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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2024

OR

 

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number: 001-39537

logo.jpg

Laird Superfood, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

Nevada

81-1589788

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

 

5303 Spine Road, Suite 204, Boulder, Colorado 80301

(Address of principal executive offices, including Zip Code)

 

Registrant’s telephone number, including area code: (541) 588-3600

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol

 

Name of each exchange

on which registered

Common Stock, $0.001 par value

 

LSF

 

NYSE American

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

☐

  

Accelerated filer

 

☐

Non-accelerated filer

 

☒

  

Smaller reporting company

 

☒

 

 

 

  

Emerging growth company

 

☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

As of August 5, 2024 the registrant had 10,254,242 shares of common stock, $0.001 par value per share, outstanding.

 
Table of Contents

 

 

TABLE OF CONTENTS

 

 

Page

Part I. Financial Information

  
   

Item 1. Financial Statements

4
   

Unaudited Consolidated Condensed Balance Sheets

4
   

Unaudited Consolidated Condensed Statements of Operations

5
   

Unaudited Consolidated Condensed Statements of Stockholders’ Equity

6
   

Unaudited Consolidated Condensed Statements of Cash Flows

7
   

Notes to Unaudited Consolidated Condensed Financial Statements

8
   

Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations

23
   

Item 3. Quantitative and Qualitative Disclosures About Market Risk

31
   

Item 4. Controls and Procedures

31
   

Part II. Other Information

31
   

Item 1. Legal Proceedings

31
   

Item 1A. Risk Factors

31
   

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

32
   

Item 3. Defaults Upon Senior Securities

32
   

Item 4. Mine Safety Disclosures

32
   

Item 5. Other Information

32
   

Item 6. Exhibits

33
   

Signatures

34

 

Laird, our logo and other trademarks or service marks appearing in this report are the property of Laird Superfood, Inc. Trade names, trademarks and service marks of other companies appearing in this report are the property of their respective owners. Solely for convenience, the trademarks, service marks and trade names included in this report are without the ®, or other applicable symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names.

 

Unless the context otherwise indicates, references to “Laird Superfood,” “we,” “our,” “us” and the “Company” refer to Laird Superfood, Inc. and its subsidiary on a consolidated basis. 

 

 

2
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements convey our current expectations or forecasts of future events and are not guarantees of future performance. They are based on numerous assumptions that we believe are reasonable, but they are open to a wide range of uncertainties and business risks. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Any statements contained in this Quarterly Report on Form 10-Q that are not statements of historical fact may be forward-looking statements. When we use the words “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “seeks,” “should,” “will,” “would,” or the negative of these terms or other comparable terminology, we are identifying forward-looking statements.

 

Forward-looking statements involve risks and uncertainties, which may cause our actual results, performance, or achievements to be materially different from those expressed or implied by forward-looking statements. Key factors that could cause actual results to be different than expected or anticipated include, but are not limited to:

 

 

●

our limited operating history and ability to become profitable;

 

 

●

our ability to manage our growth, including our human resource requirements;

 

 

●

our reliance on third parties for raw materials and production of our products;

 

 

●

our future capital resources and needs;

 

 

●

our ability to retain and grow our customer base;

 

 

●

our reliance on independent distributors for a substantial portion of our sales;

 

 

●

our ability to evaluate and measure our business, prospects, and performance metrics;

 

 

●

our ability to compete and succeed in a highly competitive and evolving industry;

 

 

●

the health of the premium organic and natural food industry as a whole;

 

 

●

risks related to our intellectual property rights and developing a strong brand;

 

 

●

our reliance on key personnel, including Laird Hamilton and Gabrielle Reece;

 

 

●

regulatory risks;

 

 

●

the risk of substantial dilution from future issuances of our equity securities; and

 

 

●

the other risks described herein and in our Annual Report on Form 10-K for the year ended December 31, 2023.

 

In light of these risks, uncertainties and assumptions, you are cautioned not to place undue reliance on forward-looking statements, which are inherently unreliable and speak only as of the date of this Quarterly Report on Form 10-Q. You should read this Quarterly Report on Form 10-Q and the documents that we reference in this report with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. When considering forward-looking statements, you should keep in mind the cautionary statements in this report. We qualify all our forward-looking statements by these cautionary statements. We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

3
Table of Contents
 

 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

 

LAIRD SUPERFOOD, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(unaudited)

 

  

As of

 
  June 30, 2024  

December 31, 2023

 

Assets

        

Current assets

        

Cash, cash equivalents, and restricted cash

 $7,827,692  $7,706,806 

Accounts receivable, net

  1,168,726   1,022,372 

Inventory, net

  6,398,377   6,322,559 

Prepaid expenses and other current assets

  1,136,412   1,285,564 

Total current assets

  16,531,207   16,337,301 

Noncurrent assets

        

Property and equipment, net

  96,477   122,595 

Intangible assets, net

  986,232   1,085,231 

Related party license agreements

  132,100   132,100 

Right-of-use assets

  290,929   354,732 

Total noncurrent assets

  1,505,738   1,694,658 

Total assets

 $18,036,945  $18,031,959 

Liabilities and Stockholders’ Equity

        

Current liabilities

        

Accounts payable

 $1,942,263  $1,647,673 

Accrued expenses

  3,131,097   2,586,343 

Related party liabilities

  29,167   2,688 

Lease liabilities, current portion

  147,720   138,800 

Total current liabilities

  5,250,247   4,375,504 

Lease liabilities

  182,470   243,836 

Total liabilities

  5,432,717   4,619,340 

Stockholders’ equity

        

Common stock, $0.001 par value, 100,000,000 shares authorized at June 30, 2024 and December 31, 2023; 10,474,633 and 10,108,929 issued and outstanding at June 30, 2024, respectively; and 9,749,326 and 9,383,622 issued and outstanding at December 31, 2023, respectively.

  10,107   9,384 

Additional paid-in capital

  120,147,868   119,701,384 

Accumulated deficit

  (107,553,747)  (106,298,149)

Total stockholders’ equity

  12,604,228   13,412,619 

Total liabilities and stockholders’ equity

 $18,036,945  $18,031,959 

 

The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.

 

4
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LAIRD SUPERFOOD, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

   

Three Months Ended

    

Six Months Ended

  
   

June 30,

    

June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Sales, net

   $ 10,003,654     $ 7,724,091     $ 19,912,592     $ 15,837,029  

Cost of goods sold

     (5,826,373 )     (5,848,023 )     (11,771,210 )     (12,087,085 )

Gross profit

     4,177,281       1,876,068       8,141,382       3,749,944  

General and administrative

                                

Salaries, wages, and benefits

     975,809       1,090,266       1,898,216       2,405,715  

Other general and administrative

     1,172,363       1,608,235       2,407,704       3,375,096  

Total general and administrative expenses

     2,148,172       2,698,501       4,305,920       5,780,811  

Sales and marketing

                                

Marketing and advertising

     1,383,425       2,036,766       3,436,683       4,187,822  

Selling

     920,739       721,630       1,699,895       1,574,834  

Related party marketing agreements

     63,566       74,776       126,067       164,564  

Total sales and marketing expenses

     2,367,730       2,833,172       5,262,645       5,927,220  

Total operating expenses

     4,515,902       5,531,673       9,568,565       11,708,031  

Operating loss

     (338,621 )     (3,655,605 )     (1,427,183 )     (7,958,087 )

Other income

     103,069       149,109       214,066       320,103  

Loss before income taxes

     (235,552 )     (3,506,496 )     (1,213,117 )     (7,637,984 )

Income tax expense

     (3,524 )     (750 )     (42,481 )     (13,172 )

Net loss

   $ (239,076 )   $ (3,507,246 )   $ (1,255,598 )   $ (7,651,156 )

Net loss per share:

                                

Basic and diluted

   $ (0.02 )   $ (0.38 )   $ (0.13 )   $ (0.83 )

Weighted-average shares of common stock outstanding used in computing net loss per share of common stock, basic and diluted

     9,833,001       9,284,585       9,617,800       9,249,738  

 

The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.

 

 

5
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LAIRD SUPERFOOD, INC.

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

 

   

Stockholders’ Equity

          
   

Common Stock

    

Additional

    

Accumulated

          
   

Shares

    

Amount

    

Paid-in Capital

    

Deficit

    

Total

  

Balances, January 1, 2024

     9,383,622     $ 9,384     $ 119,701,384     $ (106,298,149 )   $ 13,412,619  

Stock-based compensation

     —       —       279,565       —       279,565  

Common stock issuances, net of taxes

     131,103       131       (5,340 )     —       (5,209 )

Stock options exercised

     5,000       5       9,995       —       10,000  

Net loss

     —       —             (1,016,522 )     (1,016,522 )

Balances, March 31, 2024

     9,519,725       9,520       119,985,604       (107,314,671 )     12,680,453  

Stock-based compensation

     —       —       253,708       —       253,708  

Common stock issuances, net of taxes

     425,097       423       (39,585 )     —       (39,162 )

Common stock issuance costs

     —       —       (73,195 )     —       (73,195 )

Stock options exercised

     164,107       164       21,336       —       21,500  

Net loss

     —       —       —       (239,076 )     (239,076 )

Balances, June 30, 2024

     10,108,929     $ 10,107     $ 120,147,868     $ (107,553,747 )   $ 12,604,228  

 

   

Stockholders’ Equity

          
   

Common Stock

    

Additional

    

Accumulated

          
   

Shares

    

Amount

    

Paid-in Capital

    

Deficit

    

Total

  

Balances, January 1, 2023

     9,210,414     $ 9,210     $ 118,636,834     $ (96,135,032 )   $ 22,511,012  

Stock-based compensation

     —       —       147,635       —       147,635  

Common stock issuances, net of taxes

     9,086       10       (4,420 )     —       (4,410 )

Net loss

     —       —       —       (4,143,910 )     (4,143,910 )

Balances, March 31, 2023

     9,219,500       9,220       118,780,049       (100,278,942 )     18,510,327  

Stock-based compensation

     —       —       306,076       —       306,076  

Common stock issuances, net of taxes

     114,662       115       (14,842 )     —       (14,727 )

Net loss

     —       —       —       (3,507,246 )     (3,507,246 )

Balances, June 30, 2023

     9,334,162     $ 9,335     $ 119,071,283     $ (103,786,188 )   $ 15,294,430  

 

The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.

 

6
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LAIRD SUPERFOOD, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   

Six Months Ended June 30,

  
   

2024

    

2023

  

Cash flows from operating activities

                

Net loss

   $ (1,255,598 )   $ (7,651,156 )

Adjustments to reconcile net loss to net cash from operating activities:

                

Depreciation and amortization

     138,579       163,532  

Stock-based compensation

     533,273       453,711  

Provision for inventory obsolescence

     187,901       378,859  

Allowance for credit losses

     (28,425 )     51,363  

Noncash lease costs

     76,169       76,168  

Other operating activities, net

     —       38,984  

Changes in operating assets and liabilities:

                

Accounts receivable

     (117,929 )     (371,355 )

Inventory

     (263,719 )     (539,579 )

Prepaid expenses and other current assets

     149,152       1,328,709  

Operating lease liability

     (64,812 )     (62,923 )

Accounts payable

     310,019       1,202,716  

Accrued expenses

     555,804       (2,529,105 )

Net cash from operating activities

     220,414       (7,460,076 )

Cash flows from investing activities

     (13,462 )     245,706  

Cash flows from financing activities

     (86,066 )     (19,137 )

Net change in cash and cash equivalents

     120,886       (7,233,507 )

Cash, cash equivalents, and restricted cash, beginning of period

     7,706,806       17,809,802  

Cash, cash equivalents, and restricted cash, end of period

   $ 7,827,692     $ 10,576,295  

Supplemental disclosures of cash flow information

                

Right-of-use assets obtained in exchange for operating lease liabilities

   $ —     $ 344,382  

Supplemental disclosures of non-cash investing activities

                

Receivable from sale of assets held-for-sale included in other current assets at the end of the period

   $ —     $ 450,351  

 

The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.

 

 

7
Table of Contents
LAIRD SUPERFOOD, INC.
Notes to Unaudited Consolidated Condensed Financial Statements
 

1. Summary of Significant Accounting Policies and Estimates

 

Financial Statement Preparation

 

The accompanying unaudited consolidated condensed financial statements (the "balance sheet(s)," "statement(s) of operations," "statement(s) of stockholders' equity," "statement(s) of cash flows," and, collectively, the "financial statements") include the accounts of Laird Superfood, Inc., a Nevada corporation, and its wholly owned subsidiary, Picky Bars, LLC, (collectively, the “Company,” “Laird Superfood,” “we,” or "our"). In management's opinion, the financial statements contain all adjustments, which are normal recurring adjustments, necessary for a fair presentation of its financial position and its results of operations, changes in stockholders’ equity, and cash flows for the interim periods.

 

Segment information is prepared on the same basis that the Company's Chief Executive Officer, who is deemed to be the Company's Chief Operating Decision Maker, reviews financial information for operational decision-making purposes.

 

The financial statements and related financial information should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Form 10-K") filed with the Securities and Exchange Commission (the "SEC") on March 13, 2024. The financial information as of  December 31, 2023 was derived from the audited financial statements and notes for the fiscal year ended December 31, 2023 included in Item 8 of the 2023 Form 10-K. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the footnotes and management's discussion and analysis of the consolidated financial statements in the 10-K. Certain information in footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") has been condensed or omitted pursuant to the rules and regulations of the SEC and the accounting standards for interim financial statements.

 

Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results expected for the fiscal year ending December 31, 2024.

 

Recently Issued Accounting Pronouncements

 

In  November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The expanded annual disclosures are effective for the year ending  December 31, 2024, and the expanded interim disclosures are effective in 2025 and will be applied retrospectively to all prior periods presented. While the Company is currently evaluating the expanded disclosure requirements, the Company does not expect the adoption of these amendments to have a material impact on our consolidated financial statements.

 

In  December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which requires, among other things, additional disclosures primarily related to the income tax rate reconciliation and income taxes paid. The expanded annual disclosures are effective for our year ending  December 31, 2025. The Company is currently evaluating the impact that ASU 2023-09 will have on its consolidated financial statements and whether the Company will apply the standard prospectively or retrospectively.

 

Subsequent Events

 

Subsequent events are events or transactions that occur after the balance sheet date but before the financial statements are available to be issued. The Company has evaluated events and transactions subsequent to June 30, 2024 for potential recognition of disclosure in the financial statements and determined that there were no such subsequent events, aside from those discussed below.

 

On July 12, 2024, the Company granted 694,650 shares of common stock issuable upon settlement of restricted stock units granted pursuant to the Laird Superfood, Inc. 2020 Omnibus Incentive Plan, as amended, to the reporting persons. The RSUs had a grant date fair value of $4.40 and will vest in equal installments, with 20% of the shares vesting on each of February 23, 2025, 2026, 2027, 2028 and 2029, respectively.

 

8
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LAIRD SUPERFOOD, INC.
Notes to Unaudited Consolidated Condensed Financial Statements
 

 

On September 15, 2023, the Company entered into a settlement agreement (the “2023 Settlement Agreement”) with a supplier (the “Supplier”) to recover losses incurred in connection with the product quality issue with coconut milk powder that it experienced in 2023, pursuant to which the Supplier was obligated to, among other things, pay the Company $50,000 and provide a discount to the Company on the sale of future products of up to $950,000. On February 27, 2024, the Company filed a complaint against the Supplier in the District Court of Boulder, Colorado alleging that the Supplier breached the 2023 Settlement Agreement by failing to deliver acceptable coconut milk powder (the “Litigation”). Both parties dispute liability. As a result of the Litigation, on July 30, 2024, the Company entered into an additional settlement agreement with the Supplier (the “2024 Settlement Agreement”), pursuant to which, among other things, the Supplier agreed to remit cash payment to the Company of approximately $0.5 million.
 

2. Cash, Cash Equivalents, and Restricted Cash

 

Cash, cash equivalents, and restricted cash are highly liquid instruments with an original maturity of three months or less when purchased. For the purposes of the statements of cash flows, the Company includes cash on hand, cash in clearing accounts, cash on deposit with financial institutions, investments with an original maturity of three months or less, and restricted cash in determining the total balance.

 

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets as of:

 

  

June 30,

  

December 31,

 
  

2024

  

2023

 

Cash and cash equivalents

 $7,648,958  $7,566,299 

Restricted cash

  178,734   140,507 

Total cash, cash equivalents, and restricted cash

 $7,827,692  $7,706,806 

 

Amounts in restricted cash represent those that are required to be set aside by the following contractual agreements:

 

 

●

On December 3, 2020, the Company entered into an agreement with Danone Manifesto Ventures, PBC, which provided the Company $298,103 in funds for the purpose of supporting three COVID-19 relief projects. As of June 30, 2024 and December 31, 2023, cash equivalents in the amount of $99,525 were restricted under this agreement. During the three and six months ended June 30, 2024 and 2023, the Company contributed $0 to these projects. The restriction will be released upon the completion of the projects.

 

●

Cash equivalents of $530,000 were pledged to secure Company credit card limits. As of  June 30, 2024 and December 31, 2023, $79,209 and $40,982, respectively, of these funds were restricted to collateralize borrowings against these Company credit cards. 

 

Cash, cash equivalents, and restricted cash balances that exceeded the Federal Deposit Insurance Corporation (“FDIC”) and Securities Investor Protection Corporation ("SPIC") insurable limits as of June 30, 2024 and December 31, 2023 totaled $6,907,907 and $6,756,207, respectively. The Company has not experienced any losses related to these balances. The Company’s cash, cash equivalents, and restricted cash are with what the Company believes to be a high-quality financial institution and considers the risks associated with these funds in excess of FDIC and SPIC insurable limits to be low.

 

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LAIRD SUPERFOOD, INC.
Notes to Unaudited Consolidated Condensed Financial Statements
 

3. Inventory

 

Inventory is stated at the lower of cost or net realizable value, or the value of consideration that can be received upon sale of said product, and approximate costs determined on the first-in first-out basis and consists primarily of raw materials and packaging and finished goods and includes co-packing fees, indirect labor, and allocable overhead. The following table presents the components of inventory, net of reserves, as of:

 

  

June 30,

  

December 31,

 
  

2024

  

2023

 

Raw materials and packaging

 $2,823,145  $2,180,294 

Finished goods

  3,575,232   4,142,265 

Total inventory, net

 $6,398,377  $6,322,559 

 

The Company periodically reviews the value of items in inventory and provides write-offs of inventory based on current market assessment, which are charged to cost of goods sold. For the three and six months ended June 30, 2024, the Company recorded $145,697 and $187,901, respectively, of inventory obsolescence and disposal costs. For the three and six months ended June 30, 2023, the Company recorded $144,465 and $378,859, respectively, of inventory obsolescence and disposal costs.

 

As of June 30, 2024, inventory reserves totaled $1,078,595. This is comprised of estimated reserves based on inventory turnover, quantities on hand, and expiration dates of $238,055, products quarantined for quality issues of $448,258, and discontinued inventories of $392,282. As of December 31, 2023, inventory reserves totaled $1,029,657. This was comprised of estimated reserves based on inventory turnover, quantities on hand, and expiration dates of $385,069, products quarantined for quality issues of $306,276, and discontinued inventories of $338,312.

 

As of June 30, 2024 and December 31, 2023, the Company had a total of $451,289 and $449,242, respectively, of prepayments for future raw materials inventory which are included in prepaid expenses and other current assets, net on the balance sheets.
 

4. Prepaid Expenses and Other Current Assets

 

The following table presents the components of prepaid expenses and other current assets, as of:

 

   

June 30,

    

December 31,

  
   

2024

    

2023

  

Prepaid insurance

   $ 98,263     $ 371,802  

Prepaid inventory

     451,289       449,242  

Prepaid subscriptions and license fees

     293,047       139,590  

Deposits

     188,223       238,719  

Other current assets

     105,590       86,211  

Prepaid expenses and other current assets

   $ 1,136,412     $ 1,285,564  
 

5. Revolving Lines of Credit

 

On September 2, 2021, the Company entered into a revolving line of credit with Wells Fargo Bank National Association in a principal amount not exceeding $9,500,000. Any outstanding amounts under the line of credit would have had an interest rate calculated as Daily Simple Secured Overnight Financing Rate (“SOFR”) plus 1.5% per annum until paid in full. The line of credit was renewed on September 1, 2022, with a maturity date of August 31, 2023, and the available credit was reduced to $5,000,000. The line of credit was terminated pursuant to its terms on August 31, 2023, and no amounts were due thereunder. The line of credit was not renewed.

 

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LAIRD SUPERFOOD, INC.
Notes to Unaudited Consolidated Condensed Financial Statements
 
 

6. Property and Equipment

 

Property and Equipment

 

Property and equipment, net is comprised of the following as of:

 

  

June 30, 2024

  

December 31, 2023

 
  

Gross Carrying Amount

  

Accumulated Depreciation

  

Net Carrying Amount

  

Gross Carrying Amount

  

Accumulated Depreciation

  

Net Carrying Amount

 

Furniture and office equipment

 $187,772  $(119,676) $68,096  $184,241  $(85,093) $99,148 

Leasehold improvements

  56,207   (27,826)  28,381   46,276   (22,829)  23,447 
  $243,979  $(147,502) $96,477  $230,517  $(107,922) $122,595 

 

Depreciation expense was $19,866 and $39,580 for the three and six months ended June 30, 2024, respectively. Depreciation expense was $23,857 and $60,088 for the three and six months ended June 30, 2023, respectively.

 

Assets Classified as Held-for-Sale

 

In the fourth quarter of 2022, the Company entered into purchase agreements for the sale of the production equipment for an aggregate sales price of $800,000. In the first quarter of 2023, consideration amounting to $218,165 was received and $581,835 was receivable and included in prepaid expenses and other current assets on the balance sheets. Consideration was received in full by the end of 2023 and no amounts were receivable as of June 30, 2024 and December 31, 2023. 
 

7. Intangible Assets

 

Intangible assets are comprised of the following:

 

  

June 30, 2024

  

December 31, 2023

 
  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

 

Trade names (10 years)

 $890,827  $(160,349) $730,478  $890,827  $(106,899) $783,928 

Recipes (10 years)

  330,000   (104,500)  225,500   330,000   (88,000)  242,000 

Social media agreements (3 years)

  80,000   (80,000)  —   80,000   (71,111)  8,889 

Software (3 years)

  131,708   (101,454)  30,254   131,708   (81,294)  50,414 

Definite-lived intangible assets

  1,432,535   (446,303)  986,232   1,432,535   (347,304)  1,085,231 

Licensing agreements (indefinite)

  132,100   —   132,100   132,100   —   132,100 

Total intangible assets

 $1,564,635  $(446,303) $1,118,332  $1,564,635  $(347,304) $1,217,331 

 

The weighted-average useful life of all the Company’s intangible assets is 6.6 years.

 

For the three and six months ended June 30, 2024, amortization expense was $47,278 and $98,999, respectively. For the three and six months ended June 30, 2023, amortization expense was $51,722 and $103,444, respectively. 

 

Definite-lived intangible assets

 

Definite life intangible assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Examples include a significant adverse change in the extent or manner in which the Company uses the asset, or an unexpected change in financial performance. When evaluating definite life intangible assets for impairment, the Company compares the carrying value of the asset to the asset’s estimated undiscounted future cash flows. An impairment is indicated if the estimated future cash flows are less than the carrying value of the asset. The Company considered the above factors when assessing whether the Company’s long-lived assets will be recoverable.

 

Based on the analysis of the qualitative factors above, management determined that there were no triggering events or impairment charges in the three and six months ended June 30, 2024 and 2023. 

 

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LAIRD SUPERFOOD, INC.
Notes to Unaudited Consolidated Condensed Financial Statements
 

Intangible assets are amortized using the straight-line method over estimated useful lives ranging from three to ten years. The estimated amortization expense for each of the next five years and thereafter is as follows:

 

2024 (excluding the six months ended June 30, 2024)

 $90,109 

2025

  149,994 

2026

  139,899 

2027

  139,899 

2028

  139,899 

Thereafter

  326,432 
  $986,232 

 

Indefinite-lived intangible assets

 

On  August 3, 2015, the Company entered into a license agreement with the Company’s co-founder Laird Hamilton (the “LH License”). The LH License stated Mr. Hamilton’s contribution to the Company was in the form of intellectual property, granting the Company the right to use Mr. Hamilton’s name and likeness. This contribution, which was reported on the balance sheets as of  June 30, 2024 and  December 31, 2023, was valued at $132,000 and satisfied with the issuance of 660,000 shares of common stock. The Company has determined that the intangible asset associated with the LH License has an indefinite life, as there is no foreseeable limit on the period of time over which it is expected to contribute to the cash flows of the Company.

 

On  May 2, 2018, the Company entered into a license agreement with Gabrielle Reece, who is married to Mr. Hamilton (the “GR License”). Pursuant to the GR License, Ms. Reece granted the Company rights to her name, signature, voice, picture, image, likeness, and biographical information. This contribution, which is reported on the consolidated balance sheets as of  June 30, 2024 and December 31, 2023, was valued at $100 based on the consideration exchanged. The Company has determined that the intangible asset associated with the GR License has an indefinite life, as there is no foreseeable limit on the period of time over which it is expected to contribute to the cash flows of the Company.

 

On  November 19, 2018, the Company executed a License and Preservation Agreement with Mr. Hamilton and Ms. Reece which superseded the predecessor license agreements with both individuals. The agreement added specific terms related to non-competition and allowable usage of the property under the license. No additional consideration was exchanged in connection with the agreement and the life of the agreement was set at 100 years.

 

On  May 26, 2020, the Company executed a License and Preservation Agreement with Mr. Hamilton, and Ms. Reece (the “2020 License”), which superseded the predecessor license and preservation agreement with both individuals. Among other modifications, the agreement (i) modified certain approval rights of Mr. Hamilton and Ms. Reece for use of their respective images, signatures, voices, and names (other than those owned by the Company), rights of publicity and common law and statutory rights to the foregoing in the Company’s products, (ii) modified certain assignment, change of control and indemnification provisions, and (iii) granted the Company the right to extend the term of the agreement for additional ten-year terms upon the expiration of the initial one-hundred year term. No additional consideration was exchanged in connection with the agreement.
 

8. Leases

 

Lessee

 

The Company leased its warehouse space under a commercial lease with RII Lundgren Mill, LLC, dated March 1, 2018. The lease commenced March 1, 2018. The initial lease term was ten years, and the Company had the option to renew the lease for two additional five-year periods.

 

The Company executed a second lease for additional warehouse and office space under a commercial lease with RII Lundgren Mill, LLC, dated December 17, 2018. The lease commenced on July 1, 2019. However, for accounting purposes the lease commencement date was June 6, 2019. The initial lease term was ten years.

 

The Company executed a third lease for additional warehouse and office space under a commercial lease with RII Lundgren Mill, LLC, dated October 1, 2021. The lease commenced on October 1, 2021. The initial lease term was ten years.

 

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LAIRD SUPERFOOD, INC.
Notes to Unaudited Consolidated Condensed Financial Statements
 

The Company executed a lease cancellation agreement dated December 12, 2022. Under this agreement, the Company's three leases with RII Lundgren Mill, LLC, were terminated effective January 31, 2023, and the Company agreed to pay $1,550,000, of which $500,000 was remitted in 2022 and $1,050,000 was satisfied in the first quarter of 2023.

 

The Company assumed an operating lease in the acquisition of Picky Bars, LLC on May 3, 2021. The initial lease term is 62 months, and the Company has the option to renew the lease for two additional three-year periods.

 

The Company entered into a sublease agreement with Somatic Experiencing Trauma Institute with a commencement date of January 1, 2023, for a 5,257 square foot office space in Boulder, Colorado which serves as the Company's current headquarters. This lease will expire on July 1, 2027.

 

The components of lease expense were as follows:

 

  

Three Months Ended

  

Six Months Ended

 
  

June 30, 2024

  

June 30, 2024

 

Operating leases

        

Operating lease cost

 $38,085  $76,169 

Variable lease cost

  5,790   11,355 

Operating lease expense

  43,875   87,524 

Short-term lease rent expense

  79,897   144,127 

Total rent expense

 $123,772  $231,651 

 

  

Three Months Ended

  

Six Months Ended

 
  

June 30, 2023

  

June 30, 2023

 

Operating leases

        

Operating lease cost

 $38,085  $76,169 

Variable lease cost

  5,554   18,468 

Operating lease expense

  43,639   94,637 

Short-term lease rent expense

  56,960   173,187 

Total rent expense

 $100,599  $267,824 

 

  

Six Months Ended

  

Six Months Ended

 
  

June 30, 2024

  

June 30, 2023

 

Operating cash flows - operating leases

 $64,812  $62,923 

Right-of-use assets obtained in exchange for operating lease liabilities

 $-  $344,382 

 

  

June 30, 2024

  

June 30, 2023

 

Weighted-average remaining lease term – operating leases (in years)

  2.7   3.5 

Weighted-average discount rate – operating leases

  6.92%  6.56%

 

As of June 30, 2024, future minimum payments during the next five years and thereafter are as follows:

 

2024 (excluding the six months ended June 30, 2024)

 $73,987 

2025

  126,714 

2026

  109,145 

2027

  56,210 

Total

  366,056 

Less imputed interest

  (35,866)

Operating lease liabilities

 $330,190 

 

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LAIRD SUPERFOOD, INC.
Notes to Unaudited Consolidated Condensed Financial Statements
 

Lessor

 

The Company executed a sublease agreement of the Picky Bars, LLC operating lease on March 1, 2022. The lease commenced on April 1, 2022. The initial sublease term expires on April 30, 2025. The sublease meets all of the criteria of an operating lease and is accordingly recognized straight line over the sublease term with a related sublease rental asset accounting for abatements and initial direct costs. The Company had $7,803 and $11,881 of sublease rental assets as of June 30, 2024 and December 31, 2023, respectively, included in prepaid expenses and other current assets on the balance sheets.

 

The components of rental income were as follows:

 

  

Three Months Ended

  

Six Months Ended

 
  

June 30, 2024

  

June 30, 2024

 

Operating leases

        

Operating lease income

 $14,055  $28,109 

Variable lease income

  5,316   10,634 

Total rental income

 $19,371  $38,743 

 

  

Three Months Ended

  

Six Months Ended

 
  

June 30, 2023

  

June 30, 2023

 

Operating lease

        

Operating lease income

 $14,055  $28,110 

Variable lease income

  5,318   10,635 

Total rental income

 $19,373  $38,745 

 

As of June 30, 2024, future minimum payments to be received during the next five years and thereafter, as applicable, are as follows:

 

2024 (excluding the six months ended June 30, 2024)

 $31,122 

2025

  20,748 

Total

 $51,870 
 

 

9. Income Taxes

 

The Company had a tax net loss for the three and six months ended June 30, 2024 and 2023, and therefore has recorded no assessment of current federal income taxes. The Company is subject to minimum state taxes for various jurisdictions as well as subject to franchise taxes considered income taxes under Accounting Standards Codification ("ASC") 740, Income Taxes. A reconciliation of income tax expense at the federal statutory rate to the income tax provision at the Company's effective rate is as follows:

 

  

Six Months Ended

 
  

June 30, 2024

  

June 30, 2023

 
         

Income tax benefit at statutory rates

 $229,541  $1,604,134 

Valuation allowance for deferred tax assets

  (626,845)  (1,625,391)

Stock-based compensation

  380,270   (17,634)

Other expense, net

  (25,447)  25,719 

Reported income tax expense

 $(42,481) $(13,172)

Effective tax rate:

  3.5%  0.2%

 

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LAIRD SUPERFOOD, INC.
Notes to Unaudited Consolidated Condensed Financial Statements
 

The Company’s deferred tax assets consisted of the following as of:

 

  

June 30, 2024

  

December 31, 2023

 

Deferred tax assets:

        

Net operating loss carryforwards

 $20,625,634  $20,088,873 

Intangible assets

  2,176,271   2,258,079 

Property and equipment

  1,060,272   1,104,854 

Research and development credits

  251,540   235,514 

Research and development

  246,410   268,414 

Inventory

  339,365   246,182 

Accrued expenses

  518,546   496,695 

Right of use asset

  10,364   7,366 

Bad debt allowance

  98,301   64,250 

Charitable contributions

  34,487   40,773 

Unexercised options

  1,109,065   890,128 

Total deferred tax assets

  26,470,255   25,701,128 

Valuation allowance

  (26,470,255)  (25,701,128)

Total net deferred tax assets

 $—  $— 

 

As of  June 30, 2024, the Company did not provide a current or deferred U.S. federal income tax provision or benefit for any of the periods presented because the Company has reported cumulative losses since inception. The Company has recorded a provision for state income taxes and a corresponding current state income tax payable of approximately $3,598 and $7,373 as of  June 30, 2024 and December 31, 2023, respectively. 

 

As of  June 30, 2024 and December 31, 2023, the Company had aggregate net operating losses ("NOLs") totaling approximately $140.5 million and $136.8 million, respectively. As of  June 30, 2024 and December 31, 2023, the Company had federal NOLs totaling approximately $1.9 million from 2017 and prior years that can be carried forward for 20 years and which begin to expire in 2036. As of  June 30, 2024 and December 31, 2023, the Company had federal NOLs totaling approximately $79.9 million and $77.8 million, respectively, from 2018 and subsequent years that can be carried forward indefinitely. As of  June 30, 2024 and December 31, 2023, the Company had state NOLs totaling $57.7 million and $57.1 million, respectively, that can be carried forward for between 15 and 20 years. As of  June 30, 2024 and December 31, 2023, the Company had credits totaling $0.3 million and $0.2 million, respectively, that can be carried forward for five years. As of  June 30, 2024 and December 31, 2023, the Company had other carryforwards totaling $0.6 million that can be carried forward for between one and five years.

 

The use of net operating losses  may be subject to certain limitations, such as those triggered by ownership changes under Section 382 of the Internal Revenue Code. Because these provisions, the use of a portion of the Company's NOLs and tax credit carryforwards  may be limited in future periods. Further, a portion of the carryforwards  may expire before being applied to reduce future income tax liabilities.

 

The Company assesses its deferred tax assets and liabilities to determine if it is more likely than not, they will be realized; if not, a valuation allowance is required to be recorded. Management has determined it is more likely than not that the deferred tax assets would not be realized, thus a full valuation allowance was recorded against the deferred tax assets. The Company  may reduce the valuation allowance against definite-lived deferred tax assets at such a time when it becomes more likely than not that the definite-lived deferred tax assets will be realized. The change in the valuation allowance for deferred tax assets and liabilities for the six months ended June 30, 2024 and 2023 were net increases of $0.8 million and $1.8 million, respectively.

 

GAAP requires management to evaluate and report information regarding its exposure to various tax positions taken by the Company. The Company has determined whether there are any tax positions that have met the recognition threshold and has measured the Company’s exposure to those tax positions. Management believes that the Company has adequately addressed all relevant tax positions and that there are no unrecorded tax liabilities. 

 

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. U.S. and state jurisdictions have statutes of limitations that generally range from 3 to 5 years.

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LAIRD SUPERFOOD, INC.
Notes to Unaudited Consolidated Condensed Financial Statements

 
 

10. Stock Incentive Plan

 

The Company adopted an incentive plan (as amended, he “2020 Omnibus Incentive Plan”) on September 22, 2020, as amended by the First Amendment to the 2020 Omnibus Incentive Plan, which was approved by the Company's stockholders on June 27, 2024, to provide for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units ("RSUs"), deferred stock units, unrestricted stock, dividend equivalent rights, performance shares, other performance-based awards, other equity-based awards, and cash bonus awards to Company employees, non-employee directors, and certain consultants and advisors. As of June 30, 2024, the Company has 1,441,996 additional authorized shares to award under the 2020 Omnibus Incentive Plan excluding 1,944,131 of shares to be issued upon vesting and exercise of outstanding options and RSUs. 

 

Stock Options

 

The following tables summarize the Company’s stock option activity during the six months ended June 30, 2024 and 2023:

 

      

Weighted

  

Weighted

     
      

Average

  

Average

     
  

Options

  

Exercise Price

  

Contractual

  

Aggregate

 
  

Activity

  

(per share)

  

Term (years)

  

Intrinsic Value

 

Balance at January 1, 2024

  1,234,778  $4.52   7.91  $30,000 

Granted

  799,188  $0.73   —  $— 

Exercised/released (1)

  (255,750) $1.06   —  $— 

Cancelled/forfeited

  (25,788) $3.01   —  $— 

Balance at June 30, 2024

  1,752,428  $3.32   8.30  $6,377,551 

Exercisable at June 30, 2024

  523,040  $4.52   6.38  $1,108,076 
(1) Includes 86,643 shares of common stock which were withheld to cover option costs. 

 

      

Weighted

  

Weighted

     
      

Average

  

Average

     
  

Options

  

Exercise Price

  

Contractual

  

Aggregate

 
  

Activity

  

(per share)

  

Term (years)

  

Intrinsic Value

 

Balance at January 1, 2023

  921,657  $6.86   8.00  $— 

Granted

  400,000  $0.81   —  $— 

Exercised/released

  —  $—   —  $— 

Cancelled/forfeited

  (24,164) $9.99   —  $— 

Balance at June 30, 2023

  1,297,493  $4.94   7.74  $— 

Exercisable at June 30, 2023

  318,041  $8.72   5.18  $— 

 

The fair value of each stock option granted is estimated on the grant date using the Black-Scholes option valuation model. The assumptions used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect market conditions and our historical experience.

 

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LAIRD SUPERFOOD, INC.
Notes to Unaudited Consolidated Condensed Financial Statements
 

Restricted Stock Units

 

The following tables summarize the Company’s RSU activity during the six months ended June 30, 2024 and 2023:

 

      

Weighted Average

  

Weighted Average

     
      

Grant Date Fair

  

Remaining Vesting

  

Aggregate

 
  

Number of RSUs

  

Value (per share)

  

Term (years)

  

Fair Value

 

Balance at January 1, 2024

  771,885  $1.76   2.04  $1,361,696 

Granted

  100,000  $4.79   —  $— 

Exercised/released (1)

  (369,280) $1.35   —  $— 

Cancelled/forfeited

  (66) $19.00   —  $— 

Balance at June 30, 2024

  502,539  $2.67   2.03  $1,342,542 
(1) Includes 13,080 shares of common stock which were withheld to cover taxes. 

 

      

Weighted Average

  

Weighted Average

     
      

Grant Date Fair

  

Remaining Vesting

  

Aggregate

 
  

Number of RSUs

  

Value (per share)

  

Term (years)

  

Fair Value

 

Balance at January 1, 2023

  504,420  $4.22   2.94  $2,127,734 

Granted

  645,000  $0.84   —  $— 

Exercised/released (1)

  (141,361) $4.25   —  $— 

Cancelled/forfeited

  (16,293) $6.00   —  $— 

Balance at June 30, 2023

  991,766  $1.99   2.86  $1,968,741 
(1) Includes 17,613 shares of common stock which were withheld to cover taxes. 

 

The Company estimates the fair value of each RSU using the fair value of the Company’s common stock on the date of grant.

 

Market-Based Stock Units ("MSUs")

 

The following tables summarize the Company’s MSU activity during the six months ended June 30, 2024 and 2023:

 

      

Weighted Average

  

Weighted Average

     
      

Grant Date Fair

  

Remaining Vesting

  

Aggregate

 
  

Number of MSUs

  

Value (per share)

  

Term (years)

  

Fair Value

 

Balance at January 1, 2024

  621,314  $1.57   0.62  $977,558 

Granted

  —  $—   —  $— 

Exercised/released

  (200,000) $0.18   —  $— 

Cancelled/forfeited

  (21,314) $43.53   —  $— 

Balance at June 30, 2024

  400,000  $0.03   0.12  $13,090 

 

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LAIRD SUPERFOOD, INC.
Notes to Unaudited Consolidated Condensed Financial Statements
 
      

Weighted Average

  

Weighted Average

     
      

Grant Date Fair

  

Remaining Vesting

  

Aggregate

 
  

Number of MSUs

  

Value (per share)

  

Term (years)

  

Fair Value

 

Balance at January 1, 2023

  31,083  $43.53   0.60  $1,353,043 

Granted

  —  $—   —  $— 

Exercised/released

  —  $—   —  $— 

Cancelled/forfeited

  (9,769) $43.53   —  $— 

Balance at June 30, 2023

  21,314  $43.53   0.29  $927,798 

 

The MSUs vest upon the 30-day weighted average stock price reaching or exceeding established targets within the requisite service period. We estimate the grant-date fair value of the MSUs using a Monte Carlo simulation which requires assumptions for expected volatility, risk-free rate of return and dividend yield. Compensation expense for these MSUs is recognized over the requisite service period regardless of whether the market conditions are satisfied.

 

Stock-Based Compensation

 

Stock-based compensation expense is recognized ratably over the requisite service period for all awards. The following tables summarize the Company’s stock-based compensation recorded as a result of applying the provisions of ASC Topic 718, Compensation - Stock Compensation to equity awards:

 

  

Three Months Ended

  

Six Months Ended

  

Unrecognized Compensation Cost Related to Non-Vested Awards as of

  

Weighted-Average Remaining Vesting Period as of

 
  

June 30, 2024

  

June 30, 2024

  

June 30, 2024

  

June 30, 2024 (years)

 

Stock options

 $91,688  $173,194  $845,353   3.00 

RSUs

  155,187   333,981   1,243,735   1.55 

MSUs

  6,833   26,098   1,605   0.12 

Total stock-based compensation

 $253,708  $533,273  $2,090,693   2.13 
                 

Cost of goods sold

 $982  $1,664  $11,633   4.03 

General and administrative

  209,680   440,781   1,896,260   1.94 

Sales and marketing

  43,046   90,828   182,800   4.06 

Total stock-based compensation

 $253,708  $533,273  $2,090,693   2.13 

 

  

Three Months Ended

  

Six Months Ended

  

Unrecognized Compensation Cost Related to Non-Vested Awards as of

  

Weighted-Average Remaining Vesting Period as of

 
  

June 30, 2023

  

June 30, 2023

  

December 31, 2023

  

December 31, 2023 (years)

 

Stock options

 $100,196  $161,684  $654,313   2.36 

RSUs

  195,915   354,630   1,099,972   2.17 

MSUs

  9,965   (62,603)  34,281   0.57 

Total stock-based compensation

 $306,076  $453,711  $1,788,566   2.21 
                 

Cost of goods sold

 $780  $(116) $2,976   1.62 

General and administrative

  286,682   421,924   1,666,980   2.29 

Sales and marketing

  18,614   31,903   118,610   0.99 

Total stock-based compensation

 $306,076  $453,711  $1,788,566   2.21 

 
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LAIRD SUPERFOOD, INC.
Notes to Unaudited Consolidated Condensed Financial Statements
 

11. Earnings (Loss) per Share

 

Basic earnings (loss) per share is determined by dividing the net loss attributable to the Company's common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is similarly determined, except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if all dilutive potential common shares had been issued. Dilutive potential common shares consist of employee stock options, RSUs, and MSUs. The dilutive effect of employee stock options, RSUs, and MSUs by the Company are calculated using the treasury stock method. Basic earnings per share is reconciled to diluted earnings per share in the following table:

 

  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net loss

 $(239,076) $(3,507,246) $(1,255,598) $(7,651,156)

Weighted average shares outstanding - basic and diluted

  9,833,001   9,284,585   9,617,800   9,249,738 

Basic and diluted:

                

Net loss per share, basic and diluted

 $(0.02) $(0.38) $(0.13) $(0.83)

Common stock options, restricted stock awards, and market-based stock awards excluded due to anti-dilutive effect

  2,654,967   2,310,573   2,654,967   2,310,573 

 
 

12. Concentrations

 

The following table details the concentration of vendor accounts payable balances in excess of 10% of total accounts payable at each period:

 

  June 30, December 31,
  

2024

 

2023

Vendor A

 

15%

 

23%

Vendor B

 

*

 

14%

Vendor C * 10%

Total

 

15%

 

47%

* Less than 10%.

 

The following table details the concentration of customer accounts receivable balances in excess of 10% of total trade accounts receivable at each period:

 

  June 30, December 31,
  

2024

 

2023

Customer A

 

31%

 

46%

Customer B

 

25%

 

21%

Total

 

56%

 

67%

* Less than 10%.

 

The following table details the concentration of sales to specific customers in excess of 10% of total net sales for each year and the accounts receivable balances from those customers at the end of each period:

 

  

Net Sales

 

Accounts Receivable

  

Three months ended June 30,

 

Six months ended June 30,

 

As of June 30,

  

2024

 

2023

 

2024

 

2023

 

2024

 

2023

Customer A

 

18%

 

22%

 

15%

 

19%

 

552,668

 

387,772

Customer B

 

16%

 

16%

 

17%

 

15%

 

460,392

 

567,059

Customer C

 

*

 

11%

 

*

 

11%

 

*

 

653,494

Total

 

34%

 

49%

 

32%

 

45%

 

1,013,060

 

1,608,325

* Less than 10%.

 

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LAIRD SUPERFOOD, INC.
Notes to Unaudited Consolidated Condensed Financial Statements
 

The Company purchased a substantial portion of raw materials and packaging from certain suppliers. The following table details the concentration of purchases from specific suppliers in excess of 10% of total purchases for each period:

 

  

For the Three Months Ended June 30,

  

For the Six Months Ended June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Supplier A

  *   *   12%  * 

Supplier B

  *   10%  10%  * 

Supplier C

  11%  12%  11%  13%

Supplier D

  13%  11%  12%  * 

Supplier E

  10%  *   10%  * 

Supplier F

  *   *   *   18%

Total

  34%  33%  55%  31%

* Less than 10%.

 

The Company purchased a substantial portion of raw materials and packaging originating from certain geographical regions. The following table details the concentration of purchases from specific regions in excess of 10% of total purchases for each period:

 

  

For the Three Months Ended June 30,

  

For the Six Months Ended June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Sri Lanka

  *   *   13%  * 

Indonesia

  *   11%  *   12%

Total

  *   11%  13%  12%

* Less than 10%. 
 

13. Related Parties

 

FASB ASC Topic 850, Related Party Disclosures, requires that information about transactions with related parties that would influence decision making shall be disclosed so that users of the financial statements can evaluate their significance. The Company conducts business with suppliers and service providers who are also stockholders of the Company. From time to time, service providers are offered shares of common stock as compensation for their services. Shares provided as compensation are calculated based on the grant date fair value of the service provided. Additional material related party transactions are noted below.

 

License Agreements

 

On May 26, 2020, the Company executed a License and Preservation Agreement which superseded the predecessor license and preservation agreement with both Mr. Hamilton and Ms. Reece. Among other modifications, the agreement (i) modified certain approval rights, (ii) modified certain assignment, change of control and indemnification provisions, and (iii) granted the Company the right to extend the term of the agreement for additional ten-year terms upon the expiration of the initial one-hundred-year term. No additional consideration was exchanged in connection with the agreement. See additional discussion related to the 2020 License in Note 7 of the financial statements.

 

Marketing Agreements

 

On October 26, 2022, the Company executed an influencer agreement with Gabby Reece to provide certain marketing services for a term ending December 31, 2023, with an option to renew for one-year terms. In connection with these services, we recognized advertising expenses totaling $63,566 and $126,067, for the three and six months ended June 30, 2024, respectively, and $74,776 and $164,564 for the three and six months ended June 30, 2023, respectively. As of June 30, 2024 and December 31, 2023, amounts payable to Gabby Reece of $29,167 and $2,688, respectively, are included in related party liabilities in the balance sheets.

 

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LAIRD SUPERFOOD, INC.
Notes to Unaudited Consolidated Condensed Financial Statements
 
 

14. Revenue Recognition

 

The Company’s primary source of revenue is sales of coffee creamers, hydration and beverage enhancing supplements, harvest snacks and other food items, and coffee, tea, and hot chocolate products. The Company recognizes revenue when control of the promised good is transferred to the customer and in amounts that the Company expects to collect. The timing of revenue recognition takes into consideration the various shipping terms applicable to the Company’s sales. Each delivery or shipment made to a customer is considered to satisfy a performance obligation. Performance obligations generally occur at a point in time and are satisfied when control of the goods passes to the customer. The Company is entitled to collect the sales price under normal credit terms. Additionally, the Company estimates the impact of certain common practices employed by us and other manufacturers of consumer products, such as scan-based trading, product rebate and other pricing allowances, product returns, trade promotions, sales broker commissions and slotting fees. These estimates are recorded at the end of each reporting period.

 

In accordance with ASC Topic 606, Revenue from Contracts with Customers, the Company disaggregates net sales from contracts with customers based on the characteristics of the products sold:

 

  

Three Months Ended June 30,

 
  

2024

  

2023

 
  

$

  

% of Total

  

$

  

% of Total

 

Coffee creamers

 $4,696,979   47% $4,647,553   60%

Coffee, tea, and hot chocolate products

  2,503,529   25%  1,957,760   25%

Hydration and beverage enhancing supplements

  2,309,600   23%  998,309   13%

Harvest snacks and other food items

  1,683,776   17%  1,849,947   24%

Other

  91,909   1%  124,953   2%

Gross sales

  11,285,793   113%  9,578,522   124%

Shipping income

  120,402   1%  259,843   3%

Returns and discounts

  (1,402,541)  (14)%  (2,114,274)  (27)%

Sales, net

 $10,003,654   100% $7,724,091   100%

 

  

Six Months Ended June 30,

 
  

2024

  

2023

 
  

$

  

% of Total

  

$

  

% of Total

 

Coffee creamers

 $10,267,299   52% $9,779,696   62%

Coffee, tea, and hot chocolate products

  4,678,794   23%  3,912,901   25%

Hydration and beverage enhancing supplements

  4,334,872   22%  1,669,159   11%

Harvest snacks and other food items

  2,987,837   15%  3,602,344   23%

Other

  213,921   1%  154,683   1%

Gross sales

  22,482,723   113%  19,118,783   122%

Shipping income

  231,830   1%  563,069   4%

Returns and discounts

  (2,801,961)  (14)%  (3,844,823)  (26)%

Sales, net

 $19,912,592   100% $15,837,029   100%

 

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LAIRD SUPERFOOD, INC.
Notes to Unaudited Consolidated Condensed Financial Statements
 

The Company generates revenue through two channels: e-commerce and wholesale:

 

  

Three Months Ended June 30,

 
  

2024

  

2023

 
  

$

  

% of Total

  

$

  

% of Total

 

E-commerce

 $6,098,327   61% $4,139,373   54%

Wholesale

  3,905,327   39%  3,584,718   46%

Sales, net

 $10,003,654   100% $7,724,091   100%

 

  

Six Months Ended June 30,

 
  

2024

  

2023

 
  

$

  

% of Total

  

$

  

% of Total

 

E-commerce

 $11,966,664   60% $8,567,054   54%

Wholesale

  7,945,928   40%  7,269,975   46%

Sales, net

 $19,912,592   100% $15,837,029   100%

 

Receivables from contracts with customers are included in accounts receivable. Contract assets include deferred cost of goods sold associated with deferred revenue and are included in finished goods inventories. Contract liabilities include deferred revenue, customer deposits, rewards programs, and refund liabilities, and are included in accrued expenses. All contract liabilities as of December 31, 2023, were recognized in net sales for the six months ended June 30, 2024. The balances of receivables from contracts with customers, contract assets, and contract liabilities were as follow:

 

  

January 1,

  

December 31,

  

June 30,

 
  

2023

  

2023

  

2024

 

Accounts receivable, net

 $1,494,469  $1,022,372  $1,168,726 

Contract assets

 $57,249  $—  $10,342 

Contract liabilities

 $(729,667) $(427,974) $(478,311

)

 

 

On  May 7, 2024, the Company entered into an accounts receivable factoring agreement (the “Factoring Agreement”) with Alterna Capital Solutions LLC (the “Purchaser”). The Factoring Agreement allows the Company to access up to $2 million on a revolving basis. The upfront purchase price for factored accounts is up to 70% of their face value, with the remainder payable to the Company upon collection by the Purchaser. The proceeds will be used to fund general working capital needs. The Company will pay fees, including a funds usage fee (prime rate + 1.5%, minimum 10% per annum) and a collateral monitoring fee (0.05% per month). The Purchaser can require repurchase of uncollectable or ineligible accounts. 

 

The Factoring Agreement has an initial term of 12 months and will renew annually, unless terminated in accordance with the Factoring Agreement. The Company  may terminate the Factoring Agreement at any time upon 30 days prior written notice and payment to Purchaser of an early termination fee equal to 2.0% of the Maximum Amount if terminated during the first 12 months and 1.0% of the Maximum Amount during the subsequent terms.

 

The Company has granted a security interest it's personal property to secure the payment and performance of all obligations under the Factoring Agreement. The Factoring Agreement includes customary provisions, including representations, warranties and covenants, indemnification, waiver of jury trial, and the exercise of remedies upon a breach or default. Such description is qualified in its entirety by reference to the full text of the Factoring Agreement, a copy of which is attached as Exhibit 10.1 to this Quarterly Report on Form 10-Q.

 

Factored receivables due to the purchaser of $106,552 and $0 as of June 30, 2024 and December 31, 2023, respectively, were included in accounts receivable on the balance sheet. 

 

 
 

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis of our financial condition and results of operations is a supplement to and should be read in conjunction with the unaudited consolidated condensed financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2023(the "2023 Form 10-K"). This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q and the section titled “Risk Factors” included herein and in the 2023 Form 10-K.

 

Overview

 

Laird Superfood creates highly differentiated, plant-based, and functional foods, many of which incorporate adaptogens which may support a variety of brain functions. The core pillars of the Laird Superfood platform are currently Superfood Creamer coffee creamers, Hydrate hydration products and beverage enhancing supplements, Harvest snacks and other food items, and functional roasted and instant coffees, teas, and hot chocolate. Consumer preferences within the evolving food and beverage industry are shifting away from processed and sugar-laden food and beverage products, as well as those containing significant amounts of highly processed and artificial ingredients. Our long-term goal is to build the first scale-level and widely recognized brand that authentically focuses on natural ingredients, nutritional density, and functionality, allowing us to maximize penetration of a multi-billion-dollar opportunity in the grocery market.

 

Net sales were $10.0 million and $7.7 million, respectively, for the three months ended June 30, 2024 and 2023, representing 30% growth. For the six months ended June 30, 2024 and 2023, net sales were $19.9 million and $15.8 million, respectively, representing 26% growth. E-commerce channel sales increased by 47% in the second quarter of 2024 and 40% in year-to-date ("YTD") 2024 compared to the same periods in 2023 despite significant, planned reductions in media spend in the e-commerce channel. Sales through Amazon.com increased by 80% in Q2 2024 compared to Q2 2023, and by 63% comparing the 2024 and 2023 year-to-date periods, driven by growth in subscription revenue as well as new customer sales. Direct-to-Consumer ("DTC") sales, on lairdsuperfood.com and pickybars.com, increased by 32% comparing Q2 2024 to Q2 2023 and by 29% comparing YTD periods, driven by strong performance in both subscription and repeat customers, increasing average order value, and improved discount rates due to strategic shifts in promotional strategies. Wholesale channel net sales increased by 9% in both Q2 2024 and YTD 2024 as compared to the corresponding prior year periods, driven by sales growth in club stores, as well as velocity improvement and distribution expansion in grocery, and more efficient promotional spend across the wholesale channel.

 

Our e-commerce channel is comprised of DTC (lairdsuperfood.com and pickybars.com) and Amazon.com. For the three and six months ended June 30, 2024, the e-commerce channel made up 61% and 60% of our net sales, respectively, compared to 54% for the three and six months ended June 30, 2023. Amazon.com accounted for 39% and 38%, respectively, of e-commerce channel sales, as compared to 32% for the corresponding 2023 periods. Lairdsuperfood.com and pickybars.com are platforms that provide an authentic brand experience for our consumers that drive engagement through educational content and provide feedback for future product development. We view our proprietary database of customers ordering directly from our website as a strategic asset, as it enhances our ability to develop a long-term relationship with these customers. We believe the content on our websites allows Laird Superfood to educate consumers on the benefits of our products and ingredients while providing a positive customer experience. We believe this experience leads to higher retention rates among repeat users and subscribers, as evidenced by repeat users and subscribers accounting for over three quarters of DTC sales for the three and six months ended June 30, 2024 and 2023.

 

For the three and six months ended June 30, 2024, the wholesale channel made up 39% and 40% of our net sales, respectively, compared to 46% for the three and six months ended June 30, 2023. Laird Superfood products are sold through a diverse set of retail channels, including conventional, natural, and specialty grocery stores, and club stores. The diversity of our retail channel represents a strong competitive advantage for Laird Superfood and provides us with a larger total addressable market than would be considered normal for a food brand that is singularly focused on the grocery market.

 

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Recent Developments

 

Redomestication

 

On December 31, 2023 (the “Effective Date”), we changed our state of incorporation from the state of Delaware to the state of Nevada (the “Redomestication”) by means of a plan of conversion, as described in our definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission (the “SEC”) on October 10, 2023.

 

As of the Effective Date:

 

 

●

our domicile changed from the state of Delaware to the state of Nevada; and
 

●

the affairs of the Company ceased to be governed by the Delaware General Corporation Law and the Company’s then existing certificate of incorporation and bylaws, and instead became governed by the Nevada Revised Statutes and the Company's new articles of incorporation and bylaws. 

 

The Redomestication was previously submitted to a vote of, and was approved by, our stockholders at our Annual Meeting of Stockholders held on November 28, 2023. The Redomestication did not result in any change in the business, physical location, management, assets, liabilities, or net worth of the Company, nor did it result in any change in location of our current employees, including management. The Redomestication did not affect any of our material contracts with any third parties, and our rights and obligations under those material contractual arrangements continue to be the rights and obligations of the Company after the Redomestication. The daily business operations of the Company will continue as they have been conducted prior to the Redomestication. The consolidated financial condition and results of operations of the Company immediately after consummation of the Redomestication remains the same as immediately before the Redomestication.

 

Entry into an Accounts Receivable Factoring Agreement

 

On May 7, 2024, the Company entered into an accounts receivable factoring agreement (the “Factoring Agreement”) with Alterna Capital Solutions LLC (the “Purchaser”). The Factoring Agreement allows the Company to access up to $2 million on a revolving basis. The upfront purchase price for factored accounts is up to 70% of their face value, with the remainder payable to the Company upon collection by the Purchaser. The proceeds will be used to fund general working capital needs. The Company will pay fees, including a funds usage fee (prime rate + 1.5%, minimum 10% per annum) and a collateral monitoring fee (0.05% per month). The Purchaser can require repurchase of uncollectable or ineligible accounts. 

 

The Factoring Agreement has an initial term of 12 months and will renew annually, unless terminated in accordance with the Factoring Agreement. The Company may terminate the Factoring Agreement at any time upon 30 days prior written notice and payment to Purchaser of an early termination fee equal to 2.0% of the Maximum Amount if terminated during the first 12 months and 1.0% of the Maximum Amount during the subsequent terms.

 

The Company has granted a security interest it's personal property to secure the payment and performance of all obligations under the Factoring Agreement. The Factoring Agreement includes customary provisions, including representations, warranties and covenants, indemnification, waiver of jury trial, and the exercise of remedies upon a breach or default. Such description is qualified in its entirety by reference to the full text of the Factoring Agreement, a copy of which is attached as Exhibit 10.1 to this Quarterly Report on Form 10-Q. 

 

Our Strategy and Key Factors Affecting our Performance

 

We believe that our future performance will depend on many factors, including the following:

 

Ability to Grow Our Customer Base in both E-commerce and Traditional Wholesale Distribution Channels

 

We are currently seeking to grow our customer base through both paid and organic online channels, as well as by expanding our presence in a variety of physical wholesale distribution channels. E-commerce customer acquisitions typically occur at our websites, lairdsuperfood.com and pickybars.com, and Amazon.com. Our e-commerce customer acquisition program includes paid and unpaid social media, search, display, and traditional media. Our products are also sold through a growing number of wholesale channels. Wholesale customers include grocery chains, natural food outlets, club stores, drug stores, and food service customers including coffee shops, gyms, restaurants, hospitality venues and corporate dining services, among others. Customer acquisition in physical wholesale channels depends on, among other things, paid promotions through retailers, display, and traditional media.

 

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Ability to Manage Co-Manufacturer and Third-Party Logistics Relationships

 

All of our production and logistics is handled by third parties, and our performance will be highly dependent on the ability of these partners to produce and deliver our products in a timely manner and to our standards and at a reasonable cost.

 

Ability to Acquire and Retain Customers at a Reasonable Cost

 

We believe an ability to consistently acquire and retain customers at a reasonable cost relative to projected lifetime value will be a key factor affecting future performance. To accomplish this goal, we intend to balance advertising spend between online and offline channels, as well as balancing more targeted and measurable “direct response” marketing spend with advertising focused on increasing our long-term brand recognition, where success attribution is less directly measurable on a near-term basis.

 

Ability to Drive Repeat Usage of Our Products

 

We accrue substantial economic value from repeat customers who consistently re-order our products. The pace of our growth will be affected by the repeat usage dynamics of existing and newly acquired customers.

 

Ability to Expand Our Product Line

 

Our goal is to expand our product line over time to increase our growth opportunity and reduce product-specific risks through diversification into multiple products, each designed around daily use. Our pace of growth will be partially affected by the cadence and magnitude of new product launches over time.

 

Ability to Expand Gross Margins

 

Our overall profitability will be impacted by our ability to expand gross margins through effective sourcing of raw materials, controlling labor and shipping costs, controlling the impacts of inflationary market factors, as well as managing co-packer relationships.

 

Ability to Expand Operating Margins

 

Our ability to expand operating margins will be impacted by our ability to cover fixed general and administrative costs and variable sales and marketing costs with higher revenues and gross profit dollars.

 

Ability to Manage Our Global Supply Chain

 

Our ability to grow and meet future demand will be affected by our ability to properly plan for and source inventory from a variety of suppliers located inside and outside the United States. We may encounter difficulties in sourcing products.

 

Ability to Optimize Key Components of Working Capital

 

Our ability to reduce cash burn in the near-term and eventually generate positive cash flow will be partially impacted by our ability to effectively manage all the key working capital components that could influence our cash conversion cycle.

 

Components of Results of Operations

 

Sales, net

 

We sell our products indirectly to consumers through a broad set of physical wholesale channels. We also derive revenue from the sale of our products directly to consumers through our direct websites, as well as third-party online channels.

 

Cost of Goods Sold

 

Cost of goods sold includes the cost of raw materials and packaging, and overhead including inbound and outbound freight, direct and indirect labor, third-party logistics ("3PL") fees, warehouse storage costs, and other miscellaneous costs related to manufacturing and distributing our products. 

 

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Operating Expenses

 

Our operating expenses consist of general and administrative expenses and sales and marketing expenses.

 

Income Taxes

 

Due to our history of operating losses and expectation of future operating losses, we do not expect any significant income tax expenses or benefits for the foreseeable future.

 

Results of Operations

 

Comparison of the three months ended June 30, 2024 (“Q2 2024”) and June 30, 2023 (“Q2 2023”)

 

The following tables summarize our results of operations for the periods indicated:

 

   

Three Months Ended June 30,

    

$

    

%

  
   

2024

    

2023

    

Change

    

Change

  

Sales, net

   $ 10,003,654     $ 7,724,091     $ 2,279,563       30 %

Cost of goods sold

     (5,826,373 )     (5,848,023 )     21,650       (0 )%

Gross profit

     4,177,281       1,876,068       2,301,213       123 %

Gross margin

     41.8 %     24.3 %                

General and administrative

     2,148,172       2,698,501       (550,329 )     (20 )%

Sales and marketing

     2,367,730       2,833,172       (465,442 )     (16 )%

Total operating expenses

     4,515,902       5,531,673       (1,015,771 )     (18 )%

Operating loss

     (338,621 )     (3,655,605 )     3,316,984       (91 )%

Other income

     103,069       149,109       (46,040 )     (31 )%

Loss before income taxes

     (235,552 )     (3,506,496 )     3,270,944       (93 )%

Income tax expense

     (3,524 )     (750 )     (2,774 )     370 %

Net loss

   $ (239,076 )   $ (3,507,246 )   $ 3,268,170       (93 )%

 

   

Three Months Ended June 30,

    

$

    

%

  
   

2024

    

2023

    

Change

    

Change

  

Sales, net

   $ 10,003,654     $ 7,724,091     $ 2,279,563       30 %

 

Net sales increased to $10.0 million in Q2 2024 from $7.7 million in Q2 2023, representing 30% growth year-over-year. The increase was primarily driven by a 47% increase in sales in the e-commerce channel through both platforms, Amazon.com and DTC, despite a planned reduction in promotional spend in DTC, as compared to reduced sales volume in the 2023 period from out-of-stocks associated with a quality event. Further, the wholesale channel also grew by 9% driven primarily by sales growth in club stores, velocity improvements and distribution gains in grocery stores, and more efficient promotional spend. 

 

   

Three Months Ended June 30,

    

$

    

%

  
   

2024

    

2023

    

Change

    

Change

  

Cost of goods sold

   $ (5,826,373 )   $ (5,848,023 )   $ 21,650       (0 )%

 

Cost of goods sold was flat at approximately $5.8 million in Q2 2024 and Q2 2023, in a period of sales growth reflecting the full benefit realization of the transition to a variable cost third-party co-manufacturing business model. 

 

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Table of Contents

 

   

Three Months Ended June 30,

    

$

    

%

  
   

2024

    

2023

    

Change

    

Change

  

Gross profit

   $ 4,177,281     $ 1,876,068     $ 2,301,213       123 %

 

Gross profit increased to $4.2 million in Q2 2024 from $1.9 million in Q2 2023. Gross margin improved to 41.8% in Q2 2024 from 24.3% in Q2 2023. This expansion of gross margin is driven by full benefit realization of the transition to a third-party co-manufacturing model and a reduction in trade discounts due to a pullback in inefficient trade spend and elevated trade spend in the prior year associated with the quality event that occurred in 2023. 

 

   

Three Months Ended June 30,

    

$

    

%

  
   

2024

    

2023

    

Change

    

Change

  

Operating expenses

                                

General and administrative

   $ 2,148,172     $ 2,698,501     $ (550,329 )     (20 )%

Sales and marketing

     2,367,730       2,833,172       (465,442 )     (16 )%

Total operating expenses

   $ 4,515,902     $ 5,531,673     $ (1,015,771 )     (18 )%

 

General and administrative expenses decreased to $2.1 million in Q2 2024 from $2.7 million in Q2 2023, primarily driven by lower personnel costs and broad, strategic reductions in spending. 

 

Sales and marketing expenses were $2.4 million in Q2 2024 compared to $2.8 million in Q2 2023, driven by planned reductions in marketing and advertising spend as we improve our media efficiency.  

 

   

Three Months Ended June 30,

    

$

    

%

  
   

2024

    

2023

    

Change

    

Change

  

Other income

   $ 103,069     $ 149,109     $ (46,040 )     (31 )%

 

Other income is composed of interest income and expense, rental income, and other non-operating gains and losses. The decrease in other income was driven by decreases in dividend income on money market funds as the amounts carried in those accounts decreased. 

 

Comparison of the six months ended June 30, 2024 ("YTD 2024”) and June 30, 2023 (“YTD 2023”)

 

The following tables summarize our results of operations for the periods indicated:

 

   

Six Months Ended June 30,

    

$

       %
   

2024

    

2023

    

Change

    

Change

  

Sales, net

   $ 19,912,592     $ 15,837,029     $ 4,075,563       26 %

Cost of goods sold

     (11,771,210 )     (12,087,085 )     315,875       (3 )%

Gross profit

     8,141,382       3,749,944       4,391,438       117 %

Gross margin

     40.9 %     23.7 %                

General and administrative

     4,305,920       5,780,811       (1,474,891 )     (26 )%

Sales and marketing

     5,262,645       5,927,220       (664,575 )     (11 )%

Total operating expenses

     9,568,565       11,708,031       (2,139,466 )     (18 )%

Operating loss

     (1,427,183 )     (7,958,087 )     6,530,904       (82 )%

Other income

     214,066       320,103       (106,037 )     (33 )%

Loss before income taxes

     (1,213,117 )     (7,637,984 )     6,424,867       (84 )%

Income tax expense

     (42,481 )     (13,172 )     (29,309 )     223 %

Net loss

   $ (1,255,598 )   $ (7,651,156 )   $ 6,395,558       (84 )%

 

27
Table of Contents

 

   

Six Months Ended June 30,

    

$

    

%

  
   

2024

    

2023

    

Change

    

Change

  

Sales, net

   $ 19,912,592     $ 15,837,029     $ 4,075,563       26 %

 

Net sales increased to $19.9 million in YTD 2024 from $15.8 million in YTD 2023, representing 26% growth year-over-year. The increase was primarily driven by a 40% increase in the e-commerce channel in sales through both platforms, Amazon.com and DTC, as well as reductions in promotional spend in DTC, as compared to reduced sales volume in 2023 from out-of-stocks associated with a quality event. Further, the wholesale channel also grew by 9% in the six months ended June 30, 2024 as compared to the corresponding 2023 period, driven primarily by sales growth in club stores, velocity improvements and distribution gains in grocery stores, and more efficient promotional spend. 

