cbdMD, Inc. (YCBD) Q3 2026 Earnings Call Transcript

Good afternoon. Welcome to CBDMD Inc.'s June 30th, 2026, 3rd Fiscal Quarter of 2026 Earnings Call and Update. This afternoon, the company issued a press release that provided an overview of its first quarter results, which followed the filing of its quarterly report on Form 10-Q. Today's conference call is being recorded and will be available online, along with our earnings press release covering our financial results and non-GAAP presentation at cbdmd.com in accordance with CBDMD's retention policies. All participants on this call will be in a listen-only mode. The call will be followed by a question-and-answer session. At this time, I would now like to turn the conference over to Brad Whitford, the company's Chief Accounting Officer. Brad, please go ahead.

Thank you, Tiffany, and thank you all for joining CBDMD's June 30th, 2026, third quarter of fiscal 2026 earnings call and update. On the call today, we also have Ronan Kennedy, our chief executive officer and our chief financial officer. We'd like to remind everyone that various remarks about future expectations, plans, and prospects constitute forward-looking statements for purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. CBDMD cautions that these forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from those indicated, including risks described in the company's annual report on Form 10-Q for the third quarter ended June 30, 2026, and their other filings with the SEC, all of which can be reviewed on the company's website at www.cbdmd.com or on the SEC's website at www.sec.gov. Any forward-looking statements made on this conference call speak only as of today's date, Thursday, August 13, 2026, and CBDMD does not intend to update any of these forward-looking statements to reflect events or circumstances that would occur after today's date, except as may be required by federal securities laws. With that, I'd like to turn the call over to Ronan.

