Accounts Receivable and Collections Improvement
Net accounts receivable improved to $37.9M from $47.0M (down ~$9.1M, ~19.4%) and days sales outstanding improved by 8 days. Cash collected versus revenue for calendar year 2025 was 116% versus 67% in 2024 (an increase of 49 percentage points), indicating materially improved collections.
Operating Expense Reductions
Operating expenses were reduced to $10.3M from $15.1M year-over-year, a decline of $4.8M (~31.8%), reflecting successful cost-cutting and disciplined expense management.
Lower Net Loss
Net loss narrowed to $6.6M from $8.0M in the prior-year quarter (improvement of $1.4M, ~17.5%). For the six months ended 12/31/2025, net loss was reduced by $3.7M year-over-year.
Minimal Operating Cash Burn in H2 2025
From April 2025 through year-end, the company burned only $1.0M in operating cash as cost reductions and customer quality initiatives took hold, signaling improved cash discipline.
Strategic Pivot to Higher-Quality Nicotine Customers
Management intentionally shifted away from lower-value cannabis and slower-paying customers toward higher-value nicotine sector clients; this strategy drove improved receivables and collection metrics, though it reduced near-term top-line revenue.
Progress on iQTEC Age-Gating Technology and Regulatory Engagement
iQTEC advanced its component PMTA (submitted May 2024), received growing industry interest, was invited to an FDA small manufacturers roundtable, and reported a development deal (Charlie’s) slated to launch in 2–3 months with initial chip volumes of ~2–3M/month and an aspirational ramp toward 10M devices/month.
Gmesh Technology and Malaysian Manufacturing Build-Out
Gmesh superconductive-glass vaping hardware is attracting commercial interest; Malaysian facility build-out is on track to expand capacity from 6 production lines to 80 lines, aligning manufacturing with the company’s strategic pivot.
Improved Investing/Financing Cash Trends
Net cash used in investing activity for the first half was $0.9M (vs $1.1M prior-year) and financing cash use was modest ($0.7M), indicating limited near-term capital spending.