Sow Good Inc. Announces $6.0 Million Private Placement, Strategic Asset Sale, and Leadership Transition to Support Continued Candy Operations and Future Growth

Rhea-AI Summary

Sow Good (NASDAQ: SOWG) completed a $6.0 million private placement and a strategic asset sale to strengthen liquidity and move to an asset-light model while continuing candy operations.

On Dec 31, 2025 the company closed the first $3.0M tranche of Series AA/AAA convertible preferred stock; a second $3.0M tranche is expected before Mar 31, 2026 subject to stockholder approval. Sow Good sold freeze-dried snack and candy assets to Trea Grove for $1.5M payable through Mar 31, 2026, and granted Trea Grove exclusive distribution rights through Jul 31, 2026 with a 10% gross receipts remittance to Sow Good. Leadership changes include David Lazar as CEO and chair and Claudia Goldfarb shifting to COO and board member.

Positive

• $3.0M first tranche closed on Dec 31, 2025
• Total financing of $6.0M in two tranches
• Asset sale for $1.5M payable through Mar 31, 2026
• Exclusive distribution through Jul 31, 2026 with 10% remittance

Negative

• Second $3.0M tranche contingent on stockholder approval before Mar 31, 2026
• Company needs proceeds to preserve ability to operate as a going concern
• Shift to third-party distribution reduces direct control over logistics and billing

Key Figures

Private placement size $6.0 million Total financing with David Lazar via Series AA and AAA preferred

First tranche $3.0 million Closed December 31, 2025 under securities purchase agreement

Second tranche $3.0 million Expected to close by March 31, 2026 after stockholder approval

Asset sale proceeds $1.5 million Sale of freeze-dried snacks and candy assets to Trea Grove, LLC

Distributor royalty 10% of gross receipts Portion of product sales remitted to company under distribution deal

Distribution term end July 31, 2026 End of exclusive distribution period unless extended

Asset sale installments Through March 31, 2026 Timing for receipt of $1.5 million consideration

Market Reality Check

$0.5000 Last Close

Volume Volume 38,158,001 is 18.83x the 20-day average of 2,026,464, indicating unusually heavy trading activity before this announcement. high

Technical Shares at $0.465 are trading below the 200-day moving average of $0.76 and remain far below the $4.12 52-week high.

Peers on Argus

SOWG showed outsized movement versus peers, with select confectionery/related names like RMCF up 1.58% and KAVL up 1.13%, while AMBO fell 4.04%. No peers appeared in the momentum scanner, pointing to a stock-specific driver.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Nov 14	Q3 2025 earnings	Negative	-2.4%	Steep revenue drop, large losses, and heavy inventory charges reported.
Oct 31	Earnings call notice	Neutral	+2.5%	Announcement of scheduling for Q3 2025 results conference call.
Oct 27	Business update funding	Positive	+10.4%	Retail wins, $2.0M working‑capital infusion, and cost optimizations disclosed.
Aug 25	Conference presentation	Neutral	+2.0%	Participation in 2025 Gateway Conference to present and meet investors.
Aug 14	Q2 2025 earnings	Negative	-19.4%	Revenue plunge and swing from profit to loss with lower cash balance.

Pattern Detected

When Sow Good issues materially positive or negative updates, the stock has generally moved in the same direction as the news tone, with earnings disappointments drawing notable downside and positive business updates producing upside.

Recent Company History

Over the last six months, Sow Good has reported challenging fundamentals with sharp revenue declines and significant net losses in Q2 and Q3 2025, alongside going‑concern language in its filings. Despite this, the company has pursued new retail wins, a 600‑store private‑label launch, and crypto‑related funding, plus aggressive cost cuts and lease exits to reduce overhead. Conference appearances and calls in August and November 2025 supported investor communication. Today’s private placement, asset sale, and leadership changes extend this pattern of balance‑sheet repair and strategic repositioning.

Market Pulse Summary

The stock surged +15.1% in the session following this news. A strong positive reaction aligns with the company securing a $6.0 million convertible preferred financing plus a $1.5 million asset sale, which directly address prior liquidity and going‑concern risks flagged in recent 10‑Q filings. Historical news flow shows stock moves typically matching news tone, so investors may have rewarded balance‑sheet relief and a leaner, asset‑light model. However, reliance on external capital and preferred securities could cap enthusiasm if future execution or additional financings disappoint.

