BSPK 10-K & 10-Q changes, risk factors and insider trading
Bespoke Extracts, Inc. · Pharmaceutical Preparations · CIK 1409197 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Newly Established and Developing Legal Regimes”
New heading “Federal Regulation of Hemp-Based CBD & THC”
New heading “We are subject to increased costs as a result of being a public company”
New heading “We face costs of maintaining a public listing.”
Largest changes
“Our business activities rely on newly established and/or developing laws and regulations in the states in which we operate. These laws and regulations are rapidly evolving and subject to change with minimal notice. Regulatory changes may adversely affect our profitability or cause us to cease operations entirely. …”see in full comparison
“Hemp products, including psychoactive hemp-derived products, are subject to state and federal regulation in respect to the production, distribution and sale of products intended for human ingestion or topical application. Hemp is categorized as Cannabis sativa L., a subspecies of the cannabis genus. Numerous unique, chemical compounds are extractable from hemp, including CBD, THC and its various isomers (e.g., delta-8 THC, delta-9 THC, delta-10 THC, etc.), and other cannabinoids such as THC-A and THC-O (collectively, “THC Variants”). …”see in full comparison
“We are subject to increased costs as a result of being a public company”see in full comparison
Full comparison: every changed paragraph (10)
Newly Established and Developing Legal Regimes
Our business activities rely on newly established and/or developing laws and regulations in the states in which we operate. These laws and regulations are rapidly evolving and subject to change with minimal notice. Regulatory changes may adversely affect our profitability or cause us to cease operations entirely. The cannabis industry may come under further scrutiny by the Food and Drug Administration, the SEC, the Department of Justice, the Financial Industry Regulatory Advisory and other regulatory authorities that supervise or regulate the production, distribution, sale and use of cannabis for medical and nonmedical purposes in the United States. It is impossible to determine the extent of the impact of new laws, regulations or initiatives that may be proposed. The regulatory uncertainty surrounding the industry may adversely affect our business and operations, including without limitation, the costs to remain compliant with applicable laws and the impairment of our business or the ability to raise additional capital.
Federal Regulation of Hemp-Based CBD & THC
Hemp products, including psychoactive hemp-derived products, are subject to state and federal regulation in respect to the production, distribution and sale of products intended for human ingestion or topical application. Hemp is categorized as Cannabis sativa L., a subspecies of the cannabis genus. Numerous unique, chemical compounds are extractable from hemp, including CBD, THC and its various isomers (e.g., delta-8 THC, delta-9 THC, delta-10 THC, etc.), and other cannabinoids such as THC-A and THC-O (collectively, “THC Variants”). Hemp, as defined in the Farm Bill, is distinguishable from cannabis, which also comes from the Cannabis sativa L. subspecies, by its absence of more than trace amounts (0.3% or less) of the psychoactive compound Delta-9 THC.
As a result of the Farm Bill, federal law dictates that CBD and THC Variants derived from hemp are not controlled substances; however, products derived from hemp may still be considered a controlled substance under applicable state law. Individual states take varying approaches to regulating the production and sale of hemp and hemp-derived CBD and THC Variants. Some states explicitly authorize and regulate the production and sale of hemp-derived CBD and THC Variants or otherwise provide legal protection for authorized individuals to engage in commercial hemp activities. Other states, however, maintain laws that do not distinguish between cannabis and hemp and/or hemp-derived CBD or THC Variants which results in hemp being classified as a controlled substance under certain state laws.
In addition, the Farm Bill preserves the authority and jurisdiction of the U.S. Food and Drug Administration under the Food Drug & Cosmetic Act (the “FD&C Act”) to regulate the manufacture, marketing, and sale of food, drugs, dietary supplements, and cosmetics, including products that contain hemp extracts and derivatives, such as CBD and THC Variants. The Food and Drug Administration has not evaluated or approved CBD or THC Variants, and therefore does not consider them to be GRAS (Generally Recognized as Safe) for use in foods. The Food and Drug Administration has also found that because CBD and THC are in certain drugs approved by Food and Drug Administration, they cannot be used in foods or dietary supplements. Accordingly, per the Food and Drug Administration, foods and dietary supplements containing CBD and THC Variants do not comply with the FD&C Act. Food and Drug Administration enforcement of its position has thus far been minimal and limited to sending warning letters to a relatively small number of companies.
