What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2022-03-29 compared with 2021-03-31 · 72 added, 436 removed, 42 unchanged (92% of the section changed)

MARKET FOR REGISTRANT’S COMMON

EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

The Company changed its ticker

symbol from “ANFC”

to “SOWG”, effective as of the opening of trading on January 22, 2021.

symbol from “ANFC” to “SOWG”, effective as of the opening of trading on January 22, 2021.

Quotations on the OTCQB reflect

3 unchanged sentences

As of March 28, 2022,

there were approximately 341 record holders of our common stock, not including shares held in “street name”

in brokerage accounts

there were approximately 365 record holders of our common stock, not including shares held in “street name” in brokerage accounts

which is unknown.

2 unchanged sentences

Effective December 5, 2019,

the 2020 Stock Incentive Plan (the “2020 Plan”) was approved by our Board.

Amongst other things, the 2020 Plan authorized

a total of 320,000 shares of our common stock.

Subsequently, on October 1, 2020, January 4, 2021 and again

on March 19, 2021, the Board approved an increase in the number of shares of common stock reserved under the 2020 Plan, from 320,000 shares

to a total of 814,150 shares.

The increase remains subject to shareholder approval, to be provided, if at all, by October 1, 2021.

The following table sets forth certain information regarding our 2020 Plan as of December 31, 2020:

Number of securities

upon exercise of

outstanding stock options

Weighted-average

exercise price of

outstanding stock options

Number of securities

remaining available

for future issuance

under the 2020 Plan

Subsequently, on October 1, 2020, January 4, 2021 and again on March 19, 2021, the Board

approved an increase in the number of shares of common stock reserved under the 2020 Plan, from 320,000 shares to a total of 814,150 shares.

The increase was approved by a majority of shareholders of record on September 3, 2021.

The following table sets forth certain information

regarding our 2020 Plan as of December 31, 2021:

Number of securities to be issued upon exercise of outstanding stock options

Weighted-average exercise price of outstanding stock options

Number of securities remaining available for future issuance under the 2020 Plan

For the fiscal years ended

December 31, 2021 and 2020, we issued 257,975 and 439,151 stock options pursuant to the 2020 Plan.

There were no options cancelled

or forfeited pursuant to the 2020 Plan during the years ended December 31, 2020 and 2019, respectively.

There were 161,606 options

cancelled or forfeited pursuant to the 2020 Plan during the year ended December 31, 2021.

There were no options cancelled or

forfeited pursuant to the 2020 Plan during the year ended December 31, 2020.

Effective December 12, 2016,

the 2016 Non-Qualified Stock Option Plan (the “2016 Plan”) was approved by our Board.

Amongst other things, the 2016

2 unchanged sentences

as of December 31, 2021:

Number of securities

upon exercise of

outstanding stock options

Weighted-average

exercise price of

outstanding stock options

Number of securities

remaining available

for future issuance

under the 2016 Plan

Number of securities to be issued upon exercise of outstanding stock options

Weighted-average exercise price of outstanding stock options

Number of securities remaining available for future issuance under the 2016 Plan

For the fiscal years ended

3 unchanged sentences

Effective March 2, 2012,

2012, the 2012 Amended and Restated Stock Incentive Plan (the “2012 Plan”) was approved by our Board and the

holders of a majority of our outstanding shares, replacing the Ante5, Inc.

the 2012 Amended and Restated Stock Incentive Plan (the “2012 Plan”) was approved by our Board and the holders of a majority

of our outstanding shares, replacing the Ante5, Inc.

2010 Stock Incentive Plan.

Amongst other

things, the 2012 Plan increased the number of shares reserved under the Plan to a total of 25,000 shares of our common stock.

following table sets forth certain information regarding the 2012 Plan as of December 31, 2020:

Number of securities

upon exercise of

outstanding stock options

Weighted-average

exercise price of

outstanding stock options

Number of securities

remaining available

for future issuance

under the 2012 Plan

Amongst other things, the 2012 Plan increased

the number of shares reserved under the Plan to a total of 25,000 shares of our common stock.

