Star Metro - GLG Life Tech Corporation Reports 2026 Second Quarter Financial Results

FINANCIAL SUMMARY

The Company reported revenues of $2.3 million in the second quarter of 2026, a decrease of 19% compared with $2.9 million in revenues for the second quarter of 2025. The Company reported gross profit for continuing operations of $0.5 million for the three months ended June 30, 2026, compared to $0.4 million in gross profit for the same period last year. The gross profit margin was 22% for the three months ended June 30, 2026, compared to 15% for the same period in 2025, or an increase of seven percentage points.

For the six months ended June 30, 2026, the Company reported revenues of $4.7 million, a decrease of 23% compared with $6.0 million in revenues for the comparable period in 2025. The Company reported gross profit for continuing operations of $0.8 million for the six months ended June 30, 2026, compared to $0.9 million in gross profit for the same period last year. The gross profit margin was 17% for the six months ended June 30, 2026, compared to 15% for the same period in 2025, or a decrease of two percentage points.

For the three months ended June 30, 2026, compared to the same period in 2025, SG&A expenses were even at $0.3 million. For the six months ended June 30, 2026, compared to the same period in 2025, SG&A expenses were even at $0.6 million.

For the three months ended June 30, 2026, the Company had net loss attributable to the Company from continuing operations of $6.1 million, an increase in net loss of $29.9 million over the comparable period in 2025 (net income of $28.2 million), when the Company recorded a substantial one-time gain from its disposal of its Runhai subsidiary.

For the six months ended June 30, 2026, the Company had net loss attributable to the Company from continuing operations of $11.6 million, an increase in net loss of $32.2 million over the comparable period in 2025 (net income of $20.6 million).

The Company reported net loss per share from continuing operations of $0.16 for the second quarter 2026, a $0.78 increase in net loss per share relative to the second quarter of 2025 ($0.62 net income from continuing operations per share). For the first six months of 2026, the Company reported net loss per share from continuing operations of $0.30, an $0.84 increase in net loss per share relative to the comparable period in 2025 ($0.54 net income from continuing operations per share).

CORPORATE DEVELOPMENTS

The Company has held its Annual General Meeting of Shareholders on June 30, 2026, at its Corporate Headquarters in Richmond, B.C. The shareholders voted in favor of all five nominated directors, with favorable votes for each exceeding 99%. Dr. Luke Zhang continues as Chairman of the Board and Chief Executive Officer and Mr. Brian Palmieri continues as Vice Chairman of the Board. Mr. David Bishop, Madame Liu Yingchun and Mr. Simon Springett continue as directors of the Company.

Company Outlook

In recent years, management focused particularly on mitigating the losses - especially from a cash or EBITDA perspective - that the Company suffered in prior years and to ameliorate the Company's financial position. As a result of those sustained losses, the Company has lacked the cash necessary to fully fund the business operations and strategic product initiatives. The Company continues to manage its cash flows carefully to mitigate risk of insolvency and Management's efforts have been successful in improving the Company's performance, particularly its cash flows, with the Company regularly producing positive EBITDA. On the other hand, interest charges, most of which continue to be accrued rather than paid, continue to have significant impact on the Company's income statement and balance sheet. As a result of these efforts, in recent years and at a present, management has been successful in improving the Company's cash flows compared to prior years. Nevertheless, without an infusion of cash in the months ahead, the Company may not be able to realize its strategic plans and could eventually cease to be a going concern.

A factor that has over time contributed to the Company's financial situation is the competitive price pressure in the stevia market over the last few years that has reduced mainstream "Reb A" products (such as Reb A 80 and Reb A 97) to the lowest price levels in years; less mainstream products such as "Reb M" as well as more specialized products have also more recently been facing similarly competitive price pressure. Monk fruit prices have also become highly competitive in the marketplace. To maintain margins at sustainable levels, the Company has focused on managing cost of goods sold by working with its exclusive supplier, HHY, and continues to strive for a mix of products that is weighted more heavily on higher margin, specialty products, and has focused more on direct sales rather than through distributors. Margins, however, remain slimmer than desired and the impact of special tariff actions remains unclear.