 

   

Six Months Ended June 30,

    

$

       %
   

2024

    

2023

    

Change

    

Change

  

Cost of goods sold

   $ (11,771,210 )   $ (12,087,085 )   $ 315,875       (3 )%

 

Cost of goods sold decreased to $11.8 million in YTD 2024 from $12.1 million in YTD 2023, which reflects the full benefits realization of the transition to a variable cost third-party co-manufacturing business model, which was partially offset by higher sales volume. 

 

   

Six Months Ended June 30,

    

$

       %
   

2024

    

2023

    

Change

    

Change

  

Gross profit

   $ 8,141,382     $ 3,749,944     $ 4,391,438       117 %

 

Gross profit increased to $8.1 million in YTD 2024 from $3.7 million in YTD 2023. Gross margin improved to 40.9% in YTD 2024 from 23.7% in YTD 2023. This improvement reflects increased net sales as well as the full benefits of the transition to a variable cost third-party co-manufacturing business model and a reduction in trade discounts due to improved promotional efficiencies and elevated trade spend in the prior year associated with the quality event that occurred in 2023. 

 

   

Six Months Ended June 30,

    

$

       %
   

2024

    

2023

    

Change

    

Change

  

Operating expenses

                                

General and administrative

   $ 4,305,920     $ 5,780,811     $ (1,474,891 )     (26 )%

Sales and marketing

     5,262,645       5,927,220       (664,575 )     (11 )%

Total operating expenses

   $ 9,568,565     $ 11,708,031     $ (2,139,466 )     (18 )%

 

General and administrative expenses decreased to $4.3 million in YTD 2024 from $5.8 million in YTD 2023, primarily driven by lower personnel costs and broad, strategic reductions in spending. 

 

Sales and marketing expenses were $5.3 million in YTD 2024 compared to $5.9 million in YTD 2023, driven by planned reductions in marketing and advertising spend. 

 

   

Six Months Ended June 30,

    

$

    

%

  
   

2024

    

2023

    

Change

    

Change

  

Other income

   $ 214,066     $ 320,103     $ (106,037 )     (33 )%

 

Other income is composed of interest income and expense, rental income, and other non-operating gains and losses. The decrease in other income was driven by decreases in dividend income on money market funds as the amounts carried in those accounts decrease. 

 

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Table of Contents

 

Cash Flows

 

The following table shows a summary of our cash flows for the six months ended June 30, 2024 and 2023

 

   

Six Months Ended June 30,

  
   

2024

    

2023

  

Cash flows from operating activities

   $ 220,414     $ (7,460,076 )

Cash flows from investing activities

     (13,462 )     245,706  

Cash flows from financing activities

     (86,066 )     (19,137 )

Net change in cash, cash equivalents, and restricted cash

   $ 120,886     $ (7,233,507 )

 

Cash provided by operating activities in FY2024 was enabled by our greatly improved margins and lower overhead enabled by our transition to a third-party co-manufacturing business model which we executed in 2023, reduced selling, marketing, and administrative spend, and efficient working capital management. 

 

Cash used in investing activities in FY2024 consists of purchases of office equipment. The cash generated in FY2023 was due to the sale of property and equipment related to the Sisters, Oregon exit.

 

Cash used in financing activities consists of common stock related costs. The increase in FY2024 was driven by common stock registration costs incurred, offset in part by stock option exercises. 

 

Liquidity and Capital Resources

 

As of June 30, 2024, we had an accumulated deficit of $107.6 million, which includes operating losses of $1.4 million and $8.0 million for YTD 2024 and YTD 2023, respectively. While we expect to incur additional operating losses as we continue efforts to grow our business, the strategic business transformation that we have undertaken over the last two years has become evident in our significant gross margin expansion, optimized investments in trade and marketing, lower selling, general, and administrative spending, and reduced cash burn. We will continue to seek opportunities to optimize spending, expand gross margins, and free up cash flow through efficient working capital management. We have historically financed our operations and capital expenditures through private placements of our common stock, our initial public offering ("IPO"), lines of credit, and term loans. Our historical uses of cash have primarily consisted of cash used in operating activities and working capital needs.

 

As of June 30, 2024 and December 31, 2023, we had $7.8 million and $7.7 million, respectively, of cash-on-hand, and total net working capital of $11.4 million and $12.0 million for the same periods. As of June 30, 2024, we had access to up to $0.8 million of advances under an accounts receivable factoring agreement, of which $0.1 million had been utilized and was due to the Purchaser. We have no significant unused sources of liquid assets outside of our working capital. 

 

Our future capital requirements will depend on many factors, including our growth rate, the timing and extent of spending to support research and development efforts, the continued expansion of sales and marketing activities, the enhancement of our product platforms, and the introduction of new products and acquisition activity. Recent and expected working and other capital requirements, in addition to the above matters, also include the items described below:

 

 

●

We have lease arrangements for corporate office space. As of June 30, 2024, we had fixed lease payment obligations of $0.3 million, with $0.1 million payable within 12 months.

 

 

●

As of June 30, 2024, $5.1 million of current liabilities were accrued related to short-term operating activities and personnel costs, excluding the aforementioned current lease liabilities. 

 

 

●

Marketing and advertising expenditures were $3.6 million in YTD 2024 and $4.4 million in YTD 2023. We expect to continue to invest in these activities as part of the strategic expansion of sales volume, however, we have made strategic shifts to reduce and improve the efficacy of future customer acquisition costs.

 

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Table of Contents

 

Based on our current business plans, we believe that our existing cash balances, including our anticipated cash flow from operations, will be sufficient to finance our operations and meet our foreseeable cash requirements through at least the eighteen months following the date of this filing. In the future, we may raise funds by issuing debt or equity securities, or securities convertible into or exchangeable for our common stock. Such financing and other potential financing may result in dilution to stockholders, reduction in the market price of our common stock, imposition of debt covenants and repayment obligations, or other restrictions that may adversely affect our business. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. However, we may be unable to raise additional funds or enter into such other arrangements when needed, on favorable terms, or at all.

 

Segment Information

 

We have one operating segment and one reportable segment. Our Chief Executive Officer reviews financial information on a consolidated basis for purposes of allocating resources and evaluating financial performance.

 

Critical Accounting Estimates

 

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and our management's discussion and analysis of our financial condition and operating results require our management to make judgments, assumptions and estimates that affect the amounts reported. Note 1, “Summary of Significant Accounting Policies” of the Notes to the Unaudited Consolidated Condensed Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q and in the Notes to Consolidated Financial Statements in Part II, Item 8 of the 2023 Form 10-K describe the significant accounting policies and methods used in the preparation of our financial statements. There have been no material changes to our critical accounting estimates since the 2023 Form 10-K.

 

Recent Accounting Pronouncements

 

See Recently Issued Accounting Pronouncements in Note 1 to our financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

 

Emerging Growth Company Status

 

As a company with less than $1.235 billion in annual gross revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:

 

 

●

a requirement to have only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations;

 

 

●

an exemption from the auditor attestation requirement on the effectiveness of our internal control over financial reporting;

 

 

●

reduced disclosure about our executive compensation arrangements; and

 

 

●

no non-binding advisory votes on executive compensation or golden parachute arrangements.

 

We may take advantage of these provisions until the end of the fiscal year in which the fifth anniversary of our IPO occurs, or such earlier time when we no longer qualify as an emerging growth company. We will cease to be an emerging growth company on the earlier of (1) the last day of the fiscal year (a) in which we have more than $1.235 billion in annual gross revenue or (b) in which we have more than $700 million in market value of our capital stock held by non-affiliates, or (2) the date on which we issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all these reduced burdens.

 

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption from new or revised accounting standards, and therefore we will not be subject to the same requirements to adopt new or revised accounting standards as other public companies that are not emerging growth companies.

 

30
Table of Contents

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

Not Applicable.

 

Item 4. Controls and Procedures.

 

Limitations on Effectiveness of Controls and Procedures

 

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

 

Evaluation of Disclosure Controls and Procedures

 

The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to Company management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), to allow timely decisions regarding required disclosure.

 

Our management, with the participation of our CEO and CFO, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of June 30, 2024, the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2024.

 

Changes in Internal Control over Financial Reporting

 

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

Part II. Other Information

 

Item 1. Legal Proceedings.

 

From time to time, we may be involved in claims and legal actions that arise in the ordinary course of business. To our knowledge, there are no material pending legal proceedings to which we are a party or of which any of our property is the subject.

 

Item 1A. Risk Factors.

 

There were no material changes to the Risk Factors disclosed in "Item 1A. Risk Factors" in the 2023 Form 10-K during these three and six months ended June 30, 2024. This quarterly report on Form 10-Q should be read in conjunction with the risk factors previously described in the Company's 2023 Form 10-K. 

 

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Table of Contents

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not Applicable.

 

 

Item 5. Other Information

 

During the three and six months ended June 30, 2024, none of the Company's directors or executive officers adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K.
 

 

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Item 6. Exhibits.

The documents set forth below are filed herewith or incorporated herein by reference to the location indicated.

 

       

Incorporated by Reference

    

Exhibit Number

  

Description

  

Form

  

File No.

  

Exhibit

  

Filing Date

  

Filed /
Furnished
Herewith
                         
3.1   Articles of Incorporation of Laird Superfood, Inc.   8-K   001-39537   3.1   1/2/2024    
                         
3.2   Bylaws of Laird Superfood, Inc.   8-K   001-39537   3.2   1/2/2024    
                         
10.1   Accounts Receivable Factoring Agreement dated May 7, 2024, between the Company and Alterna Capital Solutions, LLC.    10-Q   001-39537   10.1   5/8/2024    
                         
10.2   First Amendment to the Laird Superfood, Inc. 2020 Omnibus Incentive Plan.    8-K   001-39537   10.1   6/28/2024    
                         

31.1

  

Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a).

                  

*
               

31.2

  

Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a).

                  

*
               

32.1

  

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.

                  

**
               

32.2

  

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

                  

**
               

101.INS

  

Inline XBRL Instance Document

                  

*
               

101.SCH

  

Inline XBRL Taxonomy Extension Schema Document

                  

*
               

101.CAL

  

Inline XBRL Taxonomy Extension Calculation Linkbase Document

                  

*
               

101.DEF

  

Inline XBRL Taxonomy Extension Definition Linkbase Document

                  

*
               

101.LAB

  

Inline XBRL Taxonomy Extension Label Linkbase Document

                  

*
               

101.PRE

  

Inline XBRL Taxonomy Extension Presentation Linkbase Document

                  

*
               

104

  

Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

                    

 

* Filed herewith.

** The certifications attached as Exhibit 32.1 and 32.2 are furnished and not deemed filed with the SEC and are not incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such.

 

33
Table of Contents

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Laird Superfood, Inc.
 

(Registrant)
   

Date: August 7, 2024

/s/ Jason Vieth
 

Jason Vieth
 

President and Chief Executive Officer
  (Principal Executive Officer and duly authorized officer)
   

Date: August 7, 2024

/s/ Anya Hamill
 

Anya Hamill
 

Chief Financial Officer
  (Principal Financial and Accounting Officer)

 

34

Exhibit 31.1

 

CERTIFICATION PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a) AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Jason Vieth, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q of Laird Superfood, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 7, 2024

By:

/s/ Jason Vieth
   

Jason Vieth
     
   

President and Chief Executive Officer and Director

(principal executive officer)

 

 

 

Exhibit 31.2

 

CERTIFICATION PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a) AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Anya Hamill, certify that:

 

1.

I have reviewed this Quarterly Report on Form 10-Q of Laird Superfood, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

(c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 7, 2024

By:

/s/ Anya Hamill
   

Anya Hamill
     
   

Chief Financial Officer

(principal financial and accounting officer)

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report on Form 10-Q of Laird Superfood, Inc. (the “Company”) for the period ending June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify in my capacity of Chief Executive Officer, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

 

1.

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Report.

 

Date: August 7, 2024

By:

/s/ Jason Vieth
   

Jason Vieth
     
   

Chief Executive Officer

(principal executive officer)

 

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report on Form 10-Q of Laird Superfood, Inc. (the “Company”) for the period ending June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify in my capacity as Chief Financial Officer, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

 

1.

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

 

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in this Report.

 

Date: August 7, 2024

By:

/s/ Anya Hamill
   

Anya Hamill
     
   

Chief Financial Officer

(principal financial and accounting officer)

 

 
v3.24.2.u1
Document And Entity Information - shares
 6 Months Ended
Jun. 30, 2024
Aug. 05, 2024
Document Information [Line Items]    
Entity Central Index Key 0001650696  
Entity Registrant Name Laird Superfood, Inc.  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2024  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2024  
Document Transition Report false  
Entity File Number 001-39537  
Entity Incorporation, State or Country Code NV  
Entity Tax Identification Number 81-1589788  
Entity Address, Address Line One 5303 Spine Road, Suite 204  
Entity Address, City or Town Boulder  
Entity Address, State or Province CO  
Entity Address, Postal Zip Code 80301  
City Area Code 541  
Local Phone Number 588-3600  
Title of 12(b) Security Common Stock, $0.001 par value  
Trading Symbol LSF  
Security Exchange Name NYSEAMER  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Ex Transition Period false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   10,254,242
v3.24.2.u1
Consolidated Condensed Balance Sheets (Current Period Unaudited) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Assets    
Cash, cash equivalents, and restricted cash $ 7,827,692 $ 7,706,806
Accounts receivable, net 1,168,726 1,022,372
Inventory, net 6,398,377 6,322,559
Prepaid expenses and other current assets 1,136,412 1,285,564
Total current assets 16,531,207 16,337,301
Noncurrent assets    
Property and equipment, net 96,477 122,595
Intangible assets, net 986,232 1,085,231
Related party license agreements 132,100 132,100
Right-of-use assets 290,929 354,732
Total noncurrent assets 1,505,738 1,694,658
Total assets 18,036,945 18,031,959
Liabilities and Stockholders’ Equity    
Accounts payable 1,942,263 1,647,673
Accrued expenses 3,131,097 2,586,343
Related party liabilities 29,167 2,688
Lease liabilities, current portion 147,720 138,800
Total current liabilities 5,250,247 4,375,504
Lease liabilities 182,470 243,836
Total liabilities 5,432,717 4,619,340
Stockholders’ equity    
Common stock, $0.001 par value, 100,000,000 shares authorized at June 30, 2024 and December 31, 2023; 10,474,633 and 10,108,929 issued and outstanding at June 30, 2024, respectively; and 9,749,326 and 9,383,622 issued and outstanding at December 31, 2023, respectively. 10,107 9,384
Additional paid-in capital 120,147,868 119,701,384
Accumulated deficit (107,553,747) (106,298,149)
Total stockholders’ equity 12,604,228 13,412,619
Total liabilities and stockholders’ equity $ 18,036,945 $ 18,031,959
v3.24.2.u1
Consolidated Condensed Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares
Jun. 30, 2024
Dec. 31, 2023
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized (in shares) 100,000,000 100,000,000
Common stock, shares issued (in shares) 10,474,633 9,749,326
Common stock, shares outstanding (in shares) 10,108,929 9,383,622
v3.24.2.u1
Consolidated Condensed Statements of Operations (Unaudited) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Sales, net $ 10,003,654 $ 7,724,091 $ 19,912,592 $ 15,837,029
Cost of goods sold (5,826,373) (5,848,023) (11,771,210) (12,087,085)
Gross profit 4,177,281 1,876,068 8,141,382 3,749,944
General and administrative        
Salaries, wages, and benefits 975,809 1,090,266 1,898,216 2,405,715
Other general and administrative 1,172,363 1,608,235 2,407,704 3,375,096
Total general and administrative expenses 2,148,172 2,698,501 4,305,920 5,780,811
Sales and marketing        
Marketing and advertising 1,383,425 2,036,766 3,436,683 4,187,822
Selling 920,739 721,630 1,699,895 1,574,834
Related party marketing agreements 63,566 74,776 126,067 164,564
Total sales and marketing expenses 2,367,730 2,833,172 5,262,645 5,927,220
Total operating expenses 4,515,902 5,531,673 9,568,565 11,708,031
Operating loss (338,621) (3,655,605) (1,427,183) (7,958,087)
Other income 103,069 149,109 214,066 320,103
Loss before income taxes (235,552) (3,506,496) (1,213,117) (7,637,984)
Income tax expense (3,524) (750) (42,481) (13,172)
Net loss $ (239,076) $ (3,507,246) $ (1,255,598) $ (7,651,156)
Net loss per share:        
Net loss per share, basic and diluted (in dollars per share) $ (0.02) $ (0.38) $ (0.13) $ (0.83)
Weighted average shares outstanding - basic and diluted (in shares) 9,833,001 9,284,585 9,617,800 9,249,738
v3.24.2.u1
Consolidated Condensed Statements of Stockholders' Equity (Unaudited) - USD ($)
Common Stock Outstanding [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Balances (in shares) at Dec. 31, 2022 9,210,414      
Balances at Dec. 31, 2022 $ 9,210 $ 118,636,834 $ (96,135,032) $ 22,511,012
Stock-based compensation $ 0 147,635 0 147,635
Common stock issuances, net of taxes (in shares) 9,086      
Common stock issuances, net of taxes $ 10 (4,420) 0 (4,410)
Net loss $ 0 0 (4,143,910) (4,143,910)
Balances (in shares) at Mar. 31, 2023 9,219,500      
Balances at Mar. 31, 2023 $ 9,220 118,780,049 (100,278,942) 18,510,327
Balances (in shares) at Dec. 31, 2022 9,210,414      
Balances at Dec. 31, 2022 $ 9,210 118,636,834 (96,135,032) $ 22,511,012
Stock options exercised (in shares)       (0)
Net loss       $ (7,651,156)
Balances (in shares) at Jun. 30, 2023 9,334,162      
Balances at Jun. 30, 2023 $ 9,335 119,071,283 (103,786,188) 15,294,430
Balances (in shares) at Mar. 31, 2023 9,219,500      
Balances at Mar. 31, 2023 $ 9,220 118,780,049 (100,278,942) 18,510,327
Stock-based compensation $ 0 306,076 0 306,076
Common stock issuances, net of taxes (in shares) 114,662      
Common stock issuances, net of taxes $ 115 (14,842) 0 (14,727)
Net loss $ 0 0 (3,507,246) (3,507,246)
Balances (in shares) at Jun. 30, 2023 9,334,162      
Balances at Jun. 30, 2023 $ 9,335 119,071,283 (103,786,188) 15,294,430
Balances (in shares) at Dec. 31, 2023 9,383,622      
Balances at Dec. 31, 2023 $ 9,384 119,701,384 (106,298,149) 13,412,619
Stock-based compensation $ 0 279,565 0 279,565
Common stock issuances, net of taxes (in shares) 131,103      
Common stock issuances, net of taxes $ 131 (5,340) 0 (5,209)
Stock options exercised (in shares) 5,000      
Stock options exercised $ 5 9,995 0 10,000
Net loss $ 0 (1,016,522) (1,016,522)
Balances (in shares) at Mar. 31, 2024 9,519,725      
Balances at Mar. 31, 2024 $ 9,520 119,985,604 (107,314,671) 12,680,453
Balances (in shares) at Dec. 31, 2023 9,383,622      
Balances at Dec. 31, 2023 $ 9,384 119,701,384 (106,298,149) $ 13,412,619
Stock options exercised (in shares) [1]       255,750
Net loss       $ (1,255,598)
Balances (in shares) at Jun. 30, 2024 10,108,929      
Balances at Jun. 30, 2024 $ 10,107 120,147,868 (107,553,747) 12,604,228
Balances (in shares) at Mar. 31, 2024 9,519,725      
Balances at Mar. 31, 2024 $ 9,520 119,985,604 (107,314,671) 12,680,453
Stock-based compensation $ 0 253,708 0 253,708
Common stock issuances, net of taxes (in shares) 425,097      
Common stock issuances, net of taxes $ 423 (39,585) 0 (39,162)
Stock options exercised (in shares) 164,107      
Stock options exercised $ 164 21,336 0 21,500
Net loss 0 0 (239,076) (239,076)
Common stock issuance costs $ 0 (73,195) 0 (73,195)
Balances (in shares) at Jun. 30, 2024 10,108,929      
Balances at Jun. 30, 2024 $ 10,107 $ 120,147,868 $ (107,553,747) $ 12,604,228
[1] Includes 86,643 shares of common stock which were withheld to cover option costs.
v3.24.2.u1
Consolidated Condensed Statements of Cash Flows (Unaudited) - USD ($)
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Cash flows from operating activities    
Net loss $ (1,255,598) $ (7,651,156)
Adjustments to reconcile net loss to net cash from operating activities    
Depreciation and amortization 138,579 163,532
Stock-based compensation 533,273 453,711
Provision for inventory obsolescence 187,901 378,859
Allowance for credit losses (28,425) 51,363
Noncash lease costs 76,169 76,168
Other operating activities, net 0 38,984
Changes in operating assets and liabilities    
Accounts receivable (117,929) (371,355)
Inventory (263,719) (539,579)
Prepaid expenses and other current assets 149,152 1,328,709
Operating lease liability (64,812) (62,923)
Accounts payable 310,019 1,202,716
Accrued expenses 555,804 (2,529,105)
Net cash from operating activities 220,414 (7,460,076)
Cash flows from investing activities (13,462) 245,706
Cash flows from financing activities (86,066) (19,137)
Net change in cash and cash equivalents 120,886 (7,233,507)
Cash, cash equivalents, and restricted cash, beginning of period 7,706,806 17,809,802
Cash, cash equivalents, and restricted cash, end of period 7,827,692 10,576,295
Supplemental disclosures of cash flow information    
Right-of-use assets obtained in exchange for operating lease liabilities 0 344,382
Supplemental disclosures of non-cash investing activities    
Receivable from sale of assets held-for-sale included in other current assets at the end of the period $ 0 $ 450,351
v3.24.2.u1
Note 1 - Summary of Significant Accounting Policies and Estimates
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

1. Summary of Significant Accounting Policies and Estimates

 

Financial Statement Preparation

 

The accompanying unaudited consolidated condensed financial statements (the "balance sheet(s)," "statement(s) of operations," "statement(s) of stockholders' equity," "statement(s) of cash flows," and, collectively, the "financial statements") include the accounts of Laird Superfood, Inc., a Nevada corporation, and its wholly owned subsidiary, Picky Bars, LLC, (collectively, the “Company,” “Laird Superfood,” “we,” or "our"). In management's opinion, the financial statements contain all adjustments, which are normal recurring adjustments, necessary for a fair presentation of its financial position and its results of operations, changes in stockholders’ equity, and cash flows for the interim periods.

 

Segment information is prepared on the same basis that the Company's Chief Executive Officer, who is deemed to be the Company's Chief Operating Decision Maker, reviews financial information for operational decision-making purposes.

 

The financial statements and related financial information should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Form 10-K") filed with the Securities and Exchange Commission (the "SEC") on March 13, 2024. The financial information as of  December 31, 2023 was derived from the audited financial statements and notes for the fiscal year ended December 31, 2023 included in Item 8 of the 2023 Form 10-K. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the footnotes and management's discussion and analysis of the consolidated financial statements in the 10-K. Certain information in footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") has been condensed or omitted pursuant to the rules and regulations of the SEC and the accounting standards for interim financial statements.

 

Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results expected for the fiscal year ending December 31, 2024.

 

Recently Issued Accounting Pronouncements

 

In  November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The expanded annual disclosures are effective for the year ending  December 31, 2024, and the expanded interim disclosures are effective in 2025 and will be applied retrospectively to all prior periods presented. While the Company is currently evaluating the expanded disclosure requirements, the Company does not expect the adoption of these amendments to have a material impact on our consolidated financial statements.

 

In  December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which requires, among other things, additional disclosures primarily related to the income tax rate reconciliation and income taxes paid. The expanded annual disclosures are effective for our year ending  December 31, 2025. The Company is currently evaluating the impact that ASU 2023-09 will have on its consolidated financial statements and whether the Company will apply the standard prospectively or retrospectively.

 

Subsequent Events

 

Subsequent events are events or transactions that occur after the balance sheet date but before the financial statements are available to be issued. The Company has evaluated events and transactions subsequent to June 30, 2024 for potential recognition of disclosure in the financial statements and determined that there were no such subsequent events, aside from those discussed below.

 

On July 12, 2024, the Company granted 694,650 shares of common stock issuable upon settlement of restricted stock units granted pursuant to the Laird Superfood, Inc. 2020 Omnibus Incentive Plan, as amended, to the reporting persons. The RSUs had a grant date fair value of $4.40 and will vest in equal installments, with 20% of the shares vesting on each of February 23, 2025, 2026, 2027, 2028 and 2029, respectively.

 

 

On September 15, 2023, the Company entered into a settlement agreement (the “2023 Settlement Agreement”) with a supplier (the “Supplier”) to recover losses incurred in connection with the product quality issue with coconut milk powder that it experienced in 2023, pursuant to which the Supplier was obligated to, among other things, pay the Company $50,000 and provide a discount to the Company on the sale of future products of up to $950,000. On February 27, 2024, the Company filed a complaint against the Supplier in the District Court of Boulder, Colorado alleging that the Supplier breached the 2023 Settlement Agreement by failing to deliver acceptable coconut milk powder (the “Litigation”). Both parties dispute liability. As a result of the Litigation, on July 30, 2024, the Company entered into an additional settlement agreement with the Supplier (the “2024 Settlement Agreement”), pursuant to which, among other things, the Supplier agreed to remit cash payment to the Company of approximately $0.5 million.
v3.24.2.u1
Note 2 - Cash, Cash Equivalents, and Restricted Cash
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Cash and Cash Equivalents Disclosure [Text Block]

2. Cash, Cash Equivalents, and Restricted Cash

 

Cash, cash equivalents, and restricted cash are highly liquid instruments with an original maturity of three months or less when purchased. For the purposes of the statements of cash flows, the Company includes cash on hand, cash in clearing accounts, cash on deposit with financial institutions, investments with an original maturity of three months or less, and restricted cash in determining the total balance.

 

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets as of:

 

  

June 30,

  

December 31,

 
  

2024

  

2023

 

Cash and cash equivalents

 $7,648,958  $7,566,299 

Restricted cash

  178,734   140,507 

Total cash, cash equivalents, and restricted cash

 $7,827,692  $7,706,806 

 

Amounts in restricted cash represent those that are required to be set aside by the following contractual agreements:

 

 

●

On December 3, 2020, the Company entered into an agreement with Danone Manifesto Ventures, PBC, which provided the Company $298,103 in funds for the purpose of supporting three COVID-19 relief projects. As of June 30, 2024 and December 31, 2023, cash equivalents in the amount of $99,525 were restricted under this agreement. During the three and six months ended June 30, 2024 and 2023, the Company contributed $0 to these projects. The restriction will be released upon the completion of the projects.

 

●

Cash equivalents of $530,000 were pledged to secure Company credit card limits. As of  June 30, 2024 and December 31, 2023, $79,209 and $40,982, respectively, of these funds were restricted to collateralize borrowings against these Company credit cards. 

 

Cash, cash equivalents, and restricted cash balances that exceeded the Federal Deposit Insurance Corporation (“FDIC”) and Securities Investor Protection Corporation ("SPIC") insurable limits as of June 30, 2024 and December 31, 2023 totaled $6,907,907 and $6,756,207, respectively. The Company has not experienced any losses related to these balances. The Company’s cash, cash equivalents, and restricted cash are with what the Company believes to be a high-quality financial institution and considers the risks associated with these funds in excess of FDIC and SPIC insurable limits to be low.

 
v3.24.2.u1
Note 3 - Inventory
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Inventory Disclosure [Text Block]

3. Inventory

 

Inventory is stated at the lower of cost or net realizable value, or the value of consideration that can be received upon sale of said product, and approximate costs determined on the first-in first-out basis and consists primarily of raw materials and packaging and finished goods and includes co-packing fees, indirect labor, and allocable overhead. The following table presents the components of inventory, net of reserves, as of:

 

  

June 30,

  

December 31,

 
  

2024

  

2023

 

Raw materials and packaging

 $2,823,145  $2,180,294 

Finished goods

  3,575,232   4,142,265 

Total inventory, net

 $6,398,377  $6,322,559 

 

The Company periodically reviews the value of items in inventory and provides write-offs of inventory based on current market assessment, which are charged to cost of goods sold. For the three and six months ended June 30, 2024, the Company recorded $145,697 and $187,901, respectively, of inventory obsolescence and disposal costs. For the three and six months ended June 30, 2023, the Company recorded $144,465 and $378,859, respectively, of inventory obsolescence and disposal costs.

 

As of June 30, 2024, inventory reserves totaled $1,078,595. This is comprised of estimated reserves based on inventory turnover, quantities on hand, and expiration dates of $238,055, products quarantined for quality issues of $448,258, and discontinued inventories of $392,282. As of December 31, 2023, inventory reserves totaled $1,029,657. This was comprised of estimated reserves based on inventory turnover, quantities on hand, and expiration dates of $385,069, products quarantined for quality issues of $306,276, and discontinued inventories of $338,312.

 

As of June 30, 2024 and December 31, 2023, the Company had a total of $451,289 and $449,242, respectively, of prepayments for future raw materials inventory which are included in prepaid expenses and other current assets, net on the balance sheets.
v3.24.2.u1
Note 4 - Prepaid Expenses and Other Current Assets
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Prepaid Expenses and Other Current Assets [Text Block]

4. Prepaid Expenses and Other Current Assets

 

The following table presents the components of prepaid expenses and other current assets, as of:

 

   

June 30,

    

December 31,

  
   

2024

    

2023

  

Prepaid insurance

   $ 98,263     $ 371,802  

Prepaid inventory

     451,289       449,242  

Prepaid subscriptions and license fees

     293,047       139,590  

Deposits

     188,223       238,719  

Other current assets

     105,590       86,211  

Prepaid expenses and other current assets

   $ 1,136,412     $ 1,285,564  
v3.24.2.u1
Note 5 - Revolving Lines of Credit
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Debt Disclosure [Text Block]

5. Revolving Lines of Credit

 

On September 2, 2021, the Company entered into a revolving line of credit with Wells Fargo Bank National Association in a principal amount not exceeding $9,500,000. Any outstanding amounts under the line of credit would have had an interest rate calculated as Daily Simple Secured Overnight Financing Rate (“SOFR”) plus 1.5% per annum until paid in full. The line of credit was renewed on September 1, 2022, with a maturity date of August 31, 2023, and the available credit was reduced to $5,000,000. The line of credit was terminated pursuant to its terms on August 31, 2023, and no amounts were due thereunder. The line of credit was not renewed.

 
v3.24.2.u1
Note 6 - Property and Equipment
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Property, Plant and Equipment Disclosure [Text Block]

6. Property and Equipment

 

Property and Equipment

 

Property and equipment, net is comprised of the following as of:

 

  

June 30, 2024

  

December 31, 2023

 
  

Gross Carrying Amount

  

Accumulated Depreciation

  

Net Carrying Amount

  

Gross Carrying Amount

  

Accumulated Depreciation

  

Net Carrying Amount

 

Furniture and office equipment

 $187,772  $(119,676) $68,096  $184,241  $(85,093) $99,148 

Leasehold improvements

  56,207   (27,826)  28,381   46,276   (22,829)  23,447 
  $243,979  $(147,502) $96,477  $230,517  $(107,922) $122,595 

 

Depreciation expense was $19,866 and $39,580 for the three and six months ended June 30, 2024, respectively. Depreciation expense was $23,857 and $60,088 for the three and six months ended June 30, 2023, respectively.

 

Assets Classified as Held-for-Sale

 

In the fourth quarter of 2022, the Company entered into purchase agreements for the sale of the production equipment for an aggregate sales price of $800,000. In the first quarter of 2023, consideration amounting to $218,165 was received and $581,835 was receivable and included in prepaid expenses and other current assets on the balance sheets. Consideration was received in full by the end of 2023 and no amounts were receivable as of June 30, 2024 and December 31, 2023. 
v3.24.2.u1
Note 7 - Intangible Assets
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Intangible Assets Disclosure [Text Block]

7. Intangible Assets

 

Intangible assets are comprised of the following:

 

  

June 30, 2024

  

December 31, 2023

 
  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

 

Trade names (10 years)

 $890,827  $(160,349) $730,478  $890,827  $(106,899) $783,928 

Recipes (10 years)

  330,000   (104,500)  225,500   330,000   (88,000)  242,000 

Social media agreements (3 years)

  80,000   (80,000)  —   80,000   (71,111)  8,889 

Software (3 years)

  131,708   (101,454)  30,254   131,708   (81,294)  50,414 

Definite-lived intangible assets

  1,432,535   (446,303)  986,232   1,432,535   (347,304)  1,085,231 

Licensing agreements (indefinite)

  132,100   —   132,100   132,100   —   132,100 

Total intangible assets

 $1,564,635  $(446,303) $1,118,332  $1,564,635  $(347,304) $1,217,331 

 

The weighted-average useful life of all the Company’s intangible assets is 6.6 years.

 

For the three and six months ended June 30, 2024, amortization expense was $47,278 and $98,999, respectively. For the three and six months ended June 30, 2023, amortization expense was $51,722 and $103,444, respectively. 

 

Definite-lived intangible assets

 

Definite life intangible assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Examples include a significant adverse change in the extent or manner in which the Company uses the asset, or an unexpected change in financial performance. When evaluating definite life intangible assets for impairment, the Company compares the carrying value of the asset to the asset’s estimated undiscounted future cash flows. An impairment is indicated if the estimated future cash flows are less than the carrying value of the asset. The Company considered the above factors when assessing whether the Company’s long-lived assets will be recoverable.

 

Based on the analysis of the qualitative factors above, management determined that there were no triggering events or impairment charges in the three and six months ended June 30, 2024 and 2023. 

 

Intangible assets are amortized using the straight-line method over estimated useful lives ranging from three to ten years. The estimated amortization expense for each of the next five years and thereafter is as follows:

 

2024 (excluding the six months ended June 30, 2024)

 $90,109 

2025

  149,994 

2026

  139,899 

2027

  139,899 

2028

  139,899 

Thereafter

  326,432 
  $986,232 

 

Indefinite-lived intangible assets

 

On  August 3, 2015, the Company entered into a license agreement with the Company’s co-founder Laird Hamilton (the “LH License”). The LH License stated Mr. Hamilton’s contribution to the Company was in the form of intellectual property, granting the Company the right to use Mr. Hamilton’s name and likeness. This contribution, which was reported on the balance sheets as of  June 30, 2024 and  December 31, 2023, was valued at $132,000 and satisfied with the issuance of 660,000 shares of common stock. The Company has determined that the intangible asset associated with the LH License has an indefinite life, as there is no foreseeable limit on the period of time over which it is expected to contribute to the cash flows of the Company.

 

On  May 2, 2018, the Company entered into a license agreement with Gabrielle Reece, who is married to Mr. Hamilton (the “GR License”). Pursuant to the GR License, Ms. Reece granted the Company rights to her name, signature, voice, picture, image, likeness, and biographical information. This contribution, which is reported on the consolidated balance sheets as of  June 30, 2024 and December 31, 2023, was valued at $100 based on the consideration exchanged. The Company has determined that the intangible asset associated with the GR License has an indefinite life, as there is no foreseeable limit on the period of time over which it is expected to contribute to the cash flows of the Company.

 

On  November 19, 2018, the Company executed a License and Preservation Agreement with Mr. Hamilton and Ms. Reece which superseded the predecessor license agreements with both individuals. The agreement added specific terms related to non-competition and allowable usage of the property under the license. No additional consideration was exchanged in connection with the agreement and the life of the agreement was set at 100 years.

 

On  May 26, 2020, the Company executed a License and Preservation Agreement with Mr. Hamilton, and Ms. Reece (the “2020 License”), which superseded the predecessor license and preservation agreement with both individuals. Among other modifications, the agreement (i) modified certain approval rights of Mr. Hamilton and Ms. Reece for use of their respective images, signatures, voices, and names (other than those owned by the Company), rights of publicity and common law and statutory rights to the foregoing in the Company’s products, (ii) modified certain assignment, change of control and indemnification provisions, and (iii) granted the Company the right to extend the term of the agreement for additional ten-year terms upon the expiration of the initial one-hundred year term. No additional consideration was exchanged in connection with the agreement.
v3.24.2.u1
Note 8 - Leases
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Leases [Text Block]

8. Leases

 

Lessee

 

The Company leased its warehouse space under a commercial lease with RII Lundgren Mill, LLC, dated March 1, 2018. The lease commenced March 1, 2018. The initial lease term was ten years, and the Company had the option to renew the lease for two additional five-year periods.

 

The Company executed a second lease for additional warehouse and office space under a commercial lease with RII Lundgren Mill, LLC, dated December 17, 2018. The lease commenced on July 1, 2019. However, for accounting purposes the lease commencement date was June 6, 2019. The initial lease term was ten years.

 

The Company executed a third lease for additional warehouse and office space under a commercial lease with RII Lundgren Mill, LLC, dated October 1, 2021. The lease commenced on October 1, 2021. The initial lease term was ten years.

 

The Company executed a lease cancellation agreement dated December 12, 2022. Under this agreement, the Company's three leases with RII Lundgren Mill, LLC, were terminated effective January 31, 2023, and the Company agreed to pay $1,550,000, of which $500,000 was remitted in 2022 and $1,050,000 was satisfied in the first quarter of 2023.

 

The Company assumed an operating lease in the acquisition of Picky Bars, LLC on May 3, 2021. The initial lease term is 62 months, and the Company has the option to renew the lease for two additional three-year periods.

 

The Company entered into a sublease agreement with Somatic Experiencing Trauma Institute with a commencement date of January 1, 2023, for a 5,257 square foot office space in Boulder, Colorado which serves as the Company's current headquarters. This lease will expire on July 1, 2027.

 

The components of lease expense were as follows:

 

  

Three Months Ended

  

Six Months Ended

 
  

June 30, 2024

  

June 30, 2024

 

Operating leases

        

Operating lease cost

 $38,085  $76,169 

Variable lease cost

  5,790   11,355 

Operating lease expense

  43,875   87,524 

Short-term lease rent expense

  79,897   144,127 

Total rent expense

 $123,772  $231,651 

 

  

Three Months Ended

  

Six Months Ended

 
  

June 30, 2023

  

June 30, 2023

 

Operating leases

        

Operating lease cost

 $38,085  $76,169 

Variable lease cost

  5,554   18,468 

Operating lease expense

  43,639   94,637 

Short-term lease rent expense

  56,960   173,187 

Total rent expense

 $100,599  $267,824 

 

  

Six Months Ended

  

Six Months Ended

 
  

June 30, 2024

  

June 30, 2023

 

Operating cash flows - operating leases

 $64,812  $62,923 

Right-of-use assets obtained in exchange for operating lease liabilities

 $-  $344,382 

 

  

June 30, 2024

  

June 30, 2023

 

Weighted-average remaining lease term – operating leases (in years)

  2.7   3.5 

Weighted-average discount rate – operating leases

  6.92%  6.56%

 

As of June 30, 2024, future minimum payments during the next five years and thereafter are as follows:

 

2024 (excluding the six months ended June 30, 2024)

 $73,987 

2025

  126,714 

2026

  109,145 

2027

  56,210 

Total

  366,056 

Less imputed interest

  (35,866)

Operating lease liabilities

 $330,190 

 

Lessor

 

The Company executed a sublease agreement of the Picky Bars, LLC operating lease on March 1, 2022. The lease commenced on April 1, 2022. The initial sublease term expires on April 30, 2025. The sublease meets all of the criteria of an operating lease and is accordingly recognized straight line over the sublease term with a related sublease rental asset accounting for abatements and initial direct costs. The Company had $7,803 and $11,881 of sublease rental assets as of June 30, 2024 and December 31, 2023, respectively, included in prepaid expenses and other current assets on the balance sheets.

 

The components of rental income were as follows:

 

  

Three Months Ended

  

Six Months Ended

 
  

June 30, 2024

  

June 30, 2024

 

Operating leases

        

Operating lease income

 $14,055  $28,109 

Variable lease income

  5,316   10,634 

Total rental income

 $19,371  $38,743 

 

  

Three Months Ended

  

Six Months Ended

 
  

June 30, 2023

  

June 30, 2023

 

Operating lease

        

Operating lease income

 $14,055  $28,110 

Variable lease income

  5,318   10,635 

Total rental income

 $19,373  $38,745 

 

As of June 30, 2024, future minimum payments to be received during the next five years and thereafter, as applicable, are as follows:

 

2024 (excluding the six months ended June 30, 2024)

 $31,122 

2025

  20,748 

Total

 $51,870 
v3.24.2.u1
Note 9 - Income Taxes
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

 

9. Income Taxes

 

The Company had a tax net loss for the three and six months ended June 30, 2024 and 2023, and therefore has recorded no assessment of current federal income taxes. The Company is subject to minimum state taxes for various jurisdictions as well as subject to franchise taxes considered income taxes under Accounting Standards Codification ("ASC") 740, Income Taxes. A reconciliation of income tax expense at the federal statutory rate to the income tax provision at the Company's effective rate is as follows:

 

  

Six Months Ended

 
  

June 30, 2024

  

June 30, 2023

 
         

Income tax benefit at statutory rates

 $229,541  $1,604,134 

Valuation allowance for deferred tax assets

  (626,845)  (1,625,391)

Stock-based compensation

  380,270   (17,634)

Other expense, net

  (25,447)  25,719 

Reported income tax expense

 $(42,481) $(13,172)

Effective tax rate:

  3.5%  0.2%

 

The Company’s deferred tax assets consisted of the following as of:

 

  

June 30, 2024

  

December 31, 2023

 

Deferred tax assets:

        

Net operating loss carryforwards

 $20,625,634  $20,088,873 

Intangible assets

  2,176,271   2,258,079 

Property and equipment

  1,060,272   1,104,854 

Research and development credits

  251,540   235,514 

Research and development

  246,410   268,414 

Inventory

  339,365   246,182 

Accrued expenses

  518,546   496,695 

Right of use asset

  10,364   7,366 

Bad debt allowance

  98,301   64,250 

Charitable contributions

  34,487   40,773 

Unexercised options

  1,109,065   890,128 

Total deferred tax assets

  26,470,255   25,701,128 

Valuation allowance

  (26,470,255)  (25,701,128)

Total net deferred tax assets

 $—  $— 

 

As of  June 30, 2024, the Company did not provide a current or deferred U.S. federal income tax provision or benefit for any of the periods presented because the Company has reported cumulative losses since inception. The Company has recorded a provision for state income taxes and a corresponding current state income tax payable of approximately $3,598 and $7,373 as of  June 30, 2024 and December 31, 2023, respectively. 

 

As of  June 30, 2024 and December 31, 2023, the Company had aggregate net operating losses ("NOLs") totaling approximately $140.5 million and $136.8 million, respectively. As of  June 30, 2024 and December 31, 2023, the Company had federal NOLs totaling approximately $1.9 million from 2017 and prior years that can be carried forward for 20 years and which begin to expire in 2036. As of  June 30, 2024 and December 31, 2023, the Company had federal NOLs totaling approximately $79.9 million and $77.8 million, respectively, from 2018 and subsequent years that can be carried forward indefinitely. As of  June 30, 2024 and December 31, 2023, the Company had state NOLs totaling $57.7 million and $57.1 million, respectively, that can be carried forward for between 15 and 20 years. As of  June 30, 2024 and December 31, 2023, the Company had credits totaling $0.3 million and $0.2 million, respectively, that can be carried forward for five years. As of  June 30, 2024 and December 31, 2023, the Company had other carryforwards totaling $0.6 million that can be carried forward for between one and five years.

 

The use of net operating losses  may be subject to certain limitations, such as those triggered by ownership changes under Section 382 of the Internal Revenue Code. Because these provisions, the use of a portion of the Company's NOLs and tax credit carryforwards  may be limited in future periods. Further, a portion of the carryforwards  may expire before being applied to reduce future income tax liabilities.

 

The Company assesses its deferred tax assets and liabilities to determine if it is more likely than not, they will be realized; if not, a valuation allowance is required to be recorded. Management has determined it is more likely than not that the deferred tax assets would not be realized, thus a full valuation allowance was recorded against the deferred tax assets. The Company  may reduce the valuation allowance against definite-lived deferred tax assets at such a time when it becomes more likely than not that the definite-lived deferred tax assets will be realized. The change in the valuation allowance for deferred tax assets and liabilities for the six months ended June 30, 2024 and 2023 were net increases of $0.8 million and $1.8 million, respectively.