The following table sets forth certain information

regarding the 2012 Plan as of December 31, 2021:

Number of securities to be issued upon exercise of outstanding stock options

Weighted-average exercise price of outstanding stock options

Number of securities remaining available for future issuance under the 2012 Plan

For the fiscal years ended

2 unchanged sentences

or forfeited pursuant to the 2012 Plan during the years ended December 31, 2021 and 2020, respectively.

consideration for four of our officers and directors’

willingness to serve as guarantors of the Cadence Loan, the Company issued

warrants to each of the Guarantors (the “Guarantor Warrants”) for the purchase of the Company’s common stock on March

The Guarantor Warrants entitle each Guarantor to purchase 26,250 shares of the Company's common stock (the “Warrant Shares”)

at an exercise price of $4.00 per share.

December 31, 2021, the Company closed a private placement and concurrently entered into a Note and Warrant Purchase Agreement with related

parties to sell an aggregate $2,075,000 of promissory notes and warrants to purchase an aggregate 311,250 shares of common stock, representing

15,000 warrant shares per $100,000 of promissory notes.

The warrants are exercisable at a price of $2.21 per share over a ten-year term.

The officers, directors and related parties receiving grants and the amounts of such grants were as follows:

Stock Warrant

Name and Title at Time of Grant

Shares Granted

Ira and Claudia Goldfarb, Chairman and Chief Executive Officer

Brad Burke, Chief Financial Officer

Lyle Berman, Director

Gutierrez, brother of the Company’s Chief Executive Officer

In consideration for four

of our officers and directors’ willingness to serve as guarantors of the Cadence Loan, the Company issued warrants to each of the

Guarantors (the “Guarantor Warrants”) for the purchase of the Company’s common stock on March 12, 2020.

The Guarantor

Warrants entitle each Guarantor to purchase 26,250 shares of the Company's common stock (the “Warrant Shares”) at an exercise

price of $4.00 per share.

The Guarantor Warrants expire on March 12, 2030.

No warrants were granted during the fiscal

year ended December 31, 2019.

The officers and directors receiving grants and the amounts of such grants were

The officers and directors receiving grants and the amounts

of such grants were as follows:

Stock Warrant

1 unchanged sentence

Shares Granted

Ken DeCubellis, Chief Executive Officer and Interim Chief Financial Officer

Bradley Berman, Chairman of the Board and Director

Ken DeCubellis, former Chief Executive Officer and former Interim Chief Financial Officer

Bradley Berman, former Chairman of the Board and Director

Lyle Berman, Director

Benjamin Oehler, Director

no warrants exercised, forfeited or expired during the years ended December 31, 2020 and 2019.

A total of 106,300

warrants were outstanding as of December 31, 2020 with a weighted average exercise price of $3.99 and a weighted average life of 9.1

Benjamin Oehler, former Director

There were no warrants

exercised, forfeited or expired during the years ended December 31, 2021 and 2020.

A total of 417,550 warrants were outstanding

as of December 31, 2021 with a weighted average exercise price of $2.66 and a weighted average life of 9.5 years.

Unregistered Issuance of Equity Securities

2 unchanged sentences

Act of 1933 pursuant to Section 4(a)(2) thereof and/or Rule 506 of Regulation D promulgated thereunder.

October 1, 2020, we issued a total of 1,120,000 shares of common stock, restricted in accordance with Rule 144 ,

to S-FDF, LLC, a Texas limited liability company, pursuant to an asset purchase agreement.

On December 8, 2021,

we issued a total of 46,665 shares of common stock, restricted in accordance with Rule 144, among five board members for services rendered.

On November 30, 2021,

we issued 5,541 shares of common stock, restricted in accordance with Rule 144, to Claudia Goldfarb, our Chief Executive Officer, for

services rendered.

On November 30, 2021,

we issued 6,044 shares of common stock, restricted in accordance with Rule 144, to Ira Goldfarb, our Executive Chairman, for services

On October 31, 2021,

we issued a total of 23,335 shares of common stock, restricted in accordance with Rule 144, among six board members for services rendered.

we issued 5,541 shares of common stock, restricted in accordance with Rule 144, to Claudia Goldfarb, our Chief Executive Officer, for

services rendered.