To address operating cash requirements, management previously negotiated revolving loan facilities with third parties for working capital purposes. Management continues to work with third parties for its working capital needs. This has been a significant departure from the Company's prior practice of arranging loans with related parties to fund the Company's operations and the Company has been successful in securing and managing these loan facilities.

Further, with an emphasis on maintaining positive cash flow, the Company has taken decisive steps in the last few years to reduce its SG&A costs as well as reduce the cost of goods sold. In that time period, both its North American operations and, while extant, its Chinese operations significantly reduced SG&A costs. For many years, the Company's production capacity had been far greater than its projected order levels, as it had then sought rapid increases in orders for Reb A products. Instead, a few years ago, the Company pivoted to focus on "right-sizing" its then-extant Chinese operations - i.e., to optimize staffing and production planning to meet the Company's then-projected production requirements while retaining the ability to accommodate growth in future order volumes - and management made significant progress in this area. These efforts, prior to disposing of the Chinese subsidiaries, enabled the Company to sell its goods at more competitive and/or more profitable prices, notwithstanding the competitive price pressures arising in the market. Against this historical backdrop, the Company strives to maintain product cost efficiencies through its production arrangement with HHY.

Management has also availed itself of opportunities to improve the Company's balance sheet - to improve the Company's working capital position and to alleviate the debt burden that has impeded the Company's progress for many years now. In 2020, management realized the sale of one of its two idle assets; the sale of the "Runhao" facility resulted in significant debt reduction. In 2023, the Company also realized significant debt reduction through the bankruptcy liquidation of its other long-idled asset, "Runyang". Shareholders, on May 22, 2025 (and as noted further above), approved the transfer of the Company's Runhai facility on terms similar to the previously consummated transfer of the Company's Runde facility. The Company has thereby removed Chinese bank debt from its books, with only related party debt and third-party working capital loans reflected as debt on its balance sheet. The Company has kept its manufacturing capabilities and practices intact through its contract relationship with HHY, comprised of essentially the same personnel and managed under the same strict protocols as was in place with the Company's Runde subsidiary, with manufacturing performed at the same Qingdao Runde facility.

While revenue trends were increasing from late 2023 into early 2025, Management has more recently observed indications that the growth trend - previously driven both by generally increasing sales volumes from existing customers and the acquisition of new customers - is at present no longer being sustained. It is possible that our customers' purchasing flows are being impacted by concern over global macroeconomic factors and/or in some cases (at least anecdotally) reflecting weakening consumer demand across an array of end customer products (not limited to products utilizing sweeteners). Nevertheless, Management continues to focus on ways to grow revenues - whether through innovative product offerings, new customer acquisition, ensuring customer retention, and other efforts - as Management remains driven in part, as a baseline goal, of ensuring EBITDA / cash flow. Management's efforts over the last two years have been successful in realizing that goal and Management aims to continue that trend.

Against this backdrop, the Company has faced significant regulatory hurdles. The Company had been cease-traded, as a result of its delay in filing its 2023 full-year financials (since filed, on June 28, 2024), pursuant to a British Columbia Securities Commission order (the failure-to-file cease trade order or "FFCTO"). As a result of that filing delay, the Company was also delayed in filing its interim first quarter financials for 2024 (filed on July 23, 2024). Further, the Company was under a delisting review initiated by the TSX, on the basis of the Company's share price and market capitalization remaining lower than the TSX's requirements, as well as the Company's sustained losses over the years and negative working capital situation, that as noted above, culminated in a decision by the TSX to delist the Company's shares effective close of business September 3, 2024.

The Company has since transferred its listing to the NEX exchange, where it is currently listed (as of September 4, 2024). While the FFCTO had been in effect during the transition to the NEX exchange, the Company was ultimately notified by the BCSC that the FFCTO has been lifted; since that time, Management has been in contact with the NEX exchange and has substantially prepared its submission to resume trading on the NEX exchange. The Company expects to submit its application to resume trading within the next ten days.

