Sow Good Inc

Item 1A. Risk Factors.

Significant tariffs could increase Costs, decrease margin, and materially adversely affect the business.

Significant tariffs on certain products could materially increase the costs of our business. These additional costs may not be able to be fully passed along to our customers. These additional costs could materially adversely affect our margins. To the extent that tariffs cause any adverse impacts on global supply chains, it could further materially affect the ability of our ability to timely source our raw materials. If, as a result of tariffs, the United States economy experiences a recession or other economic slowdown, the demand for our products may decline materially. 

There is substantial doubt re is substantial doubt about our ability to continue as a going concern.

Our financial statements as of September 30March 31, 20256 have been prepared under the assumption that we will continue as a going concern for the next twelve months. As of September 30March 31, 20256, we had cash and cash equivalents of $3872.3 thousandmillion and an accumulated deficit of $80.1105.5 million. We do not believe that our cash and cash equivalents are sufficient to fund operations and capital expenditures to reach larger scale revenue generation from our product offerings. As a result of our financial condition and other factors described herein, there is substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern will depend on our ability to obtain additional funding, as to which no assurances can be given. We continue to analyze various alternatives, including potentially obtaining debt or equity financings or other arrangements. Our future success depends on our ability to raise capital. We cannot be certain that raising additional capital, whether through selling additional debt or equity securities or obtaining a line of credit or other loan, will be available to us or, if available, will be on terms acceptable to us, and, to the extent it is obtained, it would likely have rights, preferences, and privileges senior to those of holders of our common stock and would further dilute our current stockholders. Our ability to raise capital is also constrained by the price of and demand for our common stock. The inclusion of disclosures expressing substantial doubt about our ability to continue as a going concern could also materially adversely affect our stock price and our ability to raise new capital. If we are unable to obtain funds when needed or on acceptable terms, we may be required to curtail our current development programs, cut operating costs, forgo future development and other opportunities, or even terminate our operations in which case our investors could lose some or all of their investment.

Our failure to meet the continued listing requirements of Nasdaq could result in a delisting ofWe have recently undergone a significant transition in our executive leadership and Board of Directors, which may adversely affect our securitiebusiness and operations.

On May 14rch 31, 2025, we receiv6, David Lazar resigned a letter from Nasdaq indicatings our Chief Executive Officer and Donna Guy informed our Board that tshe listing of the Companys common stock was not in compliance with Nasdaq Listing Rule 5550(a)(2), as the closing bid price of our common stock was lesswould be resigning as our Chief Financial Officer. Upon these resignations, our Board appointed Yisroel Goldberg as our Chief Executive Officer and Chief Financial Officer.

On than $1.00 per share over a consecutive 30- trading-day period. Pursuant to Nasdaq Listing Rue same date, our Board accepted the resignations of Claudia Goldfarb, Ira Goldfarb, Edward Shensky, Lyle 5810(c)(3)(A), we have a period of 180 calendar days, or until NovemBerman and Jeff Rubin from our Board. The Board elected Yisroel Goldber 10, 2025, to regain compliance with g, Binyomin Posen, Joseph Labkowski and Jack Wortzman to serve on the minimum bid pricBoard effective upon those requirement, with the possibilitysignations.

This simultaneous transition of extension forour executive officers an additional 180 calendar days if we meet Nasdaqs d Board of Directors represents a significant change that may adversely affect our company as a result of continued listing requirecentration of executive authority in a single individual, impairment for market value of publicly held shaof our ability to maintain effective disclosure controls and procedures and all other initial listing st, failure to execute our business strategy andards for the Nasdaq Capit ability to retain institutional Market with the excepknowledge critical to our operation of the minimum bid pris. There can be no assurance requirement. In addition, we would be required to provide written notice of our intention to cure the deficiency during such addthat our new management team and Board will successfully manage these responsibilities, and any failure to do so could have a material adverse effect on our business, financial conditional compliance period, by effec, results of operations and the market price of our common stock.

We are conducting a reverse stock split, if necessary

We can regain compliance ithis at-the-market offering shortly following this management and board transition. Purchasers of our common stock is at least $1.00 for a minimumn this offering will be relying on the judgment and leadership of 10 consean executive business days (unless Nasdaq exercises its discretion to extend the 10-day period) atteam and Board that have limited experience in their current roles with our company any time during the 180 day compliance period (or additional compliance period, if applicd limited familiarity with our business and industry.

There can be no assurance that our new management team and Board of Directors will be able) (the Nasdaq Listing Requirement).

If it appears to Nasdaq that we will not be abl to successfully manage our operations, maintain effective internal controls and disclosure procedures, and oversee our business strategy. Any failure to cure the deficiency indo so could have a material adverse effect on our business, financial connectdition, results of operation withs and the minimum bid pricearket price of our common stock.

Our failure to meet the continued listing requirement, or if we are otherwise not s of Nasdaq could result in a deligible for the addsting of our securitionales.

Our compliance period, and we do not regain compliance by September 30, 2025 for the minimum bid pricemon stock is currently listed for trading on Nasdaq. We must satisfy Nasdaqs continued listing requirement, s. A delisting of our common stock from Nasdaq will provide written notification to us that our sharescould materially reduce the liquidity of our common stock and result in a corresponding material reduction in the price of our common stock are subject to. In addition, delisting. At that time, we may appea could harm our ability to raise capital the delisting derough alternative financing sources on terminations acceptable to a hearings panel pursuant tous, or at all, and may result in the procedures set forth in the aotential loss of confidence by investors, supplicable Nasdaq Listing Ruleers, customers and employees and fewer business development opportunities.