We are subject to increased costs as a result of being a public company
As a public company in the United States, we are subject to the reporting requirements, rules and regulations under the applicable securities laws and rules of stock exchanges on which the Company’s securities may be listed. The requirements of existing and potential future rules and regulations will increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming or costly and may place undue strain on our personnel, systems and resources, which could adversely affect our business, financial condition and results of operations.
We face costs of maintaining a public listing.
As a public company, there are costs associated with legal, accounting and other expenses related to regulatory compliance. Securities legislation and the rules and policies of the te OTC require companies to, among other things, adopt corporate governance and related practices, and to continuously prepare and disclose material information, all of which add to a company’s legal and financial compliance costs. We may also elect to devote greater resources than it otherwise would have on communication and other activities typically considered important by publicly traded companies.
Management's Discussion & Analysis (MD&A)
New heading “Cost of Goods Sold”
Largest changes
“For the year ended December 31, 2024, the cost of goods sold (COGS) rose to $664,517, representing approximately 59% of sales, up from $442,289, or about 56% of sales, in 2023. This increase in the COGS-to-sales ratio reflects higher packaging and input costs for the company’s products. The overall rise in COGS was driven by increased prices for raw materials, packaging, and labor, particularly in the production of pre-rolled joints”see in full comparison
“As of December 31, 2023, we had cash of $6,607. Net cash used in operating activities for the year ended December 31, 2023 was $415,198. Our current liabilities as of December 31, 2023 were $1,078,957 and consisted of accounts payable and accrued liabilities of $961,255, and current portion of lease liability of $64,330 and advance related party of $53,372. As of December 31, 2022, we had cash of $24,433. Net cash used in operating activities for the year ended December 31, 2022 was $798,067. …”see in full comparison
“As of December 31, 2024, we had cash of $60,305 Net cash used in operating activities for the year ended December 31, 2024 was $289,802. Our current liabilities as of December 31, 2024 were $1,118,671 and consisted of accounts payable and accrued liabilities of $958,276, and current portion of lease liability of $73.523and advance related party of $66,872 and a $20,000 Note Payable. As of December 31, 2023, we had cash of $6,607. Net cash used in operating activities for the year ended December 31, 2023 was $415,198. …”see in full comparison
During the year ended December 31,see in full comparison20232024 there was$0$17,226associated withassociated with interest incomegain ontherentnotepayable.receivable from WonderLeaf compared to interest income of $931 forDuring the year ended December 31,2022. During the year ended December 31, 20232024 there was$10,865$60,073 of interest expense compared to interest expense of$197$10,865 forthe year ended December 31, 2022. Duringthe year ended December 31,20222023thereaswasa$15,000result ofearnoutadditionalexpenseloansassociatedduringwith inventory earnout agreement. Duringthe year ended December 31,2022 the Company recorded an reserve for notes of $45,931 and advances of $35,769.2024.
“During the year ended December 31, 2024 the Company borrowed an additional $13,500 from a related party, $25,000 note payable, secured notes payable of $310,000 and repaid $5,000 of a note payable. During the year ended December 31, 2023 the Company borrowed an additional $53,372 from a related party and repaid $90,000 owed for an inventory earnout in addition the Company borrowed an additional $434,000 in a Note payable from a related party.”see in full comparison
Full comparison: every changed paragraph (9)
We sell a produce and sell
a line
of high quality pre-rolled marijuana joints. We also provide processing services associated with the production of joints for third parties.