Key Terms

private placement financial

"entered into a securities purchase agreement for a $6.0 million private placement"

A private placement is a way for companies to raise money by selling securities directly to a small group of investors instead of through a public offering. This process is often quicker and less regulated, making it similar to offering a special, exclusive investment opportunity to select individuals or institutions. For investors, it can provide access to unique investment options that are not available on public markets.

convertible non-redeemable preferred stock financial

"issuance of Series AA and Series AAA Convertible Non-Redeemable Preferred Stock"

A type of preferred share that pays priority dividends and has a fixed claim on assets but cannot be forced back to the company for cash; holders instead have the option (or automatic right under set conditions) to convert those shares into common stock. It matters to investors because it combines steady income and downside protection with potential upside from conversion, while also affecting company ownership and possible dilution for common shareholders.

distribution agreement financial

"entered into a distribution agreement appointing Trea Grove, LLC as the exclusive distributor"

A distribution agreement is a contract that lets one party sell, market or deliver another party’s products or services in specified places or channels, and spells out who handles pricing, inventory, delivery, payments and how long the arrangement lasts. For investors it matters because these deals determine how widely a product can reach customers, how quickly revenue can grow, what profit margin the company keeps, and what legal or operational risks the business assumes—think of it like a store deciding which wholesaler will stock and promote a product.

gross receipts financial

"will remit 10% of gross receipts from product sales to the Company"

Gross receipts are the total money a business collects from sales and other income sources during a reporting period, before subtracting costs, returns, taxes or other deductions. For investors, they show the scale of a company’s cash inflows—like the total amount poured into a bucket—and changes can indicate demand and growth, but gross receipts alone don’t reveal profitability or cash left after expenses.

going concern financial

"preserve the Company’s ability to operate as a going concern while it pursues"

A going concern is a business that is expected to continue its operations and meet its obligations for the foreseeable future, rather than shutting down or selling off assets. This assumption matters to investors because it indicates stability and ongoing profitability, making the business a more reliable investment. Think of it as believing a restaurant will stay open and serve customers, rather than closing down suddenly.

AI-generated analysis. Not financial advice.

IRVING, Texas, Jan. 06, 2026 (GLOBE NEWSWIRE) -- Sow Good Inc. (NASDAQ: SOWG) (“Sow Good” or the “Company”), a leading freeze-dried food and candy manufacturer, today announced the completion of a series of strategic transactions designed to strengthen its liquidity position, transition the business to a more asset-light operating model, and provide flexibility as the Company continues operating its candy business while evaluating growth opportunities and broader strategic alternatives.

$6.0 Million Private Placement

On December 31, 2025, Sow Good entered into a securities purchase agreement for a $6.0 million private placement with investor David Lazar. The financing will be completed in two tranches of $3.0 million each through the issuance of Series AA and Series AAA Convertible Non-Redeemable Preferred Stock.

The first $3.0 million closing was completed on December 31, 2025. The second $3.0 million closing is expected to occur following receipt of required stockholder approvals and prior to March 31, 2026.

Net proceeds from the private placement are expected to be used to fund ongoing operations, address outstanding liabilities, and preserve the Company’s ability to operate as a going concern while it pursues strategic initiatives.

“Completing this financing provides Sow Good with critical runway and stability,” said David Lazar, Chief Executive Officer and Chair of the Board of Sow Good. “Our immediate focus is to continue serving customers and partners, stabilize the business, and evaluate opportunities to grow within the candy and snack category. At the same time, we will be disciplined and thoughtful as we explore additional strategic alternatives that can unlock long-term value for stockholders.”

Strategic Asset Sale and Distribution Agreement

Sow Good also completed the sale of a significant portion of the assets related to the Company's freeze-dried snacks and candy business to Trea Grove, LLC for total consideration of $1.5 million, payable in installments through March 31, 2026. The transaction includes the transfer of selected intellectual property, real property improvements, and other related assets, along with the assumption of specified liabilities.

Following the asset sale, the Company entered into a distribution agreement appointing Trea Grove, LLC as the exclusive distributor of certain Sow Good products, including fruits, snacks, and candy, through July 31, 2026, unless extended. Under the agreement, the distributor will manage customer communications, logistics, fulfillment, billing, and collections, and will remit 10% of gross receipts from product sales to the Company.