Thanks, Brad. Good afternoon, everyone, and thank you for joining us. The third quarter of fiscal 2026 was another quarter of top-line growth and one of the most active periods we've had, both in our own business and across the regulatory landscape we operate in. Let me start with the headline. Net sales grew 20% year-over-year to $5.6 million. For the first nine months of fiscal year, the revenue is up 12% to $16.2 million. That growth was led by our wholesale channel, which is up 61% year-over-year, reflecting continued momentum in Oasis and ongoing execution in our core CBD, MD brand, and the first full quarter of contribution from Bluebird Botanicals. Excluding revenue from Bluebird, our business grew approximately 10% year-over-year during the third quarter, something we were proud of, especially considering the regulatory headlines. I want to be direct with you about the quarter because transparency matters. We grew top line, but we were not satisfied with our bottom line. Our operating loss was wider than a year ago, and that was largely by design. We made a series of deliberate investments and absorbed some one-time costs that will walk through. But underneath those items, the business is healthier and, importantly, our adjusted EBITDA loss actually narrowed year over year. Brian, we'll take you through the details. Let me spend a few minutes on parts of our business that are working well. Oasis, our hemp-derived THC brand, continues to accelerate. We recently added distribution in South Carolina and transitioned to a new distribution partner in Texas. It changed at more than quadrupled the number of stores where Oasis has access to in the market. And we're already seeing that translate into market growth in the fourth quarter. Our recently launched Oasis Mixer has been very well received and is contributing to brand growth as well. The fourth quarter is off to a strong start. Suppletions from distributors, which is unit sales from our distribution, hit record in July, up 35% over the third quarter average. And August is on pace to more than double. We continue to monitor shelf space, ordering patterns, and tracking inventory carefully going into the end of the year. Today, we are also excited to announce the launch of our zero-proof Cava Oasis beverage. And I want to be clear why it matters strategically. As we move closer to the regulatory deadlines, we are seeing real gaps begin to open on the THC beverage shelf. And we believe those gaps represent a meaningful opportunity to capture shelf space with compliant, great-tasting product that retailers and consumers still want. Kava is a natural fit for that opening. Unlike many functional and botanical beverages that promise calm but deliver little, Kava produces a real, fast-acting sense of ease and a gentle lift, yet it carries none of the impairment or regulatory complexities that come with THC and other cannabinoids. That lets us keep our partner's shelves productive regardless of how the THC rules ultimately evolve. CAB is one of several botanicals we are building line extensions around specifically to create revenue visibility into 2027 and to help mitigate the regulatory uncertainty. Functional non-alcoholic products that help people relax and unwind are one of the clearest growth vectors we have, and OASIS is increasingly the tip of the sphere. Turning to Bluebird, this was Bluebird's first quarter, full quarter as part of CBDMD, and it contributed more than a half a million in revenue. You'll recall the acquisition was earnings dragged last quarter, and we absorbed transition and integration costs. This quarter drove additional revenue, and we expect Bluebird to contribute both revenue and earnings going forward as we roll out additional products and capture cost synergies. Just importantly, Bluebird validates our M&A thesis, a loyal customer base, a brand not defined solely by CBD, meaningful SG&A synergies, and self-graphed status on its full-spectrum products. We continue to evaluate additional discipline acquisitions. We can use our infrastructure, marketing engine, and NYSE American listing to unlock value. Let me address the costs directly because I don't want to gloss over them. During the quarter, we incurred legal and due diligence expense pursuing additional M&A opportunities that would further diversify our revenue and reduce regulatory exposure. We continue to invest in new product development, the carbon beverage innovation I just described. We work through supply chain and state-level compliance issues, including repacking and testing costs, and an increase in inventory reserves as we prepare for pending regulatory changes. And we continue to invest behind our clinical healthcare initiatives, including our graphs, for our broad-spectrum CBD formulations. Those are choices, but we've also taken hard action on costs. Beginning in the fourth fiscal quarter, we implemented a cost reduction program targeting $100,000 to $150,000 in monthly savings through payroll reductions, renegotiation of warehouse leases, renegotiating and exit vendor contracts, and we've identified additional supply chain savings, which we expect to begin to realize later this quarter. The goal is straightforward. Improve EBITDA and contribution margins and make sure we enter post-regulation world leaner We're more flexible than we are today. Let me turn to the regulatory environment, which has been remarkably dynamic. As a reminder, Section 781 of H.R. 5371, signed into law last November, is currently scheduled to take effect this November 12, 2026. It would narrow the federal definition of hemp and impose strict per container THC limits. The single most important recent development is the Senate Stop Gap Appropriations Proposal would, through December 11, 2026, temporarily exempt natural occurring cannabinoids from those revised restrictions. The point that I want to stress is that it's not just about buying time to comply. The greater value is the extension, is the procedural runway it creates for Congress to put a durable industry-wide framework in place so that the fix is permanent rather than temporary. The continuing resolution H.R. 6500 now moves to House of Representatives for a vote by the end of September, and we are engaged constructively to help advance a lasting solution. And the activity to build durable framework is growing. There is now a meaningful and growing number of bipartisan bills aimed at repealing, delaying, or replacing Section 781. In July, Representative Barr and Craig introduced the White House-supported Lawful Hemp Protection Act, which would establish a permanent federal framework. And just this week, on August 10th, representatives Van Dyne and Lansman introduced the Bipartisan Beverage Regulatory Parity Act, which would regulate hemp-derived beverages, much like alcohol, with age restrictions, testing, permits, and federal excise framework. That bill is directly rivaled to OASIS and reflects the kind of sensible regulation we've been advocating for on Capitol Hill. So, CBDMD believes a ban of full-spectrum hemp-derived delphin mine would be bad for public health. Demand exists, and as the saying goes, you can't put the toothpaste back in the tooth. If the legitimate industry is banned, consumers will be driven to unregulated black market products, especially in areas where no legal cannabis access exists. We applaud Washington, D.C. leadership focused on finding a sensible way to continue to prevent full-spectrum hemp products millions of Americans use on a regular basis our view has not changed as regulatory clarity emerges it favors operators built for it well capitalized compliance focused with strong quality safety and clinical standards that is the company we've built and we are actively engaged in Washington to help shape the outcome at the same time I'd be remiss not to flag state level environment which remains a general and a headwind changing roles across multiple states continue to drive packaging changes, repacking, new testing requirements, and they continue to narrow what we can sell and where. During the quarter, state-level shipping restrictions, label changes, and other rules impacted both wholesale and more tangibly are direct-to-consumer revenues. We're managing through it, but it's a real cost of operating in the category today, and it's part of what makes the federal pathway I've described so important. With that, I'll turn the call back over to Brad.