 

GAAP requires management to evaluate and report information regarding its exposure to various tax positions taken by the Company. The Company has determined whether there are any tax positions that have met the recognition threshold and has measured the Company’s exposure to those tax positions. Management believes that the Company has adequately addressed all relevant tax positions and that there are no unrecorded tax liabilities. 

 

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. U.S. and state jurisdictions have statutes of limitations that generally range from 3 to 5 years.

 
v3.24.2.u1
Note 10 - Stock Incentive Plan
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

10. Stock Incentive Plan

 

The Company adopted an incentive plan (as amended, he “2020 Omnibus Incentive Plan”) on September 22, 2020, as amended by the First Amendment to the 2020 Omnibus Incentive Plan, which was approved by the Company's stockholders on June 27, 2024, to provide for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units ("RSUs"), deferred stock units, unrestricted stock, dividend equivalent rights, performance shares, other performance-based awards, other equity-based awards, and cash bonus awards to Company employees, non-employee directors, and certain consultants and advisors. As of June 30, 2024, the Company has 1,441,996 additional authorized shares to award under the 2020 Omnibus Incentive Plan excluding 1,944,131 of shares to be issued upon vesting and exercise of outstanding options and RSUs. 

 

Stock Options

 

The following tables summarize the Company’s stock option activity during the six months ended June 30, 2024 and 2023:

 

      

Weighted

  

Weighted

     
      

Average

  

Average

     
  

Options

  

Exercise Price

  

Contractual

  

Aggregate

 
  

Activity

  

(per share)

  

Term (years)

  

Intrinsic Value

 

Balance at January 1, 2024

  1,234,778  $4.52   7.91  $30,000 

Granted

  799,188  $0.73   —  $— 

Exercised/released (1)

  (255,750) $1.06   —  $— 

Cancelled/forfeited

  (25,788) $3.01   —  $— 

Balance at June 30, 2024

  1,752,428  $3.32   8.30  $6,377,551 

Exercisable at June 30, 2024

  523,040  $4.52   6.38  $1,108,076 
(1) Includes 86,643 shares of common stock which were withheld to cover option costs. 

 

      

Weighted

  

Weighted

     
      

Average

  

Average

     
  

Options

  

Exercise Price

  

Contractual

  

Aggregate

 
  

Activity

  

(per share)

  

Term (years)

  

Intrinsic Value

 

Balance at January 1, 2023

  921,657  $6.86   8.00  $— 

Granted

  400,000  $0.81   —  $— 

Exercised/released

  —  $—   —  $— 

Cancelled/forfeited

  (24,164) $9.99   —  $— 

Balance at June 30, 2023

  1,297,493  $4.94   7.74  $— 

Exercisable at June 30, 2023

  318,041  $8.72   5.18  $— 

 

The fair value of each stock option granted is estimated on the grant date using the Black-Scholes option valuation model. The assumptions used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect market conditions and our historical experience.

 

Restricted Stock Units

 

The following tables summarize the Company’s RSU activity during the six months ended June 30, 2024 and 2023:

 

      

Weighted Average

  

Weighted Average

     
      

Grant Date Fair

  

Remaining Vesting

  

Aggregate

 
  

Number of RSUs

  

Value (per share)

  

Term (years)

  

Fair Value

 

Balance at January 1, 2024

  771,885  $1.76   2.04  $1,361,696 

Granted

  100,000  $4.79   —  $— 

Exercised/released (1)

  (369,280) $1.35   —  $— 

Cancelled/forfeited

  (66) $19.00   —  $— 

Balance at June 30, 2024

  502,539  $2.67   2.03  $1,342,542 
(1) Includes 13,080 shares of common stock which were withheld to cover taxes. 

 

      

Weighted Average

  

Weighted Average

     
      

Grant Date Fair

  

Remaining Vesting

  

Aggregate

 
  

Number of RSUs

  

Value (per share)

  

Term (years)

  

Fair Value

 

Balance at January 1, 2023

  504,420  $4.22   2.94  $2,127,734 

Granted

  645,000  $0.84   —  $— 

Exercised/released (1)

  (141,361) $4.25   —  $— 

Cancelled/forfeited

  (16,293) $6.00   —  $— 

Balance at June 30, 2023

  991,766  $1.99   2.86  $1,968,741 
(1) Includes 17,613 shares of common stock which were withheld to cover taxes. 

 

The Company estimates the fair value of each RSU using the fair value of the Company’s common stock on the date of grant.

 

Market-Based Stock Units ("MSUs")

 

The following tables summarize the Company’s MSU activity during the six months ended June 30, 2024 and 2023:

 

      

Weighted Average

  

Weighted Average

     
      

Grant Date Fair

  

Remaining Vesting

  

Aggregate

 
  

Number of MSUs

  

Value (per share)

  

Term (years)

  

Fair Value

 

Balance at January 1, 2024

  621,314  $1.57   0.62  $977,558 

Granted

  —  $—   —  $— 

Exercised/released

  (200,000) $0.18   —  $— 

Cancelled/forfeited

  (21,314) $43.53   —  $— 

Balance at June 30, 2024

  400,000  $0.03   0.12  $13,090 

 

      

Weighted Average

  

Weighted Average

     
      

Grant Date Fair

  

Remaining Vesting

  

Aggregate

 
  

Number of MSUs

  

Value (per share)

  

Term (years)

  

Fair Value

 

Balance at January 1, 2023

  31,083  $43.53   0.60  $1,353,043 

Granted

  —  $—   —  $— 

Exercised/released

  —  $—   —  $— 

Cancelled/forfeited

  (9,769) $43.53   —  $— 

Balance at June 30, 2023

  21,314  $43.53   0.29  $927,798 

 

The MSUs vest upon the 30-day weighted average stock price reaching or exceeding established targets within the requisite service period. We estimate the grant-date fair value of the MSUs using a Monte Carlo simulation which requires assumptions for expected volatility, risk-free rate of return and dividend yield. Compensation expense for these MSUs is recognized over the requisite service period regardless of whether the market conditions are satisfied.

 

Stock-Based Compensation

 

Stock-based compensation expense is recognized ratably over the requisite service period for all awards. The following tables summarize the Company’s stock-based compensation recorded as a result of applying the provisions of ASC Topic 718, Compensation - Stock Compensation to equity awards:

 

  

Three Months Ended

  

Six Months Ended

  

Unrecognized Compensation Cost Related to Non-Vested Awards as of

  

Weighted-Average Remaining Vesting Period as of

 
  

June 30, 2024

  

June 30, 2024

  

June 30, 2024

  

June 30, 2024 (years)

 

Stock options

 $91,688  $173,194  $845,353   3.00 

RSUs

  155,187   333,981   1,243,735   1.55 

MSUs

  6,833   26,098   1,605   0.12 

Total stock-based compensation

 $253,708  $533,273  $2,090,693   2.13 
                 

Cost of goods sold

 $982  $1,664  $11,633   4.03 

General and administrative

  209,680   440,781   1,896,260   1.94 

Sales and marketing

  43,046   90,828   182,800   4.06 

Total stock-based compensation

 $253,708  $533,273  $2,090,693   2.13 

 

  

Three Months Ended

  

Six Months Ended

  

Unrecognized Compensation Cost Related to Non-Vested Awards as of

  

Weighted-Average Remaining Vesting Period as of

 
  

June 30, 2023

  

June 30, 2023

  

December 31, 2023

  

December 31, 2023 (years)

 

Stock options

 $100,196  $161,684  $654,313   2.36 

RSUs

  195,915   354,630   1,099,972   2.17 

MSUs

  9,965   (62,603)  34,281   0.57 

Total stock-based compensation

 $306,076  $453,711  $1,788,566   2.21 
                 

Cost of goods sold

 $780  $(116) $2,976   1.62 

General and administrative

  286,682   421,924   1,666,980   2.29 

Sales and marketing

  18,614   31,903   118,610   0.99 

Total stock-based compensation

 $306,076  $453,711  $1,788,566   2.21 

 
v3.24.2.u1
Note 11 - Earnings (Loss) Per Share
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Earnings Per Share [Text Block]

11. Earnings (Loss) per Share

 

Basic earnings (loss) per share is determined by dividing the net loss attributable to the Company's common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is similarly determined, except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if all dilutive potential common shares had been issued. Dilutive potential common shares consist of employee stock options, RSUs, and MSUs. The dilutive effect of employee stock options, RSUs, and MSUs by the Company are calculated using the treasury stock method. Basic earnings per share is reconciled to diluted earnings per share in the following table:

 

  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net loss

 $(239,076) $(3,507,246) $(1,255,598) $(7,651,156)

Weighted average shares outstanding - basic and diluted

  9,833,001   9,284,585   9,617,800   9,249,738 

Basic and diluted:

                

Net loss per share, basic and diluted

 $(0.02) $(0.38) $(0.13) $(0.83)

Common stock options, restricted stock awards, and market-based stock awards excluded due to anti-dilutive effect

  2,654,967   2,310,573   2,654,967   2,310,573 

 
v3.24.2.u1
Note 12 - Concentrations
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Concentration Risk Disclosure [Text Block]

12. Concentrations

 

The following table details the concentration of vendor accounts payable balances in excess of 10% of total accounts payable at each period:

 

  June 30, December 31,
  

2024

 

2023

Vendor A

 

15%

 

23%

Vendor B

 

*

 

14%

Vendor C * 10%

Total

 

15%

 

47%

* Less than 10%.

 

The following table details the concentration of customer accounts receivable balances in excess of 10% of total trade accounts receivable at each period:

 

  June 30, December 31,
  

2024

 

2023

Customer A

 

31%

 

46%

Customer B

 

25%

 

21%

Total

 

56%

 

67%

* Less than 10%.

 

The following table details the concentration of sales to specific customers in excess of 10% of total net sales for each year and the accounts receivable balances from those customers at the end of each period:

 

  

Net Sales

 

Accounts Receivable

  

Three months ended June 30,

 

Six months ended June 30,

 

As of June 30,

  

2024

 

2023

 

2024

 

2023

 

2024

 

2023

Customer A

 

18%

 

22%

 

15%

 

19%

 

552,668

 

387,772

Customer B

 

16%

 

16%

 

17%

 

15%

 

460,392

 

567,059

Customer C

 

*

 

11%

 

*

 

11%

 

*

 

653,494

Total

 

34%

 

49%

 

32%

 

45%

 

1,013,060

 

1,608,325

* Less than 10%.

 

The Company purchased a substantial portion of raw materials and packaging from certain suppliers. The following table details the concentration of purchases from specific suppliers in excess of 10% of total purchases for each period:

 

  

For the Three Months Ended June 30,

  

For the Six Months Ended June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Supplier A

  *   *   12%  * 

Supplier B

  *   10%  10%  * 

Supplier C

  11%  12%  11%  13%

Supplier D

  13%  11%  12%  * 

Supplier E

  10%  *   10%  * 

Supplier F

  *   *   *   18%

Total

  34%  33%  55%  31%

* Less than 10%.

 

The Company purchased a substantial portion of raw materials and packaging originating from certain geographical regions. The following table details the concentration of purchases from specific regions in excess of 10% of total purchases for each period:

 

  

For the Three Months Ended June 30,

  

For the Six Months Ended June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Sri Lanka

  *   *   13%  * 

Indonesia

  *   11%  *   12%

Total

  *   11%  13%  12%

* Less than 10%. 
v3.24.2.u1
Note 13 - Related Parties
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Related Party Transactions Disclosure [Text Block]

13. Related Parties

 

FASB ASC Topic 850, Related Party Disclosures, requires that information about transactions with related parties that would influence decision making shall be disclosed so that users of the financial statements can evaluate their significance. The Company conducts business with suppliers and service providers who are also stockholders of the Company. From time to time, service providers are offered shares of common stock as compensation for their services. Shares provided as compensation are calculated based on the grant date fair value of the service provided. Additional material related party transactions are noted below.

 

License Agreements

 

On May 26, 2020, the Company executed a License and Preservation Agreement which superseded the predecessor license and preservation agreement with both Mr. Hamilton and Ms. Reece. Among other modifications, the agreement (i) modified certain approval rights, (ii) modified certain assignment, change of control and indemnification provisions, and (iii) granted the Company the right to extend the term of the agreement for additional ten-year terms upon the expiration of the initial one-hundred-year term. No additional consideration was exchanged in connection with the agreement. See additional discussion related to the 2020 License in Note 7 of the financial statements.

 

Marketing Agreements

 

On October 26, 2022, the Company executed an influencer agreement with Gabby Reece to provide certain marketing services for a term ending December 31, 2023, with an option to renew for one-year terms. In connection with these services, we recognized advertising expenses totaling $63,566 and $126,067, for the three and six months ended June 30, 2024, respectively, and $74,776 and $164,564 for the three and six months ended June 30, 2023, respectively. As of June 30, 2024 and December 31, 2023, amounts payable to Gabby Reece of $29,167 and $2,688, respectively, are included in related party liabilities in the balance sheets.

 
v3.24.2.u1
Note 14 - Revenue Recognition
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Revenue from Contract with Customer [Text Block]

14. Revenue Recognition

 

The Company’s primary source of revenue is sales of coffee creamers, hydration and beverage enhancing supplements, harvest snacks and other food items, and coffee, tea, and hot chocolate products. The Company recognizes revenue when control of the promised good is transferred to the customer and in amounts that the Company expects to collect. The timing of revenue recognition takes into consideration the various shipping terms applicable to the Company’s sales. Each delivery or shipment made to a customer is considered to satisfy a performance obligation. Performance obligations generally occur at a point in time and are satisfied when control of the goods passes to the customer. The Company is entitled to collect the sales price under normal credit terms. Additionally, the Company estimates the impact of certain common practices employed by us and other manufacturers of consumer products, such as scan-based trading, product rebate and other pricing allowances, product returns, trade promotions, sales broker commissions and slotting fees. These estimates are recorded at the end of each reporting period.

 

In accordance with ASC Topic 606, Revenue from Contracts with Customers, the Company disaggregates net sales from contracts with customers based on the characteristics of the products sold:

 

  

Three Months Ended June 30,

 
  

2024

  

2023

 
  

$

  

% of Total

  

$

  

% of Total

 

Coffee creamers

 $4,696,979   47% $4,647,553   60%

Coffee, tea, and hot chocolate products

  2,503,529   25%  1,957,760   25%

Hydration and beverage enhancing supplements

  2,309,600   23%  998,309   13%

Harvest snacks and other food items

  1,683,776   17%  1,849,947   24%

Other

  91,909   1%  124,953   2%

Gross sales

  11,285,793   113%  9,578,522   124%

Shipping income

  120,402   1%  259,843   3%

Returns and discounts

  (1,402,541)  (14)%  (2,114,274)  (27)%

Sales, net

 $10,003,654   100% $7,724,091   100%

 

  

Six Months Ended June 30,

 
  

2024

  

2023

 
  

$

  

% of Total

  

$

  

% of Total

 

Coffee creamers

 $10,267,299   52% $9,779,696   62%

Coffee, tea, and hot chocolate products

  4,678,794   23%  3,912,901   25%

Hydration and beverage enhancing supplements

  4,334,872   22%  1,669,159   11%

Harvest snacks and other food items

  2,987,837   15%  3,602,344   23%

Other

  213,921   1%  154,683   1%

Gross sales

  22,482,723   113%  19,118,783   122%

Shipping income

  231,830   1%  563,069   4%

Returns and discounts

  (2,801,961)  (14)%  (3,844,823)  (26)%

Sales, net

 $19,912,592   100% $15,837,029   100%

 

The Company generates revenue through two channels: e-commerce and wholesale:

 

  

Three Months Ended June 30,

 
  

2024

  

2023

 
  

$

  

% of Total

  

$

  

% of Total

 

E-commerce

 $6,098,327   61% $4,139,373   54%

Wholesale

  3,905,327   39%  3,584,718   46%

Sales, net

 $10,003,654   100% $7,724,091   100%

 

  

Six Months Ended June 30,

 
  

2024

  

2023

 
  

$

  

% of Total

  

$

  

% of Total

 

E-commerce

 $11,966,664   60% $8,567,054   54%

Wholesale

  7,945,928   40%  7,269,975   46%

Sales, net

 $19,912,592   100% $15,837,029   100%

 

Receivables from contracts with customers are included in accounts receivable. Contract assets include deferred cost of goods sold associated with deferred revenue and are included in finished goods inventories. Contract liabilities include deferred revenue, customer deposits, rewards programs, and refund liabilities, and are included in accrued expenses. All contract liabilities as of December 31, 2023, were recognized in net sales for the six months ended June 30, 2024. The balances of receivables from contracts with customers, contract assets, and contract liabilities were as follow:

 

  

January 1,

  

December 31,

  

June 30,

 
  

2023

  

2023

  

2024

 

Accounts receivable, net

 $1,494,469  $1,022,372  $1,168,726 

Contract assets

 $57,249  $—  $10,342 

Contract liabilities

 $(729,667) $(427,974) $(478,311

)

 

 

On  May 7, 2024, the Company entered into an accounts receivable factoring agreement (the “Factoring Agreement”) with Alterna Capital Solutions LLC (the “Purchaser”). The Factoring Agreement allows the Company to access up to $2 million on a revolving basis. The upfront purchase price for factored accounts is up to 70% of their face value, with the remainder payable to the Company upon collection by the Purchaser. The proceeds will be used to fund general working capital needs. The Company will pay fees, including a funds usage fee (prime rate + 1.5%, minimum 10% per annum) and a collateral monitoring fee (0.05% per month). The Purchaser can require repurchase of uncollectable or ineligible accounts. 

 

The Factoring Agreement has an initial term of 12 months and will renew annually, unless terminated in accordance with the Factoring Agreement. The Company  may terminate the Factoring Agreement at any time upon 30 days prior written notice and payment to Purchaser of an early termination fee equal to 2.0% of the Maximum Amount if terminated during the first 12 months and 1.0% of the Maximum Amount during the subsequent terms.

 

The Company has granted a security interest it's personal property to secure the payment and performance of all obligations under the Factoring Agreement. The Factoring Agreement includes customary provisions, including representations, warranties and covenants, indemnification, waiver of jury trial, and the exercise of remedies upon a breach or default. Such description is qualified in its entirety by reference to the full text of the Factoring Agreement, a copy of which is attached as Exhibit 10.1 to this Quarterly Report on Form 10-Q.

 

Factored receivables due to the purchaser of $106,552 and $0 as of June 30, 2024 and December 31, 2023, respectively, were included in accounts receivable on the balance sheet. 

 

 
v3.24.2.u1
Insider Trading Arrangements
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2024
Insider Trading Arr Line Items    
Material Terms of Trading Arrangement [Text Block]  

Item 5. Other Information

 

During the three and six months ended June 30, 2024, none of the Company's directors or executive officers adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K.
Rule 10b5-1 Arrangement Adopted [Flag] false false
Non-Rule 10b5-1 Arrangement Adopted [Flag] false false
Rule 10b5-1 Arrangement Terminated [Flag] false false
Non-Rule 10b5-1 Arrangement Terminated [Flag] false false
v3.24.2.u1
Significant Accounting Policies (Policies)
 6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Basis of Accounting, Policy [Policy Text Block]

Financial Statement Preparation

 

The accompanying unaudited consolidated condensed financial statements (the "balance sheet(s)," "statement(s) of operations," "statement(s) of stockholders' equity," "statement(s) of cash flows," and, collectively, the "financial statements") include the accounts of Laird Superfood, Inc., a Nevada corporation, and its wholly owned subsidiary, Picky Bars, LLC, (collectively, the “Company,” “Laird Superfood,” “we,” or "our"). In management's opinion, the financial statements contain all adjustments, which are normal recurring adjustments, necessary for a fair presentation of its financial position and its results of operations, changes in stockholders’ equity, and cash flows for the interim periods.

 

Segment information is prepared on the same basis that the Company's Chief Executive Officer, who is deemed to be the Company's Chief Operating Decision Maker, reviews financial information for operational decision-making purposes.

 

The financial statements and related financial information should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Form 10-K") filed with the Securities and Exchange Commission (the "SEC") on March 13, 2024. The financial information as of  December 31, 2023 was derived from the audited financial statements and notes for the fiscal year ended December 31, 2023 included in Item 8 of the 2023 Form 10-K. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the footnotes and management's discussion and analysis of the consolidated financial statements in the 10-K. Certain information in footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") has been condensed or omitted pursuant to the rules and regulations of the SEC and the accounting standards for interim financial statements.

 

Operating results for the three and six months ended June 30, 2024 are not necessarily indicative of the results expected for the fiscal year ending December 31, 2024.

 
New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Pronouncements

 

In  November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The expanded annual disclosures are effective for the year ending  December 31, 2024, and the expanded interim disclosures are effective in 2025 and will be applied retrospectively to all prior periods presented. While the Company is currently evaluating the expanded disclosure requirements, the Company does not expect the adoption of these amendments to have a material impact on our consolidated financial statements.

 

In  December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which requires, among other things, additional disclosures primarily related to the income tax rate reconciliation and income taxes paid. The expanded annual disclosures are effective for our year ending  December 31, 2025. The Company is currently evaluating the impact that ASU 2023-09 will have on its consolidated financial statements and whether the Company will apply the standard prospectively or retrospectively.

 
Subsequent Events, Policy [Policy Text Block]

Subsequent Events

 

Subsequent events are events or transactions that occur after the balance sheet date but before the financial statements are available to be issued. The Company has evaluated events and transactions subsequent to June 30, 2024 for potential recognition of disclosure in the financial statements and determined that there were no such subsequent events, aside from those discussed below.

 

On July 12, 2024, the Company granted 694,650 shares of common stock issuable upon settlement of restricted stock units granted pursuant to the Laird Superfood, Inc. 2020 Omnibus Incentive Plan, as amended, to the reporting persons. The RSUs had a grant date fair value of $4.40 and will vest in equal installments, with 20% of the shares vesting on each of February 23, 2025, 2026, 2027, 2028 and 2029, respectively.

