- Management raises expectation for FY2026 net revenue: Now it expects revenue to exceed
$45 million , representing growth of more than 80% year-over-year - Management adds full-year 2026 outlook to include positive Adjusted EBITDA
Management to Host Conference Call
"We're very pleased with the progress we're making through disciplined and improved execution across the business," said
"Looking ahead, we expect those shipments to contribute to the third quarter being one of the strongest quarters in the Company's history. Based on our year-to-date performance and the opportunities we see ahead, we're raising our full year revenue growth expectation from approximately 60% to approximately 80% and expect to achieve positive Adjusted EBITDA for the full year. We're also building the next phase of growth, including our recently announced collaboration with Rap Snacks, which we expect to begin contributing revenue in fiscal 2027. We expect to announce additional initiatives during the second half of 2026."
Second Quarter 2026 Financial Summary vs. Second Quarter 2025
- Revenue increased 107.8% to
$10.2 million compared to$4.9 million in the year ago period, despite the timing of certain shipments shifting a portion of expected revenue from the second quarter into the second half of the year. - Gross profit margin was 27.5% compared to 33.3% in the year ago period. High oil prices was the primary driver for the lower margin. The Company has made progress reducing its freight expenses in the quarter and is seeing improved gross margins.
- Net loss from continuing operations of
$650,000 , or$(0.01) per share, compared to net income from continuing operations of$2.7 million , inclusive of a one-time gain on disposition of our Cannabis subsidiary of$3.7 million , or$0.02 per share, in the second quarter of 2025. - Adjusted EBITDA1 loss from continuing operations was
$(312,000) , compared to an Adjusted EBITDA loss from continuing operations of$(739,000) in the second quarter of 2025, an improvement of$427,000 .
Year-to-date 2026 Financial Summary vs. Year-to-date 2025
- Revenue increased 147.7% to
$22.6 million compared to$9.1 million in the year ago period. - Gross profit margin was
$6.7 million (30% of net revenue) compared to$3.0 million (33% of net revenue) in the year ago period. The decrease was primarily driven by higher world oil prices in the second quarter. - Net loss from continuing operations of
$0.5 million , or$(0.00) per share, compared to net income from continuing operations of$1.6 million , inclusive of a one-time gain on disposition of our Cannabis subsidiary of$3.7 million , or$0.01 per share, in the year ago period. - Adjusted EBITDA2 from continuing operations was
$0.2 million , compared to an Adjusted EBITDA loss from continuing operations of$1.7 million in the year ago period.
Recent Business Highlights
- Announced a new collaboration with Rap Snacks, the Official Snack Brand of
Hip Hop , to launch a line of hip hop inspired craft sodas, with revenue contribution expected to begin in fiscal 2027. - Launched a new Zero Sugar craft soda lineup at
Western Canada club stores, broadening the Company's better-for-you beverage offerings and increasing retail presence in a key market. - Launched a second limited edition sale of Fallout Nuka Cola Quantum
Rocket Bottles following the rapid sellout of the initial release, demonstrating continued consumer demand for the Fallout partnership. - Completed a brokered private placement, raising approximately
$1.7 million in gross proceeds to support working capital and the Company's strategic growth initiatives. - Completed the first tranche of non-brokered private placement, raising approximately
$0.2 million in gross proceeds to support working capital needs. - Completed an RFP for major freight lanes that resulted in significantly lower freight costs beginning late in the second quarter.
- Brought back the limited-edition Crayola x
Jones Soda collection featuring a new Fruit Punch flavor for the 2026 back to school season.
___________________________ |
1 Adjusted EBITDA is a Non-GAAP measure. Adjusted EBITDA is meant to reflect management's view of recurring business activities. It is reconciled to the GAAP measure "Net Income (Loss) from continuing operations" by removing interest expense, interest income, taxes, depreciation, amortization, stock-based compensation and one-time items. |
2 Adjusted EBITDA is a Non-GAAP measure. Adjusted EBITDA is meant to reflect management's view of recurring business activities. It is reconciled to the GAAP measure "Net Income (Loss) from continuing operations" by removing interest expense, interest income, taxes, depreciation, amortization, stock-based compensation and one-time items. |
Second Quarter 2026 Financial Results
Revenue increased 108% to
For the three months ended
Total operating expenses were
Net loss for the second quarter of 2026 was
Adjusted EBITDA3 loss from continuing operations was
As of
___________________________ |
3 Adjusted EBITDA is a Non-GAAP measure. Adjusted EBITDA is meant to reflect management's view of recurring business activities. It is reconciled to the GAAP measure "Net Income (Loss) from continuing operations" by removing interest expense, interest income, taxes, depreciation, amortization, stock-based compensation and one-time items. |
Second Quarter and 2026 Revenue Guidance
The following forward-looking statements reflect the Company's expectations as of
The Company is increasing its full-year fiscal 2026 net revenue growth expectation and now expects net revenue to increase approximately a minimum of 80% over fiscal 2025. In addition, the Company expects to generate positive Adjusted EBITDA for the full year.
