Financial Data and Key Metrics Changes - Total revenue for fiscal year 2025 declined from $151.9 million to $127.5 million, a decrease of $24.4 million compared to fiscal year 2024 [12][13] - Gross profit decreased to $22.7 million from $29.8 million year-over-year, with gross margins at 17.8%, down 1.8% from 19.6% in fiscal 2024 [14][15] - Net loss for fiscal 2025 was $39.2 million, slightly improved from a net loss of $40.8 million in fiscal 2024 [16] Business Line Data and Key Metrics Changes - The company strategically pivoted away from the cannabis sector, leading to a decline in revenue from North America, which fell to approximately $32.6 million from $63.1 million in fiscal 2024 [14] - Revenue from Europe increased by $8.8 million or 13.6% to approximately $74.1 million compared to $65.3 million last year [14] - Revenue from Asia Pacific decreased to approximately $12.3 million from $17.6 million in the previous fiscal year [14] Market Data and Key Metrics Changes - The company reported a significant backlog of $18 million tied to a specific ODM client in the UK, indicating strong demand despite market challenges [40] - The company is experiencing increased interest from major international nicotine and tobacco providers looking to diversify their supply chains, particularly in light of tariff considerations [41][42] Company Strategy and Development Direction - The company is focusing on building its nicotine manufacturing capabilities, particularly in Malaysia, with plans to scale production from six lines to up to 80 lines [5][6] - Investments in breakthrough technologies like ICE-TECH and GMASH are expected to position the company well for future growth [5][19] - The strategic shift from cannabis to the higher-value nicotine sector is aimed at building a more sustainable and profitable business model [4][11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing challenges in the cannabis industry due to cash flow issues and the lack of federal legalization, which has prompted the pivot away from cannabis [31][32] - The company remains optimistic about its age verification technology and its potential to reshape industry standards, with a focus on regulatory compliance [9][19] - Future growth opportunities are anticipated from international ODM partnerships and expanding manufacturing capabilities in Malaysia [10][18] Other Important Information - The company undertook significant cost optimization measures, resulting in an estimated annual savings of $10.2 million [8] - The appointment of Jay Yu as the new CFO reflects the company's commitment to strong financial stewardship during its transformation [10] Q&A Session Summary Question: Key milestones for age gating technology approval - Management indicated that the FDA accepted the component PMPA application within four weeks, which is unprecedented, and the review is expected to be expedited [23][24] Question: Approval timelines in other markets - Management expressed optimism about potential approvals in two unnamed countries outside the U.S. that are moving quickly on age verification technology [26] Question: Intellectual property protections for age verification technology - The company has filed patents in multiple regions, emphasizing strong IP defensibility, particularly in blockchain-based technology [28] Question: Details on the $22 million provision for receivables - Management clarified that the provision was a cumulative effect from various customers rather than a single client issue [34] Question: Future of cannabis revenue - Management stated that Q4 cannabis revenue is expected to be the bottom, with new customer acquisitions and product launches anticipated to drive future growth [47][48]