Q2 2026 iFabric Corp Earnings Call

August 20, 2026

Moderator: Joining us, we have an update with iFabric, who recently reported their Q2 numbers, which were fantastic, carrying on with a record year. Here to tell you more about that is Hylton Karon, CEO, Hilton Price, CFO, Giancarlo Beevis, COO. Before we get started, just so we are clear on the format, the gentlemen are going to provide a very brief overview of the quarter. I think we have a lot of Q&A, so we will just jump right into Q&A fairly quickly. I do not believe that we will be working off a presentation, but this session will contain forward-looking statements. If you would like to know more about those, you can find them on the presentation posted on the website, which has been updated if you want to check that out.

Operator: Joining us, we have an update with iFabric, who recently reported their Q2 numbers, which were fantastic, carrying on with a record year. Here to tell you more about that is Hylton Karon, CEO, Hilton Price, CFO, Giancarlo Beevis, COO. Before we get started, just so we are clear on the format, the gentlemen are going to provide a very brief overview of the quarter. I think we have a lot of Q&A, so we will just jump right into Q&A fairly quickly. I do not believe that we will be working off a presentation, but this session will contain forward-looking statements. If you would like to know more about those, you can find them on the presentation posted on the website, which has been updated if you want to check that out.

Speaker #2: Joining us, we have an update with iFabric, who recently reported their Q2 numbers, which were fantastic, carrying on with their record year. So here to tell you more about that is Hilton Karen, CEO.

Speaker #2: Hilton Price, CFO. Giancarlo Bivis, COO. Before we get started, just so we're clear on the format, the gentlemen are going to provide a very brief overview of the quarter, and I think we have a lot of Q&A, so we'll just jump right into Q&A fairly quickly.

Speaker #2: I don't believe that we will be working off a presentation, but this session will contain forward-looking statements. If you'd like to know more about those, you can find them in the presentation posted on the website, which has been updated if you want to check that out.

Speaker #2: And like I said, there will be significant Q&A sections, so feel free to enter your questions in the box at the bottom. With that out of the way, I'll hand the mic over to one of the Hiltons.

Moderator: Like I said, there will be significant Q&A sections, so feel free to enter your questions in the box at the bottom. With that out of the way, I will hand the mic over to one of the Hiltons.

Operator: Like I said, there will be significant Q&A sections, so feel free to enter your questions in the box at the bottom. With that out of the way, I will hand the mic over to one of the Hiltons.

Hilton Price: I am in. Okay.

Speaker #2: Looks like it's Hilton Price.

Moderator: Looks like it's Hilton Price.

Operator: Looks like it's Hilton Price.

Speaker #3: Thank you. Good morning, everyone, and welcome. As I normally do, I'll start the webinar by saying that we put out a very comprehensive press release on the Q2 and 6-month numbers and results.

Hilton Price: Thank you. Good morning, everyone, and welcome. As I normally do, I will start the webinar by saying that we put out a very comprehensive press release on the Q2 and six-month numbers and results. The release, as well as the financial statements, management discussion, and analysis, can be viewed on our website at www.ifabriccorp.com. I am going to deal with what I consider the main or salient features of the results. I will start off with revenues. Q2 revenues came in at CAD 9.6 million compared to CAD 5.8 million in 2025, which was an increase of CAD 3.8 million or 65%. There is one item I would like to discuss here, and that is we provided CAD 650,000 in advertising support to customers. As required by IFRS, this is deducted from revenues. So in fact, our true amount invoiced to customers was around CAD 10.3 million. Look, I do not agree with this requirement.

Speaker #3: And the release, as well as the financial statements, management discussion, and analysis, can be viewed on our website at www.ifabriccorp.com. So, I'm going to deal with what I consider the main or salient features of the results.

Speaker #3: I'll start off with revenues. Q2 revenues came in at $9.6 million, compared to $5.8 million in 2025, which is an increase of $3.8 million, or 65%.

