Q4 2025 cbdMD Inc Earnings Call

December 19, 2025

Operator: Good afternoon and welcome to cbdMD, Inc.'s fiscal year 2025 earnings call and business update. Earlier today, the company issued a press release discussing results for the fiscal year ended 30 September 2025, following the filing of its annual report on Form 10-K. Today's call is being recorded and will be available on the company's website along with the earnings release and supplemental materials. All participants are currently in listen-only mode. Following prepared remarks, we will open the call for questions. I will now turn the call over to Brad Whitford, Chief Accounting Officer of cbdMD.

Speaker #1: Good afternoon, and welcome to the cbdMD, Inc. Fiscal Year 2025 earnings call and business update. Earlier today, the company issued a press release discussing results for the fiscal year ended September 30, 2025, following the filing of its annual report on Form 10-K.

Speaker #1: Today's call is being recorded and will be available on the company's website, along with the earnings release and supplemental materials. All participants are currently in listen-only mode.

Speaker #1: We will now open the call for questions. Following prepared remarks, we will now turn the call over to Brad Whitford, Chief Accounting Officer of cbdMD.

Speaker #2: Thank you, and thank you all for joining us today. Before we begin, I'd like to remind everyone that today's remarks contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Bradley Whitford: Thank you. Thank you all for joining us today. Before we begin, I'd like to remind everyone that today's remarks contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our annual report on Form 10-K for the year ended 30 September 2025, and our other filings with the SEC for discussion of these risks. All forward-looking statements are made as of today, and the company undertakes no obligation to update them except as required by law. With that, I'll turn the call over to Ronan Kennedy, our CEO and CFO.

Brad Whitford: Thank you. Thank you all for joining us today. Before we begin, I'd like to remind everyone that today's remarks contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our annual report on Form 10-K for the year ended 30 September 2025, and our other filings with the SEC for discussion of these risks. All forward-looking statements are made as of today, and the company undertakes no obligation to update them except as

Speaker #2: These statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to our annual report on Form 10-K for the year ended September 30, 2025, and our other filings with the SEC for discussion of these risks.

Speaker #2: All forward-looking statements are made as of today, and the company undertakes no obligation to update them except as required by law. With that, I'll turn the call over to Ronan Kennedy, our CEO, and

required by law. With that, I'll turn the call over to Ronan Kennedy, our CEO and CFO.

Speaker #2: CFO. Good

Speaker #3: Afternoon, everyone, and thank you for joining us. Fiscal 2025 was a year of disciplined execution and meaningful progress for cbdMD. It marked our third consecutive year of operating improvement, continued balance sheet strengthening, and a repositioning of the company toward categories and regulatory frameworks that we believe offer long-term durability.

Ronan Kennedy: Good afternoon, everyone, and thank you for joining us. Fiscal 2025 was a year of discipline, execution, and meaningful progress for cbdMD. It marked our third consecutive year of operating improvement, continued balance sheet strengthening, and a repositioning of the company toward categories and regulatory framework that we believe offer long-term durability. While we are not yet where we ultimately want to be financially, the direction of travel is clear: lower operating losses, a cleaner capital structure, restored exchange compliance, and improving commercial momentum. Over the past several years, cbdMD has executed a deliberate reset focused on reducing fixed costs and simplifying our operations, rationalizing our product portfolio toward higher margin and volume SKUs, repairing and strengthening our balance sheet, and investing in categories supported by science, quality, and regulatory readiness. Fiscal 2025 represented an important execution year in that reset.

Speaker #3: While we are not yet where we ultimately want to be financially, the direction of travel is clear: lower operating losses, a cleaner capital structure, restored exchange compliance, and improving commercial momentum.

Speaker #3: Over the past several years, cbdMD has executed a deliberate reset focused on reducing fixed costs and simplifying our operations. Rationalizing our product portfolio toward higher-margin and volume SKUs, repairing and strengthening our balance sheet, investing in categories supported by science, quality, and regulatory readiness—fiscal 2025 represented an important execution year in that reset.

years, cbdMD has executed a deliberate reset focused on reducing fixed costs and simplifying our operations, rationalizing our product portfolio toward higher margin and volume SKUs, repairing and strengthening our balance sheet, and investing in categories supported by science, quality, and regulatory readiness. Fiscal 2025 represented an important execution year in that reset.

Speaker #3: For the year, we reduced our operating loss by $1.2 million to approximately a $2.1 million loss. That represents our third straight year of improved operating results.

Ronan Kennedy: For the year, we reduced our operating loss by $1.2 million to approximately $2.1 million loss. That represents our third straight year of improved operating results. Our adjusted non-GAAP EBITDA improved from a $1.7 million loss in 2024 to a $900,000 loss in 2025. These gains were driven by disciplined cost control, more efficient marketing spend, supply chain optimization, and tighter focus across our core brands, all while investing in growing a new beverage brand, Oasis. We now have distribution across nine states, including North Carolina, Florida, Alabama, Texas, Tennessee, Georgia, South Carolina, and Minnesota, with additional markets under evaluation. We are seeing improving case sell-through in core markets and growing distributor engagement as the brand gains awareness. We believe Oasis positions cbdMD in one of the fastest-growing segments of the beverage market: functional alcohol alternative social beverages supported by shifting consumer preferences.

For the year, we reduced our operating loss by $1.2 million to approximately $2.1 million loss. That represents our third straight year of improved operating results. Our adjusted non-GAAP EBITDA improved from a $1.7 million loss in 2024 to a $900,000 loss in 2025. These gains were driven by disciplined cost control, more efficient marketing spend, supply chain optimization, and tighter focus across our core brands, all while investing in growing a new beverage brand, Oasis. We now have distribution across nine states, including North Carolina, Florida, Alabama, Texas, Tennessee, Georgia,

Speaker #3: Our adjusted non-GAAP EBITDA improved from a $1.7 million loss in 2024 to a $900,000 loss in 2025. These gains were driven by disciplined cost control, more efficient marketing spend, supply chain optimization, and tighter focus across our core brands.

Speaker #3: All while investing in growing a new beverage brand, Oasis. We now have distribution across nine states, including North Carolina, Florida, Alabama, Texas, Tennessee, Georgia, South Carolina, and Minnesota, with additional markets under evaluation.

South Carolina, and Minnesota, with additional markets under evaluation. We are seeing improving case sell-through in core markets and growing distributor engagement as the brand gains awareness. We believe Oasis positions cbdMD in one of the fastest-growing segments of the beverage market: functional alcohol alternative social beverages supported by shifting consumer preferences.

Speaker #3: We are seeing improving case sell-through in core markets, and growing distributor engagement as the brand gains awareness. We believe Oasis positions cbdMD in one of the fastest-growing segments of the beverage market.

Speaker #3: Functional alcohol alternative social beverages, supported by shifting consumer preferences. Across our core cbdMD and Paw CBD brands, we focus on SKU rationalization, margin protection, and prioritizing higher velocity products.

