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Sow Good Reports Third Quarter 2024 Results

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Sow Good Inc. (SOWG) reported Q3 2024 financial results with revenue of $3.6 million, down from $5.0 million in Q3 2023. The decrease was primarily due to delayed shipments caused by quality concerns during extreme summer heat. Gross profit declined to $0.6 million with a 16.0% margin, compared to $1.3 million and 27.0% in Q3 2023. The company reported a net loss of $3.4 million or $(0.33) per share.

Year-to-date revenue significantly increased to $30.6 million compared to $6.5 million in 2023, with gross profit rising to $14.2 million and a 46.4% margin. The company's sixth freeze dryer is now operational, and they're implementing temperature-controlled distribution to prevent future heat-related issues.

Sow Good Inc. (SOWG) ha riportato i risultati finanziari del terzo trimestre 2024 con un fatturato di 3,6 milioni di dollari, in calo rispetto ai 5,0 milioni di dollari del terzo trimestre 2023. La diminuzione è stata principalmente causata da ritardi nelle spedizioni dovuti a preoccupazioni di qualità durante il caldo estremo estivo. L'utile lordo è sceso a 600.000 dollari con un margine del 16,0%, rispetto a 1,3 milioni di dollari e un margine del 27,0% nel terzo trimestre 2023. L'azienda ha riportato una perdita netta di 3,4 milioni di dollari o $(0,33) per azione.

Da inizio anno, il fatturato è significativo aumentato a 30,6 milioni di dollari rispetto ai 6,5 milioni del 2023, con l'utile lordo che è salito a 14,2 milioni di dollari e un margine del 46,4%. Il sesto essiccatore a freddo dell'azienda è ora operativo, e stanno implementando distribuzione a temperatura controllata per prevenire futuri problemi legati al caldo.

Sow Good Inc. (SOWG) reportó los resultados financieros del tercer trimestre de 2024 con ingresos de 3.6 millones de dólares, una disminución respecto a 5.0 millones de dólares en el tercer trimestre de 2023. La disminución se debió principalmente a retrasos en los envíos causados por preocupaciones de calidad durante el intenso calor del verano. La utilidad bruta cayó a 600,000 dólares con un margen del 16.0%, en comparación con 1.3 millones de dólares y un margen del 27.0% en el tercer trimestre de 2023. La compañía reportó una pérdida neta de 3.4 millones de dólares o $(0.33) por acción.

Hasta la fecha, los ingresos han aumentado significativamente a 30.6 millones de dólares en comparación con 6.5 millones de dólares en 2023, con la utilidad bruta aumentando a 14.2 millones de dólares y un margen del 46.4%. El sexto deshidratador por congelación de la compañía ya está operativo y están implementando distribución controlada por temperatura para evitar futuros problemas relacionados con el calor.

Sow Good Inc. (SOWG)는 2024년 3분기 재무 결과를 발표했고, 수익은 360만 달러로 2023년 3분기의 500만 달러에서 감소했습니다. 감소의 주요 원인은 극심한 여름 더위로 인한 품질 문제로 인한 배송 지연이었습니다. 총 이익은 60만 달러로 16.0%의 마진을 기록했으며, 2023년 3분기의 130만 달러와 27.0%에 비해 감소했습니다. 이 회사는 340만 달러의 순손실을 보고했고, 주당 $(0.33)의 손실을 기록했습니다.

연초부터의 수익은 2023년의 650만 달러에 비해 3060만 달러로 크게 증가했으며, 총 이익은 1420만 달러로 46.4%의 마진을 기록했습니다. 회사의 여섯 번째 동결 건조기가 이제 가동 중이며, 향후 열 관련 문제를 방지하기 위해 온도 조절 분배를 시행하고 있습니다.

Sow Good Inc. (SOWG) a annoncé les résultats financiers du troisième trimestre 2024, avec des revenus de 3,6 millions de dollars, en baisse par rapport à 5,0 millions de dollars au troisième trimestre 2023. La baisse est principalement due à des retards d'expédition causés par des préoccupations de qualité lors de la chaleur extrême de l'été. Le bénéfice brut a diminué à 600 000 dollars avec une marge de 16,0%, contre 1,3 million de dollars et 27,0% au troisième trimestre 2023. La société a déclaré une perte nette de 3,4 millions de dollars ou $(0,33) par action.

