# EDGAR Filing Document

**Accession Number:** 0001967269
**File Stem:** 0001104659-25-093449
**Filing Date:** 2025-9
**Character Count:** 41140
**Document Hash:** 845855148203712f54753cda6bb2f0d8
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-25-093449.hdr.sgml**: 20250926

**ACCESSION NUMBER**: 0001104659-25-093449

**CONFORMED SUBMISSION TYPE**: 1-SA

**PUBLIC DOCUMENT COUNT**: 1

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250926

**DATE AS OF CHANGE**: 20250925

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Howloo, Inc.
- **CENTRAL INDEX KEY:** 0001967269
- **STANDARD INDUSTRIAL CLASSIFICATION:** MISCELLANEOUS FOOD PREPARATIONS & KINDRED PRODUCTS [2090]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 812161226
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 1-SA
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 24R-00948
- **FILM NUMBER:** 251344958

**BUSINESS ADDRESS:**
- **STREET 1:** 4206 OKEECHOBEE RD
- **CITY:** FORT PIERCE
- **STATE:** FL
- **ZIP:** 34947
- **BUSINESS PHONE:** (941) 237-0287

**MAIL ADDRESS:**
- **STREET 1:** 4206 OKEECHOBEE RD
- **CITY:** FORT PIERCE
- **STATE:** FL
- **ZIP:** 34947

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 1-SA**

**SPECIAL FINANCIAL REPORT PURSUANT TO REGULATION A**

For the six month period ended June 30, 2025

**Howloo, Inc.**

*(Exact name of registrant as specified in its charter)*

Commission File Number: **024-12359**

---

| | |
|:---|:---|
| &nbsp;&nbsp;Delaware | &nbsp;&nbsp;81-2161226 |
| &nbsp;&nbsp;(State or other jurisdiction of<br> incorporation or organization) | &nbsp;&nbsp;(Employer Identification Number) |
| &nbsp;&nbsp;4206 Okeechobee Rd<br> Fort Pierce, FL. 34947 | &nbsp;&nbsp;941-237-0287 |
| &nbsp;&nbsp;(Address of principal executive offices) | &nbsp;&nbsp;(Registrant's telephone number,<br> including area code) |

---

**Common Stock**

(Title of each class of securities issued pursuant to Regulation A)

*In this report, the term "the company" or "us" or "we" refers to Howloo, Inc.*

**Forward-Looking Statements**

This report may contain forward-looking statements and information relating to, among other things, our business plan and strategy, and its industry. These forward-looking statements are based on the beliefs of, assumptions made by, and information currently available to our management. When used in this report, the words "estimate," "project," "believe," "anticipate," "intend," "expect" and similar expressions are intended to identify forward-looking statements, which constitute forward looking statements. These statements reflect management's current views with respect to future events and are subject to risks and uncertainties that could cause the company's actual results to differ materially from those contained in the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company does not undertake any obligation to revise or update these forward-looking statements to reflect events or circumstances after such date or to reflect the occurrence of unanticipated events.

**ITEM 1. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

The following discussion of our financial condition and results of operations for the six-month period ended June 30, 2024 (the "**2024 Interim Period**"), and the six-month period ended June 30, 2025 (the "**2025 Interim Period**") should be read in conjunction with our unaudited consolidated financial statements and the related notes included in this report.

**Overview**

Our predecessor-in-interest, Howloo LLC, was formed as a Delaware limited liability on April 8, 2016, and converted into Howloo, Inc., a Delaware corporation, on January 1, 2023. Our headquarters are in Fort Pierce, Florida.

**Results of Operation**

*Revenues*

For the 2025 Interim Period we had revenues of $8,268,287, compared to $6,796,940 for the 2024 Interim Period. The increase in revenues during the 2025 Interim Period is primarily as a result of the launch of our subscription service, wholesale portal and our relocation to a larger facility that has increased our manufacturing capacity.

*Cost of Goods Sold*

For the 2025 Interim Period our cost of goods sold was $3,864,213, compared to $2,363,629 for the 2024 Interim Period, which increase is primarily as a result of our increase in sales.