Conference Call
Chief Executive Officer
Date:
Time:
Webcast and Q&A: Link
Toll-free dial-in number: 1-877-407-0784
International dial-in number: 1-201-689-8560
Conference ID: 13762150
Please call the conference telephone number five minutes before the start time. An operator will register your name and organization. If you have any difficulty connecting to the call, please contact Hayden IR at 1-646-755-7412.
A telephonic replay of the conference call will be available after
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 13762150
Presentation of Non-GAAP Information
This press release contains disclosure of the Company's Adjusted EBITDA and Adjusted Gross Profit Margin which are not a United States Generally Accepted Accounting Principle ("GAAP") financial measures. The difference between Adjusted EBITDA (a non-GAAP measure) and Net Loss (the most comparable GAAP financial measure) It is reconciled to the GAAP measure "Net Income (Loss) from continuing operations" by removing interest expense, interest income, taxes, depreciation, amortization, stock-based compensation and one-time items. Adjusted Gross Profit margin is defined as GAAP Gross Profit plus one time inventory write-offs related to HD9 business and inventories written off related to a legal dispute with a Co-manufacturer divided by GAAP Revenue. We have included reconciliations of Adjusted EBITDA to Net Loss and Adjusted Gross Profit Margin to GAAP Gross Profit Margin under "
About
Forward-Looking Statements Disclosure
Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all passages containing words such as "will," "aims," "anticipates," "becoming," "believes," "continue," "estimates," "expects," "future," "intends," "plans," "predicts," "projects," "targets," or "upcoming." Forward-looking statements also include any other passages that are primarily relevant to expected future events or that can only be evaluated by events that will occur in the future. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. Factors that could affect the Company's actual results, including its financial condition and results of operations, include, among others: its ability to successfully execute on its growth strategies and operating plans for the future; the Company's ability to continue to develop and market hemp-infused beverages and edibles, and to comply with the new federal and state laws and regulations governing hemp and related products, including but not limited to recent federal legislation that prohibits the unregulated sale of intoxicating hemp-based or hemp-derived products (including HD9 products); the Company's ability to manage operating expenses and generate sufficient cash flow from operations; the Company's ability to create and maintain brand name recognition and acceptance of its products; the Company's ability to adapt and execute its marketing strategies; the Company's ability to compete successfully against much larger, well-funded, established companies currently operating in the beverage industry generally and in the craft beverage segment specifically; the Company's ability to respond to changes in the consumer beverage marketplace, including potential reduced consumer demand due to health concerns (including obesity) and legislative initiatives against sweetened beverages (including the imposition of taxes); its ability to develop and launch new products and to maintain brand image and product quality; the Company's ability to maintain and expand distribution arrangements with distributors, independent accounts, retailers or national retail accounts; its ability to manage inventory levels and maintain relationships with manufacturers of its products; its ability to maintain a consistent and cost-effective supply of raw materials and flavors and to manage factors affecting its supply chain; its ability to attract, retain and motivate key personnel; its ability to protect its intellectual property; the impact of future litigation and the Company's ability to comply with applicable regulations; its ability to maintain an effective information technology infrastructure, fluctuations in freight and fuel costs; the impact of currency rate fluctuations; its ability to access the capital markets for any future equity financing; the Company's ability to maintain disclosure controls and procedures and internal control over financial reporting; dilutive and other adverse effects from future potential securities issuances; and any actual or perceived limitations by being traded on the
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
