Reported Net Revenue of $11.0 Million and Margins of 40% for Second Quarter 2025

Adjusted EBITDA Improvement of $1.9 Million Year-Over-Year for First Six Months 2025

Starco Group Merger Expected to Close Before Year-End 2025, Delivering Enhanced Scale and Vertical Integration

Starco Brands, Inc. (the “Company” or “Starco Brands”) (OTCQB: STCB), inventor and acquirer of consumer products and brands, today reported financial results for the three- and six-month periods ended June 30, 2025.

Management Comments

Starco Brands Chairman & CEO Ross Sklar said: “Our first-half performance demonstrates strong customer demand and our team’s proven expertise in driving operational excellence. As a house of brands, Starco Brands continues to enhance efficiency and innovation while improving profitability across our portfolio of companies. We improved first-half Adjusted EBITDA by $1.9 million year-over-year while reducing operating expenses by 32%, excluding non-cash items, through decisive actions including workforce optimization and the strategic exit of unprofitable SKUs and underperforming retail channels. As we enter the high-selling season in the second half of 2025, we are exceptionally well-positioned to capitalize on this momentum and deliver strong results.”

Mr. Sklar continued, “We continue to move towards the transformational merger and integration of The Starco Group by year-end. This strategic combination will realize our long-held vision of creating a fully vertically integrated consumer products manufacturing and branded platform that unlocks synergies and growth opportunities and delivers the scale needed to compete on a global level.”

Second Quarter of 2025 Financial Results

Reported net revenue for the second quarter of 2025 was $11.0 million, compared to $15.0 million in the second quarter of 2024. Gross profit was $4.4 million for the second quarter of 2025, compared to $5.7 million in the second quarter of 2024. The year-over-year decline was primarily due to intentional portfolio optimization, where the Company strategically exited unprofitable SKUs and specific retail channels. The Company is prioritizing profitability by focusing resources on its higher margin direct-to-consumer and e-commerce channels.

Marketing, General and Administrative expenses decreased to $3.2 million, or 29% of reported net revenue in the second of 2025, compared to $4.5 million, or 30% of reported net revenue in the second quarter of 2024. Compensation expense decreased to $1.7 million in the second quarter of 2025, compared to $2.4 million in the second quarter of 2024. Professional fees decreased to $0.9 million in the second quarter of 2025, compared to $1.1 million in the second quarter of 2024. The year-over-year reduction in operating expenses reflects headcount adjustments and operational improvements implemented during the second quarter of 2025. No fair value share adjustment was recorded in the second quarter of 2025, compared to a loss of $8.7 million in the second quarter of 2024.

Reported unadjusted net loss for the second quarter of 2025 improved to $1.8 million, compared to a net loss of $11.6 million in the second quarter of 2024. The year-over-year reduction was primarily due to non-recurring period impacts, including a $8.7 million loss from changes in the fair value of stock payable to Soylent stockholders.

First Six Months of 2025 Financial Results

Reported net revenue for the first six months of 2025 was $21.9 million, compared to $30.2 million for the first six months of 2024. The year-over-year decline was primarily due to intentional portfolio optimization, where the Company strategically exited unprofitable SKUs and specific retail channels to focus resources on the Company’s higher margin direct-to-consumer and e-commerce channels. Gross profit was $9.2 million for the first six months of 2025, compared to $12.7 million for the first six months of 2024.

Marketing, General and Administrative expenses for the first six months of 2025 decreased to $6.6 million, or 30% of reported net revenue, compared to $9.8 million, or 33% of reported net revenue for the first six months of 2024. Compensation expense was $3.4 million for the first six months of 2025, compared to $5.0 million for the first six months of 2024. Professional fees were $1.7 million for the first six months of 2025, compared to $2.3 million for the first six months of 2024. The decrease in operating expenses reflects headcount adjustments, lower contractor services, lower royalty costs and the elimination of several vendor services. For the first six months of 2025 there was a gain on far value share adjustment of $3.7 million, compared to a loss of $10.6 million for the first six months of 2024.

Reported unadjusted net income for the first six months of 2025 improved to $28,839, as compared to net loss of $16.0 million for the first six months of 2024. The year-over-year reduction was primarily driven by a fair value gain of $3.7 million related to share-based adjustments recognized in the first six months of 2025. The prior year period was negatively impacted by a loss of $10.6 million associated with changes in the fair value of stock payable to Soylent stockholders.