Depuis le début de l'année, les revenus ont considérablement augmenté à 30,6 millions de dollars par rapport à 6,5 millions de dollars en 2023, le bénéfice brut atteignant 14,2 millions de dollars et une marge de 46,4%. Le sixième lyophilisateur de l'entreprise est désormais opérationnel, et ils mettent en œuvre une distribution contrôlée par la température pour prévenir de futurs problèmes liés à la chaleur.

Sow Good Inc. (SOWG) hat die finanziellen Ergebnisse des dritten Quartals 2024 bekannt gegeben, mit einem Umsatz von 3,6 Millionen Dollar, was einen Rückgang von 5,0 Millionen Dollar im dritten Quartal 2023 bedeutet. Der Rückgang war hauptsächlich auf verzögerte Lieferungen aufgrund von Qualitätsbedenken während der extremen Sommerhitze zurückzuführen. Der Bruttogewinn sank auf 600.000 Dollar mit einer Marge von 16,0%, im Vergleich zu 1,3 Millionen Dollar und 27,0% im dritten Quartal 2023. Das Unternehmen berichtete von einem Nettoverlust von 3,4 Millionen Dollar oder $(0,33) pro Aktie.

Der Umsatz im laufenden Jahr hat sich signifikant auf 30,6 Millionen Dollar erhöht, im Vergleich zu 6,5 Millionen Dollar im Jahr 2023, wobei der Bruttogewinn auf 14,2 Millionen Dollar und eine Marge von 46,4% gestiegen ist. Der sechste Gefriertrockner des Unternehmens ist nun in Betrieb und es wird eine temperaturkontrollierte Distribution implementiert, um zukünftige hitzebedingte Probleme zu vermeiden.

Positive
  • YTD revenue increased significantly to $30.6M from $6.5M in 2023
  • YTD gross profit improved to $14.2M with 46.4% margin from -2.0% in 2023
  • Cash position strengthened to $6.9M from $2.4M at year-end 2023
  • Expanded retail presence with launches at major retailers
Negative
  • Q3 revenue decreased 28% YoY to $3.6M from $5.0M
  • Q3 gross margin declined to 16.0% from 27.0% YoY
  • Operating expenses increased significantly to $3.8M from $1.0M YoY
  • Net loss of $3.4M in Q3 compared to $0.3M profit last year
  • Quality issues due to heat affecting product distribution
  • Increased competition from large CPG companies entering the market

Insights

The Q3 results reveal significant challenges for Sow Good, with concerning financial metrics across the board. Revenue declined 28% year-over-year to $3.6 million, while gross margins contracted sharply from 27% to 16%. The company swung to a net loss of $3.4 million from a profit of $0.3 million last year.

The operational headwinds are substantial: quality control issues from extreme heat led to shipping delays, melted products damaged sales velocity and operating expenses nearly quadrupled to $3.8 million. While YTD revenue shows strong growth at $30.6 million, the recent challenges and increasing competition from large CPG companies pose significant risks. The cash position of $6.9 million provides some runway, but continued losses at this rate could pressure liquidity.

The freeze-dried candy market dynamics present both opportunities and threats. Sow Good's current penetration of only 10% of potential retail locations indicates significant growth potential in the 100,000+ untapped U.S. stores. However, the entry of large CPG companies with superior resources creates intense competitive pressure that could squeeze margins and market share.

The expansion into major retailers like World Market, Cracker Barrel and Kroger demonstrates market validation, but quality control issues and distribution challenges need immediate resolution to maintain these relationships. The planned implementation of temperature-controlled distribution and expanded sales team are positive steps, but execution will be critical given the increasing competition.

IRVING, Texas, Nov. 14, 2024 (GLOBE NEWSWIRE) -- Sow Good Inc. (Nasdaq: SOWG) (“Sow Good” or “the Company”), a trailblazer in the freeze-dried dried candy and treat industry, is reporting financial and operating results for the third quarter ended September 30, 2024.

