Executive Summary

Q2 2025 revenue was $3.146M, down ~26% year over year (Q2 2024: $4.268M) but up ~16% sequentially (Q1 2025: $2.718M), reflecting the exit of low‑margin floral and lettuce and early shelf‑stable CPG traction .
Gross margin compressed to ~20% from ~37% YoY on product mix, labor/raw material inflation, and infrastructure/personnel investments; SG&A rose to $4.227M on legal and transaction costs (NaturalShrimp, Narayan) and franchise taxes .
Results missed S&P Global consensus: revenue $4.481M* vs actual $3.146M and EPS ($0.74)* vs actual ($6.58), driven by category exits and VMS transition to Kick; only one covering estimate in quarter (significant undercoverage) .
Strategic highlights: private label herbs +19.1% YoY; non‑perishable unit sales +~17% YoY; hydroponic basil +7.1% YoY; international VMS revenue +66.5% YoY; Kick launched on Amazon and expanding to brick‑and‑mortar .
Balance sheet note: pro forma stockholders’ equity would have been ~$16.6M at 6/30/25 if Series B Preferred is classified as permanent equity; management believes this supports Nasdaq equity compliance after the amended certificate .

What Went Well and What Went Wrong

What Went Well

Private label herbs through major big‑box retailers grew 19.1% YoY; core produce momentum with hydroponic basil +7.1%, potted herbs +6.4%, wheatgrass +4.1% .
Non‑perishable unit sales increased ~17% YoY; international vitamin/supplements revenue rose 66.5% YoY as distribution expanded; Kick launched on Amazon, boosting e‑commerce .
CEO: “Our results this quarter validate the disciplined choices…focus on higher‑margin, innovation‑driven categories…building a stronger, more resilient portfolio” .

What Went Wrong

Revenue fell $1.122M YoY to $3.146M and gross profit declined to $0.634M (from $1.566M) as exits of floral/lettuce (~$741K impact) and mix/volume shifts weighed; SG&A increased to $4.227M on acquisition/legal/tax costs .
Net loss widened to $4.043M vs $1.932M YoY; deemed dividend on warrants of $9.833M further increased net loss attributable to common stockholders to $13.876M .
CFO cited condiments softness and transition from legacy Vitamin Whey to Kick as additional revenue headwinds; core herbs were “flat to a little soft” vs prior year .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$4.268	$2.718	$3.146
Gross Profit ($USD Millions)	$1.566	$0.088	$0.634
Gross Margin (%)	37%	3.2%	20%
SG&A ($USD Millions)	$2.748	$3.015	$4.227
Net Loss ($USD Millions)	$(1.932)	$(3.324)	$(4.043)
Diluted EPS ($USD)	$(30.02)	$(2.47)	$(6.58)
Net Loss Attributable to Common ($USD Millions)	$(1.932)	$(3.324)	$(13.876)
Deemed Dividend on Warrants ($USD Millions)	$—	$—	$(9.833)

Actual vs S&P Global consensus (Q2 2025):

Metric	Consensus*	Actual
Revenue ($USD Millions)	$4.481*	$3.146
Primary EPS ($USD)	$(0.74)*	$(6.58)
# of Estimates	1*	—

Values retrieved from S&P Global.*

Revenue streams (disaggregation):

Revenue Stream ($USD Thousands)	Q2 2024	Q2 2025
Herbs, Produce & Floral	$3,835	$2,886
Vitamins & Supplements	$433	$260
Total	$4,268	$3,146

KPIs and Operating Highlights:

KPI / Metric	Q1 2025	Q2 2025
Non‑perishable revenue YoY growth (%)	+15%	+~15%
Non‑perishable unit sales YoY (%)	—	+~17%
Private Label herb sales YoY (%)	—	+19.1%
Cut herbs unit growth (%)	+13% (seasonal)	—
Hydroponic Basil YoY (%)	—	+7.1%
Potted Herbs YoY (%)	—	+6.4%
Wheatgrass YoY (%)	—	+4.1%
International VMS revenue YoY (%)	—	+66.5%

Liquidity snapshot (end of Q2 2025): Cash $2.821M; total debt $2.030M gross; pro forma equity ~$16.6M if Series B classified as permanent equity .

Guidance Changes

No formal quantitative guidance (revenue, margins, EPS, tax rate, OpEx) was provided in the Q2 2025 press release or call; management emphasized strong Q4 seasonality and increased preorders/new accounts but did not issue ranges .