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The notice is a notice of deficiency, not dehave in the past, and may in the future, be unable to comply with certain of the listing,  stand does not currently affecards that we are required to meet the listing or trado maintain the listing of our common stockhares on Nasdaq, which continues to trade under. For example, on May 14, 2025, we received a letter from the Staff indicating that, based upon the symbol SOWG. However, as of Junclosing bid price of our common stock for the 30, 2025 consecutive business days, we did not meet the Nasdaq Listing Rminimum bid price of $1.00 per share requirement, and we may not meetd for continued listing on Nasdaq pursuant to that requirement beforee Minimum Bid Price Rule. The letter also indicated the end of the at we will be provided with a compliance period (or additionalof 180 calendar days, or until November 10, 2025, in which to regain compliance period, if applicable).

ursuant to Nasdaq Listing Rule 5810(c)(3)(A). On November 11, 2025, Nasdaq grantsubsequently issued a secondletter providing us with an additional 180- day period compliance period in o, or until May 11, 2026 to regain compliance.

In order to effect our plans to increase the share regain compliance with the Minimum Bid Price Rule, our common stock must maintain a minimum closing bid price, or effect a stock split, if needed by  of $1.00 for at least ten consecutive business days during the Minimum Bid Price Compliance Period (which we believe we cured on May 117, 2026. We continue). However, if it appears to actively monitorNasdaq that we will be unable to cure the closing bid price of deficiency, Nasdaq will provide notice that our common stock and are evaluawill be subject to delisting available options, includi. There can be no assurance that the Nasdaq staff would grant our request for continued listing by effecting subsequent to any delisting notification. In the 1-for-3 reverse stock split that wasnt of such a notification, we may approved by eal the Companys stockholders at the Companys Staffs determination to delist its securities.

Further, on April 7, 2025 Ann6, we received written notice from the Listing Qual Meetifications Department of Nasdaq stating of Stthat, based upon the stockholders held on June 13equity reported in our Form 10-K for the period ended December 31, 2025, and intend to take appropriate steps we were no longer in compliance with Nasdaq Listing Rule 5550(b)(1), which requires a company to maintain our listing on a minimum of $2,500,000 in stockholders equity. In accordance with the Nasdaq. However Listing Rules, there can be no assu Company has 45 calendar days, or until May 22, 2026, to submit a plan to regain compliance. If the Companys plan is accepted, Nasdaq may grance that we will be able to t the Company an extension of up to 180 calendar days from the date of the Notice, or until October 4, 2026, to evidence compliance. If the Companys plan to regain compliance with the minimum bid price rstockholders equirement.

Such a delisting would likely have a negativty standard is not accepted or if it is accepted but the Company does not regain compliance by the end of the effect on xtension granted by Nasdaq, or if the price of Company fails to satisfy anothe securities and wr Nasdaq requirement for continued listing, Nasdaq staff could iprovide notice that the Compair your abilitynys common shares will become subject to sell or purchase tdelisting. In such event, Nasdaq rules permit the securities when you wish to do so. In Company to request a hearing to appeal to a Nasdaq hearings panel, which would stay any furthe event of a delistr delisting actions through the hearings process. According, wely, there can providbe no assuguarancetee that the Company action taken by us to restorewill be able to maintain its Nasdaq listing.

There is no assurance that we will regain compliance with li, or maintain compliance with the minimum listing requirements would allow our securities to beith all applicable requirements for continued listing on Nasdaq. If our come mon stock were delisted again, stabilize thefrom Nasdaq, trading of our common stock would most likely take place on an over-the-counter market price established for unlisted securities, such as the OTCQB or improve the liquidity of ourthe Pink Market maintained by OTC Markets Group Inc. An investor would likely find it less convenient to securities, prevent ll, or to obtain accurate quotations in seeking to buy, our securities from dropping below the Nasdaq minimum bid price requirement orcommon stock on an over-the-counter market, and many investors would likely not buy or sell our common stock due to difficulty in accessing over-the-counter markets, policies prevent futureing them from trading in securities non-compliance with Nasdaqs t listed on a national exchange or other reasons. In addition, as a delisting requirements. Aed security, our common stock would be subject to SEC rules as a penny stock, which impose additionally, if our securities are not listed on, or become delisted from, Nasdaq for any reason, and are quoted on disclosure requirements on broker-dealers. The regulations relating to penny stocks, coupled with the typically higher cost per trade to the investor of penny stocks due to factors such as broker commissions generally representing a higher percentage of the OTC Bulletin Board, an inter-dealer automated quotaprice of a penny stock than of a higher-priced stock, would further limit the ability of investors to trade in our common stock. In addition system for equi, delisting could harm our ability securities that is noto raise capital through alternative financing sources on terms acceptable to us, or at a nationll, and may result in the potential securities exchange, the liquidityloss of confidence by investors, suppliers, customers and employees and price of our securfewer business development opportunities may be more limited than if we were quoted or listed on Nasdaq or. For these reasons and others, delisting would adversely affect the liquidity, trading volume and price of our common stock, causing the value of another national securities exchange. You may be unable to sell your securities unless a market can be establish investment in us to decrease and having an adverse effect on our business, financial condition and results of operations, including our ability to attract and retain qualified or sustainedemployees and to raise capital.

These are not the only risks we face. You should carefully consider these risk factors, together with the risk factors set forth in Item 1A of our Annual Report on Form 10-K. There have been no other material changes from the risk factors previously disclosed in the Companys most recent Annual Report on Form 10-K for the year ended December 31, 2024. 5.