Hilton Price: I will start off with revenues. Q2 revenues came in at CAD 9.6 million compared to CAD 5.8 million in 2025, which was an increase of CAD 3.8 million or 65%. There is one item I would like to discuss here, and that is we provided CAD 650,000 in advertising support to customers. As required by IFRS, this is deducted from revenues. So in fact, our true amount invoiced to customers was around CAD 10.3 million. Look, I do not agree with this requirement.

Speaker #3: There's one item I'd like to discuss here. That is, we provided $650,000 in advertising support to customers, and as required by IFRS, this is deducted from revenues.

Speaker #3: So, in fact, our true amount invoiced to customers was around $10.3 million. But look, I don't agree with this requirement. I think it's stupid, but that is what it is.

Hilton Price: I think it is stupid, but it is what it is. So revenues were reduced by CAD 650,000. The rule is that if the customer gets to determine how the dollars are spent, it is a deduction from revenue. With regard to the six months revenues, those came in at a record CAD 37.1 million compared to CAD 12.9 million in 2025, which is an increase of CAD 24.2 million or 188%, an absolute record. I would like to take a few moments to discuss the seasonal nature of our business. In this regard, we have two kinds of programs: seasonal programs, and this would include products like swimwear, footwear. These are set programs and currently range in size from around CAD 3 million to CAD 8 million. They sell through fairly quickly, around two to three months. These programs will normally ship in Q1 and Q4.

Speaker #3: So, revenues were reduced by $650,000. The rule is that if a customer gets to determine how the dollars are spent, it's a deduction from revenue.

Speaker #3: With regard to the six-month revenues, those came in at a record $37.1 million, compared to $12.9 million in 2025, which is an increase of $24.2 million, or 188%.

Speaker #3: An absolute record. I'd like to take a few moments to discuss the seasonal nature of our business. In this regard, we have two kinds of programs.

Speaker #3: Seasonal programs—and this would include products like swimwear and footwear—are set programs, and currently range in size from around $3 million to $8 million.

Speaker #3: They sell through fairly quickly, around two to three months. These programs will normally ship in Q1 and Q4, and that's the reason why those are our biggest quarters historically.

Hilton Price: That is the reason why those are our biggest quarters historically. That may change in time as we get programs through the middle part of the year. At this point, those programs generally go out in Q1 and Q4. The second category of revenue is from replenishment. These are programs that run throughout the year. Those kind of products would be scrubs, leak-proof underwear, and the bulk of our intimate apparel. In the current quarter, we mainly focused on replenishment. I do not believe we did any set programs. So if you look at the 65% increase growth year-on-year, that is a good indication of strong momentum in my mind. Gross margins. On the face of it, margins dropped from 37% last year to 30% in the current quarter. Here again, the CAD 650,000 that we provided in advertising is deducted from margins.

Speaker #3: That may change in time, as we get programs through the middle part of the year, but at this point, those programs generally go out in Q1 and Q4.

Speaker #3: And the second category of revenues from replenishment—these are programs that run throughout the year. Those kinds of products would be scrubs, leak-proof underwear, and the bulk of our intimate apparel.

Speaker #3: So, in the current quarter, we mainly focused on replenishment. I don't believe we did any set programs. So, if you look at the 65% increase in growth year over year, that's a good indication of strong momentum, in my mind.

Speaker #3: Gross margins, on the face of it—margins dropped from 37% last year to 30% in the current quarter. And here again, the $650,000 that we provided in advertising is deducted from margins.

Speaker #3: Because it's deducted from revenue, it flows down to margins. So, the full 7% drop in margins is attributable to that $650,000 deduction for advertising.