*Gross Profit*

For the 2025 Interim Period we had a gross profit of $4,764,074, compared to gross profit of $4,433,311 for the 2024 Interim Period.

*Operating Expenses*

For the 2025 Interim Period, our total operating expenses were $5,913,402, consisting of $4,369,488 for sales and marketing expenses, and $1,543,914 for general and administrative expenses. For the 2024 Interim Period, our total operating expenses were $4,602,33, consisting of $2,984,200 for sales and marketing expenses, and $1,618,133 for general and administrative expenses.

*Net Operating (Loss)Income*

For the 2025 Interim Period we had a net loss of $1,207,858, compared to a net loss of $184,836 for the 2024 Interim Period.

**Liquidity and Capital Resources**

As of June 30, 2025, we had cash in the amount of $1,429,001, as compared to $2,750,554 as of December 31, 2024.

As of May 31, 2024, and excluding any future proceeds raised in our current Regulation CF offering, we had sufficient operating capital to fund our operations through June 2026.

We will incur significant additional costs in operating our business, including, but not limited to, in production, marketing, sales and customer service, and intend to continue to fund our operations, in part, through funds received from our pending Regulation CF Offering. We may also engage in additional debt and/or equity financings as determined to be necessary.

**Debt**

In May 2020, we entered into an SBA Loan in the original principal amount of $131,900 that accrues interest at a rate of 3.75%, and matures in May 2050. We are required to make monthly payments of $644. As of June 30, 2025, $112,543 was outstanding under the SBA loan.

**Plan of Operations**

In 2025, we plan to expand our product portfolio with the launch of new ready-to-drink canned coffee flavors, and specialty roasted blends. We are also focused on accelerating retail distribution across the U.S. and Canada, building on our growing brand awareness and strong direct-to-consumer foundation. These initiatives are aimed at scaling revenue, diversifying sales channels, and reinforcing Blackout Coffee's position as a premium, American-made coffee brand.

**ITEM 2. OTHER INFORMATION**

Nothing to disclose.

**ITEM 3. FINANCIAL STATEMENTS**

The accompanying semiannual financial statements are unaudited and have been prepared in accordance with the instructions to Form 1-SA. Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included, and all such adjustments are of a normal recurring nature. Operating results for the six months ended June 30, 2023 are not necessarily indicative of the results that can be expected for the year ending December 31, 2024.

**ITEM 4. EXHIBITS**

---

| | |
|:---|:---|
| [1](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex1.htm) | [Posting Agreement with StartEngine Crowdfunding (1)](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex1.htm) |
| [2.1](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex2-1.htm) | [Certificate of Incorporation (2)](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex2-1.htm) |
| [2.2](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex2-2.htm) | [Certificate of Amendment to Amended and Restated Certificate of Incorporation (3)](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex2-2.htm) |
| [2.3](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex2-3.htm) | [Bylaws (4)](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex2-3.htm) |
| [4](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex4.htm) | [Form of Subscription Agreement (5)](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex4.htm) |
| [5](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex5.htm) | [Stockholder Agreement (6)](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex5.htm) |
| [8](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex8.htm) | [Escrow Services Agreement (7)](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex8.htm) |

---

(1) Filed
 as an exhibit to Howloo, Inc. Regulation A Offering Statement on Form 1-A/A filed January 19, 2024 (Commission File
 No. **024-12359**) and incorporated herein by reference. Available at, [https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex1.htm](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex1.htm) .

(2) Filed
 as an exhibit to Howloo, Inc. Regulation A Offering Statement on Form 1-A/A filed January 19, 2024 (Commission File
 No. 024-12359) and incorporated herein by reference. Available at, [https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex2-1.htm](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex2-1.htm) .

(3) Filed
 as an exhibit to Howloo, Inc. Regulation A Offering Statement on Form 1-A/A filed January 19, 2024 (Commission File
 No. 024-12359) and incorporated herein by reference. Available at, [https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex2-2.htm](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex2-2.htm) .