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q4	N/A	No formal guidance; management “credibly bullish” on strong Q4 demand and added accounts	N/A
Gross Margin	FY	N/A	No formal guidance; focus on higher‑margin mix and cost actions	N/A
SG&A	FY	N/A	No formal guidance; expect normalization after transaction costs	N/A
EPS	FY/Q3	N/A	No formal guidance	N/A

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Product mix shift to higher‑margin CPG	2024 gross margin rose to 16.7%; exit lettuce/floral; CPG launches (Kick, Pulp, Squeezables)	Non‑perishable units +~17% YoY; private label +19.1% YoY; Amazon launch of Kick	Positive, scaling
Technology/AI/automation	GreenThumb 2.0, nano‑bubble trials (up to +55% yield)	Aquaponics IP from NaturalShrimp; R&D expansion at Prairie Hills	Broadening scope
Supply chain and distribution	Vertical integration, Heartland facility fully in‑house	Midwest central facility improves distribution; 98%+ fill rate cited historically	Improving
Tariffs/macro	NA	Shrimp stateside production referenced amid tariff concerns; sustainability focus	Risk mitigation
Regulatory/Nasdaq	Regained bid price compliance; panel monitor	Pro forma equity supports Nasdaq equity rule compliance	Stabilizing
Seasonality	Q4 is “Super Bowl”; heavy holiday demand	Management “credibly bullish” on Q4; preorders up; new accounts expected	Strong setup
R&D execution	Nano‑bubble, sustainability initiatives	Aquaponics patents and R&D hub at Prairie Hills	Accelerating
Health features	Functional pickles (Pickle Party), clean‑label sports nutrition	Kick expanding; pre/post‑workout SKUs; gut‑health condiments momentum	Expanding portfolio

Management Commentary

CEO: “By exiting underperforming, low‑margin product lines and investing in CEA‑informed, better‑for‑you shelf‑stable products, we are building a stronger, more resilient portfolio” .
CEO on private label momentum: “Contracted business, low marketing costs…accelerating with 3‑year contracts (e.g., Meijer)” .
CFO: “Revenue decline primarily reflects exit of floral and lettuce (~$740K impact); gross profit $634K vs $1.6M; SG&A $4.2M on NaturalShrimp/Narayan/franchise tax” .
CEO on Prairie Hills acquisition: “Enhances R&D in aquaponics, patented water treatment tech, improves distribution from central Midwest, and provides capacity to scale” .

Q&A Highlights

Private label growth and mix: ~19% YoY dollars and ~22% units at Meijer; contracted programs reduce marketing cost burden .
Drivers of revenue shortfall beyond exits: condiments softness; transitioning Vitamin Whey out as Kick ramps; core herbs “flat to a little soft” YoY .
Kick Sports Nutrition: higher margin category, Amazon partner support, adding pre/post‑workout SKUs; brick‑and‑mortar load‑ins in ~45 days targeting Q4 .
Seasonality: Q4 preorders up; new accounts; investments in labor/refrigeration/lines position for stronger execution without significant incremental costs .
NaturalShrimp acquisition: facility to serve as R&D/warehousing/logistics hub; aquaponics patents to lower costs and improve sustainability; initial sales nominal, focus on margin accretion via platform .

Estimates Context

Q2 2025 results missed Wall Street consensus from S&P Global: revenue $4.481M* (one estimate) vs actual $3.146M and EPS $(0.74)* vs $(6.58), a material miss driven by category exits, mix and transaction costs .
Coverage is thin (one estimate), increasing the likelihood of larger revisions post‑print; near‑term models likely to reflect lower herb/produce volumes and higher SG&A, with potential offset from private label and non‑perishable growth. Values retrieved from S&P Global.*

Key Takeaways for Investors

Q2 print was a significant miss vs consensus on both revenue and EPS due to legacy category exits and higher SG&A; expect estimate cuts and model recalibration near term .
Mix shift is working in core KPIs: private label strength, non‑perishable and international VMS growth, and Kick’s Amazon launch provide medium‑term margin tailwinds despite transitory softness in condiments/core herbs .
Balance sheet/liquidity: $2.821M cash at 6/30/25; gross debt $2.030M; amended Series B classification supports pro forma equity and Nasdaq compliance—monitor covenant constraints with Streeterville and going‑concern language .
Execution catalysts: Q4 seasonality (“Super Bowl”), increased preorders/new accounts, Kick brick‑and‑mortar load‑ins, and private label expansion can drive sequential revenue/mix improvement .
Strategic assets: Prairie Hills aquaponics patents and central location should lower costs and improve distribution over time; expect incremental R&D outputs and potential nutraceutical innovation .
Risk checklist: thin sell‑side coverage (one estimate), customer concentration (four customers ~84.7% of revenue; receivables concentration ~91.8%), and capital needs/going concern disclosures warrant caution on financing/dilution risk .
Trading implication: narrative hinges on proof of CPG scale‑up and Q4 execution; watch for margin stabilization, SG&A normalization post‑transaction, and evidence of Kick/private label sell‑through in retail/e‑commerce .

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