Summary of Significant Accounting Policies (Policies) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting | Segment Reporting FASB ASC 280-10-50 requires annual and interim reporting for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and expenses, and about which separate financial information is regularly evaluated by the chief operating decision maker in deciding how to allocate resources. The Company operates as a single segment. For further details on segment reporting, refer to Note 15 – Segment Reporting. |
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| Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
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| Reclassifications | Reclassifications Certain amounts in the prior period financial statements have been reclassified to conform with the current presentation. |
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| Environmental Liabilities | Environmental Liabilities The Company was formerly a direct owner of assets in the oil and gas industry. The oil and gas industry is subject, by its nature, to environmental hazards and clean-up costs. At this time, management knows of no substantial losses from environmental accidents or events which would have a material effect on the Company. |
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| Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents include money market accounts which have maturities of three months or less. Cash equivalents are stated at cost plus accrued interest, which approximates market value. |
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| Cash in Excess of FDIC Insured Limits | Cash in Excess of FDIC Insured Limits The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation ("FDIC") and the Securities Investor Protection Corporation ("SIPC") up to $250,000 and $500,000, respectively, under current regulations. The Company had cash in excess of FDIC and SIPC insured limits of $1,189,975 at December 31, 2025. The Company had cash in excess of FDIC and SIPC insured limits of $1,837,840 at December 31, 2024. The Company has not experienced any losses in such accounts. |
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| Accounts Receivable | Accounts Receivable Accounts receivable are carried at their estimated collectible amounts. Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. The Company had an allowance for doubtful accounts of $0, and $33,549 at December 31, 2025 and 2024. The Company estimates its reserve based on historical loss information. The Company believes that historical loss information is a reasonable base on which to determine expected credit losses for trade receivables held at the reporting date because the composition of the trade receivables at the reporting date is consistent with that used in developing the historical credit-loss percentages. However, the Company will continue to monitor and adjust the historical loss rates to reflect the effects of current conditions and forecasted changes. |
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| Accounts Receivable - Related Party | Accounts Receivable - Related Party Related party receivables are $1,651,471 for the year ended December 31, 2025 and $0 for the year ended December 31, 2024. These receivables consisted of the $1,500,000 purchase price of the assets of Sow Good under the Asset Purchase Agreement, which was with Trea Grove, a company owned by Ira Goldfarb, and approximately $151,472 in withholding taxes due from Claudia and Ira Goldfarb related to fully vested shares granted as employee compensation. |
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| Other Receivables | Other Receivables Other accounts receivable of $93,198 and $0 for the years ended December 31, 2025 and 2024 respectively, consisted primarily of a tax refund receivable from the State of Delaware for franchise taxes and interest receivable from investments, respectively. |
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| Divestiture | Divestiture
On December 30, 2025, the Company entered into an Asset Purchase Agreement with Trea Grove LLC, an entity controlled by the Goldfarbs, a related party under common ownership (see Note 5 — Related Party Transactions). The Company evaluated the transferred set of assets, processes, and employees under ASC 805-10-55 and determined that the disposition of the manufacturing and omnichannel distribution business constituted a sale of a business. The transaction included the transfer of an assembled workforce, operational processes, manufacturing equipment, and leasehold improvements. In connection with the transaction, Trea Grove LLC also assumed the lease of the Union Bower facility, a facility owned by the Goldfarbs. Accordingly, the transaction was accounted for as a sale of a business and the loss on divestiture was recognized upon closing in accordance with ASC 810-40. The results of operations of the disposed business have been reclassified as discontinued operations for all periods presented in the accompanying consolidated financial statements in accordance with ASC 205-20.
The table below summarizes the components of the transaction and the resulting gain on divestiture recognized in the Consolidated Statements of Operations:
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| Inventory | Inventory
On December 30 and December 31, 2025, the Company entered into an Asset Purchase Agreement and a Distribution Agreement, respectively. As a result of these transactions, the Company transitioned from operating as a manufacturer and omnichannel seller of freeze-dried candy to operating as a commission-based distribution agent, earning a fixed percentage of distributor gross receipts from sales of Sow Good-branded products. In addition, the Company retained certain SKUs to market independently of the Distribution Agreement.
