IVFH 10-K & 10-Q changes, risk factors and insider trading
Innovative Food Holdings Inc. · OTC · Wholesale-Groceries, General Line · CIK 312257 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our recent acquisitions, dispositions, discontinued operations, facility closures, and leadership transition may create operational disruption and uncertainty and could adversely affect our business.”
New heading “Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.”
Removed heading “Pandemics and epidemics, natural disasters, terrorist activities, political unrest, and other outbreaks could disrupt our operations, which could materially and adversely affect our business, financial condition, and results of operations.”
Removed heading “We are and may be subject to regulatory compliance and legal uncertainties.”
Removed heading “We may not be able to realize benefits of acquisitions or successfully integrate the businesses we acquire.”
Removed heading “Our products may infringe the intellectual property rights of others, which may cause us to incur unexpected costs or potentially prevent us from selling our products.”
Removed heading “We utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on our variable rate indebtedness, and we are exposed to risks related to counterparty credit worthiness or non-performance of these instruments.”
Largest changes
see in full comparisonWeAscurrentlyof December 31, 2025, we havemultiplealoansloan with MapleMarkBank. All of these contain cross-default provisions which means that all outstanding borrowings can be accelerated and can become immediately due and payable in the event of a default in any of such loans, which includes, among other things, failure to comply with certain financial covenants or breach of representations contained in the loan documents, defaults under other loans or obligations or involvement in bankruptcy proceedings (as such terms are defined in the loan documents). We are alsoBank subject to negative covenants which, during the life of the loans, prohibit and/or limit us from, among other things, incurring certain types of other debt, acquiring other companies, making certain expenditures or investments, and changing the character of our business. Any material change to the business and economic landscape negatively impacting our business, including among other things, an outbreak of infectious disease, a pandemic or a similar public health threat, such as the COVID-19 outbreak, or bank failures, inflation, recession, or other significant economic turmoil, could adversely impact our ability to comply with such covenants. Our failure to comply with such covenants or any other breach of the loan documents could cause a default and we may then be required to repay all of such borrowings with capital from other sources. Under these circumstances, other sources of capital may not be available or may be available only on unfavorable terms. In the event of a default, it is possible that our assets and certain of our subsidiaries’ assets may be attached or seized by the lenders. Any (i) failure by us to comply with the covenants or other provisions of the loan documents, (ii) difficulty in securing any required future financing, or (iii) any such seizure or attachment of assets could have a material adverse effect on our business and financial condition. This has not occurred in the past.
“As of December 31, 2025, we have identified material weakness existing in the Company’s internal control over financial reporting related to information technology general controls over certain applications that support the Company’s financial reporting processes. We are working to remediate the material weaknesses as further discussed in Item 9A of this Amended 2024 Annual Report. …”see in full comparison
“We utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on our variable rate indebtedness, and we are exposed to risks related to counterparty credit worthiness or non-performance of these instruments.”see in full comparison
“Pandemics and epidemics, natural disasters, terrorist activities, political unrest, and other outbreaks could disrupt our operations, which could materially and adversely affect our business, financial condition, and results of operations.”see in full comparison
“Global pandemics, epidemics in China or elsewhere in the world, or fear of spread of contagious diseases, such as Ebola virus disease (EVD), coronavirus disease 2019 (COVID-19), Middle East respiratory syndrome (MERS), severe acute respiratory syndrome (SARS), H1N1 flu, H7N9 flu, and avian flu, as well as hurricanes, earthquakes, tsunamis, or other natural disasters could disrupt our business operations, reduce or restrict our supply of products and services, incur significant costs to protect our employees and facilities, or result in regional or global economic distress, which may …”see in full comparison
“The success of our business depends, in part, on third parties and factors over which we have limited control. …”see in full comparison
Full comparison: every changed paragraph (49)
As
of December 31, 2024,2025, we had an accumulated deficit of $36,209,764.$38,275,076. We had unrestricted cash at December 31, 2025 of $927,468, a decrease
of $350,620 compared to December 31, 2024. We also had restricted cash of $507,517, a decrease of $352,264 compared to December 31, 2024.
We cannot assure you that we can achieve profitability on a quarterly
or annual basis in the future. If revenues grow more slowly than
we anticipate, or if operating expenses exceed our expectations or cannot
be adjusted accordingly, or other extraordinary events occur,
we will incur losses. Our potential success is contingent upon the effective
development and commercialization of our services and products,
as well as the continued expansion of our product portfolio and customer
base, for which we can provide no assurance. Any future success
we may achieve will be influenced by numerous factors, including those
beyond our control or presently unforeseeable. These factors may
include changes in or increased levels of competition, including the
entry of additional competitors and increased success by existing
competitors, changes in general economic conditions, increases in operating
costs, including costs of supplies, personnel, marketing
and promotions, reduced margins caused by competitive pressures, taxes, and
other economic and non-economic factors. These conditions
may have a materially adverse effect upon us or may force us to curtail operations.
In addition, we could require additional funds to
sustain and expand our sales and marketing activities, particularly if a well-financed
competitor emerges. We can give no assurance that
financing will be available in amounts or on terms acceptable to us, if at all. Our
inability in such instance to obtain sufficient funds
from our operations or external sources could require us to curtail operations.
