Revenue Resilience Despite Headwinds
Revenue of $3.2M for Q1 2026, only down 3% sequentially from Q4 2025 and down 11% year-over-year, demonstrating resilience in a difficult operating and regulatory environment.
Improved Gross Margin Year-over-Year
Gross margin expanded to 48.9% in Q1 2026 versus 46.0% in Q1 2025 (improvement of 2.9 percentage points), driven by lower product costs and progress insourcing manufacturing.
Meaningful Cost Reductions
Operating expenses (SG&A) declined roughly 13.3% to $1.9M compared with the prior year period, driven by lower legal/professional fees, reduced marketing spend and administrative efficiencies.
Adjusted EBITDA and Cash Flow Improvement
Adjusted EBITDA loss improved to $0.1M (loss) in Q1 2026 from a $0.3M loss in Q1 2025. The company generated positive operating cash flow of approximately $0.1M versus operating cash usage of ~$0.1M in the prior year period.
Progress Toward Cash Flow Breakeven and Balance Sheet Actions
Company is approaching cash flow breakeven, ended Q1 with approximately $0.3M cash (slightly higher than year-end 2025), and amended a note payable into a convertible-note structure to improve financial flexibility.
Product and Channel Momentum
Launched PlusHLTH EMPOWR (20g protein, 5g creatine, probiotics) and announced multiple non-cannabinoid product plans for 2026. Direct-to-consumer channel remains strong at 44% of revenue and early consumer/retailer feedback for new products is encouraging.
Strategic M&A and Operational Insourcing
Acquisitions of Cultured Foods and Elevated Softgels contributing to scale, diversification, and supply chain flexibility; strategic insourcing of manufacturing expected to lower costs and speed time-to-market with synergies anticipated in H2 2026.
Market Position and Regulatory Tailwinds
Maintained #1 selling Hemp extract brand in natural product retail per SPINS. Federal developments: CMS BEI program (up to $500 annually for eligible hemp-derived products) and an FDA limited enforcement-discretion letter provide early regulatory clarity and potential new channels.
Inventory and Working Capital Management
Inventory reduced to $3.9M from $4.1M at year-end, reflecting tighter working capital management and improved collections and payables oversight.