25,156 and $ 27,440 for Claudia and Ira,

respectively, based on the closing price of the Company’s common stock on the date of grant .

The shares were subsequently

issued on April 6, 2021, in satisfaction of the outstanding common stock payable.

SOW GOOD INC.

Notes to Condensed

Financial Statements

issued on July 7, 2021, in satisfaction of the outstanding common stock payable.

Issuance of Shares for Services

On May 31, 2021,

the Company issued 5,541 and 6,044 shares to Claudia and Ira Goldfarb , respectively ,

for their services for May 2021.

The aggregate fair value of the shares was $ 26,320 and $ 28,709 for Claudia and Ira, respectively, based

on the closing price of the Company’s common stock on the date of grant.

On May 25, 2021,

the Company issued 2,000 shares to each of two advisory board members for their services.

The total aggregate fair value of the shares was $ 20,000 , based on the closing price of the Company’s common stock on the date of

On April 30, 2021,

the Company issued 5,541 and 6,044 shares to Claudia and Ira Goldfarb , respectively ,

for their services for April 2021.

The aggregate fair value of the shares was $ 31,307 and $ 34,148 for Claudia and Ira, respectively, based

on the closing price of the Company’s common stock on the date of grant.

On March 31, 2021,

the Company awarded 5,541 and 6,044 shares of common stock to Claudia and Ira Goldfarb , respectively, for their services for March

The aggregate fair value of the shares was $ 34,853 and $ 38,016 for Claudia and Ira, respectively,

based on the closing price of the Company’s common stock on the date of grant .

The shares were subsequently issued on April

6, 2021, in satisfaction of the outstanding common stock payable.

On February 28, 2021,

2 unchanged sentences

The aggregate fair value of the shares was $ 38,787 and $ 42,308 for Claudia and Ira, respectively,

based on the closing price of the Company’s common stock on the date of grant.

On January 31, 2021,

2 unchanged sentences

The aggregate fair value of the shares was $ 29,035 and $ 31,671 for Claudia and Ira, respectively,

based on the closing price of the Company’s common stock on the date of grant.

On January 27, 2021,

upon Benjamin Oehler’s resignation, the Company a ppointed Chris Ludeman as a member of the Board of Directors of the Company,

and appointed him to the Company’s Audit Committee as Chairperson.

upon Benjamin Oehler’s resignation, the Company a ppointed Chris Ludeman as a member of the Board of Directors of the Company,

and appointed him to the Company’s Audit Committee as Chairperson.

Pursuant to his appointment, Mr.

2 unchanged sentences

The aggregate fair value of the common stock was $ 40,000 , based on the closing

price of the Company’s common stock on the date of grant.

On January 7, 2021,

the Company issued an aggregate 16,623 and 18,133 shares of common stock to Claudia and Ira Goldfarb , respectively, for services

the Company issued an aggregate 16,623

shares of common stock to Claudia and Ira Goldfarb , respectively, for services

from October 2020 through December 31, 2020 in satisfaction of the outstanding common stock payable.

Common Stock Sold for Cash

On February 5, 2021, the Company entered into a Stock Purchase Agreement with multiple

accredited investors to sell and issue to the Purchasers an aggregate 631,250 shares of the Company’s common stock at a price of

$4.00 per share for total proceeds of $2,525,000.

A total of 225,000 of these shares, or proceeds of $900,000 were purchased by officers

and directors.

Note 13 –

On February 5, 2021, the Company entered into

a Stock Purchase Agreement with multiple accredited investors to sell and issue to the Purchasers an aggregate 631,250 shares of the Company’s

common stock at a price of $ 4.00 per share for total proceeds of $ 2,525,000 .

A total of 225,000 of these shares, or proceeds of $ 900,000

were purchased by officers and directors.

Common Stock Sold for Cash, Subscriptions Payable

On July 2, 2021, the Company entered into a Stock

Purchase Agreement with multiple accredited investors to sell and issue to the purchasers, thereunder, an aggregate of 714,701 shares

of the Company’s common stock at a price of $4.25 per Share.

Proceeds to the Company from the sale of the Shares were $3,036,797,

of which $2,472,136 was received on June 30, 2021, which was recognized as a subscription payable as the underlying 581,675 shares were

subsequently issued on July 9, 2021.

A total of 407,204 of these shares, or proceeds of $1,730,621 were purchased by officers and directors,

including 347,057 shares, or $ 1,474,996 , received on June 30, 2021.

