BNB Standard Corp.

Q2 revenue was $1.1 million, down from $3 million in the year-ago period. Gross profit was approximately $79,000, or 7.4% of revenue, versus $300,000, or 10.2%, a year ago. Operating expenses were about $800,000, down 62% year over year, and net loss improved to about $700,000, or negative $0.09 per share, from $1.8 million, or negative $0.23 per share. Cash and cash equivalents were $14.2 million at June 30, 2023, versus $18.6 million at December 31, 2022, and the company remained debt free. No formal numeric guidance for next quarter or full year was given; management said it expects to continue running a lean operation, seek additional cost savings, and target new contract wins in cannabis and traditional agriculture.

Tony McDonald said the broader cannabis and controlled-environment agriculture markets remain under pressure from pricing, inflation, and reduced capital spending, which has hurt bookings and revenue. He emphasized that the company responded by cutting costs, lowering operating expenses by more than 60% year over year, and keeping a disciplined approach to capital allocation. He also said the board has launched a strategic alternatives review and is casting a wide net to maximize shareholder value, including possibilities inside and outside the current sectors.

Ian Patel highlighted the quarter’s hard numbers: revenue of $1.1 million, gross profit of about $79,000 at 7.4% margin, operating expenses of about $800,000, and net loss of about $700,000, or negative $0.09 per share. He noted bookings of about $200,000 and backlog of $1.1 million, both down materially from last year, reflecting fewer industry capital projects. He also said cash and cash equivalents were $14.2 million, working capital declined by about $900,000 during the period, and the company had no debt as of June 30.

In the pre-submitted Q&A, management was asked how often it would update investors on the strategic alternatives process and said updates would be provided as the board deems appropriate. Asked what kind of partner or acquirer it wants, management said it is casting a wide net for the greatest shareholder outcome, including parties inside and outside cannabis and CEA Industries. It also acknowledged that contract opportunities have slowed, which is why sales and marketing spend was reduced, while saying it will continue evaluating new business and servicing current and new projects.