Cost of Goods Sold
For the year ended December 31, 2024, the cost of goods sold (COGS) rose to $664,517, representing approximately 59% of sales, up from $442,289, or about 56% of sales, in 2023. This increase in the COGS-to-sales ratio reflects higher packaging and input costs for the company’s products. The overall rise in COGS was driven by increased prices for raw materials, packaging, and labor, particularly in the production of pre-rolled joints
Selling, general and administrative
expenses for the year ended December 31, 20232024 and December 31, 20222023 were $1,586,666$1,279,361 and $3,742,275,$1,586,666, respectively. The decrease was mainly
attributable to stock-based compensation of $2,995,500$268,193 during the year ended December 31, 20222024 compared to $380,382 during the year ended
December 31, 2023 and increase in salaries, partially offset by reduced marketing expenses. Professional fees were $192,476$97,532 and $155,888,$192,476,
respectively for the year ended December 31, 20232024 and December 31, 2022.2023. The increasedecrease in expenses was due to increaseddecreased legal and accounting
fees associated with the pending WonderLeaf, LLC acquisition. Consulting expense was $36,000$70,670 and $124,750,$36,000, for the year ended December
31, 2023 2024
and December 31, 2022,2023, respectively. The decreaseincrease was primarily due to reductionincreased in consulting expenses for sales and marketing during
during the year ended December 31, 2022.2024.
During the year ended December 31, 20232024 there was $0$17,226associated
with associated with
interest incomegain on therent notepayable. receivable from WonderLeaf compared to interest income of $931 forDuring the year ended December 31, 2022. During
the year ended December 31, 20232024 there was $10,865$60,073 of interest expense compared to interest expense
of $197$10,865 for the year ended December
31, 2022. During the year ended December 31, 20222023 thereas wasa $15,000result of earnoutadditional expenseloans associatedduring with inventory earnout agreement. During
the year ended December 31, 2022 the Company recorded an reserve for notes of $45,931 and advances of $35,769.2024.
As of December 31, 2024, we had cash of $60,305 Net cash used in operating activities for the year ended December 31, 2024 was $289,802. Our current liabilities as of December 31, 2024 were $1,118,671 and consisted of accounts payable and accrued liabilities of $958,276, and current portion of lease liability of $73.523and advance related party of $66,872 and a $20,000 Note Payable. As of December 31, 2023, we had cash of $6,607. Net cash used in operating activities for the year ended December 31, 2023 was $415,198. Our current liabilities as of December 31, 2023 were $1,078,957 and consisted of accounts payable and accrued liabilities of $961,255, and current portion of lease liability of $64,330 and advance related party of $53,372.
During the year ended December 31, 2024 the Company borrowed an additional $13,500 from a related party, $25,000 note payable, secured notes payable of $310,000 and repaid $5,000 of a note payable. During the year ended December 31, 2023 the Company borrowed an additional $53,372 from a related party and repaid $90,000 owed for an inventory earnout in addition the Company borrowed an additional $434,000 in a Note payable from a related party.
As of December 31, 2023, we
had cash of $6,607. Net cash used in operating activities for the year ended December 31, 2023 was $415,198. Our current liabilities as
of December 31, 2023 were $1,078,957 and consisted of accounts payable and accrued liabilities of $961,255, and current portion of lease
liability of $64,330 and advance related party of $53,372. As of December 31, 2022, we had cash of $24,433. Net cash used in operating
activities for the year ended December 31, 2022 was $798,067. Our current liabilities as of December 31, 2022 were $865,648 and consisted
of accounts payable and accrued liabilities of $295,818, notes payable- related party of $415,500, an inventory earn-out of $90,000 and
current portion of lease liability of $64,330.
During the year ended December 31, 2023 and 2022, the Company repaid
$0 and $2,500, respectively of a note payable from a related party and borrowed an additional $434,000 an $415,500, respectively. In addition,
the Company raised a total of $0 and $344,450, respectively from the sale of common stock and warrants during the years ended December
31, 2023 and 2022.