In
2003, Next Day Gourmet initially contracted
with our subsidiary, Food Innovations, Inc. (“Food Innovations”), to handle the
distribution of over 3,000 perishable and
specialty food products to customers of USF. Effective January 1, 2018, we executed a contract
amendment between Food Innovations, our
wholly owned subsidiary, and USF which provides for no limit on automatic annual renewals
thereafter if no party gives the other 30 days’
notice of its intent not to renew. Our sales through USF generated gross revenues
for us of $26,914,423 in the year ended December 31,
2025, and $31,185,864 in the year ended December 31, 2024, and $34,070,052 in the year ended December 31, 2023.2024. Those amounts contributed
43% 37% and 48%43% of our total consolidated sales for each
of 20242025 and 2023,2024, respectively. Other significant customers include Gate Gourmet and Sam’s
Club. During the years ended December
31, 20242025 and 2023,2024, sales to Gate Gourmet amounted to $11,574,069,$11,253,657, or 14% of total consolidated sales, and $11,930,216, or 16% of total sales, and $10,742,556,
or 15% of totalconsolidated sales, respectively. During the years ended December 31, 20242025 and 2023,2024, sales to Sam’s Club amounted to $5,520,214,$8,563,465
or 8%12% of total consolidated sales, and $0,$5,863,377, or 8%, respectively. With the discontinuance of the retail cheese business, we do
not anticipate further sales with Sams. Our sales efforts within specialty foodservice are for the most part substantially dependent upon
upon the efforts of the USF sales force. Although we have generated revenues from customers other than USF, if our relationship with
USF were
to be materially changed and we may not be able to secure alternative revenue streams to mitigate the impact of such a loss,
which may
result in us significantly curtailing our operations.
Our
operational results have fluctuated in the past
and may fluctuate in the future, depending upon a variety of factors, including changes
in economic conditions, and shifts in the timing
of holiday related purchases. Although our annual sales have historically had a significant
seasonal aspect, this has become less pronounced
following the divestment of the assets of igourmet.com and M Innovations LLC (“Mouth”). However, we have expanded our distribution
of specialty cheeses, which are more seasonally relevant during the fourth quarter. Due to the seasonal nature of this business, we would
be significantly and disproportionately affected by unforeseen events such as terrorist attacks or economic shocks (including those caused
by worldwide pandemics or other factors) that negatively impact the retail environment or consumer buying patterns during our key selling
season. Additionally, events such as pandemics, strikes, or weather-related delays that interfere with the shipment of goods during the critical
critical holiday season would adversely affect us.
The Company has evaluated the potential impact of recently enacted legislation, including but not limited to the OBBBA, on its business, financial condition, results of operations, and cash flows. Based on management’s review, the Company concluded the legislation did not have a material impact on its financial condition, results of operations, or cash flows. However, the legislation is complex and may be subject to additional regulatory guidance, interpretation, or implementation requirements. The Company will continue to monitor developments and assess any potential effects as further guidance becomes available.
Our
future success depends to a significant degree on the skills, experienceexperience, and efforts of key personnel in our senior management,management team,
whose
vision for ourthe company,Company, knowledge of our businessbusiness, and expertise would be difficult to replace. IfWe anyhave oneexperienced significant
turnover in senior leadership and our Board of ourDirectors key(the employees“Board”) leaves,during the past 2 years, including the departures
isof unableRobert toWilliam work,Bennett oras failsChief toExecutive performOfficer and wedirector, areHank unableCohn to findas a qualifieddirector replacement,and weSam mayKlepfish beas unablea to execute our business strategy.director.
In October 2025, Gary Schubert, our former Chief Financial Officer, was appointed Chief Executive Officer, and we are currently conducting a search for a new Chief Financial Officer. Mr. Schubert had not previously served as Chief Executive Officer of a public company prior to his appointment. If any of our key employees or directors leave, are unable to work, or fail to perform, or if we are unable to recruit and retain qualified replacements and successfully manage leadership transitions, we may be unable to execute our business strategy and our business, financial condition, results of operations, and stock price could be adversely affected.
We
may be unable to manage our growth or operational complexity, which could result inimpair our being unableability to maintain our operations.operations and execute our
business model.
Our strategy involves operating multiple distribution channels and managing a large supplier base and product portfolio, including Local Distribution (Chicago and Denver operations), National Distribution, and Digital Channels (drop-ship and e-commerce). The execution of this strategy requires effective operational controls, forecasting and procurement discipline, reliable technology systems, and sufficient management and personnel resources. As we seek to increase sales, expand our supplier relationships, and broaden our product assortment, we may experience additional complexity in inventory management, fulfillment operations, customer service, vendor onboarding, and compliance obligations.
We may not be able to successfully increase sales to existing customers or attract new customers at the rate we anticipate, and we may not achieve the operational efficiencies or economies of scale required to sustain profitability. Any expansion of our operations could place increased demands on our management team, systems, internal controls, and working capital. Our ability to execute may also depend on our ability to obtain additional capital on acceptable terms, if needed. We can give no assurance that we will be able to successfully implement growth initiatives, finance expansion, or manage a larger operation. If our systems, procedures, or controls are not adequate to support our operational requirements, or if we fail to manage growth and complexity effectively, our business, financial condition, results of operations, liquidity, and stock price could be adversely affected.
Our recent acquisitions, dispositions, discontinued operations, facility closures, and leadership transition may create operational disruption and uncertainty and could adversely affect our business.
In recent periods, we have undertaken significant strategic actions that have changed our operating footprint, business mix, and leadership structure. These actions have included acquisitions, divestitures, discontinued operations, and operational wind-down activity, each of which has required management attention, integration and restructuring efforts, and operational adjustments.
