Financial Data and Key Metrics Changes - Total revenue for Q1 fiscal 2026 was $3.4 million, a decrease of $5.9 million from $9.3 million in Q1 fiscal 2025, attributed to a strategic shift away from cannabis customers [9][10] - Gross profit reduced to $5.1 million from $7.7 million in the prior year, with gross margins at 70%, down from $19.5 million in Q1 fiscal 2025 [9][10] - Operating expenses decreased by approximately 39% year over year, from $12.9 million to $7.8 million [5][10] - Net loss improved from $5.6 million in Q1 fiscal 2025 to $3.3 million in Q1 fiscal 2026, with non-GAAP EBITDA reaching $600,000 [5][12] Business Line Data and Key Metrics Changes - The company has shifted its focus to higher quality customers and the higher value nickel sector, resulting in improved cash flow and reduced operating expenses [4][5] - The operational side has seen solid progress with the ICTECH joint venture gaining traction, focusing on blockchain-based ACE verification technology [5][6] Market Data and Key Metrics Changes - The company is in discussions with large and medium-sized nicotine companies regarding proprietary GMASH technology solutions for next-generation vaping products [6] - The Malaysian manufacturing facility is progressing well, with plans to increase production capacity from six lines to 80 lines [7][8] Company Strategy and Development Direction - The strategic focus has shifted to high-quality nickel customers and stringent cost management, aiming for sustainable and profitable growth [4][12] - The company is committed to leading the industry in safety and compliance, particularly through age-gating technology initiatives [6][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term stability and profitability of the business despite current revenue declines due to the strategic shift [9][10] - There is optimism regarding the adoption of age-gating technology in various countries, potentially ahead of the U.S. [21][22] Other Important Information - The company is awaiting a permanent license for its Malaysian operations, with expectations to receive it by the end of the year or early next year [19] - The company remains cautious about re-entering the U.S. cannabis market until federal-level changes provide more financial support [27][28] Q&A Session Summary Question: Partnership and licensing opportunities related to JUUL - Management highlighted their confidence in their technology not infringing on JUUL's patents and their strategy to onboard clients as JUUL's agreements expire [16][17] Question: Update on Malaysian license timing - The interim license is valid until October 2026, and management is confident about receiving the permanent license soon [18][19] Question: Adoption of age-gating technology in other countries - Management indicated that other countries might adopt age-gating technology faster than the U.S., with ongoing discussions suggesting strong regulatory support [20][21] Question: U.S. cannabis market strategy - Management remains cautious about the U.S. cannabis market, focusing on high-quality customers until federal changes occur [27][28] Question: Supply chain strategy if tariffs are reversed - Management would diversify the supply chain but remains mindful of geopolitical conflicts, leveraging both U.S. and Malaysian factories [29] Question: Year-on-year sales and gross margin growth - The growth is attributed to a change in product mix and onboarding ODM customers, with a focus on quality revenue and improved gross margins [30][31]