(4) Filed
 as an exhibit to Howloo, Inc. Regulation A Offering Statement on Form 1-A/A filed January 19, 2024 (Commission File
 No. 024-12359) and incorporated herein by reference. Available at, [https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex2-3.htm](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex2-3.htm) .

(5) Filed
 as an exhibit to Howloo, Inc. Regulation A Offering Statement on Form 1-A/A filed January 19, 2024 (Commission File
 No. 024-12359) and incorporated herein by reference. Available at, [https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex4.htm](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex4.htm) .

(6) Filed
 as an exhibit to Howloo, Inc. Regulation A Offering Statement on Form 1-A/A filed January 19, 2024 (Commission File
 No. 024-12359) and incorporated herein by reference. Available at, [https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex5.htm](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex5.htm) .

(7) Filed
 as an exhibit to Howloo, Inc. Regulation A Offering Statement on Form 1-A/A filed January 19, 2024 (Commission File
 No. 024-12359) and incorporated herein by reference. Available at, [https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex8.htm](https://www.sec.gov/Archives/edgar/data/1967269/000110465924005174/tm242533d1_ex8.htm) .

**SIGNATURES**

Pursuant to the requirements of Regulation A, the issuer has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Fort Pierce, State of Florida, on September 25, 2025.

**HOWLOO, INC.**

---

| | | |
|:---|:---|:---|
| By | /s/ John Santos | /s/ John Santos |
|  | Title: | Chief Executive Officer, Principal Executive Officer and Director |
|  | Dated: | September 25, 2025 |

---

---

| | | |
|:---|:---|:---|
| By | /s/ Rachael A. Santos | /s/ Rachael A. Santos |
|  | Title: | Principal Financial Officer, Principal Accounting Officer and Director |
|  | Dated: | September 25, 2025 |

---

------

**HOWLOO, INC. DBA BLACKOUT COFFEE CO.**

**Unaudited Financial Statements**

**for the six-months ending June 30, 2025**

*(Expressed in United States Dollars)*

 

**Index to Financial Statements**

------

Page

FINANCIAL STATEMENTS:

---

| | |
|:---|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Balance Sheets](#a_001) | [1](#a_001) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Statements of Operations](#a_002) | [2](#a_002) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Statements of Changes in Stockholders' Equity](#a_003) | [3](#a_003) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Statements of Cash Flows](#a_004) | [4](#a_004) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[Notes to Financial Statements](#a_005) | [5](#a_005) |

---

**Howloo Inc. DBA Blackout Coffee Co.**

**Balance Sheets**

------

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br>**2025** | **December 31,**<br>**2024** |
| **ASSETS** | **(Unaudited)** |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $1429001 | $2750554 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 83912 | 96017 |
| &nbsp;&nbsp;&nbsp;Inventory | 2019879 | 1463317 |
| &nbsp;&nbsp;&nbsp;Prepaids and other current assets | 24233 | 709402 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 3557025 | 5019290 |
| Property and equipment, net | 875066 | 977348 |
| Intangible assets, net | 2778 | 2945 |
| Right of use assets | 2009185 | 2278248 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $6444054 | $8277831 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| &nbsp;&nbsp;&nbsp;Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $50000 | $314627 |
| &nbsp;&nbsp;&nbsp;Credit card | 290646 | 212346 |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debt | 17600 | 17600 |
| &nbsp;&nbsp;&nbsp;Right of use liability, current portion | 413582 | 344797 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 237387 | 290466 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 1009215 | 1179836 |
| Other long-term liabilities |  |  |
| Right of use liability | 1766279 | 1986591 |
| Long-term debt less current maturities | 112543 | 98559 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 2888037 | 3264986 |
| Stockholders' equity: |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value, 19,300,000 shares authorized, 17,103,388 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively | 1710 | 1710 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 4028353 | 4277323 |
| &nbsp;&nbsp;&nbsp;Retained earnings | (474046) | 733812 |
| &nbsp;&nbsp;&nbsp;Total stockholders' equity | 3556017 | 5012845 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity | $6444054 | $8277831 |