Acquisitions. In November 2024, we acquired Golden Organics and, through our Golden Organics operations, acquired substantially all of the operating assets of LoCo in December 2024. Integration of acquired operations can involve challenges related to personnel, systems, logistics, vendor and customer relationships, controls, and operational processes, and may take longer or cost more than anticipated.
Dispositions and discontinued operations. We have also exited or divested certain businesses and assets in recent periods, including the sale of substantially all assets related to marketing and selling certain artisan foods and related drop-ship fulfillment services including the website www.igourmet.com (which closed October 23, 2024), as well as other discontinued operations referenced in our SEC filings. In March 2026, we sold real property located at 220 Oak Hill Road, Mountaintop, Pennsylvania 18707, together with all rights, title, improvements, easements, and appurtenant interests, as well as certain personal property, contracts, and intangibles of Innovative Properties. These actions have required changes to personnel, systems, and processes and may continue to require management attention and operational resources.
Operational changes and facility actions. We have also undertaken operational changes, including facility-related actions and business wind-down activity. Such actions may require additional expenditures, increase operational complexity during transition periods, and create execution risk related to fulfillment, customer service, workforce management, and vendor coordination.
Leadership transition. In addition, we have experienced changes in senior leadership in recent periods, including a transition in the Chief Executive Officer role in 2025. Leadership transitions can create execution risk, including disruption to strategic planning, operational decision-making, and internal controls, and may impair our ability to retain key personnel or maintain relationships with customers, suppliers, and other business partners. If we are unable to effectively manage leadership transitions, maintain continuity of operations, and sustain adequate management and financial oversight, our business, financial condition, results of operations, liquidity, and stock price could be adversely affected.
Collectively, these acquisitions, dispositions, discontinued operations, operational changes, and leadership transition may create uncertainty among employees, customers, suppliers, and investors and may contribute to the perception that our business remains in transition. They may also divert management attention, increase costs, and disrupt operations. If we are unable to stabilize and execute our current operating model and strategy, or if we experience further unanticipated disruption, our business, financial condition, results of operations, liquidity, and stock price could be adversely affected.
Our
strategy for growth is focused on continued enhancements and expansion to our existing business model, offering a broader range of services
and products, affiliating with additional vendors and through possible joint ventures. Pursuing this strategy presents a variety of challenges.
We may not experience an increase in our services to our existing customers, and we may not be able to achieve the economies of scale,
or provide the business, administrative and financial services, required to sustain profitability from servicing our existing and future
customer base. Should we be successful in our expansion efforts, the expansion of our business would place further demands on our management,
operational capacity and financial resources. To a significant extent, our future success will be dependent upon our ability to maintain
adequate financial controls and reporting systems to manage a larger operation and to obtain additional capital upon favorable terms.
We can give no assurance that we will be able to successfully implement our planned expansion, finance its growth, or manage the resulting
larger operations, if any. In addition, we can give no assurance that our current systems, procedures or controls will be adequate to
support any expansion of our operations. Our failure to manage our growth effectively could have a material adverse effect on our business,
financial condition and results of operations.
Shortages
in supplies of the food products we sell may impair our ability to provide our services. Our vendors are independent and we cannot guarantee
their ability to source the products that we sell. Many of our products are wild-caught, and we cannot guarantee their availability in
the future. Unforeseen strikes and labor disputes as well as adverse weather conditions may result in our inability to deliver our products
in a timely manner. Also, if our suppliers fail to supply quality product in a timely and effective manner it could lead to an increase
in recalls and customer litigation against us which could harm our brands’ images and negatively affect our business and operating
results. The success of our business depends, in part, on our ability to timely and effectively deliver merchandise (e.g. fresh products)
to our customers. We cannot control all of the various factors that might affect our fulfilment rates in direct-to-customer sales. We
are heavily dependent upon one national carrier for the delivery of our fresh products to our customers. Accordingly, we
are subject to risks, including labor disputes, union organizing activity, inclement weather, technology breakdowns, natural disasters,
the closure of their offices or a reduction in operational hours due to an economic slowdown or health related crisis, possible acts
of terrorism, their ability to provide delivery services to meet our shipping needs, disruptions or increased fuel costs, and costs associated
with any regulations to address climate change. Since our customers rely on us to deliver their orders daily ortypically within 24-72 hours,
delivery delivery
delays could significantly harm our business.
InIf
order to be successful, we mustare be ableunable to enhance our existing products and services or develop and introduce new products and services toin respond
response to changing
market demand.demand, our results of operations could be adversely affected.
Demand for specialty food products and services can change based on customer preferences, competition, pricing dynamics, supply availability, and broader economic conditions. Our ability to respond to these changes may depend on our ability to identify attractive offerings, source or develop them, and execute fulfillment and service requirements on a timely and cost-effective basis. We may be unable to develop, introduce, or market enhancements to our existing offerings or new offerings at all, or we may be unable to do so profitably due to constraints related to facilities, labor, systems, supplier capabilities, or logistics. For example, we may identify demand for certain value-added or processing-related offerings, but may be unable to scale those offerings profitably within our existing operating footprint. If we fail to respond effectively to customer demand or competitive changes, we could experience reduced sales, margin pressure, loss of customers, or increased operating costs.
The
markets in which we operate are characterized by frequently changing customer demand and the introduction of new “flavors of the
month” as certain foods become more and less popular. Changes in customer preferences and buying trends may also affect our products
differently. We must be able to stay current with preferences and trends in specialty food and address the customer tastes for each of
our target customer demographics. We must also be able to identify and adjust products to cater to customer demands and dietary needs.