On October 31, 2021,

we issued 6,044 shares of common stock, restricted in accordance with Rule 144, to Ira Goldfarb, our Executive Chairman, for services

On October 7, 2021,

we issued 5,541 shares of common stock, restricted in accordance with Rule 144, to Claudia Goldfarb, our Chief Executive Officer, for

services rendered.

On October 7, 2021,

we issued 6,044 shares of common stock, restricted in accordance with Rule 144, to Ira Goldfarb, our Executive Chairman, for services

SELECTED FINANCIAL DATA.

Not applicable.

MANAGEMENT’S

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should

be read in conjunction with our financial statements and notes to those statements.

In addition to historical information, the following

discussion and other parts of this annual report contain forward-looking information that involves risks and uncertainties.

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”.

We intend to launch

our line of freeze-dried snacks, smoothies and soups, and our direct-to-consumer focused website, to coincide with initial production

from our state-of-the-art facility located in Irving, Texas in the first half of 2021.

will operate under two distinct brands, Sow Good and Sustain Us.

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.

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.

With the extensive

freeze-dried manufacturing and food product-focused business development experience of our senior management team, including recent additions,

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

S-FDF Business Combination

October 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.

The Company did not assume any liabilities of Seller or any liabilities, liens,

or encumbrances pertaining to or encumbering the Purchased Assets, except for those related to agreements or arrangements specified in

the Asset Purchase Agreement.

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 shares to be issued to Seller 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 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

The combined issuances represented approximately 46% of the Company’s issued and outstanding common stock, on a fully diluted

Black Ridge Oil & Gas, Inc.

was determined to be the acquiror of the business combination.

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 shares to be issued to Seller 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.

BRAC Business Combination

October 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 October 18, 2017).

In addition, the Company purchased 445,000 BRAC units at $10.00 per unit in a private placement transaction for

a total contribution of $4,450,000 in order to fulfill its obligations in sponsoring BRAC, a blank check company formed for the purpose

of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business

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 through December 31, 2019.

On December 19, 2018, BRAC entered

into a business combination agreement, which subsequently closed on August 9, 2019.

BRAC was renamed Allied Esports Entertainment,

following the merger, or “AESE”, and referred to herein, as such.

Going Concern Uncertainty

As of December 31, 2020, the

Company had a cash balance of $1,912,729 and total working capital of $1,768,153.

Based on projections of cash expenditures in the Company’s

current business plan, the cash on hand would be insufficient to sustain operations over the next year.

On February 5, 2021, we raised

$2.525 million from the sale of an aggregate 631,250 shares of the Company’s common stock at $4.00 per share, resulting in approximately

$2.7 million of cash on hand and $650,000 of liquid securities for a combined liquidity of $3.35 million as of March 19, 2021.

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.

The report of the Company’s

independent registered public accounting firm that accompanies its audited financial statements in this Annual Report on Form 10-K

contains an explanatory paragraph regarding the substantial doubt about the Company’s ability to continue as a going concern.

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

Overview of 2020 results

Our 2020 results were largely

dominated by managing, searching for potential business combination candidates and ultimately closing the business combination with S-FDF,

LLC to enter into the freeze-dried foods business.

We did not earn any revenues in 2020, compared to earning $466,595 in management fees

for the year ended December 31, 2019, from our management agreement with BRAC subsequent to the AESE transaction.

We anticipate generating

revenues from our freeze-dried foods business in 2021.

Our general and administrative

expenses remained relatively consistent throughout 2020, driven primarily by salaries and benefits amounting to $1,477,124.

Our stock-based

compensation of $1,104,096 consisted of $268,608 of stock issued to officers and directors, $458,048 of expense related to the amortization

of stock options and $377,440 of expense related to warrants issued to officers and directors as a debt discount for their personal guarantee

on a line of credit.

Application of Critical Accounting Policies

Our discussion and analysis

of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with

accounting principles generally accepted in the United States of America.