Note 13 – Options

The 2020 Equity Plan was approved by written consent

of a majority of shareholders of record as of November 12, 2019 and adopted by the Board on December 5, 2019, as provided in the definitive

information statement filed with Securities and Exchange Commission on January 10, 2020 (the “DEF 14C”).

The description of

3 unchanged sentences

shares of common stock at a weighted average strike price of $ 5.94 , exercisable over a weighted average life of 9.14 years were outstanding

as of March 31, 2021.

as of June 30, 2021.

Options Granted

On January 27, 2021, Chris Ludeman was granted

options to purchase 24,151 shares of the Company’s common stock, having an exercise price of $6.25 per share, exercisable over a

ten-year term.

The options will vest in three equal annual installments beginning of January 27, 2022 and continuing on each of the two

anniversaries thereafter until fully vested.

On May 25, 2021, two advisory board members

were granted options to purchase an aggregate 6,000

shares of the Company’s common stock, having an exercise price of $ 5.00

per share, exercisable over a 10 ten-year term.

The options will vest 60% on the third anniversary, and 20% each anniversary

thereafter until fully vested.

The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 191 %

and a call option value of $4.9272, was $ 29,562 .

The options were expensed over the vesting period, resulting in $327 of stock-based

compensation expense during the three months ended March 31, 2021.

SOW GOOD INC.

Notes to Condensed

Financial Statements

On January 4, 2021, Claudia and Ira Goldfarb were

each granted options to purchase 75,000 shares of the Company’s common stock, having an exercise price of $3.70 per share, exercisable

over a ten-year term.

The options will vest in three equal installments beginning of January 4, 2022 and continuing on each of the two

anniversaries thereafter until fully vested.

The aggregate estimated value using the Black-Scholes Pricing Model, based on a volatility

rate of 198% and a call option value of $3.9412, was $591,178.

The options were expensed over the vesting period, resulting in $ 4,147

of stock-based compensation expense during the three months ended March 31, 2021.

of stock-based compensation expense during the six months ended June 30, 2021.

On April 22, 2021, Brad Burke was granted

options to purchase 27,500

shares of the Company’s common stock, having an exercise price of $ 5.50

per share, exercisable over a 10 ten-year term.

The options will vest 60% on the third anniversary, and 20% each anniversary

thereafter until fully vested.

The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 193 %

and a call option value of $5.4381, was $ 149,547 .

The options were expensed over the vesting period, resulting in $ 5,736

of stock-based compensation expense during the six months ended June 30, 2021.

On April 22, 2021, a total of fifteen

employees and consultants were granted options to purchase an aggregate 19,875

shares of the Company’s common stock, having an exercise price of $ 5.50

per share, exercisable over a 10 ten-year term.

The options will vest 60% on the third anniversary, and 20% each anniversary

thereafter until fully vested.

The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 193 %

and a call option value of $5.4381, was $ 108,082 .

The options were expensed over the vesting period, resulting in $ 584

of stock-based compensation expense during the six months ended June 30, 2021.

On January 27, 2021, Chris Ludeman was

granted options to purchase 24,151

shares of the Company’s common stock, having an exercise price of $ 6.25

per share, exercisable over a 10 ten-year term.

The options will vest in three equal annual installments beginning of January 27,

2022 and continuing on each of the two anniversaries thereafter until fully vested.

The estimated value using the Black-Scholes

Pricing Model, based on a volatility rate of 198 %

and a call option value of $6.1794, was $ 149,239 .

The options were expensed over the vesting period, resulting in $ 7,769

of stock-based compensation expense during the six months ended June 30, 2021.

On January 4, 2021, Claudia and Ira Goldfarb

were each granted options to purchase 75,000 shares of the Company’s common stock, having an exercise price of $ 3.70 per

share, exercisable over a 10 ten-year term.

The options will vest in three equal installments beginning of January 4, 2022 and

continuing on each of the two anniversaries thereafter until fully vested.

The aggregate estimated value using the Black-Scholes

Pricing Model, based on a volatility rate of 198 % and a call option value of $3.9412, was $ 591,178 .

The options were expensed over

the vesting period, resulting in $95,560 of stock-based compensation expense during the six months ended June 30, 2021.

The Company recognized a total of $ 261,465 , and

$21,489 of compensation expense during the three months ended March 31, 2021 and 2020, respectively, related to common stock options

issued to Officers, Directors, and Employees that are being amortized over the implied service term, or vesting period, of the options.

The remaining unamortized balance of these options is $2,053,560 as of March 31, 2021.