“We are pleased to announce that our sixth freeze dryer is operational and that we were able to resume shipments in October following a third quarter pause due to quality concerns amid extreme summer heat,” said Claudia Goldfarb, CEO of Sow Good. “Unfortunately, some melted products reached shelves, impacting short-term sales velocity. We are working closely with our retail partners to remove these items and restore the growth we saw earlier in the year. Moving forward, we are implementing temperature-controlled distribution to prevent similar issues next summer.

“As we look ahead, we’ve expanded our sales team to pursue the opportunities we have in the over 100,000 U.S. stores that could carry our treats but currently do not. According to IRI data, we are only in about 10% of locations that traditionally carry candy, giving us significant room for growth. While large CPG companies are entering the freeze-dried candy space, leveraging their significant market power and budgets to minimize competition, we see this as a validation of the category that we helped establish and a testament to our product’s strength. Although we anticipate some short-term impact on certain customer relationships and sales, we remain confident in our brand’s position.”

Third Quarter 2024 Highlights

  • Revenue in the third quarter of 2024 was $3.6 million compared to $5.0 million for the same period in 2023. The decrease was largely due to the Company’s decision to delay the majority of product shipments as the extreme heat during the period was negatively impacting product quality. In addition, revenue was affected by an increase in promotional activity and customer allowances.
  • Gross profit in the third quarter of 2024 was $0.6 million compared to $1.3 million for the same period in 2023. Gross margin was 16.0% in the third quarter of 2024 compared to 27.0% in the prior year period. The decline in margin was primarily due to higher costs of goods sold as a percentage of revenue due to higher costs related to the company’s new facility and a lower production yield.
  • Operating expenses in the third quarter of 2024 were $3.8 million compared to $1.0 million for the same period in 2023, primarily due to strategic investments in brand expansion and infrastructure growth as well as higher salaries and benefits expense. The Company allocated more resources toward trade shows and branding and marketing efforts, aiming to strengthen its market presence and support the expansion into new retail and distribution channels. Occupancy costs also increased as the Company transitioned to a 320,000-square-foot facility to accommodate rising demand.
  • Net loss in the third quarter of 2024 was $3.4 million, or $(0.33) per diluted share, compared to net income of $0.3 million, or $0.04 per diluted share, for the same period in 2023. The decline reflects the lower level of gross profit generated during the quarter and increased operating expenses during the 2024 period.
  • Adjusted EBITDA (a non-GAAP financial measure defined and reconciled herein) in the third quarter of 2024 was ($1.9) million compared to $0.6 million for the same period in 2023. For a reconciliation of Adjusted EBITDA to the nearest comparable GAAP metric, net income, please see the tables below.
  • Cash and cash equivalents were $6.9 million at September 30, 2024, compared to $2.4 million at December 31, 2023. 

Year to Date 2024 Highlights

  • Revenue for the nine months ending September 30, 2024, increased significantly to $30.6 million compared to $6.5 million in 2023. The substantial revenue growth underscores the effectiveness of the Company’s retail distribution outlet expansion strategy as well as price improvements.
  • Gross profit for the nine months ending September 30, 2024, increased significantly to $14.2 million compared to $(0.1) million in 2023. Gross margin was 46.4% in the first nine months of 2024 compared to negative 2.0% in the prior year period. This was driven by strong revenue growth combined with raw material cost improvements.
  • Operating expenses for the nine months ending September 30, 2024, increased to $11.6 million from $2.9 million in 2023 as the Company scaled operations to support the strong revenue growth referenced above.

Ira Goldfarb, Executive Chairman of Sow Good, added: “We remain committed to our growth strategy, driven by our proprietary technology and focus on quality. Our retail partner roster is expanding with launches at World Market, Cracker Barrel, Kroger, Albertsons, and Five Below, along with new prospects in international markets, regional and convenience stores, and non-traditional channels.”

Conference Call

Sow Good will conduct a conference call today at 10:00 A.M. Eastern time to discuss its results for the third quarter ended September 30, 2024.

Date: Thursday, November 14, 2024
Time: 10:00 a.m. Eastern time
Registration Link: https://register.vevent.com/register/BI42dee1790eee4c30ae622dda21abc466

To access the call by phone, please register via the registration link above and you will be provided with dial-in instructions and details. If you have any difficulty connecting with the conference call, please contact Gateway Group at 1-949-574-3860.