For example, a change in customer preferences for gluten free items may not correlate to a similar change in buying trends for other
specialty food. In order to be successful, we must be able to enhance our existing products and anticipate and develop and introduce
new products and services to respond to changing market demand for new tastes. The development and enhancement of services and products
entails significant risks, including:
If
we misjudge either the market for our products or our customers’ purchasing habits, our sales may decline significantly which would
negatively impact our business and operating results.
Any
acquisitions we makecomplete, orand integrations of acquisitions we have madecompleted, could result in difficulties in successfully managing our
business and consequentlycould harm our financial
condition. condition and results of operations.
We have completed acquisitions in recent periods, and we have experienced integration challenges from time to time, including difficulties aligning operating processes, systems, and controls; retaining personnel and customers of the acquired business; and devoting significant management attention and resources to integration and operational stabilization. We may not realize expected operational or commercial benefits, including anticipated synergies, cross-selling opportunities, or channel expansion initiatives, and integration efforts may take longer or cost more than expected. In addition, service disruptions or performance issues during integration periods may harm our reputation and customer relationships. Similar challenges could occur in connection with any future acquisitions or continued integration of recent acquisitions, which could adversely affect our results of operations, liquidity, and financial condition.
Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.
We are required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which requires management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting. Our independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial reporting until the later of the year following our first annual report required to be filed with the SEC or the date we are no longer an emerging growth company and are an accelerated or large accelerated filer.
We may need to undertake various actions, such as implementing new internal controls and procedures and hiring additional accounting or internal audit staff. In addition, we may identify material weaknesses in our internal control over financial reporting that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404.
If we identify weaknesses in our internal control over financial reporting, are unable to comply with the requirements of Section 404 in a timely manner or to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by Nasdaq on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.
As of December 31, 2025, we have identified material weakness existing in the Company’s internal control over financial reporting related to information technology general controls over certain applications that support the Company’s financial reporting processes. We are working to remediate the material weaknesses as further discussed in Item 9A of this Amended 2024 Annual Report. If we cannot successfully remediate identified control deficiencies, including any current or future material weaknesses in our internal control over financial reporting; the accuracy and timing of our financial reporting may be adversely affected; our liquidity, access to capital markets and perceptions of our creditworthiness may be adversely affected; we could face difficulty forecasting our financial results accurately, impacting decision-making by investors and analysts; we may be unable to maintain compliance with securities laws, stock exchange listing requirements and debt instruments’ covenants regarding the timely filing of periodic reports; we may be subject to regulatory investigations and penalties; investors may lose confidence in our financial reporting; and our common stock price may decline.
We
seek to expand by acquiring complementary businesses or assets in our current or ancillary markets. We cannot accurately predict the
timing, size and success of our acquisition efforts and the associated capital commitments that might be required. We expect to face
competition for acquisition candidates, which may limit the number of acquisition opportunities available to us and may lead to higher
acquisition prices. There can be no assurance that we will be able to identify, acquire or profitably manage additional businesses or
successfully integrate acquired businesses, if any, without substantial costs, delays or other operational or financial difficulties.
In addition, acquisitions involve a number of other risks, including:
Client
dissatisfaction or performance problems at a single acquired business could negatively affect our reputation. The inability to acquire
businesses on reasonable terms or successfully integrate and manage acquired companies, or the occurrence of performance problems at
acquired companies, both prior and after acquisition, could result, or has resulted, in dilution, potential violations of bank covenants,
unfavorable accounting treatment or one-time charges, and difficulties in successfully managing our business, requiring us to expend
additional effort and expense in obtaining waivers, settling matters and otherwise addressing any such issues.
Our business depends on internal technology systems and third-party platforms that support core operations, including order management, inventory and warehouse processes, logistics coordination, product and pricing data management, and integrations with customers, vendors, and other partners, and we may have limited control over required technology interfaces. These systems are subject to limitations, errors, failures, downtime, and integration disruptions (which we have experienced from time to time), as well as cybersecurity incidents and evolving privacy and data protection requirements. Any of these events could disrupt operations, increase costs, and harm customer or vendor relationships and our reputation.
The
success of our business depends, in part, on third parties and factors over which we have limited control. We are also vulnerable to
certain additional risks and uncertainties associated with our e-commerce and product catalog websites, our internal IT systems and IT
integration with our partners, including: changes in required technology interfaces; system issues and limitations, website downtime
and other technical failures; internet connectivity issues; costs and technical issues as we upgrade our website software; computer viruses;
changes in applicable federal and state regulations; security breaches; and consumer privacy concerns. In addition, we must keep up to
date with competitive technology trends, including the use of new or improved technology, creative user interfaces and other e-commerce
marketing tools such as paid search and mobile applications, among others, which may increase our costs and which may not succeed in
increasing sales or attracting customers. Our failure to successfully respond to these risks and uncertainties might adversely affect
our sales, as well as damage our reputation and brands.
Pandemics
and epidemics, natural disasters, terrorist activities, political unrest, and other outbreaks could disrupt our operations, which could
materially and adversely affect our business, financial condition, and results of operations.
Global
pandemics, epidemics in China or elsewhere in the world, or fear of spread of contagious diseases, such as Ebola virus disease (EVD),
coronavirus disease 2019 (COVID-19), Middle East respiratory syndrome (MERS), severe acute respiratory syndrome (SARS), H1N1 flu, H7N9
flu, and avian flu, as well as hurricanes, earthquakes, tsunamis, or other natural disasters could disrupt our business operations, reduce
or restrict our supply of products and services, incur significant costs to protect our employees and facilities, or result in regional
or global economic distress, which may materially and adversely affect our business, financial condition, and results of operations.
