What changed in this filing

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Item 1. Financial Statements

2022-05-13 compared with 2021-11-15 · 435 added, 582 removed, 404 unchanged (72% of the section changed)

2 unchanged sentences

CONDENSED BALANCE SHEETS

September 30,

Current assets:

1 unchanged sentence

Accounts receivable

Investment in Allied Esports Entertainment, Inc.

Prepaid expenses

1 unchanged sentence

Property and equipment:

Construction in progress

Property and equipment

3 unchanged sentences

Right-of-use asset

Intangible assets

LIABILITIES AND STOCKHOLDERS' EQUITY

1 unchanged sentence

Accounts payable

Accounts payable, related party

Accrued expenses

2 unchanged sentences

Operating lease liabilities

Notes payable, related parties, net of $ 639,489 and $ 699,213 of debt discounts at March 31, 2022 and December 31, 2021

Notes payable

3 unchanged sentences

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, 4,727,650 and 2,742,890 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

Common stock, $ 0.001 par value, 500,000,000 shares authorized, 4,820,655 and 4,809,070 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

Additional paid-in capital

Common stock payable, consisting of 11,585 and 535,729 shares at September 30, 2021 and December 31, 2020, respectively

Common stock payable, consisting of 4,255 and 11,585 shares at March 31, 2022 and December 31, 2021, respectively

Accumulated deficit

3 unchanged sentences

Total liabilities and stockholders' equity

See accompanying notes to unaudited condensed financial statements.

accompanying notes to unaudited condensed financial statements.

SOW GOOD INC.

CONDENSED STATEMENTS OF OPERATIONS

STATEMENTS OF OPERATIONS

For the Three Months

For the Nine Months

Ended September 30,

Ended March 31,

Cost of goods sold

10 unchanged sentences

( 1,150,860 )

( 1,844,635 )

Other income (expense):

Interest expense, including $ 377,440 of warrants issued as a debt discount for the nine months ending September 30, 2020

Loss on disposal of property and equipment

Interest expense, including $ 59,724 of warrants issued as a debt discount for the three months ending

March 31, 2022

Gain on early extinguishment of debt

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

( 1,503,601 )

( 2,186,557 )

Gain on investment in Allied Esports Entertainment, Inc.

Total other income (expense)

1 unchanged sentence

$ ( 807,877 )

$ ( 1,582,157 )

$ ( 2,492,204 )

$ ( 3,947,828 )

$ ( 4,421,001 )

Weighted average common shares outstanding - basic and fully diluted

Net loss per common share - basic and fully diluted

Weighted average common shares outstanding - basic

Net loss per common share – basic

Weighted average common shares outstanding - fully diluted

Net loss per common share – fully diluted

See accompanying notes to unaudited condensed financial statements.

1 unchanged sentence

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

For the Three Months Ended September 30, 2020

Stockholders'

Balance, June 30, 2020

$ ( 33,286,196 )

Common stock options granted to employees and directors for services

Net income for the nine months ended September 30, 2020

( 2,492,204 )

Balance, September 30, 2020

$ ( 35,778,400 )

For the Three Months Ended September 30, 2021

Stockholders'

Balance, June 30, 2021

$ ( 40,626,166 )

Common stock sales for cash to officers and directors

( 1,474,996 )

Common stock sales for cash

Common stock issued to officers and directors 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 September 30, 2021

( 1,582,157 )

Balance, September 30, 2021

$ ( 40,626,166 )

For the Nine Months Ended September 30, 2020

Stockholders'

Balance, December 31,

$ ( 36,678,338 )

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 nine months ended September 30, 2020

( 4,421,001 )

Common stock issued on subscriptions

payable for the purchase of S-FDF, LLC assets

( 1,853,600 )

Balance, September 30, 2020

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 options granted to officers

and directors for services

Common stock options granted to employees

Net loss for the three months ended

March 31, 2021

Balance, March 31, 2021

$ ( 37,486,215 )

For the Nine Months Ended September 30, 2021

Stockholders'

1 unchanged sentence

$ ( 43,552,494 )

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

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 nine months ended September 30, 2021

Common stock issued to officers and

directors for services

Common stock awarded to advisory

board member for services

Common stock options granted to officers

and directors for services

Common stock options granted to employees

Net loss for the three months ended

March 31, 2022

( 1,552,062 )

Balance, September 30, 2021

Balance, March 31, 2022

$ ( 45,104,556 )

2 unchanged sentences

CONDENSED STATEMENTS OF CASH FLOWS

For the Nine Months

Ended September 30,

For the Three Months

Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

3 unchanged sentences

Depreciation and amortization

Loss on disposal of property and equipment

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

Gain on investment in Allied Esports Entertainment, Inc.

