BIOX

This section is organized by key topic as follows:

• Strategic Transition and Refocusing
  • The quarter is a period of transition and operational refocus for the company, and is historically the weakest quarter for baseline business performance.
  • The company is executing a strategic shift in the seeds segment to a more asset-light, lower working capital model, which reduces near-term reported revenue while cutting exposure to low-margin, capital-intensive activity.
  • Management is conducting a full strategic review of continuing operations to align organizational resources and capital allocation with the core business areas expected to deliver the highest long-term value.
• ProPharm Litigation and Foreclosure Update
  • In November 2025, four secured note holders filed a lawsuit in New York against the company and affiliate guarantors, alleging defaults under 2022 agreements and seeking immediate full payment.
  • The company strongly disputes all allegations, noting all claimed defaults rely on contested facts, and has acted in good faith under board supervision to manage liquidity and preserve enterprise value. The company has filed counterclaims against the plaintiffs and third parties.
  • In January 2026, note holders conducted a foreclosure auction of ProPharm Group collateral; an affiliate note holder was the only bidder and acquired the assets via a $15 million credit bid. The company argues the foreclosure was commercially unreasonable and is challenging the process via its counterclaims.
  • ProPharm has been classified as discontinued operations, with a $179 million non-cash loss recognized in the second quarter of fiscal 2026 following the reclassification of ~$194 million in ProPharm net assets.
  • Litigation remains in early stages, and the company will continue to vigorously defend its position and pursue its affirmative claims.
• Operational and Financial Initiatives
  • The company has made continuous progress on cost control and organizational streamlining, delivering a meaningful reduction in operating expenses during the quarter.
  • Joint venture results improved year-over-year, providing a positive contribution to earnings.
  • Management is prioritizing liquidity preservation, working capital discipline, and tighter capital allocation across the organization to stabilize the core business and improve long-term financial flexibility.
  • The company is advancing liability reprofiling for existing Argentine debt obligations, including discussions for voluntary maturity extensions with bondholders and ongoing coordination with key banking partners.
  • Governance and internal processes are being reinforced to strengthen organizational fundamentals.

Management did not provide specific quantitative forward guidance or formal revisions to prior guidance in this call. The company's stated forward-looking priorities are to stabilize core continuing operations, preserve enterprise value of core assets, strengthen balance sheet flexibility, and position the business for long-term resilient and sustainable growth while ongoing legal matters are resolved.

Total continuing operations revenue for the quarter was $39.4 million, a 23% year-over-year decline. By segment:

1. Crop Protection: Revenue of $24.6 million, down 18% year-over-year. Segment gross margin fell from 37% to 35%, in line with the revenue decline, driven by lower Atubans contribution to the product mix.
2. Seeds and Integrated Products: Revenue declined 71% year-over-year as the company phases out downstream seeds and grain sales as part of its strategic shift to an asset-light model. While gross profit declined in absolute terms, segment gross margin improved from 19% to 30% due to a higher contribution from higher-margin seed treatment packs in the current product mix.
3. Crop Nutrition: Revenue grew 15% year-over-year to $11.6 million. However, gross profit declined 38% year-over-year due to a non-recurring inventory obsolescence adjustment for inoculants. Excluding this adjustment, underlying profitability was broadly stable year-over-year.

Overall gross profit for the quarter was $12.7 million, a 30% year-over-year decline, with overall gross margin falling from 35% to 32% (broadly in line with the prior year period when excluding the non-recurring inoculant adjustment). Adjusted EBITDA was negative $0.6 million, compared to positive $9.1 million in the prior year quarter, impacted by the absence of $7.7 million in non-recurring prior-year IP and contractual income and the non-recurring inoculant adjustment, partially offset by cost reduction initiatives.

• Ongoing litigation related to the ProPharm foreclosure and alleged note defaults creates material uncertainty for the company, and court outcomes may differ materially from management's current expectations.
  • Substantially all of the company's related debt is currently classified as short-term on the balance sheet following the note holders' acceleration notice, creating liquidity risk if the company is required to repay the full amount immediately.
  • Softened demand, competitive pricing pressure, and inventory adjustments across distribution channels in key crop protection markets are negatively impacting near-term revenue and profitability.
  • Geopolitical tensions create global supply and pricing uncertainty for crop nutrition products.
  • The strategic transition to an asset-light seeds model reduces near-term reported financial results even as it improves long-term business fundamentals.

Q: Kemp Dolliver of Brookline Capital Markets asked for an update on the company's receivables collection initiative, noting it was hard to assess progress due to recent financial restatements for discontinued operations.

A: Management confirmed that reducing receivables and accelerating collections is a top priority to support liquidity and working capital discipline. The company is approaching this on two fronts: offering customer incentives to speed up payment on outstanding receivables, and implementing shorter, industry-standard payment terms for all new sales, with incentives to encourage early payment.

Q: Dolliver followed up to request the operating cash flow figure for the quarter and year-to-date period.

A: Management stated they did not have the exact figure available during the call, but committed to providing the requested operating cash flow information to Dolliver in a follow-up analyst session after the call.