BRFH

New in FY2025

• We completed our first acquisition in the fourth quarter of 2025.
• Growth by acquisitions involves risks, and we may not be able to effectively integrate the business we acquired to achieve the objectives of the acquisition or implement the contract manufacturing agreement.
• We completed the acquisition of Arps Dairy in October 2025.
• The Acquisition is subject to various risks and uncertainties and could have a negative impact on our business, financial condition, and/or results of operations.
• These risks include the inability to integrate effectively the operations, products, and personnel of the acquired company which is located a significant distance from our existing business, the inability to complete construction that was in progress on the New Facility at the time of the Acquisition within the anticipated timeframe and budget, the inability to achieve anticipated cost savings or operating synergies, the management of risks associated with manufacturing operations including product quality and safety, and the risk we may not be able to effectively manage our operations at an increased scale of operations resulting from the Acquisition.
• By acquiring Arps Dairy, we are now exposed to operational risk in dairy processing.
• Operating a dairy processing plant involves significant operational, regulatory, and market-related risks.
• The plant is highly dependent on a consistent supply of raw milk, which may be affected by factors outside of our control.
• In addition, dairy processing facilities must comply with stringent food safety, environmental, and occupational health regulations; failure to maintain compliance could result in fines, recalls, suspension of operations, or reputational damage.
• Equipment breakdowns, labor shortages, or disruptions in energy and water supply could materially impact production capacity and increase costs.
• Moreover, given the perishable nature of dairy products, disruptions in transportation or refrigeration systems pose heightened risks of spoilage and product loss.
• These factors, individually or in combination, may adversely affect the plant’s operational performance, profitability, and long-term viability.
• Our operations depend on the consistent availability and quality of raw milk.
• The supply and cost of raw milk are influenced by factors outside of our control, including seasonal fluctuations, weather conditions, feed and fuel costs, disease outbreaks, and general agricultural market conditions.
• Interruptions in raw milk supply or significant increases in input costs could materially and adversely affect our ability to produce and sell dairy products, and could negatively impact our operating results.
• Dairy processing facilities are subject to extensive regulation.
• Our dairy processing facility will need to comply with regulations by federal, state, and local authorities, including requirements related to food safety, sanitation, labeling, environmental protection, and occupational health and safety.
• Failure to comply with applicable laws and regulations could result in fines, mandatory product recalls, product seizures, suspension of operations, reputational harm, and liability for damages.
• Compliance costs may also increase over time as regulations become more stringent.
• Any such outcomes could have a material adverse effect on our business and financial performance.
• Our dairy processing operations are dependent on reliable performance of our equipment.
• The operations at Arps Dairy rely on specialized processing equipment, refrigeration systems, and a reliable supply of utilities such as water and energy.
• Equipment breakdowns, malfunctions, or prolonged utility outages could disrupt our production and distribution activities, cause product spoilage, and increase operating costs.
• Because dairy products are perishable, even brief disruptions in equipment or infrastructure can result in significant product loss and revenue reduction.
• We require reliable and trained personnel for our dairy operations.
• Our success depends on maintaining a trained and reliable workforce to operate our dairy processing facilities.
• Labor shortages, increased wage pressures, or work stoppages could impair our ability to operate efficiently.
• In addition, recruiting and retaining qualified personnel in rural or specialized markets may be difficult.
• Labor-related challenges could increase costs, reduce production capacity, or negatively impact product quality and safety.
• In addition to the financial damage from the product withdrawal, we were forced to obtain suitable replacement contract manufacturers and regain the confidence of our customers and investing public, all while seeking a resolution with the Manufacturer.
• These tasks required substantial amounts of personnel and capital resources in 2023, 2024, and 2025, including production trial and other start-up costs.
• Disruption within our supply chain, contract manufacturing or distribution channels has had and may continue to have an adverse effect on our business, financial condition and results of operations.
• In the past, damage or disruption to our suppliers or to manufacturing or distribution capabilities due to weather, natural disaster, fire or explosion, terrorism, pandemics such as COVD-19 and influenza, labor strikes or other reasons, has impaired the manufacture, distribution and sale of our products.
• Many of these events were outside of our control.
• Our experience with the Manufacturer demonstrated how our reliance on a limited number of manufacturers and suppliers increased this risk.
• Starting in 2023 and continuing through the third quarter of 2025 we did not have contracts in place to produce sufficient units to meet projected demand.
• If one of our manufacturers failed to perform, we were faced with a significant interruption in our supply chain.
• If one of our manufacturers or suppliers failed to perform or deliver products, for any reason, our sales and results of operations were adversely affected, and led to the possible loss of customers.
• Our contract manufacturer that supplied 54% of our product in 2024 and 43% in 2025 (“Manufacturer A”) gave notice that it would not renew our contract when it concluded in February 2026.
• Additionally, in December 2025, our manufacturer that supplied 38% of our product in 2024 and 40% in 2025 (“Manufacturer B”) discontinued manufacturing our products.

and 23 more.

