Note 14 - Related Parties |
6 Months Ended |
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Jun. 30, 2026 | |
| Notes to Financial Statements | |
| Related Party Transactions Disclosure [Text Block] |
14. Related Parties
ASC Topic 850, Related Party Disclosures, requires that information about transactions with related parties that would influence decision making 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
See Note 13 to the consolidated financial statements in the 2025 Form 10-K for a description of the License and Preservation Agreement with Mr. Hamilton and Ms. Reece. There have been no changes to the agreement during the three and six months ended June 30, 2026.
Marketing Services
On October 26, 2022, the Company executed an influencer agreement with Ms. Reece to provide certain marketing services for the Company for a term ending December 31, 2025, with an option to renew for one-year terms. In connection with these services, the Company recognized advertising expenses totaling $88.2 thousand and $175.0 thousand for the three and six months ended June 30, 2026, respectively, and $78.0 thousand and $147.2 thousand for the three and six months ended June 30, 2025. As of June 30, 2026 and December 31, 2025, amounts payable to Ms. Reece of $29.5 thousand and $46.5 thousand, respectively, are included in related party liabilities in the balance sheets.
Nexus Capital Management LP — Controlling Stockholder
Gateway Superfood NSSIII Investment, LLC and Gateway Superfood NSSIV Investment, LLC (collectively, the “Investor”), each an affiliate of Nexus, are related parties of the Company. Nexus serves as investment manager to the Investor and may be deemed an indirect beneficial owner of the securities held thereby. Damian Giangiacomo, Michael Cohen, and Daniel Flesh are the owners of Nexus Capital Management LP and its general partner entities. Michael Cohen serves as a member of the Company's Board of Directors as a Nexus designee.
Following the issuance of Series A Convertible Preferred Stock at the Initial Closing on March 12, 2026 and the Subsequent Closing on April 21, 2026, affiliates of Nexus hold an aggregate of 110,000 shares of Series A Convertible Preferred Stock, representing beneficial ownership of approximately 73.8% of the Company's common stock on a fully diluted, as-converted basis. As a result of this ownership, the Company is a “controlled company” within the meaning of the NYSE American Company Guide and is exempt from certain NYSE American corporate governance requirements otherwise applicable to listed companies.
See Note 3 — Mezzanine Equity for a description of the terms of the Series A Convertible Preferred Stock, the Investment Agreement, and the related board designation rights.
Advisory Agreement
In connection with the Company's acquisition of Terrasoul, the Company entered into an advisory agreement, dated April 21, 2026, with Dennis Botts, who prior to the acquisition was an indirect beneficial owner of 64.66% of the outstanding membership interests in Terrasoul. Under the agreement, Mr. Botts provides advisory services related to the ongoing operation and integration of the Terrasoul business, including transition support, business introductions, and insight on growth and brand development, in exchange for a monthly fee of $62,500 over a -year term. During the three and six months ended June 30, 2026, the Company incurred expenses of $0.1 million under this agreement, which was included in other general and administrative expenses.
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