Inventory is stated at the lower of average cost or net realizable value, with cost determined using the first-in, first-out (“FIFO”) method. The Company evaluates inventory for potential obsolescence and excess quantities on a periodic basis. In connection with the exit of its manufacturing and omnichannel distribution business, the Company recorded an impairment and write-off of inventory of $13,737,675 during the year ended December 31, 2025. Because the impaired inventory related entirely to the former manufacturing and direct-sales business, the impairment expense has been included in loss from discontinued operations for all periods presented. As of December 31, 2025, the Company retained approximately $22,871 of inventory related to certain SKUs that were not transferred in the Asset Purchase Agreement. This inventory has been recorded at the lower of cost or net realizable value. Based on our Distribution Agreement with the Distributor, the net realizable value for units the Company expects to sell through its Distributor is 10% of the expected selling price of the Distributor. |
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| Property and Equipment | Property and Equipment Property and equipment are stated at the lower of cost or estimated net recoverable amount. The cost of property, plant and equipment is depreciated using the straight-line method based on the lesser of the estimated useful lives of the assets or the lease term based on the following life expectancy:
Construction in progress was included as assets sold under the Asset Purchase Agreement with Trea Grove on December 30, 2025. Construction in progress for the year ended December 31, 2024 was stated at cost and no depreciation expense was recorded on construction-in-progress until such time as the relevant assets were completed and put into use. Repairs and maintenance expenditures are charged to operations as incurred. Major improvements and replacements, which extend the useful life of an asset, are capitalized and depreciated over the remaining estimated useful life of the asset. When assets are retired or sold, the cost and related accumulated depreciation and amortization are eliminated and any resulting gain or loss is reflected in operations. Depreciation expense included in continuing operations was $33,101 and $31,644, for the twelve months ended December 31, 2025 and 2024, respectively. Depreciation related to the assets used in the manufacture and sale of freeze-dried candy was reclassified to cost of goods sold, and has been included in the loss on discontinued operations. |
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| Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). Following the sale of substantially all manufacturing and operating assets and the entry into a long-term Distribution Agreement effective December 31, 2025, the Company no longer manufactures products or sells goods to customers. Instead, the Company operates as a commission-based distribution agent and earns a fixed percentage of distributor gross receipts from sales of Sow Good-branded products. For the year ended December 31, 2025, the Company recognized no revenue from continuing operations, as the Distribution Agreement became effective at year end and no commission revenue was earned during the period. Revenue recognized in prior periods under the Company’s former manufacturing and direct-sales business model has been reclassified to loss from discontinued operations for all periods presented and is not comparable to revenue that may be recognized under the Company’s current commission-based distribution model.
Under ASC 606, the Company has concluded that it acts as an agent in these arrangements because it does not control the underlying products prior to transfer to end customers, does not have primary responsibility for fulfillment, and does not bear inventory or credit risk. Accordingly, for the units of inventory sold under the Distribution Agreement, the Company recognizes revenue on a net basis in an amount equal to the commission to which it is entitled.
The Company’s performance obligation under the Distribution Agreement is to provide ongoing brand support and access to the Sow Good brand to its distribution partner. This performance obligation is satisfied over time. Commission revenue is recognized in the period in which the related underlying product sales occur and the distributor’s gross receipts are generated, as this corresponds to when the Company’s right to consideration becomes fixed and determinable.
The Company does not record revenue related to gross product sales, shipping, or handling activities, that are performed by the Distributor and third-party manufacturers. The Company also does not record provisions for product returns, discounts, or allowances, for items which are sold by our Distributor. |
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| Advertising Costs | Advertising Costs Amounts related to the Company’s former manufacturing and direct-sales business model have been reclassified to loss from discontinued operations for all periods presented. The Company did not recognize any advertising costs under our commission-based distribution model. |
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| Customer Concentration | Customer Concentration
Following the sale of substantially all manufacturing and operating assets and the transition to a capital light sales through a distributor model, the Company earns revenue mainly from a single distribution partner pursuant to a long-term Distribution Agreement. Trea Grove LLC, a related party, is expected to be the Company’s sole distributor of Sow Good-branded products going forward. The Company may also sell inventory independently from time to time.