Gain on early extinguishment of debt

Common stock issued to officers and directors for services

Common stock issued to consultants for services

Common stock awarded to advisors for services

Amortization of stock options

3 unchanged sentences

Prepaid expenses

( 1,021,099 )

Right-of-use asset

7 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES

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

Purchase of property and equipment

( 1,004,611 )

Net cash provided by (used in) investing activities

Cash paid for construction in progress

Cash paid for intangible assets

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds received from notes payable

Repayments on notes payable

Proceeds received from the sale of common stock and subscriptions payable

Proceeds received from the sale of common stock

Net cash provided by financing activities

NET CHANGE IN CASH AND CASH EQUIVALENTS

( 1,530,940 )

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

3 unchanged sentences

Income taxes paid

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Value of debt discounts attributable to warrants

Value of investment in securities distributed to board members and employees

See accompanying notes to unaudited condensed financial statements.

to Condensed Financial Statements

SOW GOOD INC.

Notes to Condensed

Financial Statements

Note 1 – Organization and Nature of Business

2 unchanged sentences

to Sow Good Inc.

(“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.

We became a publicly traded

company when our shares began trading on July 1, 2010.

From October 2010 through August 2019, we had been engaged in the business

of acquiring oil and gas leases and participating in the drilling of wells in the Bakken and Three Forks trends in North Dakota and Montana

and/or managing similar assets for third parties.

(“SOWG,” “Sow Good,” or the “Company”) to pursue

the freeze-dried fruits and vegetables business as acquired with our October 1, 2020 acquisition of S-FDF, LLC.

Our 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”.

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

We became a publicly traded company

when our shares began trading on July 1, 2010.

From October 2010 through August 2019, we had been engaged in the business of acquiring

oil and gas leases and participating in the drilling of wells in the Bakken and Three Forks trends in North Dakota and Montana and /or

managing similar assets for third parties.

On September 26, 2017, the Company finalized an

1 unchanged sentence

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

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.

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

agreement, which subsequently closed on August 9, 2019.

On 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

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 agreement, which subsequently closed on

August 9, 2019.

On October 1, 2020, the

6 unchanged sentences

The proceeds were used to find capital expenditures and working capital investment.

On May 5, 2021, the Company announced the launch

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

Sow Good launched with its first line of non-GMO

products including 6 ready-to-make smoothies and 9 snacks.

On July 7, 2021, the Company raised over $ 3 million

of capital from the sale of 714,701 newly issued shares at a share price of $4.25 in a private placement.

Investors in the private placement

included Sow Good’s Chief Executive Officer, Executive Chairman, and Chief Financial Officer, in addition to other Sow Good board

members and a small group of accredited investors.

The proceeds are being used to invest in inventory ahead of pursuing larger business-to-business

relationships, as well as funding incremental capital expenditures and general operating expenses.

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.

to Condensed Financial Statements

On May 5, 2021, the Company

announced the launch of our direct-to-consumer freeze-dried consumer packaged goods (CPG) food brand, Sow Good.

Sow Good launched with

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

On July 7, 2021, the

Company raised over $ 3 million of capital from the sale of 714,701 newly issued shares at a share price of $ 4.25 in a private placement.

Investors in the private placement included Sow Good’s Chief Executive Officer, Executive Chairman, and Chief Financial Officer,

in addition to other Sow Good board members and a small group of accredited investors.

The proceeds were used to invest in inventory ahead

of pursuing larger business-to-business relationships, as well as funding incremental capital expenditures and general operating expenses.

SOW GOOD INC.

Notes to Condensed

Financial Statements

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.

On December 31, 2021,

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

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 proceeds will be used for working capital investment and to ramp up our freeze-dried consumer packaged goods business.

April 8, 2022, we sold an aggregate $ 3,700,000 of promissory notes and warrants to purchase an aggregate 925,000 shares of common

stock, including $ 3,120,000 and warrants to purchase an aggregate 570,000 shares of common stock, to related parties .

The warrants are exercisable at a price of $ 2.35 per share over a ten-year term.

These proceeds will also be used for working capital

investment and to ramp up our freeze-dried consumer packaged goods business.

Note 2 – Basis of Presentation and Significant

36 unchanged sentences

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

had $ 1,813,489 of cash in excess of FIDC and SIPC insured limits at September 30, 2021, and has not experienced any losses in such accounts.

to Condensed Financial Statements

had $ 1,266,071 of cash in excess of FIDC and SIPC insured limits at March 31, 2022, and has not experienced any losses in such accounts.

SOW GOOD INC.

Notes to Condensed

Financial Statements

Property and Equipment

8 unchanged sentences

Machinery and equipment

Intangible assets

Leasehold improvements

7 unchanged sentences

Depreciation expense was $ 72,954 and $ 4,996

for the nine months ended September 30, 2021 and 2020, respectively.

for the three months ended March 31, 2022 and 2021, respectively.

of Long-Lived Assets

14 unchanged sentences

Inventory, consisting of raw materials, material

overhead, labor, and manufacturing overhead, are stated at the lower of cost (first-in, first-out) or net realizable value and consists

of the following:

overhead, labor, and manufacturing overhead, are stated at the average cost or net realizable value and consists of the following:

Schedule of inventory

September 30,

Finished goods

Raw materials

Work in progress

Packaging materials

Work in progress

Raw materials

Total inventory

No reserve for obsolete inventories has been recognized.

and we have not yet commenced significant production.

to Condensed Financial Statements

SOW GOOD INC.

Notes to Condensed

Financial Statements

The Company evaluates goodwill on an annual basis

11 unchanged sentences

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.

