Summary and Analysis of Key Points

Overview of the Company’s Financial Performance:

• The company’s sales increased by $13.7 million to $69.4 million in 2024 compared to 2023, primarily due to the full-year operations of the Ellwood Thompson’s acquisition and the GreenAcres Market acquisition.
• Cost of goods sold increased by $6.9 million, also due to the acquisitions.
• Total operating expenses decreased by $2.0 million, mainly due to a $6.1 million decrease in goodwill impairment charges, offset by increases from the acquisitions.
• The company had a net loss of $4.5 million in 2024, an improvement from the $9.9 million net loss in 2023.

Revenue and Profit Trends:

• The company’s sales growth was driven by the acquisitions of Ellwood Thompson’s and GreenAcres Market, which offset a decrease in same-store sales.
• Gross profit increased by $6.7 million, but the company continued to operate at a net loss, though the loss was reduced compared to the prior year.
• The company’s Adjusted EBITDA, a non-GAAP metric, improved from a loss of $2.9 million in 2023 to a loss of $0.2 million in 2024.

Strengths and Weaknesses: Strengths:

• The company was able to grow its top-line through strategic acquisitions.
• It was able to reduce its operating expenses, including a significant decrease in goodwill impairment charges.
• The company’s Adjusted EBITDA loss narrowed, indicating improved underlying profitability.

Weaknesses:

• The company continues to operate at a net loss, though the loss has been reduced.
• Same-store sales declined, indicating challenges in the core business.
• The company had negative working capital at the end of 2024, indicating potential liquidity concerns.

Outlook for the Future:

• The company expects to continue incurring losses in the foreseeable future.
• It is formulating plans to raise additional capital from outside investors and equity offerings to fund operating losses and support further acquisitions.
• The company believes its current cash on hand and planned capital raises will enable it to meet its obligations and capital requirements for at least the next 12 months.
• The company does not believe climate change currently poses a material risk to its operations or financial performance, but it will continue to monitor any developments that could indirectly impact its business.

Overall, the company’s financial performance showed improvement in 2024 compared to 2023, with growth in sales and a reduction in net losses. However, the company continues to face challenges in its core business and liquidity concerns, which it is addressing through strategic acquisitions and planned capital raises.