The preparation of these financial statements requires us to

make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of

contingent assets and liabilities.

On an ongoing basis, we evaluate our estimates, including those related to impairment of property,

plant and equipment, intangible assets, deferred tax assets and fair value computation using the Black Scholes option pricing model.

base our estimates on historical experience and on various other assumptions, such as the trading value of our common stock and estimated

future undiscounted cash flows, that we believe to be reasonable under the circumstances, the results of which form the basis for making

judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Actual results may differ

from these estimates under different assumptions or conditions.

We believe that our estimates, including those for the above-described

items, are reasonable.

Critical Accounting Policies

The establishment and consistent

application of accounting policies is a vital component of accurately and fairly presenting our financial statements in accordance with

generally accepted accounting principles in the United States (GAAP), as well as ensuring compliance with applicable laws and regulations

governing financial reporting.

While there are rarely alternative methods or rules from which to select in establishing accounting and

financial reporting policies, proper application often involves significant judgment regarding a given set of facts and circumstances

and a complex series of decisions.

Deferred tax assets are recognized

for temporary differences in financial statement and tax basis amounts that will result in deductible amounts and carry-forwards in future

Deferred tax liabilities are recognized for temporary differences that will result in taxable amounts in future years.

tax assets and liabilities are measured using enacted tax law and tax rate(s) for the year in which we expect the temporary differences

to be deducted or settled.

The effect of a change in tax law or rates on the valuation of deferred tax assets and liabilities is recognized

in income in the period of enactment.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it

is more likely than not that some portion or all of the deferred tax assets will not be realized.

Significant future taxable income would

be required to realize this net tax asset.

Estimating the amount of the

valuation allowance is dependent on estimates of future taxable income, alternative minimum tax income, and changes in shareholder ownership

that would trigger limits on use of net operating losses under Internal Revenue Code Section 382.

Fair Value of Financial Instruments

Our cash and cash equivalents,

investments, accounts receivable and accounts payable are stated at cost which approximates fair value due to the short-term nature of

these instruments.

In January 2010, the FASB issued an amendment to the accounting standards related to the disclosures about an

entity’s use of fair value measurements.

Among these amendments, entities are required to provide enhanced disclosures about transfers

into and out of the Level 1 (fair value determined based on quoted prices in active markets for identical assets and liabilities)

and Level 2 (fair value determined based on significant other observable inputs) classifications, provide separate disclosures about

purchases, sales, issuances and settlements relating to the tabular reconciliation of beginning and ending balances of the Level 3

(fair value determined based on significant unobservable inputs) classification and provide greater disaggregation for each class of assets

and liabilities that use fair value measurements.

Use of Estimates

In accordance with accounting

principles generally accepted in the United States, management utilizes estimates and assumptions that affect the reported amounts of

assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the

reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Results of Operations for the Years Ended December

31, 2020 and 2019.

The following table summarizes

selected items from the statement of operations for the years ended December 31, 2020 and 2019.

Years Ended December 31,

Management fee income

Operating expenses:

General and administrative:

Salaries and benefits

Stock-based compensation

Deferred compensation

Professional services

Other general and administrative

Total general and administrative

Depreciation and amortization

Total operating expenses:

Net operating loss

Other income:

Gain on deconsolidation of subsidiary

(20,448,687 )

Interest expense

Loss on disposal of property and equipment

Loss on investment in Allied Esports Entertainment, Inc.

Total other income (expense)

(17,792,080 )

Net income (loss) before provision for income taxes

(18,205,021 )

Provision for income taxes

Net income from continuing operations, net of tax

(18,205,021 )

Net income (loss) from discontinued operations

Net income before non-controlling interest

(10,783,971 )

Net income attributable to redeemable non-controlling interest

Net income (loss) attributable to Sow Good Inc.

$ (5,320,939 )

$ (9,451,442 )

Management Fee Revenue

The Company earned $466,595

in management fees for the year ended December 31, 2019, from its management agreement with BRAC subsequent to the Mergers.

did not earn any management fees during the year ended December 31, 2020.