Ronan Kennedy: Across our core cbdMD and Paw CBD brands, we focus on SKU rationalization, margin protection, and prioritizing higher velocity products. This discipline allows us to stabilize the business while preserving strong gross margins relative to our peers. A major focus in fiscal 2025 was restoring balance sheet strength and capital flexibility. Through the Series A preferred equity conversion and the financing completed at the end of September, net book value increased from under $2 million to over $7 million. Over $7 million in annual accrued preferred dividend obligations were eliminated, working capital improved materially year over year, and our capital structure complexity was significantly reduced. As we announced earlier today, we recently closed $2.25 million in additional financing. This transaction resulted in a temporary halt in our stock trading until the material event was publicly disclosed.

Across our core cbdMD and Paw CBD brands, we focus on SKU rationalization, margin protection, and prioritizing higher velocity products. This discipline allows us to stabilize the business while preserving strong gross margins relative to our peers. A major focus in fiscal 2025 was restoring balance sheet strength and capital flexibility. Through the Series A preferred equity conversion and the financing completed at the end of September, net book value increased from under $2 million to over $7 million. Over $7 million in annual accrued preferred dividend obligations were eliminated, working capital

Speaker #3: This discipline allows us to stabilize the business while preserving strong gross margins relative to our peers. A major focus in fiscal 2025 was restoring balance sheet strength and capital flexibility.

Speaker #3: Through the Series A preferred equity conversion and the financing completed at the end of September, net book value increased from under $2 million to over $7 million.

Speaker #3: Over $7 million in annual accrued preferred dividend obligations were eliminated. Working capital improved materially year over year. And our capital structure complexity was significantly reduced.

improved materially year over year, and our capital structure complexity was significantly reduced. As we announced earlier today, we recently closed $2.25 million in additional financing. This transaction resulted in a temporary halt in our stock trading until the material event was publicly disclosed.

Speaker #3: As we announced earlier today, we recently closed $2.25 million in additional financing. This transaction resulted in a temporary halt in our stock trading until the material event was publicly disclosed.

Speaker #3: Given the heightened trading activity this past week, we've received numerous interests to raise substantially more capital; however, we remain mindful of dilution and associated fees.

Ronan Kennedy: Given the heightened trading activity this past week, we've received numerous interests to raise substantially more capital. However, we remain mindful of dilution and associated fees. We believe we were able to secure the financing at favorable valuation and establish a $20 million equity line of credit with minimal fees, providing us with significant flexibility to raise capital prudently under favorable market conditions. We continue to engage with several strategic opportunities that could help add revenue, contribution dollars, and bolster our product offering. We believe our strong balance sheet could help position us as a more attractive strategic partner with the wherewithal to weather regulatory uncertainty. In December 2025, cbdMD received formal confirmation from the NYSE American that all prior compliance deficiencies had been fully resolved. This milestone removes a significant overhang and reflects the progress we've made in restoring financial stability and governance discipline.

Given the heightened trading activity this past week, we've received numerous interests to raise substantially more capital. However, we remain mindful of dilution and associated fees. We believe we were able to secure the financing at favorable valuation and establish a $20 million equity line of credit with minimal fees, providing us with significant flexibility to raise capital prudently under favorable market conditions. We continue to engage with several strategic opportunities that could help add revenue, contribution dollars, and bolster our product offering. We believe our strong balance sheet

Speaker #3: We believe we were able to secure the financing at a favorable valuation and establish a $20 million equity line of credit with minimal fees, providing us with significant flexibility to raise capital prudently under favorable market conditions.

Speaker #3: We continue to engage with several strategic opportunities that could help add revenue, contribution dollars, and bolster our product offering. We believe our strong balance sheet could help position us as a more attractive strategic partner with the wherewithal to weather regulatory uncertainty.

could help position us as a more attractive strategic partner with the wherewithal to weather regulatory uncertainty. In December 2025, cbdMD received formal confirmation from the NYSE American that all prior compliance deficiencies had been fully resolved. This milestone removes a significant overhang and reflects the progress we've made in restoring financial stability and governance discipline.

Speaker #3: In December 2025, cbdMD received a formal confirmation from the NYSE American that all prior compliance deficiencies had been fully resolved. This milestone removes a significant overhang and reflects the progress we've made in restoring financial stability and governance discipline.

Speaker #3: Yesterday, the White House issued a significant executive order directing federal agencies to modernize federal cannabis policy, including accelerating the rescheduling of cannabis and expanding research and access pathways for cannabinoids.

Ronan Kennedy: Yesterday, the White House issued a significant executive order directing federal agencies to modernize federal cannabis policy, including accelerating the rescheduling of cannabis and expanding research and access pathways for cannabinoids. Importantly for the hemp and CBD industry, the administration also highlighted support for exploring Medicare reimbursement pathways for legal full-spectrum hemp-derived CBD products under appropriate medical supervision. While these initiatives require additional administrative action and are not yet law, we view this executive order as an important direction that will signal that federal policy is evolving towards science-based evaluation and healthcare integration. This is particularly notable given the uncertainty created by the restrictive hemp language included in HR 5371 legislation enacted in November. The executive order underscores that federal policy is not monolithic and that there is active work underway to reconcile public health, consumer access, and scientific evidence.

Yesterday, the White House issued a significant executive order directing federal agencies to modernize federal cannabis policy, including accelerating the rescheduling of cannabis and expanding research and access pathways for cannabinoids. Importantly for the hemp and CBD industry, the administration also highlighted support for exploring Medicare reimbursement pathways for legal full-spectrum hemp-derived CBD products under appropriate medical supervision. While these initiatives require additional administrative action and are not yet law, we view this executive order as an important direction that will

Speaker #3: Importantly, for the hemp and CBD industry, the administration also highlighted support for exploring Medicare reimbursement pathways for legal, full-spectrum hemp-derived CBD products under appropriate medical supervision.

Speaker #3: While these initiatives require additional administrative action and are not yet law, we view this executive order as an important direction and a signal that federal policy is evolving toward science-based evaluation and healthcare integration.

signal that federal policy is evolving towards science-based evaluation and healthcare integration. This is particularly notable given the uncertainty created by the restrictive hemp language included in HR 5371 legislation enacted in November. The executive order underscores that federal policy is not monolithic and that there is active work underway to reconcile public health, consumer access, and scientific evidence.

Speaker #3: This is particularly notable given the uncertainty created by the restrictive hemp language included in H.R. 5371 legislation enacted in November. The executive order underscores that federal policy is not monolithic and that there is active work underway to reconcile public health, consumer access, and scientific evidence.

Speaker #3: We believe cbdMD is exceptionally well-positioned in this evolving environment. We were founded on THC-free and broad-spectrum CBD, which remains the majority of our revenue.

Ronan Kennedy: We believe cbdMD is exceptionally well positioned in this evolving environment. We were founded on THC-free and broad-spectrum CBD, which remains the majority of our revenue. We operate with CGMP manufacturing, rigorous testing, and conservative formulas. We've invested in years in safety, documentation, and compliance, not shortcuts. As regulatory clarity improves, we believe well-capitalized, science-driven operators like cbdMD stand to benefit while less compliant competitors face increasing pressure. I'll now turn the call over to Brad for more details on the financials.

