Sow Good Inc. 8-K

What Happened
Sow Good Inc. (SOWG) filed an 8‑K disclosing a set of transactions and governance changes effective Dec. 30–31, 2025. The company entered a Securities Purchase Agreement with investor David Lazar for a $6.0 million private placement in two closings (aggregate gross proceeds $6.0M). The First Closing occurred on Dec. 31, 2025 (1,500,000 Series AA preferred shares at $2.00 each, $3.0M received) and the Second Closing (1,500,000 Series AAA preferred shares at $2.00 each, $3.0M) is expected after required stockholder approvals and before Mar. 31, 2026. Sow Good also entered an asset purchase agreement with related party Trea Grove, LLC to sell freeze‑dried snacks/candy assets for $1.5M (payable through Mar. 31, 2026) and a Distribution Agreement appointing Trea Grove as exclusive distributor (Distributor remits 10% of gross receipts). Governance changes include the resignation of Executive Chairman Ira Goldfarb as an officer (effective after the First Closing), resignation of directors Joe Mueller and Chris Ludeman, appointment of David Lazar as CEO (and chair) and principal financial officer, and election of David Lazar and David Natan to the board. The company filed the Series AA Certificate of Designations on Dec. 31, 2025.

Key Details

• Private placement: $6.0M total; First Closing completed Dec. 31, 2025 — 1,500,000 Series AA at $2.00 each ($3.0M). Second Closing: 1,500,000 Series AAA at $2.00 each ($3.0M) expected after stockholder approvals (by Mar. 31, 2026).
• Conversion mechanics (subject to stockholder approvals and charter amendments): Series AA initially convertible into 14 shares of common stock per preferred share (1.5M × 14 = 21,000,000 common shares); Series AAA initially convertible into 250 shares per preferred share (1.5M × 250 = 375,000,000 common shares).
• Asset sale & distribution: Purchase of manufacturing‑related assets to Trea Grove for $1.5M; Distributor handles sales/fulfillment and remits 10% of gross receipts to Sow Good.
• Governance & settlements: David Lazar named CEO and chair; David Natan added to board. Voting agreements grant irrevocable proxies over 5,392,537 shares held by certain stockholders for two years. Officer settlement: Ira Goldfarb to receive $1.25M upon the stockholder meeting in exchange for waiving contractual severance.

Why It Matters

• Immediate liquidity and runway: The company received $3.0M at the First Closing and expects up to $4.5M more from the Second Closing and asset sale (subject to approvals and payment schedule). Proceeds are earmarked to fund operations and pay liabilities (including related‑party creditors).
• Potential for substantial dilution: If the preferred shares convert as currently structured, the number of outstanding common shares could increase dramatically (the filings show conversion math that could create tens to hundreds of millions of new common shares), but conversion is subject to stockholder approvals and charter amendments.
• Governance shift and strategic pivot: The investor gains rights to recommend up to eight board nominees (subject to Nasdaq rules) and secured voting agreements; management changes (new CEO/chair) signal a change in control dynamics. The sale of manufacturing assets and the distribution arrangement reflect a move to an asset‑light operating model.
• Pending approvals and conditions: The Second Closing depends on multiple stockholder approvals (including increasing authorized common shares, a reverse stock split authorization range, and equity plan increases) and filing of the Series AAA designation — these items are material milestones investors should watch.

Keywords: private placement, preferred stock, conversion, asset sale, CEO appointment, board change, dilution, stockholder approvals.