---

See the accompanying notes to the consolidated financial statements

**Howloo Inc. DBA Blackout Coffee Co.**

**Statements of Operations**

------

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| Net revenues | $8628287 | $6796940 |
| Cost of goods sold | 3864213 | 2363629 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 4764074 | 4433311 |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | 1543914 | 1618133 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 4369488 | 2984200 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 5913402 | 4602333 |
| Income from operations | (1149328) | (169022) |
| Other income (expense): |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (19772) | (36469) |
| &nbsp;&nbsp;&nbsp;Other income (loss) | (38758) | 20655 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income (loss) before provision for income taxes | (58530) | (15814) |
| Provision/(benefit) for income taxes | - | - |
| Net loss | (1207858) | (184836) |
| Weighted average number of common shares outstanding - basic and diluted | 17103388 | 16861854 |
| Net loss per common share - basic and diluted | $(0.07) | $(0.01) |

---

See the accompanying notes to the consolidated financial statements

**Howloo Inc. DBA Blackout Coffee Co.**

**Statements of Changes in Stockholders' Equity**

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | |
|  | **Shares** | **Amount** | **Additional**<br>**Paid-in**<br>**Capital** |<br>**Retained**<br>**Earnings** | **Total**<br>**Stockholders'**<br>**Equity** |
| **Balance at December 31, 2023** | 16861854 | $1686 | $2529229 | $32397 | $2563312 |
| Issuance of common stock | 271575 | 27 | 1271081 |  | 1271108 |
| Net loss | - | - | - | (184836) | (184836) |
| **Balance at June 30, 2024** | 17133429 | $1713 | $3800310 | $(152439) | $3649584 |
| **Balance at December 31, 2024** | 17103388 | $1710 | $4277323 | $733812 | $5012845 |
| Subscription receivable |  |  | (248970) |  | (248970) |
| Net loss | - | - | - | (1207858) | (1207858) |
| **Balance at June 30, 2025** | 17103388 | $1710 | $4028353 | $(474046) | $3556017 |

---

See the accompanying notes to the consolidated financial statements

**Howloo Inc. DBA Blackout Coffee Co.**

**Statements of Cash Flows**

------

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended** | **Six Months Ended** |
|  | **June 30,** | **June 30,** |
|  | **2025** | **2024** |
| **Cash Flows From Operating Activities** |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $(1207858) | $(184836) |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of Intangibles | 167 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization | 88496 | 64753 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash interest expense | 17612 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of ROU assets | 117536 | 110314 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on disposal of property and equipment | 58634 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acccounts receivable, net | 12105 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventory | (556562) | 136009 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaids and other current assets | 436199 | (408526) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable | (264627) | (63784) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Credit card | 78300 | 60501 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current liabilities | (53079) | 2508 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (1273078) | (283061) |
| **Cash Flows From Investing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of property and equipment | (44848) | (110802) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (44848) | (110802) |
| **Cash Flows From Financing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;Repayments of debt | (3628) | (11741) |
| &nbsp;&nbsp;&nbsp;Issuance of common stock |  | 1271108 |
| &nbsp;&nbsp;&nbsp;Right-of-use lease, operating lease | - | (110314) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) financing activities | (3628) | 1149053 |
| Net Change In Cash | (1321553) | 755190 |
| Cash at beginning of period | 2750554 | 2149126 |
| Cash at end of period | $1429001 | $2904316 |
| **Supplemental Disclosure of Cash Flow Information** |  |  |
| Cash paid during the period for interest | $2160 | $5479 |
| Cash paid during the year for income taxes | $- | $- |

---

See the accompanying notes to the consolidated financial statements

**Howloo Inc. DBA Blackout Coffee Co.**

**Notes to Financial Statements**

**For Six Months Ended to June 30, 2025**

**1.** **nature of operations** 

Howloo Inc. DBA Blackout Coffee Co. was formed on April 8, 2016, in the state of Delaware as Howloo LLC. and subsequently incorporated in the same state on January 1, 2023. The financial statements of Howloo Inc. DBA Blackout Coffee Co. (which may be referred to as the "Company", "we", "us", or "our") are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The Company's headquarters are located in Fort Pierce, Florida.