We believe cbdMD is exceptionally well positioned in this evolving environment. We were founded on THC-free and broad-spectrum CBD, which remains the majority of our revenue. We operate with CGMP manufacturing, rigorous testing, and conservative formulas. We've invested in years in safety, documentation, and compliance, not shortcuts. As regulatory clarity improves, we believe well-capitalized, science-driven operators like cbdMD stand to benefit while less compliant competitors face increasing pressure. I'll now turn the call over to Brad for more details on the financials.

Speaker #3: We operate with cGMP manufacturing, rigorous testing, and conservative formulas. We've invested years in safety, documentation, and compliance—not shortcuts. As regulatory clarity improves, we believe well-capitalized, science-driven operators like cbdMD stand to benefit.

Speaker #3: While less compliant competitors face increasing pressure, I'll now turn the call over to Brad for more details on the—

Speaker #3: financials. Thank you, Ryan.

Bradley Whitford: Thank you, Ronan. Total net sales for the fourth quarter of fiscal 2025 were $4.7 million, or a 2% increase from the prior year compared to quarter total. For the 2025 fiscal year, net sales totaled $19.1 million as compared to $19.5 million in the prior year. Our quarterly e-commerce direct-to-consumer business generated sales of $3.5 million in the fourth quarter of fiscal 2025. This was a 6% year-over-year quarterly decrease. Some of the year-over-year decline is tied to a shift in consumer-to-hemp beverage category. E-commerce represented 75.1% of our total net sales for the fourth quarter of 2024 versus 81% in the prior year comparative quarter. For fiscal year 2025, e-commerce generated $14.7 million of net sales compared to $15.7 million for the comparative prior fiscal year, or a 6% decrease. E-commerce represented 77% of our total net sales for the fiscal year ended 2025.

Brad Whitford: Thank you, Ronan. Total net sales for the fourth quarter of fiscal 2025 were $4.7 million, or a 2% increase from the prior year compared to quarter total. For the 2025 fiscal year, net sales totaled $19.1 million as compared to $19.5 million in the prior year. Our quarterly e-commerce direct-to-consumer business generated sales of $3.5 million in the fourth quarter of fiscal 2025. This was a 6% year-over-year quarterly decrease. Some of the year-over-year decline is tied to a shift in consumer-to-hemp beverage category. E-commerce represented 75.1% of our total net sales for the fourth quarter of 2024 versus 81%

Speaker #2: Title net sales for the fourth quarter of fiscal 2025 were $4.7 million, or a 2% increase from the prior-year comparable quarter total.

Speaker #2: For the 2025 fiscal year, net sales totaled $19.1 million, compared to $19.5 million in the prior year. Our quarterly e-commerce direct-to-consumer business generated sales of $3.5 million in the fourth quarter of fiscal 2025.

Speaker #2: This was a 6% year-over-year quarterly decrease. Some of the year-over-year decline is tied to a shift in consumer-to-hemp beverage category. E-commerce represented 75.1% of our total net sales for the fourth quarter of 2024 versus 81% in the prior-year comparative quarter.

in the prior year comparative quarter. For fiscal year 2025, e-commerce generated $14.7 million of net sales compared to $15.7 million for the comparative prior fiscal year, or a 6% decrease. E-commerce represented 77% of our total net sales for the fiscal year ended 2025.

Speaker #2: For fiscal year '25, e-commerce generated $14.7 million of net sales, compared to $15.7 million for the comparative prior fiscal year, or a 6% decrease.

Speaker #2: E-commerce represented 77% of our total net sales for the fiscal year ended 2025. For fiscal 2025, our marketing spend to direct-to-consumer revenue totaled 30%, as compared with 27% in the prior year.

Bradley Whitford: For fiscal 2025, our marketing spend to direct-to-consumer revenue totaled 30% as compared with 27% in the prior year. We continue to test and iterate to find out the right marketing spend-to-revenue ratio and position the company to grow in fiscal 2026. Our wholesale business generated $1.2 million of net sales for the fourth quarter of fiscal 2025, up 25% as compared to $900,000 for the comparative quarter in fiscal 2024. Ongoing state-level regulatory changes did impact our business during the quarter, but despite this, our core wholesale business continues to improve while we are able to expand our Oasis business. For the fiscal years ended 30 September 2025 and 2024, our wholesale business generated net sales of $4.5 million and $3.8 million, respectively.

For fiscal 2025, our marketing spend to direct-to-consumer revenue totaled 30% as compared with 27% in the prior year. We continue to test and iterate to find out the right marketing spend-to-revenue ratio and position the company to grow in fiscal 2026. Our wholesale business generated $1.2 million of net sales for the fourth quarter of fiscal 2025, up 25% as compared to $900,000 for the comparative quarter in fiscal 2024. Ongoing state-level regulatory changes did impact our business during the quarter, but despite this, our core wholesale business continues to improve while we are able to expand

Speaker #2: We continue to test and iterate to find out the right marketing spend-to-revenue ratio and position the company to grow in fiscal 2026.

Speaker #2: Our wholesale business generated $1.2 million of net sales for the fourth quarter of fiscal '25, up 25% as compared to $900,000 for the comparative quarter in fiscal 2024.

Speaker #2: Ongoing state-level regulatory changes did impact our business during the quarter. But despite this, our core wholesale business continues to improve, while we are able to expand our OASIS business.

our Oasis business. For the fiscal years ended 30 September 2025 and 2024, our wholesale business generated net sales of $4.5 million and $3.8 million, respectively.

Speaker #2: For the fiscal years ended September 30, 2025 and 2024, our wholesale business generated net sales of $4.5 million and $3.8 million, respectively. Our gross profit as a percentage of net sales came in at 59% for the fourth quarter of fiscal 2025, compared to 54% in the prior-year comparative quarter.

Bradley Whitford: Our gross profit as a percentage of net sales came in at 59% for the fourth quarter of fiscal 2025, as compared to 54% in the prior year comparative quarter. During the fourth quarter, we wrote off approximately $113,000 related to legacy swag that had aged out as compared to $588,000 in 2024 related to legacy botanical products, and outdated packaging that was all greater than two years old. For fiscal 2025 and fiscal 2024, gross margins totaled 63% and 62%, respectively. Our SG&A expenses for the fourth quarter of fiscal 2025 totaled $3.4 million compared to $2.7 million in the prior year comparative quarter. 2024 included a $700,000 gain related to the settlement of our headquarters' lease liability. Management continues to focus on our cost and profitability. For the full 2025 fiscal year, SG&A expenses dropped $1.2 million from $15.3 million to $14.1 million.

Our gross profit as a percentage of net sales came in at 59% for the fourth quarter of fiscal 2025, as compared to 54% in the prior year comparative quarter. During the fourth quarter, we wrote off approximately $113,000 related to legacy swag that had aged out as compared to $588,000 in 2024 related to legacy botanical products, and outdated packaging that was all greater than two years old. For fiscal 2025 and fiscal 2024, gross margins totaled 63% and 62%, respectively. Our SG&A expenses for the fourth quarter of fiscal 2025 totaled $3.4 million compared to $2.7 million in the prior year

Speaker #2: During the fourth quarter, we wrote off approximately $113,000 related to legacy swag, which had aged out, as compared to $588,000 in 2024 related to legacy botanical products and outdated packaging, all of which was greater than two years old.

