0001104659-26-056615
SEC filingRevenue declined sharply, but net loss improved due to lower interest expense; liquidity was bolstered by a Series B preferred stock offering.
Revenue for the first quarter of 2026 was $4.1 million, a decrease of 31.1% compared to $6.0 million in the same period last year. The decline reflects lower sales volumes, particularly in the contract manufacturing segment, as the company continues to face customer concentration risks and reduced demand.
Gross profit was $2.2 million, representing a gross margin of 53.1%. While the margin remains relatively healthy, the absolute gross profit declined in line with revenue. The company has not provided a breakdown of cost of goods sold or specific drivers of margin changes.
Diluted earnings per share was -$18.08, compared to -$2.50 in the prior year, reflecting a significant increase in the weighted-average share count due to equity issuances, including the Series B convertible preferred stock. The large negative EPS is also impacted by deemed dividends on preferred stock, which increase the loss available to common shareholders.
Management has expressed substantial doubt about the company's ability to continue as a going concern within one year from the issuance of the financial statements. The company's plans to improve liquidity do not alleviate this doubt. If additional capital is not available when needed, the company may be required to liquidate inventory or assets, cease or curtail operations, or seek bankruptcy protection.