2026 (unaudited) | 2025 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 2,351 | $ | 3,599 | ||||
Accounts receivable, net of allowance of | 3,280 | 3,603 | ||||||
Note receivable | - | 1,400 | ||||||
Current licensing fees receivable | 225 | 150 | ||||||
Inventories, net | 4,689 | 2,657 | ||||||
Prefunded insurance premiums from financing | 71 | 214 | ||||||
Prepaid expenses and other current assets | 996 | 1,224 | ||||||
Deferred financing costs | 415 | 415 | ||||||
Total current assets | 12,027 | 13,262 | ||||||
Long-term licensing fees receivable | 1,521 | 1,647 | ||||||
Fixed assets, net of accumulated depreciation of | 183 | 321 | ||||||
Total assets | $ | 13,731 | $ | 15,230 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 5,340 | $ | 6,378 | ||||
Accrued expenses | 3,376 | 3,960 | ||||||
Revolving credit facility and loans | 3,721 | 3,022 | ||||||
Insurance premium financing | 71 | 214 | ||||||
Promissory notes | - | 190 | ||||||
Total current liabilities | 12,508 | 13,764 | ||||||
Total liabilities | 12,508 | 13,764 | ||||||
Commitments and contingencies (Note 14) | ||||||||
Shareholders' equity: | ||||||||
Common stock, no par value: | ||||||||
Authorized -- 800,000,000. Issued and outstanding shares -- 118,780,917 shares and 118,227,478 shares, respectively | 96,254 | 95,895 | ||||||
Accumulated other comprehensive income | 232 | 299 | ||||||
Accumulated deficit | (95,263) | (94,728) | ||||||
Total shareholders' equity | 1,223 | 1,466 | ||||||
Total liabilities and shareholders' equity | $ | 13,731 | $ | 15,230 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended | Six Months Ended | |||||||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||||||
Net Revenue | $ | 10,168 | $ | 4,894 | $ | 22,600 | $ | 9,124 | ||||||||
Cost of goods sold | (7,376) | (3,266) | (15,910) | (6,101) | ||||||||||||
Gross profit | 2,792 | 1,628 | 6,690 | 3,023 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling and marketing | 1,900 | 1,060 | 3,936 | 2,173 | ||||||||||||
General and administrative | 1,417 | 1,328 | 2,926 | 2,531 | ||||||||||||
Total operating expenses | (3,317) | (2,388) | (6,862) | (4,704) | ||||||||||||
Loss from operations | (525) | (760) | (172) | (1,681) | ||||||||||||
Other income (expenses): | ||||||||||||||||
Interest income | 5 | 5 | 19 | 6 | ||||||||||||
Interest expense | (126) | (70) | (366) | (148) | ||||||||||||
Other (expense) income, net | (1) | (179) | (11) | (273) | ||||||||||||
Gain on disposition of subsidiaries | - | 3,663 | - | 3,663 | ||||||||||||
Total other income (expense) | (122) | 3,419 | (358) | 3,248 | ||||||||||||
Income (loss) before income taxes | (647) | 2,659 | (530) | 1,567 | ||||||||||||
Income tax expense, net | (3) | (7) | (5) | (7) | ||||||||||||
Net income (loss) from continuing operations | (650) | 2,652 | (535) | 1,560 | ||||||||||||
Loss (income) from discontinued operations | - | (41) | - | 199 | ||||||||||||
Net income (loss) | $ | (650) | $ | 2,611 | $ | (535) | $ | 1,759 | ||||||||
Earning (loss) per share – basic and diluted | ||||||||||||||||
Income (loss) from continuing operations | $ | (0.01) | $ | 0.02 | $ | (0.00) | $ | 0.01 | ||||||||
Income from discontinued operations | $ | - | $ | 0.00 | $ | - | $ | 0.01 | ||||||||
Total | $ | (0.01) | $ | 0.02 | $ | (0.00) | $ | 0.02 | ||||||||
Weighted average common shares outstanding - basic and diluted | 118,780,917 | 116,180,383 | 118,698,360 | 116,023,676 | ||||||||||||
See accompanying notes to condensed consolidated financial statements.
Reconciliation of GAAP Net Income from Continuing Operations to Non-GAAP Adjusted EBITDA (unaudited)
(In thousands, except per share data)
For the three months ended | For the six months ended | ||||
2026 | 2025 | 2026 | 2025 | ||
$ | $ | $ | $ | ||
Net income (loss) from continuing operations | (650) | 2,652 | (535) | 1,560 | |
Add: Interest expense | 126 | 70 | 366 | 148 | |
Add: Income tax expenses | 3 | 7 | 5 | 7 | |
(521) | 2,729 | (164) | 1,715 | ||
Add: Depreciation | 96 | 17 | 171 | 30 | |
Add: Amortization | - | - | - | - | |
(425) | 2,746 | 7 | 1,745 | ||
Add: Loss on disposal | - | - | - | - | |
Less: Gain on disposition of subsidiaries | - | (3,663) | - | (3,663) | |
Add: Stock-based compensation | 99 | 196 | 235 | 287 | |
Add: Impairment of receivable | 23 | - | 25 | (46) | |
Add: Impairment of note receivable | - | - | - | - | |
Add: Impairment of inventory | - | (13) | - | (38) | |
Less: Finance income | (9) | (5) | (19) | (6) | |
(312) | (739) | 248 | (1,721) | ||
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