Speaker #2: For fiscal 2025 and fiscal 2024, gross margins totaled 63% and 62%, respectively. Our SG&A expenses for the fourth quarter of fiscal 2025 totaled $3.4 million, compared to $2.7 million in the prior year comparative quarter.

comparative quarter. 2024 included a $700,000 gain related to the settlement of our headquarters' lease liability. Management continues to focus on our cost and profitability. For the full 2025 fiscal year, SG&A expenses dropped $1.2 million from $15.3 million to $14.1 million.

Speaker #2: 2024 included a $700,000 gain related to the settlement of our headquarters' lease liability. Management continues to focus on our costs and profitability. For the full 2025 fiscal year, SG&A expenses dropped $1.2 million, from $15.3 million to $14.1 million.

Speaker #2: Overall, this resulted in a loss from operations of approximately $600,000 for the fourth quarter of fiscal 2025, as compared to a $300,000 loss for the prior year period.

Bradley Whitford: Overall, this resulted in a loss from operations of approximately $600,000 for the fourth quarter of fiscal 2025, as compared to a $300,000 loss for the prior year period. Our increase in warehouse lease cost was a key driver of this change. The full fiscal year operating loss totaled $2.1 million as compared to an operating loss of $3.3 million in 2024. Our non-GAAP adjustments to operating expenses for the fourth quarter of fiscal 2025 included $8,000 in non-cash employee stock expense, $262,000 in depreciation and amortization expense, $113,000 in inventory write-downs, resulting in a non-GAAP adjusted operating loss of $301,000 for the fourth quarter of fiscal 2025, as compared to a $131,000 non-GAAP adjusted operating loss in the fourth quarter of fiscal 2023.

Overall, this resulted in a loss from operations of approximately $600,000 for the fourth quarter of fiscal 2025, as compared to a $300,000 loss for the prior year period. Our increase in warehouse lease cost was a key driver of this change. The full fiscal year operating loss totaled $2.1 million as compared to an operating loss of $3.3 million in 2024. Our non-GAAP adjustments to operating expenses for the fourth quarter of fiscal 2025 included $8,000 in non-cash employee stock expense, $262,000 in depreciation and amortization expense, $113,000 in inventory write-downs, resulting in a non-GAAP adjusted

Speaker #2: Our increase in warehouse lease costs was a key driver of this change. The full fiscal year operating loss totaled $2.1 million, as compared to an operating loss of $3.3 million in 2024.

Speaker #2: Our non-GAAP adjustments to operating expenses for the fourth quarter of fiscal 2025 included $8,000 in non-cash employee stock expense, $262,000 in depreciation and amortization expense, and $113,000 in inventory write-downs, resulting in a non-GAAP adjusted operating loss of $301,000 for the fourth quarter of fiscal 2025, as compared to a $131,000 non-GAAP adjusted operating loss in the fourth quarter of fiscal 2023.

operating loss of $301,000 for the fourth quarter of fiscal 2025, as compared to a $131,000 non-GAAP adjusted operating loss in the fourth quarter of fiscal 2023.

Speaker #2: The change in non-GAAP adjusted operating loss over the prior year period is primarily attributable to slightly lower revenue and the increase in our warehouse expense over the prior year comparative period.

Bradley Whitford: The change in non-GAAP adjusted operating loss over the prior year period is primarily attributable to slightly lower revenue and the increase in our warehouse expense over the prior year comparative period. For the 2025 fiscal year, our non-GAAP adjusted EBITDA loss totaled $900,000 as compared to $1.6 million for fiscal 2024, driven by lower G&A costs in 2025. We have negotiated further cost savings during Q1 2026, including insurance and other SG&A items, and continue to focus on reducing overhead while we grow revenue. We had cash and cash equivalents of approximately $2.2 million and working capital of approximately $3.3 million on 30 September 2025, as compared to $2.4 million in working capital of approximately -$1 million on 30 September 2024.

The change in non-GAAP adjusted operating loss over the prior year period is primarily attributable to slightly lower revenue and the increase in our warehouse expense over the prior year comparative period. For the 2025 fiscal year, our non-GAAP adjusted EBITDA loss totaled $900,000 as compared to $1.6 million for fiscal 2024, driven by lower G&A costs in 2025. We have negotiated further cost savings during Q1 2026, including insurance and other SG&A items, and continue to focus on reducing overhead while we grow revenue. We had cash and cash equivalents of approximately $2.2 million and working

Speaker #2: For the 2025 fiscal year, our non-GAAP adjusted EBITDA loss totaled $900,000, as compared to $1.6 million for fiscal 2024. Driven by lower G&A costs in 2025, we have negotiated further cost savings during the first quarter of 2026, including insurance and other SG&A items, and continue to focus on reducing overhead while we grow revenue.

Speaker #2: We had cash and cash equivalents of approximately $2.2 million and working capital of approximately $3.3 million on September 30th, 2025, as compared to $2.4 million in working capital of approximately negative $1 million on September 30th, 2024.

capital of approximately $3.3 million on 30 September 2025, as compared to $2.4 million in working capital of approximately -$1 million on 30 September 2024.

Speaker #2: The main driver of the working capital improvement was the elimination of the accrued preferred dividend, which was a short-term liability on our balance sheet.

Bradley Whitford: The main driver of the working capital improvement was the elimination of the accrued preferred dividend, which was a short-term liability on our balance sheet, and proceeds from the sale of our Series B preferred stock. Our current assets as of 30 September 2025 improved slightly to approximately $6.6 million. As of 30 September 2025, the company's total current liabilities were $3.1 million. Considering our cash balance, including the recent Series C preferred financing, we believe we are entering into calendar 2026 with a very strong liquidity position and are focused on driving P&L performance. With ongoing regulatory volatility ahead, our focus is to ensure we have a strong, flexible balance sheet and maintain a nimble organization to ensure we can effectively and efficiently react to changing market dynamics. With that, I'll turn the call back over to Ronan.

The main driver of the working capital improvement was the elimination of the accrued preferred dividend, which was a short-term liability on our balance sheet, and proceeds from the sale of our Series B preferred stock. Our current assets as of 30 September 2025 improved slightly to approximately $6.6 million. As of 30 September 2025, the company's total current liabilities were $3.1 million. Considering our cash balance, including the recent Series C preferred financing, we believe we are entering into calendar 2026 with a very strong liquidity position and are focused on driving P&L performance. With

Speaker #2: And proceeds from the sale of our Series B Preferred Stock. Our current assets, as of September 30th, 2025, improved slightly to approximately $6.6 million.

Speaker #2: As of September 30, 2025, the company's total current liabilities were $3.1 million. Considering our cash balance, including the recent Series C preferred financing, we believe we are entering calendar 2026 with a very strong liquidity position, and our focus remains on driving P&L performance.

Speaker #2: With ongoing regulatory volatility ahead, our focus is to ensure we have a strong, flexible balance sheet and maintain a nimble organization to ensure we can effectively and efficiently react to changing market dynamics.

ongoing regulatory volatility ahead, our focus is to ensure we have a strong, flexible balance sheet and maintain a nimble organization to ensure we can effectively and efficiently react to changing market dynamics. With that, I'll turn the call back over to Ronan.

