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 from 19.6% [14][15] - Net loss for fiscal 2025 was $39.2 million, compared to $40.8 million in fiscal 2024 [16] Business Line Data and Key Metrics Changes - Revenue from the European market increased by $8.8 million or 13.6% to approximately $74.1 million [14] - North American revenue fell to approximately $32.6 million from $63.1 million, primarily due to the strategic pivot away from cannabis [14] - Revenue from Asia Pacific decreased to approximately $12.3 million from $17.6 million [14] Market Data and Key Metrics Changes - Revenue from other countries increased by $2.6 million to $8.5 million, with the majority of sales coming from South Africa [14] - The company reduced net accounts receivable by over 21% year-over-year, marking the first decline in its history [7] Company Strategy and Development Direction - The company is shifting focus from the cannabis sector to the higher-value nicotine sector, aiming for sustainable long-term growth [4][11] - Investments in manufacturing capabilities in Malaysia are being scaled up, with plans for up to 80 production lines [5][6] - The company is pursuing breakthrough technologies like ICE-TECH and GMASH, which are gaining traction with major tobacco companies [5][9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ongoing uncertainty and financial challenges in the cannabis industry, emphasizing a focus on quality over quantity in customer relationships [7][31] - The company is optimistic about its international nicotine ODM business, which is gaining momentum after a slower start [9][10] - Management expressed confidence in the potential of their age verification technology and its regulatory approval process [24][26] 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's review of the component PMPA application is expected to be expedited, but the timeline for the next steps is uncertain [23][24] Question: Approval timelines in other markets - Management is optimistic about potential approvals in other countries, with at least two countries moving faster than the U.S. [26] Question: Details on receivables provision - The large provision of $22 million was a cumulative effect across multiple customers, not tied to a single client [34] Question: Future of cannabis revenue - Management believes that Q4 2025 represents the bottom for cannabis revenue, with expectations for new customer acquisition and product development to drive future growth [47][48] Question: Feedback on UK supply agreement - Initial feedback from the UK ODM client has been encouraging, with a backlog of $18 million tied to this customer [39] Question: Tariff landscape and supply chain diversification - The company is seeing increased interest from brands looking to diversify supply chains, which may lead to the consideration of a third facility in Malaysia [42][44]