 

 

On September 15, 2023, the Company entered into a settlement agreement (the “2023 Settlement Agreement”) with a supplier (the “Supplier”) to recover losses incurred in connection with the product quality issue with coconut milk powder that it experienced in 2023, pursuant to which the Supplier was obligated to, among other things, pay the Company $50,000 and provide a discount to the Company on the sale of future products of up to $950,000. On February 27, 2024, the Company filed a complaint against the Supplier in the District Court of Boulder, Colorado alleging that the Supplier breached the 2023 Settlement Agreement by failing to deliver acceptable coconut milk powder (the “Litigation”). Both parties dispute liability. As a result of the Litigation, on July 30, 2024, the Company entered into an additional settlement agreement with the Supplier (the “2024 Settlement Agreement”), pursuant to which, among other things, the Supplier agreed to remit cash payment to the Company of approximately $0.5 million.
v3.24.2.u1
Note 2 - Cash, Cash Equivalents, and Restricted Cash (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Cash and Cash Equivalents [Table Text Block]
  

June 30,

  

December 31,

 
  

2024

  

2023

 

Cash and cash equivalents

 $7,648,958  $7,566,299 

Restricted cash

  178,734   140,507 

Total cash, cash equivalents, and restricted cash

 $7,827,692  $7,706,806 
v3.24.2.u1
Note 3 - Inventory (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Inventory, Current [Table Text Block]
  

June 30,

  

December 31,

 
  

2024

  

2023

 

Raw materials and packaging

 $2,823,145  $2,180,294 

Finished goods

  3,575,232   4,142,265 

Total inventory, net

 $6,398,377  $6,322,559 
v3.24.2.u1
Note 4 - Prepaid Expenses and Other Current Assets (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block]
   

June 30,

    

December 31,

  
   

2024

    

2023

  

Prepaid insurance

   $ 98,263     $ 371,802  

Prepaid inventory

     451,289       449,242  

Prepaid subscriptions and license fees

     293,047       139,590  

Deposits

     188,223       238,719  

Other current assets

     105,590       86,211  

Prepaid expenses and other current assets

   $ 1,136,412     $ 1,285,564  
v3.24.2.u1
Note 6 - Property and Equipment (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Property, Plant and Equipment [Table Text Block]
  

June 30, 2024

  

December 31, 2023

 
  

Gross Carrying Amount

  

Accumulated Depreciation

  

Net Carrying Amount

  

Gross Carrying Amount

  

Accumulated Depreciation

  

Net Carrying Amount

 

Furniture and office equipment

 $187,772  $(119,676) $68,096  $184,241  $(85,093) $99,148 

Leasehold improvements

  56,207   (27,826)  28,381   46,276   (22,829)  23,447 
  $243,979  $(147,502) $96,477  $230,517  $(107,922) $122,595 
v3.24.2.u1
Note 7 - Intangible Assets (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Finite-Lived Intangible Assets [Table Text Block]
  

June 30, 2024

  

December 31, 2023

 
  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

  

Gross Carrying Amount

  

Accumulated Amortization

  

Net Carrying Amount

 

Trade names (10 years)

 $890,827  $(160,349) $730,478  $890,827  $(106,899) $783,928 

Recipes (10 years)

  330,000   (104,500)  225,500   330,000   (88,000)  242,000 

Social media agreements (3 years)

  80,000   (80,000)  —   80,000   (71,111)  8,889 

Software (3 years)

  131,708   (101,454)  30,254   131,708   (81,294)  50,414 

Definite-lived intangible assets

  1,432,535   (446,303)  986,232   1,432,535   (347,304)  1,085,231 

Licensing agreements (indefinite)

  132,100   —   132,100   132,100   —   132,100 

Total intangible assets

 $1,564,635  $(446,303) $1,118,332  $1,564,635  $(347,304) $1,217,331 
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

2024 (excluding the six months ended June 30, 2024)

 $90,109 

2025

  149,994 

2026

  139,899 

2027

  139,899 

2028

  139,899 

Thereafter

  326,432 
  $986,232 
v3.24.2.u1
Note 8 - Leases (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Lease, Cost [Table Text Block]
  

Three Months Ended

  

Six Months Ended

 
  

June 30, 2024

  

June 30, 2024

 

Operating leases

        

Operating lease cost

 $38,085  $76,169 

Variable lease cost

  5,790   11,355 

Operating lease expense

  43,875   87,524 

Short-term lease rent expense

  79,897   144,127 

Total rent expense

 $123,772  $231,651 
  

Three Months Ended

  

Six Months Ended

 
  

June 30, 2023

  

June 30, 2023

 

Operating leases

        

Operating lease cost

 $38,085  $76,169 

Variable lease cost

  5,554   18,468 

Operating lease expense

  43,639   94,637 

Short-term lease rent expense

  56,960   173,187 

Total rent expense

 $100,599  $267,824 
  

Six Months Ended

  

Six Months Ended

 
  

June 30, 2024

  

June 30, 2023

 

Operating cash flows - operating leases

 $64,812  $62,923 

Right-of-use assets obtained in exchange for operating lease liabilities

 $-  $344,382 
  

June 30, 2024

  

June 30, 2023

 

Weighted-average remaining lease term – operating leases (in years)

  2.7   3.5 

Weighted-average discount rate – operating leases

  6.92%  6.56%
Lessee, Operating Lease, Liability, to be Paid, Maturity [Table Text Block]

2024 (excluding the six months ended June 30, 2024)

 $73,987 

2025

  126,714 

2026

  109,145 

2027

  56,210 

Total

  366,056 

Less imputed interest

  (35,866)

Operating lease liabilities

 $330,190 
Operating Lease, Lease Income [Table Text Block]
  

Three Months Ended

  

Six Months Ended

 
  

June 30, 2024

  

June 30, 2024

 

Operating leases

        

Operating lease income

 $14,055  $28,109 

Variable lease income

  5,316   10,634 

Total rental income

 $19,371  $38,743 
  

Three Months Ended

  

Six Months Ended

 
  

June 30, 2023

  

June 30, 2023

 

Operating lease

        

Operating lease income

 $14,055  $28,110 

Variable lease income

  5,318   10,635 

Total rental income

 $19,373  $38,745 
Lessor, Operating Lease, Payment to be Received, Maturity [Table Text Block]

2024 (excluding the six months ended June 30, 2024)

 $31,122 

2025

  20,748 

Total

 $51,870 
v3.24.2.u1
Note 9 - Income Taxes (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]
  

Six Months Ended

 
  

June 30, 2024

  

June 30, 2023

 
         

Income tax benefit at statutory rates

 $229,541  $1,604,134 

Valuation allowance for deferred tax assets

  (626,845)  (1,625,391)

Stock-based compensation

  380,270   (17,634)

Other expense, net

  (25,447)  25,719 

Reported income tax expense

 $(42,481) $(13,172)

Effective tax rate:

  3.5%  0.2%
Schedule of Deferred Tax Assets and Liabilities [Table Text Block]
  

June 30, 2024

  

December 31, 2023

 

Deferred tax assets:

        

Net operating loss carryforwards

 $20,625,634  $20,088,873 

Intangible assets

  2,176,271   2,258,079 

Property and equipment

  1,060,272   1,104,854 

Research and development credits

  251,540   235,514 

Research and development

  246,410   268,414 

Inventory

  339,365   246,182 

Accrued expenses

  518,546   496,695 

Right of use asset

  10,364   7,366 

Bad debt allowance

  98,301   64,250 

Charitable contributions

  34,487   40,773 

Unexercised options

  1,109,065   890,128 

Total deferred tax assets

  26,470,255   25,701,128 

Valuation allowance

  (26,470,255)  (25,701,128)

Total net deferred tax assets

 $—  $— 
v3.24.2.u1
Note 10 - Stock Incentive Plan (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Share-Based Payment Arrangement, Option, Activity [Table Text Block]
      

Weighted

  

Weighted

     
      

Average

  

Average

     
  

Options

  

Exercise Price

  

Contractual

  

Aggregate

 
  

Activity

  

(per share)

  

Term (years)

  

Intrinsic Value

 

Balance at January 1, 2024

  1,234,778  $4.52   7.91  $30,000 

Granted

  799,188  $0.73   —  $— 

Exercised/released (1)

  (255,750) $1.06   —  $— 

Cancelled/forfeited

  (25,788) $3.01   —  $— 

Balance at June 30, 2024

  1,752,428  $3.32   8.30  $6,377,551 

Exercisable at June 30, 2024

  523,040  $4.52   6.38  $1,108,076 
      

Weighted

  

Weighted

     
      

Average

  

Average

     
  

Options

  

Exercise Price

  

Contractual

  

Aggregate

 
  

Activity

  

(per share)

  

Term (years)

  

Intrinsic Value

 

Balance at January 1, 2023

  921,657  $6.86   8.00  $— 

Granted

  400,000  $0.81   —  $— 

Exercised/released

  —  $—   —  $— 

Cancelled/forfeited

  (24,164) $9.99   —  $— 

Balance at June 30, 2023

  1,297,493  $4.94   7.74  $— 

Exercisable at June 30, 2023

  318,041  $8.72   5.18  $— 
Share-Based Payment Arrangement, Restricted Stock Unit, Activity [Table Text Block]
      

Weighted Average

  

Weighted Average

     
      

Grant Date Fair

  

Remaining Vesting

  

Aggregate

 
  

Number of RSUs

  

Value (per share)

  

Term (years)

  

Fair Value

 

Balance at January 1, 2024

  771,885  $1.76   2.04  $1,361,696 

Granted

  100,000  $4.79   —  $— 

Exercised/released (1)

  (369,280) $1.35   —  $— 

Cancelled/forfeited

  (66) $19.00   —  $— 

Balance at June 30, 2024

  502,539  $2.67   2.03  $1,342,542 
      

Weighted Average

  

Weighted Average

     
      

Grant Date Fair

  

Remaining Vesting

  

Aggregate

 
  

Number of RSUs

  

Value (per share)

  

Term (years)

  

Fair Value

 

Balance at January 1, 2023

  504,420  $4.22   2.94  $2,127,734 

Granted

  645,000  $0.84   —  $— 

Exercised/released (1)

  (141,361) $4.25   —  $— 

Cancelled/forfeited

  (16,293) $6.00   —  $— 

Balance at June 30, 2023

  991,766  $1.99   2.86  $1,968,741 
Share-Based Payment Arrangement, Activity [Table Text Block]
      

Weighted Average

  

Weighted Average

     
      

Grant Date Fair

  

Remaining Vesting

  

Aggregate

 
  

Number of MSUs

  

Value (per share)

  

Term (years)

  

Fair Value

 

Balance at January 1, 2024

  621,314  $1.57   0.62  $977,558 

Granted

  —  $—   —  $— 

Exercised/released

  (200,000) $0.18   —  $— 

Cancelled/forfeited

  (21,314) $43.53   —  $— 

Balance at June 30, 2024

  400,000  $0.03   0.12  $13,090 
      

Weighted Average

  

Weighted Average

     
      

Grant Date Fair

  

Remaining Vesting

  

Aggregate

 
  

Number of MSUs

  

Value (per share)

  

Term (years)

  

Fair Value

 

Balance at January 1, 2023

  31,083  $43.53   0.60  $1,353,043 

Granted

  —  $—   —  $— 

Exercised/released

  —  $—   —  $— 

Cancelled/forfeited

  (9,769) $43.53   —  $— 

Balance at June 30, 2023

  21,314  $43.53   0.29  $927,798 
Share-Based Payment Arrangement, Cost by Plan [Table Text Block]
  

Three Months Ended

  

Six Months Ended

  

Unrecognized Compensation Cost Related to Non-Vested Awards as of

  

Weighted-Average Remaining Vesting Period as of

 
  

June 30, 2024

  

June 30, 2024

  

June 30, 2024

  

June 30, 2024 (years)

 

Stock options

 $91,688  $173,194  $845,353   3.00 

RSUs

  155,187   333,981   1,243,735   1.55 

MSUs

  6,833   26,098   1,605   0.12 

Total stock-based compensation

 $253,708  $533,273  $2,090,693   2.13 
                 

Cost of goods sold

 $982  $1,664  $11,633   4.03 

General and administrative

  209,680   440,781   1,896,260   1.94 

Sales and marketing

  43,046   90,828   182,800   4.06 

Total stock-based compensation

 $253,708  $533,273  $2,090,693   2.13 
  

Three Months Ended

  

Six Months Ended

  

Unrecognized Compensation Cost Related to Non-Vested Awards as of

  

Weighted-Average Remaining Vesting Period as of

 
  

June 30, 2023

  

June 30, 2023

  

December 31, 2023

  

December 31, 2023 (years)

 

Stock options

 $100,196  $161,684  $654,313   2.36 

RSUs

  195,915   354,630   1,099,972   2.17 

MSUs

  9,965   (62,603)  34,281   0.57 

Total stock-based compensation

 $306,076  $453,711  $1,788,566   2.21 
                 

Cost of goods sold

 $780  $(116) $2,976   1.62 

General and administrative

  286,682   421,924   1,666,980   2.29 

Sales and marketing

  18,614   31,903   118,610   0.99 

Total stock-based compensation

 $306,076  $453,711  $1,788,566   2.21 

 
v3.24.2.u1
Note 11 - Earnings (Loss) Per Share (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Net loss

 $(239,076) $(3,507,246) $(1,255,598) $(7,651,156)

Weighted average shares outstanding - basic and diluted

  9,833,001   9,284,585   9,617,800   9,249,738 

Basic and diluted:

                

Net loss per share, basic and diluted

 $(0.02) $(0.38) $(0.13) $(0.83)

Common stock options, restricted stock awards, and market-based stock awards excluded due to anti-dilutive effect

  2,654,967   2,310,573   2,654,967   2,310,573 
v3.24.2.u1
Note 12 - Concentrations (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Schedules of Concentration of Risk, by Risk Factor [Table Text Block]
  June 30, December 31,
  

2024

 

2023

Vendor A

 

15%

 

23%

Vendor B

 

*

 

14%

Vendor C * 10%

Total

 

15%

 

47%

  June 30, December 31,
  

2024

 

2023

Customer A

 

31%

 

46%

Customer B

 

25%

 

21%

Total

 

56%

 

67%

  

Net Sales

 

Accounts Receivable

  

Three months ended June 30,

 

Six months ended June 30,

 

As of June 30,

  

2024

 

2023

 

2024

 

2023

 

2024

 

2023

Customer A

 

18%

 

22%

 

15%

 

19%

 

552,668

 

387,772

Customer B

 

16%

 

16%

 

17%

 

15%

 

460,392

 

567,059

Customer C

 

*

 

11%

 

*

 

11%

 

*

 

653,494

Total

 

34%

 

49%

 

32%

 

45%

 

1,013,060

 

1,608,325

  

For the Three Months Ended June 30,

  

For the Six Months Ended June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Supplier A

  *   *   12%  * 

Supplier B

  *   10%  10%  * 

Supplier C

  11%  12%  11%  13%

Supplier D

  13%  11%  12%  * 

Supplier E

  10%  *   10%  * 

Supplier F

  *   *   *   18%

Total

  34%  33%  55%  31%
  

For the Three Months Ended June 30,

  

For the Six Months Ended June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Sri Lanka

  *   *   13%  * 

Indonesia

  *   11%  *   12%

Total

  *   11%  13%  12%
v3.24.2.u1
Note 14 - Revenue Recognition (Tables)
 6 Months Ended
Jun. 30, 2024
Notes Tables  
Disaggregation of Revenue [Table Text Block]
  

Three Months Ended June 30,

 
  

2024

  

2023

 
  

$

  

% of Total

  

$

  

% of Total

 

Coffee creamers

 $4,696,979   47% $4,647,553   60%

Coffee, tea, and hot chocolate products

  2,503,529   25%  1,957,760   25%

Hydration and beverage enhancing supplements

  2,309,600   23%  998,309   13%

Harvest snacks and other food items

  1,683,776   17%  1,849,947   24%

Other

  91,909   1%  124,953   2%

Gross sales

  11,285,793   113%  9,578,522   124%

Shipping income

  120,402   1%  259,843   3%

Returns and discounts

  (1,402,541)  (14)%  (2,114,274)  (27)%

Sales, net

 $10,003,654   100% $7,724,091   100%
  

Six Months Ended June 30,

 
  

2024

  

2023

 
  

$

  

% of Total

  

$

  

% of Total

 

Coffee creamers

 $10,267,299   52% $9,779,696   62%

Coffee, tea, and hot chocolate products

  4,678,794   23%  3,912,901   25%

Hydration and beverage enhancing supplements

  4,334,872   22%  1,669,159   11%

Harvest snacks and other food items

  2,987,837   15%  3,602,344   23%

Other

  213,921   1%  154,683   1%

Gross sales

  22,482,723   113%  19,118,783   122%

Shipping income

  231,830   1%  563,069   4%

Returns and discounts

  (2,801,961)  (14)%  (3,844,823)  (26)%

Sales, net

 $19,912,592   100% $15,837,029   100%
Disaggregation of Revenue Based on Channels [Table Text Block]
  

Three Months Ended June 30,

 
  

2024

  

2023

 
  

$

  

% of Total

  

$

  

% of Total

 

E-commerce

 $6,098,327   61% $4,139,373   54%

Wholesale

  3,905,327   39%  3,584,718   46%

Sales, net

 $10,003,654   100% $7,724,091   100%
  

Six Months Ended June 30,

 
  

2024

  

2023

 
  

$

  

% of Total

  

$

  

% of Total

 

E-commerce

 $11,966,664   60% $8,567,054   54%

Wholesale

  7,945,928   40%  7,269,975   46%

Sales, net

 $19,912,592   100% $15,837,029   100%
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Table Text Block]
  

January 1,

  

December 31,

  

June 30,

 
  

2023

  

2023

  

2024

 