The conference call will be broadcast live and available for replay here and on the Company’s website at www.sowginc.com.

About Sow Good Inc.

Sow Good Inc. is a trailblazing U.S.-based freeze dried candy and snack manufacturer dedicated to providing consumers with innovative and explosively flavorful freeze dried treats. Sow Good has harnessed the power of our proprietary freeze-drying technology and product-specialized manufacturing facility to transform traditional candy into a novel and exciting everyday confectionaries subcategory that we call freeze dried candy. Sow Good is dedicated to building a company that creates good experiences for our customers and growth for our investors and employees through our core pillars: (i) innovation; (ii) scalability; (iii) manufacturing excellence; (iv) meaningful employment opportunities; and (v) food quality standards.

Non-GAAP Financial Measures

This press release contains “non-GAAP financial measures” that are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with GAAP. Specifically, we make use of the non-GAAP financial measure “Adjusted EBITDA.” Adjusted EBITDA has been presented in this press release as a supplemental measure of financial performance that is not required by, or presented in accordance with, GAAP. Adjusted EBITDA is a supplemental measure of our performance that is not required by or presented in accordance with GAAP. We define Adjusted EBITDA as net income (loss) before depreciation, interest expense, net and income tax benefit, adjusted to eliminate loss on early extinguishment of debt and stock-based compensation. The most directly comparable GAAP measure is net income (loss). Adjusted EBITDA is not recognized terms under GAAP and should not be considered as an alternative to net income (loss) as a measure of financial performance or cash provided by operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. In addition, in evaluating Adjusted EBITDA, you should be aware that in the future, we may incur expenses similar to the adjustments in the presentation of Adjusted EBITDA. The presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Because not all companies use identical calculations, the presentations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company.

We present this non-GAAP measure because we believe it assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes Adjusted EBITDA is useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate, and capital investments. Management uses Adjusted EBITDA to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation, and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone provide.

There are a number of limitations related to the use of Adjusted EBITDA rather than net income (loss), which is the most directly comparable financial measure calculated and presented in accordance with GAAP. Some of these limitations are:

  • Adjusted EBITDA excludes stock-based compensation expense as it has recently been, and will continue to be for the foreseeable future, a significant recurring non-cash expense for our business;
  • Adjusted EBITDA excludes depreciation and amortization expense and, although this is a non-cash expense, the assets being depreciated and amortized may have to be replaced in the future;
  • Adjusted EBITDA does not reflect the cash requirements necessary to service interest on our debt which affects the cash available to us;
  • Adjusted EBITDA does not reflect the monies earned from our investments since it does not reflect our core operations;
  • Adjusted EBITDA does not reflect change in fair value of financial instruments since it does not reflect our core operations and is a non-cash expense;
  • Adjusted EBITDA does not reflect income tax expense that affects cash available to us; and
  • the expenses and other items that we exclude in our calculations of Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from Adjusted EBITDA when they report their operating results.

In addition, other companies may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.

Forward-Looking Statements

This press release contains forward-looking statements. Statements other than statements of historical facts contained in this press release may be forward-looking statements. Statements regarding our future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding the offering, expected growth, and future capital expenditures, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “target,” “plan,” “intend,” “seek,” “goal,” “will,” “should,” “may” or other words and similar expressions that convey the uncertainty of future events or outcomes. Forward-looking statements contained in this press release include, but are not limited to statements about: (a) our ability to compete successfully in the highly competitive industry in which we operate; (b) our ability to maintain and enhance our brand; (c) our ability to successfully implement our growth strategies related to launching new products; (d) the effectiveness and efficiency of our marketing programs; (e) our ability to manage current operations and to manage future growth effectively; (f) our future operating performance; (g) our ability to attract new customers or retain existing customers; (h) our ability to protect and maintain our intellectual property; (i) the government regulations to which we are subject; (j) our ability to maintain adequate liquidity to meet our financial obligations; (k) failure to obtain sufficient sales and distributions for our freeze dried product offerings; (l) the potential for supply chain disruption and delay; (m) the potential for transportation, labor, and raw material cost increases or disruptions (including as a result of seasonal factors); and (n) such other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission, including the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2023 and our most recent Quarterly Reports on Form 10-Q. All information provided in this release is as of the date hereof and we undertakes no duty to update this information except as required by law.