Speaker #2: With that, I'll turn the call back over to Ronan. Thanks, Brad. As we enter calendar 2026, cbdMD is fundamentally stronger than it was two years ago.

Ronan Kennedy: Thanks, Brad. As we enter calendar 2026, cbdMD is fundamentally stronger than it was two years ago. A cleaner balance sheet, lower operating losses, restored exchange compliance, exposure to high-growth beverage category, and encouraging regulatory signs. Our priorities remain clear: scale Oasis responsibly as distribution matures, drive efficient, profitable D2C growth through disciplined marketing execution, preserve margins and capital discipline, and evaluate strategic opportunities aligned with our regulatory strength and diversification. We believe the heavy lifting of the turnaround is largely behind us, and fiscal 2026 is about continuing to convert that foundation into improved financial performance and capitalizing on a dynamic regulatory environment. We are still absorbing the president's announcement of potentially $30 billion and 60 million Medicaid consumers that could be turned into CBD starting in April. We know many of these Americans are already buying, but the potential demand increase for quality product could be staggering.

Speaker #2: The cleaner balance sheet, lower operating losses, restored exchange compliance, exposure to high-growth beverage category, and encouraging regulatory signs. Our priorities remain clear: scale OASIS responsibly as distribution matures; drive efficient, profitable D2C growth through disciplined marketing execution; preserve margins and capital discipline; and evaluate strategic opportunities aligned with our regulatory strength and diversification.

Speaker #2: We believe the heavy lifting of the turnaround is largely behind us, and fiscal 2026 is about continuing to convert that foundation into improved financial performance and capitalizing on a dynamic regulatory environment.

us, and fiscal 2026 is about continuing to convert that foundation into improved financial performance and capitalizing on a dynamic regulatory environment. We are still absorbing the president's announcement of potentially $30 billion and 60 million Medicaid consumers that could be turned into CBD starting in April. We know many of these Americans are already buying, but the potential demand increase for quality product could be staggering.

Speaker #2: We are still absorbing the President's announcement of potentially $30 billion and 60 million Medicaid consumers that could be turned into CBD starting in April.

Speaker #2: We know many of these Americans are already buying, but the potential demand increase for quality product could be staggering. This should be an exciting quarter to watch, as the details and downstream impact of the executive order unfold.

Ronan Kennedy: This should be an exciting quarter to watch as the details and downstream impact of the executive order unfolds. I want to thank our employees, partners, and shareholders for their continued support. With that, Operator, we're happy to take questions.

This should be an exciting quarter to watch as the details and downstream impact of the executive order unfolds. I want to thank our employees, partners, and shareholders for their continued support. With that, Operator, we're happy to take questions.

Speaker #2: I want to thank our employees, partners, and shareholders for their continued support, and with that, Operator, we're happy to take questions.

Speaker #3: Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Please ensure that your phone is not on mute when called upon. Again, it is star one to ask a question. Your first question comes from Thomas McGovern with Maxim Group. Please go ahead.

Speaker #3: Please ensure that your phone is not on mute when called upon. Again, it is star one to ask a question. Your first question comes from Thomas McGovern with Maxim Group.

Speaker #3: Please go

Speaker #3: Please go ahead. Hey, guys.

Thomas McGovern: Hey, guys. Thanks for taking my question. Yeah, so just, you know, firstly, on a high level, you guys see 2026 as, you know, kind of, you know, a return to growth for you guys after a lot of the heavy lifting on the restructuring was executed. The turnaround strategy was executed in 2025. Just curious, as you look out in 2026, what do you, among your brands, what do you really think is going to be the key driver of growth from a top-line perspective? Do you think it's going to be the Oasis expanding into these new states or, you know, maybe some innovation within the cbdMD, cbdMD core brand? Just maybe walk me through what you think will be the biggest driver of growth in 2026.

Speaker #4: Thanks for taking my question. Yes, so just firstly, on a high level, you guys see '26 as kind of a return to growth for you guys after a lot of the heavy lifting on the restructuring was executed and the turnaround strategy was executed in '25.

Speaker #4: Just curious, as you look out in '26, what do you, among your brands, what do you really think is going to be the key driver of growth from a top-line perspective?

Speaker #4: Do you think it's going to be the Herbal Oasis expanding into these new states, or maybe some innovation within the cbdMD core brand? Just maybe walk me through what you think will be the biggest driver of growth in '26.

what you think will be the biggest driver of growth in 2026.

Speaker #2: Sure. Thomas, thank you for the call. So, look, we do think there's opportunity to continue to grow with the core cbdMD brand. I think our team—we've made a significant transformation this year with our team, and they're starting to really dial things in, and we're feeling good about where the core business is.

Ronan Kennedy: Sure. Thomas, thank you for the call. Look, we do think there's opportunity to continue to grow with the core cbdMD brand. I think our team, we've made a significant transformation this year with our team, and they're starting to really dial things in, and we're feeling good about where the core business is. That said, we still think there's huge growth opportunity that we have visibility on, on the beverage side, you know, at least through November, and we're still sort of depending on where some of the regulatory framework shakes out for the year.

Speaker #2: That said, we still think there's huge growth opportunity that we have visibility on the beverage side, at least through November. We're still sort of depending on where some of the regulatory framework shakes out for the year.

Speaker #4: Understood. And when we look at your direct-to-consumer business, we did see a year-over-year decline there. Just maybe if you could unpack that a little bit for us, to try and give us an understanding if that's a reflection of some of the SKU reduction you guys have executed, or if it's maybe some declining KPIs in terms of returning customers or customer acquisition. Just any insight you can provide on that would be helpful.

Thomas McGovern: Understood. When we look at your direct-to-consumer business, we did see a year-over-year decline there. Just kind of maybe if you could unpack that a little bit for us, to try and get us an understanding if that's a reflection of some of the SKU reduction you guys have executed or if it's, you know, maybe some declining KPIs in terms of returning customers or customer acquisition. Just kind of any insight you can provide on that would be helpful.

Speaker #2: Sure. I mean, I think if we look at, sort of, if we scale back kind of our 24-month trend, I think we see the business right now trending slightly up over prior-year periods on the D2C side.

Ronan Kennedy: Sure. I mean, I think, you know, if we look at sort of if we scale back kind of our 24-month trend, I think, you know, we see the business right now trending, you know, slightly up over, you know, prior year periods on the D2C side. So I think it was a matter of, you know, when we made the changes to the organization early during 2025, you know, it sort of took some time to sort of get our arms around it and sort of create that bottoming out and then as we're starting to sort of move back in the right direction.

Speaker #2: So I think it was a matter of when we made the changes to the organization early during 2025, it sort of took some time to sort of get our arms around it.

Speaker #2: And sort of create that bottoming out, and then as we're starting to sort of move back in the right—

Speaker #2: direction. Understood.