Although the regulatory hurdles are substantial, Management continues to have a positive outlook on the Company's ability to sustain and grow revenues, albeit with a cautious eye given global macroeconomic uncertainties and some signs of softened general market demand, at least in the near term. As Management seeks to have the Company's stock trading again, Management continues to focus on maintaining and increasing revenues, notwithstanding pricing pressures, as well as on maintaining and improving sales volumes and margins and increasing cash flows.

Cease-Trade Status

As noted in the Outlook section above, while the Company has been cease-traded since April of 2024, the FFCTO was ultimately revoked last year. Management has been in contact with the NEX exchange and is planning to submit its application to the exchange to resume trading within the next ten days.

SELECTED FINANCIALS

As noted above, the complete set of financial statements and management discussion and analysis for the three and six months ended June 30, 2026, are available on SEDAR and on the Company's website at www.glglifetech.com.

Results from Operations

The following results from operations have been derived from and should be read in conjunction with the Company's annual consolidated financial statements for 2025 and the condensed interim consolidated financial statements for the three- and six-month periods ended June 30, 2026.

Note regarding presentation of financials:

Discontinued Operations / Restatement - Runhai

In November 2024, and as further discussed in the Company's Management Circular (available on the Company's website) for the Company's Annual General and Special Meeting, held on May 22, 2025, the Company entered into a transfer agreement for its Runhai subsidiary, akin to the transfer agreement discussed above for Runde. Consummation of the transfer had been pending the shareholder vote at the Special Meeting, hence the Company reclassified Runhai's operations (idled since September 2023) into discontinued operations on a retrospective basis for years ended December 31, 2024 and 2023. With the shareholders having approved the consummation of the transfer agreement on May 22, 2025, the Company recorded the disposition of Runhai and its subsidiaries (Bengbu) in its second quarter interim financial filings.

Revenue

Revenue for the three months ended June 30, 2026, decreased by 19% to $2.3 million, a $0.5 million decrease compared to $2.9 million for the same period in 2025. This 19% decrease was primarily attributable to decreases in both unit prices (driven by overall market pricing pressures) and units sold for many of the Company's products, relative to the comparable 2025 period. International (ex-China) sales comprised 100% of revenues in the second quarter (100% in second quarter of 2025).

Revenue for the six months ended June 30, 2026, decreased by 23% to $4.7 million, a $1.4 million decrease compared to $6.0 million for the same period in 2025. This 23% decrease was primarily attributable to decreases in both unit prices (driven by overall market pricing pressures) and units sold for many of the Company's products, relative to the comparable 2025 period. International (ex-China) sales comprised 100% of revenues in the first six months of 2026 (100% in first six months of 2025).

Cost of Sales

For the three months ended June 30, 2026, the cost of sales decreased to $1.8 million, compared to a cost of sales of $2.4 million for the same period last year (a decrease in cost of sales of 25%). Cost of sales as a percentage of revenues was 78% for the second quarter, a seven-percentage point improvement compared to the second quarter of 2025 (85%). This seven-percentage point improvement in cost of sales as a percentage of revenues is attributable to several factors, including a more favorable mix of higher margin product sales relative to the second quarter of 2025, tariff rebates received in the second quarter of 2026, and favorable impact of foreign exchange rates relative to the second quarter of 2025.

For the six months ended June 30, 2026, the cost of sales decreased to $3.9 million, compared to a cost of sales of $5.1 million for the same period last year (a decrease in cost of sales of 25%). Cost of sales as a percentage of revenues was 83% for the first six months of 2026, a two-percentage point improvement compared to the first six months of 2025 (85%).

Gross Profit

Gross profit for the three months ended June 30, 2026, increased by 17% to $0.5 million, compared to $0.4 million in gross profit for the same period last year. This 17% increase in gross profit was driven by factors listed above in the Cost of Sales section. The gross profit margin was 22% for the second quarter of 2026, compared to 15% in the second quarter of 2025, for the same reasons as described above for the year-over-year comparison of cost of sales as a percentage of revenues.