Howloo Inc. DBA Blackout Coffee Co. prides itself as an American, family owned and operated coffee roasting company that delivers right to your doorstep small batches of freshly roasted coffee. Howloo Inc. DBA Blackout Coffee Co. doesn't just have a passion for making coffee with an exciting but unique taste; they are also proud of what they do and want you to have an amazing cup of coffee knowing that all of their coffee beans are responsibly sourced.

**2.** **SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** 

**<u>Basis of Presentation</u>**

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America ("US GAAP"). The Company has adopted the calendar year as its basis of reporting.

**<u>Use of Estimates</u>**

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amount of expenses during the reporting periods. Actual results could materially differ from these estimates. It is reasonably possible that changes in estimates will occur in the near term.

**<u>Fair Value of Financial Instruments</u>**

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:

***Level 1*** – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

***Level 2*** – Include other inputs that are directly or indirectly observable in the marketplace.

***Level 3*** – Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

**Howloo Inc. DBA Blackout Coffee Co.**

**Notes to Financial Statements**

**For Six Months Ended to June 30, 2025**

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2023 and 2022. These financial instruments include cash, accounts payable, and accrued liabilities. Fair values for these items were assumed to approximate carrying values because of their short term in nature or they are payable on demand.

**<u>Cash and Cash Equivalents</u>**

Cash and cash equivalents include all cash in banks. The Company's cash is deposited in demand accounts at financial institutions that management believes are creditworthy. The Company's cash and cash equivalents in bank deposit accounts, at times, may exceed federally insured limits.

**<u>Concentration of Credit Risk</u>**

The Company maintains its cash with a major financial institution located in the United States of America which it believes to be creditworthy. Balances are insured by the Federal Deposit Insurance Corporation up to $250,000. At times, the Company may maintain balances in excess of the federally insured limits.

**<u>Accounts Receivable and Allowance for Doubtful Accounts</u>**

Accounts receivable are recorded at net realizable value or the amount that the Company expects to collect on gross customer trade receivables. We estimate losses on receivables based on known troubled accounts and historical experience of losses incurred. Receivables are considered impaired and written-off when it is probable that all contractual payments due will not be collected in accordance with the terms of the agreement. As of June 30, 2025 and December 31, 2024 the Company determined that no reserve was necessary.

**<u>Inventory</u>**

Inventories are valued at the lower of cost and net realizable value. Costs related to raw materials and finished goods are determined using an average method.

**<u>Property and Equipment</u>**

Property and equipment are stated at cost. Normal repairs and maintenance costs are charged to earnings as incurred and additions and major improvements are capitalized. The cost of assets retired or otherwise disposed of, and the related depreciation are eliminated from the accounts in the period of disposal and the resulting gain or loss is credited or charged to earnings.

Depreciation is computed over the estimated useful lives of the related asset type or term of the operating lease using the straight-line method for financial statement purposes. The estimated service lives for property and equipment are as follows:

Equipment – 5-10 years

Vehicles – 5 years

Leasehold improvements – Shorter of estimated useful life or remaining lease term

**Howloo Inc. DBA Blackout Coffee Co.**

**Notes to Financial Statements**

**For Six Months Ended to June 30, 2025**

**<u>Intangible Assets</u>**

Intangible assets are stated at cost, net of accumulated amortization. Amortization is calculated using the straight-line method over the estimated useful lives to the residual value of the related assets. Intangibles include website development costs and are amortized over the period of fifteen years.

**<u>Leases</u>**

The Company accounts for its leases under ASC 842, *Leases*. Under this guidance, arrangements meeting the definition of a lease are classified as operating or financing leases, and are recorded on the consolidated balance sheet as both a right of use asset and lease liability, calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company's incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the right of use asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the right of use asset result in straight-line rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the right of use asset results in front-loaded expense over the lease term. Variable lease expenses are recorded when incurred.