Thomas McGovern: Understood. And then, last question for me, you know, obviously there's a lot going on in the regulatory environment. Just curious, have you had any insight on, you know, a possible timeline for Medicare coverage of, you know, CBD or hemp-derived products? And then also, you know, maybe just on a higher level, how you guys have adjusted your strategy just given the dynamic environment we're facing currently?

Speaker #4: And then, last question for me—obviously, there's a lot going on in the regulatory environment. Just curious, have you had any insight on a possible timeline for Medicare coverage of CBD or hemp-derived products?

Speaker #4: And then also, maybe just on a higher level, how you guys have adjusted your strategy just given the dynamic environment we're facing.

Speaker #4: currently? Sure.

Ronan Kennedy: Sure. Sure. I will say, Thomas, there's a little bit of change in sort of the script over the last 24 hours given what happened yesterday. But look, I think what we understand is they are trying to pilot a program starting in 1 April. And I think, you know, with his commitment to trying to use the category to help consumers, right now it gives most of the industry, I think, encouragement that they're going to solve for some of the language restrictions that was in the bill in November. I think everybody's still very much for smart regulations around safety, around labeling, around packaging, around quality. I think it's just a matter of how do we ease the right limits to make sure that there's a viable, effective product for adult consumers.

Speaker #2: Sure. I will say, Thomas, there’s a little bit of a change in sort of the script over the last 24 hours, given what happened yesterday.

Speaker #2: But look, I think what we understand is they are trying to pilot a program starting on April 1st. And I think with his commitment to trying to use the category to help consumers, it right now gives most of the industry, I think, encouragement that they're going to solve for some of the language restrictions that were in the bill in November.

Speaker #2: I think everybody's still very much for smart regulations around safety, around labeling, around packaging, around quality. I think it's just a matter of how do we ease the right limits to make sure that there's viable, effective product for adult consumers.

Ronan Kennedy: matter of how do we ease the right limits to make sure that there's a viable, effective product for adult consumers.

Speaker #4: Understood. I appreciate you taking the time to answer all my questions.

Thomas McGovern: Understood. I appreciate you taking the time to answer all my questions.

Speaker #2: Sure.

Ronan Kennedy: Sure. Thanks.

Speaker #2: Thanks. The next question comes

Operator: The next question comes from Mark Tasney, private investor. Your line is open.

Speaker #3: From Mark Tasney, private investor. Your line is open.

Speaker #5: Hi, guys. Hey, I'm just wondering, could you put it in perspective? Sometimes things are overdone in the market when you hear news. So I'm just wanting to understand, this executive order—have you guys talked among yourselves about the benefits or the negative aspects that it may have on your business, whether it's for the good or not the good?

Adam Waldo: Hi, guys. Hey, I'm just wondering, you know, could you put in perspective? Sometimes, you know, things are overdone in the market when you hear of news. So I'm just wanting to understand this executive order, you know, as you guys talk among yourselves about the benefits or the negative aspects that it may have on your business, whether it's for the good or not the good, is it overdone? Can you put it maybe in detail what you guys think will, what it can do for your business in the future, if anything? Maybe what you've discussed, you know, among each other, like, is it a game changer for your business or is it overdone? Is the hype overdone? I guess that's the best I could put it.

[Analyst]: Hi, guys. Hey, I'm just wondering, you know, could you put in perspective? Sometimes, you know, things are overdone in the market when you hear of news. So I'm just wanting to understand this executive order, you know, as you guys talk among yourselves about the benefits or the negative aspects that it may have on your business, whether it's for the good or not the good, is it overdone? Can you put it maybe in detail what you guys think will, what it can do for your business in the future, if anything? Maybe what you've discussed, you know, among each other, like, is it a game changer for your business or is it

Speaker #5: Is it overdone? Can you put it maybe in detail what you guys think it will—what it can do for your business in the future, if anything?

Speaker #5: Maybe what you've discussed among each other, like, is it a game changer for your business, or is it overdone? Is the hype overdone? I guess that's the best I could put it.

overdone? Is the hype overdone? I guess that's the best I could put it.

Speaker #2: Mark, thanks for the call. Look, I mean, I think we're still trying to just sort of digest his statements, and I think the devil's going to be in the detail and how it all gets enacted.

Ronan Kennedy: Mark, thanks for the call. Look, I mean, I think we're still trying to just sort of digest sort of, you know, his statements, and I think the devil's going to be in the detail and how it all gets enacted. But I mean, he clearly, the way we viewed it is he made a statement that he wanted to make CBD product available as an alternative solution for, you know, people on Medicare by our, you know, from what we understand, there's over 60 million consumers on Medicare. And as part of the statements, they spoke about, you know, potentially up to $500 a year in reimbursement for CBD products. So when we do the math, that works out to $30 billion of potential Medicare spend that has the potential to help drive demand for the CBD category. Now, will we get there in April?

Speaker #2: But I mean, he clearly—the way we viewed it is, he made a statement that he wanted to make CBD product available as an alternative solution for people in Medicare. From what we understand, there's over 60 million consumers on Medicare, and as part of the statements, they spoke about potentially up to $500 a year in reimbursement for CBD products.

Speaker #2: So, when we do the math, that works out to $30 billion of potential Medicare spend that has the potential to help drive demand for the CBD category.

works out to $30 billion of potential Medicare spend that has the potential to help drive demand for the CBD category. Now, will we get there in April?

Speaker #2: Now, will we get there in April? No, but I think what it shows is that, over the next couple of years, there could be a very significant increase in demand for safe, effective, high-quality product.

Ronan Kennedy: No, but I think, you know, what it shows is that over the next couple of years, there could be a very significant increase in demand for, you know, safe, effective, high-quality product. You know, how do we model that into our business? I think, you know, in 24 hours, I think, you know, we still don't know. I think we are still sort of. I think we will approach it as aggressively as we can to position ourselves, but at the same time, making sure that we are being, you know, prudent and careful with our balance sheet, and, you know, build our business without that demand into, you know, a profitable long-term organization.

No, but I think, you know, what it shows is that over the next couple of years, there could be a very significant increase in demand for, you know, safe, effective, high-quality product. You know, how do we model that into our business? I think, you know, in 24 hours, I think, you know, we still don't know. I think we are still sort of. I think we will approach it as aggressively as we can to position ourselves, but at the same time, making sure that we are being, you know, prudent and careful with our balance sheet, and, you know, build our business without that demand into, you know, a profitable long-term organization.

Speaker #2: How do we model that into our business? I think in 24 hours—I think we still don't know. I think we are still sort of—I think we will approach it as aggressively as we can to position ourselves, but at the same time, making sure that we are being prudent and careful with our balance sheet, and build our business without that demand into profitable long-term.

Speaker #2: organization. Okay.

Adam Waldo: Okay. Listen, one comment I'd like to make before I hang up is my dad has neuropathy of the feet, and he tried the CBD products, and so he's paying out of pocket because it actually helps him, the cream and the internal. And so he's paying out of pocket, but, you know, he has Medicare. So, you know, it looks like even with older people, you know, they're up for it, you know, and the Medicare could kick in to help them, you know, purchase it. So that's all I wanted to say. But thanks for making those comments. I appreciate it.

