LSF

Business Context and Reporting Period

This Form 10-K covers the fiscal year ended December 31, 2025 for Laird Superfood, Inc. (NYSE American: LSF). The Company develops and markets functional food and beverage products, primarily coffee creamers, coffee, hydration products, and snacks. The reporting period reflects operations prior to the consummation of significant transactions that occurred in March 2026, specifically the acquisition of Navitas LLC and a concurrent investment by Nexus Capital Management LP.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Net sales increased 15% year-over-year, driven primarily by a 41% increase in wholesale channel sales due to distribution expansion and higher shelf velocity. This growth was partially offset by a 3% decline in e-commerce sales.
• Margin Contraction: Gross margin decreased from 40.9% to 37.9%. Management attributed this to inflationary product costs, tariff impacts, and increased procurement costs.
• Expense Increases: Operating expenses rose 12% to $22.3 million. General and administrative expenses increased by $0.9 million, largely due to $0.7 million in impairment charges related to the decision to discontinue the Picky Bars brand and $1.1 million in professional fees for the Navitas Acquisition. Sales and marketing expenses increased 15% due to higher paid media and advertising investments.
• Cash Flow: The Company shifted from positive operating cash flow in 2024 to a usage of $2.8 million in 2025. This was driven by working capital changes, specifically a $2.1 million increase in accounts receivable and a $2.5 million increase in inventory (strategic buildup to mitigate anticipated tariff costs).

Guidance, Outlook, and Material Events

Subsequent Events (Post-Year End)

On March 12, 2026, the Company completed two major transactions:

• Navitas Acquisition: Acquired Navitas LLC for $38.5 million in cash, expanding the product portfolio to include healthy baking products, wellness staples, and functional snacks.
• Nexus Investment: Raised $50.0 million through the sale of Series A Preferred Stock to an affiliate of Nexus Capital Management LP. Proceeds were used to fund the Navitas Acquisition.

Management Commentary and Strategy

• Brand Consolidation: The Company plans to discontinue the Picky Bars brand in Q2 2026 to redeploy capital toward the Laird Superfood brand.
• Liquidity: As of December 31, 2025, the Company had $5.3 million in cash and access to a $2.0 million factoring facility (unused). Management believes existing cash and anticipated operating cash flows are sufficient for operations through the next 12 months.
• Risks: Key risks include the ability to integrate Navitas, reliance on third-party co-manufacturers (72% of inventory held by two partners), supply chain disruptions, and potential impacts from tariffs and trade policies.

Investor Verification Checklist

• Integration Risks: Verify the progress and cost of integrating Navitas LLC and the realization of anticipated synergies.
• Margin Recovery: Monitor whether gross margins can recover from 37.9% given ongoing commodity inflation and tariff pressures.
• Capital Structure: Review the terms of the Series A Preferred Stock issued to Nexus, noting that Nexus holds convertible shares representing 56.2% of the common stock (as of March 2026), granting significant control.
• Internal Controls: Note the disclosure of a material weakness in internal controls over financial reporting related to journal entry approval workflows, which was remediated subsequent to year-end.
• Supplier Concentration: Assess the risk associated with reliance on a small number of suppliers and co-manufacturers for raw materials and production.