Earnings call transcript: Red Light Holland Q2 2025 sees moderate revenue growth

Red Light Holland reported its Q2 2025 earnings, showcasing a modest revenue increase alongside strategic operational shifts. The company’s revenue rose by 4% compared to the previous year, reaching $4.9 million. According to InvestingPro data, the company maintains a solid financial health score of 2.62, rated as "GOOD." Despite a reduction in cash reserves, Red Light Holland continues to focus on its core competencies, particularly in the functional gummies and supplement markets. The stock saw a sharp decline of 20% in its latest trading session, closing at $0.04.

Key Takeaways

• Revenue increased by 4% year-over-year to $4.9 million.
• Adjusted EBITDA loss narrowed by 24%.
• Stock price fell by 20% in the latest session.
• Focus remains on functional gummies and expanding psychedelic research markets.

Company Performance

Red Light Holland demonstrated a steady performance in Q2 2025, with revenue growth driven by its innovative product line, including Health Canada-approved functional mushroom gummies. InvestingPro analysis shows the company holds more cash than debt on its balance sheet, with a current ratio of 1.9x, indicating strong short-term liquidity. The company has phased out unprofitable revenue streams and reduced operational costs, aligning with its strategic focus on profitable ventures.

Financial Highlights

• Revenue: $4.9 million, up 4% from 2024
• Gross Profit: $1.9 million, steady year-over-year
• Adjusted EBITDA Loss: $2.5 million, reduced by 24%
• Total Cash Position: $12.8 million, down from $14.4 million
• Total Assets: $21.2 million, down from $24.1 million

Market Reaction

Red Light Holland’s stock experienced a significant drop, falling 20% to $0.04. InvestingPro data reveals the stock has historically traded with high price volatility, with a beta of 1.29. This decline reflects investor concerns over the company’s reduced cash reserves and overall market volatility, particularly within the mushroom farming sector, which has faced declining sales in luxury varieties. InvestingPro subscribers have access to 8 additional ProTips and comprehensive financial metrics to better understand the company’s valuation and market position.

Outlook & Guidance

The company remains committed to its core strategy, focusing on the functional gummies and supplement market, while continuing to advocate for psychedelic research and access. Red Light Holland is also exploring international market expansion and maintaining a lean operational approach.

Executive Commentary

CEO Todd Shapiro emphasized the company’s mission-driven approach, stating, "We are a mission-focused business." CTO Sarah highlighted the importance of networking in governmental changes, noting, "Changes in government are very network-based, knowledge-based."

Risks and Challenges

• Volatility in the mushroom farming market
• Declining sales in luxury mushroom varieties
• Challenges in the Canadian agricultural market
• Cash reserve reduction impacting operational flexibility
• Dependence on emerging markets for psychedelic research

Q&A

During the earnings call, analysts inquired about the company’s banking challenges and solutions, its Bitcoin strategy, and the impact of declining mushroom sales. Executives detailed their strategic focus on advocacy efforts for psychedelic legalization and their approach to navigating the competitive landscape. For deeper insights into Red Light Holland’s financial health and market position, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which provides detailed analysis of the company’s performance metrics and growth potential.

Full transcript - Red Light Holland Corp (TRIP) Q2 2025:

Moderator: Welcome, everyone. Todd, I’ll just get you to, unmute yourself if you can, and we can get started.

Todd Shapiro, CEO, Red Light Holland: Right. Good morning, shareholders, supporters, curious minds, stock forum posters. Thank you for joining today’s live q and a. As you know, I’m Todd Shapiro, the CEO of Red Light Holland, and I’m proud to present an honest data driven and passionate overview of our year end 2025 audited results, which closed 03/31/2025. Let’s begin with the facts.

Despite a year marked by global headwinds from Dutch tourism downturns to being debunked in Canada, we continue to grow revenues, reduced our adjusted EBITDA loss by over 24%, and preserved a healthy cash balance of 12,800,000.0. Importantly, this year’s performance is a result of a deliberate and strategic moves. We phased out unprofitable revenue streams and doubled down on efficient operations. As a result, nearly every one of our operating subsidiaries was cash positive for the year. This is an achievement that distinguishes us in an industry that’s faced consistently with financial turbulence.

Now while others in the sector have been well, and seen high burn rates and solvency risks, Red Light Holland has stayed lean, smart, and scrappy, delivering just shy of 5,000,000 in revenue and over 16,000,000 in cumulative sales since going public in 2020. Some standout wins include Costco. And Costco Canada reordered happy caps with our kits, you know, that were in over 60 plus stores, we’re very happy with that. We broke into The US retail strategy with Albertsons and Safeway. We launched our Health Canada approved functional mushroom gummies.

Not an easy feat, by the way, available, and they have an n b NPN number. I won’t get into the entire number, but it’s there, meaning it’s Health Canada approved for antioxidants and immune boosting. And on the innovation side, we successfully shipped homegrown psilocybin truffles to a DEA compliant lab in California, which is a huge leap for our r and d ambitions. We’ve also taken bold steps in digital resilience. After facing institutional debanking, we turned to Bitcoin, and that’s a long term hedge, allocating up to 2,000,000 under the guidance of trusted crypto analyst Scott Melker.

This isn’t just about finance. It’s about freedom, innovation, and the ethos of the sovereignty that aligns us with psychedelics based on deregulation and deep and and and decentralization. In parallel, our scientific credit our scientific credibility has grown tremendously this year. Our partnership with Arizona State University through psychedelic genome product will help advance personalized psychedelic medicine, and we welcomed doctor Robin Carhart Harris. I mean, I call him the Tom Brady of psychedelics who’s a pioneer in as a psychedelic neuroscientist, and he’s now our scientific adviser, which is a testament to our data collection and our vision to legitimize and responsibly scale psilocybin based products worldwide.

Now before we head into questions, I’d like to pass it over to our CFO who’s done an incredible job for our company. He’s come on now as our permanent c e CFO and as well with the the help of our control, Elliot Terlero, Keith Lee. And he’s gonna walk you through some of the high level financial results that we just published a couple of days ago. Keith, over to you. Thank you.

Keith Lee, CFO, Red Light Holland: So thank you, Todd, and, welcome everyone to the q and a. So to begin with, I’ll walk through some financial numbers for fiscal year ending March 2024. Before we start, the full details, will be available in our audited financial statements, and management discussions and analysis, which is posted on SEDAR. We will also be posting these reports, on our website shortly. So starting with, operations, our revenue in 2025 grew to $4,900,000.

That was a increase of about 4% compared to 2024. While the numbers might look modest at 4%, it was, however, strategic as it reflect our exit from some lower margin businesses while laying down the foundations for future profitability. Gross profit was steady at, $1,900,000, little bit down from $2,000,000, last year’s. This is in line with our disciplined, cost cutting approach and product mix changes. And most notably, as, Todd mentioned, we improved our adjusted EBITDA loss by almost 24%.

We came down at the loss numbers of $2,500,000 versus a loss of 3,300,000.0 from the year before. This is a significant reductions as we reflect our commitment to keeping our operations lean. In terms of financial positions, we continue to maintain a strong and healthy balance sheets. Our total cash push positions at the end of the year was 12,800,000.0, down from 14,400,000.0 from a year ago. This decrease in cash was being driven primarily by new investments made into product development along with strategic initiatives.

Total assets, that number closed at 21,200,000.0 at the end of the year, down from 24,100,000.0. This is largely due to some nonrecurring adjustments and also calculated write downs in certain noncore areas. Additionally, our cost approach, cost cutting approach is paying off. Nearly all of our operating subsidiaries are cash positive in 2025. And also with, excess funds that we have on hand, we have deployed them into some high yield investments as well as making some new investments through our newly announced Bitcoin strategy.

So overall, fiscal twenty twenty five was a year of, stabilizations. It gave us operational clarity. So we are not just trying to report some numbers, but at the same time, we also are trying to tell a story of transformation, control growth, and careful capital management. Back to your thought.

Todd Shapiro, CEO, Red Light Holland: Yeah. Thank you very much, Keith. Really appreciate that. And that’s the type of fiscal responsibility and leadership we pride ourselves in at Red Light Holland. And today’s session is about accountability, transparency, and dialogue.

I invite all of your questions. We’re so grateful that you’ve joined us here today. And, of course, we are open to listening to all your concerns and your curiosity. As you know, we’re playing the long game. It’s strategic.

It’s deliberate. It’s deeply committed to mental wellness, regulatory integrity, and shareholder value. So thanks for believing us. Let’s get to your questions.

Moderator: So if anyone would like to ask a question, I just ask that you either, use the Zoom function to raise your hand, or if it’s easier to just hop on camera and give me a wave, I don’t mind unmuting you.

Todd Shapiro, CEO, Red Light Holland: Any questions yet? Yeah. We got Adam, it looks like.

Adam, Shareholder: Todd, I know you were Red Lake Holland was the bank. Have you now secured another bank, or or what what’s the update on that?

Todd Shapiro, CEO, Red Light Holland: Yeah. We updated it, in the MD and A. And and, yeah, we’re we’re really strong with banking now in terms of day to day operations. So there’s some great modern online platforms that help with things like payroll and and and wire payments and essentially, you know, what a bank does, except that there’s no physical bank. It’s it’s all online.

So we we’ve set up a really good system. We also work with a credit union. So we we put in a lot of amount into a credit union that will be insure insured and backed by the Canadian government. So a certain amount per per, you know, transfer if we need immediate funds. And in terms of AEM, not on the Peterborough side, but the AEM New Brunswick side, we did reestablish a smaller relationship for day to day with TD.

But, you know, when it came to lending and potential construction loans, there wasn’t one of the top tier banks that that would approve, as you know, we’ll get into it, I’m sure, the farm build in Peterborough. And that was just purely not based on on budgets or or the forward looking economic outlook. It it it purely had to do with reputation risk because we touched psilocybin in a legal market in The Netherlands. But big data banking is getting and I might add actually, which is kind of ironic, banking in The Netherlands is quite stable. So so we’ve done a good job in The Netherlands to work with some top tier banks over there.

Any other questions, Adam? Yeah. Maggie, unmute if you wouldn’t mind.

Adam, Shareholder: Yeah. I was was just curious how the crypto would integrate with your existing banking. And I understand there’s company you’ve hired to to look into that and manage it. Is that is that right?

Todd Shapiro, CEO, Red Light Holland: Yeah. That’s correct. First off, you know, I think one of the things we we’ve always done really well at Red Light Holland is dealt with with experts in their fields. You know, this isn’t just sort of like a management down. This isn’t this is, hey.

Let’s work with people who know a heck of a lot more than we know. We always like to be coached. So when it comes to Bitcoin, it it can be a bit risky as we know and a bit volatile. So so we hired, as you know, Scott Melker. He goes by the Wolf of Wall Street on Twitter.

Really popular individual in the crypto space. And and he’s also like, he’s not just your typical crypto bro column. He gets into all sorts of finance. He gets, like, big leagues on the show from Yahoo Finance to you know, he’s been on MSNBC and all that kind of stuff. So he’s helped guide us, towards a company called Arch Public.

And Arch Public has a very interesting strategy that still I’m discovering about, and and I sat with the team, I had multiple meetings with them. And, basically, what they do is they accumulate and they set buy sell models so you can actually play off the dips and hopefully gain them when when when you’re buying low and almost selling high. So it’s kind of a constant. But the goal is, you know, as the company, which we’ve we’ve we’ve established and and made it very clear, we wanna use up to 2,000,000 of our treasury towards Bitcoin, and and we’ll see where it goes from there. Obviously, we believe it’s a great hedge and a great store of value.

Bitcoin I’ve been involved in Bitcoin, by the way, for about ten, fifteen years, so I I do know a lot about it as well. And it’s interesting. It feels even though the price is higher now than, say, it was a couple of years ago, it feels safer with the BlackRock’s getting involved with, you know, the big the big institutions now talking about it. I mean, listen. Look at the Trump admin talking about it nonstop.

So we feel like it’s a it’s a really good opportunity for our company. And most importantly, we feel the ethos really connects. We were debunked. We believe in, like I said, deregulation and decentralization and that ethos of personal sovereignty where we crave mental, freedom and and and wellness freedom. If you think about what we’re trying to do here as a company, we want people to have the right to try psychedelics, and the access is is something that we continue to advocate for, and that’s still the core business.

But when it comes to the Bitcoin balance sheet strategy, that aligns in this crypto psychedelic community. It’s it’s huge. Actually, it’s kind of funny. Christian Agameyer, who’s the CEO of a tie, he even tweeted about the same ethos that I’ve been talking about over the last three weeks. I’m I’m sure I I I’m sure he saw it for me first.

And and, but this alignment is great. I’ve been invited to the futurist Blockchain Conference in Miami, and and I’m looking forward to doing more of these. And I think that’s what that’s really gonna do is combine our worlds, and and we’re really excited. Also, though, most importantly, on the balance sheet, a safe store of value.

Adam, Shareholder: Got more questions if you want them.

Todd Shapiro, CEO, Red Light Holland: Yeah. I mean, do we wanna yeah. I mean, you might be answering. I I’m just worried you’re you’re asking for other people. Why don’t why don’t we come back to you in a minute, Adam?

So Sure. But but we will come back. Maggie Maggie, please keep that in mind.

Moderator: Yeah. For sure. We just have one other person, Sam. I’m just asking you to unmute now, and then we can go back to Adam if

Sam, Shareholder: Thank you. Question, and good morning, everyone. I was able to read the MDNA, yesterday, and something that came to a surprise to me was the shutting down of Radix Motion. And I don’t know if people did see that, but I want you to kind of touch on that a bit because I think about the implications or possible implications of what that means, particularly things like the technology, of, like, the iMicrodose privacy data, which I think is powered by that technology. I think about the IP and the, like, the work that went on to get patents as it pertains to some of those technologies.

What is why was that decision made, and what are the implications? And, Shaskas, maybe that’s a question for you. Thanks.

Moderator: Yeah, Todd. I think I just need you on mute from your end there.

Todd Shapiro, CEO, Red Light Holland: Yeah. Okay. Sorry. I was having trouble unmuting. It’s a great question.

We’ll let Shashi just answer the back end of it. But, you know, part of the part of the decision making is is a lot of cost savings. So we can incorporate a lot of what we’ve done with Radix into our existing business. And and what happens is it ends up saving a lot on audits, reevaluations. We’ve already had the write down on Radixx, but, you know, you have to get, US lawyers, when it comes to the audit time.

So part of streamlining and and part of looking at is our chase to profitability exists. And as you’ve seen, our reducing our burn, we’re looking at every way we can save costs. When it comes to the technical stuff on in terms of, the IP and and everything we do in terms of the tech side and and Sarah being our chief technology officer, I’d love for her to answer.

Sarah, Chief Technology Officer, Red Light Holland: Okay. Yeah. So I think there won’t be really any actual changes. We’ve transferred the IP officially to the parent company using the same IP firm with Graham Petchnik that we’ve been using this whole time. The sites will all keep running.

The data will keep running. It’s all just under the parent company. And like Todd said, mostly, we’re trying to save on accounting fees, lawyer fees, Delaware tax. So there’s just a lot of overhead, and we’re gonna make sure that the small revenues that Radix does get, for instance, from the VR experience, goes directly into the parent company.

Todd Shapiro, CEO, Red Light Holland: It’s a great question.

Moderator: I’m not sure where Sam went to see if Sam

Sam, Shareholder: Still here. Gave a thumbs up. I’m glad to see that we haven’t let go of the patent. I was really excited to see that. And with the evolution of the psychedelic sector and those that are falling closely, especially what’s going on south of the border, I think it could be a valuable asset to you to the company.

And I hope that you guys continue to pursue that down the road. Thank you.

Todd Shapiro, CEO, Red Light Holland: Thanks, Sam.

Moderator: If no one has any other questions, Adam, we can go back to you if that’s that’s great. I think you’re still there.

Adam, Shareholder: Sure. Just on the you know, follow-up questions to the new crypto strategy. Just looking at deep banking, but is there a concern that the holder anyone’s holding the crypto for you that they are a risk? And is that has that been addressed or researched?

Todd Shapiro, CEO, Red Light Holland: Yeah. Great question in terms of having a custodian and a proper exchange. So we will divulge that plan in the coming weeks, actually, through Arch public. I would say that the the risks are are completely mitigated these days. I mean, I think the days of of hacking, stealing are really few and far between.

It is a valid point, and it and it comes with some risks in Bitcoin. With that being said, the partnerships that we have with with Arch public and with Scott Melker, we’re we’re we’re absolutely doing it as as as safe as anyone in the planet can do it. Put it that way. There there’s no there will be no other safer measures, and we’ll divulge. And I think people will understand that that safety concern in terms of protecting the capital that you do put into Bitcoin, when when that announcement comes out soon.

Adam, Shareholder: Okay. And the and the is there has any other debanking risks been resolved, like, backups put in place or any other risks like that?

Todd Shapiro, CEO, Red Light Holland: Numerous different banks now, so we think we have a really good system that’s working for us. Yeah. We’re always doing outreach. People are actually reaching out to us a lot too. It’s amazing how far the press release is.

But Keith, I can I send that over to Keith too, but but, you know, as far as I know, we we’re right now in a in a good position? Where where we’re not in a good position is for is for lending for capital terms of doing a construction loan. That’s been proven to be very difficult. But, Keith, why don’t why don’t you maybe help, answer Adam in terms of the actual banking situation?

Keith Lee, CFO, Red Light Holland: So, Adam, in terms of the, banking situations, we have gone back and, we established banking relationships. Like Todd mentioned, AYAN Farms, we move on from RBC, moved to TD. We also set up, you know, new accounts with the credit union that he mentioned. We also have, like, online platforms which facilitate, you know, making payments for, payroll, paying bill for suppliers. So as far as I’m concerned, yeah, there are no issues in term of the, the banking situation.

Adam, Shareholder: Okay. Thanks. I think, yeah, I think that’s all my questions. Thank you.

Todd Shapiro, CEO, Red Light Holland: Yeah. Thanks for your participation, Adam. We really appreciate it. Looks like Dan is raising his hand.

Dan, Shareholder: Yeah. Hi. Can you hear me?

Todd Shapiro, CEO, Red Light Holland: Got you, Dan. Thank you.

Dan, Shareholder: Alright. I’m just I have a question about the Health Canada well, it’s a federal ruling against the Health Canada refusal to allow exemptions for health care workers to use psilocybin. That came through on June 20, I think. I’m just wondering if that has opened any pathways of conversation for you with health care providers looking to experiment with psilocybin in Canada. Yeah.

Todd Shapiro, CEO, Red Light Holland: Yeah. So so there’s gonna be a they’re hopefully going to have a have a re ruling on that and allowing facilitators. Is that what you’re you’re suggesting, Dan? I think he’s muted now.

Dan, Shareholder: Yeah. Yeah. It, looks like they they reversed their the federal decision to say that it was it was biased and that they’re considering opening it up now. Health Canada is considering opening it up. I’m just wondering if that has immediately led to any new conversations for you.

What do you have an idea of how soon you might be able to supply, psychedelics in Canada for research?

Todd Shapiro, CEO, Red Light Holland: So so the the short answer is no. There’s still no timelines on it, and it would be irresponsible of me to to say that there are. In terms of advocacy, understanding the players, and, you know, obviously, wanting this to happen so we can help provide access one day is ultimately the the the end goal and the intention. As you know, we we did a partnership not this year, but last year with Aerosil, so we know them quite well. Actually, there there’s someone, you know, really close to us.

I I just I I I’m gonna I’m gonna hold back his name because he’s not on the call, but but there’s someone that we know quite well with the organization and who’s going to be a facilitator themselves. So, yes, absolutely. We have, you know, weekly conversations about where that may lead. And and, you know, one of the things for us that that is ultimately the most important is that access and the right to try and and whether it’s post traumatic stress disorder or veterans, whatever, we all have our own trauma. So we continually want to get that message across.

And and, you know, after five years of being public for Red Light Holland, which is quite significant, I I was sort of perusing, preparing for the q and a a little bit. And, you know, I I I laughed. It’s not like I need to prepare. It’s sort know, this is my day to day. This is all I do.

This is what I consume with. This is what the teams consume with. But I was kinda looking at, like, all the other companies that went public when we went public, and and it’s it’s really amazing how many just don’t exist anymore or how many, like, have, like, $20 in the bank. So part of the long game, as I said in the opening, is we have to be. We we are a mission focused business, and and it’s difficult.

While we had pivots and buying from mushroom growth, some farming, they try to do product growth and EPG, etcetera. The added core business is we wanna help. So this slow delivery of bill to get to that shareholders believe in that mission. And and what we I think we I shouldn’t say I think. I know we’ve done very well is is we built a brand in wanting to have Now when will government authorities allow us to help?

We still don’t know. It pisses me off, quite frankly, that we we a country that allows people to have medically assisted suicide for trauma now, they’ve opened that up, but they haven’t opened up legally or at least more access, like, other than, you know, the special access or the exemption 56, which are which are very few and far between. But they haven’t opened up on scale the ability to try magic mushrooms as a last resort because science has proven it, and Sarah can talk to the science how it’s proven helping turn around people’s lives. So this is what we continually fight for. I can’t put a timeline on it, Dan, but I can tell you we’re always in the conversation and in the know.

There’s there’s never not an email or a tweet or a message I get from someone that we’re not already all over. And that if and my mom’s listening, that includes you, mom. I you don’t need to send me all this stuff. We get it. We’re we’re we’re on top of everything.

Dan, Shareholder: Thanks so much. That’s that’s great information.

Todd Shapiro, CEO, Red Light Holland: You know, and maybe, Sierra Dan, I’ll interrupt. Sorry. But may maybe Sarah can just jump in and talk about, you know, those slow baby steps that that we’ve done with Seacrest. And and maybe it’s a good segue for her to to explain what we’re starting to do with Urban Labs in California, the the FDA compliant and DEA approved lab, because, I I mean, honestly, that I always gotta be careful of language and everything, but that’s groundbreaking. We we we’ve done all the research.

We don’t think anyone in the world shipped naturally occurring psilocybin from The Netherlands over into into The USA. We you know, with with the DEA quota filled with you know, they’re they’re they’re pretty strict country when it comes to this stuff, and and they’re allowing us to get it through their borders. And and what the ultimate plan is for there, and especially with the great love or hate this administration. I always say, you gotta love them when it comes to psychedelics because they’re absolutely putting it in people’s faces. So maybe, Sarah, you can add to that a little bit too.

Yeah. That’s

Sarah, Chief Technology Officer, Red Light Holland: Yeah. That that’s a big part of, providing access is having a product that will fit in with whatever regulations. And that’s where, you know, Seacrest we’re we’re still very close to them. They did an amazing job, but their license did not really allow them to export or to sell directly to patients or provide to patients. And that’s why we took the the data that they created, and we found a lab in The US that has that ability, legally.

So, yeah, I think that was a really, really big milestone, like Todd said. So much bureaucracy. I I really hope the next segment will be, you know, easier, but it was the first time. So we had the lab talking to the DA agents to make sure that everything, everything, every single line, every lock on the door, you know, everything is compliant. And then we we were, talking to the custom agents, which had never seen anything like this before because, from The Netherlands, it’s an agricultural project product, but in The US, it’s a schedule one drug.

So we were very, very excited that it all went extremely smoothly at the end when we when we pressed the pressed the trigger. And now we have the ability to work with a lab that can manufacture and and export, which is the the important part for us, and provide products to both clinical trials maybe in the future in Canada. And there’s a lot of other markets, I think, that are opening, and I hope that will, you know, maybe give Canada a bit of a a a kick in the, you know, behind, to help them move forward because, it is a little bit, sad to see that it’s so easy to get, access on the street, in a nonregulated way to substances that are not tested. You don’t know the quantity, the dose, what’s actually, fully in them when we have the possibility to make some things that is dosed, that is exact, that we know the shelf life, and we really want to get that into the hands of people.

Todd Shapiro, CEO, Red Light Holland: Yeah. Let me just add to that. That that’s such a great point you make. And I I kinda say this year after year during these q and a’s, and and, you know, we’re so grateful you all joined. I I wish I hope everyone has a question, to be honest, because, a, as you know, I’m candid, I’m talkative, and and we’re transparent.

And, you know, when it comes to consumer demand, it’s it’s proven to be there. If you just even look at things like alcohol decline in sales, nonalc sales are going up. And when it comes back to the magic mushrooms, consumer demand, while there’s not pure data out there, other than probably what we have in The Netherlands,

Sarah, Chief Technology Officer, Red Light Holland: it’s every Or Oregon. Right?

Moderator: We did

Todd Shapiro, CEO, Red Light Holland: some Or Oregon. Yeah. We we did some

Sarah, Chief Technology Officer, Red Light Holland: research in Oregon also. Yeah. So there’s definitely demand. Yeah.

Todd Shapiro, CEO, Red Light Holland: And, you know, in Canada, it drives us nuts. Like, you see these stores, they’re pop you know, they’re popping up everywhere. And I and I know you probably heard this out of my mouth, but if you’re a new shareholder or someone who hasn’t tuned in before, it it it it’s it’s devastating. I mean, people are going, walking in, getting product. There’s very few, you know, hurdles or objectives or anything that’s getting in their way.

And and then you can buy it online. Canada Post, our public Canadian postal service, ships it right to your door, but the company who pays its audits, who pays its lawyers for lawyers’ opinions, who has to pay listing fees, all the capital costs that are associated with our business that are quite steep, to be honest. And that’s one of the things you can see on the financial statements where the businesses are doing pretty good. It’s the public costs because we wanna be the one that changes the regulatory bodies and influence that. And we’re self regulatory.

We have great corporate governance, and we’ve proven that legally. And and it just it really disgusts me that that there’s a path that’s done illegally. And we call ourselves the outliers, but they’re the outlaws. And I’d rather be the outliers, but it’s takes time to to to get ahead of that, you know, that curve. And and that’s again what we’re talking about when we’re streamlining and focused on sustainability because our horse in the race is so strong for those hopeful changes that we believe we’ve grown one of the greatest companies in the naturally occurring retail space of access to psychedelics.

And we really don’t think anybody’s done it quite quite as well as we have in the entire world. So this is the stuff we’re so proud of as a team. And behind the scenes, I I hope all shareholders understand our our fight for it all, the hurdles, and the headaches that we go through. Sarah just mentioned a few of them in terms of just getting product over the border. Just because you see a press release, trust me, We’re sitting there on pins and needles before it gets there to make sure it gets there.

And and and Sarah is, like, getting up all hours in the morning and making sure everything’s on on on par and and working out. So this is the end goal still, and and, know, the more advocacy we have from even shareholders, right, your government officials. Like, if you’re using magic mushrooms and you wanna know what’s in it, if you wanna know dosages, if you wanna know contraindications, if you wanna know, obviously, that it’s legal. We implore everybody to to fight the fight with us because that’s how you make change. And we wanna make change together because we’re all on one big team here.

It’s a Sam and Dan show.

Sam, Shareholder: It sure is. Thanks, Todd. I think a major elephant in the room that I’m hoping we could segue to is the Peterborough Farm and the decision not to kind of pursue the construction. I know debanking was a major catalyst for that decision, but it gets me thinking around the path of profitability and the numbers that were shared and forecast. I I think keyword is forecast, and you were very clear that it was a forecast projection.

That being said, though, it was deemed to be a major revenue generator. So why did why the decision now to sell the land, and what’s the next steps when it comes to the functional mushrooms path? Because I saw that as a big piece of the puzzle when it comes to Red Lake Holland, and I’m sure a lot of investors on this call wanna have more context on that decision.

Todd Shapiro, CEO, Red Light Holland: Great. Remind me about the function of mushroom part because I’ll talk some time. Yeah. When when when it when it comes to the farm listen. We were all in, right, as everybody knows.

And and I wish I wish there was a reality show on our company sometimes so so shareholders could see what we’re going through. We we first, you go through all the forecasts and the budgets, and and and then we disclose it, obviously. And and, yes, it’s forward looking, we make that very clear. But these are the same forecasts we’re sending to banks for a construction loan. So it’s not like we’re exaggerating those numbers on one level for you to see it.

Those projections were also partly and mostly really to to get an x amount of a construction loan so we’re not using and burning through all our capital to get it there. And and, obviously, we’re forecasting even the interest payments to to make whole on those on those revenue by payments and then, you know, obviously, showing revenue down the road. So profitability. The we were, like, right there. We were right there.

We we I don’t know what I can say or not say, but it doesn’t matter. It’s all truthful. That’s what my lawyers always remind me of. We got approved to get the loan. We were, like, fist pumping, you know, back backseat.

Like, we were ready to go. We we as you remember, we we started, announcing that we we had signed a Polish company to help start bill doing the bill. And then when it went through compliance, when we got approval on the loan and then it went through compliance, you know, and it’s some guy sitting in his, like, thirtieth store, you know, downtown building, you know, not caring about farming necessarily, not caring about psychedelics, but just putting a big red flag like, woah. They’re involved in in psychedelics. We can’t give them that loan.

We’re we’re again devastated because that was the full intention. So then we go to other tier one banks. We go to other lenders. And next thing you know, it’s just not moving. So here we are sitting on a great piece of property.

We started roadwork on it. We have, like, these tremendous state of the art, plans, and and we’re we’re we’re sitting on it frustrated as hell, to be honest. So when you start to figure out what to do, how to pivot as opposed to just going, we don’t we can’t fund it with our own capital because then the company will run out of money, and that can’t be the core business, just a mushroom farm. What are we gonna do here? So you start talking to groups.

Are you interested? Are you not interested? Those are very loosely based conversations. But in the last few weeks, there’s been a group that’s come to us and said and and we put it in the MD and A as well. Like, we we we put a number there about 12.5, sorry, two point five, two point six million.

That’s kind of this loosely based conversation number we’re having of of someone taking over everything. And to us, you know, what what does that do? That basically covers all our costs up at this point, putting it into the farm, farmland plans, etcetera. So you kind of make whole on that investment. In a way, it’s like parking capital for a few years.

And where can we best put that capital moving forward where we won’t have lending partners that that won’t work with us? And and, you know, stuff that we can do on our own, like back to functional mushrooms, maybe dedicating a higher advertising budget for DTC or or things like this for growth. So I’m actually kinda combining the answers in one. Good for me for remembering both. But it it was frustrating.

We thought we were over the line. Yes. We we we we ultimately believe that this could be a good business despite mushroom sales, by the way, being pretty difficult. It’s it’s sort of another thing that’s playing into it, and you saw we talked about it at AEM in in in New Brunswick. I mean, their sales have been down consistently.

A little bit of an upswing over the last few months, but the tariff situation has caused a lot of confusion for farming in Canada. And and that’s impacting mushroom sales too, and so is I I think The States is actually really booming. I think Canada is really hurting in terms of disposable income and and just families’ finances. And things like mushrooms are a bit of a luxury item. You know, not your white or your browns, but your shiitake, your lion’s mane, your oyster.

These are luxury items. So, know, you we’re also carefully monitoring, like, where is farming going at this point in time, not as to where we started to talk about it two years prior. And and it’s it’s also a tough business. So I’m not saying it’s a blessing in disguise because I still believe in the mushroom farming business, but I can tell you if we can if we can somehow get a deal done because nothing’s concrete or material at this point. The board of directors and management believes that’s a great opportunity for us to get capital back in the business to grow, to to get to aim to use for for profitable path.

I hope that answers your question.

Sam, Shareholder: I do have a follow-up then. Are you selling the land at a loss? And if so, why the rush to kind of get that back to the treasury? Why not wait until you see the land go back to value or maybe make a profit out of it?

Todd Shapiro, CEO, Red Light Holland: Sam, you know, the problem is it’s it’s a bit material at this point. Like like, it’s it’s immaterial because there’s no deal in place, but I can’t tell you the exact numbers because that’s the materiality of it. With that being said, our end goal is not to lose money. And and and and you saw the numbers at that 2.5, 2.6. Like, that’s in our MD and A of of what we’re confersing on on selling it.

So we bought the farmland, if I’m correct. It’s 1,850,000.00. So that that leaves us that buffer of, you know, call it about 600 to 700,000 that we’ve invested in some of the other stuff. So I I believe we’re, like, right on par, but nothing’s material there. But, Trent, we don’t wanna take a loss.

You know, I’m a businessman at the end of the day. So, you know, that that’s part of the strategy here.

Moderator: K. I see Sam, gave us a thumbs up, so I’m going to, ask Gabriel to unmute and ask a question.

Todd Shapiro, CEO, Red Light Holland: I like Gabe. How are doing, Gabe?

Gabriel, Shareholder: Doing well, Todd. Good to, see you again. And hi, all the rest of the team. Yeah. Quick question on the impairment.

So I was hoping somebody could kind of go over in layman’s terms, the CGU impairments for AM Wellness and Mini Champ. Are

Al Kessler, Shareholder: you

Gabriel, Shareholder: guys seeing a loss of customer, a loss of brand recognition? What’s happening with those three? Keith?

Keith Lee, CFO, Red Light Holland: K. So sorry. I was just unmuting myself. Oh, yeah. So let’s start with the AEM goodwill.

Essentially, we have that 200 close to $300,000 goodwill balance, before we start the audit. And, on an annual basis, we have to, do a test just to see if that goodwill might be impaired or not. So just very high level, the way that we approached it. We did a discounted cash flow model. We presented the numbers with, to the auditors.

Essentially, you know, with the AEM farm in Peterborough not in operations at this point, all the projected numbers that we had, last year’s, you know, we can’t really use it. So with that big drop in the, you know, DCF numbers, this is kind of the reason we ended up writing down the goodwill for close to $300,000. And then on the AEM form itself, yeah, we also had the, impairment loss of about quarter million dollars. This is kind of related to, what Todd was mentioning about. Yeah.

We have discussions with, people right now about selling the farm. So during the audit, we also have a little appraisal just for the purpose of audit to see, you know, what exactly, the amount that we should be booking that into the, financials. So we took kind of an average of the, what we think the price we will be selling versus the price that the appraisal appraisal came back, average it down, and then, yeah, this is kind of the impairment loss or accounting numbers that we booked, you know, just to satisfy the auditors. But, again, you know, we do expect the sale to go through at the 2.5, 2.6. So once that materializes, yeah, we are going to reverse that impairment loss, and, that should bring us back to, breakeven.

Todd Shapiro, CEO, Red Light Holland: And just to be clear, it it it’s it’s it’s it’s it’s not a definitive agreement at any point. Like, we’re in high level discussions with the group, but I think we’re feeling quite confident that that that would be a sale. I think, Keith, that’s a that’s a great point you make in terms of coming back on the impairment if if we get what we think we should get for it. Does that I mean, does anyone wanna comment on that in terms of viewer management, your strategy? Like, do do you like that idea?

Do you not like that idea? Do you think we should have stopped trying to find like, I I I you know, we’re like I said about transparency, we we’d I’d love to hear some thoughts on it.

Gabriel, Shareholder: We could put a pin in that. I have another follow-up related to the AM revenue figure. So it seems like gourmet mushrooms are on the decline. Has there been any any discussion about pivoting to some of the more common varieties that might be a little bit more affordable and might have, I don’t know, more consistency in the sales?

Todd Shapiro, CEO, Red Light Holland: No. None. Okay. We we know we know partners quite well on that side too. It’s listen.

Mushrooms have proven to be a tough tough go at it the last year. The it’s you know what it is, which it wasn’t before? And, again, I’m new to mushroom farming and learning about the mushroom farming business when I say new, like, three, four years. Historically, there was a little bit less competition, and there was also less volatility. And and what you’re seeing now is, like, a lot of micro farmers pop up.

By the way, they they usually don’t have sustainability. Like, there’s there’s another mushroom company, candidly, we were looking at buying. We’re we’re on the brink of buying them smaller. They’re in grocery stores, and and we even met with their with their head buyer at one of the big grocery stores to ensure that that that that would be a, channel they’d still be in. And during that meeting, we found out that actually weren’t even listed in that grocery store anymore.

We’d have to re go through that entire process of pitching them to try to get into, like, a 100 plus retail outlets. So we’re very close to buying another mushroom brand, but that what I’m trying to say is that this adds to the volatility of it, and and it’s it’s it’s a difficult business. So here’s a company that would have raised millions and millions of dollars that is basically broke right now and getting out of the fresh mushroom business. So we were gonna buy it for pennies on the dollar, but without sales, what was the point of just adding to their burn? So, you know, we’re we’re learning a lot about this time period in Canada, specifically.

Can you know, farming is difficult in Canada right now. Unless you’re, like, the real, real, real big, big, big time farmers, it’s tough to disrupt. And while you think you’re disrupting small pieces at a time because there’s these microfarmers that kind of are doing it, We’re not seeing any sustainability for these smaller farms to last.

Gabriel, Shareholder: Gotcha. Thanks for your response and time, Al.

Todd Shapiro, CEO, Red Light Holland: Yeah. Thank you. Alan again? I don’t I don’t say that negatively.

Al Kessler, Shareholder: Hi. It’s Al Kessler. How are doing today?

Todd Shapiro, CEO, Red Light Holland: Doing good. How are you?

Al Kessler, Shareholder: Hey. Doing great. Thanks for taking my call. You know, I’ve been with you guys for quite a while. I really, really enjoyed the company.

I’m trying to see, you know, hopefully, that down the road, we’ll make some good progress. But, you know, I had two questions. One for you first. You know, given the recent share issuance to settle some debts, what step are you taking to avoid any future share dilution and protect the shareholders’ value with your growth initiatives?

Todd Shapiro, CEO, Red Light Holland: Yeah. Getting the note off the table because we had the capital, I think, was a good decision instead of paying a high interest on it. When it comes to protecting dilution, it’s it’s first off, you know, there’s always this back and forth of should a roll a rollback be approved. It wasn’t approved in the last AGM. Some people like them.

Some people don’t like them. I mean, perceptually, it like, it doesn’t change the market cap or the valuation of the company, and I think that’s a misnomer for a lot of, like, just kind of retail shareholders. I will say, perceptually, I would say that I think it’s always good to have a potential, reverse split, available to management. Reason being, if you ever want to do an m and a with a company and you wanna use your shares as opposed to your cash, now all of sudden, you can obviously issue more shares to acquire a company, but you would then consolidate and bring down the share count and increase the share price, same market cap. Perceptually, I think that looks a lot better to institutional investors.

So if, you know, if we had a 10 one rollback and a 4¢ stock and it’s now a 40¢ stock, you’re you’re it just perceptually looks better. I would never wanna do it just to do, but when it comes to dilution, where I think, you know, the number one potential bigger dilutive scenario that may happen is through m and a. And and and we’re always looking. I mean, Troy and I, who’s on Troy, our head of sales, we we must have looked at, god, like, 30 to 40 companies this year, going through their financial statements, going through, you know, their their entire, balance sheet. And and at the end of the day, like, honestly, every single one of them was losing money, and every one of them needed working capital to continue.

So we’re looking to buy stock, companies for stock at pennies on the dollar, use some stock to get them, and then us provide them the working capital to get us to get them over the hump. It’s a big part of our m and a strategy. We haven’t found the right company yet. But where that relates back to dilution, that would be a potential scenario dilution using stock to buy a company. And then listen.

Like, what did I do? I issued, for instance, when I say, I management approves everything I do. It’s not just Todd. Like, there’s a big process here in corporate governance. But we brought on Scott Melker, and and, you know, the stock is is is fairly low, but we issued them RSUs to instead of cash to help with the crypto strategy.

So, you know, there’s a bit of dilution there. I I think it was a very fair compensation. You can see a press release. It’s all disclosed. So, you know, sometimes when you bring on personnel, there could be dilution.

But overall, yes, I think it’s a pretty high share count. I would love shareholders to, you know, reconsider at the x next AGM to have optionality for management in case of of a a potential big m and a, like I said, to be able to to consolidate. But, we’re always trying to protect it. Listen. You know, I I hate to sound, like, kinda egocentric here, but I’m the largest shareholder of the company, I believe, still.

And, you know, I obviously, you know, way, way out there would love to, you know, grow my own value. So the word dilute, that hurts my value too. I’m in it for everybody because I want the company to win for all of us. So it’s always carefully crafted decisions when it comes to dilution, but I would say that it’s it’s it’s not that it’s like, hey. Let’s dilute dilute and give shares and and give away, but I would say it’s inevitable at some point that more do get issued.

Al Kessler, Shareholder: Fair enough. Appreciate that. Thank you for your answer. And one for Troy. Haven’t heard from Troy yet today.

I mean, I’m an I’m an ex Bell guy working for Bell. They always say, Bell, what the hell? Don’t be nice. I was a business development representative in the commercial markets division. So welcome aboard, Troy.

You’re doing a great job. I’m just thinking, what’s your plan going forward? I mean, for me as a lead generator, I guess, I’d be calling every big box store. Everyone is trying to get a product right in there immediately. So they’re ready to go as soon as, you know, we get the green light.

And there’s so much work to do in The States. What’s what’s your plan on that? Like, how are you working with that? And how large is your sales team? Is it just you and a few reps?

Or, like, your what are you doing? So I can have some clarity on it, please.

Troy, Head of Sales, Red Light Holland: Sure. Hi, Alan. Hi. Yeah. The real strategy over the last twelve months has been to really focus on profitability and ensuring that every you know, whether it’s mushroom kit, our gummies, that we’ve got the right price point where we can reinvest back into marketing.

So my goal really and the the sales goal is to just continue to increase our distribution points, increasing our store counts, increasing the availability in store. You know, the with the launch of the gummies, it really gives us something with a a longer shelf life that really fits more into the traditional retail channels. Sort of the last four weeks since we’ve launched the gummies, We’ve put them on Shopify. We’ve put them on amazon.ca. With that, we wanna really determine and establish who the demographic is.

And then with that, you know, work hand in hand with Todd to develop a marketing strategy that’s gonna, you know, maximize your ROI on on spend. I’ve met with several distributors, several brokers. With regards to the sales team, you know, yeah, it it’s really myself, but then working with brokers and partners to to gain the distribution. We did a nice job with Safeway, in the West Coast, of, you know, Portland, Oregon, where I went out there and met with the buyer there. So we’re in constant communication with them.

We’re very confident that we’ll see another seasonal program with the the homegrown kits there. We’re in constant communication, with with Costco. And I get really, the, you know, the strategy with the kits is a seasonal item, to have them in stores, and we’ve seen this with real Canadian superstore. To have it in there fifty two weeks of the year becomes stale, you know, the turns, shelf life, you know, you start to lose money when you get billed back and you get credited on, you know, damages and and expired products. So the real strategy moving forward is, you know, 90% of what we focus on will be on our functional gummies and and then continue to look at innovative products and and things that we can, you know, put into stores that have longer shelf lives with higher margins, and we can continue to to, you know, at the end of the day, you know, grow those rooftops and and take products that you know, instead of having 300 or 500 partners and and customers, you know, how do we get that to 5,000?

How do we get that to 10,000? By partnering with large retailers that have an appetite for a product that we’re selling. You know? So taking our functional gummies to a Shoppers Drug Mart where you get a thousand customers, you know, as soon as you you get the listing. The difficulty with that, though, and fully transparent is, you know, the larger retails, the sales cycle is anywhere from six to twelve months.

So we’ve started. We’re we’re confident. We’ve had some real strong conversation with some retailers early, whether it be some, like, smaller independent retailers, regional partners, and and getting it out there to to test the markets and, you know, really figure out our price point and what works, and what the cuss the consumer’s appetite is to spend. You know, it I look at the product and it’s you know, we need to find partners that have a large organic set within their store where people are accustomed to and used to to buying supplements and spending, you know, 70 or $80 on a a single product. So that’s really the goal.

That is our strategy. It’s definitely you know, it’s it’s something I work on every day.

Todd Shapiro, CEO, Red Light Holland: It’s trying

Al Kessler, Shareholder: to I appreciate that. Find that. What is the shelf life on the gummies currently?

Troy, Head of Sales, Red Light Holland: It’s we’re sitting at eighteen months. We’ve just sent it over to some Cress Labs Yep. To do some, you know, sustainability testing on it. So it could be minimum, it’ll be eighteen. It could be twenty four months, which

Keith Lee, CFO, Red Light Holland: That’s great.

Troy, Head of Sales, Red Light Holland: Us, that’s exciting. For me, that’s exciting. I’m Yeah. I’m a old consumer package goods guru with brands like Coca Cola and Red Bull where, you know, I had longer shelf lives. And so that’s where and I I’m constantly leveraging those those old relationships and and partnerships with some of the larger retailers and brokers that I’ve worked with and distributors that I’ve worked with in the past where, you know, we believe that we can take this from, you know, zero to a thousand customers in the next three to six months.

And then once you establish that, it doubles and triples very quickly.

Al Kessler, Shareholder: Exactly. Okay. Thank you so much, Troy. I appreciate it.

Todd Shapiro, CEO, Red Light Holland: No problem. I’ll just add that. Yeah. Sorry, Troy, for interrupting. Great job.

What I will say is we probably established the number one homegrown kit brands for lion’s mane shiitake and oyster in Canada in in two years. Like, that’s quite significant. When we when we acquired we first acquired 80% of Happy Caps, and then we eventually took over the last 20%. And and there was something like a hun they were like a mom, paw, shop, couple of guys, and the great guys, by the way. But, you know, we we really elevated that brand.

But it’s a difficult product because of margins. It’s difficult because of shelf life. It’s difficult because of, you know, the odd return. People don’t really know what to do, so they just return them. And and and it it’s it’s difficult because we’re not sure who is a repeat customer.

That’s, like, always been a constant back and forth with Troy and I. Like, is this just a onetime customer? So that’s why we started to develop the gummies because we know their subscription models. This is a supplement that if you continually use with the NPN numbers proven to help to you know, proven to help you, people get in more habit forming of these types of products. And and, basically, what I wanna really establish is this is again more on an emotional level, not on a proven out level yet in terms of sales, that the opening door conversations that we have these functional happy caps mushroom gummies, Like, it’s an instant spark for everybody, where the homegirl kit was like a sell.

Like, a real hard explain it. Here’s the video. Here’s the instructions. Let me send you some. Grow them with your team.

It it it took months and months to get that, and we still grew, you know, the largest homegrown kit business in Canada, we think. I don’t think anyone sold as many kits as us, and that’s obviously a huge part because of Costco and and and our other retail strategy. But if we can if we can manage and we haven’t managed it yet, but if we can manage that with the home with with the functional mushroom gummies, including way better margins, way better shelf life, and and more of the masses, I think, really adapting to them, That’s why we’re very excited by it. But still, we just launched a month and a bit ago. It’s it’s it’s a slow build, and and it’s gonna take time.

And, you know, if you think of HappyCaps, we bought that brand, and they were already existing for three years before us. It took time No. Really, ultimately, for all of it to get there. So we’re gonna do it carefully, and and Troy and I also butt heads a little bit in terms of what’s our what’s not butt heads is not fair to say, actually. We just we we we try to whiteboard together to see what’s the direct to consumer strategy because part of our fear on mass marketing to get these things selling is it relates back to all the companies that Troy and I have looked at buying.

A lot of these consumer packaged goods companies, a lot of them raised $10,000,000, for example, spent, you know, basically, all of that on marketing only to make $8,000,000. So, yeah, they had 8,000,000 in sales, but they lost 2,000,000 to get there because online marketing is a very difficult We still believe that the retail strategy is one that we can we can hopefully try to conquer, and and yet we will slowly get it out there online for people to see, learn, and love.

Al Kessler, Shareholder: Exactly. K. Thank you so much.

Todd Shapiro, CEO, Red Light Holland: Banana Man. I’m I’m nervous by this name. Hey. Can you hear me? We got you, man.

Dan, Shareholder: I’m just wondering, is Bruce Linton still involved in this operation?

Todd Shapiro, CEO, Red Light Holland: Absolutely. Bruce and I talk once a month at at the least, probably more. You know, right now, you know, what what Bruce did early on for us was two amazing things. He he opened up a a a shit ton of doors for me, quite frankly. Just bankers at the time, was a capital.

How could our raises? Like, really got validity for our company in terms of the institutional relationships. He was brilliant at that. And he and he Bruce is a deal guy. He he his famous line when he ran Canopy was like, do a deal.

If it’s a bad deal, do another deal. You know? Like, so Bruce was always trying to get deals done for us and opening doors for deals. The the the the problem, and Bruce gets this with with deal flow right now, is when you when your stock’s a bit low and the volume liquidity is not there, your your stock to buy businesses isn’t that desirable for the for some, unless they really need survival and which which most are needing right now. So Bruce’s role isn’t as active right now because there’s just not a ton of deal flow.

But, like, if psychedelics in the sector has a cycle and we see it turn around again, I think we’re all optimistic. It’s it’s ironic. Again, I I I relate back to Christian Engemeier today. He put up this, like, very bold post as the CEO of a tie saying, like, he’s basically saying, a tie. This is like, the market is gonna change.

He was talking about the sector in general, and I’m like, that that’s kinda, like, pretty you gotta be really careful when you, you know, try to lead people to buy your stock. But the sector we believe in still. We believe in this admin. We believe in in what this company’s done. We we are very proud of all the outliers and whether they’re synthetic versions and doing pure r and d and and and trying to disrupt big pharma or us who are trying to disrupt it in a naturally occurring way with standardized products.

We want everybody to win because the more people win in this in this sector, it means, ultimately, the more people win out there, the more people who take care of their mental health can have solutions. And I’ve said this also repeatedly over the five years that we’ve gone public is that, like, my dad might be more comfortable taking a synthetic rather than naturally occurring products. I think the youth want more access to naturally occurring products. So I guess what I’m getting at is is we’re we’re we’re we’re hoping that they’re great cycling here. And then a guy like Bruce is gonna be calling me and be like, it’s deal flow time.

And, you know, that’s that that’s where he’s best at. So but we love Bruce, and and a great friend to me as well. He’s he’s just as well as a mentor.

Dan, Shareholder: Just a follow-up. Mister Capps, is that is that over?

Todd Shapiro, CEO, Red Light Holland: It’s not over. This is where it stands. You know, it’s it we present them still. As when Troy goes out, he goes, look. We got this brand Happy Capps, and we got this brand Mr.

Capp. And and, essentially, inside of it is the exact same thing. And and a lot of retailers and customers gravitated towards HappyCaps more than Mr. Caps. Did we get the support we we wanted out of the gate?

You know, in hindsight, probably not. I don’t wanna throw anyone on the bus here, but, you know, it probably wasn’t as strong as we imagined it to be. And the other problem with mister Capps is and, again, it’s not dead in the water because he who knows? There might be a huge retailer one day that goes, oh my god. I love these little characters.

Kids are gonna love how to grow mushrooms. Let let’s get it let’s get it out there. You know, maybe that’s a thing. But we also, you know, candidly, have some inventory that’s sitting there that we would like to be able to use, inventory in terms of boxes and spray bottles. So, it’s not dead, but but the the the happy caps is even better margins too because then there’s a royalty that you would have to pay that team.

You lose a bit of margin in that spread as well. So the genuine authentic happy caps growing better than it isn’t necessarily terrible for the company and the shareholders. With that being said, it’s not dead, but, we haven’t had that excitement that I’m accountable here, by the way. I I thought Mr. Capsule’s gonna be huge.

I I love the branding. It’s the same product that’s been proven. So, you know, part of it is, like, you know, I hope I hope there is someone that that looks at if Troy presents it to them, we’re like, yeah. You know what? This is the one we wanna order 15,000 kits of, and then here we go.

Banana man. I said that out loud. Maggie, think you you have to unmute him.

Moderator: Todd, I believe he gave us a thumbs up and then lowered his head. Does that have any questions?

Todd Shapiro, CEO, Red Light Holland: What a turnout, though. And I and I I know it’s midday in summer, but we try to do these as close as we can to to filing, obviously. And some sometimes we hadn’t, but I thought it was a great opportunity to speak to speak to all our shareholders. Really close to financials this time. Anyone else?

I I I would love a couple more questions. We’ve dedicated this amount of time. Let’s let’s go for a little bit more. Okay. Adam again.

Adam, Shareholder: Yeah. I got one more. Cannabis has, you know, four twenty rallies and this got, you know, that kind of grassroots advocacy. Now what’s what does magic mushrooms have, or what can red light pollen do to feed the fuel feed the flame of consumer demand for legalization?

Todd Shapiro, CEO, Red Light Holland: Yeah. It’s a it’s it’s a good question. So I know they have, like, they have, like, bicycle day. They have World Psychedelics Day, which ironically is on my birthday on, like, June 20. 06/20, not 04/20.

Sarah, early on, was really, really instrumental in us getting to know a lot of these different advocacy groups and and and call it, these rally groups of people who believe in the sector and and, you know, the ones who go to Burning Man and the ones who go to Costa Rica for the retreats and things like this and really interesting people. And, you know, the the constant the constant difficulty for me is at what point do we just use capital for advocacy and promotion, but then burn the capital because you can’t commercialize it on in the end? And and, you know, Sarah, what was that one group, Fireside, that app where where it was all about responsible use? What were they called again?

Sarah, Chief Technology Officer, Red Light Holland: Fireside was a it still is a support group in California. And, you know, I’m still doing that. I’m here in California. Again, I’m meeting with the the psychedelic church in Oakland, on on Saturday, which they have successfully decriminalized. So I think what we’re trying to do is learn from these grassroots, see if there’s ways like, maybe they’re interested in our WisdomVR or or LAMPs for, like, educational, and responsible use policies, the microdosing app.

You know, we have a lot of interesting technologies that I think, would be great if if got out in in decriminalized legal places where we can’t still we can’t sell because they’re just decriminalized, but we can bring technology and education and and information. And, yeah, constantly talking to where things are moving. And I think what’s happening, in Canada and maybe some other places, they’re not, it’s not legal, but nobody’s being arrested for having, you know, magic mushrooms or taking magic mushrooms. And that’s why people aren’t going to the streets and and demonstrating and saying, hey. We want you to legalize this because there isn’t that level of cost to the consumer who is using this, illegally.

But we are seeing, you know, big movements, whether it’s in New Zealand where there was a first prescriber allowed, whether it’s Czech Republic that from the beginning of next year is gonna allow a prescription model. But it seems that that’s how things are moving within a supervised framework, somewhere between really medicalized prescription to what we’re seeing in The States, which is more maybe of a wellness model, but still supervised. And I think that’s important for us not to come as a company and invent the wheel, but really work with these advocates, see where we can assist them, learn from them, and try to, like, bring knowledge from one place to the other. So, you know, that’s what we’re really trying to do because we were, frankly, a pretty big part in helping Oregon figure out micro dosing regulations because they weren’t even thinking in that direction. They were just thinking about, you know, the these very large therapeutic doses that are very expensive.

The the financial model there isn’t working very well for for most companies. But there there’s a big opportunity in microdosing for both helping people at a lower risk and a lower price. So we’re trying to bring the knowledge that we know about micro dosing, about these regulations to, for instance, The Czech Republic, to New Zealand, to Australia. You know, was writing to the government there. So we are constantly doing this type of advocacy and and connecting.

And and, of course, if anybody has any other connections, you know, send send them my way. It’s a big part of of what I do. But as Todd said, when it comes to to financing them, like, were working with PMAW. We were financing the lobbyists in Washington. Washington.

Right? And it was such almost a great result. You know, both Republicans and Democrats were voting for it, and then the governor just came literally just ripped out the bill and wrote whatever he wanted instead of it. And this is how politics turns out just works. And, you know, we got a nice pilot bill, but not really what we wanted, our pilot program that they they set off to do.

So, yeah, we’re being very careful with the cash, but very generous with our knowledge and and data and technology. And I think that’s, you know, bringing interesting collaborations our way. Should we do some giant big event that, maybe is gets a little bit of press for one day? Personally, I don’t think so. I’ve been an advocate and and and activist in in many areas, and this is not how real change works.

This is how, you know, people vent. They feel that they’re doing something, but the governments don’t really care. Changes in government are are very, you know, network based, knowledge based, advocacy with these specific, you know, information that we’re giving them. That’s why we did also this collaboration with, drug science. So we’re working with really established researchers.

That’s why we brought in Robert Cartwright Harris who’s connecting me to lots of other, you know, scientists and advocates in the field. So we can actually bring the knowledge, educate the the lawmakers, and create something there, because it seems that really that’s how it’s working. Like, you need, an advocate within the government to say, hey. I’m gonna do this and keep pushing this forward to get things done. And that’s a lot a lot more effective than, yeah, having a a big party that maybe you get one snapshot in the news.

Todd Shapiro, CEO, Red Light Holland: Yeah. And and, Sarah, it’s it’s really good that you bring up all these channels on the back of kind of, like, how do we promote psychedelics across the world that end stigmas? And it’s interesting how you put it. We really are, like, an open source psychedelic company where we’ve collected great data that we’re sharing with with drug science professor David Nutt that Robin Carhart Harris is now looking at. The the these are really big, big people in the space, you know, the Timothy Leary’s of our days.

And we’re we’re learning, and we’re using our capital wisely. And and Sarah’s constantly asking for money. I mean, she’s a scientist. Scientists raise money. They’re not necessarily always focused on making it.

And and we’re just delicately balancing how we approach it. So the only other thing I’ll say, Adam, which is sort of an interesting thought from a peripheral on promotion and and and get more people understanding about Red Light Holland and our mission, The the the peculiar thing is I really believe that this kind of Bitcoin alignment is is going to help this, like, revolution. I think, I just got like I said earlier, I got invited to the blockchain futurist conference in Miami. And so I’m gonna do what I’m good at. You know?

I was twenty years in media. I’m I’m hosting a fireside chat, or I’m gonna be a part of a fireside chat where there’s gonna host interviewing me. I’m gonna be hosting a panel of of of experts. But don’t get me wrong. Like, in those conferences of tens of thousands of people, some of them and and others are calling, by the way.

I haven’t signed any others, but others are calling me to be a big a big part of. And I think I can really demonstrate a message very clearly and concretely and fun. Let’s be honest. It’s fun to combine these spaces. And if we can get the crypto community supporting the psychedelic community and then getting that message out because they’re so deeply ingrained, and I it’s a great opportunity for the company.

It’s what I’m saying for exposure and for messaging. And and it’s earned. It’s free. You know? And I’m not paying to be there.

They’re they’re having me there as a host. So that I think this is a really great opportunity. I’m gonna relate it back to the shareholders of the company for one second. It’s it’s it’s sort of opened up as my, you know, my long winded mind takes over and and, just blurts out whatever it thinks as I speak and think at the same time. It’s I think it’s one of the things that really does frustrate me with those chat forms within our company.

And and I’m not a guy who’s going and fishing through chat chat forms daily or even monthly. Like, maybe once every maybe once a month is fair. Like, I’m gonna be honest. I look through. But there there’s such negativity from the shareholder base in in by a specific few people in those in those chat forms, and they don’t come to these q and a’s.

I know I’ve mentioned it before. They feel like they don’t have a platform. They feel like, you know, they’re gonna I’m gonna make the they’ll say I’ll make every excuse in the book for acknowledged failures and and and maybe, you know, like, recent modest growth and all this kind of stuff. But if you think of how community growth works and really what it can do to impact passionate investing, it’s it can be it’s the more powerful than any fundamental at the end of the day. And trust me, our head is down on fundamentals.

It has You gotta grow a business that gets to profitability. We know our job. But if you think of what Tesla investors did early on or what Bitcoin investors did early on, created these communities of great optimism and and great alignment and and financial freedom, and in our case, mental freedom, if I as I said before. I I think that’s why those these chat forms, there’s such an opportunity there with the tens of thousands of comments in them for others to get involved on an optimistic level.

Yeah. Call us out on financials. Call us out on when I make a mistake. That’s different. Like, that’s the fundamental side of business.

But in terms of the optimism, what we see with the Bitcoin community, it we can have that in the psychedelic community. And if anything, we need you’re right, Adam. It’s a great question. The promotion, ending the stigma of it. How do we get that together?

So I, again, I implore everyone. Call us out on on stuff you don’t like, on on pivots, on the farmland not being built out because of the the debanking and the no lending. You know, get upset that Mr. Capps didn’t work. We understand that as part of being a shareholder, but we’re in it for psychedelics, I think, as well.

And and we can do that together, and and it starts with those chat forms. I really believe that. Like, we can just get positive messages out there about the sector instead of always, you know, digging deep into this negativity. They remind me of sports fans. It’s like, you know, I’m a Leaf fan, and, obviously, it’s painful to be a Leaf fan over there you know, years and years of not going to the cup.

In fact, not even in my lifetime. But I’m not gonna sit there on a sports call in show and just talk shit about the Leafs. I’m gonna talk optimistically how much I love this team. And, yeah, I’ll call them out for things, but I’m still gonna bleed blue at the end of the day because I love the team. And and that’s what I think people should be doing for the not just our company, but for this psychedelic company.

Because if you wanna make a difference for your child’s future to be able to have access and deal with mental health in a different way, it starts with all of us. And and that’s just kind of, like, one of my passionate statements that that I thought of based on the back of your question, Adam.

Adam, Shareholder: Thanks. Yeah. I’m heavily involved in the crypto community. I’m a Polkadot ambassador. I’m actually at a Polkadot community event right now.

And there’s an alignment with a mushroom thing team in the Polkadot community. So I would love to send you some information. I’m glad you’re involved in crypto now because I the grassroots community element of crypto is very strong, and I’m sure you’ll be happy to adopt my terms into that as well. So yeah.

Todd Shapiro, CEO, Red Light Holland: And and I was joking with Scott Melker on a on a podcast. I’m like, the the next thing I wanna do is I really wanna find out who’s micronosing and using mushrooms and trading crypto at the same time because of the focus that it would give you. And and I know it’s a large number of traders love magic mushrooms. So great great to hear, Adam, that that you’re aligned. We thank you for your positivity, and and you’ve, you know, basically led this from a q and a perspective.

And you’ve you know, you’re you’re not asking us easy questions. You’re delving in deep and making sure we’re accountable, and yet you see the alignment of what we’re trying to do and and this community we’re trying to build. And it’s only five years. I mean, big brands take decades to build. So we’re we’re just getting started, and and, we’re trying to use to preserve the capital wisely to get to where we wanna be.

And most importantly, we’re always thinking about that path to profitability, and I hope people are really pleased with that decrease in burn over the last year because it was very significant. And that’s a testament to Keith coming on, to Troy working his ass off, to what Sarah’s doing and us really rolling up our sleeves and working tirelessly and and affordably, to to to try to make that difference with a small team. Think Dan’s got another question. Adam, please answer.

Gabriel, Shareholder: Yeah. Thank you.

Dan, Shareholder: Yeah. I do. I just have a question. I thought I heard you saying that you’re the first, psilocybin to get approved for import into The United States via the DEA. Is that correct?

Todd Shapiro, CEO, Red Light Holland: I said that I believe we’re the first naturally occurring product out of The Netherlands ever to get to The D to get

Dan, Shareholder: Okay. Specifically out of The Netherlands. Okay. Thank you. And then I just have one other question.

I know you were talked about focusing on 90% on the drive.

Todd Shapiro, CEO, Red Light Holland: Yeah. Just by the way, was there another company? I have no problem if there was.

Dan, Shareholder: Oh, I have no idea. Okay.

Todd Shapiro, CEO, Red Light Holland: Yeah. Yeah. And, like and it could be across Europe. Like, we’ve looked. We haven’t we haven’t seen any.

So

Dan, Shareholder: I’ve been looking too. So I was curious.

Todd Shapiro, CEO, Red Light Holland: Yeah. Like, I I don’t think any others. Like, Sarah and I have looked you know, we do deep dives, Sarah and I, together. And and, obviously, you know, these things like ChatGPT help too. We we haven’t seen much.

Dan, Shareholder: Cool. That’s that’s promising. I just have another question about your your distribution of functional mushrooms. You’re switching to the dried mushrooms for 90% of your focus, I believe, was what you said.

Todd Shapiro, CEO, Red Light Holland: Well, they’re not strong. They’re dried. They’re supplements. Like like, they’re they’re gummy. They’re gummy form.

Dan, Shareholder: Okay. Sorry. Moisture reduced. More shelf stable. Right?

I’m just wondering if you are looking at a more local growth and distribution method for fresh mushrooms at all. You said you’re struggling with shelf life of the fresh mushrooms in grocery stores. I know you were talking about m and a with a a company that was in grocery stores. I think I might be familiar about them without naming any names, but I did just see them disappear. I was really interested in them.

They’re no longer in grocery stores. So they obviously have a problem, and I like, I’ve seen it as a consumer. The mushrooms, they aren’t selling. They’re delicious, but for whatever reason, you know, you walk in to go buy lion’s mane and it’s on the shelf and it’s decomposing. You’re like, oh, I don’t I don’t want this.

I want something premium. I’ve grown it at home with blocks similar to your happy caps blocks and, like, the results at home are phenomenal. So I guess the question, if I can say it accurately, is are you looking at a more localized distribution with fresh mushrooms where you could get it into the hands of consumers or restaurants in a more rapid fashion?

Todd Shapiro, CEO, Red Light Holland: Great question. So if I can start this in. It’s interesting because I think we probably produce the most selfless there. So so the problem is it’s only three months. So it’s not like we’re struggling with it necessarily.

We’re struggling with the idea that it can’t ever be this kinda eighteen month, twenty four month thing that when supplements end. But, in terms of a company, I think the happy caps are probably gonna be better than any of the other real good markets, or products in in terms of having them and waiting for them to grow. So, yeah, I mean, you’re probably talking about a company I mean, I’m gonna be careful, but we we get that localized model and the localized farming model. And it was disruptive in a in a on a very small level, and I mentioned that earlier in the call where, like, little companies have popped up. And if you think if they’re taking away 1% of an overall bigger farming partner’s market share, but there’s 10 of them, now they’re kinda taking away 10 of that market share, but they’re not lasting.

I go back to to Troy and I looking at so many different companies in CPG and in farming, And and they’re all, like, running out of money, and there’s not a lot of access to capital in Canada, it’s tough for them to prove out their model. So it’s been difficult. In fact, like, I even worked with a company who we sold mushrooms for, and, like, I probably shouldn’t say this, but they they didn’t pass their bill. Probably some we’re still chasing them. I think we’ll get it.

That’s that’s so tight. I know they earn money. So yeah. Maybe I say too much, but they are. It’s true.

So the localized approach is cute. Right? It is cute. But is it sustainable? I don’t think so.

And and to credit where credit is due, our partners over at Holborn and and FNR, I mean, they they have a really big facility. And and while the mushroom industry is struggling, they’re the ones who can wait out, you know, those those market cycles and changes in in in extra produce sales because they they can just scale better than anybody. So the the the the small ones are cute. If you can grow the brand, I think it’s tremendous. But I we believe and Troy and I really believe now in this sort of co packaging model.

We really like it. So you’re not necessarily just so focused. I used to love the vertically integrated, to be honest, but you see struggles each way. If you can just have a great partner and a loyal partner and and and one that can produce for you and you have the margins there, it’s a lot less headaches. And there’s a lot of headaches in product shipment and logistics, and, you know, the cost and logistics are just insane these days.

So, localized is is is, I think, a little too cute, but it’s not to say that if you don’t find the right one that’s profitable, we wouldn’t explore it just as a as a brand build that that we could take national. The virtual thumbs up in case others didn’t see it. Any other questions? I quite like this. Dan, jump in.

Dan, Shareholder: I appreciate the answer. I understand that completely. And makes sense with the the pivot to the gummies for the shelf life and the interim. Just I wanted to say

Todd Shapiro, CEO, Red Light Holland: I I’m interrupting. They’re they’re so good. Like, we we did a lot of thorough investigation in these, and and Sarah included his quality control. Like, the NPN number is huge, but, like, my favorite part is they’re they’re just they taste amazing. We we tried out we almost bought another gummy company too, by the way.

I don’t know how they’re doing. Because I I always judge a company’s not doing well because I don’t see them advertised on Instagram anymore. That’s, like, kinda my means they ran out of money to market it. That that’s sort of my thought on it. But if they were blasting, blasting, blasting before it, but they were, like, sticky, and they tasted kinda funky.

Like, he they they’ve done good, but these, I’m really confident we can grow these. They they don’t stick. They’re sugar free, vegan, and and proven again. So we’re excited. I I

Dan, Shareholder: just wanna say I’m super excited to hear you talking about the trying to merge the idea space with crypto. I remember you talking about crypto on the radio in the early two thousands, to be honest. And it’s kind of full circle for me to, you know, find this company, find you as a CEO, and see you till still talking about it and looking to try and merge these ideas. I think it’s a really positive direction. So thank you for the insight.

Todd Shapiro, CEO, Red Light Holland: No. Of course, Dan. Thank you, man. By the way, the other thing I I wanna remind everyone still on the call and the stuff you don’t see in an MD and A, through all this team’s hard work, and it’s a really, really nice team, you know, we’re we’re innovative. Like, we’re we’re creative.

And and and that helps, I think, in the long run to grow a business because what that creativity is doing you know, I wanna sort of really highlight this is we’re looking to backdoor ways to get to governments. Right? So when you get an NPN number on a on a on a product in in a mushroom gummy, like, there’s now a connection with Health Canada there. So, like, maybe we can backdoor that in one day if psilocybin’s ever legal to get, like, that approved, You know, as our you know, with our branding and our name or, you know, the homegrown kits, like, getting them to all these channels and learning about distribution. Well, you know, when they legalized cannabis, the the Canadian government also legalized homegrown for every adult up to, like, I think, three or four plants in in your home.

So if they ever legalize psilocybin, will they allow homegrown kits? So now instead of a liquid mycelium being lion’s mane oyster shiitake, like, just another injection of of a Mexicana or tamponensis or a galindoy, things we know well. So it’s all about even farm care health, which hasn’t been mentioned here, and and that’s just a small pro a project that Tony Clement, former, you know, minister of health for Canada and minister of industry, actually. You know, we’re talking to communities of food insecurity, and and and and a lot of these you know, very sadly, but very accurately, in a lot of these, you know, communities of food insecurity, there’s lot of mental health trauma too. So while we wanna help and figure out ways, affordable solutions to get food to people, specifically mushrooms and and that’s a long road, by the way.

Making dense with government officials is difficult. But it also opens up conversations to backdooring into, hey. There’s also psilocybin options, like, not only food insecurity, but, you know, mental health difficulties. Maybe we can help be a part of that solution. So this is where our team is really creative and has forethought for long term vision.

And and there’s a method to our madness, and, we we get that it’s it’s difficult. And I know shareholders want us to get to the profitable path, but, you know, everything we’re doing is is aimed at that and and and then beyond. And and think we’re seeing a lot of, like, nice narrowed focus now and streamlined, opportunities here where we’re not just looking at unprofitable channels, but really zeroing in on the things that can make us money while being creative and and and creating a great community around psychedelics in crypto. Sounds like an Oscar speech, but no worries. Anyway, we’re I don’t know if we have any other questions, but I’ll give it about thirty seconds here.

And if not, we’ll just do some closing thoughts. I I really truly appreciate, the amount of people that showed up. You know, we do have thousands and thousands of shareholders still in the company. And, I think overall, collectively, know, you we’re we’re aligned here and and focused. And anytime anyone wants to reach out, I always say this.

I probably make myself too accessible, but I’m more than happy to answer an email, set up a call through Maggie. Sarah is a great resource too. She even said it earlier. If you if you know of anyone in the advocacy side or maybe someone maybe you have an aunt who lives in Czechoslovakia and that, you know, knows a government official. Like, all these things happen.

And by the way, like, maybe Sarah could have dealt deeper into all the different areas that are still looking to open up these modern medicinal industries. And and, you know, Australia, New Zealand, Czech Republic, Oregon, like, we’re involved in all of them on some level or another. We we we have people on the ground, but the more the merrier, anything to help the mission and and help us get into those markets. Emerging markets are key. Regulatory changes are key.

And in the meantime, we will continue to put our head down and and grow our business to the best of our abilities. And I implore all of you to keep helping the community as a passionate investor. I’m not saying you have to always talk about red light just the community in general of psychedelics. Keep keep ending the stigma around it, and and, you know, any advice or or or communication you wanna and or, you know, or or people you wanna introduce us to, we’re always open to talking to them. And we’re very excited for what the next few years have in store.

We’re seeing great regulatory progress, and we believe as a company, we’ve we’ve really aligned ourselves with with a great mission here. And and, we’re really excited to continue to grow and do our very best to increase all of your shareholder value. So we thank you so much for your time. I thank you to Keith for coming on. I wanna give a really big extra thank you, honestly, to Keith and Leah who head out who head up our our our financial team.

Audits are very difficult process for small cap companies. We’re not like a Google that has hundreds of staff and can hand off every file. You know, we get audited thoroughly in in The Netherlands too, so we have an individual there named Jeffrey who helps with us. So thank you to all. It’s always interesting time for small cap companies, but it obviously proves that our great corporate governance.

I wanna thank Troy for for, you know, busting busting down doors every day and understanding sales cycles take time. But, you know, with this new launch, we’re excited by it. And Sarah’s doing an incredible job on the r and d side. And and, these relationships with doctor Robin Harris now and earlier with, this year, professor David Nutt and, of course, Arizona State University, and we’re looking towards other great opportunities in affordable r and d, always thinking about long term commercialization, not just funding projects, but thinking how we can make money from those projects. So the goal is the goal is more revenues and and and and keep growing the company as best we can while getting great outreach on on many different angles.

So thank you very much, and we really look forward to the next one. And I hope you all have a great rest of the summer.

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