Financial Data and Key Metrics Changes - Net sales grew 20% year over year to $12 million in Q2, driven by a 47% increase in the wholesale channel, which now represents nearly half of total net sales [5][10] - Gross margin was 39.9%, slightly down from 41.8% in the prior year due to higher trade spend and commodity costs, yet remains among the best in the industry [6][11] - Adjusted EBITDA was positive at $100,000 compared to a loss of $100,000 in the same quarter last year, indicating progress towards profitability [12] Business Line Data and Key Metrics Changes - Coffee creamers led growth with a 44% increase, making up 56% of gross sales, reflecting consumer demand for plant-based options [5][10] - Coffee, tea, and hot chocolate products also grew by 44%, aligning with the company's strategy to become a leader in functional coffee solutions [6] Market Data and Key Metrics Changes - E-commerce sales increased by 2% year over year, contributing 52% of total net sales, primarily driven by Amazon [10][11] - The wholesale channel's growth was attributed to distribution expansion and increased velocity in grocery and club stores [10][11] Company Strategy and Development Direction - The company is focusing on growing its wholesale channel to become the largest segment of its business, with a strategic emphasis on brand building, innovation, and operational efficiency [5][9] - Plans to introduce new products, including a super optimized liquid creamer and a protein-based coffee product, are underway, indicating a commitment to innovation [36][39] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the second half of the year, despite ongoing economic pressures and tariff uncertainties, highlighting the company's resilience and strong brand appeal [9][17] - The company reaffirmed its full-year net sales growth guidance of 20% to 25% and aims to maintain gross margins while achieving breakeven adjusted EBITDA [15][17] Other Important Information - The company ended the quarter with $4.2 million in cash and no debt, indicating a solid balance sheet [7][13] - Cash usage was primarily driven by inventory investments to meet demand and mitigate supply chain risks, with expectations to normalize in the coming quarters [7][14] Q&A Session Summary Question: Revenue guidance for the year and confidence in achieving it - Management noted that previous out-of-stock issues and a cyber attack impacted sales, but they do not anticipate similar events in the second half, supporting their revenue guidance [20][22] Question: Impact of the cyber attack and liquid product transition - The cyber attack is estimated to have cost around $100,000 in sales, while the transition to a new liquid product size has been challenging but is now showing positive results [26][27][29] Question: Innovation focus for the back half of the year - The company is excited about new product innovations, including a new liquid creamer formula and a protein-based coffee product, which are expected to differentiate them in the market [35][39] Question: Performance during Amazon Prime Day and customer acquisition metrics - Amazon Prime Day went as planned, with strong initial sales, although e-commerce growth is slowing, reflecting broader trends in the industry [46][52] Question: Plans for increasing trade promotion - Management is considering increasing trade promotions in response to consumer price sensitivity but has not yet made decisions, focusing on maintaining gross margins [54][56]

Core Viewpoint - AQrin is a health nutrition brand that emphasizes safety and greenness, distinguishing itself from numerous counterfeit brands in the industry, and has gained significant consumer recognition through its commitment to product safety and quality [1][4]. Industry Issues - The health nutrition industry is plagued by numerous issues, including a high prevalence of counterfeit brands, quality problems, and unethical practices such as exaggerating product efficacy and using harmful ingredients, which pose serious health risks [1][3]. Company Strategy - AQrin adopts a slow and steady approach to business, avoiding the quick profit-seeking tactics common in the industry, and focuses on building a solid brand foundation, quality standards, and core research directions [3][4]. - The company emphasizes gradual growth and prioritizes team management and product quality over aggressive sales targets and advertising, relying instead on word-of-mouth marketing [3][4]. Brand Principles - AQrin has established eight core principles and commitments to maintain high product quality, including a strict policy against using harmful ingredients, cutting corners, and making false claims about product efficacy [4][5]. - The brand encourages public oversight to ensure adherence to these principles, aiming to build a long-lasting reputation based on quality [4]. Commitment to Safety and Standards - AQrin views "green" and "safe" not merely as compliance with existing standards but as a commitment to innovate and create higher safety standards, addressing the shortcomings of current regulations [5]. - The company invests in safety research and analysis of global safety incidents, continuously testing new technologies, processes, and materials to enhance product safety [5].