Actual or threatened war, terrorist activities, political unrest, civil strife, and other geopolitical uncertainty could have a similar
adverse effect on our business, financial condition, and results of operations. Any one or more of these events may impede our production
and delivery efforts and adversely affect our sales results, or even for a prolonged period of time, which could materially and adversely
affect our business, financial condition, and results of operations.
We
are also vulnerable to natural disasters and other calamities. We cannot assure you that we are adequately protected from the effects
of fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks, or similar
events. Any of the foregoing events may give rise to interruptions, damage to our property, delays in production, breakdowns, system
failures, technology platform failures, or internet failures, which could cause the loss or corruption of data or malfunctions of our
facilities, as well as adversely affect our business, financial condition, and results of operations.
We
have significant operations in Colorado, Illinois, Pennsylvania, and in other areas where weather or other events such as an earthquake, tsunami,
tsunami, hurricane, flood, fire, high winds, extreme heat or cold, or other natural or manmade events, could disrupt our operations and impair
impair production or distribution of our products, damage inventory, interrupt critical functions, or otherwise affect our business negatively,
adversely affecting our results of operations.
We
are and may be subject to regulatory compliance and legal uncertainties.
Changes
in government regulation and supervision or proposed Department of Agriculture or other regulatory agency reforms or rule changes could
impair our sources of revenue and limit our ability to expand our business. In the event any future laws or regulations are enacted which
apply to us, we may have to expend funds and/or alter our operations to ensure compliance. New legislation or regulation, or the application
of existing laws and regulations to the areas related to our business could add additional costs and risks to doing business. In addition,
we are subject to regulations applicable to businesses generally and laws and regulations directly applicable to communications over
the Internet and access to e-commerce. In addition, it is possible that a number of laws and regulations may be adopted with respect
to the Internet and other areas of our business, covering issues such as user privacy, pricing, content, copyrights, distribution, antitrust,
taxation and characteristics and quality of products and services.
We
may not be able to realize benefits of acquisitions or successfully integrate the businesses we acquire.
Our
growth strategy includes growth through strategic acquisitions. If we are unable to integrate acquired businesses successfully or to
realize anticipated economic, operational, and other benefits and synergies in a timely manner, our profitability could be adversely
affected. Integration of an acquired business may be more difficult when we acquire a business in a market in which we have limited expertise
or with a company culture different from ours. A significant expansion of our business and operations, in terms of geography or magnitude,
could strain our administrative and operational resources. Additionally, we may be unable to retain qualified management and other key
personnel employed by acquired companies and may fail to build a network of acquired companies in new markets. We could face significantly
greater competition from broadline foodservice distributors in these markets than we face in our existing markets.
We
regularly evaluate opportunities to acquire other companies. To the extent our future growth includes acquisitions, we may not be able
to obtain any necessary financing for such acquisitions, consummate such potential acquisitions effectively, effectively and efficiently
integrate any acquired entities, or successfully expand into new markets.
In
connection with our acquisition of businesses in the future, if any, we may decide to consolidate the operations of any acquired business
with our existing operations or make other changes with respect to the acquired business, which could result in special charges or expenses.
Our results of operations also may be adversely affected by expenses we incur in making acquisitions, by amortization of acquisition-related
intangible assets with definite lives and by additional depreciation attributable to acquired assets. Moreover, in connection with contemplated
or completed acquisitions or divestitures, we may incur related asset impairment charges that reduce our profitability.
Our
products may infringe the intellectual property rights of others, which may cause us to incur unexpected costs or potentially prevent
us from selling our products.
We
cannot be certain that our products do not and will not infringe intellectual property rights of others. We may be subject to legal proceedings
and claims in the ordinary course of our business, including claims of alleged infringement of intellectual property rights of third
parties by us or our customers in connection with their use of our products. Any such claims, whether or not meritorious, could result
in costly litigation and divert the efforts of our management and personnel. Moreover, should we be found liable for infringement, we
may be required to enter into licensing agreements (if available on acceptable terms or at all) or to pay damages and to cease making
or selling certain products. Any of the foregoing could cause us to incur significant costs and prevent us from manufacturing or selling
our products.
WeAs
currentlyof December 31, 2025, we have multiplea loansloan with MapleMark Bank. All of these contain cross-default provisions which means that all outstanding borrowings
can be accelerated and can become immediately due and payable in the event of a default in any of such loans, which includes, among other
things, failure to comply with certain financial covenants or breach of representations contained in the loan documents, defaults under
other loans or obligations or involvement in bankruptcy proceedings (as such terms are defined in the loan documents). We are alsoBank subject
to negative covenants which, during the life of the loans, prohibit
and/or limit us from, among other things, incurring certain types
of other debt, acquiring other companies, making certain expenditures
or investments, and changing the character of our business. Any
material change to the business and economic landscape negatively impacting
our business, including among other things, an outbreak of
infectious disease, a pandemic or a similar public health threat, such as
the COVID-19 outbreak, or bank failures, inflation, recession,
or other significant economic turmoil, could adversely impact our ability
to comply with such covenants. Our failure to comply with such
covenants or any other breach of the loan documents could cause a default
and we may then be required to repay all of such borrowings
with capital from other sources. Under these circumstances, other sources
of capital may not be available or may be available only on
unfavorable terms. In the event of a default, it is possible that our assets
and certain of our subsidiaries’ assets may be attached
or seized by the lenders. Any (i) failure by us to comply with the covenants
or other provisions of the loan documents, (ii) difficulty
in securing any required future financing, or (iii) any such seizure or attachment
of assets could have a material adverse effect on
our business and financial condition. This has not occurred in the past.