Sow Good Investor Inquiries:
Cody Slach
Gateway Group, Inc.
1-949-574-3860
SOWG@gateway-grp.com

Sow Good Media Inquiries:
Sow Good, Inc.
1-214-623-6055
pr@sowginc.com

SOW GOOD INC.
CONDENSED BALANCE SHEETS
 
  September 30,  December 31, 
  2024  2023 
ASSETS (Unaudited)    
       
Current assets:      
Cash and cash equivalents $6,946,387  $2,410,037 
Accounts receivable, net  1,232,958   2,578,259 
Inventory  19,434,041   4,123,246 
Prepaid inventory  572,098   563,131 
Prepaid expenses  202,430   563,164 
Total current assets  28,387,914   10,237,837 
       
Property and equipment:      
Construction in progress  2,848,191   1,522,465 
Property and equipment  9,430,983   6,287,422 
Less accumulated depreciation  (1,550,550)  (967,602)
Total property and equipment, net  10,728,624   6,842,285 
       
Security deposit  1,357,956   346,616 
Right-of-use asset  17,193,154   4,061,820 
Total assets $57,667,648  $21,488,558 
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
       
Current liabilities:      
Accounts payable $1,301,098  $853,535 
Accrued interest  398,617   860,693 
Accrued expenses  1,839,323   648,947 
Income tax payable - current  65,603   - 
Current portion of operating lease liabilities  2,140,084   550,941 
Current maturities of notes payable, related parties, net of $447,236 and $431,854 of debt discounts at September 30, 2024 and December 31, 2023, respectively  2,731,901   2,543,146 
Current maturities of notes payable, net of $26,116 and $86,062 of debt discounts as of September 30, 2024 and December 31, 2023, respectively  213,134   313,938 
Total current liabilities  8,689,760   5,771,200 
       
Operating lease liabilities  16,005,280   3,671,729 
Notes payable, related parties, net of $0 and $1,448,858 of debt discounts as of September 30, 2024 and December 31, 2023, respectively  -   4,171,142 
Notes payable, net of $0 and $135,962 of debt discounts as of September 30, 2024 and December 31, 2023, respectively  150,000   594,038 
       
Total liabilities  24,845,040   14,208,109 
       
Commitments and contingencies      
       
Stockholders' equity:      
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, 10,245,388 and 6,029,371 shares issued and outstanding as of September 30, 2024 and December 31, 2023  10,245   6,029 
Additional paid-in capital  91,086,537   66,014,415 
Accumulated deficit  (58,274,174)  (58,739,995)
Total stockholders' equity  32,822,608   7,280,449 
       
Total liabilities and stockholders' equity $57,667,648  $21,488,558 


SOW GOOD INC.
CONDENSED STATEMENTS OF OPERATIONS
 
  For the Three Months Ended  For the Nine Months Ended 
  September 30,  September 30, 
  2024  2023  2024  2023 
Revenues $3,554,157  $5,034,203  $30,608,526  $6,548,479 
Cost of goods sold  2,998,171   3,698,962   16,415,970   6,679,224 
Gross profit  555,986   1,335,241   14,192,556   (130,745)
             
Operating expenses:            
General and administrative expenses:            
Salaries and benefits  1,875,908   618,907   6,350,038   1,450,103 
Professional services  320,289   294,720   1,382,393   404,256 
Other general and administrative expenses  1,607,844   74,728   3,879,350   959,218 
Total general and administrative expenses  3,804,041   988,355   11,611,781   2,813,577 
Depreciation and amortization  8,583   9,261   23,060   94,638 
Total operating expenses  3,812,624   997,616   11,634,841   2,908,215 
             
Net operating income (loss)  (3,256,638)  337,625   2,557,715   (3,038,960)
             
Other income (expense):            
Interest income  39,509   -   43,639   - 
Interest expense  (225,095)  (3,641)  (1,243,428)  (1,349,486)
Loss on early extinguishment of debt  -   -   (696,502)  - 
Total other income (expense)  (185,586)  (3,641)  (1,896,291)  (1,349,486)
             