Thanks, Renan. Turning to the financials for the third quarter of fiscal 2026. Net sales increased to $5.6 million, representing a 20% increase compared to $4.6 million in the prior year period. For the first nine months of fiscal 2026, net sales totaled $16.2 million, up 12% compared to $14.5 million in the prior year period. The increase reflects growth across both our direct-to-consumer and wholesale business. We continue to see particularly strong momentum in wholesale. Wholesale sales increased approximately 629,000 or 61% during the quarter and represented approximately 30% of our total sales compared with 22% in the prior year quarter. For the first nine months, wholesale represented approximately 30% of sales versus 23% last year, reflecting the continued expansion of our distribution business. The Bluebird acquisition also contributed to the growth, generating more than 500,000 of revenue during the quarter. We believe the acquisition continues to provide us with an attractive customer base, a complementary brand, and additional opportunities to leverage our existing infrastructure. Gross margin was 54.7% for the quarter compared to 61.5% in the prior year period, and for the first nine months, gross margin was 57.3% compared to 63.5% last year. The decline was primarily attributable to the continued shift towards wholesale, which generally carries lower margins, as well as higher warehouse labor associated with product repacking required by changing state regulations. We also recorded an additional 187,000 increase in inventory reserves during the quarter as we prepare for pending regulatory changes. We recognize that improving gross margin is an important component of our path to profitability, and we are continuing to evaluate pricing, product mix, manufacturing, and supply chain opportunities, while also working to improve product quality and documentation and streamline our response to changing regulatory requirements. Operating expenses were approximately $4.2 million for the quarter, an increase of approximately $432,000, or 12% from the prior year period. A significant portion of that increase reflects investments associated with new to product development and additional warehouse staffing required to support higher sales and regulatory related product rework. We also incurred approximately $200,000 of additional professional fees during the quarter associated with the Medicare initiative, Bluebird valuation work, settlements, other M&A activity, and our gross report. Loss from operations was approximately $1.1 million compared with a loss of approximately $905,000 in the prior year period. While the quarter was impacted by these investments in regulatory related costs, we've already begun implementing actions to reduce our fixed cost structure. In particular, beginning in the fourth quarter, we implemented a cost reduction and right-sizing program, targeting approximately $1,000 to $150,000 of monthly savings, or approximately $1.2 to $1.8 million on an annualized basis. These initiatives include payroll reductions, renegotiating our warehouse lease, and renegotiating or exiting certain vendor contracts, as well as identifying additional supply chain savings. Adjusted non-GAAP EBITDA loss for the quarter was approximately $507,000 compared with approximately $624,000 in the prior year quarter. For the first nine months of fiscal 2026, adjusted EBITDA loss was approximately $764,000. The quarter included approximately $120,000 of additional inventory reserve expense, $53,000 of regulatory and legal matter, $126,000 of M&A and financing-related expenses, and $65,000 of an employee and director stock compensation. Importantly, we believe the cost actions we've initiated should provide a meaningful benefit to adjusted EBITDA and contribution margin as we move through the fourth quarter. Net loss attributable to common shareholders was approximately $1.2 million, or $0.11 per share, compared to a net loss of approximately $1.2 million, or 21 cent per share in the prior year quarter. While the absolute net loss remained relatively consistent, the improvement in the per share result reflects the significant increase in our weighted average common share count following the conversion of our former Series A preferred stock and other equity activity. From a cash flow perspective, cash used in operating activities was approximately 2 million for the first nine months compared with 1.2 million in the prior period. The primary working capital uses were accounts receivable and inventory as the business has grown. Accounts receivable increased approximately $691,000 and inventory increased approximately $283,000 during the nine months. At June 30, we had approximately $2.1 million in cash and $4.7 million of working capital, compared with $2.3 million of cash and $3.4 million of working capital at September 30th, 2025. We also generated approximately $2 million of financing cash during the nine months, primarily from the issuance of preferred stock earlier in the year. Looking ahead, we are encouraged by the underlying revenue momentum, while maintaining very focused on profitability and cash generation. We are also taking a proactive approach to the changing regulatory environment. During the quarter, restrictions on shipping certain products to additional states affected approximately 150,000 of direct-to-consumer revenue. At the same time, we are actively evaluating product reformulation, channel diversification, and other alternatives to mitigate the potential impact of the November regulatory changes. Overall, we remain encouraged by the continued double-digit revenue growth, the expansion of our wholesale distribution footprint, and the contribution from Bluebird and the opportunities we see in new product categories. Just as importantly, we are taking decisive action on our cost structure, our focus in the fourth quarter is on converting the revenue growth we are generating into improved contribution margin, lower fixed costs, and stronger adjusted EBITDA, while maintaining disciplined working capital and inventory management. We will leave these initiatives, combined with continued revenue diversification and the opportunities created by our expanded distribution platform, to position CBDMD to navigate the current regulatory environment and continue progressing towards sustainable profitability. With that, I'll turn the call back to Ronan.

