Deep Dive: One World Products, Inc. (OWPC) 2024 10-K Review

In the rapidly evolving cannabis and hemp markets, One World Products, Inc. ("One World", ticker: OWPC) is trying to carve out a foothold with cannabidiol (CBD) products and a new industrial hemp packaging business aimed at the automotive supply chain. On June 3, 2020, former NBA star Isiah L. Thomas III was named CEO and later became Chairman of the Board. Under his leadership, One World has pivoted from failing Colombian operations to a two-pronged approach in the U.S. market:

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1. Consumer CBD Topicals (Pro-11): A CBD-rub product launched in the spring of 2024 and sold online through a partnership with musician Stephen Marley’s Kx Family Care.
2. Industrial Hemp Solutions for Automakers: Hemp-based reusable totes to ship and protect automotive parts, with an initial order of 1,400 units placed in late 2024.

Business Background & Corporate Transactions

• Historical Acquisition: On February 21, 2019, One World (then One World Pharma) completed a reverse merger with OWP Ventures—formerly a public shell—and gained a 100% stake in One World Pharma S.A.S. (OWP SAS), its Colombian cultivation and extraction arm.
• Name Change: In November 2021, the company changed its corporate name from One World Pharma, Inc. to One World Products, Inc., aligning with a broader product portfolio beyond pharmaceuticals.
• Colombian Liquidation: OWP SAS, having struggled with cash flow and license compliance, entered insolvency proceedings under Colombian Law 1116 of 2006 in December 2023 and moved to liquidation on October 1, 2024. OWP SAS no longer contributes revenues or operations; One World deconsolidated and recorded a $1.56 million loss in 2023. In 2024, it recorded another $245,000 equity-write-down on the Colombian investment.
• New Ventures: In May 2024, One World acquired Pétalo Pharmaceutical SAS—a non-operational license holder in Colombia—for $75,000, later writing off the entire amount. This venture was dissolved before assets or sales could materialize.

2024 Financial Highlights

1. Revenue & Gross Profit

• Revenue: $4,863 in 2024 vs. $7,589 in 2023, a 36% decline. One World’s only revenue in 2024 came from sales of its consumer CBD topical, Pro-11; prior revenue in 2023 was mostly seed sales in Colombia.
• Cost of Goods Sold: $948 in 2024 (shipping and packaging costs) vs. $173,122 in 2023 (cultivation and processing costs). The massive prior COGS and negative gross margin in 2023 reflected the idle Colombian assets.
• Gross Profit (Loss): +$3,915 in 2024 vs. –$165,533 in 2023, driven by the shift to an asset-light retail model in the U.S.

2. Operating Expenses

• General & Administrative (G&A): $653,983 in 2024 vs. $1,289,656 in 2023, a 49% drop. Lower G&A is tied to downsizing in Colombia, reduced travel, and no greenhouse/plant operations overhead.
• Professional Fees: $1,061,926 in 2024 vs. $591,416 in 2023. The increase is attributable to one-time legal and finance advisory costs tied to new debt placements and management incentives. Notably, $622,714 of the 2024 figure was non-cash stock-based compensation.
• Impairment Expense: $160,000 in 2024, mostly on forfeited equipment deposits tied to Pétalo Pharmaceutical.
• Operating Loss: $1,871,994 in 2024 vs. $2,080,871 in 2023, a modest 10% improvement.

3. Other Expenses & Net Loss

• Loss on Debt Extinguishment: $724,086 in 2024, largely non-cash charges on refinancing related-party and outside debt.
• Loss on Investment: $245,272 recognized in 2024 as the Colombian asset writedown after liquidation was initiated.
• Interest & Debt Amortization: $1,093,660 of interest expense and $722,716 of debt discount amortization in 2024.
• Net Loss: $3,935,012 (–$0.04 per share) in 2024 vs. $3,953,321 (–$0.05) in 2023.

4. Balance Sheet & Cash Flow

• Cash Position: $42,456 at December 31, 2024, versus $726 at year-end 2023.
• Working Capital: Negative $3.10 million as of 2024-12-31 (vs. –$3.86 million in 2023), driven by $3.17 million of current liabilities and $68,300 of current assets.
• Debt Profile: $3.75 million of related-party and third-party notes outstanding, net of debt discounts.
• Operating Cash Flow: –$1.12 million in 2024 vs. –$1.19 million in 2023, indicating persistent cash burn.
• Financing Activities: $1.28 million raised in 2024 vs. $1.06 million in 2023, primarily through related-party loans and equity transactions.

Liquidity & Going Concern

The 2024 10-K carries a going-concern qualification, reflecting recurring operating losses and severe cash constraints. One World’s ability to continue hinges on:

• Fundraising: The Company has raised debt and equity from insiders (including a $250,000 related-party loan in April 2025) but needs institutional or larger retail financing.
• Revenue Growth: Scaling Pro-11 consumer CBD sales and launching industrial hemp packaging at commercial volumes.
• Cost Control: Keeping operating expenses in check while R&D for hemp solutions advances.

Until revenue stabilizes, equity or debt financings remain essential, albeit highly dilutive at current share prices ($0.03 to $0.08 range in 2024). Failure to secure funding could force operational cutbacks or insolvency.

Management & Insider Transactions

• CEO & Chairman: Isiah L. Thomas, III—a 12-time NBA All-Star—owns ~20.9% of common stock, plus 200,000 votes of Series C Special Preferred Stock (100 shares × 2× votes/share) that control 83.9% of combined voting power.
• Vice Chairman: Dr. Kenneth Perego II, M.D., owns 15.6% of common and 22.7% of Series A Preferred, contributing to 4.1% of vote power.
• CFO: Todd Peterson, a CPA with microcap experience, was appointed in July 2024.

Notable related-party loans exceed $2 million, carrying interest from 6–12% and due on demand or in 2027. One World has amended debt with significant stock-based consideration, resulting in >35 million warrants and options outstanding.

Risk Factors & Regulatory Environment

As an Early Stage company with no proven scale, One World faces significant risks:

• Going-Concern & Dilution: Near-term financings will dilute shareholders heavily.
• Regulatory: CBD still faces a patchwork of state laws; FDA oversight risks product delisting.
• Competitive: The hemp plastics market is emerging; automakers may favor incumbents.
• Legal: OWP SAS litigation in Colombian courts could yield creditor challenges.
• Operating: Consumer CBD is crowded; profit margins are often thin.

Investment Score & Conclusion

On our 1–10 scale (10 = highest potential), we assign 3.0 to One World Products, Inc. This low score reflects:

• Persistently large annual losses (~$4 million) with minimal revenues.
• A balance sheet stressed by $3.8 million of near-term liabilities and no visible funding runway.
• Heavy reliance on insider loans and equity dilutions at low share prices.
• Uncertain path to profitable scale, despite the promising industrial hemp initiative.

One World is a high-risk, speculative bet on the managerial pedigree of Isiah Thomas III and a pivot from a failed Colombian venture to niche U.S. CBD and hemp packaging. Only material new capital and strong commercial traction in Pro-11 or the automotive hemp product will meaningfully improve its prospects.

Net Loss (2024): $3,935,012

Investment Score: 3.0/10