$ 70,943 of compensation expense during the six months ended June 30, 2021 and 2020, respectively, related to common stock options issued

to Officers, Directors, and Employees that are being amortized over the implied service term, or vesting period, of the options.

The remaining

unamortized balance of these options is $ 2,200,507 as of June 30, 2021.

Options Exercised

No options were exercised during the three months

ended March 31, 2021 and 2020.

No options were exercised during the six months

ended June 30, 2021 and 2020.

Options Forfeited

A total of 28,205 options with a weighted average

exercise price of $90 were forfeited during the three months ended March 31, 2021.

Note 14 –

exercise price of $ 50.74 were forfeited during the six months ended June 30, 2021.

Note 14 – Warrants

Outstanding Warrants

Warrants to purchase an aggregate total of 106,300

shares of common stock at a $3.99 strike price, exercisable over a weighted average life of 8.86 years were outstanding as of March 31,

shares of common stock at a $ 3.99 strike price, exercisable over a weighted average life of 8.61 years were outstanding as of June 30,

Warrants Granted

No warrants were granted during the three months

ended March 31, 2021 and 2020.

No warrants were granted during the six months

ended June 30, 2021 and 2020.

Warrants Exercised

No warrants were exercised during the three months

ended March 31, 2021 and 2020.

Note 15 –

No warrants were exercised during the six months

ended June 30, 2021 and 2020.

Note 15 – Income Taxes

The Company accounts for income taxes under ASC

5 unchanged sentences

Losses incurred during the period from April

2011 (inception) to March 31, 2021 could be used to offset future tax liabilities.

Accounting standards require the consideration of a

valuation allowance for deferred tax assets if it is “more likely than not”

that some component or all of the benefits of

deferred tax assets will not be realized.

As of March 31, 2021, net deferred tax assets were $5,658,442, with no deferred tax liability,

9, 2011 (inception) to June 30, 2021 could be used to offset future tax liabilities.

Accounting standards require the consideration of

a valuation allowance for deferred tax assets if it is “more likely than not” that some component or all of the benefits

of deferred tax assets will not be realized.

As of June 30, 2021, net deferred tax assets were $ 5,981,775 , with no deferred tax liability,

primarily related to net operating loss carryforwards.

2 unchanged sentences

In accordance with FASB ASC 740, the Company has

evaluated its tax positions and determined there are no significant uncertain tax positions as of any date on, or before March 31, 2021.

SOW GOOD INC.

Notes to Condensed

Financial Statements

Note 16 –

evaluated its tax positions and determined there are no significant uncertain tax positions as of any date on, or before June 30, 2021.

Note 16 – Commitments

The Company is involved in various inquiries,

3 unchanged sentences

is not able to estimate the minimum loss to be incurred, if any, as a result of the final outcome of the matters arising in the normal

course of business but believes they are not likely to have a material adverse effect upon the Company’s financial position or results

of operations and, accordingly, no provision for loss has been recorded.

4 unchanged sentences

Upon closing of the Asset Purchase Agreement,

the Company assumed the Seller’s obligations under a real property lease for its 20,945 square foot facility in Irving, Texas, under

which an entity owned entirely by Ira Goldfarb is the landlord.

2 unchanged sentences

The future minimum lease payments due under operating leases as of

March 31, 2021 is as follows:

June 30, 2021 is as follows:

Schedule of future minimum lease payments

Fiscal Year Ending

Minimum Lease

2021 (for the nine months remaining)

2021 (for the six months remaining)

Less effects of discounting

Lease liability recognized

Note 17 –

Subsequent Events

Note 17 – Subsequent Events

The Company evaluates events that have occurred

after the balance sheet date through the date these financial statements were issued.

Common Stock Issued to Officers on Common Stock

On April 6, 2021,

the Company issued 5,541 and 6,044 shares of common stock to Claudia and Ira Goldfarb , respectively, for services earned during

March 31, 2021 in satisfaction of the outstanding common stock payable.

Common Stock Awarded to Officers

On approximately

May 6, 2021, the Company issued 5,541 and 6,044 shares of common stock to Claudia and Ira Goldfarb , respectively, for

services earned during April 30, 2021 .

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Cautionary Statements

We are including the following

discussion to inform our existing and potential security holders generally of some of the risks and uncertainties that can affect our

company and to take advantage of the “safe harbor”

protection for forward-looking statements that applicable federal securities

From time to time, our management

or persons acting on our behalf may make forward-looking statements to inform existing and potential security holders about our company.