Hilton Price: Because it is deducted from revenue, it flows down to margins. The full 7% drop in margins is attributable to that CAD 650,000 deduction for advertising. Going forward, we have taken the decision actually to provide less direct support to customers in favor of doing the advertising campaigns or the marketing ourselves in-house. We have hired specialists to do that. In our experience, retailers do not always spend the marketing dollars efficiently. I think actually we could do a better job. It also makes for far more consistent margins, which I think tends to confuse investors. Selling and administration expenses increased by CAD 800,000 in the quarter compared to 2025. Most of the increase is variable costs, such as royalties and commissions as a result of the increased revenues. Although we did do a lot more traveling in the quarter, and we have increased our staff complement year-over-year.

Speaker #3: Going forward, we're going to take a we've taken the decision, actually, to provide less direct support to customers in favor of doing the advertising campaigns or the marketing ourselves in-house.

Speaker #3: We've hired specialists to do that. In our experience, retailers don't always spend the marketing dollars efficiently. I think, actually, we could do a better job.

Speaker #3: It also makes for far more consistent margins, which I think tends to confuse investors. Selling and administration expenses increased by $800,000 in the quarter compared to 2025. Most of the increase is variable costs, such as royalties and commissions.

Speaker #3: As a result of the increased revenues—although we did do a lot more traveling in the quarter, and we have increased our staff complement year over year.

Speaker #3: So, that is part of the increase, but the bulk of the increase is variable costs. EBITDA came in at $715,000. Oh, let me just discuss one other thing before EBITDA.

Hilton Price: That is part of the increase, but the bulk of the increase is variable costs. EBITDA. That came in at CAD 715,000. Let me just discuss one other thing before EBITDA. In the quarter, I am pleased to report that we recognized CAD 925,000 as sundry income in respect of the recovery of Trump tariffs. This is net of our processing costs. The amount has been fully processed by U.S. Customs and Border Protection. To date, we have already received CAD 710,000 in cash. We have CAD 215,000 still to be received, which I believe will be received in the next quarter. EBITDA. EBITDA came in at CAD 715,000, a turnaround of about CAD 1 million from 2025. I was projecting break even, so the tariff recovery obviously did provide us with some earnings. Hey, I will take it. All gifts graciously received.

Speaker #3: In the quarter, I'm pleased to report that we recognized $925,000 as sundry income in respect of the recovery of tariffs—Trump tariffs. This is net of our processing costs.

Speaker #3: The amount is being fully processed by U.S. Customs, and to date, we've already received $710,000 in cash. We've got $215,000 still to be received, which I believe will be received in the next quarter.

Speaker #3: EBITDA came in at $715,000, a turnaround of about $1 million from 2025. I was projecting break-even, so the tariff recovery obviously did provide us with some earnings.

Speaker #3: I'll take it. All gifts graciously received. EBITDA for the 6 months is $5.8 million, compared to $0 in 2025, and that's an absolute record for the company.

Hilton Price: EBITDA for the six months is CAD 5.8 million, compared to zero in 2025, and that is an absolute record for the company. Anything else there? No. I think that is it for the profit and loss account or the income statement. In terms of our balance sheet, our balance sheet has been beefed up by our very successful capital raise that we closed in June. We received with bank net proceeds of around CAD 21 million. We finished the quarter with CAD 25 million in cash after paying off our credit line. Our working capital stood at around CAD 45.1 million. So together with available credit lines of about CAD 14 or CAD 15 million between our trade credits and our regular bank line, I have calculated that we can push revenues well north of CAD 100 million without the need for additional capital or debt. I think that is all I really have to say.

Speaker #3: Anything else there? No? Cool. I think that's it for the profit and loss account, or the income statement. In terms of our balance sheet, our balance sheet's been beefed up by a very successful capital raise that we closed in June.

Speaker #3: We received, or we banked, net proceeds of around $21 million. And we finished the quarter with $25 million in cash after paying off our credit line.

Speaker #3: And our working capital stood at around $45.1 million. So, together with available credit lines of about $14 or $15 million between our trade credits and our regular bank line, I've calculated that we can push revenues well north of $100 million without the need for additional capital.