The Company’s evaluation of goodwill completed during the year resulted in an impairment loss of $ 1,524,030 for the year ended December 31,

Revenue Recognition

2 unchanged sentences

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

model in which the Company will evaluate the transfer of promised goods or services and recognize revenue when customers obtain control

of promised goods or services in an amount that reflects the consideration which the Company expects to be entitled to receive in exchange

for those goods or services.

To determine revenue recognition for the arrangements that the Company determines are within the scope of

ASC 606, the Company will perform the following five steps:

(1) identify the contract(s) with a customer, (2) identify the performance

obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations

in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

The Company has elected, as

a practical expedient, to account for the shipping and handling as fulfillment costs, rather than as a separate performance obligation.

Revenue will be reported net of applicable provisions for discounts, returns and allowances.

Methodologies for determining these provisions

will be dependent on customer pricing and promotional practices.

The Company will record reductions to revenue for estimated product returns

and pricing adjustments in the same period that the related revenue is recorded.

These estimates will be based on industry-based historical

data, historical sales returns, if any, analysis of credit memo data, and other factors known at the time.

from the sale of its freeze-dried food products, in accordance with a five-step model in which the

Company evaluates the transfer of promised goods or services and recognizes revenue when customers obtain control of promised goods or

services in an amount that reflects the consideration which the Company expects to be entitled to receive in exchange for those goods

To determine revenue recognition for the arrangements that the Company determines are within the scope of ASC 606, the Company

performs the following five steps:

(1) identify the contract(s) with a customer, (2) identify the performance obligations in

the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the

contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

The Company has elected, as a practical

expedient, to account for the shipping and handling as fulfillment costs, rather than as a separate performance obligation.

reported net of applicable provisions for discounts, returns and allowances.

Methodologies for determining these provisions are dependent

on customer pricing and promotional practices.

The Company records reductions to revenue for estimated product returns and pricing adjustments

in the same period that the related revenue is recorded.

These estimates are based on industry-based historical data, historical sales

returns, if any, analysis of credit memo data, and other factors known at the time.

Basic and Diluted Earnings (Loss) Per Share

14 unchanged sentences

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

compensation was $ 1,015,233 and $ 393,831 , consisting entirely of expenses related to common stock and options issued for services for

the nine months ended September 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 U.S.

compensation was $ 144,261 and $ 375,891 , consisting entirely of expenses related to common stock and options issued for services for the

three months ended March 31, 2022 and 2021, 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

Treasury securities at the grant date.

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

in consideration of personal guarantees provided for debt financing for the nine months ended September 30, 2020.

to Condensed Financial Statements

In addition, $ 59,724 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, 2022.

SOW GOOD INC.

Notes to Condensed

Financial Statements

The Company recognizes deferred tax assets and

9 unchanged sentences

effective, will not have a material impact on the Company's financial statements upon adoption.

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) :

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.

This guidance

also eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and requires the use

of the if converted method.

The new guidance is effective for all entities for annual periods, and interim periods within

those annual periods, beginning after December 15, 2021, 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.

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.

The final rules were effective

January 1, 2021.

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

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

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 .

provisions of this update did not have a material impact on the Company’s financial position or results of operations.

October 2021, the FASB issued ASU 2021-08 , Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities

from Contracts with Customers, which creates an exception to the general recognition and measurement principle for contract assets

and contract liabilities from contracts with customers acquired in a business combination.

The new guidance will require companies to

apply the definition of a performance obligation under accounting standard codification (“ASC”) Topic 606 to recognize and

measure contract assets and contract liabilities (i.e., deferred revenue) relating to contracts with customers that are acquired in a

business combination.

Under current GAAP, an acquirer in a business combination is generally required to recognize and measure the assets

it acquires and the liabilities it assumes at fair value on the acquisition date.

The new guidance will result in the acquirer recording

acquired contract assets and liabilities on the same basis that would have been recorded by the acquiree before the acquisition under

ASC Topic 606.

These amendments are effective for fiscal years beginning after December 15, 2022, with early adoption permitted.

adoption of ASU 2021-08 is not expected to have a material impact on the Company’s financial statements or related disclosures.

In May 2021, the FASB issued ASU No.

Earnings Per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation (Topic

718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) Issuer’s Accounting

for Certain Modifications or Exchanges of Freestanding Equity Classified Written Call Options .

ASU 2021-04 addresses issuer’s

accounting for certain modifications or exchanges of freestanding equity-classified written call options.

ASU 2021-04 is effective for

fiscal years beginning after December 15, 2021 and interim periods within those fiscal years, with early adoption permitted.

of ASU 2021-04 has not had a material impact on the Company’s financial statements or related disclosures.

March 2020, the FASB issued ASU 2020-04 establishing Topic 848, Reference Rate Reform .

ASU 2020-04 contains practical expedients

for reference rate reform related activities that impact debt, leases, derivatives and other contracts.

The guidance is optional and is

effective between March 12, 2020 and December 31, 2022.

The guidance may be elected over time as reference rate reform activities occur.

