Rubicon Organics Inc.

Good morning, ladies and gentlemen, and welcome to Rubicon Organic's second quarter earnings call. At this time, all lines are in a lesson-only mode. Following the presentation, we will conduct the question and answer session. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. I would now like to turn the conference call over to Margaret Brody. Please go ahead.

I'll share an update on Rubicon Organics Q2 2025 performance, our growth opportunities, and outlook. Glenn Ibbitt will be walking you through our financial results. In Q2, we appointed Glenn Ibbitt as interim CFO, completed a $4.5 million private placement, finalized the acquisition of our Hope facility, launched our new all-in-one vape product to market, all while positioning the company for long-term success. We also delivered record results in the quarter, Net revenue of $15 million, our highest ever single quarter. Gross profit of $5.9 million, another record high, and delivered adjusted EBITDA of $1.4 million, building on the $800,000 from Q125, for year-to-date $2.1 million. Rubicon's growth continues to outpace total market. One of the key drivers behind our year-over-year growth was the exceptional performance of our 1964 510 Thread Revenue Baseline, Launched in Q2-24 with just two SKUs, we expanded to five by year-end, and by the close of Q2-25, we have seven SKUs in market, further strengthening our portfolio. These vape carts are extremely well-received, quickly capturing over 15% of the segment and continuing to gain momentum. Beyond resin vapes, we saw strong growth in 1964 pre-rolls, dried flower, and concentrates, along with gains in Simply Bear pre-rolls. we also drove innovation in edibles and capsules. High Fire is reporting now that pre-rolls both infused and flour-only were the fastest-growing segment in the first half of 25 and now account for 35% of total market sales. Rubicon also holds the number one position in premium edibles, and we have strong offerings under our brands of Simply Bare, 1964, and Wildflower. In topicals, we continue to lead the category with the market's top-selling SKUs, despite our premium pricing. While we've experienced some share erosion with the entry of competitors offering more SKUs at lower price points, our revenue in the segment continues to hold its own. This speaks to the strength of our product quality and the brand equity we've built over time. In growing our offerings to customers, we are regularly launching new products that build on the strength of our house of premium brands and leverage our genetics bank. In Q2, a few standouts for you. We launched BC Organic Sunset Runs by Simply Bare. Again, honored to share another legacy genetic from Gastown Genetics. This was launched under Simply Bare. It's earning outstanding reviews and is a key part of our drop strategy, bringing fresh, distinctive flavors to our consumers. We launched our first all-in-one resin vape under our award-winning and best-selling Comatose strain. We've provided a new and discreet format to consumers to enjoy on the go. We are seeing rapid gains in distribution. and we'll have a more fulsome update view on the performance of all-in-one in the third quarter. Now to Glenn on financials.

Thank you, Margaret. Good morning, everyone. Today we reported Q2 2025 net revenue of $15 million, which was our highest ever for a single quarter, up 24% versus Q2 of 2024, and up 21% sequentially. Our 1964 brand saw growth led by the pre-roll segment, following format enhancements in 2024. Additional momentum came from our 510 live resin base, launched late in Q2 2024, which benefited from a full three and six months in the market this year. The brand clearly resonates with consumers as it also saw continued strength in flour, edibles, and concentrates. Simply Bare Organic also delivered growth in both the three- and six-month periods, driven primarily by strong performance in the pre-roll segment. This was supported by the momentum of our superb genetics, such as BC Organic Fruit Loops, and strengthened by recent innovations in capitals and edibles. Wildflower maintained a strong presence in the topical category, with its 60-gram topical stick ranking as Canada's best-selling SKU in the segment, according to HiFire. And with the number two market share in topicals, Wildfire remains a trusted leader in the wellness space. Gross profit before fair value adjustments was $5.1 million, up 40% from Q2 of last year, with gross margin improving to 34% compared to 30% a year ago. This reflects strong revenue growth, the benefits of scale, and ongoing operational efficiencies at our Delta facilities. Within SG&A, Q2 2025 costs increased by just under $1 million as we invested in targeted marketing to support brand growth and invested in people and infrastructure to position the business for future expansions. Bringing it all together, adjusted EBITDA for Q2 2025 was $1.4 million, up from $900,000 last year. This marks our fifth consecutive quarter of positive adjusted EBITDA, highlighting the strength of our underlying business, even as we continue to invest in long-term growth. Turning to cash flow and financial health, we generated $800,000 in cash from operating activities in the quarter, driven by our net profit. This compares to an operating cash outflow of $300,000 in Q2 of 2024. We closed the quarter with $7.3 million in cash and a solid working capital position of $18.7 million. Our liquidity remains strong, supported by disciplined cost control and a prudent capital structure. As you recall, in November 2024, we secured $10 million in credit facilities at an interest rate of 6.75%. During Q2 2025, we raised gross proceeds of $4.5 million in equity financing to support the startup and scale-up of the whole facility. We may consider additional financing should we choose to accelerate key projects, but we consider Rubicon's current balance sheet to be very healthy. To summarize my review of our Q2 and first half 2025 financial performance, solid revenue growth across all of our key segments and products, combined with operational efficiencies and continued cost discipline, as a positive operating cash flow, the fifth consecutive quarter of positive adjusted EBITDA, and overall robust financial health. I'll now turn the call back to Margaret.