This article first appeared on GuruFocus .
Release Date: August 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Completed the acquisition of EMJX, strengthening the company's strategic capabilities in digital asset management and AI-driven trading models.
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Ended the quarter with a highly liquid, debt-free balance sheet, including $36.7 million in cash equivalents and restricted cash, and $62.9 million in net asset value.
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Halo's supply chain fill rates recovered to 98% in June, leading to a record Prime Day performance with a 13% year-over-year increase in new-to-brand consumers.
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Operating expenses were reduced by 52% year-over-year, and the loss from operations improved by 63%, demonstrating significant cost discipline and operational efficiency.
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The EMJX strategy model demonstrated strong risk management, with a maximum drawdown of approximately 10.6% versus benchmark comparators ranging from 28% to 58% negative.
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The Board declared a one-time cash dividend and authorized a share repurchase program of up to 10 million shares, signaling confidence in the company's financial position and commitment to returning capital to shareholders.
Negative Points
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The company's stock performance remains weak, with a significant gap between the current market capitalization and the reported net asset value, causing shareholder frustration.
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The EMJX strategy model's reported performance is hypothetical and not actual trading results, with only two weeks of data since the acquisition close, making it too early to assess real-world effectiveness.
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Halo's gross margin remains low at 27%, and while improvement initiatives are underway, the company acknowledges significant work remains to drive sustainable revenue growth and profitability.
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The company is still in early-stage discussions with institutional counterparties for EMJX commercialization, with no material developments or revenue generation yet.
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No share repurchases have been made under the authorized program to date due to a blackout period, delaying the intended capital return to shareholders.
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The company continues to report GAAP net losses, with a net loss from continuing operations of $4.1 million, though improved year-over-year, indicating ongoing challenges in achieving profitability.
Q & A Highlights
Q: What is the current capitalization structure of the company, including fully diluted share count? A: Nina Martinez (CFO): At June 30, the common share count is approximately 19.5 million on a post-split basis. On a fully diluted basis, assuming conversion of all outstanding preferred stock, exchangeable shares, exercise of all warrants, and shares reserved for issuance under the stock incentive plan, the fully diluted share count is approximately 22.8 million.
Q: Are there plans for future capital raises? A: Kent Cunningham (CEO): We have sufficient capital to execute on our current strategy. We ended the quarter with $36.7 million in cash, $65.2 million in current assets, and no debt. We do not currently anticipate raising capital simply to fund the existing operating plan. Any future financing needs would need to make strategic and economic sense.
Q: What is the structure of EMJX within SRX and is Event Horizon IQ part of that? A: Eric Jackson (President of EMJX and Head of Asset Management): EMJX is separate from Event Horizon IQ. EMJX is focused on AI models that help predict cryptocurrencies like Bitcoin and Ethereum and manage the overall Gen. 2 treasury. Event Horizon IQ is a separate entity with its own AI models. There is potential for Event Horizon IQ to work with SRX, and if that happens, commercial terms will be disclosed in future filings.
Q: Can you provide more detail into the rationale and details regarding the company's recent investments in Vistagen, Jersey Mike's IPO, and SpaceX? A: Kent Cunningham (CEO): Each of those investments was evaluated independently based on risk-return profile, valuation, downside protection, liquidity, and potential to create shareholder value. The size of those positions reflects our conviction and the opportunity, balanced against overall portfolio risk and the importance of maintaining diversification and liquidity. Each met our investment criteria within that broader framework.
Q: What were the key operational highlights for Halo during the quarter? A: Kent Cunningham (CEO): Halo's supply chain fill rate recovery is on track, reaching 98% in June. The company achieved a record Prime Day performance with new-to-brand consumers increasing 13% year-over-year, while search cost per click was $2.51, approximately 8% below the pet category benchmark. The recurring subscription base across Chewy and Amazon remains one of Halo's most valuable assets, offering predictable cash flow and high consumer retention.
Q: What is the status of the EMJX strategy model performance and live trading? A: Eric Jackson (President of EMJX and Head of Asset Management): The figures disclosed are hypothetical system-generated model results, not actual trading results. From June 16 close through June 30, Bitcoin declined approximately 10.8%, while the EMJX strategy model generated hypothetical performance of 4.3%, representing approximately 15.1 percentage points of outperformance. From the February 11, 2026 inception through June 30, the strategy model's maximum drawdown was approximately 10.6%, compared to maximum drawdowns of 28% to 58% across benchmark comparators. The company is now preparing to deploy real capital into live execution.
Q: What were the financial results for the fiscal third quarter? A: Nina Martinez (CFO): Net sales totaled $3.4 million, an increase of 27% year-over-year. Gross profit was approximately $904,000, representing a gross margin of 27%. Operating expenses were $4.1 million, a reduction of 52% year-over-year. Loss from operations improved 63% year-over-year to $3.2 million. GAAP net loss from continuing operations was $4.1 million, an improvement of 40% year-over-year and 35% quarter-over-quarter. Adjusted EBITDA loss improved 35% year-over-year to $1.6 million.
Q: What is the status of the dividend and share repurchase program? A: Nina Martinez (CFO): The company has fully funded the dividend distribution with the transfer agent, and distributions are being completed to eligible shareholders. The Board authorized a share repurchase program of up to 10 million shares or up to 50% of shares outstanding with up to $20 million allocated to the program through July 27. No repurchases have been made to date due to a blackout period in connection with the quarterly reporting process.
Q: What is the company's net asset value and balance sheet position? A: Nina Martinez (CFO): The company ended June with $36.7 million in cash equivalents and restricted cash, $65.2 million in total current assets, and only $2.4 million in total liabilities with no debt outstanding. Net asset value at the end of the quarter was $62.9 million, or $3.22 per common share, exceeding the preliminary estimate of $3.07 per share. Approximately 70% of total current assets are considered liquid.
Q: What is the company's strategy for EMJX commercialization? A: Eric Jackson (President of EMJX and Head of Asset Management): EMJX is intended to function as a stand-alone revenue generator for SRX. The company is in discussions with institutional counterparties regarding potential applications of the strategy to corporate treasuries and exchange-traded products. EMJX is also beginning to develop additional models that can inform SRX's broader investment process, incorporating insights into due diligence and investment decision-making frameworks.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