We are currently evaluating the impact that the expected market transition from the London Interbank Offered Rate, commonly referred to

as LIBOR, to alternative references rates will have on our financial statements as well as the applicability of the aforementioned expedients

and exceptions provided in ASU 2020-04.

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) :

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.

This guidance also eliminates the treasury stock method to

calculate diluted earnings per share for convertible instruments and requires the use of the if converted method.

The new guidance

is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2021,

with early adoption permitted.

The adoption of ASU 2020-06 has not had a material impact on the Company’s financial statements or

related disclosures.

No other new accounting pronouncements, issued

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

or effective during the period ended March 31, 2022, have had or are expected to have a significant impact on the Company’s financial

SOW GOOD INC.

Notes to Condensed

Financial Statements

to Condensed Financial Statements

Note 3 – Going Concern

As shown in the accompanying financial statements,

as of September 30, 2021, the Company has incurred recurring losses from operations resulting in an accumulated deficit of $ 40,626,166 ,

and had cash on hand of $ 2,580,489 .

as of March 31, 2022, the Company has incurred recurring losses from operations resulting in an accumulated deficit of $ 45,104,556 , and

had cash on hand of $ 1,814,988 .

We 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.

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.

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

has commenced sales and continues to develop its operations.

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 Company has

commenced sales and continues to develop its operations, and the Company raised an additional $3.7 million from

the sale of Promissory Notes and Warrants in April, 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

6 unchanged sentences

additional capital.

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, 2020.

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.

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 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.

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

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 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.

to Condensed Financial Statements

acquisition was accounted for as a business combination under the purchase method of accounting.

The purchase resulted in the recognition

of $ 6,411,327

of goodwill, which is evaluated annually for impairment, unless circumstances change that require an earlier determination.

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

Consideration:

Fair value of 1,620,973 shares of common stock

Liabilities assumed:

Accounts payable

Accrued expenses

Lease liabilities

Total consideration

Fair value of identifiable assets acquired:

Other receivables

Prepaid expenses

Property and equipment

Construction in progress

Security deposit

Right-of-use asset

Total fair value of assets acquired

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

The consideration paid in excess of the net fair value of assets acquired and liabilities assumed was recognized as goodwill.

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.

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 Nine Months Ended September 30,

Net operating loss

$ ( 4,191,113 )

$ ( 1,844,635 )

$ ( 3,947,828 )

$ ( 4,421,001 )

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 nine months ended September 30, 2020 are identical to

the Company’s actual results, other than the basic and fully diluted net income per share amounts.

to Condensed Financial Statements

Note 4 – Related Party

Issuance of Shares in Completion of Acquisition

In connection with the closing of the Amended

Asset Purchase Agreement between the Company and S-FDF, LLC, the Company was obligated to make certain adjustments to the common stock

issued to Seller.

The adjustment was based primarily on the fair value of AESE shares sold subsequent to the Asset Purchase Agreement.

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

stock on the date of grant.

On January 4, 2021, the 500,973 shares were issued in settlement of the common stock payable.

Common Stock Payable Awarded to Officers

On September 30, 2021,

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

September 30, 2021.

The aggregate fair value of the shares was $ 15,792 and $ 17,225 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 October 7, 2021, in satisfaction of the outstanding common stock payable.

Issuance of Shares for Services

dates between January 31, 2021 and September 7, 2021, the Company issued an aggregate 44,328 and 48,352 shares in

monthly increments of 5,541 and 6,044 shares to Claudia and Ira Goldfarb, respectively,

for their services.

The aggregate fair value of the shares was $ 246,409 and $ 268,776 for Claudia and Ira, respectively, based on the closing

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

January 27, 2021, upon Benjamin Oehler’s resignation, the Company appointed 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.

Ludeman was issued 6,400

shares of common stock for his services to be rendered.

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.

January 7, 2021, 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, 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 $ 3,037,511 ,

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.

to Condensed Financial Statements

Options Granted

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 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 $ 13,275 of stock-based compensation expense during the nine months ended September 30,

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 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 $ 15,292 of stock-based

compensation expense during the nine months ended September 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 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 $ 145,230

of stock-based compensation expense during the nine months ended September 30, 2021.

25, 2022, the Company issued 5,541 and 6,044 shares of common stock to Claudia and Ira Goldfarb , respectively, in satisfaction

of an outstanding common stock payable for services earned during December 31, 2021.

aggregate fair value of the shares was $ 12,467 and $ 13,599 for Claudia and Ira, respectively, based on the closing price of the Company’s

common stock on the date of grant.

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.

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.

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

from IG Union Bower, LLC (“Union Bower”), an entity owned entirely by Ira Goldfarb, under which Union Bower 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.

Note 5 – Fair Value of Financial Instruments

8 unchanged sentences

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.

SOW GOOD INC.

Notes to Condensed

Financial Statements

The Company’s financial assets and liabilities

3 unchanged sentences

prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

to Condensed Financial Statements

Level 2 - Inputs include quoted prices

5 unchanged sentences

The following schedule summarizes the valuation

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

of financial instruments at fair value on a recurring basis in the balance sheets as of March 31, 2022 and December 31, 2021:

Valuation of financial instruments at fair value

Fair Value Measurements at September 30, 2021

Fair Value Measurements at March 31, 2022

Cash and cash equivalents

Intangible assets

Notes payable, related parties, net of $639,489 of debt discounts

Notes payable

3 unchanged sentences

Cash and cash equivalents

Investment in Allied Esports Entertainment, Inc.