Accounts receivable, net

 $1,494,469  $1,022,372  $1,168,726 

Contract assets

 $57,249  $—  $10,342 

Contract liabilities

 $(729,667) $(427,974) $(478,311

)
v3.24.2.u1
Note 1 - Summary of Significant Accounting Policies and Estimates (Details Textual) - USD ($)
 1 Months Ended 6 Months Ended
Jul. 12, 2024
Sep. 15, 2023
Jul. 31, 2024
Jun. 30, 2024
Jun. 30, 2023
Coconut Milk, September 2023 Litigation [Member]          
Litigation Settlement, Amount Awarded from Other Party   $ 50,000      
Litigation Settlement, Amount Awarded from Other Party in Discounts on Sale of Future Products   $ 950,000      
Subsequent Event [Member] | Coconut Milk July 2024 [Member]          
Litigation Settlement, Amount Awarded from Other Party     $ 0.5    
Restricted Stock Units (RSUs) [Member]          
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)       $ 4.79 $ 0.84
The 2020 Omnibus Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Subsequent Event [Member]          
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares) 694,650        
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share) $ 4.4        
The 2020 Omnibus Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Subsequent Event [Member] | Share-Based Payment Arrangement, Tranche One [Member]          
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage 20.00%        
The 2020 Omnibus Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Subsequent Event [Member] | Share-Based Payment Arrangement, Tranche Three [Member]          
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage 20.00%        
The 2020 Omnibus Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Subsequent Event [Member] | Share-Based Payment Arrangement, Tranche Four [Member]          
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage 20.00%        
The 2020 Omnibus Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Subsequent Event [Member] | Share-Based Payment Arrangement, Tranche Two [Member]          
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage 20.00%        
The 2020 Omnibus Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Subsequent Event [Member] | Share-Based Payment Arrangement, Tranche Five [Member]          
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage 20.00%        
v3.24.2.u1
Note 2 - Cash, Cash Equivalents, and Restricted Cash (Details Textual) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Dec. 03, 2020
Cash, Uninsured Amount $ 6,907,907   $ 6,907,907   $ 6,756,207  
Asset Pledged as Collateral [Member] | Credit Card Limits [Member]            
Cash Equivalents, at Carrying Value 530,000   530,000      
Restricted Cash Equivalents 79,209   79,209   40,982  
Danone Manifesto Ventures, PBC [Member] | Three COVID-19 Relief Projects [Member]            
Other Commitment           $ 298,103
Restricted Cash 99,525   99,525   $ 99,525  
Payments for Other Commitment $ 0 $ 0 $ 0 $ 0    
v3.24.2.u1
Note 2 - Cash, Cash Equivalents, and Restricted Cash - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Cash and cash equivalents $ 7,648,958 $ 7,566,299
Restricted cash 178,734 140,507
Total cash, cash equivalents, and restricted cash $ 7,827,692 $ 7,706,806
v3.24.2.u1
Note 3 - Inventory (Details Textual) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Inventory Write-down $ 145,697 $ 144,465 $ 187,901 $ 378,859  
Inventory Valuation Reserves 1,078,595   1,078,595   $ 1,029,657
Prepaid Supplies 451,289   451,289   449,242
Inventory Turnover, Quantities on Hand, and Expiration Dates [Member]          
Inventory Valuation Reserves 238,055   238,055   385,069
Products Quarantined for Quality Issues [Member]          
Inventory Valuation Reserves 448,258   448,258   306,276
Discontinued Inventories [Member]          
Inventory Valuation Reserves $ 392,282   $ 392,282   $ 338,312
v3.24.2.u1
Note 3 - Inventory - Components of Inventory (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Raw materials and packaging $ 2,823,145 $ 2,180,294
Finished goods 3,575,232 4,142,265
Total inventory, net $ 6,398,377 $ 6,322,559
v3.24.2.u1
Note 4 - Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Prepaid insurance $ 98,263 $ 371,802
Prepaid inventory 451,289 449,242
Prepaid subscriptions and license fees 293,047 139,590
Deposits 188,223 238,719
Other current assets 105,590 86,211
Prepaid expenses and other current assets $ 1,136,412 $ 1,285,564
v3.24.2.u1
Note 5 - Revolving Lines of Credit (Details Textual) - USD ($)
May 07, 2024
Sep. 02, 2021
Aug. 31, 2023
Sep. 01, 2022
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration] Prime Rate [Member] Secured Overnight Financing Rate (SOFR) [Member]    
Revolving Credit Facility [Member] | Wells Fargo National Association Line of Credit [Member]        
Line of Credit Facility, Maximum Borrowing Capacity   $ 9,500,000   $ 5,000,000
Debt Instrument, Basis Spread on Variable Rate   1.50%    
Long-Term Line of Credit     $ 0  
v3.24.2.u1
Note 6 - Property and Equipment (Details Textual) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Dec. 31, 2022
Depreciation $ 19,866 $ 23,857   $ 39,580 $ 60,088    
Production Equipment [Member]              
Asset, Held-for-Sale, Not Part of Disposal Group $ 0   $ 581,835 $ 0   $ 0 $ 800,000
Proceeds from Sale, Property, Held-for-Sale     $ 218,165        
v3.24.2.u1
Note 6 - Property and Equipment - Schedule of Property and Equipment, Net (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Gross carrying amount $ 243,979 $ 230,517
Accumulated depreciation (147,502) (107,922)
Property and equipment, net 96,477 122,595
Factory and Office Equipment [Member]    
Gross carrying amount 187,772 184,241
Accumulated depreciation (119,676) (85,093)
Property and equipment, net 68,096 99,148
Leasehold Improvements [Member]    
Gross carrying amount 56,207 46,276
Accumulated depreciation (27,826) (22,829)
Property and equipment, net $ 28,381 $ 23,447
v3.24.2.u1
Note 7 - Intangible Assets (Details Textual) - USD ($)
 3 Months Ended 6 Months Ended
May 26, 2020
Nov. 19, 2018
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Finite-Lived Intangible Asset, Useful Life (Year)     6 years 7 months 6 days   6 years 7 months 6 days    
Amortization of Intangible Assets     $ 47,278 $ 51,722 $ 98,999 $ 103,444  
License Agreement Terms [Member] | Laird Hamilton [Member]              
Indefinite-Lived Intangible Assets (Excluding Goodwill)     132,000   $ 132,000   $ 132,000
Stock Issued During Period, Shares, Issued for Services (in shares)         660,000    
License Agreement Terms [Member] | Gabrielle Reece [Member]              
Indefinite-Lived Intangible Assets (Excluding Goodwill)     $ 100   $ 100   $ 100
License Agreement Terms [Member] | Laird Hamilton and Gabrielle Riece [Member]              
Term of License Agreement (Year)   100 years          
Additional Term of License Agreement (Year) 10 years            
Minimum [Member]              
Finite-Lived Intangible Asset, Useful Life (Year)     3 years   3 years    
Maximum [Member]              
Finite-Lived Intangible Asset, Useful Life (Year)     10 years   10 years    
v3.24.2.u1
Note 7 - Intangible Assets - Schedule of Intangible Assets (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Gross carrying amount $ 1,432,535 $ 1,432,535
Accumulated amortization (446,303) (347,304)
Net carrying amount 986,232 1,085,231
Total gross intangible assets 1,564,635 1,564,635
Total intangible assets 1,118,332 1,217,331
Licensing Agreements [Member]    
Licensing agreements (indefinite) 132,100 132,100
Trade Names [Member]    
Gross carrying amount 890,827 890,827
Accumulated amortization (160,349) (106,899)
Net carrying amount 730,478 783,928
Recipes [Member]    
Gross carrying amount 330,000 330,000
Accumulated amortization (104,500) (88,000)
Net carrying amount 225,500 242,000
Social Media Agreement [Member]    
Gross carrying amount 80,000 80,000
Accumulated amortization (80,000) (71,111)
Net carrying amount 0 8,889
Computer Software, Intangible Asset [Member]    
Gross carrying amount 131,708 131,708
Accumulated amortization (101,454) (81,294)
Net carrying amount $ 30,254 $ 50,414
v3.24.2.u1
Note 7 - Intangible Assets - Schedule of Intangible Assets (Details) (Parentheticals)
Jun. 30, 2024
Finite useful life (Year) 6 years 7 months 6 days
Trade Names [Member]  
Finite useful life (Year) 10 years
Recipes [Member]  
Finite useful life (Year) 10 years
Social Media Agreement [Member]  
Finite useful life (Year) 3 years
Computer Software, Intangible Asset [Member]  
Finite useful life (Year) 3 years
v3.24.2.u1
Note 7 - Intangible Assets - Schedule of Future Amortization Expense (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
2024 (excluding the six months ended June 30, 2024) $ 90,109  
2025 149,994  
2026 139,899  
2027 139,899  
2028 139,899  
Thereafter 326,432  
Finite-Lived Intangible Assets, Net $ 986,232 $ 1,085,231
v3.24.2.u1
Note 8 - Leases (Details Textual)
 3 Months Ended 12 Months Ended
Oct. 01, 2021
May 03, 2021
Jul. 01, 2019
Mar. 01, 2018
Mar. 31, 2023
USD ($)
Dec. 31, 2022
USD ($)
Jun. 30, 2024
USD ($)
Dec. 31, 2023
USD ($)
Jan. 31, 2023
USD ($)
Jan. 01, 2023
ft²
Operating Lease, Cancellation Payment                 $ 1,550,000  
Operating Lease, Payment of Cancellation Fee         $ 1,050,000 $ 500,000        
Sublease Rental Assets             $ 7,803 $ 11,881    
Commericial Lease with RII Lundgren Mill, LLC [Member]                    
Operating Lease, Term (Year)       10 years            
Second Commercial Lease with RII Lundgren Mill, LLC [Member]                    
Operating Lease, Term (Year)     10 years              
Third Commercial Lease with RII Lundgren Mill, LLC [Member]                    
Operating Lease, Term (Year) 10 years                  
Picky Bars, LLC Lease [Member]                    
Operating Lease, Term (Year)   62 months                
Somatic Experiencing Trauma Institute Sublease [Member]                    
Area of Real Estate Property (Square Foot) | ft²                   5,257
v3.24.2.u1
Note 8 - Leases - Lease Costs (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Operating lease cost $ 38,085 $ 38,085 $ 76,169 $ 76,169
Variable lease cost 5,790 5,554 11,355 18,468
Operating lease expense 43,875 43,639 87,524 94,637
Short-term lease rent expense 79,897 56,960 144,127 173,187
Total rent expense $ 123,772 $ 100,599 231,651 267,824
Operating cash flows - operating leases     64,812 62,923
Right-of-use assets obtained in exchange for operating lease liabilities     $ 0 $ 344,382
Weighted-average remaining lease term – operating leases (in years) (Year) 2 years 8 months 12 days 3 years 6 months 2 years 8 months 12 days 3 years 6 months
Weighted-average discount rate – operating leases 6.92% 6.56% 6.92% 6.56%
v3.24.2.u1
Note 8 - Leases - Future Minimum Lease Payments (Details)
Jun. 30, 2024
USD ($)
2024 (excluding the six months ended June 30, 2024) $ 73,987
2025 126,714
2026 109,145
2027 56,210
Total 366,056
Less imputed interest (35,866)
Operating lease liabilities $ 330,190
v3.24.2.u1
Note 8 - Leases - Lease Income (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Operating lease income $ 14,055 $ 14,055 $ 28,109 $ 28,110
Variable lease income 5,316 5,318 10,634 10,635
Total rental income $ 19,371 $ 19,373 $ 38,743 $ 38,745
v3.24.2.u1
Note 8 - Leases - Future Minimum Lease Income (Details)
Jun. 30, 2024
USD ($)
2024 (excluding the six months ended June 30, 2024) $ 31,122
2025 20,748
Total $ 51,870
v3.24.2.u1
Note 9 - Income Taxes (Details Textual) - USD ($)
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Tax Credit Carryforward, Amount $ 300,000   $ 200,000
Deferred Tax Assets, Other Loss Carryforwards 600,000    
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount 800,000 $ 1,800,000  
State and Local Jurisdiction [Member]      
Taxes Payable, Current 3,598   7,373
Operating Loss Carryforwards 57,700,000   57,100,000
Domestic Tax Jurisdiction [Member]      
Operating Loss Carryforwards 140,500,000   136,800,000
Domestic Tax Jurisdiction [Member] | Expiring in 2036 [Member]      
Operating Loss Carryforwards 1,900,000   1,900,000
Domestic Tax Jurisdiction [Member] | Indefinitely [Member]      
Operating Loss Carryforwards $ 79,900,000   $ 77,800,000
v3.24.2.u1
Note 9 - Income Taxes - Income Tax Reconciliation (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Income tax benefit at statutory rates     $ 229,541 $ 1,604,134
Valuation allowance for deferred tax assets     (626,845) (1,625,391)
Stock-based compensation     380,270 (17,634)
Other expense, net     (25,447) 25,719
Reported income tax expense $ (3,524) $ (750) $ (42,481) $ (13,172)
Effective tax rate:     3.50% 0.20%
v3.24.2.u1
Note 9 - Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Net operating loss carryforwards $ 20,625,634 $ 20,088,873
Intangible assets 2,176,271 2,258,079
Property and equipment 1,060,272 1,104,854
Research and development credits 251,540 235,514
Research and development 246,410 268,414
Inventory 339,365 246,182
Accrued expenses 518,546 496,695
Right of use asset 10,364 7,366
Bad debt allowance 98,301 64,250
Charitable contributions 34,487 40,773
Unexercised options 1,109,065 890,128
Total deferred tax assets 26,470,255 25,701,128
Valuation allowance (26,470,255) (25,701,128)
Total net deferred tax assets $ 0 $ 0
v3.24.2.u1
Note 10 - Stock Incentive Plan (Details Textual) - shares
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Share-Based Payment Arrangement, Option [Member]    
Share-Based Payment Arrangement, Shares Withheld for Tax Withholding Obligation (in shares) 86,643  
Restricted Stock Units (RSUs) [Member]    
Share-Based Payment Arrangement, Shares Withheld for Tax Withholding Obligation (in shares) 13,080 17,613
The 2020 Omnibus Incentive Plan [Member]    
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares) 1,441,996  
Common Stock, Capital Shares Reserved for Future Issuance (in shares) 1,944,131  
v3.24.2.u1
Note 10 - Stock Incentive Plan - Stock Option Activity (Details) - USD ($)
 6 Months Ended 12 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Dec. 31, 2022
Balance, options (in shares) 1,234,778 921,657 921,657  
Balance, options, weighted average exercise price (in dollars per share) $ 4.52 $ 6.86 $ 6.86  
Balance, options, weighted average contractual term (Year) 8 years 3 months 18 days 7 years 8 months 26 days 7 years 10 months 28 days 8 years
Balance, options, aggregate intrinsic value $ 6,377,551 $ 0 $ 30,000 $ 0
Granted, options (in shares) 799,188 400,000    
Granted, options, weighted average exercise price (in dollars per share) $ 0.73 $ 0.81    
Exercised/released, options (in shares) (255,750) [1] 0    
Exercised/released, options, weighted average exercise price (in dollars per share) $ 1.06 $ 0    
Cancelled/forfeited, options (in shares) (25,788) (24,164)    
Cancelled/forfeited, options, weighted average exercise price (in dollars per share) $ 3.01 $ 9.99    
Balance, options (in shares) 1,752,428 1,297,493 1,234,778 921,657
Balance, options, weighted average exercise price (in dollars per share) $ 3.32 $ 4.94 $ 4.52 $ 6.86
Exercisable, options (in shares) 523,040 318,041    
Exercisable, options, weighted average exercise price (in dollars per share) $ 4.52 $ 8.72    
Exercisable, options, weighted average contractual term (Year) 6 years 4 months 17 days 5 years 2 months 4 days    
Exercisable, options, aggregate intrinsic value $ 1,108,076 $ 0    
[1] Includes 86,643 shares of common stock which were withheld to cover option costs.
v3.24.2.u1
Note 10 - Stock Incentive Plan - RSU Activities (Details) - Restricted Stock Units (RSUs) [Member] - USD ($)
 6 Months Ended 12 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Dec. 31, 2022
Balance, other than options (in shares) 771,885 504,420 504,420  
Balance, other than options, weighted average grant date fair value (in dollars per share) $ 1.76 $ 4.22 $ 4.22  
Balance, other than options, weighted average vesting term (Year) 2 years 10 days 2 years 10 months 9 days 2 years 14 days 2 years 11 months 8 days
Balance, other than options, aggregate fair value $ 1,342,542 $ 1,968,741 $ 1,361,696 $ 2,127,734
Granted, other than options (in shares) 100,000 645,000    
Granted, other than options, weighted average grant date fair value (in dollars per share) $ 4.79 $ 0.84    
Exercised/released, other than options (in shares) (369,280) [1] (141,361) [2]    
Exercised/released, other than options, weighted average grant date fair value (in dollars per share) $ 1.35 $ 4.25    
Cancelled/forfeited, other than options (in shares) (66) (16,293)    
Cancelled/forfeited, other than options, weighted average grant date fair value (in dollars per share) $ 19 $ 6    
Balance, other than options (in shares) 502,539 991,766 771,885 504,420
Balance, other than options, weighted average grant date fair value (in dollars per share) $ 2.67 $ 1.99 $ 1.76 $ 4.22
[1] Includes 13,080 shares of common stock which were withheld to cover taxes.
[2] Includes 17,613 shares of common stock which were withheld to cover taxes.
v3.24.2.u1
Note 10 - Stock Incentive Plan - MSU Activities (Details) - Market Based Stock Units [Member] - USD ($)
 6 Months Ended 12 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Dec. 31, 2022
Balance, other than options (in shares) 621,314 31,083 31,083  
Balance, other than options, weighted average grant date fair value (in dollars per share) $ 1.57 $ 43.53 $ 43.53  
Balance, other than options, weighted average vesting term (Year) 1 month 13 days 3 months 14 days 7 months 13 days 7 months 6 days
Balance, other than options, aggregate fair value $ 13,090 $ 927,798 $ 977,558 $ 1,353,043
Granted, other than options (in shares) 0 0    
Granted, other than options, weighted average grant date fair value (in dollars per share) $ 0      
Exercised/released, other than options (in shares) (200,000)      
Exercised/released, other than options, weighted average grant date fair value (in dollars per share) $ 0.18      
Cancelled/forfeited, other than options (in shares) (21,314) (9,769)    
Cancelled/forfeited, other than options, weighted average grant date fair value (in dollars per share) $ 43.53 $ 43.53    
Balance, other than options (in shares) 400,000 21,314 621,314 31,083
Balance, other than options, weighted average grant date fair value (in dollars per share) $ 0.03 $ 43.53 $ 1.57 $ 43.53
Granted, other than options (in shares) 0 0    
Cancelled/forfeited, other than options (in shares) (21,314) (9,769)    
v3.24.2.u1
Note 10 - Stock Incentive Plan - Schedule of Stock Based Compensation (Details) - USD ($)
 3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Total stock-based compensation $ 253,708 $ 306,076 $ 533,273 $ 453,711  
Unrecognized compensation cost 2,090,693   $ 2,090,693   $ 1,788,566
Vesting period (Year)     2 years 1 month 17 days   2 years 2 months 15 days
Share-Based Payment Arrangement, Option [Member]          
Total stock-based compensation 91,688 100,196 $ 173,194 161,684  
Unrecognized compensation cost 845,353   $ 845,353   $ 654,313
Vesting period (Year)     3 years   2 years 4 months 9 days
Restricted Stock Units (RSUs) [Member]          
Total stock-based compensation 155,187 195,915 $ 333,981 354,630  
Unrecognized compensation cost 1,243,735   $ 1,243,735   $ 1,099,972
Vesting period (Year)     1 year 6 months 18 days   2 years 2 months 1 day
Market Based Stock Units [Member]          
Total stock-based compensation 6,833 9,965 $ 26,098 (62,603)  
Unrecognized compensation cost 1,605   $ 1,605   $ 34,281
Vesting period (Year)     1 month 13 days   6 months 25 days
Award With Cost to be Recognized in Cost of Goods Sold [Member]          
Total stock-based compensation 982 780 $ 1,664 (116)  
Unrecognized compensation cost 11,633   $ 11,633   $ 2,976
Vesting period (Year)     4 years 10 days   1 year 7 months 13 days
Award With Cost to be Recognized in General and Administrative [Member]          
Total stock-based compensation 209,680 286,682 $ 440,781 421,924  
Unrecognized compensation cost 1,896,260   $ 1,896,260   $ 1,666,980
Vesting period (Year)     1 year 11 months 8 days   2 years 3 months 14 days
Award With Cost to be Recognized in Sales and Marketing [Member]          
Total stock-based compensation 43,046 $ 18,614 $ 90,828 $ 31,903  
Unrecognized compensation cost $ 182,800   $ 182,800   $ 118,610
Vesting period (Year)     4 years 21 days   11 months 26 days
v3.24.2.u1
Note 11 - Earnings (Loss) Per Share - Earnings Per Share (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Net loss $ (239,076) $ (1,016,522) $ (3,507,246) $ (4,143,910) $ (1,255,598) $ (7,651,156)
Weighted average shares outstanding - basic and diluted (in shares) 9,833,001   9,284,585   9,617,800 9,249,738
Net loss per share, basic and diluted (in dollars per share) $ (0.02)   $ (0.38)   $ (0.13) $ (0.83)
Common stock options, restricted stock awards, and market-based stock awards excluded due to anti-dilutive effect (in shares) 2,654,967   2,310,573   2,654,967 2,310,573
v3.24.2.u1
Note 12 - Concentrations - Schedule of Concentration Risk (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Accounts Payable [Member] | Vendors Concentration Risk Member [Member] | Vendor A [Member]        
Concentration risk     15.00% 23.00%
Accounts Payable [Member] | Vendors Concentration Risk Member [Member] | Vendor B [Member]        
Concentration risk       14.00%
Accounts Payable [Member] | Vendors Concentration Risk Member [Member] | Vendor C [Member]        
Concentration risk       10.00%
Accounts Payable [Member] | Vendors Concentration Risk Member [Member] | Vendor A, B, C, D, E [Member]        
Concentration risk     15.00% 47.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer A [Member]        
Concentration risk     31.00% 46.00%
Concentration risk $ 552,668 $ 387,772 $ 552,668 $ 387,772
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer B [Member]        
Concentration risk     25.00% 21.00%
Concentration risk 460,392 567,059 $ 460,392 $ 567,059
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customers A,B, and C [Member]        
Concentration risk     56.00% 67.00%
Concentration risk $ 1,013,060 1,608,325 $ 1,013,060 $ 1,608,325
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer C [Member]        
Concentration risk   $ 653,494   $ 653,494
Cost of Goods and Service Benchmark [Member] | Supplier Concentration Risk [Member] | Supplier A [Member]        
Concentration risk     12.00%  
Cost of Goods and Service Benchmark [Member] | Supplier Concentration Risk [Member] | Supplier B [Member]        
Concentration risk   10.00% 10.00%  
Cost of Goods and Service Benchmark [Member] | Supplier Concentration Risk [Member] | Supplier C [Member]        
Concentration risk 11.00% 12.00% 11.00% 13.00%
Cost of Goods and Service Benchmark [Member] | Supplier Concentration Risk [Member] | Supplier D [Member]        
Concentration risk 13.00% 11.00% 12.00%  
Cost of Goods and Service Benchmark [Member] | Supplier Concentration Risk [Member] | Supplier E [Member]        
Concentration risk 10.00%   10.00%  
Cost of Goods and Service Benchmark [Member] | Supplier Concentration Risk [Member] | Supplier F [Member]        
Concentration risk       18.00%
Cost of Goods and Service Benchmark [Member] | Supplier Concentration Risk [Member] | Supplier A, B, C, D, E, and F [Member]        
Concentration risk 34.00% 33.00% 55.00% 31.00%
Cost of Goods and Service Benchmark [Member] | Geographic Concentration Risk [Member] | SRI LANKA        
Concentration risk     13.00%  
Cost of Goods and Service Benchmark [Member] | Geographic Concentration Risk [Member] | INDONESIA        
Concentration risk   11.00%   12.00%
Cost of Goods and Service Benchmark [Member] | Geographic Concentration Risk [Member] | Specific Regions in Excess of 10% [Member]        
Concentration risk   11.00% 13.00% 12.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer A [Member]        
Concentration risk 18.00% 22.00% 15.00% 19.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer B [Member]        
Concentration risk 16.00% 16.00% 17.00% 15.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customers A,B, and C [Member]        
Concentration risk 34.00% 49.00% 32.00% 45.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer C [Member]        
Concentration risk   11.00%   11.00%
v3.24.2.u1
Note 13 - Related Parties (Details Textual) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Accounts Payable, Current $ 1,942,263   $ 1,942,263   $ 1,647,673
Gabby Reece [Member]          
Advertising Expense 63,566 $ 74,776 126,067 $ 164,564  
Accounts Payable, Current $ 29,167   $ 29,167   $ 2,688
v3.24.2.u1
Note 14 - Revenue Recognition (Details Textual) - USD ($)
May 07, 2024
Sep. 02, 2021
Jun. 30, 2024
Dec. 31, 2023
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration] Prime Rate [Member] Secured Overnight Financing Rate (SOFR) [Member]    
Alterna Capital Solutions (ACS) [Member]        
Line of Credit Facility, Maximum Borrowing Capacity $ 2,000,000      
Factoring Agreement, Upfront Purchase Price, Percentage 70.00%      
Debt Instrument, Basis Spread on Variable Rate 1.50%      
Factoring Agreement, Collateral Monitoring Fee, Monthly, Percentage 0.05%      
Debt Instrument, Term (Month) 12 months      
Factoring Agreement, Factored Receivables Due     $ 106,552 $ 0
Alterna Capital Solutions (ACS) [Member] | First Twelve Months [Member]        
Factoring Agreement, Early Termination Fee, Percentage 2.00%      
Alterna Capital Solutions (ACS) [Member] | After Twelve Months [Member]        
Factoring Agreement, Early Termination Fee, Percentage 1.00%      
Alterna Capital Solutions (ACS) [Member] | Minimum [Member]        
Factoring Agreement, Usage Fees, Annual, Percentage 10.00%      
v3.24.2.u1
Note 14 - Revenue Recognition - Disaggregation of Revenue (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Revenue $ 10,003,654 $ 7,724,091 $ 19,912,592 $ 15,837,029
Percentage of revenue 100.00% 100.00% 100.00% 100.00%
Coffee Creamer [Member]        
Revenue $ 4,696,979 $ 4,647,553 $ 10,267,299 $ 9,779,696
Percentage of revenue 47.00% 60.00% 52.00% 62.00%
Coffee Tea and Hot Chocolate Products [Member]        
Revenue $ 2,503,529 $ 1,957,760 $ 4,678,794 $ 3,912,901
Percentage of revenue 25.00% 25.00% 23.00% 25.00%
Hydration and Beverage Enhancing Supplements [Member]        
Revenue $ 2,309,600 $ 998,309 $ 4,334,872 $ 1,669,159
Percentage of revenue 23.00% 13.00% 22.00% 11.00%
Harvest Snacks and Other Food Items [Member]        
Revenue $ 1,683,776 $ 1,849,947 $ 2,987,837 $ 3,602,344
Percentage of revenue 17.00% 24.00% 15.00% 23.00%
Other [Member]        
Revenue $ 91,909 $ 124,953 $ 213,921 $ 154,683
Percentage of revenue 1.00% 2.00% 1.00% 1.00%
Gross Sales [Member]        
Revenue $ 11,285,793 $ 9,578,522 $ 22,482,723 $ 19,118,783
Percentage of revenue 113.00% 124.00% 113.00% 122.00%
Shipping Income [Member]        
Revenue $ 120,402 $ 259,843 $ 231,830 $ 563,069
Percentage of revenue 1.00% 3.00% 1.00% 4.00%
Returns and Discount [Member]        
Revenue $ (1,402,541) $ (2,114,274) $ (2,801,961) $ (3,844,823)
Percentage of revenue (14.00%) (27.00%) (14.00%) (26.00%)
v3.24.2.u1
Note 14 - Revenue Recognition - Disaggregation of Revenue Based on Channels (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Revenue $ 10,003,654 $ 7,724,091 $ 19,912,592 $ 15,837,029
Percentage of revenue 100.00% 100.00% 100.00% 100.00%
Online [Member]        
Revenue $ 6,098,327 $ 4,139,373 $ 11,966,664 $ 8,567,054
Percentage of revenue 61.00% 54.00% 60.00% 54.00%
Wholesale [Member]        
Revenue $ 3,905,327 $ 3,584,718 $ 7,945,928 $ 7,269,975
Percentage of revenue 39.00% 46.00% 40.00% 46.00%
v3.24.2.u1
Note 14 - Revenue Recognition - Summary of Receivables (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Jan. 01, 2023
Accounts receivable, net $ 1,168,726 $ 1,022,372 $ 1,494,469
Contract assets 10,342 0 57,249
Contract liabilities $ (478,311) $ (427,974) $ (729,667)
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