For the year ended December 31, 2025, the Company recognized no revenue from continuing operations. |
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| Supplier Concentration | Supplier Concentration
Following the sale of substantially all manufacturing and operating assets and the transition to a capital light sales through a distributor model, the Company earns revenue mainly from a single distribution partner pursuant to a long-term Distribution Agreement. Trea Grove LLC, a related party, is expected to be the Company’s sole distributor of Sow Good-branded products going forward. The Company may also sell inventory independently from time to time.
Purchases from vendors relate primarily to corporate overhead, professional services, and other administrative costs. Amounts related to the Company’s former manufacturing and direct-sales business model have been reclassified to loss from discontinued operations for all periods presented. |
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| Basic and Diluted Earnings (Loss) Per Share | Basic and Diluted Earnings (Loss) Per Share The basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding. Diluted net income (loss) per common share is computed by dividing the net income (loss) adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the periods where potential dilutive securities would have an anti-dilutive effect and they were not included in the calculation of diluted net loss per common share. |
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| Stock-Based Compensation | Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation. Stock-based compensation for equity instruments issued to employees and non-employees is measured at fair value on the grant date and recognized as compensation expense over the requisite service period.
All transactions in which the consideration for goods or services is settled in equity instruments are accounted for based on the fair value of the equity instruments issued. The measurement date is the date at which the key terms and conditions of the award is reached.
The Company accounts for forfeitures as they occur. When an award is forfeited prior to completion of the requisite service period, any previously recognized compensation cost related to the unvested portion of the award is reversed in the period of forfeiture.
The fair value of service-based stock options is estimated using the Black-Scholes option-pricing model, with expected terms ranging from 2.3 to 7.3 years, determined based on either the weighted-average vesting period and contractual term or as calculated under the valuation model. The risk-free interest rate is based on U.S. Treasury securities with maturities commensurate with the expected term of the awards at the grant date.
The Company uses a Monte Carlo simulation model to estimate the fair value of performance-based and market-based stock options. Stock option expense is recognized on a straight-line basis over the requisite service period or the implied service period, as applicable. Amortization of options granted to members of the Board of Directors is included in other general and administrative expense. Amortization of options granted to officers and employees is included in salaries and benefits.
Stock-based compensation related to the issuance of shares of common stock to members of the Board of Directors for their services was $280,000 and $295,648 for the years ended December 31, 2025 and 2024, respectively, and is included in other general and administrative expense. Stock-based compensation related to the issuance of shares of common stock to Officers of the Company for their services was $689,288 and $0 for the years ended December 31, 2025 and 2024, respectively, and is included in salaries and benefits.
Stock-based compensation related to the amortization of stock option grants was $1,427,945 and $4,511,657 for the years ended December 31, 2025 and 2024, respectively.
As of December 31, 2025, the Company had $2,762,546 of total unrecognized stock-based compensation cost related to unvested awards, which is expected to be recognized over a weighted-average period of 1.4 years. |
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| Income Taxes | Income Taxes The Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not. |
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| Uncertain Tax Positions | Uncertain Tax Positions In accordance with ASC 740 – Income Taxes (“Topic 740”), the Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits of the position. These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. These standards also provide guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Various taxing authorities can periodically audit the Company’s income tax returns. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. The Company has not yet undergone an examination by any taxing authorities. The assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions. |
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| Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, to enhance the transparency and decision-usefulness of income tax disclosures, particularly in the rate reconciliation table and disclosures about income taxes paid. The ASU’s amendments are effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted. The Company adopted this standard during the current year. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU requires disclosures about specific types of expenses, including purchases of inventory, employee compensation, depreciation and amortization. The amendments in this ASU are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its Consolidated Financial Statements and related disclosures. No other new accounting pronouncements, issued or effective during the year ended December 31, 2025, have had or are expected to have a significant impact on the Company’s financial statements. |
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