What changed in the latest 10-Q
Risk Factors
Not required for smaller reporting companies.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Accounts Receivable”
New heading “Stock Based Compensation”
Largest changes
“Accounts receivable are recorded at fair value on the date revenue is recognized. The Company provides provision for credit losses resulting from the inability of its customers to repay their obligation. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to repay, additional allowances may be required. The Company provides for potential uncollectible accounts receivable based on specific customer identification and historical collection experience adjusted for existing market conditions. …”see in full comparison
“Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out basis and net realizable value. Net realizable value is defined as sales price less cost of completion, disposition and transportation and a normal profit margin.”see in full comparison
Cost of goods sold for the three months endedsee in full comparisonJuneSeptember 30, 2025 was$193,054$233,770 compared to$172,046$162,476 for the three months endedJuneSeptember 30, 2024. The increase was a direct result of the increase in sales. The increase in cost of sales was due to increases in purchases of raw materials, packaging, and labor associated with the production of pre-rolled joints.LaborTheanddecreaseinputinmaterials,cost of goods sold, as a percentage of sales,bothwasdecreasedprimarilywhendrivencomparedbytodecreases in all categories as theprior year period. Packaging and production materials, as a percentage of sales,company increasedwhenefficienciescomparedwithtorevenuethe prior yeargrowth.
“We utilize the asset and liability method of accounting for income taxes. We recognize deferred tax liabilities or assets for the expected future tax consequences of temporary differences between the book and tax basis of assets and liabilities. We regularly assess the likelihood that our deferred tax assets will be recovered from future taxable income. We consider projected future taxable income and ongoing tax planning strategies in assessing the amount of the valuation allowance necessary to offset our deferred tax assets that will not be recoverable. …”see in full comparison
Full comparison: every changed paragraph (26)
Through
our wholly ownedwholly-owned subsidiary,
Bespoke Extracts Colorado, LLC, we operate a marijuana infused products manufacturing facility in Colorado.
On December 2, 2021, Bespoke
Extracts Colorado, LLC, a newly formed wholly owned
wholly-owned subsidiary of the Company entered into an asset purchase agreement with WonderLeaf,
and on December 7, 2021, Bespoke Colorado
and WonderLeaf entered into an amendment to such asset purchase agreement (as amended, the “WonderLeaf
Purchase Agreement”).
Pursuant to the WonderLeaf Purchase Agreement, Bespoke Colorado agreed to purchase from WonderLeaf, and WonderLeaf
agreed to sell to Bespoke
Colorado, certain assets of WonderLeaf, including a license to manufacture marijuana-infused products, existing
inventory, and extraction
equipment and ancillary items, all as further set forth in the WonderLeaf Purchase Agreement, for a purchase
price of $50,000, to be paid
in shares of common stock of the Company. The Company issued a total of 222,223 shares of common stock ($0.225
per share), the fair market
value on the date of issuance.
Beginning January 1, 2025,
we rebranded our product offerings in Colorado as The Joint Company.
Results of Operations for the three months
ended JuneSeptember 30, 2025 and JuneSeptember 30, 2024
Sales
during the three months ended JuneSeptember 30, 2025 were $390,553 $467,945
compared to $278,163$277,471 for the three months ended JuneSeptember 30, 2024. The increase
in sales was a
result of increased product sales of pre-rolled joints to licensed dispensaries in Colorado as well as increased joint
production services
for third parties. The increase in joint sales was primarily driven by new products in addition to an increase in sales of Fresh Joint
products. The increase in sales was also a result of increased processing services for third parties.