Income (loss) before income tax  (3,442,224)  333,984   661,424   (4,388,446)
Benefit (provision) for income tax  62,315   -   (195,603)  - 
Net income (loss) $(3,379,909) $333,984  $465,821  $(4,388,446)
             
Weighted average common shares outstanding - basic  10,245,388   5,123,735   8,651,223   4,942,182 
Net income (loss) per common share - basic $(0.33) $0.07  $0.05  $(0.89)
             
Weighted average common shares outstanding - diluted  10,245,388   8,066,577   9,613,553   4,942,182 
Net income (loss) per common share - diluted $(0.33) $0.04  $0.05  $(0.89)


SOW GOOD INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
 
  For the Three Months Ended September 30, 2024 
        Additional     Total 
  Common Stock  Paid-in  Accumulated  Stockholders' 
  Shares  Amount  Capital  Deficit  Equity 
Balance, June 30, 2024  10,245,388   10,245   89,899,666   (54,894,265)  35,015,646 
Common stock issued in public offering, net of offering costs          - 
Common stock issued in private placement offering          - 
Common stock issued to directors for services        -   - 
Proceeds from exercise of stock options and warrants          - 
Common stock options granted to directors and advisors for services      29,284     29,284 
Common stock options granted to officers and employees for services      1,157,587     1,157,587 
Net loss for the three months ended September 30, 2024        (3,379,909)  (3,379,909)
Balance, September 30, 2024  10,245,388  $10,245  $91,086,537  $(58,274,174) $32,822,608 


  For the Three Months Ended September 30, 2023 
        Additional     Total 
  Common Stock  Paid-in  Accumulated  Stockholders' 
  Shares  Amount  Capital  Deficit  Equity 
Balance, June 30, 2023  4,868,083  $4,868  $59,117,367  $(60,401,992) $(1,279,757)
Common stock issued in private placement offering  735,000   74   3,674,926     3,675,000 
Common stock issued to directors for services          - 
Common stock options granted to directors and advisors for services      29,296     29,296 
Common stock options granted to officers and employees for services      111,463     111,463 
Net income for the three months ended September 30, 2023        333,984   333,984 
Balance, September 30, 2023  5,603,083  $4,942  $62,933,052  $(60,068,008) $2,869,986 


  For the Nine Months Ended September 30, 2024 
        Additional     Total 
  Common Stock  Paid-in  Accumulated  Stockholders' 
  Shares  Amount  Capital  Deficit  Equity 
Balance, December 31, 2023  6,029,371  $6,029  $66,014,415  $(58,739,995) $7,280,449 
Common stock issued in public offering, net of offering costs  1,380,000   1,380   11,973,596     11,974,976 
Common stock issued in private placement offering  515,597   516   3,737,484     3,738,000 
Common stock issued to directors for services  31,211   32   295,616     295,648 
Proceeds from exercise of stock options and warrants  2,289,209   2,288   5,670,680     5,672,968 
Common stock options granted to directors and advisors for services      86,892     86,892 
Common stock options granted to officers and employees for services      3,307,854     3,307,854 
Net income for the nine months ended September 30, 2024        465,821   465,821 
Balance, September 30, 2024  10,245,388  $10,245  $91,086,537  $(58,274,174) $32,822,608 


  For the Nine Months Ended September 30, 2023 
        Additional     Total 
  Common Stock  Paid-in  Accumulated  Stockholders' 
  Shares  Amount  Capital  Deficit  Equity 
Balance, December 31, 2022  4,847,384  $4,847  $58,485,602  $(55,679,562) $2,810,887 
Common stock issued in private placement offering  735,000   74   3,674,926     3,675,000 
Common stock issued to directors for services  20,699   21   125,208     125,229 
Common stock warrants granted to related party note holders pursuant to debt financing      197,198     197,198 
Common stock warrants granted to note holders pursuant to debt financing      50,682     50,682 
Common stock options granted to directors and advisors for services      91,990     91,990 
Common stock options granted to officers and employees for services      307,446     307,446 
Net loss for the three months ended September 30, 2023        (4,388,446)  (4,388,446)
Balance, September 30, 2023  5,603,083  $4,942  $62,933,052  $(60,068,008) $2,869,986 


