Good day. Thank you for standing by. Welcome to the Solesence Fourth Quarter and Full Year 2025 Conference Call. Today's call is being recorded. During this call, management will make statements that include forward-looking statements within the meaning of the federal securities laws, which are pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This conference call may contain statements that reflect the company's current beliefs, and a number of important factors could cause actual results for future periods to differ materially from those stated on this call. These important factors include, without limitation, a discussion of a customer to cancel a purchase order or supply agreement, demand for acceptance of the company's personal care ingredients, advanced materials and formulated products, changes in development and distribution relationships, the impact of the competitive products and technology, possible disruption in commercial activities occasioned by public health issues, terrorist activities and armed conflicts and other risks indicated in the company's filings with the Securities and Exchange Commission. Except as required by federal securities laws, the company undertakes no obligation to update or revise these forward-looking statements to reflect new events, uncertainties or other contingencies. I'll now hand the conference call over to Kevin Cureton, President and Chief Executive Officer. Please go ahead, sir.

Thank you, operator, and thank you to our investors, brand partners and teammates who are joining us today. Today, we will provide more guidance on our 2026 plan and the strategy we initiated at the end of 2025, which aims to take our company forward to enhance consumer health and well-being while delivering outstanding results to our investors. This initiative is called Transform and Transcend. Before we delve into our plans, we will review our 2025 results. To walk you through how we wrapped up 2025, I'll turn the call over to our CFO, Laura Riffner. Laura?

Thank you, Kevin. I will begin with a review of our fourth quarter 2025 results before moving to full year performance and our 2026 outlook. For the fourth quarter, revenue was $12.5 million, roughly even compared to the previous year. Fourth quarter 2025 gross profit was $3.4 million compared to $2.8 million for the same period in 2024. Gross margin was 27% in the fourth quarter of 2025 compared to 22% in the same period in 2024. Our results were affected by transition costs and operational inefficiencies in manufacturing resulting from our facility consolidation. Operating expenses in the fourth quarter of 2025 were $3.2 million compared to $2.8 million in the same period in 2024. This figure included relocation charges as we transitioned from 3 facilities to 2. Solesence reported net income for the quarter of $163,000 compared to a net loss of $558,000 the previous year. Turning to the full year 2025. Revenue reached a record $62.1 million, up 18.6% from $51.9 million in 2024. This was primarily driven by a large-scale launch in the first half of 2025 as well as 20 new brand partners who launched products in 2025. While revenue growth was substantial, full year gross profit was $16.1 million compared to $16.2 million in 2024. As Kevin noted in our third quarter call last November, our margins were compressed by 3 key areas. The first is labor costs. Elevated labor costs this period were primarily driven by extended process changeovers and related downtime as we scaled our production volume. The second is product design, which relates to start-up and quality costs associated with a complex launch in the first half of 2025. Third, inventory control, which represented the most substantial headwind to margins this period. Driven by our efforts to grow while scaling production, we…

Thank you, Laura. As we look back on 2025, it is important to reflect on our company's journey over the last 12 months, indeed, the past 2 years. During that period, our company nearly doubled its revenue. As I noted in our press release, this affirmed both the value we bring to the industry and our ability to establish ourselves as a leading innovator and manufacturer of SPF-infused beauty products. We increased our patent portfolio by 20%, which now numbers over 120 and through this expanded position, created a valuable picket fence that protects our market position and provides one-of-a-kind leverage for our brand partners as they grow. While we achieved these important business milestones, we invested in building our manufacturing infrastructure which both modernized our production capabilities and expanded capacity, which will enable us to generate over $200 million in revenue without further major investment. In October of 2025, we showcased a new product, Day Mode Hero Concealer. Day Mode is a hybrid product that combines skin care and color cosmetics with skin longevity claims, including UV protection and leverages 2 new technology platforms that we will bring to market in 2026. This prototype product was recently named a finalist across 4 categories of the Cosmetics & Toiletries Alle Awards. These categories are wellness, anti-aging and skin care, color cosmetics and UV protection. While the winners will not be announced until later in 2026, the cross-category recognition for this multifunctional concealer demonstrates the broad and enduring appeal of our innovations and affirms that our technology and product stories resonate with brands and industry experts alike. Through these developments, we have built a company on the cusp of changing the health and well-being of millions of people while dynamically growing our enterprise value, but there is still more work to…

[Operator Instructions] Our first question comes from Tony Rubin, who's an investor.