Gone since FY2024

• Beginning in March 2020, the COVID-19 pandemic had a significant impact on the Company.
• Specifically, our business was impacted by dining bans targeted at restaurants to reduce the size of public gatherings.
• Such bans precluded our single-serve products from being served at those establishments and in some instances, resulted in abandoned product launches.
• Furthermore, many school districts closed regular attendance for a period of time thereby disrupting sales of product into that channel.
• In 2022 and 2023, we experienced supply chain interruptions and inflation for component and transportation costs.
• We believe that the impact of the pandemic has substantially abated, but will continue to monitor and assess developments.
• In addition to the financial damage from the product withdrawal, we must obtain suitable replacement contract manufacturers and regain the confidence of our customers and investing public, all while seeking a resolution with the Manufacturer.
• These tasks have required substantial amounts of personnel and capital resources in 2023 and 2024, including production trial and other start-up costs, with ongoing activities expected in 2025.
• We may need additional financing in the future, which may not be available when needed or may be costly and dilutive.
• We may require additional financing to support our working capital needs in the future.
• Although we believe various debt and equity financing alternatives will be available to us to support our working capital needs, financing arrangements on acceptable terms may not be available to us when needed.
• Many of our competitors or potential competitors have substantially greater financial and other resources than we do, which may allow them to react to changes in the market quicker than we can.
• Disruption within our supply chain, contract manufacturing or distribution channels could have an adverse effect on our business, financial condition and results of operations.
• Damage or disruption to our suppliers or to manufacturing or distribution capabilities due to weather, natural disaster, fire or explosion, terrorism, pandemics such as COVD-19 and influenza, labor strikes or other reasons, could impair the manufacture, distribution and sale of our products.
• Many of these events are outside of our control.
• Failure to take adequate steps to protect against or mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, could adversely affect our business, financial condition and results of operations.
• Our experience with the Manufacturer demonstrates how our reliance on a limited number of manufacturers and suppliers further increases this risk.
• In 2023 and 2024 we did not have contracts in place to produce sufficient units to meet projected demand.
• If one of our manufacturers fails to perform, we would be faced with a significant interruption in our supply chain.
• If one of our manufacturers or suppliers fails to perform or deliver products, for any reason, our sales and results of operations could be adversely affected.
• Furthermore, if we are unable to meet our customers’ demands due to a disruption in our supply chain, we may lose that customer which could adversely affect our business, financial condition and results of operations.
• Our dependence on independent contract manufacturers could make management of our manufacturing and distribution efforts inefficient or unprofitable.
• We are expected to arrange for our contract manufacturing needs sufficiently in advance of anticipated requirements, which is customary in the contract manufacturing industry for comparably sized companies.
• Based on the cost structure and forecasted demand for the particular geographic area where our contract manufacturers are located, we continually evaluate which of our contract manufacturers to use.
• To the extent demand for our products exceeds available inventory or the production capacity of our contract manufacturing arrangements, or orders are not submitted on a timely basis, we will be unable to fulfill distributor orders on demand.
• Conversely, we may produce more product inventory than warranted by the actual demand for it, resulting in higher storage costs and the potential risk of inventory spoilage.
• Our failure to accurately predict and manage our contract manufacturing requirements and our inventory levels may impair relationships with our independent distributors and key accounts, which, in turn, would likely have a material adverse effect on our ability to maintain effective relationships with those distributors and key accounts.
• At present, we must replace the Manufacturer with one or more new contract manufacturers and/or arrange for increased production from our existing contract manufacturers, all of which require several months to implement.
• Packaging costs such as paper and aluminum cans have experienced industry-wide price increases in the past and there is always the risk that the Company’s contract manufacturers increase their toll rates based on increases in their fixed and variable costs.
• If the Company is unable to pass on these costs, the gross margin will be significantly impacted.
• Supplies and prices of the various ingredients that we are going to use can be affected by a variety of factors, such as weather, seasonal fluctuations, demand, politics and economics in the producing countries.
• Additionally, continued geopolitical turmoil, including the ongoing wars in Ukraine and Israel, has heightened the risk of cyberattacks.
• While we regained compliance with this Rule in 2023, our stockholders’ equity at December 31, 2024 was only $578,000.
• We may be required to seek financing through the issuance of equity or convertible securities to fund our operations.
• Our board of directors controls the majority of the outstanding shares of voting stock.
• At present, members of our board of directors and/or their affiliated entities control over 50% of the outstanding shares of voting stock, and therefore have the power to control all matters requiring the approval of our stockholders, including the election of directors and the approval of mergers and other significant corporate transactions.