Aug 17, 2026 earnings call — Scaling food-grade contracts and Panama ramp
Company aims to grow two food contracts to greater than $50 million per year in the next four to six quarters.
Revenue $0.0B (est $0.0B) · EPS $-0.15 (est $0.01)
Key quotes
"This training process for both the August and the January contracts is the primary reason for the losses in Illinois."
"Somewhere between $5 million and $7 million a year is the revenue recovery expectation across the next 12 months."
"We have a significant inventory of most raw materials, but we anticipate that we will have to raise prices to our customers in the third or fourth quarter, unless there is a significant reduction in the price of oil that reduces our raw material costs."
Analyst Q&A 4
Why inventory was higher
Q (Alan Markham · Van Clemens & Co. Incorporated): The analyst asked if higher raw material costs caused the larger-than-expected inventories noted in the 10-Q and whether that connection made sense.
A: Management said they bought more inventory instead of holding cash because some product prices were low last fall, especially in Panama. They avoid buying key ingredients like aspartic acid in spring and summer and refill in fall and winter. They do the same cyclical buying with several other products.
"We have been banking inventory rather than money, because there were low prices last fall for certain of our products." — Dan O'Brien (CEO)
August contract performance and receivables
Q (William Gregozeski · Greenridge Global): He asked why sales were down on the August 2025 food contract and whether they should expect a ramp. He also asked why receivables fell by about $9 million and whether the $2.5 million R&D fees last year were paid by the August or January customers.
A: Management said the August 2025 project has reached full capacity but is being optimized for profitability; training many workers to run 24/7 caused early inefficiency and losses. On the receivables decline, management referred listeners to the 10-Q and said he did not have it open. He said the $2.5 million R&D fee was paid by the August customer and there could be up to another $3 million if milestones are met, but timing and certainty are unclear.
"If I remember my speech correctly, that project has reached full capacity, and we are optimizing it so that it's profitable." — Dan O'Brien (CEO)
Equipment, shelf shares, revenue timing, margins
Q (Tim Clarkson · Van Clemens & Co. Incorporated): He asked whether anything besides labor (like equipment) hurt getting the food additive contracts running, the status of the shelf offering, when the biggest new contract would show material revenues, whether the $4 million inventory buildup was tied to that deal, and how margins compare across the three contracts.
A: Management said the equipment is working but not yet fully optimal and they expect duplicate equipment next year to expand. The shelf prospectus is being kept on the shelf and will not be used at current prices unless an unmissable acquisition appears. He said the biggest contract should show material revenue this quarter, the $4 million inventory is tied to that and Panama, the wine contract will have higher margins but lower volume (around $3 million to $4 million a year at 25%-26%), and the two newer contracts target 22%-25% gross margins and 15% to 17% net margins after tax.
"The wine contract will be slightly higher, but the volume will be lower." — Dan O'Brien (CEO)
Recovering old customers and revenue amount
Q (Deniz Ercan · Singular): He asked how much revenue could be realistically expected in Q3 and by year-end from recovering FL LLC historical business, and whether customers had already started placing orders directly.
A: Management would not estimate revenue for a specific customer but confirmed they have already received substantial orders directly from former FL LLC customers and are working with them directly, including rehired representatives. He gave a recovery expectation of somewhere between $5 million and $7 million a year across the next 12 months.
"Somewhere between $5 million and $7 million a year is the revenue recovery expectation across the next 12 months." — Dan O'Brien (CEO)