In addition, subsequent to year end, the Company repaid the MapleMark Bank loan in full on March 6, 2026 and, as a result, the negative covenants and related restrictions under that facility are no longer applicable. However, the Company may in the future enter into other financing arrangements that contain similar covenants and restrictions.
We
utilize derivative financial instruments to reduce our exposure to market risks from changes in interest rates on our variable rate indebtedness,
and we are exposed to risks related to counterparty credit worthiness or non-performance of these instruments.
We
enter into pay-fixed interest rate swaps to limit our exposure to changes in variable interest rates. Such instruments may result in
economic losses should interest rates decline to a point lower than our fixed rate commitments. We are also exposed to credit-related
losses, which could affect the results of operations in the event of fluctuations in the fair value of the interest rate swaps due to
a change in the credit worthiness or non-performance by the counterparties to the interest rate swaps.
Management's Discussion & Analysis (MD&A)
Removed heading “Use of Estimates in the Preparation of Consolidated Financial Statements”
Removed heading “Fair Value of Financial Instruments”
Largest changes
“Use of Estimates in the Preparation of Consolidated Financial Statements”see in full comparison
“The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. Accrued interest and penalties are included within income taxes payable in the consolidated balance sheet At December 31, 2025, the Company has a net operating loss carryforward of approximately $21,256,747.”see in full comparison
“The Company measures its financial assets and liabilities in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The estimated fair values approximate their carrying value because of the short-term maturity of these instruments or the stated interest rates are indicative of market interest rates. These fair values have historically varied due to the market price of the Company’s stock at the date of valuation.”see in full comparison
“Total Cash OpEx Reduction: The total Cash OpEx decreased by $904 thousand, reflecting the Company’s cost-cutting efforts and restructuring initiatives.”see in full comparison
Total Non-Cash OpEx Reduction: The total Non-Cash OpEx decreased bysee in full comparison$557$2.2thousand,million, primarily due to theabsencerevaluation ofimpairmentstockcostsappreciationand reduced depreciation and amortization expenses.rights.
Full comparison: every changed paragraph (31)
Acquisitions
and Share IssuanceDisposition
On August 30, 2024, Innovative Gourmet, which is a wholly-owned subsidiary of the Company, and iGourmet, entered into an amended and restated asset purchase agreement (the “Amended and Restates APA”). Pursuant to the Amended and Restates APA, Innovative Gourmet sold to iGourmet substantially all of its assets related to marketing and selling certain artisan foods and related drop-ship fulfillment services including the website www. igourmet.com (the “Purchased Assets”), for total consideration of $700,000. This transaction was closed on October 23, 2024. In connection with the closing of the transaction, Innovative Gourmet and iGourmet entered into a Transition Services Agreement, dated August 30, 2024, pursuant to which Innovative Gourmet provided certain inventory and fulfilment services related to the Purchased Assets for a period of thirty days after closing pursuant to that certain Transition Services Agreement, dated August 30, 2024, with iGourmet. We exited this business during the year ended December 31, 2024.
On
November 30, 2024 and December 4, 2024, the Company entered into a series of securities purchase agreements with certain investors, pursuant
to which, among other things, the Company issued the investors an aggregate of 2,031,250 shares of common stock of the Company at a purchase
price of $1.60 per share, for an aggregate purchase price of $3,250,000.
On
December 20, 2024, the Company through its subsidiary, Golden Organics, acquired substantially all of LoCo’s properties, business,
and assets used and/or useful in the operation of LoCo’s business of sourcing and wholesaling food products, and agreed to assume
certain liabilities of LoCo for an aggregate purchase price of $304,269, which is payable to LoCo’s lenders for all outstanding
and unpaid indebtedness of LoCo, pursuant to the LoCo APA, with LoCo, Elizabeth G. Mozer and Benjamin Mozer. In addition, as an adjustment
to the purchase price, if earned, Golden Organics will pay $53,430 as earnout if, in the twelve-month period, LoCo achieves certain revenue
and adjusted EBITDA targets. In connection with the LoCo
APA, Ms. Mozer entered into a consulting services agreement with Golden Organics
to provide consulting services for a period of twelve
(12) months with the option to extend on a month-to-month basis with respect to
the transitioning of the relationships and knowledge
concerning the LoCo’s business, which agreement also contains a two-year non-solicitation
provision.
The Company’s subsidiary, Innovative Properties, entered into an Agreement of Purchase and Sale dated July 28, 2025, as amended on September 11, 2025, September 29, 2025, and November 13, 2025, with Mountaintop Holdings. Pursuant to the agreement, Innovative Properties agreed to sell to Mountaintop Holdings certain real property located at 220 Oak Hill Road, Mountaintop, Pennsylvania 18707, together with all rights, title, improvements, easements, and appurtenant interests, which is improved with warehouse facilities, as well as certain personal property, contracts, and intangibles of Innovative Properties. The sale closed on March 6, 2026, at which time Innovative Properties received gross proceeds of $9.225 million.
2025 represented a transitional year for IVFH as the Company shifted its focus toward strengthening its internal operating foundation to support sustainable growth. During the year, management prioritized improvements to core business processes, operational discipline, and supporting software and systems, with the objective of creating greater consistency, visibility, and scalability across the organization. These efforts included initiatives to better align procurement, forecasting, and order management processes, enhance operational workflows across distribution channels, and reinforce the Company’s core operating platform.