Stepping back, let me leave you with how we're thinking about the balance of fiscal 2026 and beyond. First, the core business in Oasis. We're going to keep pushing on what's working, driving Oasis sell-through in our distribution footprint, building on the mixture momentum and carbon launches, and driving disciplined customer acquisition across CBD, MD, PAW, and Bloomberg. Second is eminent. We continue to pursue acquisitions that will deliver a revenue base, grow our customer database, and retail relationships, and de-risk the business against regulatory change. We'll continue to evaluate creative, disciplined opportunities that broaden our portfolio at durable revenue and reduce our exposure to any single product category or regulatory outcome. And third, cost and margin. The cost reduction program we put in place is a deliberate step to improve profitability. We had to invest in the short term to position the business for changes in the coming months and into 2027, and we are now tightening down. Combined with our margin initiatives, we expect these actions to show through our results in the next quarter. On the regulatory front, I would describe our view as cautious optimism. There is real work still ahead. First, securing a House vote on the extension before the end of September, and then a more comprehensive and durable solution before the end of the year. With the midterm elections approaching, the politics may also be moving in a constructive direction. A growing body of polling include national surveys of likely voters and more recent statewide polls in Louisiana show that more than 70% of voters favor sensible regulation of hemp-derived THC rather than an outright banned, and that support is consistent across Democrats, Republicans, and Independents. We believe this is an issue that the candidates in competitive races will find increasingly hard to ignore. We are generally encouraged by the growing leadership in Washington and by a widening slate of bipartisan bills that approach this category the way it should be approached, with common sense and data rather than hyperbolic tactics that too often get used to scare people. That shift matters. Are there bad actors in this industry? Of course there are, as there are in any young category. But they do not represent the supermajority of the industry that was built to help consumers. An industry of responsible operators who invest in quality, safety, testing, and science. We believe that the more conversation is grounded in evidence, the better the outcome will be for consumers and for operators like CBMD who have built their business the right way. We're going to keep making the case constructively everywhere we have a seat at the table. Let me close with this. We understand that we're in a very dynamic environment, and we are treating it as an opportunity rather than simply a risk. We are actively pursuing opportunities to capture market share, in many cases, while others in our category are pulling back. If regulation moves in our direction, we believe CBMD is positioned not just to participate but to accelerate growth meaningfully. If that path proves slower or less certain, we are not standing still. We are building toward durable 2027 revenue and a revenue base with a scale, product flexibility, and diversification to absorb and manage the impact whatever regulatory outcomes emerge. Either way, our intent is the same, to come out of this period stronger, more diversified, and with a larger share of the market than we hold today. We like our position. I want to thank our employees, partners, and shareholders for their continued support. With that, I'm happy to take questions.

At this time, if you would like to ask a question, press star, sending number one on your telephone keypad. To withdraw your question, simply press star one again. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Adam Waldo with Lismore Partners, LLC. Please go ahead.

Good afternoon, Ronan and Brad. Thanks for taking my questions.

Hi, Adam. Happy to.

So when we chatted last quarter on the results conference call, you were feeling fairly good about your ability to have a cash flow break even level with revenue in a given quarter, as you put it, somewhat below $7 million. You posted $5.6 million this quarter, obviously a noisy quarter with a lot of non-cash charges, and obviously you have the cost reductions you implemented in the July quarter. So as we put all together, a couple questions. First, on the guidance you gave for OPEX reduction, is the $100,000 to $150,000 a month that you're setting as the guidance range, on a cash basis or an accrual accounting basis? And if there's a major difference, can you just give us a better sense for what the cash OPEX savings would be?

Yeah, those numbers were cash-related, Adam. And they come mostly out of our operating expenses with some identified cost savings through our supply chain, which we think will start being realized for more so in September, the supply chain savings.

Okay, and so they're being phased in over the quarter. Is it fair to say, Ronan, would you expect by the end of the current fiscal fourth quarter that those cash operating expense savings would be fully captured?

For the most part, it would be the warehouse lease update occurs in October when the legacy sort of lease sort of flips into the new amendment.

Okay. All right. So there will be some bleed over probably into the middle of the fiscal first quarter of 27. Is that fair in terms of the timing of fully realizing those savings?

That's about $10,000 a month on the lease.

Oh, okay. So pretty small. So lion's share, call it, 90-plus percent captured by the end of the current fiscal fourth quarter.

We are working very hard to get that in place by end of fully, as much as we can by the end of this month.