In calculating the right of use asset and lease liability, the Company has elected to combine lease and non-lease components. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election, and recognizes rent expense on a straight-line basis over the lease term.

**<u>Impairment of Long-lived Assets</u>**

Long-lived assets, such as property and equipment and identifiable intangibles with finite useful lives, are periodically evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We look for indicators of a trigger event for asset impairment and pay special attention to any adverse change in the extent or manner in which the asset is being used or in its physical condition. Assets are grouped and evaluated for impairment at the lowest level of which there are identifiable cash flows, which is generally at a location level. Assets are reviewed using factors including, but not limited to, our future operating plans and projected cash flows. The determination of whether impairment has occurred is based on an estimate of undiscounted future cash flows directly related to the assets, compared to the carrying value of the assets. If the sum of the undiscounted future cash flows of the assets does not exceed the carrying value of the assets, full or partial impairment may exist. If the asset carrying amount exceeds its fair value, an impairment charge is recognized in the amount by which the carrying amount exceeds the fair value of the asset. Fair value is determined using an income approach, which requires discounting the estimated future cash flows associated with the asset.

**<u>Revenue Recognition</u>**

The Company recognizes revenues in accordance with FASB ASC 606, revenue from contracts with customers, when delivery of goods is the sole performance obligation in its contracts with customers. The Company typically collects payment upon sale and recognizes the revenue when the item has shipped and has fulfilled its sole performance obligation.

Revenue recognition, according to Topic 606, is determined using the following steps:

1) Identification of the contract, or contracts, with the customer: the Company determines the existence of a contract with a customer when the contract is mutually approved; the rights of each party in relation to the services to be transferred can be identified, the payment terms for the services can be identified, the customer has the capacity and intention to pay, and the contract has commercial substance.

**Howloo Inc. DBA Blackout Coffee Co.**

**Notes to Financial Statements**

**For Six Months Ended to June 30, 2025**

2) Identification of performance obligations in the contract: performance obligations consist of a promised in a contract (written or oral) with a customer to transfer to the customer either a good or service (or a bundle of goods or services) that is distinct or a series of distinct goods or services that are substantially the same and that have the same pattern of transfer to the customer.

3) Recognition of revenue when, or how, a performance obligation is met: revenues are recognized when or as control of the promised goods or services is transferred to customers.

The Company earns revenues from sale of manufactured products (coffee, tea and cocoa) and merchandise online and via wholesale.

**<u>Cost of sales</u>**

Costs of goods sold include the cost of raw material as well as other directly attributable expenses.

**<u>Advertising and Promotion</u>**

Advertising and promotional costs are expensed as incurred. Advertising and promotional expenses for the years ended December 31, 2024, and December 31, 2023, amounted to $7,085,843 and $2,405,188 which is included in sales and marketing expenses.

**<u>Income Taxes</u>**

The Company is taxed as a C Corporation effective January 1, 2023. Under this structure, the Company is subject to federal and applicable state corporate income taxes on its taxable income. The Company has filed all required tax returns from inception through December 31, 2024 and is not yet subject to examination by the Internal Revenue Service or state regulatory agencies.

**<u>Subsequent Events</u>**

The Company considers events or transactions that occur after the balance sheets date, but prior to the issuance of the financial statements to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Subsequent events have been evaluated through September 09, 2025, which is the date the financial statements were issued.

**<u>Recently Issued and Adopted Accounting Pronouncements</u>**

The FASB issues ASUs to amend the authoritative literature in ASC. There have been a number of ASUs to date that amend the original text of ASC. Management believes that those issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to us or (iv) are not expected to have a significant impact our financial statements.