All statements other than statements of historical facts included in this report regarding our financial position, business strategy,

plans and objectives of management for future operations and industry conditions are forward-looking statements.

When used in this report,

forward-looking statements are generally accompanied by terms or phrases such as “estimate,”

“project,”

“predict,”

“believe,”

“expect,”

“anticipate,”

“target,”

“plan,”

“intend,”

“seek,”

“goal,”

“will,”

“should,”

“may”

or other words and similar expressions

that convey the uncertainty of future events or outcomes.

Items making assumptions regarding actual or potential future sales, market

size, collaborations, trends or operating results also constitute such forward-looking statements.

Forward-looking statements

involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results

to differ materially from those set forth in the forward-looking statements include the following:

the effect of the coronavirus (“COVID-19”)

pandemic on our ability to obtain funding through various financing transactions or arrangements;

volatility or decline of our stock price;

low trading volume and illiquidity of our common stock;

potential fluctuation in quarterly results;

low trading volume and price of our investment in AESE Shares;

inability to maintain adequate liquidity to meet our financial obligations;

failure to obtain sufficient sales and distributions of our freeze-dried fruit product offerings;

litigation, disputes and legal claims involving outside parties;

risks related to our ability to be traded on the OTCQB and meeting trading requirements

We have based these forward-looking

statements on our current expectations and assumptions about future events.

While our management considers these expectations and assumptions

to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties,

most of which are difficult to predict and many of which are beyond our control.

Accordingly, results actually achieved may differ materially

from expected results in these statements.

Forward-looking statements speak only as of the date they are made.

Readers are urged not to place

undue reliance on these forward-looking statements.

We assume no obligation to update any forward-looking statements in order to reflect

any event or circumstance that may arise after the date of this report, other than as may be required by applicable law or regulation.

Readers are urged to carefully review and consider the various disclosures made by us in our reports filed with the United States Securities

and Exchange Commission (the “SEC”) which attempt to advise interested parties of the risks and factors that may affect our

business, financial condition, results of operation and cash flows.

If one or more of these risks or uncertainties materialize, or if

the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected.

Overview and Outlook

Effective January 21, 2021,

we changed our name from Black Ridge Oil & Gas, Inc.

to Sow Good Inc.

Our common stock is quoted on the OTCQB under the trading symbol

“SOWG”.

On March 20, 2021,

our first freeze drier successfully completed its production testing.

In addition, we completed the build-out of our production facility

in March, and have finalized products and packaging, while delivering samples to potential B2B customers.

As of May, 2021, we have launched

our direct-to-consumer freeze-dried consumer packaged good (CPG) food brand, under our Sow Good brand.

Sow Good launches with its first

line of non-GMO products including 6 ready-to-make smoothies and 9 snacks.

The smoothie lineup offers a mix of both new and familiar flavors:

Açaí

of Relief (açaí, blueberry);

Mint to Be (banana, coconut, mint);

and Berry Apeeling (banana, strawberry).

Sow Good packaged snack lineup includes single-ingredient fruits and vegetables such as Mon Cherry (cherries);

Cool Beans (edamame);

What’s Apple’n (apples).

Smoothies are $7.50 each and packaged snacks are $5.25 per bag.

add additional products in 2021, including soups and to launch our Sustain Us brand and product line.

In addition, we

completed the build-out of our production facility in March, and have finalized products and packaging, while delivering samples to potential

B2B customers.

Our first freeze

drier successfully completed its production testing in March 2021.

The company is now producing its own freeze-dried fruits and vegetables

from individual quick freeze (IQF) raw materials.

Freeze dried food production also continues to be supplemented by our relationships

with co-manufacturing partners.

Our unique food

products are targeting the large, and growing, freeze-dried food products market.

The global freeze-dried food products market is estimated

by Technavio to total nearly $60B in 2020, with the United States representing almost 30% of the total.

further projects market growth to continue at over 8% per year through 2024.

With the extensive

freeze-dried manufacturing and food product-focused business development experience of our senior management team, we believe we are well

positioned to lead the Company's growth and development in the freeze-dried food industry.

Going Concern Uncertainty

As of March 31, 2021, the

Company has incurred recurring losses from operations resulting in an accumulated deficit of $37,486,215, and had cash and liquid securities

on hand of $3,057,253.

As of March 31, 2021, the Company’s cash on hand may not be sufficient to sustain operations.

These factors

raise substantial doubt about the Company’s ability to continue as a going concern.

