Financial Data and Key Metrics Changes - For the third quarter of fiscal 2025, total revenue decreased to approximately $26,200,000, representing a decline of 12.7% or $3,800,000 compared to $30,000,000 in the same period last year [17][21] - Gross profit for Q3 was approximately $4,800,000, down from approximately $6,100,000 for the same period last year, with gross margins decreasing to 18.2% from 20.4% [19][21] - The net loss for Q3 was $10,900,000 or $0.19 per share, compared to a net loss of $5,900,000 or $0.11 per share for the same period last year [21] Business Line Data and Key Metrics Changes - Revenue from North America decreased by approximately $3,600,000 or 28.9% to $8,800,000, largely due to new tariffs on Chinese products and the transition of manufacturing to Malaysia [18] - European revenues slightly declined by $300,000 or 2.9% to approximately $13,200,000 [18] - Asia Pacific revenues decreased by $800,000 or 21.4% to approximately $3,000,000, primarily due to reduced demand in South Korea [18] Market Data and Key Metrics Changes - The company reported a focus on higher quality customers, which has impacted revenue collection and overall performance [19] - The pending increase in tariffs on Chinese-made goods has affected product pricing dynamics, but the company expects to be less impacted due to manufacturing in Malaysia [10] Company Strategy and Development Direction - The company aims to become a leading manufacturer of precision dosing technology for global nicotine companies, with significant progress made in the third quarter [7] - The interim nicotine product manufacturing license secured in Malaysia is a central part of the global business strategy [10] - The company is shifting its pricing strategy from landed pricing to FOB factory pricing to enhance flexibility and strengthen market position [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about converting consumers from the black market to compliant products with the new age gating technology [28] - The company anticipates that the Malaysian facility will significantly expand manufacturing capacity and reduce geopolitical risks [11] - Management highlighted ongoing discussions with global nicotine providers and the potential for significant market opportunities [24] Other Important Information - The company has filed a PMPA for its blockchain-based age gating system with the FDA, which is seen as a necessary step towards regulation in the industry [12] - The launch of the Sprout device, developed in partnership with Raw Garden, emphasizes the company's commitment to safety and performance in the cannabis market [15] Q&A Session Summary Question: What does the FDA's focus on port shopping mean for illicit vape supply in the U.S.? - Management believes the new technology will convert consumers from the black market to compliant products, with estimates suggesting the black market could be worth between $5.5 billion to $70 billion [28] Question: Are there specific countries in the EU market that the company is excited about? - Management indicated that the UK and EU's move to ban disposables will benefit the company, as it has a strong brand presence in pod systems [32] Question: How are customer reactions to new hardware devices in the U.S.? - Management noted positive reactions to the new Sprout and Vault platforms, which aim to set new safety and performance standards in the industry [41][44] Question: What alternatives do customers have regarding tariffs? - Management discussed successful renegotiations with U.S. cannabis customers to switch to FOB factory pricing, which helps mitigate tariff impacts [48]