Intangible assets

Notes payable, related parties, net of $699,213 of debt discounts

Notes payable

2 unchanged sentences

There were no transfers of financial assets or

liabilities between Level 1 and Level 2 inputs for the nine months ended September 30, 2021.

to Condensed Financial Statements

liabilities between Level 1 and Level 2 inputs for the three months ended March 31, 2022.

SOW GOOD INC.

Notes to Condensed

Financial Statements

Note 6 – Prepaid Expenses

1 unchanged sentence

Schedule of prepaid expenses

September 30,

Prepaid software licenses

Prepaid insurance costs

Prepaid employee benefits

Prepaid office and other costs

Trade show advances

Advances on equipment purchases

Total prepaid expenses

Note 7 – Property and Equipment

Property and equipment at September 30, 2021 and December 31,

2020, consists of the following:

Schedule of property and equipment

September 30,

Property and equipment at March 31, 2022 and December 31, 2021, consists

of the following:

Property and equipment

Office equipment

Leasehold improvements

Construction in progress

Accumulated depreciation and amortization

Total property and equipment, net

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 have been capitalized

as Leasehold Improvements and Machinery, respectively, upon completion.

On September 30, 2020, the Company disposed of

computer equipment no longer in service.

No proceeds were received on the disposal of the equipment, resulting in a loss on disposal of

fixed assets of $ 5,369 , which represented the net book value at the time of disposal.

The Company recognized depreciation expense of

$ 129,915 and $ 1,030 for the nine months ended September 30, 2021 and 2020, respectively.

to Condensed Financial Statements

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”).

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 $ 73,668 ,

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

As of September 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

September 30,

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

$ ( 2,186,557 )

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

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

$ ( 2,384,569 )

$ 72,954 and $ 4,996 for the three months ended March 31, 2022 and 2021, respectively.

SOW GOOD INC.

Notes to Condensed

Financial Statements

Note 8 – Intangible Assets

Intangible assets consist of the following:

Schedule of Intangible assets

Branding, Sow Good

Branding, Sustain Us

Trademarks and patents

Total intangible assets

Note 9 – Leases

3 unchanged sentences

2021, subject to the ASU 2016-02.

In the locations in which it is economically feasible to continue to operate, management expects to enter

into a new lease upon expiration.

The operating and office facility lease contains provisions requiring payment of property taxes, utilities,

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

the present value of lease payments.

In the locations in which it is economically feasible to continue to operate, management expects to

enter into a new lease upon expiration.

The operating and office facility lease contains provisions requiring payment of property taxes,

utilities, 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 the present value of lease payments.

The components of lease expense were as follows:

Schedule of components of lease expense

September 30,

For the Three

Operating lease cost:

Fixed rent expense

to Condensed Financial Statements

SOW GOOD INC.

Notes to Condensed

Financial Statements

Supplemental balance sheet information related to leases was as follows:

Schedule of supplemental balance sheet information

September 30,

Operating leases:

9 unchanged sentences

Schedule of supplemental cash flow and other information

September 30,

For the Three

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

3 unchanged sentences

The future minimum lease payments due under operating leases as of

September 30, 2021 was as follows:

March 31, 2022 was as follows:

Schedule of future minimum lease payments

1 unchanged sentence

Minimum Lease

2021 (for the three months remaining)

2022 (for the nine months remaining)

2026 and thereafter

Less effects of discounting

Lease liability recognized

SOW GOOD INC.

Notes to Condensed

Financial Statements

Note 10 – Notes Payable, Related Parties

Notes payable, related parties consists of the

following at March 31, 2022 and December 31, 2021, respectively:

Schedule of Notes payable, related parties

On December 31, 2021, the Company received $ 1,500,000 pursuant to a note and warrant purchase agreement with the Company’s Chairman and CEO, Mr.

Goldfarb, as lenders.

The unsecured note bears interest at 8% per annum, compounded semi-annually, and shall be payable in cash semi-annually on June 30 th and December 31 st .

The note matures on December 31, 2024 .

The noteholders also received warrants to purchase 225,000 shares of common stock, exercisable at $2.21 per share over a ten-year term.

On December 31, 2021, the Company received $ 500,000 pursuant to a note and warrant purchase agreement from the Lyle A.

Berman Revocable Trust, as beneficially controlled by one of the Company’s Directors, as lender.

The unsecured note bears interest at 8% per annum, compounded semi-annually, and shall be payable in cash semi-annually on June 30 th and December 31 st .

The note matures on December 31, 2024 .

The noteholder also received warrants to purchase 75,000 shares of common stock, exercisable at $2.21 per share over a ten-year term.

On December 31, 2021, the Company received $ 25,000 pursuant to a note and warrant purchase agreement from the Company’s then CFO, Bradley K.

Burke, as lender.

The unsecured note bears interest at 8% per annum, compounded semi-annually, and shall be payable in cash semi-annually on June 30 th and December 31 st .

