Insignia(US:LDWY)2025-11-10 21:35Financial Performance - Revenue for the three months ended September 30, 2025, was $5,153,000, a decrease of 22.1% compared to $6,628,000 for the same period in 2024[63]. - Gross loss for the same period was $60,000, representing a gross margin of (1.2)%, down from a gross profit of $1,440,000 and a margin of 21.7% in 2024[64][66]. - Operating loss increased to $3,043,000 for the three months ended September 30, 2025, compared to $1,351,000 in 2024, reflecting an operating loss margin of (59.1)%[64][66]. - The company recorded a net loss from continuing operations of $3,365,000 for the three months ended September 30, 2025, compared to a net loss of $1,458,000 in 2024[64][70]. - EBITDA for the three months ended September 30, 2025, was $(2,390,000), compared to $(574,000) in 2024, indicating a decline in operational profitability[75]. Cash Flow and Working Capital - Working capital increased to $11,264,000 as of September 30, 2025, compared to $1,098,000 at June 30, 2025, due to the purchase of approximately $11,000,000 in Dutch tulip bulbs[76]. - Net cash used in operating activities was $9,927,000 for the three months ended September 30, 2025, compared to $7,555,000 in 2024, attributed to higher Euro prices for bulbs[77]. - The company drew $8,575,000 on its revolving line of credit during the three months ended September 30, 2025, compared to $5,056,000 in 2024, reflecting increased costs associated with bulb purchases[80]. - Cash from operations, combined with funds from the Credit Facility and the 2024 and 2025 Notes, is expected to support ongoing operations and capital expenditures for at least the next 12 months[87]. Future Outlook - The company expects revenue to increase in the remaining quarters of fiscal year 2026 due to more bulbs in inventory, subject to normal growing risks[65]. - Forward-looking statements indicate the Company anticipates adequate liquidity and capital resources for the next twelve months[91]. - The Company may need to raise additional capital through equity offerings or debt financing, which could dilute existing stockholders' ownership[88]. - The Company’s ability to raise additional capital may be adversely impacted by worsening global economic conditions and disruptions in credit markets[88]. Risks and Compliance - The Company faces risks including dependency on Dutch tulip bulbs and concentration of revenue among a small number of customers[92]. - The Audit Committee approved the entry into the 2024 Note and 2025 Notes, ensuring compliance with the Related Person Transaction Approval Policy[86]. - The 2025 Notes restrict the Company's ability to incur additional indebtedness, which may limit financial flexibility[85]. - The Company assumes no responsibility to update forward-looking statements unless required by law[92]. Acquisition Impact - Bloomia, acquired on February 22, 2024, produced over 75 million tulip stems in 2024, enhancing the company's market position in the fresh-cut tulip industry[56][57]. Shareholder Information - As of September 23, 2025, Kohler beneficially owned approximately 8.9% of the Company's outstanding Common Stock, while Air T owned greater than 10%[86].