SOW GOOD INC.
CONDENSED STATEMENTS OF CASH FLOWS
 
  For the Nine Months Ended 
  September 30, 
  2024  2023 
CASH FLOWS FROM OPERATING ACTIVITIES      
Net income (loss) $465,821  $(4,388,446)
Adjustments to reconcile net income (loss) to net cash used in operating activities:      
Bad debts expense  176,032   - 
Depreciation and amortization  582,948   306,092 
Non-cash amortization of right-of-use asset and liability  791,360   15,245 
Impairment of obsolete inventory  -   2,075,080 
Common stock issued to directors for services  295,648   125,229 
Amortization of stock options  3,394,746   399,436 
Amortization of stock warrants issued as a debt discount  932,883   900,228 
Loss on early extinguishment of debt  696,502   - 
Decrease (increase) in current assets:      
Accounts receivable  1,169,269   (1,197,608)
Prepaid expenses  360,734   (10,760)
Inventory  (15,319,762)  (2,342,871)
Security deposits  (1,011,340)  (12,309)
Increase (decrease) in current liabilities:      
Accounts payable  447,563   257,091 
Income tax payable  65,603   - 
Accrued interest  (363,326)  419,807 
Accrued expenses  1,190,375   125,270 
Net cash provided by used in operating activities  (6,124,944)  (3,328,516)
       
CASH FLOWS FROM INVESTING ACTIVITIES      
Purchase of property and equipment  (3,143,561)  (1,326,276)
Cash paid for construction in progress  (1,325,726)  - 
Net cash used in investing activities  (4,469,287)  (1,326,276)
       
CASH FLOWS FROM FINANCING ACTIVITIES      
Proceeds from common stock offerings, net of offering costs of $859,024  15,712,976   3,675,000 
Proceeds from the exercise of warrants and options  373,855   - 
Proceeds received from notes payable, related parties  -   2,400,000 
Proceeds received from notes payable  -   400,000 
Repayments of borrowings  (956,250)  - 
Net cash provided by financing activities  15,130,581   6,475,000 
       
NET CHANGE IN CASH AND CASH EQUIVALENTS  4,536,350   1,820,208 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD  2,410,037   276,464 
CASH AND CASH EQUIVALENTS AT END OF PERIOD $6,946,387  $2,096,672 
       
SUPPLEMENTAL INFORMATION:      
Interest paid $667,293  $27,878 
Interest received $43,639   - 
Income taxes paid $130,000   - 
       
NON-CASH INVESTING AND FINANCING ACTIVITIES:      
Non-cash exercise of warrants $5,299,113   - 
Repayment of interest $(98,750)  - 
Repayments of borrowings $(5,200,363)  - 
Reclassification of construction in progress to property and equipment $2,864,649  $1,766,110 
Value of debt discounts attributable to warrants $-  $247,880 


SOW GOOD INC.
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA
 
  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  2024  2023  2024  2023 
             
Net income (loss) $(3,379,909) $333,984  $465,821  $(4,388,446)
Depreciation and amortization  216,164   150,676   582,948   306,092 
Interest expense, net  185,586   3,641   1,199,789   1,349,486 
Provision for income tax  (62,315)  -   195,603   - 
EBITDA  (3,040,474)  488,301   2,444,161   (2,732,868)
Share-based payments  1,186,871   140,759   3,690,394   524,665 
Loss on early extinguishment of debt  -   -   696,502   - 
Adjusted EBITDA $(1,853,603) $629,060  $6,831,057  $(2,208,203)

FAQ

What was Sow Good's (SOWG) revenue in Q3 2024?

Sow Good reported revenue of $3.6 million in Q3 2024, compared to $5.0 million in Q3 2023.

Why did SOWG's Q3 2024 sales decline?

Sales declined due to delayed shipments caused by quality concerns during extreme summer heat, which led to melted products reaching shelves.

What was SOWG's net income for Q3 2024?

Sow Good reported a net loss of $3.4 million, or $(0.33) per diluted share, compared to net income of $0.3 million in Q3 2023.

How much cash did SOWG have as of September 30, 2024?

Sow Good had cash and cash equivalents of $6.9 million as of September 30, 2024.

Sow Good Inc.

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Packaged Foods
Food and Kindred Products
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