The note matures on December 31, 2024 .

The noteholder also received warrants to purchase 3,750 shares of common stock, exercisable at $2.21 per share over a ten-year term.

On December 31, 2021, the Company received $ 50,000 pursuant to a note and warrant purchase agreement from the Cesar J.

Gutierrez Living Trust, as beneficially controlled by the brother of the Company’s CEO, as lender.

The unsecured note bears interest at 8% per annum, compounded semi-annually, and shall be payable in cash semi-annually on June 30 th and December 31 st .

The note matures on December 31, 2024 .

The noteholder also received warrants to purchase 7,500 shares of common stock, exercisable at $2.21 per share over a ten-year term.

Total notes payable, related parties

Less unamortized debt discounts:

Notes payable

current maturities

Notes payable, related parties, less current maturities

SOW GOOD INC.

Notes to Condensed

Financial Statements

The Company recorded total discounts of $ 699,213 ,

consisting of debt discounts on warrants granted to the related parties during the year ended December 31, 2021.

The discounts are

being amortized to interest expense over the term of the notes, until repayment, using the straight-line method, which closely approximates

the effective interest method.

The Company recognized $ 102,299 of interest expense

for the three months ended March 31, 2022.

Interest expense consisted of $ 42,575 of stated interest expense and $ 59,724 of amortized

debt discounts related to stock-based warrants.

There was no interest expense during the three months ended March 31, 2021.

Note 11 – Notes Payable

Notes payable consists of the following at September 30,

Notes payable consists of the following at March

31, 2022 and December 31, 2021, respectively:

Schedule of notes payable

September 30,

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.

Under the EIDL Note, the Company is required to pay principal and interest payments of $ 731 every month beginning June 16, 2022, as extended.

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%

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.

Under the EIDL Note, the Company is required to pay principal and interest payments

of $731 every month beginning June 16, 2022, as extended.

All remaining principal and accrued interest is due and payable on June

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”).

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 .

The PPP Note could have been repaid at any time without penalty.

Under the Payroll Protection Program, the Company received loan forgiveness of $ 113,772 , consisting of $112,925 of principal and $847 of accrued interest, on January 19, 2021.

The forgiveness amount was equal to the amount that the Company spends during the 24-week period beginning April 24, 2020 on payroll costs, payment of rent on any leases in force prior to February 15, 2020 and payment on any utility for which service began before February 15, 2020.

The maximum amount of loan forgiveness for non-payroll expenses was 40% of the amount of the PPP Note.

Total notes payable

1 unchanged sentence

Notes payable, less current maturities

The Company recognized $ 4,431 and $ 384,456 of

interest expense, consisting of $ 4,431 and $ 7,016 of interest and $- 0 - and $ 377,440 of stock-based warrant expense pursuant to the amortization

of the debt discounts, during the nine months ended September 30, 2021 and 2020, respectively.

to Condensed Financial Statements

The Company recognized $ 1,494 and $ 1,512 of interest

expense during the three months ended March 31, 2022 and 2021, 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”).

No fractional shares were issued.

Instead, the Company issued the following

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.

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.

The Company was authorized to issue 500,000,000

shares of common stock prior to the Reverse Stock Split, which remains unaffected.

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

share information in this Interim Report has been retroactively adjusted to reflect the Reverse Stock Split.

Preferred Stock

4 unchanged sentences

of $ 0.001 par value common stock.

As of September 30, 2021, a total of 4,727,650 shares of common stock have been issued.

Issuance of Shares in Completion of Acquisition

In connection with the closing of the Amended

Asset Purchase Agreement between the Company and S-FDF, LLC, the Company was obligated to make certain adjustments to the common stock

issued to Seller.

The adjustment was based primarily on the fair value of AESE shares sold subsequent to the Asset Purchase Agreement.

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

stock on the date of grant.

On January 4, 2021, the 500,973 shares were issued in settlement of the common stock payable.

Common Stock Payable Awarded to Officers

On September 30, 2021,

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

September 30, 2021.

The aggregate fair value of the shares was $ 15,792 and $ 17,225 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 October 7, 2021, in satisfaction of the outstanding common stock payable.

to Condensed Financial Statements

Issuance of Shares for Services

dates between January 31, 2021 and September 7, 2021, the Company issued an aggregate 44,328 and 48,352 shares in

monthly increments of 5,541 and 6,044 shares to Claudia and Ira Goldfarb , respectively ,

for their services.

The aggregate fair value of the shares was $ 246,409 and $ 268,776 for Claudia and Ira, respectively, based on the closing

price of the Company’s common stock on the dates 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 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.

Pursuant to his appointment, Mr.

Ludeman was issued

6,400 shares of common stock for his services to be rendered.

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

from October 2020 through December 31, 2020 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 $3,037,511,

of which $2,472,136 was received on June 30, 2021, and the other $ 565,375 was received in July 9, 2021.

The shares were all 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.

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.

As of March 31, 2022, a total of 4,820,655 shares of common stock have been issued.

SOW GOOD INC.