Non-GAAP Adjusted EBITDA

Adjusted EBITDA, which is net loss adjusted for stock-based compensation, gain on disposal of property and equipment, one-time expenses that the Company reasonable believes will not gain on settlements, interest and other expense, net, depreciation of property and equipment, amortization of intangible assets, (recovery) provision for doubtful accounts, and provision for income taxes and certain other items that impact the periods presented. Adjusted EBITDA is provided so that investors have the same financial data that management uses to assess the Company’s operating results with the belief that it will assist the investment community in properly assessing the ongoing performance of the Company for the periods being reported and future periods. The presentation of this additional information is not meant to be considered a substitute for measures prepared in accordance with U.S. GAAP. Because Adjusted EBITDA excludes some, but not all, items that affect net income (loss) and is defined differently by different companies, our definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies. For reconciliation of GAAP Net Income (loss) to Adjusted EBITDA, see our reports we file from time-to-time with the SEC, which are available to read at www.sec.gov.

Adjusted EBITDA was a loss of approximately $221,000 for the second quarter of 2025, compared to a loss of $1.3 million for the second quarter of 2024. Adjusted EBITDA for the first six months of 2025 was a loss of approximately $188,000, compared to a loss of $2.1 million for the first six months of 2024.

Adjusted EBITDA is a non-GAAP financial measure. See the supplementary schedules in this press release for a reconciliation thereof to the most directly comparable GAAP measure.

Balance Sheet

As of June 30, 2025, the Company had approximately $0.9 million in cash, and approximately $8.4 million in inventory on its balance sheet compared to $1.2 million in cash, and approximately $8.2 million in inventory on its balance sheet as of December 31, 2024.

Second Quarter of 2025 Segment Review

Starco Brands: Starco Brands’ segment includes AOS, Whipshots and Winona Popcorn Spray. Segment gross revenues of $1.8 million for the second quarter of 2025, compared to $2.1 million for the second quarter of 2024. Segment gross profit of $0.9 million for the second quarter of 2025, compared to $1.1 million for the second quarter of 2024.

Skylar: Segment gross revenues of $2.4 million for the second quarter of 2025, compared to $1.9 million for the second quarter of 2024. Segment gross profit of $1.1 million for the second quarter of 2025, compared to $1.3 million for the second quarter of 2024.

Soylent: Segment gross revenues of $6.8 million for the second quarter of 2025, compared to $11.0 million for the second quarter of 2024. Segment gross profit of $2.4 million for the second quarter of 2025, compared to $3.3 million for the second quarter of 2024.

Forward-Looking Statements

Any statements in this press release about the STCB’s future expectations, plans and prospects, including statements about our proposed transaction, future operations, future financial position and results, market growth, new product launches and product growth, total revenue, as well as other statements containing the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” and similar expressions, constitute forward-looking statements within the meaning of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. The transaction may not actually close and STCB may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements, and you should not place undue reliance on the such forward-looking statements. All forward-looking statements are subject to assumptions, risks and uncertainties that may change at any time, and readers are therefore cautioned that actual results could differ materially from those expressed in any forward-looking statements. STCB undertakes no obligation to update any forward-looking statements as a result of new information, future developments or otherwise, except as expressly required by law. All forward-looking statements in this document are qualified in their entirety by this cautionary statement. The forward-looking statements included in this press release represent STCB’s views as of the date hereof. STCB anticipates that subsequent events and developments may cause STCB’s views to change.

About Starco Brands

Starco Brands (OTCQB: STCB) invents and acquires consumer products and brands with behavior-changing technologies that spark excitement in the everyday. Today, its portfolio companies include Whipshots, an alcohol whipped cream brand in partnership with Cardi B; Art of Sport, a premium body care and nutrition brand cofounded by Kobe Bryant; Winona Pure a line of Popcorn Seasoning and Cooking Sauce Sprays; Soylent Nutrition a dairy free meal replacement, protein and nutrition brand, and Skylar Beauty, a clean prestige fragrance and personal care brand partnered with Leah Kateb. A modern-day public holding company and invention factory to its core. Starco Brands publicly trades on the OTC stock exchange. Visit www.starcobrands.com for more information.

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