Okay. So that's encouraging. So that leaves us at a point where, absent meaningful change in the revenue run rate, where our cash burn is in the couple hundred thousand a quarter range, if we're doing the math right. And so obviously that gives you a pretty good runway to see how things will progress on the federal regulatory development side. And so my final question is, from a product strategy standpoint and a marketing spend standpoint, is it fair to infer that you intend to be fairly cautious on major new marketing initiatives and product launches until you'll get much better federal regulatory clarity, hopefully, before the election?

I think that's fair. We do have a few new launches that we're planning, but I think it's leveraging existing distribution channels that we have and existing customer bases that we're focused on. But I think we are being as cautious as we can in sort of the marketing spend as we sort of look to the end of the calendar year.

Okay. So final comment. So as I sort of take all of your commentary, which is very helpful on the call to build on what you put in the press release, it seems that back in the envelope, the break-even quarterly revenue run rate now from a cash standpoint is now in the low $6 million a quarter. Is that directionally correct, low $6 million to mid $6 million?

That is how we are modeling this out right now. And our goal is clearly to get it as low as possible.

Great. Thank you very much. and best wishes on perhaps achieving break-even here in the near term. Thank you, Adam. I appreciate it.

Your next question comes from the line of Thomas McGovern with Maxim Group. Please go ahead.

Thanks for taking the question here. So we're seeing a lot of momentum with the Oasis brand. I was just curious if you could dive a little bit deeper into what's driving the acceleration and depletions. How should we look at this? Is this more of a story of expanding distribution points or is it reflective of just a higher sell-through rate at existing doors?

Great, great question, Thomas. I think, you know, it's a little bit of both. I think, you know, we've been very focused on our territory and investing in sales resource and programming within our distributors and retailers. So it's a conscious effort of making sure that we're aligned with the right partners I can, you know, cast as wide of a net as possible in the territories we're in, and then making sure that we're driving sell-through through those accounts as well.

Got it, right. And speaking of finding the right partner, right, it's great you guys have the new distribution partner down in Texas. It seems that that will make a substantial difference, at least in the state. I'm curious, you know, as you guys are expanding to these additional distribution points, I think you said it was quadruple what the prior distributor had you at. But can you comment at all? I mean, first of all, when did you sign with this new distributor? And then how have you seen sell-through rates at this point with them? You know, it's great to get into the doors, but I'm just curious at, you know, kind of what the momentum is of the product once they're on the shelves.

Yeah, yeah, great question. Look, I think we made that move right at the end of June. So I think some of the revenue from the quarter came from some of that – from the post-move. But since then, we've seen kind of, you know, things strengthen and are seeing good results, both in, you know, adding doors and sell-through and some of the doors as well. I think especially in Texas, they've had some updates since August 1 where they've restricted other sort of categories and synthetic cannabinoids. So I think you could actually see the sales of sort of hemp-derived THC, that's sort of just the THC and CBD. Demand in those products accelerated as some of the other categories have been restricted since then.

Gotcha. Thanks for that, caller. And speaking of products that are compliant with existing regulations, you guys recently launched the Cava Oasis brand. And, you know, you mentioned just high level that it's performing well. But I'm curious, you know, how did that go-to-market strategy look different being that it's not, you know, a cannabinoid-derived product? Have you guys thought about, you know, does it change the demographic? Does it change the marketing? And just, you know, just high level. Also, I mean, I'm not sure if it was mentioned earlier, but was that also launched during the quarter or is that, you know, subsequent to quarter end?

Thomas, that was launched today. So today is sort of the first day that that product is available. And where that, you know, that came from is we have been looking at a number of other botanicals to help support the Herbal Oasis brand, knowing that, you know, customers have moved into the, you know, there's been a strong movement into the hemp drive THC sort of beverage space. And part of that is they're seeking a non-alcoholic solution that's going to help them, you know, relax and unaligned. And kava is one of those ingredients that, you know, you're able to do that. It's a different experience. But I think, you know, what we've spent extra time on this year is making sure that, you know, we can get the flavor correct. It's some of these botanics are challenging to flavor mask. And I think, you know, we've worked with our partners and processes to create a really what we think is one of the best tasting flavors of Kava product out there. And then as we look to kind of the problem that we're seeing at the retailers and distribution footprint right now is with the looming regs, people are starting to pull back. retailers are starting to pull back shelf space are sort of not reorder be more disciplined than what they what they're ordering and that's creating opportunities of empty shelf space so it's it's really sort of how do we find another product that it is mildly euphoric it helps you relax and it's a natural botanical and it's a it's a product that we think can help fill the need of our retail partners as well and allow us to capture some shelf space as the regs create further uncertainty.