The Company is currently seeking additional

sources of capital to fund short term operations.

The Company intends to sell its AESE shares to continue as a going concern, however,

there can be no assurance the share price will be sufficient to sustain operations, therefore the Company may be dependent upon its ability

to secure equity and/or debt financing and there are also no assurances that the Company will be successful;

therefore, without sufficient

financing it would be unlikely for the Company to continue as a going concern.

We continue to pursue sources

of additional capital through various financing transactions or arrangements, including equity financing or other means.

We may not be

successful in identifying suitable funding transactions in a sufficient time period or at all, and we may not obtain the capital we require

by other means.

If we do not succeed in raising additional capital, our resources may not be sufficient to fund our business.

to scale production and distribution capabilities and further increase the value of our brands, is largely dependent on our success in

raising additional capital.

As of May 6th 2021, the Company had $1,862,434 of cash on hand and shares in AESE stock with a fair market

value of $425,950.

The report of the Company’s

independent registered public accounting firm that accompanies its audited financial statements in the Company’s Annual Report on

Form 10-K contains an explanatory paragraph regarding the substantial doubt about the Company’s ability to continue as a going

The financial statements do not include any adjustments that might result from the outcome of the going concern uncertainty.

Results of Operations for the Three Months

Ended March 31, 2021 and 2020.

The following table summarizes

selected items from the statement of operations for the three months ended March 31, 2021 and 2020, respectively.

Three Months Ended

Total revenues:

Operating expenses:

General and administrative expenses:

Salaries and benefits

Salaries and benefits, stock-based

Professional services

Other general and administrative expenses

Total general and administrative expenses

Depreciation and amortization

Total operating expenses

Net operating loss

Other income (expense)

Interest expense, including $13,795 of warrants issued as a debt discount for the three months ending March 31, 2020

Gain on early extinguishment of debt

Gain (loss) on investment in Allied Esports Entertainment, Inc.

Total other income (expense)

$ (2,645,579 )

$ (1,837,702 )

The Company did not earn any

revenues during the three months ended March 31, 2021 or 2020.

General and administrative expenses

Salaries and benefits

Salaries and benefits for

the three months ended March 31, 2021 were $381,253, compared to $219,724 for the three months ended March 31, 2020, an increase of $161,529,

The increase in salaries and benefits was primarily due to increased operations as we developed our freeze-dried food operations.

Salaries and benefits, stock-based

compensation expense for the three months ended March 31, 2021 was $375,891, compared to $21,489 for the three months ended March 31,

2020, an increase of $354,402, or 1,649%.

Stock-based compensation consists of $121,221 and $21,489 of stock options expense incurred

in the three months ended March 31, 2021 and 2020, respectively, and $254,670 of expense related to shares of common stock issued to officers

and directors in the current period for services rendered.

Stock-based compensation increased as management accepted stock-based compensation

in lieu of cash while the Company developed its freeze-dried food operations.

Professional services

Professional services were

$101,899 for the 2021 period, compared to $84,984 for the 2020 period, an increase of $16,915, or 20%.

The increase was primarily due

to legal fees incurred in connection with our name change in January 2021 and our sale of common stock in February 2021.

Other general and administrative expenses

Other general and administrative

expenses for the three months ended March 31, 2021 was $286,821, compared to $91,150 for the three months ended March 31, 2020, an increase

of $195,671, or 215%.

The increase is primarily attributable to increased administrative infrastructure as we seek to scale the production

and sales of our freeze-dried products.

Depreciation expense for the

three months ended March 31, 2021 was $4,996, compared to $271 for the three months ended March 31, 2020, an increase of $4,725, or 1,744%.

The increase is attributable to the addition of new computer equipment in 2020 and 2021.

Other income (expense)

In the three months ended

March 31, 2021, other income was $342,983, consisting of a $113,772 gain on early extinguishment of debt and a net gain on investments

in Allied Esports Entertainment, Inc.

securities of $230,723, as offset by $1,512 of interest expense derived from the operating loans

the Company received from the PPP and EIDL programs.

During the comparative three months ended March 31, 2020, other expense was $2,227,961,

consisting of $1,314 of interest expense derived from the business loans the Company received from Cadence Bank, N.A and RBC Capital

Markets, LLC, and $13,795 of expense related to the amortization of warrants issued in consideration of personal guarantees provided for

debt financing, along with a net loss on investments in Allied Esports Entertainment, Inc.

of $2,212,852.

