Financial Data and Key Metrics Changes - Sales for Q2 2025 increased by 8% compared to Q2 2024, reaching $11,370,000 compared to $10,530,000 [21] - Q2 2025 recorded a profit of $2,030,000 or $0.16 per share, compared to a profit of $1,290,000 or $0.10 per share in Q2 2024 [22] - The company recorded unusual R&D revenue of $2,500,000 in Q2 2025, which significantly contributed to the profit [22][34] Business Line Data and Key Metrics Changes - The NanoChem division (NCS) represents approximately 70% of the company's revenue, focusing on biodegradable polymers and nitrogen conservation products [4] - The E&P division is expected to continue growth in 2025, with early signs of improvement in Q3 [14] - The food division is anticipated to have lower margins initially due to tariff and inflation protection clauses in new contracts [13] Market Data and Key Metrics Changes - Agricultural products in the U.S. are under pressure, with crop prices not increasing at the rate of inflation, leading to uncertainty for growers [15] - Tariffs on imports of raw materials from China range from 30% to 68%, impacting costs and pricing strategies [16] - The company is transitioning production to Panama to mitigate tariff impacts and improve shipping efficiency [19] Company Strategy and Development Direction - The company is focusing on expanding its food grade operations and has secured a five-year contract with a minimum revenue of $6,500,000 per year [10] - Plans to develop a new facility in Panama to produce products for international customers, reducing exposure to U.S. tariffs [19] - The company aims to optimize food grade production in the U.S. while expanding its international sales capabilities [20] Management Comments on Operating Environment and Future Outlook - Management expects continued weakness in agriculture sales due to external pressures, but anticipates a return to growth in the second half of 2025 [15] - The company is confident in executing its plans without the need for equity financing, relying on existing capital and cash flow [26] - Management believes that the recent contracts and operational improvements will lead to increased revenue and profitability in the coming quarters [12] Other Important Information - The company has substantial cash on hand and access to unused lines of credit, ensuring adequate working capital for operations [8][26] - The transition to the Panama facility is expected to begin production in Q3 2025, with all equipment already on site [18] Q&A Session Summary Question: What is the business magic behind getting new food contracts? - The company emphasizes its role as a solution provider, focusing on R&D to meet customer needs [28][29] Question: How was the R&D contract treated in financials? - The R&D revenue was classified as a second line in revenue, indicating its significance to the quarter's performance [33][34] Question: What are the expected margins for the food contracts? - The company anticipates net margins before tax in the range of 22% to 25%, with a 31% income tax rate applicable [35] Question: How is the E&P division performing? - The E&P division is showing steady growth, while agriculture remains uncertain due to external factors [46][47] Question: Will the wine product move to Panama? - The wine product will remain in Illinois for now, as the Panama facility is not yet food grade certified [50]

Financial Data and Key Metrics Changes - Sales for Q1 2025 decreased by 19% compared to Q1 2024, amounting to $7.47 million versus $9.22 million [18] - Profits in Q1 2025 resulted in a loss of $278,000 or $0.02 per share, compared to a gain of $457,000 or $0.04 per share in Q1 2024 [19] - Operating cash flow for Q1 2025 was $480,000 or $0.04 per share, down from $1.38 million or $0.11 per share in 2024 [20] Business Line Data and Key Metrics Changes - The NanoChem division (NCS) accounts for approximately 70% of total revenue, focusing on biodegradable polymers and nitrogen conservation products [4] - The E and P division, which targets greenhouse turf and golf markets, experienced reduced sales compared to the previous year [19] - The food division's sales are projected to grow in 2025, contingent on the production timeline of a new food-grade product [13] Market Data and Key Metrics Changes - Agricultural products in the US are under pressure, with crop prices not increasing at the rate of inflation, leading to uncertainty due to tariff changes [12] - Current tariffs on imports from China range between 30% to 58.5%, affecting raw material costs [13] Company Strategy and Development Direction - The company is developing a new agriculture and polymer factory in Panama to enhance international sales and reduce tariff exposure [14][15] - The strategy includes optimizing food-grade production in the US while transitioning agriculture and polymer production to Panama [16] - The company aims to achieve significant revenue growth from the new food-grade contract, with a target of $30 million per year in revenue over the next four to six quarters [9] Management's Comments on Operating Environment and Future Outlook - Management expects growth to continue in 2025, particularly in the second half of the year [11] - The company anticipates that challenges from inventory reductions by large customers will resolve in Q2 [19] - Management expressed confidence in the ability to execute plans with existing capital and no need for additional financing [21] Other Important Information - The company is investing approximately $4 million in capital expenditures for equipment and plant improvements related to the new food-grade product [8] - Long-term debt is being paid down according to loan terms, with significant cash flow expected to be freed up by the end of 2025 [21] Q&A Session Summary Question: Financial responsibility for the clean room for the new contract - The company is solely responsible for the clean room costs, while the client contributes to equipment expenses [24] Question: Expectations on margins for the new food business - Margins are expected to be stable and tied to inflation, with a set pricing equation in place [25] Question: Impact of high tariff products on margins - The company does not expect significant margin hits from high tariff products [31] Question: Future capital or operating expenses after expansions - Continuous cost increases are anticipated, particularly for accounting and software upgrades due to new complex products [33] Question: Dividend policy considerations - The company may consider a more formalized dividend policy but emphasizes flexibility [36] Question: Expectations for Q2 results - Management expects Q2 results to be better than Q1 [39] Question: Risks to making the new contract work - Risks include equipment, clean room, and timing, but the probability of failure is considered low [40] Question: Future food deals in the pipeline - Potential deals exist, but specifics cannot be disclosed due to contractual constraints [50] Question: Impact of declining oil prices on business - Lower oil prices could reduce raw material and shipping costs, potentially increasing margins [52] Question: Competitors in TPA domain - The company is a leader in food-grade TPA, with no direct competitors in the food sector [58]