Notes to Condensed

Financial Statements

Common Stock Payable Awarded to Advisory Board

25, 2022, the Company awarded 4,255 shares of common stock to a newly appointed advisory

board member for services.

The fair value of the shares was $ 10,000 , based on the closing price of the Company’s common stock on

the date of grant.

The shares were subsequently issued on April 11, 2022.

Settlement of Common Stock Payable Awarded

25, 2022, the Company issued 5,541 and 6,044 shares of common stock to Claudia and Ira

Goldfarb , respectively , for their services earned in December of 2021.

The fair value of

the shares was $ 12,467 and $ 13,599 for Claudia and Ira, respectively, based on the closing price of the Company’s common stock on

the dates of grant.

Note 13 – Options

4 unchanged sentences

the 2020 Equity Plan is qualified in its entirety by the text of the 2020 Equity Plan, a copy of which was attached as Annex C to the

On September 29, 2020, January 4, 2021, and March 19, 2021, the Board of Directors adopted and approved amendments that in aggregate

increase the number of shares reserved for issuance under the 2020 Equity Plan to an aggregate total of 814,150 shares and such amendments

were approved by a majority of shareholders of record on September 3, 2021.

On September 29, 2020, January 4, 2021, and March 19, 2021, the Board of Directors adopted and approved amendments that

in aggregate increase the number of shares reserved for issuance under the 2020 Equity Plan to an aggregate total of 814,150 shares and

such amendments were approved by a majority of shareholders of record on September 3, 2021.

Outstanding Options

1 unchanged sentence

shares of common stock at a weighted average strike price of $ 5.26 , exercisable over a weighted average life of 8.61 years were outstanding

as of September 30, 2021.

to Condensed Financial Statements

as of March 31, 2022.

Options Granted

On August 27, 2021, a total of twelve employees

On March 30, 2022, a total of sixteen employees

and consultants were granted options to purchase an aggregate 19,436 shares of the Company’s common stock, having an exercise price

4 unchanged sentences

of $2.6435, was $ 51,380 .

The options were expensed over the vesting period, resulting in $ 1,317 of stock-based compensation expense during

the nine months ended September 30, 2021.

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 year term.

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

The options are being expensed over the vesting period, resulting in $ 25 of stock-based compensation expense

during the three months ended March 31, 2022.

As of March 31, 2022, a total of $ 51,355 of unamortized expenses are expected to be expensed

over the vesting period.

On March 25, 2022, a newly appointed advisory

board member was granted options to purchase an aggregate 6,382 shares of the Company’s common stock, having an exercise price of

$ 2.35 per share, exercisable over a 10-year term.

The options will vest 20% on each anniversary over a five year period, until fully vested.

The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 406 % and a call option value of $2.2584, was

The options were expensed over the vesting period, resulting in $ 2,074 of stock-based compensation expense during the nine months

ended September 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 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 $ 13,275 of stock-based compensation expense during the nine months ended September 30,

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 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 $ 9,179 of stock-based compensation expense during

the nine months ended September 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 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 $ 15,292 of stock-based

compensation expense during the nine months ended September 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 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 $145,230

of stock-based compensation expense during the nine months ended September 30, 2021.

The options are being expensed over the vesting period, resulting in $ 47 of stock-based compensation expense during the three

months ended March 31, 2022.

As of March 31, 2022, a total of $ 14,366 of unamortized expenses are expected to be expensed over the vesting

The Company recognized a total of $ 134,261 and

$ 393,831 of compensation expense during the nine months ended September 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

The remaining unamortized balance of these options is $ 2,045,171 as of September 30, 2021.

$ 121,221 of compensation expense during the three months ended March 31, 2022 and 2021, respectively, related to common stock options

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

The remaining unamortized balance of these options is $ 1,665,080 as of March 31, 2022.

SOW GOOD INC.

Notes to Condensed

Financial Statements

Options Exercised

No options were exercised during the nine months

ended September 30, 2021 and 2020.

No options were exercised during the three months

ended March 31, 2022 and 2021.

Options Forfeited

A total of 20,063 options with a weighted average

exercise price of $ 44.94 were forfeited during the nine months ended September 30, 2021.

to Condensed Financial Statements

exercise price of $ 4.07 were forfeited during the three months ended March 31, 2022.

Note 14 – Warrants

1 unchanged sentence

Warrants to purchase an aggregate total of 417,550

shares of common stock at a $ 3.99 strike price, exercisable over a weighted average life of 8.36 years were outstanding as of September 30,

shares of common stock at a $ 2.66 strike price, exercisable over a weighted average life of 9.27 years were outstanding as of March 31,

Warrants Granted

No warrants were granted during the nine months

ended September 30, 2021 and 2020.

No warrants were granted during the three months

ended March 31, 2022 and 2021.

Warrants Exercised or Expired

No warrants were exercised or expired during the

nine months ended September 30, 2021 and 2020.

three months ended March 31, 2022 and 2021.

Note 15 – Income Taxes

6 unchanged sentences

Losses incurred during the period from April 9,

2011 (inception) to September 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 September 30, 2021, net deferred tax assets were $ 6,293,642 , with no deferred

tax liability, primarily related to net operating loss carryforwards.

