OPERATING SEGMENT

12 Months Ended

Dec. 31, 2024

Segment Reporting [Abstract]

OPERATING SEGMENT

OPERATING SEGMENT

Segment information

The Company has determined that it operates in a single operating and reportable segment, which is the production and sale of hemp-based CBD wellness products, which makes up substantially all of the revenue at this time. This is consistent with how the chief operating decision maker (the "CODM") allocates resources and assesses performance. The Company’s CODM is the executive operations committee that includes the chief executive officer, the chief financial officer, the chief operations officer and the chief people officer. The Company’s products have similar characteristics due to the same raw material ingredient (CBD and derivatives), similar nature of cultivation process, the type of customer and the regulatory nature of the industry.

The accounting policies of the production and sale of the hemp-based CBD wellness segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for this segment and decides how to allocate resources based on pre-tax net income/(loss) that is reported on the consolidated statement of operations. The measure of segment assets is reported on the consolidated balance sheets as total assets. The CODM uses pre-tax net income/(loss) to evaluate income generated from segment assets in deciding whether to reinvest profits into the segment or into other parts of the Company. Pre-tax net income/(loss) are used to monitor budget versus actual results.

For the year ended December 31, 2024 and 2023, the segment's revenues and pre-tax net loss were $49,667 and $(29,807); and $63,155 and $(23,267), respectively. Further details of the segment's revenues are included in Note 2 under Revenue Recognition. Further details of the segment's expenses are included in the consolidated statements of operations. Further details of the segment's reconciliation between pre-tax net income/(loss) are included in the results of operations measures section of this Form 10-K.

There are no difference between segment revenues, pre-tax net income/(loss) and the Company's consolidated revenues and pre-tax net income/(loss).

General Information

Factors used to Identify Reportable Segments: The Company operates as a single reportable segment, focusing on the production and sale of hemp-based CBD wellness products.

Products and Services: The Company's revenue is primarily derived from the production and sale of hemp-based CBD wellness products.

Chief Operating Decision Maker (CODM): The Company's Chief Executive Officer is William Morachnick, the Chief Financial Officer is Erika Lind, the Chief Operations Officer is Ray Kunkel and the Chief People Officer is Mindy Garrison.

Measure of Segment Profit or Loss and Total Assets: The accounting policies of the single reportable segment are the same as those described in the summary of significant accounting policies. The CODM evaluates performance and allocates resources based on pre-tax net income/(loss), as presented in the accompanying financial statements. The measure of segment assets is reported on the balance sheet as total consolidated assets.

Significant Segment Expenses

The following significant expenses are regularly reviewed by the CODM for the year ended December 31, 2024 and 2023: Cost of goods sold $28,407 and $27,589, respectively; Selling, general, and administrative expenses $53,247 and $75,630, respectively; Asset impairment $— and $548, respectively; Change in fair value of financial instruments $615 and $20,039, respectively; and Depreciation and Amortization $9,979 and $15,160, respectively.

Reconciliation to Consolidated Financial Statements

As the Company operates as a single reportable segment, the amounts presented above align directly with the consolidated totals in the financial statements.

	Year Ended December 31,
	2024			2023
Product Revenue	$	49,019		$	63,155
Service Revenue	648			—
Total Revenue	$	49,667		$	63,155
Cost of goods sold	28,407			27,589
Gross profit	$	21,260		$	35,566
Gross profit %	42.8		%	56.3		%
Selling, general, and administrative expenses	53,247			75,630
Asset impairment	—			548
Operating loss	$	(31,987)		$	(40,612)
Change in fair value of financial instruments	615			20,039
Other income (expense), net	1,565			(2,694)
Loss before provision for income taxes	$	(29,807)		$	(23,267)
Other segment information
Depreciation/Amortization	9,979			15,160
Total assets	113,442			152,548
Long-term liabilities	70,419			73,344