Absolutely. I mean, that makes a ton of sense to me, just kind of positioning yourselves to have a little bit of, you know, protection against potential regulatory shifts. So that's great to hear. And, you know, you just commented on it, right? So you guys are going to be examining or evaluating other botanicals or, you know, functional ingredients that are non-intoxicating. So I'm just curious, you know, do you have any expectation of a timeline and whether or not these products would be developed in-house or sought through an acquisition?

As mentioned, we have one or two other ingredients that we're working on formulations with. So we, you know, we're moving as aggressively as we can. You know, part of this is making sure we get the right flavor, and some of these are a little bit more challenging, and it's newer categories to do that with. So I would expect before the end of the year, you know, some announcements around some other botanicals. We're always, you know, open for discussions on acquisitions around this category as well. And, you know, we're looking beyond just sort of a functional beverage from an acquisition standpoint.

Understood. And then last question for me is on the wholesale side of the business. So we saw, you know, meaningful growth year over year there, you know, accounted for about 30% of your revenue mix. And it was common around at least twice as you guys are kind of shifting to a more wholesale revenue versus, you know, you're historically very strong in DTC. I'm just curious, you know, how should we look at this from, you know, a company-wide level? You know, once you, as you see it currently, how do you think this will kind of shake out? You know, will we start to see the mix, you know, at some point favor wholesale or is it going to settle around 50-50? I mean, just any kind of call you can give there would be helpful so that we can kind of better understand how we should look at margins and just the business on the whole.

Yeah, look, I wish I could give you great clarity, but someone that's relying on sort of regulatory changes. I think it would be prudent to think that as regulators, when you look at some of the regulation that's coming out, like the hemp parity bill that came out this week, what they're fundamentally doing is saying, look, if people are concerned about, you know, keeping these products away from kids, using the alcohol, the traditional alcohol industry is a very logical way to think about, you know, regulating this product. And that means that, you know, could end up ultimately going through a three-tier system, which would, you know, by, you know, result force more of the revenue into sort of a wholesale type business for intoxicating kind of Delta 9 level products. You know, so I think you are seeing a shift at states as well, like Tennessee made some changes where they banned sort of the sale direct-to-consumer, you know, TSC-containing products, but it's able to go through registered distribution. So we're seeing a little bit more shift in that, you know, being driven by, you know, regulatory pressure.

Got it. And it makes sense as well. Well, I appreciate you taking the time to thoroughly answer all my questions. I'll hop out of queue. Thanks, Thomas.

Your next question comes from the line of Adam Waldo with Lismore Partners, LLC. Please go ahead.

So, Ronan, given the commentary you gave in both your prepared remarks and then in response to Thomas' questions around M&A, a couple follow-ups on that topic to conclude. How should we think about your thought process or philosophy with respect to structuring acquisition consideration amidst the current uncertainty on the regulatory front on the one hand and all of the moving parts with respect to your accelerating revenue growth and cash cost reductions on the other?

Look, I think we are trying to be as flexible and opportunistic as we can. I think, you know, I can appreciate, as you highlighted, some of the noise. I think we are looking at opportunities where we think our infrastructure can, you know, create a one-on-one equals, you know, three opportunity and continue to pursue those in ways that we believe, you know, create value for, you know, the targets as well as for our shareholders.

To – sorry, to just draw you out slightly more on that, is it fair to say that you'd rather see more regulatory clarity before moving further on the M&A front, or are you at a point where you feel you can structure potential M&A transactions in such a way that there's significant upside for your equity and you can minimize the share of that that goes to the target given your one plus one equal three strategy?

Look, I think we are focused on getting transactions done that we think will be accretive and irrespective of changes in regulation. and we're on a mission to drive shareholder value and have to make decisions in light of some uncertainty looking out over the next 12 months.

Okay, and so you're targeting, are you targeting immediate cash flow accretion in one to two quarters after closing in the way you're approaching M&A?

We are trying to drive, you know, cash, short-term cash flow as quickly as we, as quickly as possible and both in the core business and within the M&A that we pursue.

Okay.

Thank you very much and best of luck.

All right. Thank you, Adam. That concludes our question and answer session. I will now turn the call back over to Ronan Kennedy for closing remarks.

Thank you, everyone, for attending the call today. We will continue to update the company as we have updates, and we look forward to jumping on our year-end call in December. Have a great evening.

Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.