Gross profit for the six months ended June 30, 2026, decreased by 9% to $0.8 million, compared to $0.9 million in gross profit for the same period last year. This 9% decrease in gross profit was driven primarily by the decrease in revenues for the first six months of 2026 compared to the first six months of 2025 as well as by a decrease in unit prices attributable to competitive price pressures in the stevia marketplace. The gross profit margin was 17% for the first six months of 2026, compared to 15% for the first six months of 2025.

Net Income (Loss) Attributable to the Company - Continuing Operations

For the three months ended June 30, 2026, the Company had net loss attributable to the Company from continuing operations of $6.1 million, an increase in net loss of $29.9 million over the comparable period in 2025 (net income of $28.2 million). This $29.9 million increase in net loss is attributable to (1) an increase in other expenses ($29.9 million) offset by (2) an increase in gross profit ($0.1 million).

For the six months ended June 30, 2026, the Company had net loss attributable to the Company from continuing operations of $11.6 million, an increase in net loss of $32.2 million over the comparable period in 2025 (net income of $20.6 million). This $32.2 million increase in net loss is attributable to (1) an increase in other expenses ($32.1 million) and (2) a decrease in gross profit ($0.1 million).

Quarterly Basic and Diluted Loss per Share

The basic loss and diluted loss per share from continuing operations was $0.16 for the three months ended June 30, 2026, compared with a basic and diluted net income per share from continuing operations of $0.62 for the comparable period in 2025. The basic and diluted loss per share for consolidated (continuing) operations was $0.16 for the second quarter of 2026 compared to net income per share of $0.73 for the second quarter of 2025.

The basic loss and diluted loss per share from continuing operations was $0.30 for the six months ended June 30, 2026, compared with a basic and diluted net income per share from continuing operations of $0.54 for the comparable period in 2025. The basic and diluted loss per share for consolidated (continuing) operations was $0.30 for the first six months of 2026 compared to net income per share of $0.63 for the comparable period in 2025.

Additional Information

Additional information relating to the Company, including our Annual Information Form, is available on SEDAR (www.sedar.com). Additional information relating to the Company is also available on our website (www.glglifetech.com).

For further information, please contact:

Simon Springett, Investor Relations
Phone: +1 (604) 285-2602 ext. 101
Fax: +1 (604) 285-2606
Email: [email protected]

About GLG Life Tech Corporation

GLG Life Tech Corporation is a global leader in the supply of high-purity zero calorie natural sweeteners including stevia and monk fruit extracts used in food and beverages. Additionally, to further meet the varied needs of the food and beverage industry, GLG maintains its Naturals+ product line, enabling it to supply a host of complementary ingredients reliably sourced through its supplier network in China. For further information, please visit www.glglifetech.com.

Forward-looking statements: This press release may contain certain information that may constitute "forward-looking statements" and "forward looking information" (collectively, "forward-looking statements") within the meaning of applicable securities laws. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases or words and phrases that state or indicate that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.

While the Company has based these forward-looking statements on its current expectations about future events, the statements are not guarantees of the Company's future performance and are subject to risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such factors include amongst others the effects of general economic conditions, consumer demand for our products and new orders from our customers and distributors, changing foreign exchange rates and actions by government authorities, uncertainties associated with legal proceedings and negotiations, industry supply levels, competitive pricing pressures and misjudgments in the course of preparing forward-looking statements. Specific reference is made to the risks set forth under the heading "Risk Factors" in the Company's Annual Information Form for the financial year ended December 31, 2025. In light of these factors, the forward-looking events discussed in this press release might not occur.

Further, although the Company has attempted to identify factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

As there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements, readers should not place undue reliance on forward-looking statements.

SOURCE: GLG Life Tech Corporation

View the original press release on ACCESS Newswire

K.Morrison--SMC