Net loss for the three months

ended March 31, 2021 was $807,877, compared to $2,645,579 during the three months ended March 31, 2020, a decrease of $1,837,702,

The decreased net loss was due primarily to our gain on investments in Allied Esports Entertainment, Inc.

securities, compared

to our prior period loss on investments.

Liquidity and Capital Resources

The following table summarizes

our total current assets, liabilities and working capital at March 31, 2021 and December 31, 2020, respectively.

Current Assets

Current Liabilities

Working Capital

As of March 31, 2021, we had

working capital of $3,061,621.

The following table summarizes

our cash flows during the three-month periods ended March 31, 2021 and 2020, respectively.

Three Months Ended

Net cash used in operating activities

$ (1,194,871 )

Net cash used in investing activities

Net cash provided by financing activities

Net change in cash and cash equivalents

Net cash used in operating

activities was $1,194,871 and $321,659 for the three months ended March 31, 2021 and 2020, respectively, a period over period increase

The increase was primarily due to an increase of $315,493 in inventory purchases, as well as, increased costs as we moved

our operations from Minnesota to Texas to develop our new freeze-dried food business.

Net cash used in investing

activities were $696,745 for the three months ended March 31, 2021.

Cash used in investing activities were comprised of $38,208 of fixed

asset purchases, along with $658,537 of construction in progress costs during the three months ended March 31, 2021, as we built out our

freeze-dried foods warehouse and equipment.

Net cash provided by financing

activities was $2,525,000 and $265,000 for the three months ended March 31, 2021 and 2020, respectively.

All of the 2021 activity was

the result of the $2,525,000 we raised from the sale of an aggregate 631,250 shares of the Company’s

common stock at $4.00 per share , compared to $265,000 of net proceeds received from notes payable in the comparative three months

ended March 31, 2020.

Satisfaction of our cash obligations for

the next 12 months

As of March 31, 2021, our

balance of cash was $2,546,113 and we had total working capital of $3,061,621.

B ased on projections

of cash expenditures in the Company’s current business plan, the cash on hand as of March 31, 2021 would be insufficient to sustain

operations over the next year.

We expect to incur significant costs related to the development and operation of our freeze-dried foods

business which will put a strain on our cash resources.

Should the Company be successful in launching its products, we may pursue the

expansion of our production capabilities through the construction of a second freeze drier.

Adding a second freeze drier would require

approximately $1 million of incremental capital and would likely require the Company to identify additional sources of funding .

O ur plan for satisfying our cash requirements for the next twelve months is through cash on hand

and additional financing in the form of equity or debt as needed .

Our ability to scale production

and distribution capabilities and further increase the value of our brands is largely dependent on our success in raising additional capital .

Off-Balance Sheet Arrangements

We have no off-balance sheet

arrangements.

Critical Accounting Policies and Estimates

Our management’s discussion

and analysis of financial conditions and results of operations is based on our financial statements, which have been prepared in accordance

with accounting principles generally accepted in the United States, or GAAP.

The preparation of these financial statements required us

to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses.

On an ongoing basis, we evaluate

these estimates and judgments.

We base our estimates on our historical experience and on various other assumptions that we believe to

be reasonable under the circumstances.

These estimates and assumptions form the basis for making judgments about the carrying values of

assets and liabilities that are not readily apparent from other sources.

Actual results and experiences may differ materially from these

Our critical accounting policies

are more fully described in Note 2 of the footnotes to our financial statements appearing elsewhere in this Form 10-Q, and Note 2 of the

footnotes to the financial statements provided in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK .

As a “smaller reporting

company”

as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item

July 31, 2021, the Company issued 5,541 and 6,044 shares of common stock to Claudia and Ira

Goldfarb , respectively, for their services during July 2021 .

Common Stock Issued to Officers on Common Stock

On July 7, 2021,

the Company issued 5,541 and 6,044 shares of common stock to Claudia and Ira Goldfarb , respectively, for their services earned

during June 2021 in satisfaction of the outstanding common stock payable.

Common Stock Sold for Cash

On July 2, 2021, the Company entered into a Stock

Purchase Agreement with multiple accredited investors to sell and issue to the purchasers, thereunder, an aggregate of 714,701 shares

of the Company’s common stock at a price of $4.25 per Share.

Proceeds to the Company from the sale of the Shares were $3,036,797,

of which $2,472,136 was received on June 30, 2021, which was recognized as a subscription payable as the underlying 581,675 shares were

subsequently issued on July 9, 2021.

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

What changed 10-Q

Item 1. Financial Statements