A valuation allowance of approximately $ 6,293,642 was applied to

the net deferred tax assets.

2011 (inception) to March 31, 2022 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, 2022, net deferred tax assets were $ 7,864,739 , with no deferred tax liability,

primarily related to net operating loss carryforwards.

A valuation allowance of approximately $ 7,864,739 was applied to the net deferred

Therefore, the Company has no tax expense for 2022 to date.

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 September 30,

evaluated its tax positions and determined there are no significant uncertain tax positions as of any date on, or before March 31, 2022.

Note 16 – Commitments

The Company is involved in various inquiries,

administrative proceedings and litigation relating to matters arising in the normal course of business.

The Company is not currently a

defendant in any material litigation and is not aware of any threatened litigation that could have a material effect on the Company.

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.

Legal Proceedings

The Company may be subject from time to time to

various inquiries, administrative proceedings and litigation relating to matters arising in the normal course of business.

is not currently a defendant in any material litigation and is not aware of any threatened litigation that could have a material effect

on the Company.

Management 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.

Cash in Excess of FDIC Limits

The Company periodically maintains cash balances

2 unchanged sentences

or other financial institution is not subject to estimation at this time.

to Condensed Financial Statements

Lease Commitments

Upon closing of the Asset Purchase Agreement,

4 unchanged sentences

The future minimum lease payments due under operating leases as of

September 30, 2021 is as follows:

March 31, 2022 was as follows:

Schedule of future minimum lease payments

1 unchanged sentence

Minimum Lease

2021 (for the three months remaining)

2022 (for the nine months remaining)

2026 and thereafter

Less effects of discounting

3 unchanged sentences

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

Common Stock Awarded to Officers

31, 2021, the Company issued 5,541 and 6,044 shares of common stock to Claudia and Ira Goldfarb , respectively, for their services

during October 2021 .

Common Stock Issued to Officers on Common Stock

On October 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 September 2021 in satisfaction of the outstanding common stock payable.

Debt Financing

8, 2022 , the Company closed a private placement and concurrently entered into a Note and Warrant

Purchase Agreement (the “Purchase Agreement”) to sell an aggregate $3,700,000

of Promissory Notes (the “Notes”) and warrants (the “Warrants”)

to purchase an aggregate 925,000 shares of common stock, representing 25,000 warrant shares per

$100,000 of promissory notes.

Accrued interest on the Notes is payable semi-annually beginning June 30, 2022 at the rate of 6%

per annum, and the principal amount of the Notes matures and becomes due and payable on April 8, 2025.

The Warrants are exercisable immediately

and for a period of 10 years at a price of $2.35 per share.

Proceeds to the Company from the sale of the Securities were $3,700,000.

Company may redeem outstanding warrants prior to their expiration, at a price of $0.01 per share, provided that the volume weighted average

sale price per share of Common Stock equals or exceeds $9.00 per share for thirty (30) consecutive trading days ending on the third business

day prior to the mailing of notice of such redemption.

Assuming full exercise thereof, further proceeds to the Company from the exercise

of the Warrant Shares is calculated as $2,173,750.

The Offering closed simultaneously with execution of the Purchase Agreement.

aggregate $3,700,000 of Notes, a total of $3,120,000 of Notes were sold to officers or directors.

Common Stock Issued to Advisory Board Members

2022, the Company issued 4,000 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

Common Stock and Options Awarded to Recently

Appointed Director

On April 11, 2022, the

Company appointed Joe Mueller as a member of the Board of Directors and Audit Committee.

Pursuant to the Company’s Non-Employee

Director Compensation Plan, Mr.

Mueller received 8,064 shares of common stock as compensation.

Pursuant to the Company’s 2020 Stock

Incentive Plan (the “2020 Equity Plan”), Mr.

Mueller was also granted options to purchase 24,151 shares of the Company’s

common stock at an exercise price of $3.10 per share.

These options will vest 20% as of April 11, 2023 and 20% each anniversary thereafter

until fully vested.

Common Stock Issued to Advisory Board Member

on Subscriptions Payable

2022, the Company issued 4,255 shares in satisfaction of a Subscriptions Payable to an Advisory

Board Member for services provided.

The total fair value of the shares was $10,000, based on the closing price of the Company’s

common stock on the date of grant.

Departure of CFO

30, 2022, Mr.

Brad Burke resigned as the Company’s Chief Financial Officer, and the Company’s Chief Executive Officer, Claudia

Goldfarb, was appointed as the interim Chief Financial Officer.

On May 3, 3022, the Company entered into a Separation Agreement and Release,

which entitles Mr.

Burke to receive an amount equal to the base salary that he would have received for a three-month period (“Severance

Pay”), and the accelerated vesting of options to purchase an aggregate 75,000 shares of common stock with a weighted average exercise

price of $4.09 per share, along with an extension of the time period to exercise such stock option agreements to the fifth anniversary

of the separation.

Options Granted

On April 1, 2022, a total of twenty employees

and consultants were granted options to purchase an aggregate 63,477 shares of the Company’s common stock, having an exercise price

of $2.75 per share, exercisable over a 10-year term, including options to purchase 27,500 shares issued to Mr.

The options will

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

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