Q: Will AI play a role in the company's operations? If so, how will it affect the company's business? A: David Phipps, CEO, explained that AI is becoming increasingly important to their growth strategy and operating capabilities. It enables them to identify and respond to trends across e-commerce and healthcare businesses more quickly and helps efficiently process and analyze growing volumes of patient data. AI is a core component of Clear Metrics 4, their proprietary healthcare data analytics platform, and they have developed several new internal systems on the e-commerce side that automate tasks and improve efficiency using AI.

Q: Does the company have any update on the status of the ongoing lawsuit? A: David Phipps, CEO, stated that there is no update beyond what has already been disclosed in previously filed periodic reports. The Form 10-Q for the second quarter will be filed shortly and will contain a current disclosure on the matter. He noted the lawsuit remains in the hands of counsel and their insurance company, and they remain committed to resolving it as quickly as possible while protecting the long-term interests of shareholders.

Q: What is driving the significant improvement in gross margin and the path to profitability? A: Amanda Ferrio, CFO, highlighted that consolidated gross margin improved to a record 40% in Q2 2026, up from 22% in the prior year period, driven by a strategic shift toward higher-margin contracted healthcare services, particularly 340B and medication fulfillment. Healthcare gross margin reached 46%, the strongest quarterly performance in company history. She noted that with improved fundamentals and anticipated contributions from new contracted services, they expect to reach bottom-line profitability beginning in Q3 2026 and sustain it into 2027, though Q3 will absorb transaction and integration costs related to the pharmacy acquisition.

Q: How is the contracted pharmacy revenue growth progressing, and what is the outlook for new 340B contracts? A: Bruta Nkuta, VP of Healthcare Operations, reported that contracted pharmacy revenue increased 136% year-over-year to approximately $2.2 million in Q2, driven by medication fulfillment contracts secured in late 2025 and early 2026. They secured six new 340B contracts in Q2, beating the Q1 record of five. These agreements typically require about 90 days to onboard, with revenue from Q1 entities expected to contribute late in Q3 and Q2 entities more fully in Q4. The contracted business now represents approximately 61% of total healthcare gross profit.

Q: What is the status of the Pensacola pharmacy acquisition and how does it fit into the growth strategy? A: Bruta Nkuta, VP of Healthcare Operations, confirmed that subsequent to quarter end, they announced an agreement to acquire a profitable pharmacy operation in the Pensacola area of northwest Florida, a market they do not currently serve. The transaction is expected to close by Q4, subject to customary closing conditions, and will be funded from cash on hand. This acquisition provides a licensed physical platform to introduce higher-value services like 340B support and contracted medication fulfillment, a model they intend to apply as they evaluate additional markets.

Q: Can you provide more detail on the e-commerce segment performance and its outlook? A: Amanda Ferrio, CFO, noted that e-commerce operations were essentially flat with the prior year period but up 27% sequentially to $4.1 million in Q2, with gross margin improving to 27%. David Phipps, CEO, added that global demand for satellite-based connectivity products remains strong, with sales to customers in 115 countries and record levels of high-margin recurring airtime contract revenue. There is particular strength in the government and military sector in Europe, with over $1.75 million in sales to government sector customers in the first half of 2026.

Q: What are the key drivers behind the year-over-year decline in total revenue, and when will comparisons become more favorable? A: Amanda Ferrio, CFO, explained that total net revenues were $11.9 million in Q2 2026, down from $13.2 million in the prior year period, primarily reflecting lower payer reimbursement rates and payer mix in the retail pharmacy business. However, she emphasized that the more important trend is sequential improvement, with revenue up more than 20% from Q1 2026. She stated that looking to Q3 and Q4, in addition to continued sequential improvement, year-over-year comparisons should become more favorable as contracted services growth offsets expected headwinds.

Q: How is the company managing operating expenses, and what is the expectation for professional fees? A: Amanda Ferrio, CFO, reported that total operating expenses were $4.8 million in Q2, an increase of about 2% year-over-year, entirely attributable to a $0.5 million increase in professional fees within SG&A. Every other operating expense line declined or remained flat. She noted that excluding the increase in professional fees, the operating expense base declined year-over-year, and they expect the elevated professional fee level to moderate as the year progresses, supporting improved operating leverage.

Q: What is the company's cash position and how will it support future growth initiatives? A: Amanda Ferrio, CFO, stated that the company ended Q2 with $11.9 million in cash, an increase of $0.9 million from March 31, with working capital of $14.2 million and no meaningful debt. She noted that cash used in operating activities improved to $1.5 million for the first six months, down from $3.1 million in the prior year period. The company has not sold any shares under the at-the-market program established in May, which remains available for financial flexibility to support growth initiatives, including potential joint ventures or acquisitions.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .