v3.26.1
SEGMENT REPORTING
 3 Months Ended
Mar. 31, 2026
Segment Reporting [Abstract]  
SEGMENT REPORTING

NOTE 12 – SEGMENT REPORTING

 

On September 2, 2025, the Company announced that Seth Yon, its President and Chief Commercial Officer was appointed to the position of President and Chief Executive Officer, effective September 15, 2025. The Company’s Chief Executive Officer is the chief operating decision maker (the “CODM”). The CODM reviews operating results and makes decisions about resource allocation. As described in Note 1, the THP segment met the accounting requirements to be classified as discontinued operations at September 30, 2025, and the Company no longer reports the THP segment. Accordingly, the Company has one reportable segment. The determination that the Company operates as a single segment is consistent with the nature of its operations and the financial information regularly reviewed by the Company’s CODM.

 

Net income (loss) is the primary profitability measure used by the CODM for purposes of assessing financial performance and resource allocation. In addition to net income (loss), the CODM also uses Adjusted EBITDA for purposes of assessing financial performance and resource allocation. Adjusted EBITDA is a non-GAAP measure and is defined as net income (loss) from continuing operations excluding interest expense/income, provision/benefit for income taxes, depreciation and amortization, noncash share-based compensation expense, change in fair value of earnout liabilities, asset impairment charges, share of losses from equity method investments, gains/losses on the disposal of property and equipment, executive separation costs, and legal and diligence expenses related to acquisitions, as each is applicable to the periods presented. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. The CODM also reviews budget-to-actual variances for expenses on a monthly basis when making decisions about allocating resources to the segment. The measure of segment assets is reported in the Consolidated Balance Sheets as total consolidated assets.

 

The following table reflects results of operations including significant segment expenses that are regularly provided to the CODM for the Company’s reportable segment and Adjusted EBITDA for the periods presented:

 

   2026   2025 
  

Three Months Ended March 31,

 
   2026   2025 
Net revenue  $27,798,534   $23,434,096 
Cost of goods sold   1,923,589    1,834,967 
General and administrative   4,874,621    4,045,211 
Sales and marketing (1)   17,006,899    15,083,997 
Research and development   759,592    950,359 
Depreciation and amortization(2)   587,252    694,032 
Other expense (3)   2,248,894    1,446,096 
Net income (loss) from continuing operations  $397,687   $(620,566)
Adjusted EBITDA  $4,262,168   $2,695,058 

 

(1)For the three months ended March 31, 2026 and 2025, sales and marketing included compensation and benefits, commissions, travel and other sales and marketing expenses.
   
(2)Depreciation expense of $5,461 was reclassified as continuing operations in the three months ended March 31, 2025 and is therefore no longer reflected in discontinued operations.
   
(3)For the three months ended March 31, 2026, other expense included interest expense and share of losses from equity method investments, offset by interest income. For the three months ended March 31, 2025, other expense included interest expense and share of losses from equity method investments, offset by interest income and gain on disposal of property and equipment.

 

 

The following table provides a reconciliation of net income (loss) from continuing operations to Adjusted EBITDA for the periods presented:

 

   2026   2025 
  

Three Months Ended March 31,

 
   2026   2025 
Net income (loss) from continuing operations  $397,687   $(620,566)
Adjustments:          
Interest expense   1,799,345    1,317,092 
Depreciation and amortization(1)   587,252    694,032 
Noncash share-based compensation   1,028,335    1,175,496 
Share of losses from equity method investments   462,507    143,608 
Gain on disposal of property and equipment   -    (10,932)
Interest income   (12,958)   (3,672)
Adjusted EBITDA  $4,262,168   $2,695,058 

 

(1)Depreciation expense of $5,461 was reclassified as continuing operations in the three months ended March 31, 2025 and is therefore no longer reflected in discontinued operations.