As part of this effort, the Company also took steps to streamline its operating footprint and improve overall efficiency. This included the planned exit and subsequent sale of the Pennsylvania facility, which was completed in the first quarter of 2026, and the transition of certain related activities into existing operating locations. These actions were intended to simplify the operating structure, reduce complexity, and allow management to focus resources on core distribution and digital channel operations.
Innovative
Food Holdings, Inc. (IVFH) experienced a transformative year in 2024, marked by strategic initiatives aimed at stabilizing the business
and laying the foundation for future growth. The Company focused on enhancing its digital presence, expanding its specialty foodservice
platform, and diversifying its distribution channels. Key milestones included the acquisition of Golden Organics and LoCo, the sale of
non-core assets, and the onboarding of a new CFO.
For the fiscal year ended December 31, 2025, IVFH reported revenue of $60.7 million, a 2.1% increase compared to $59.5 million in 2024. Revenue Breakdown:
Cost of goods sold for the year was $45.0 million, compared to $44.4 million in 2024, an increase of 1.4%. Gross margin increased 49 basis points to 25.8%, primarily due to changes in revenue mix, including shifts in the relative sales volume by distributor within the drop ship channel.
For
the fiscal year ended December 31, 2024, IVFH reported revenue of $72.1 million, a 2.5% increase compared to $70.4 million in
2023. Our organic revenue growth, which excludes the impact of divestitures and acquisitions, was an impressive 11.4% for the full year.
Revenue growth was particularly strong in Q4, with total revenue increasing 19.2% and organic revenue increasing 44.3%. These results
reflect our strategic efforts to enhance our market presence and expand our customer base.
Revenue
Breakdown:
Cost
of goods sold for the year was $55.3 million, an increase of 3.6% compared to $53.3 million in 2023. Gross margin declined by 85
basis points to 23.4%, primarily due to liquidation of inventory from divested businesses and the ramp-up of the lower-margin
retail business. However, this decline was offset by a reduction in operating expenses and positive non-operating income driven by
strategic divestments and cost reductions.
The total Cash OpEx increased by $1.4 million, primarily related to $2.0 million in operating expenses associated with the acquisition of the Denver business, offset by the items noted above.
Total
Cash OpEx Reduction: The total Cash OpEx decreased by $904 thousand, reflecting the Company’s cost-cutting efforts and
restructuring initiatives.
Total
Non-Cash OpEx Reduction: The total Non-Cash OpEx decreased by $557$2.2 thousand,million, primarily due to the absencerevaluation of impairmentstock costsappreciation and
reduced depreciation and amortization expenses.rights.
Non-Operating
Income (Tax Expense):
During
the year, IVFH recorded several gains and losses:
The
total non-operating income was $1.8 million, contributing positively to the Company’s overall financial performance.
Net
income from continuing operations improved
significantly,declined reachingby 39.1% to $2.5 millionmillion, compared to a net loss of $3.7$4.2 million in 2023.2024.
Critical
Accounting PolicyPolicies and Estimates
Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. In preparing our consolidated financial statements, we make assumptions, judgments, and estimates that can have a significant impact on amounts reported in our consolidated financial statements. We evaluate our estimates and assumptions on an ongoing basis. We base our assumptions, judgments, and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions.
Our significant accounting policies are described in Part II, Item 8, “Nature of Activities and Summary of Significant Accounting Policies,” Note 1, “Business and Summary of Significant Accounting Policies,” in the notes to consolidated financial statements. An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably possible could materially impact the financial statements. We believe that of all our significant accounting policies, the following accounting policies and specific estimates involve a greater degree of judgment and complexity. Accordingly, these are the accounting policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.
Use of Estimates in the Preparation of Consolidated
Financial Statements
The preparation of these consolidated financial statements
requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities. These estimates include certain assumptions related to, among others, doubtful accounts
receivable, valuation of stock-based services, operating right of use assets and liabilities, and income taxes. On an on-going basis,
we evaluate these estimates, including those related to revenue recognition and concentration of credit risk. We base our estimates on
historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
Accounts subject to estimate and judgements are allowance for credit losses, income taxes, intangible assets, contingent liabilities,
and equity-based instruments. Actual results may differ from these estimates under different assumptions or conditions. We believe our
estimates have not been materially inaccurate in past years, and our assumptions are not likely to change in the foreseeable future.
Stock options
Options and stockStock appreciationAppreciation rights (“SARS”):Rights
Fair
Value of Financial Instruments
The
Company measures its financial assets and liabilities in accordance with accounting principles generally accepted in the United States
of America (“U.S. GAAP”). The estimated fair values approximate their carrying value because of the short-term maturity of
these instruments or the stated interest rates are indicative of market interest rates. These fair values have historically varied due
to the market price of the Company’s stock at the date of valuation.
The
Company uses the liability method of accounting
for income taxes. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to financial statements
carrying amounts of existing assets and liabilities and their respective tax bases
and operating loss and tax credit carry-forwards. The
measurement of deferred tax assets and liabilities is based on provisions of applicable
tax law. The measurement of deferred tax assets
is reduced, if necessary, by a valuation allowance based on the amount of tax benefits
that, based on available evidence, is not expected
to be realized. At December 31, 2024, the Company has a net operating loss carryforward
of approximately $3,875,000.
The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. Accrued interest and penalties are included within income taxes payable in the consolidated balance sheet At December 31, 2025, the Company has a net operating loss carryforward of approximately $21,256,747.