[Analyst]: Okay. Listen, one comment I'd like to make before I hang up is my dad has neuropathy of the feet, and he tried the CBD products, and so he's paying out of pocket because it actually helps him, the cream and the internal. And so he's paying out of pocket, but, you know, he has Medicare. So, you know, it looks like even with older people, you know, they're up for it, you know, and the Medicare could kick in to help them, you know, purchase it. So that's all I wanted to say. But thanks for making those comments. I appreciate it.

Speaker #5: Listen, one comment I'd like to make before I hang up is, my dad has neuropathy of the feet and he tried the CBD products, and so he's paying out of pocket because it actually helps him—the cream and the internal.

Speaker #5: And so he's paying out of pocket, but he has Medicare. So it looks like even with older people, they're up for it. And the Medicare could kick in to help them purchase it.

Speaker #5: So, that's all I wanted to say. But thanks for making those comments. I appreciate it.

Speaker #2: Sure, and thank you for your comment about your father. We're glad that he is seeing about it.

Ronan Kennedy: Sure. Thank you for your comment about your father, and we're glad that he is seeing a better one.

Speaker #5: Okay. Thanks.

Adam Waldo: Okay. Thanks. Bye-bye.

[Analyst]: Okay. Thanks. Bye-bye.

Speaker #5: Bye-bye. Once again, if you

Operator: Once again, if you have a question, it is star one. Your next question comes from Adam Waldo with Lismore Partners, LLC. Please go ahead.

Speaker #3: I have a question, it is star one. Your next question comes from Adam Waldo with Lismore Partners, LLC. Please go ahead.

Speaker #6: Good day, Ronan. Thank you very much for taking our questions, and happy holidays to all of you.

Adam Waldo: Good day, Ronan. Thank you very much for taking our questions, and happy holidays to all of you.

Speaker #2: Thank you, Adam. You too.

Ronan Kennedy: Thank you, Adam. You too.

Speaker #5: I just want to clarify something in the press release. The paragraph that makes reference to the executive order yesterday talks about the statements around Medicare supporting full-spectrum hemp for seniors, and then a couple of sentences later, it makes reference to 60 million seniors on Medicaid.

Adam Waldo: I just want to clarify something in the press release. The paragraph that makes reference to the executive order yesterday talks about the statements around Medicare supporting full-spectrum hemp for seniors, and then the couple of sentences later, it makes reference to 60 million seniors on Medicaid. Was that a typo, or do you expect that the executive order, and I know it's only been about 24 hours, but do you expect the executive order signed yesterday would address both Medicare and Medicaid patients who are seniors?

Speaker #5: Was that a typo, or do you expect that the executive order—and I know it's only been about 24 hours—but do you expect that executive order signed yesterday would address both Medicare and Medicaid patients who are seniors?

Speaker #2: Adam, I'm sorry that was I think you did pick up a typo. But my I guess the way we would look at it is that if it is working, Medicare and they're seeing consumers are seeing benefits and if the administration can show that it's a positive return or sort of a cost savings with a better efficacy that it could be expanded to that program as well.

Ronan Kennedy: Adam, I'm sorry. That was - I think you did pick up a typo, but I guess the way we would look at it is that if it is working on Medicare, and they're seeing, you know, consumers are seeing benefits, and, you know, if the administration can show that it's, you know, there's a positive return or sort of a cost savings with a better efficacy, that, you know, it could be expanded to that program as well. Although I don't believe it's the same size as what Medicare is.

Speaker #2: Although I don't believe it's the same size as what Medicare—

Speaker #2: is. Fair enough.

Thomas McGovern: Fair enough. Yeah. So potentially Centers for Medicare and Medicaid might extend it to Medicaid over time, but the executive order language explicitly only addresses Medicare at this time. Is that a fair statement on my part?

Adam Waldo: Fair enough. Yeah. So potentially Centers for Medicare and Medicaid might extend it to Medicaid over time, but the executive order language explicitly only addresses Medicare at this time. Is that a fair statement on my part?

Speaker #4: Yeah, so potentially, Centers for Medicare & Medicaid might extend it to Medicaid over time, but the executive order language explicitly only addresses Medicare at this time.

Speaker #4: Is that a fair statement on my part?

Speaker #2: To the best of our knowledge, that's

Ronan Kennedy: To the best of our knowledge, that's correct. I apologize for the typo.

Speaker #2: Correct. I apologize for the typo. No, no.

Thomas McGovern: No, no worries. I just wanted to clarify that because obviously it's only 24 hours, but they're both obviously big potential markets. Okay. So now, obviously, you've only had 24 hours to digest this. You probably had sort of put together an operating plan for fiscal 2026, obviously back in the September timeframe that didn't contemplate any of this. You've raised, you know, Series B convertible preferred at the end of September. Now you've raised Series C. So liquidity looks pretty good near term. How are you prioritizing, you know, given the regulatory fluidity, how are you prioritizing growth investment for the balance of fiscal 2026 as between sort of the traditional core business and Oasis, given that I think the executive order really only signed yesterday only pertains to the traditional business? Is that right?

Adam Waldo: No, no worries. I just wanted to clarify that because obviously it's only 24 hours, but they're both obviously big potential markets. Okay. So now, obviously, you've only had 24 hours to digest this. You probably had sort of put together an operating plan for fiscal 2026, obviously back in the September timeframe that didn't contemplate any of this. You've raised, you know, Series B convertible preferred at the end of September. Now you've raised Series C. So liquidity looks pretty good near term. How are you prioritizing, you know, given the regulatory fluidity, how are you prioritizing growth investment for the

Speaker #4: Worries. I wanted to clarify that, because obviously it's only 24 hours, but they both, obviously, are big potential markets. Okay. So now, obviously, you've only had 24 hours to digest this.

Speaker #4: You probably had sort of put together an operating plan for fiscal '26. Obviously, back in the September timeframe, that didn't contemplate any of this.

Speaker #4: You've raised Series B convertible preferred at the end of September. Now you've raised Series C. So liquidity looks pretty good near term. How are you prioritizing, given the regulatory fluidity?

Speaker #4: How are you prioritizing growth investment for the balance of fiscal '26 as between the traditional core business and Herbal Oasis, given that I think the executive order, really only signed yesterday, only pertains to the traditional business?

balance of fiscal 2026 as between sort of the traditional core business and Oasis, given that I think the executive order really only signed yesterday only pertains to the traditional business? Is that right?

Speaker #4: Is that right?

Speaker #2: I think it highlights a lot more of that traditional business, but I do think as we look at—I guess there are some conflicting regulations out there now between the bill in November and sort of the statements from Trump, and then I think two weeks ago there was a—I think what happened in November with the language change and the definition of hemp has forced the industry to really come together and coalesce. It was done by circumventing sort of a normal process and any sort of normal comment period and review, and we won't get into the details of how or why, but it is what it is.

Ronan Kennedy: I think highlights a lot more of that traditional business, but I do think, you know, as we look at, I guess there's some conflicting regulations out there now between the bill in November and sort of the statements from Trump. And that, you know, I think two weeks ago there was a - I think what happened in November with the language change and the definition of hemp has forced sort of the industry to really come together and coalesce. It was done by circumventing sort of a normal process and any sort of normal comment period and review. And, you know, we won't get into sort of the details of how or why, but it is what it is. And I think it's giving us, you know, the industry is starting to come together.

why, but it is what it is. And I think it's giving us, you know, the industry is starting to come together.

