Financial Data and Key Metrics Changes - Gross profit for 2024 increased by 181.3%, reaching $2.3 million compared to $0.8 million in 2023, with gross margin improving from 5.9% to 16.7% [10][32] - Total revenue for 2024 was $13.9 million, reflecting a 1.4% decrease from $14 million in 2023, primarily due to strategic exits from lower-margin product lines [29][30] - Net loss for 2024 was $11.1 million, compared to a net loss of $10.2 million in 2023, attributed to increased selling, general, and administrative expenses [33] Business Line Data and Key Metrics Changes - Revenue from the core herb business grew by 1.7 million or 16.3% year-over-year, highlighting the strength of the focused approach [12][30] - The company exited lower-margin categories like lettuce and floral, which accounted for a $1.7 million decline in revenue [30] - Cost of goods sold decreased by 12.7% to $11.6 million for the year, driven by reduced reliance on third-party growers [31] Market Data and Key Metrics Changes - The company expanded its retail footprint across the U.S., strengthening its presence in key consumer markets [19] - The launch of Kik Sports Nutrition, a clean-label lineup, is expected to enhance market presence and drive growth [21] Company Strategy and Development Direction - The company refocused operations around its core herb business and launched new shelf-stable products, stepping away from lower-margin categories [10][11] - A non-binding letter of intent to acquire Narayan Group, a European producer of organic coconut and superfood products, marks a significant strategic growth step [16][18] - The company aims to leverage vertical integration and operational improvements to drive long-term profitability and efficiency [15][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the momentum from operational improvements and strategic realignment will carry into 2025 [12][14] - The company is positioned to capitalize on new opportunities and reinvest in high-growth areas, with a focus on sustainability and innovation [19][24] - Management highlighted the importance of maintaining strong relationships with major retailers to drive future growth [88] Other Important Information - The company made significant progress in strengthening its balance sheet through disciplined cost controls and successful capital raises [14] - The introduction of herbicide-recyclable pots is part of the company's sustainable packaging initiatives, contributing to CO2 emissions reduction [24] Q&A Session Summary Question: Can you elaborate on the gross margins and any inventory write-offs? - Management indicated that the lower gross profit margin in Q4 was primarily due to increased labor costs during the holiday season [40][41] Question: What are the cross-selling opportunities with the proposed acquisition? - The acquisition of Narayan Group presents opportunities to leverage coconut products and superfoods across existing retail channels [46][48] Question: What is the outlook for the sports nutrition category in 2025? - Management expressed optimism about the growth potential in the sports nutrition category, particularly with the Kik brand launching on Amazon [55][57] Question: Are there any expected one-time charges related to exiting lower-margin businesses? - Management does not anticipate any additional charges beyond those already accounted for in 2023 [71] Question: How will the company leverage vertical integration moving forward? - Management emphasized the importance of operational efficiency and the ability to respond quickly to market opportunities as key benefits of vertical integration [78][80]

Financial Data and Key Metrics Changes - Gross profit for 2024 grew by 181.3%, with gross margin increasing from 5.9% in 2023 to 16.7% in 2024, reflecting the strength of the core herb business and strategic plans [10][32] - Total revenue for 2024 was $13.9 million, a 1.4% decrease from $14 million in 2023, primarily due to the exit from lower-margin product lines [29][30] - Net loss for 2024 was $11.1 million, compared to a net loss of $10.2 million in 2023, attributed to increased SG&A expenses and interest costs [33] Business Line Data and Key Metrics Changes - Revenue from the core herb business grew by 1.7 million or 16.3% year-over-year, highlighting the strength of the focused approach [12][30] - The company exited lower-margin categories like lettuce and floral, which accounted for a $1.7 million decline in revenue [30] Market Data and Key Metrics Changes - The company is expanding its retail footprint across the U.S., strengthening its presence in key consumer markets [19] - The proposed acquisition of Narayan Group aims to expand the company's international footprint and diversify product offerings [16][18] Company Strategy and Development Direction - The company refocused operations around its core herb business and launched new shelf-stable products and a clean-labeled sports nutrition line [10][11] - The strategic decision to exit lower-margin categories is expected to drive long-term profitability and operational efficiency [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the momentum from the second half of 2024 will carry into 2025, with a focus on higher-margin, more profitable opportunities [12][13] - The company aims to leverage its vertically integrated model to enhance efficiency and drive growth [15][19] Other Important Information - The company signed a non-binding letter of intent to acquire Narayan Group, which could significantly enhance its product offerings and operational efficiency [16][18] - The company is committed to sustainability and innovation, with initiatives like herbicide-recyclable pots contributing to CO2 emissions reduction [24] Q&A Session Summary Question: What impacted the gross margins in Q4? - Management indicated that increased labor costs during the holiday season were a significant factor affecting gross profit margins in Q4 [40][41] Question: Can you elaborate on the proposed acquisition and cross-selling opportunities? - The acquisition of Narayan Group is expected to provide cross-selling opportunities with products like coconut water and superfoods, enhancing the company's portfolio and margins [46][48] Question: What are the expectations for the sports nutrition category in 2025? - Management highlighted the growing consumer interest in clean-label supplements and the strategic launch of Kik Sports Nutrition on Amazon, indicating strong growth potential [55][56] Question: Are there any anticipated one-time charges related to exiting lower-margin products? - Management does not anticipate any additional charges beyond those already accounted for in 2023 related to exiting the lettuce and floral business [71] Question: How does the company plan to leverage vertical integration moving forward? - Management emphasized the importance of operational efficiency gained from vertical integration, which positions the company to focus on top-line growth and new product launches [78][80]