So I heard a lot of interesting words in the call, but I was hoping you could drill down to [ GrassTechs. ] In 2024, you had EPS of $0.07 per share. And Laura, you talked about increasing EBIT, but didn't really provide an EPS goal. So my question on that aspect is, will EPS in 2026 be at or above the 2024 levels? And kind of a related question is, Kevin, previously, you had suggested that gross margins would return to at least the mid-30s level. And on this call, Laura mentioned a floor of 30%. So I hope you would both agree that maximizing shareholder value is the purpose of a company. So with those goals in mind, could you address those 2 specific items?

Thank you, Tony, and thanks for joining. So what we'll do is have Laura address your first question and also can provide some color on the gross margin area, and then I may offer additional color to that. Laura?

Thank you for joining us today. Regarding the EPS, we aren't prepared to provide guidance on that this morning. As I did mention, we are expecting and targeting an increase in EBITDA to return to double-digit numbers in 2026. Regarding the 30% gross margin floor. On that, Tony, our guidance is intentionally conservative. And while we are -- we have that as our guidepost, our intention is to leverage the Transform and Transcend initiative to improve that number.

I think Laura has answered both those questions very well. So there's nothing additional I can offer at this point other than, again, reaffirming our guidance is on an annual basis and that we are taking a conservative approach to that guidance, but expect to obviously focus on improving enterprise value, which ultimately will increase the value to our shareholders.

Our next question comes from James Lieberman with American Trust Investment Services.

And I want to actually congratulate you for all the transitions that are going on. Most people don't fully appreciate what you've accomplished over the last couple of years. And in terms of consolidating manufacturing into your new facility, I'm sure that's a major step, and you have to be extremely careful about doing that transition so that you don't have real supply issues and manufacturing issues that could have been more difficult to meet your customers' goals. But can you address some of the questions of if you have an aspirational say that you could grow the company to be $200 million, is there sort of like a some sort of road map to get there in terms of the kind of new products you're coming out with, the relationships with your customers and how you see the market sort of, say, like a 2- to 3-year period? And also, can you give us an aspirational profit margin? So you're hitting on all cylinders. Could you reach as high as like a 40%? Can you address those areas?

Jim, thank you for your thoughts, and I appreciate your involvement in our company for as long as you have been. So thank you. There's a lot you offered there. We'll try and start by addressing, yes, the consolidation was successful. And in fact, through that consolidation, we did not have any impact or negative impact on OTIF. We actually continue to have a high performance on time and in full while we conducted that consolidation. So we're excited about that and excited about what contributions that consolidation will have in terms of improving our overall financial performance. When looking beyond the current state and being aspirational in a careful manner this morning, that is really at the heart of the Transform and Transcend plan. What we talked about in our prepared remarks was to really address some of our operational execution challenges so that we could amplify our innovation platform. We're really in a unique position based upon the type of IP that we've created, the type of protection that it builds around our brand partners and for us and uniquely addresses what's really the most important or really preferred area for consumers, which is mineral-based sunscreen is preferred by all consumers or at least at 70% of women as one of our resources say. So we're building a platform that really is targeting the areas that are growing the fastest. We're working with brands that are the fastest growing. We work with the middle market brands primarily, and those are the brands that are the fastest growing in the industry, and we're addressing a critical area that also is driving the change in the marketplace. So all of those things point to us resuming the type of growth that we've had in the past, which is growing at a multiple of the industry's growth rate. And so we anticipate that to happen. We also have talked in the past, Jim, about getting full value of the technology that we provide through the Transform and Transcend initiative, we also mentioned some of the changes that we're making relative to increasing our share of the value chain. And quite honestly, along with that, the share of the value chain that our brand partners have as well. Those initiatives or that specific initiative, along with the rest of what we've described in Transform and Transcend will help to significantly increase our gross profit margin performance and therefore, in the end, our EBITDA, so that we are targeting levels that you mentioned and maybe even greater. All of that takes time, as you know, and as you have appreciated over the many years you've been part of our investor community. And so we're excited about what's going to start, but we know that it will take some time for us to get to all of those objectives, but we're really excited about where we are and where it's headed.

[Operator Instructions] Our next question comes from Stefano Bolis, an investor.

I have 2. The first is, are you still planning to have a dedicated investor call, as you mentioned last time? And the second is on the BASF volumes. In the last 3 years, they have been decreasing. So one would have expected after the lawsuit story that this is because they needed more, not because they needed less. So how do you see this trend moving forward on BASF?