**Howloo Inc. DBA Blackout Coffee Co.**

**Notes to Financial Statements**

**For Six Months Ended to June 30, 2025**

**3.** **INVENTORY** 

Inventory consists of the following items:

---

| | | |
|:---|:---|:---|
| **As of** | **June 30, 2025** | **December 31, 2024** |
| Packaging | $348005 | $252115 |
| Merchandise | 277752 | 201220 |
| Raw Material | 765170 | 554334 |
| Finished products | 628952 | 455649 |
| **Total Inventory** | $**2019880** | $**1463317** |

---

**4.** **DETAILS OF CERTAIN ASSETS AND LIABILITIES** 

Accounts payable consist primarily of trade payables while credit card liabilities refer to short-term liabilities towards the bank due to credit card usage.

Prepaid and other current assets consist of the following items:

---

| | | |
|:---|:---|:---|
| **As of** | **June 30, 2025** | **December 31, 2024** |
| Prepaid Expense | $18033 | $39258 |
| Deposits | 6200 | 6200 |
| Deposits on future purchases |  | 358264 |
| Escrow receivable | - | 305680 |
| **Total Prepaids and Other Current Assets** | $**24233** | $**709402** |

---

Other current liabilities consist of the following items:

---

| | | |
|:---|:---|:---|
| **As of** | **June 30, 2025** | **December 31, 2024** |
| Tax Payable | $70809 | $65743 |
| Accrued expenses | 4478 | 23448 |
| Gift card | 110175 | 110749 |
| Income Tax Payable | 51926 | 90526 |
| **Total Other Current Liabilities** | $**237388** | $**290466** |

---

**Howloo Inc. DBA Blackout Coffee Co.**

**Notes to Financial Statements**

**For Six Months Ended to June 30, 2025**

**5.** **PROPERTY AND EQUIPMENT** 

As of June 30, 2025, and December 31, 2024, property and equipment consist of:

---

| | | |
|:---|:---|:---|
| **As of** | **June 30, 2025** | **December 31, 2024** |
| Equipment | $1196543 | $1187360 |
| Vehicles | 195411 | 195411 |
| Leasehold Improvements | 78412 | 121327 |
| **Property and Equipment, at Cost** | **1470366** | **1504098** |
| Accumulated Depreciation | (595300) | (526750) |
| **Property and Equipment, net** | $**875066** | $**977348** |

---

Depreciation expenses for the periods ended June 30, 2025, and June 30, 2024, were in the amount of $88,496 and $64,587, respectively.

**6.** **INTANGIBLE ASSETS** 

As of June 30, 2025, and December 31, 2024, intangible assets consist of:

---

| | | |
|:---|:---|:---|
| **As of** | **June 30, 2025** | **December 31, 2024** |
| Website | $5000 | $5000 |
| **Intangible Assets, at Cost** | **5000** | **5000** |
| Accumulated amortization | (2222) | (2055) |
| **Intangible Assets, Net** | $**2778** | $**2945** |

---

Amortization expense for the period ended June 30, 2025, and June 30, 2024, were in the amount of $167 and $167 respectively.

**7.** **stockholders' EQUITY** 

The ownership percentages of the stockholders are as follows:

---

| | | |
|:---|:---|:---|
| **As of** | **June 30, 2025** | **December 31, 2024** |
| John Santos | 38% | 38% |
| Rachael Santos | 38% | 38% |
| Jared James Yanis | 9% | 9% |
| Regulation CF Investors | 15% | 15% |
| **Total** | **100%** | **100%** |

---

Prior to January 1, 2023, the Company operated as a limited liability company and ownership interests were expressed as percentage ownership rather than units. Effective January 1, 2023, the Company converted from a limited liability company to a C-corporation. In connection with this conversion, the owners received an aggregate of 14,352,000 shares of the Company's common stock.

In 2023, the Company has raised $2,946,575 through issuance of its common stock pursuant to an offering under Regulation Crowdfunding, where 2,509,854 shares were issued at $1.174 per share.

For the year ended December 31, 2023, there was $159,388 of funds held in escrow, related to these issuances. Direct offering costs related to its financing activities totaled $415,659 for the fiscal year ended December 31, 2023.

