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]

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] - Q1 2025 profits 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, is expected to see growth in the second half of 2025 [11] - 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 of raw materials from China range between 30% to 58.5%, impacting cost structures [13] Company Strategy and Development Direction - The company is developing a duplicate agriculture and polymer factory in Panama to reduce exposure to US tariffs and improve shipping efficiency [14][15] - The strategy includes moving most agriculture and polymer production to Panama, allowing the Illinois plant to focus on food-grade production [16] - The company aims to achieve significant revenue from the new food-grade contract, with a target of $30 million per year in the next four to six quarters [9] Management's Comments on Operating Environment and Future Outlook - Management expects Q2 2025 results to improve compared to Q1 2025, with anticipated resolution of inventory reductions by large customers [19][35] - The company is cautious about the impact of rising costs and low crop prices on sales, particularly due to political actions and tariffs [12] - Management believes that lower oil prices could positively affect raw material and shipping costs, potentially increasing margins [49] Other Important Information - The company has sufficient cash flow and working capital to execute its plans without the need for debt or equity financing [21][22] - Long-term debt is being paid down, with significant cash flow expected to be freed up in the coming years [21] Q&A Session Summary Question: Financial responsibility for clean room construction - The company is solely responsible for the clean room capital expenditures, while the client contributes to equipment costs [24] Question: Expectations on margins for new food business - Margins are expected to be stable and tied to inflation, with a set pricing equation agreed upon with the client [25][26] Question: Impact of high tariff products on margins - The company did not purchase high tariff raw materials, mitigating potential margin hits [29] Question: Expectations for sustained operating expenses post-expansion - Continuous cost increases are anticipated, particularly for accounting and software upgrades due to new complex products [31] Question: Future dividend policy - A regular dividend is possible but would be small to ensure sustainability during uncertain events [33] Question: Anticipated improvements in Q2 results - Management expects Q2 results to be better than Q1 [35] Question: Risks associated with new contract execution - Risks include equipment and clean room timing, but management is confident in execution capabilities [36] Question: Rationale for shifting manufacturing to Panama - The decision was influenced by previous tariff impacts and the need for a competitive international production site [39][40] Question: Potential food deals in the pipeline - The company has potential deals but cannot disclose details due to contractual constraints [47] Question: Relationship between oil prices and business - Lower oil prices could lead to reduced raw material and shipping costs, potentially benefiting margins [49]

Financial Data and Key Metrics Changes - Revenue for 2024 was flat compared to 2023, at $38.23 million versus $38.32 million [35] - Profits for 2024 were $3.04 million or $0.24 per share, compared to $2.78 million or $0.22 per share in 2023 [35] - Operating cash flow for 2024 was $7.08 million or $0.57 per share, up from $4.60 million or $0.37 per share in 2023 [36] Business Line Data and Key Metrics Changes - The NanoChem division (NCS) represents approximately 70% of total revenue, focusing on biodegradable polymers and agricultural products [5][6] - The ENP division focuses on sales into greenhouse, turf, and golf markets, with mild growth expected to continue in 2025 [14][15] - The food division is projected to grow in 2025, depending on the production timeline of new products [20] Market Data and Key Metrics Changes - Agricultural products in the US are selling reasonably well, but crop prices are not increasing at the rate of inflation [18] - Tariffs on raw materials imported from China have negatively impacted costs, cash flow, and profits [21] - The company is developing a new facility in Panama to mitigate tariff impacts and improve operational efficiency for international sales [24][25] Company Strategy and Development Direction - The company is focusing on expanding its food-grade product line and has secured a significant food-grade contract, requiring new equipment and clean room installations [9][10] - A new production facility in Panama is expected to begin operations in Q3 2025, which will reduce tariff exposure and improve shipping logistics [24][26] - The company is exploring entry into the drug compounding industry, with plans to secure sales before further investments [31][32] Management's Comments on Operating Environment and Future Outlook - Management anticipates a return to growth in 2025, particularly in the second half of the year [34] - The company is optimistic about its positioning to grow despite uncertainties related to the new administration [34] - Management highlighted challenges in finalizing new orders, including the need for equipment installation and customer satisfaction with pricing [48] Other Important Information - The company has substantial cash on hand and does not anticipate needing equity financing for upcoming capital expenditures [10] - The company has hired a consulting group to assist in obtaining export rebates for tariffs, which have been difficult to recover [22] Q&A Session Summary Question: What is the deal with Panama and tariffs? - The tariffs in Panama are much lower than those in the US, allowing for reduced friction in operations [43] Question: Expected gross margins on new food business contracts? - Margins are uncertain but expected to be in the same range as historical margins [44][45] Question: What are the challenges in finalizing orders? - Challenges include building new clean rooms, installing equipment, and proving scalability to customers [48] Question: Is the new product a proprietary development? - The new product is proprietary to the customer, and the company is adapting its operations to manufacture it [52][54] Question: What sets the company apart in securing this business? - The company has demonstrated high-quality operations and a willingness to invest in changes to earn the business [56][57]