Shares fell 1.4% following Q1 results that reflected the drag from the California divestiture and the absence of a one-time loyalty benefit. Despite underlying revenue stability and margin resilience, investors remain cautious amid ongoing market headwinds and a cautious near-term outlook.

• Total revenue declined sequentially to $21.1 million from $25.2 million, primarily due to the exit from California ($2.5 million impact) and the non-recurrence of a Florida loyalty accrual benefit from Q4.
• Underlying revenue, excluding these items, was approximately flat quarter-over-quarter with April trends tracking in line with internal Q2 plans.
• Gross margin held steady at 44.6%, improving 5.4% sequentially on an adjusted basis after excluding the prior quarter’s loyalty benefit; margin pressure was partly from selling remaining California inventory below cost.
• Adjusted EBITDA loss widened to $2.3 million from $0.3 million sequentially, driven mainly by the nonrecurrence of the Florida loyalty benefit and the California exit costs.
• Cost discipline continues with G&A down $800,000 sequentially to $11.2 million and lowered nearly $3 million year-over-year, poised for further efficiencies in 2026.