General and Administrative Expenses

Salaries and Benefits

Salaries and benefits for

the year ended December 31, 2020 were $1,477,124, compared to $1,172,745 for the year ended December 31, 2019, an increase of $304,379,

The increase in salaries and benefits was primarily due to severance pay accrued pursuant to the separation agreements for the

former management team, as we transitioned to our new line of business.

Stock-based Compensation

Stock-based compensation expense

for the year ended December 31, 2020 was $726,656, compared to $100,526 for the year ended December 31, 2019, an increase of $626,130,

Stock-based compensation consisted of stock options expense in both periods, in addition to $268,608 of expense related to the

issuance of common stock to officers and directors incurred during the year ended December 31, 2020.

Amortization of stock options

increased as new options were granted toward the end of February 2020, with a five-year vesting period, and the vesting period was accelerated

pursuant to separation agreements entered into on September 30, 2020.

Deferred Compensation

Deferred compensation expense

for the year ended December 31, 2019 was $1,396,460, consisting of expense related to the 2018 Management Incentive Plan (the “2018

Plan”).

There was no deferred compensation expense in the current period.

Professional Services

General and administrative

expenses related to professional services were $451,125 for the 2020 period, compared to $132,505 for the 2019 period, an increase of

$318,620, or 240%.

The increase was primarily due to legal costs related to our asset purchase agreement with S-FDF,

Other General and Administrative Expenses

Other general and administrative

expenses for the year ended December 31, 2020 were $350,875, compared to $259,968 for the year ended December 31, 2019, an increase of

$90,907, or 35%.

The increase is attributable to increased administrative activity in the fourth quarter pursuant to the development of

our freeze-dried foods business.

Depreciation expense for the

year ended December 31, 2020 was $3,642, compared to $872 for year ended December 31, 2019.

The increase is attributable to the significant

increase in capital expenditures incurred as we developed our freeze-dried foods production facility.

Other Income (Expense)

In the year ended December

31, 2020, other expense was $2,311,517, consisting of $386,164 of interest expense derived from operating loans, including $377,440 of

warrants issued as consideration to officers and directors in exchange for their personal guarantees, a loss on the disposal of equipment

of $5,369, and a net loss on investments in Allied Esports Entertainment, Inc.

securities of $1,925,029, as offset by a $5,000 grant from

the Small Business Administration under their EIDL program and $45 of interest income.

In the year ended December

31, 2019, other income was $15,480,563, consisting of the gain upon deconsolidation of BRAC of $26,322,687 and an offsetting merger incentive

expense of $5,874,000 to recognize the cost related to transferring shares of AESE stock to the former owners of Allied Esports and WPT

and other investors as incentive to participate in the merger, and $51 of interest income, as offset by a net loss on investments in Allied

Esports Entertainment, Inc.

securities of $4,968,175.

Provision for Income Taxes

The Company had no income

tax expense in the 2020 or 2019 periods, as the Company continues to reserve against any deferred tax assets due to the uncertainty of

realization of any benefit.

Net Loss from Discontinued

Net loss from discontinued

operations relates to the income and expenses of BRAC during the periods prior to deconsolidation.

Net loss from discontinued operations

consisted of a loss of $7,421,050 during the year ended December 31, 2019.

During the 2019 period, there were contingent closing

costs from BRAC’s underwriter and other investment bankers involved in the merger of $7,917,500.

Interest from investments in the

trust account for the benefit of potential redeeming shareholders was $1,780,992 in 2019, due to trust account redemptions and the withdrawal

of the remaining assets at the time of the Mergers.

Liquidity and Capital Resources

The following table summarizes

our total current assets, liabilities and working capital at December 31, 2020 and 2019.

Current Assets

Current Liabilities

Working Capital

As of December 31, 2020, we had working capital

of $1,768,153.

The following table summarizes

our cash flows during the years ended December 31, 2020 and 2019, respectively.

Years Ended December 31,

Net cash used in operating activities

$ (1,743,409 )

$ (9,709,780 )

Net cash provided by investing activities

Net cash provided by financing activities

Net change in cash and cash equivalents

$ (1,394,744 )

Net cash used in operating

activities was $1,743,409 and $9,709,780 for the years ended December 31, 2020 and 2019, respectively, a year over year

decreased use of $7,966,371.

The decreased use was primarily due to a decrease of $8,618,568 in net losses in discontinued operations

of BRAC due primarily to the recognition of $7,917,500 of contingent fees upon BRAC’s business combination.

Changes in working capital

from continuing operating activities resulted in an increase in cash of $340,735 during the year ended December 31, 2020, as compared

to an increase in cash of $7,360 for the same period in the previous year.

Net cash provided by investing

activities was $3,284,457 and $6,883,062 for the years ended December 31, 2020 and 2019, respectively.

During the year ended

December 31, 2020, cash provided by investing activities consisted of $1,154,459 of cash received pursuant to our business combination

with S-FDF, LLC, and $3,181,735 of proceeds received from the sale of AESE securities, as offset by $257,626 of equipment purchases and

$794,111 paid on construction projects still in progress.

In the comparative period, virtually all the cash was provided from discontinued

operations and was the result of transfers and withdrawals from the Trust Account, other than $6,046 of equipment purchases during 2019.

Net cash provided by financing

activities was $262,925 and $1,431,974 for the years ended December 31, 2020 and 2019, respectively.

Net cash provided

by financing activities consisted of $802,025 of proceeds received from debt financing, including $112,925 of proceeds received under

the Paycheck Protection Program (“PPP”) that were forgiven in January of 2021, as offset by $539,100 of debt repayments in

All of the 2019 activity was the result of activities in the discontinued operations of BRAC.

Satisfaction of our cash obligations for

the next 12 months

As of December 31, 2020,

our balance of cash and cash equivalents was $1,912,729 and we had total working capital of $1,768,153.

Based on projections of cash expenditures

in the Company’s current business plan, the cash on hand as of December 31, 2020 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.

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.

Our 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 .

On February 5, 2021, we raised $2.525 million from the sale of an aggregate 631,250 shares of the Company’s common stock at $4.00

per share, resulting in approximately $2.7 million of cash on hand and $650,000 of liquid securities for a combined liquidity of $3.35

million as of March 19, 2021.

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.

Effects of inflation and pricing

We do not expect any significant

effects from inflation and pricing.

Contractual obligations and commitments

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

Union Bower Rd.

Irving, TX 75061, under which an entity owned entirely by Ira Goldfarb is the landlord.

The lease term is through

September 15, 2025, with two five-year options to extend, at a monthly lease term of $10,036, with approximately a 3% annual escalation

of lease payments commencing September 15, 2021.

Summary of product and research and development

that we will perform for the term of our plan

We anticipate performing product

research and development as required for our products and distribution under our new plan of operation.

The Company currently has one

full-time employee dedicated to product research and development.

The Company’s research and development activities primarily consist

of product formulation, nutritional analysis, and taste analysis.

Expected purchase or sale of plant and significant

We anticipate the purchase

of significant property and equipment in 2021 as we complete our freeze-dried production facility.

Significant changes in the number of employees

As of December 31, 2020,

we had eighteen employees, our chief executive officer, Claudia Goldfarb, our Executive Chairman, Ira Goldfarb, our chief financial officer,

Brad Burke and fifteen other employees.

We expect a significant change in the number of full-time employees over the next 12 months based

upon our currently-projected business plan, as we commence production.

We are using and will continue to use the services of independent

consultants and contractors to perform various professional services for us or on behalf of our partners.

We believe that this use of

third-party service providers enhances our ability to contain general and administrative expenses.

Currently, there are no organized labor

agreements or union agreements and we do not anticipate any in the future.

Off-Balance Sheet Arrangements

We do not have any off-balance

sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, revenues, expenses,

results of operations liquidity, capital expenditures or capital resources that are material to investors.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

Commodity Price Risk

We do not expect any significant

effects from commodity price risk.

Interest Rate Risk

We do not anticipate entering

into any transactions that would expose us to any direct interest rate risk.

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 5. Market for Registrant’s Common Equity