Speaker #2: And I think it's giving us—the industry is starting to come together. You've seen the Widen bill come out and present sort of more reasonable THC limits.

Ronan Kennedy: You've seen the Wyden Bill come out and, you know, present sort of more reasonable THC limits as part of sort of a cannabinoid or hemp-derived cannabinoid product. But I don't think what they fully understood in November was it has, you know, pretty, you know, concerning impact next November if language isn't changed around, you know, a lot of firms that, you know, this would wipe out 100% of their revenue. So I think the economic analysis of November sort of didn't really happen. And I think as people understand sort of that true economic impact, I think there's better ways to regulate that. And we've seen that with the Wyden Bill.

You've seen the Wyden Bill come out and, you know, present sort of more reasonable THC limits as part of sort of a cannabinoid or hemp-derived cannabinoid product. But I don't think what they fully understood in November was it has, you know, pretty, you know, concerning impact next November if language isn't changed around, you know, a lot of firms that, you know, this would wipe out 100% of their revenue. So I think the economic analysis of November sort of didn't really happen. And I think as people understand sort of that true economic impact, I think there's better ways to regulate that. And we've

Speaker #2: As part of sort of a cannabinoid or hemp-derived cannabinoid product. But I don't think what they fully understood in November was it has pretty concerning impact next November if language isn't changed around—a lot of firms, this would wipe out 100% of their revenue.

Speaker #2: So I think the economic analysis of November sort of didn't really happen. And I think as people understand sort of that true economic impact, I think there are better ways to regulate that.

Speaker #2: And we've seen that with the widened bill. And then I think having Trump make his statements yesterday, we feel like there's a much more encouraging outlook that we'll get some resolution to how the language is written in the November bill.

seen that with the Wyden Bill.

Ronan Kennedy: Then I think having, you know, Trump make his statements yesterday, we feel like, you know, there's a much more encouraging outlook that we'll get some resolution to how the language is written in the November bill at some point during this time. You know, so we are operating carefully, and we have, you know, some contingency plans in place. I think we've got to be careful. Many of our competitors are on these calls, so we don't want to release too much. But I think we do have a strategy of, you know, that we do believe the regs will get figured out, and the question will become what are those upper limits on the THC side of things. But at the same time, we have a core strong business that we continue to improve.

Then I think having, you know, Trump make his statements yesterday, we feel like, you know, there's a much more encouraging outlook that we'll get some resolution to how the language is written in the November bill at some point during this time. You know, so we are operating carefully, and we have, you know, some contingency plans in place. I think we've got to be careful. Many of our competitors are on these calls, so we don't want to release too much. But I think we do have a strategy of, you know, that we do believe the regs will get figured out, and the question will become what are those upper limits on the

Speaker #2: At some point during this time, so we are operating carefully. And we have some contingency plans in place. I think we've got to be careful—many of our competitors are on these calls.

Speaker #2: So, we don't want to release too much, but I think we do have a strategy in that we do believe the regs will get figured out, and the question will become, what are those upper limits on the THC side of things.

THC side of things. But at the same time, we have a core strong business that we continue to improve.

Speaker #2: But at the same time, we have a core, strong business that we continue to improve. And we still have a very strong, sort of THC business, and are looking to continue to expand and build upon that core.

Ronan Kennedy: You know, we still have a very strong sort of THC business and are looking to continue to expand and build upon that core base.

You know, we still have a very strong sort of THC business and are looking to continue to expand and build upon that core base.

Speaker #2: base. Right.

Adam Waldo: Right. And again, at a high level, and very, very helpful. At a high level, are you prioritizing incremental working capital investment for the next few quarters more in the Oasis business, which had been your strategy, you know, for most of the last year, or will you now put more working capital in the inventory build on the CBD, you know, traditional CBD product side, the non-beverage side? Or is it just so fluid right now that it's a little hard to know where to prioritize incremental working capital investment in your operation?

Speaker #4: And again, at a high level, I'm very, very helpful. At a high level, are you prioritizing incremental working capital investment for the next few quarters more in the Herbal Oasis business—which had been your strategy for most of last year—or will you now put more working capital in the inventory build on the CBD, traditional CBD product side, the non-beverage side?

Speaker #4: Or is it just so fluid right now that it's a little hard to know where to prioritize incremental working capital investment in your operation?

Speaker #2: I would say, probably for the next quarter, it will be a little bit more weighted on the Oasis side. And then there will be constant evaluation with respect to where the regs are moving, to try to readjust that as we move through 2026.

Ronan Kennedy: I would say probably for the next quarter, it will be a little bit more weighted on the Oasis side. And then, you know, there will be constant evaluation with respect to where the regs are moving to try to readjust that as we move through 2026.

Speaker #4: Yeah, very fair. Okay, last question if you'll permit me—share count. So, pro forma for the closing of the Series C Preferred yesterday, can you just quickly—or maybe Thomas can address this—but can you guys just quickly give us what the fully diluted share count would be?

Adam Waldo: Yeah, very fair. Okay. Last question, if you'll permit me. Share count. So, you know, pro forma for the closing of the Series C preferred yesterday, can you just quickly, or maybe Thomas can address it, but can you guys just quickly give us what the fully diluted share count would be? And then is there any, you know, new executive comp plan being contemplated in light of the regulatory change that might, you know, change the equity, the common shares outstanding in a meaningful way going forward?

Speaker #4: And then, is there any new executive comp plan being contemplated in light of the regulatory change that might change the equity or the common shares outstanding in a meaningful way going forward?

Speaker #2: Sure. So I think we closed around—I think in the documents it's just around $8.9 million and change outstanding. You've got the $1.7 million in the B, there was $1 million in the—

Ronan Kennedy: Sure. I think we closed around, I think in the documents, it's just around 8.9 million and change outstanding. You've got the 1.7 million in the B. There was a 1 million in the C.

Speaker #2: And right, then at the end of November, the board approved a new 2025 employee compensation plan that is subject to shareholder vote in our upcoming annual meeting.

Adam Waldo: Right.

Ronan Kennedy: Then at the end of November, the board has approved a new 2025 employee compensation plan that is subject to, you know, shareholder vote in our upcoming annual meeting.

Adam Waldo: Okay. And those details would be forthcoming in the proxy and/or in the Q for the quarter?

Speaker #4: Forthcoming in the proxy and/or in the queue for the quarter?

Speaker #2: I believe they might have been AK'd at the end of November.

Ronan Kennedy: I believe they might have been OK'd at the end of November.

Speaker #4: Okay, I guess we just missed that. So, okay. We'll have a look. Thank you very much.

Adam Waldo: Okay. I guess we just missed that. So, okay. We'll have a look. Thank you very much.

Speaker #2: Sure. Thanks,

Ronan Kennedy: Sure. Thanks, Adam.

Speaker #2: Adam. This concludes

Operator: This concludes the question and answer session, and we'll conclude today's call. We thank you for joining. You may now disconnect.

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