Cost
of goods sold for the three months ended JuneSeptember 30, 2025 was $193,054
$233,770 compared to $172,046$162,476 for the three months ended JuneSeptember 30, 2024. The
increase was a
direct result of the increase in sales. The increase in cost of sales was due to increases in purchases of raw materials,
packaging, and
labor associated with the production of pre-rolled joints. LaborThe anddecrease inputin materials,cost of goods sold, as a percentage of sales, bothwas decreasedprimarily
whendriven comparedby todecreases in all categories as the prior year period. Packaging and production materials, as a percentage of sales,company increased whenefficiencies comparedwith torevenue the prior
yeargrowth.
Selling,
general and administrative expenses for the three months Juneended September 30, 2025 and JuneSeptember 30, 2024 were $337,625$260,228 and $325,885,$361,393, respectively.
The The
decrease was mainly attributable to stock-based compensation of $0$10,496 for the three months ended JuneSeptember 30, 2025 compared to $59,855 for the
three months ended June 30, 2024 and decrease in rent paid of $12,000$47,679 for the three months ended JuneSeptember 30, 20252024 compared to $36,000 for
the three months ended June 30, 2024. These itemsand were partially offset by increasesincrease in auditsalaries. Professional fees were $27,838
and $16,070, respectively, for the three months ended September 30, 2025 and accountingSeptember expense,30, sales2024. commissionsThe increase in professional fees was
anddue payrollto an increase in bookkeeping expense. The decrease in expenses was due to decreased general legal fees.
Our
net loss for the three months ended JuneSeptember 30, 2025 was $205,106, $78,088,
or $0.02$0.01 per share, compared to a net loss for the three months ended
June September 30, 2024 of $260,895,$275,613, or $0.03 per share.
Results of Operations for the sixnine months ended
JuneSeptember 30, 2025 and JuneSeptember 30, 2024
Sales during the sixnine months ended JuneSeptember 30, 2025 were $653,712$1,121,657
compared compared
to $538,591$816,062 for the sixnine months ended JuneSeptember 30, 2024. The increase in sales was a result
of increased product sales of pre-rolled joints
to licensed dispensaries in Colorado as well as increased joint production services for
third parties. The increase in joint sales was
primarily driven by new products in addition to an increase in sales of Fresh Joint products.
The increase in sales was also a result
of increased processing services for third parties.
Cost
of goods sold for the sixnine months ended JuneSeptember 30, 2025 was $345,434$579,204 compared to $329,893$492,369 for the sixnine months ended JuneSeptember 30, 2024.
The increase
was a direct result of the increase in sales. The increase in cost of sales was due
to increases in purchases of raw materials, packaging,
and labor associated with the production of pre-rolled joints. The decrease in
cost of goods sold, as a percentage of sales, was primarily
driven by decreases in all categories as the company increased efficiencies
with revenue growth.
Selling,
general and administrative expenses for the sixnine months JuneSeptember 30, 2025 and JuneSeptember 30, 2024 were $650,778$911,006 and $673,744,$1,035,137, respectively.
The decrease
was mainly attributable to stock-based compensation of $0$14,350 for the sixnine months ended JuneSeptember 30, 2025 compared to $82,079 $225,551
for the sixnine months
ended JuneSeptember 30, 2024 and waswere partially offset by increase in salaries and product delivery expense.salaries. Professional fees were $64,796$92,634 and $104,070,
$88,000, respectivelyrespectively, for the sixnine months ended JuneSeptember 30, 2025 and JuneSeptember 30, 2024. The decrease in expenses was due to decreased general
legal fees.
Our
net loss for the sixnine months ended JuneSeptember 30, 2025 was $465,627, $543,715
or $0.04$0.05 per share, compared to a net loss for the sixnine months ended June
September 30, 2024 of $575,013,$850,626, or $0.06$0.08 per share.
As
of JuneSeptember 30, 2025, we had cash of $1,363.$16,743. Net cash used in operating activities for the sixnine months ended JuneSeptember 30, 20252024 was
$123,562. $103,942.