These transactions do not represent a liquidation or cessation of operations. Sow Good will continue selling and distributing its candy products in the ordinary course of business.

“This transition allows Sow Good to remain active in the candy market while significantly reducing fixed operating costs,” said Claudia Goldfarb, Board member and Chief Operating Officer of Sow Good. “We believe this structure positions the Company to continue serving its customers, through a third-party distribution arrangement, pursue growth opportunities within the candy industry, and thoughtfully assess additional strategic paths that may enhance value.”

Board and Management Updates

In connection with the transactions:

• David Lazar was appointed Chief Executive Officer and Chair of the Board.
• Claudia Goldfarb stepped down as Chief Executive Officer and remains with the Company as Chief Operating Officer and a member of the Board.
• David Lazar and David Natan were elected to the Board of Directors.
• Joe Mueller and Chris Ludeman resigned from the Board in connection with the transactions.
• Ira Goldfarb resigned as Executive Chairman and Chair of the Board.
  
  

Strategic Path Forward

Following the completion of these transactions, Sow Good will continue operating its candy business while evaluating growth opportunities within the candy and snack industry. The Company will also assess other strategic alternatives, including potential partnerships, acquisitions, or additional corporate transactions, with the goal of strengthening its financial position and creating long-term stockholder value.

About Sow Good Inc.

Sow Good Inc. (NASDAQ: SOWG) is a U.S.-based leader in freeze-dried snacks and candies, driven by a commitment to quality, innovation, and excellence. The company’s proprietary freeze-drying technology and vertically integrated manufacturing platform power some of the most exciting products in the better-for-you and indulgent snack categories—all proudly made in Texas.

Forward-Looking Statements

This press release contains forward-looking statements. Statements other than statements of historical facts contained in this press release may be forward-looking statements that involve substantial risks and uncertainties. Any statements in this press release about the Company’s future expectations, plans and prospects, including but not limited to statements about the Company’s expectations with respect to the occurrence of the First Closing and Second Closing, the potential officer and director appointments, the potential receipt of Stockholder Approvals, the Company’s ability to identify and consummate a strategic alternative transaction on the timeline anticipated or at all and other statements containing the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “likely,” “will,” “would,” “could,” “should,” “continue,” and similar expressions constitute forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: whether the conditions for the Second Closing of the Private Placement will be satisfied, including the failure to obtain Stockholder Approvals; uncertainties as to the timing of the consummation of First Closing and the Second Closing; the Company’s ability to maintain its listing on The Nasdaq Capital Market; and other important factors, any of which could cause the Company’s actual results to differ from those contained in the forward-looking statements discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K, most recently filed Quarterly Report on Form 10-Q and other filings the Company makes with the SEC. These forward-looking statements represent the Company’s views as of the date of this press release and should not be relied upon as representing the Company’s views as of any date subsequent to the date hereof. The Company does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Sow Good Contact:
David Lazar
Chief Executive Officer and Chairman of the Board
david@activistinvestingllc.com

Sow Good Media Inquiries:
Sow Good, Inc.
1-214-623-6055
pr@sowginc.com

FAQ

What financing did Sow Good (SOWG) complete on December 31, 2025?

Sow Good closed the first $3.0M tranche of a $6.0M private placement on Dec 31, 2025.

When is the second $3.0M tranche for SOWG expected to close?

The second $3.0M tranche is expected to close after required stockholder approvals and prior to Mar 31, 2026.

What assets did Sow Good (SOWG) sell and for how much?

Sow Good sold a significant portion of freeze-dried snack and candy assets to Trea Grove for $1.5M, payable through Mar 31, 2026.

How will Sow Good (SOWG) receive revenue from the distribution deal?

Under the exclusive distribution agreement, the distributor will remit 10% of gross receipts from product sales to Sow Good.

How long is Trea Grove the exclusive distributor for SOWG products?

Trea Grove is exclusive distributor for certain products through Jul 31, 2026, unless extended.

Who is the new CEO and board chair of Sow Good (SOWG)?

David Lazar was appointed Chief Executive Officer and Chair of the Board.