**Howloo Inc. DBA Blackout Coffee Co.**

**Notes to Financial Statements**

**For Six Months Ended to June 30, 2025**

In 2024, the Company has raised $1,748,118 through the issuance of its common stock pursuant to an offering under Regulation A, where 241,534 shares were issued.

For the year ended December 31, 2024, there was $305,680 of funds held in escrow, related to these issuances. Direct offering costs related to its financing activities totaled $366,259 for the fiscal year ended December 31, 2024.

As of both June 30, 2025, and December 31, 2024, 17,103,388 shares of Common Stock have been issued and were outstanding, respectively.

**8.** **DEBT** 

During the years presented, the Company entered into loans agreements. The details of the Company's loans and the terms are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Maturity year** | **Effective interest rate** | **June 30, 2025** | **December 31, 2024** |
| SBA Loan | 2050 | 3.75% | $112543 | $116159 |
|  |  |  | 130143 | 116159 |
| Total notes payable, net |  |  | 130143 | 116159 |
| Less: Current portion, net |  |  | (17600) | (17600) |
| Notes payable, net |  |  | $112543 | $98559 |

---

As of June 30, 2025, the aggregate maturities of long-term borrowings are as follows:

---

| | |
|:---|:---|
| **Period ending December 31,** | |
| 2025 | $17600 |
| 2026 | 19085 |
| 2027 | 20091 |
| 2028 | 21165 |
| 2029 | 22310 |
| Thereafter | 29892 |
| Total maturities of long-term borrowings | 130143 |
| Less: Current portion of lonag-term borrowings | (17600) |
| **Long-term borrowings** | $**112543** |

---

**Howloo Inc. DBA Blackout Coffee Co.**

**Notes to Financial Statements**

**For Six Months Ended to June 30, 2025**

**9.** **Commitments and Contingencies** 

**<u>Operating leases</u>**

On May 5, 2023 the Company entered into a lease agreement with Renaissance Business Park, LLC, for business premises located in St Lucie County, Florida. Rent commencement shall be November 1, 2023 and the lease is in effect until October 31, 2029. As a result, the Company recognized a right-of-use asset and corresponding lease liability, calculated using a discount rate of 8.72%.

On December 12, 2024 the Company entered into a lease agreement with Renaissance Business Park, LLC, for additional business premises located at Unit 26A, 4100 Okeechobee Road, Unit 1, Fort Pierce, Florida. Rent commencement shall be January 1, 2025 and the lease is in effect until January 1, 2030. As a result, the Company recognized a right-of-use asset and corresponding lease liability, calculated using a discount rate of 8.72%.

The following is the summary of operating lease assets and liabilities:

---

| | |
|:---|:---|
|  | **June 30,**<br>**2025** |
| **<u>Operating Leases</u>** |  |
| Right-of-use assets | $2009185 |
| Short-term lease liabilities | 413582 |
| Long-term lease liabilities | 1766279 |
| &nbsp;&nbsp;&nbsp;Total lease liabilities | $2179861 |
| Weighted Average Remaining Lease Term | 4.24 |
| Weighted Average Discount Rate | 8.72% |

---

The following is the summary of future minimum payments:

---

| | |
|:---|:---|
| **Period ending** | |
| 2026 | $577458 |
| 2027 | 604414 |
| 2028 | 615926 |
| Thereafter | 795036 |
| Total lease payments | 2592834 |
| Less: Imputed interest | (412973) |
| Total | $2179861 |

---

**<u>Contingencies</u>**

The Company's operations are subject to a variety of local and state regulation. Failure to comply with one or more of those regulations could result in fines, restrictions on its operations, or losses of permits that could result in the Company ceasing operations. Management of the Company believes that the Company is in compliance with applicable local and state regulations as of June 30, 2025, and December 31, 2024.

**<u>Litigation and Claims</u>**

From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As of June 30, 2025, and December 31, 2024, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company's operations.

**10.** **SUBSEQUENT EVENTS** 

The Company has evaluated subsequent events that occurred after June 30, 2025, through September 23, 2025, which is the issuance date of these financial statements.