The
Company determines if an arrangement is a lease at inception. Operating lease right-of-use assets (“ROU assets”) and short-term
and long-term lease liabilities are included on the face of the condensed consolidated balance sheet. Finance lease ROU assets are presented
within otherlong term assets, and finance lease liabilities are presented within accrued liabilities. The Company used our incremental borrowing
rate of 6.75% in calculating the value of the ROU assets and liabilities.
What changed in the latest 10-Q
Risk Factors
As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in report. However, for detailed descriptions of the risks relating to our Company, see the section titled “Risk Factors” contained in our Annual Report for the year ended December 31, 2025. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Six Months Ended June 30, 2026”
New heading “Operating Expenses”
Largest changes
“During the six months ended June 30, 2026 and 2025, U.S. Foods, Inc. and its affiliates accounted for approximately 40% and 34% of total revenue, respectively. Gate Gourmet accounted for approximately 17% and 14% of total revenue, respectively, during the six months ended June 30, 2026 and 2025.”see in full comparison
“Cost of goods sold for the six months ended June 30, 2026 decreased by approximately 20% to $18.7 million compared to $23.5 million in the prior year period, which is primarily due to a 21% decrease in revenue. Gross margin remained flat at approximately 26%.”see in full comparison
Cost of goods sold for the three months endedsee in full comparisonMarchJune31,30, 2026 decreased by approximately18%22% to$9.1$9.6 million compared to$11.1$12.4 million in the prior year period, which is primarily duedueto a19%21.5% decrease in revenue. Gross profit declined by 20.1% to $3.4 million, while gross marginremainedincreasedflattoat26.2%approximatelyfrom26%.25.7%.
“The discontinued operations reported net income of $1.5 million in the current quarter, compared to a net loss of $684 thousand in the prior year primarily due to the $2.1 million gain on the sale of the Pennsylvania facility in 2026.”see in full comparison
Full comparison: every changed paragraph (17)
As of June 30, 2026, no SARs were executed and all SARs were expired.
The Company maintained
an allowance in the amount of $247,272 $259,446
and $218,319 for credit losses at MarchJune 31,30, 2026 and December 31, 2025, respectively. The Company
has an operational relationship of several
years with our major customers, and we believe this experience provides us with a solid foundation
from which to estimate our expected
losses on accounts receivable. Should our sales mix change or if we develop new lines of business
or new customers, these estimates and
our estimation process will change accordingly. These estimates have been accurate in the past.
Financial highlights for the fiscal quarter ended
MarchJune 31,30, 2026: we reported revenue of $12.2$13.1 million, a 19.0%21.5% decrease compared to $15.0$16.6 million in 2025.
Three Months Ended MarchJune 31,30, 2026
Cost of goods sold for the three months ended
MarchJune 31,30, 2026 decreased by approximately 18%22% to $9.1$9.6 million compared to $11.1$12.4 million in the prior year period, which is primarily due
due to a 19%21.5% decrease in revenue. Gross profit declined by 20.1% to $3.4 million, while gross margin remainedincreased flatto at26.2% approximatelyfrom 26%.25.7%.
Six Months Ended June 30, 2026
Revenue Breakdown:
Cost of goods sold for the six months ended June 30, 2026 decreased by approximately 20% to $18.7 million compared to $23.5 million in the prior year period, which is primarily due to a 21% decrease in revenue. Gross margin remained flat at approximately 26%.
Operating Expenses
Total operating expenses decreased by $1.3 million, or 18.5%, primarily due to the factors described below:
Discontinued Operations
The discontinued operations reported net income
of $1.5 million in the current quarter, compared to a net loss of $684 thousand in the prior year primarily due to the $2.1 million gain
on the sale of the Pennsylvania facility in 2026.
Liquidity and Capital Resources at MarchJune 31,30,
2026
As of MarchJune 31,30, 2026, we had current assets of
$9.8$10.1 million and current liabilities of $3.3$3.5 million. Net working capital was $6.5$6.6 million.
We believe we have sufficient liquidity to fund
operations for at least the next twelve months. With the sale of the Pennsylvania facility, operating cash flows are expected to continue
to improve as facility costs and lower margin product sales roll off. We do not anticipate the need to raise additional capital. We are
working on aexploring new credit facility options to provide working capital flexibility. Remaining severance obligations are not expected to be
material, material,
and staffing levels are being managed to align with current business needs.
During the three months ended MarchJune 31,30, 2026,2026 and
and 2025, U.S. Foods, Inc. and its affiliates accounted for approximately 40% and 41%34% of total revenue, respectively. Gate Gourmet accounted
for approximately 15%18% and 19%15% of total revenue, respectively, during the three months ended MarchJune 31,30, 2026,2026 and 2025.
During the six months ended June 30, 2026 and 2025, U.S. Foods, Inc. and its affiliates accounted for approximately 40% and 34% of total revenue, respectively. Gate Gourmet accounted for approximately 17% and 14% of total revenue, respectively, during the six months ended June 30, 2026 and 2025.
IVFH 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.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-14 | Saterbo Erik John |
Grant/award | 150,000 | — | — |
| 2026-09-14 | Schubert Gary |
Grant/award | 1,350,000 | — | — |
| 2026-09-14 | Liarakos Argie |
Grant/award | 150,000 | — | — |
| 2026-07-31 | Jcp Investment Holdings, Llc |
Other | 105,491 | — | — |
Well-known investors holding IVFH (13F)
None of the 59 investors we track reported a position in their latest 13F.