Thank you, Stefano. I appreciate your call in today. So a couple of questions there. Let's take the last one first and just guide that as with many of our brand partners, even those that we are well known like BASF or publicly known, maybe a better way to state it, like BASF, we are very careful not to provide specific guidance on their performance. There -- we are permitted to acknowledge those brands, but not really provide specific guidance on their performance. So I'll not be able to provide more than that. We certainly continue to partner with them closely and have a good working relationship with BASF.

Our next question comes from Wayne Rowan, who is an investor.

Yes. I'd like to thank you for your integrity and not trying to gloss over things. That's much appreciated. Nobody likes BS. Why have we struggled so much on production? Because it seems like we've been struggling with that for quite a while now. And then the other thing is, did we lose a brand partner, a place where we sold a lot of product? Or did I mishear that? I'm a little old and sometimes my hearing ain't so good. And then do you anticipate -- the other thing I'd like you to address is why it took so long to get this call this quarter. And then you anticipate an improvement in sales this year, and thank you for your hard work and tell Jeff hello too.

Thank you, Wayne, for continuing to be a committed investor in our company. We certainly are committed to providing as much transparency as we can. And I hope as you -- and Stefano, I did not address your first question, which was related to the investor call. It is our intent to provide improved communications to the investors. Now that we've communicated a little bit more relative to the Transform and Transcend program, we will be prepared to continue that process going forward. What we had talked about, again, I'll first finish up by addressing Stefano's question regarding the investor call. What we really talked about was an investor presentation. We do believe that is something that is important for us to present, and we will have further information and guidance that we'll provide in the months to come. So thank you again for that question, and we'll move on to some of Wayne's questions now. So Wayne, you had several questions, and thank you for our team helping me to track all of them. The first one is related to production. And I believe, as we mentioned in the script, one of our challenges has been that we've simultaneously grown at a multiple of the industry's growth rate and installed new capability. And what our emphasis has been over that time has been to make sure that we met the quality standards that are necessary for a cGMP production, which has its own unique challenges, but also to make sure that we're meeting the on-time and in full performance that's necessary to keep products on the shelves for our brand partners. So that simultaneous challenge certainly has been one that hasn't translated into the gross profit margins that we would like to see, but we've now reached a place through the plans that we have in front of us that we are confident in our ability to perform well in the future. I think the next question that you had, Wayne, was related to a brand partner. We did not mention in any of our guidance that there was any loss of any brand partner, just to be clear. What we guided was that there were some challenges that one of our brand partners was having in sell-through in the mass market.

The next question, Wayne, I believe, was why it took so long to schedule the call. We prefer to schedule the call after our year-end audit is completed. And the scheduling of the audit gets done quite literally almost a year in advance. So by the time the audit was scheduled with our auditing firm and finalized, it's simply just how long it took to get it scheduled.

Yes. So the last question was related to the sales target. And again, thanks, Wayne, for all the questions. The sales targets, as we've guided, is that this year will be a period of normalization. And so that is on a full year basis, the guidance that we can provide at this point. We are excited about the future of our business. We continue to be excited about the addition of our new Vice President of Brand Partnerships, Yoolie Park, who brings over 20 years of experience in turnkey manufacturing. And that in and of itself has already helped us in terms of our ability to more effectively deepen the relationships that we have with some of our key brand partners and put new brand partners in front of us in a way that will materially improve and grow our company over the years to come.

I'm not showing any further questions at this time. I'd like to turn the call back over to Kevin for any further remarks.

Thank you, Kevin. Before we sign off, I wanted to just give you a final thought on our future. Back in 2019, when our consumer products line was less than $2 million, we said the future of Sun Care is the future of beauty. Today, with over $50 million in revenue from our consumer products line and a global patent estate to support it, that vision has been validated. However, our 2025 results showed us that scale without operational excellence will not enable us to create a platform for our company to achieve our goal of dynamic growth in our enterprise value. That is why 2026 is our year of transformation. Through Transform and Transcend, we are removing inefficiencies from our operations, modernizing our supply chain and refining our partner base and ways of working with them to ensure mutual success at both the top and bottom lines. We are doing the hard work now to ensure that our proprietary technologies and consumer preferred products translate into the best-in-class financial returns our shareholders expect. We are confident by stabilizing our foundation this year, we are setting the stage for the next 5 years to be the most profitable in our company's history. Thank you for your continued support. Have a great day.

Thank you. Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.