Our current liabilities as of JuneSeptember 30, 2025 were $ 1,485,466$1,872,581 and consisted of accounts payable and accrued liabilities of
$1,344,241,$1,392,869, current portion of lease liability of $59,353$52,650, note payable of $25,000, secured notes payable of $335,190 and advances payable
related party of $66,872. As of JuneSeptember 30, 2024,
we had cash of $24,791.$60,305. Net cash used in operating activities for the sixnine months
ended JuneSeptember 30, 2024 was $125,316.$153,662. Our current
liabilities as of JuneSeptember 30, 2024 were $ 1,573,439$1,078,957 and consisted of accounts payable
and accrued liabilities of $1,329,393,$961,255, current
portion of lease liability of $64,330$64,330, secured notes payable of $120,394 and advances payable
related party of $61,872.
During
the six months ended June 30, 2025 the Company borrowed $0 from a related party. During the six months ended June 30, 2024 the Company
borrowed $8,500 from a related party.
During
the nine months ended September 30, 2025 the Company borrowed an additional $12000, repaid $7,000 note payable and secured notes payable
of $75,000. During the nine months ended September 30, 2024 the Company borrowed an additional $8,500 from a related party, $25,000 note
payable and secured notes payable of $135,000 The
unaudited condensed consolidated financial statements included in this report have been prepared assuming a continuation of the Company
as a going concern. The Company had negative cash flows from operations for the sixnine months ended JuneSeptember 30, 2025 and the year ended
December December
31, 2024 and had a working capital deficit at JuneSeptember 30, 2025 and December 31, 2024. This raises substantial doubt about our
ability to
continue as a going concern.
UntilWe
recently, we have not generated positive cash flows from operating activities. Our primary source of capital has been from the sale of
equity and convertible
debt securities. Our primary use of capital has been for professional fees and selling, general and administrative
costs. We have no committed
sources of capital and will need to raise additional capital to continue and expand our operations. Additional
capital may not be available
on terms acceptable to us, or at all.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reported periods. The more critical accounting estimates include estimates related to revenue recognition and accounts receivable allowances. We also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results, which are described below and in Note 1 to our financial statements appearing elsewhere in this report.
Accounts Receivable
Accounts receivable are recorded at fair value on the date revenue is recognized. The Company provides provision for credit losses resulting from the inability of its customers to repay their obligation. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to repay, additional allowances may be required. The Company provides for potential uncollectible accounts receivable based on specific customer identification and historical collection experience adjusted for existing market conditions. If market conditions decline, actual collection experience may not meet expectations and may result in decreased cash flows and increased bad debt expense.
Inventory
Inventories are stated at the lower of cost or net realizable value. Cost is determined by the first-in, first-out basis and net realizable value. Net realizable value is defined as sales price less cost of completion, disposition and transportation and a normal profit margin.
Income Taxes
We utilize the asset and liability method of accounting for income taxes. We recognize deferred tax liabilities or assets for the expected future tax consequences of temporary differences between the book and tax basis of assets and liabilities. We regularly assess the likelihood that our deferred tax assets will be recovered from future taxable income. We consider projected future taxable income and ongoing tax planning strategies in assessing the amount of the valuation allowance necessary to offset our deferred tax assets that will not be recoverable. We have recorded and continue to carry a full valuation allowance against our gross deferred tax assets that will not reverse against deferred tax liabilities within the scheduled reversal period. If we determine in the future that it is more likely than not that we will realize all or a portion of our deferred tax assets, we will adjust our valuation allowance in the period we make the determination. We expect to provide a full valuation allowance on our future tax benefits until we can sustain a level of profitability that demonstrates our ability to realize these assets.
Stock Based Compensation
Stock options and warrants issued to consultants and other non-employees as compensation for services provided to the Company are accounted for based on the fair value of the services provided or the estimated fair market value of the option or warrant, whichever is more reliably measurable, and in accordance FASB ASC 718, Compensation-Stock Compensation, including related amendments and interpretations.
BSPK insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding BSPK (13F)
None of the 59 investors we track reported a position in their latest 13F.