Hilton Price: So together with available credit lines of about CAD 14 or CAD 15 million between our trade credits and our regular bank line, I have calculated that we can push revenues well north of CAD 100 million without the need for additional capital or debt. I think that is all I really have to say.

Speaker #3: Or debt. I think that's all I really have to say. I'm happy to answer any questions.

Hilton Price: I am happy to answer any questions.

Speaker #1: Okay, great. Thanks, Hilton. I had a bunch of questions come in in advance, so I'll start with those while the audience inputs any questions that they may have.

Moderator: Okay, great. Thanks, Hilton. I had a bunch of questions come in in advance, so I will start with those while the audience inputs any questions that they may have. Deposits paid to suppliers fell from CAD 1.87 million at December to CAD 884,000 at June, down 53%. In April, you said deposits were CAD 5 to CAD 8 million, and that when deposits go down, you have a problem. What is the number today, and what does it commit you to for Q4?

Operator: Okay, great. Thanks, Hilton. I had a bunch of questions come in in advance, so I will start with those while the audience inputs any questions that they may have. Deposits paid to suppliers fell from CAD 1.87 million at December to CAD 884,000 at June, down 53%. In April, you said deposits were CAD 5 to CAD 8 million, and that when deposits go down, you have a problem. What is the number today, and what does it commit you to for Q4?

Speaker #1: So, deposits paid to suppliers fell from $1.87 million at December to $884,000 at June, down 53%. In April, you said deposits were $5 to $8 million, and that when deposits go down, you have a problem?

Speaker #1: What's the number today, and what does it commit you to for Q4?

Hilton Price: Well, today the deposits have grown to CAD 5 million. That is indicative of the fact that all the programs that we are expecting for the latter part of the year are starting to materialize and crystallize. I think the deposit figure will grow a bit more. Then normally we put down 25%. If you times that number by four, that shows what is already in the books with more to come.

Speaker #3: Today, the deposits have grown to $5 million. So, that's indicative of the fact that all the programs that we're expecting for that part of the year are starting to materialize and crystallize.

Speaker #3: I think the deposits figure will grow a bit more, and that normally we put down 25%. So if you times that number by four, that shows what's already in the books, with more to come.

Speaker #2: Yeah. Also, just to add to that, we've negotiated some better terms with our suppliers, so our deposit numbers are a little bit lower on the front end.

Giancarlo Beevis: Yeah. Also, just to add to that, we have negotiated some better terms with our suppliers, so our deposit numbers are a little bit lower on the front end.

Hilton Price: Of course.

Speaker #2: So that's why you're seeing a little bit of a lower number on deposits.

Giancarlo Beevis: So that's why you're seeing a little bit of a lower number on deposits.

Speaker #1: Got it. And your 2025 segment note shows a 49% gross margin in intimate apparel, and 27.5% in intelligent fabrics, with IFTNA at 81% of revenue.

Moderator: Got it. Your 2025 segment note shows 49% gross margin in intimate apparels and 27.5% in intelligent fabrics with IFTNA at 81% of revenue. That arithmetic gives 32% blended, which is what you reported. You guided to the high 30s. What were the two segment gross margins in the H1, and what gets IFTNA above 27.5%?

Operator: Got it. Your 2025 segment note shows 49% gross margin in intimate apparels and 27.5% in intelligent fabrics with IFTNA at 81% of revenue. That arithmetic gives 32% blended, which is what you reported. You guided to the high 30s. What were the two segment gross margins in the H1, and what gets IFTNA above 27.5%?

Speaker #1: That arithmetic gives 32% blended, which is what you reported. You guided to the high 30s. What were the two segment gross margins in the first half, and what gets IFTNA above 27.5%?

Speaker #3: Well, I did mention that $650,000, which is all IFTNA, so that did impact IFTNA's margins. Our target for blended is 35%. Intimate apparel tends to be a bit higher, around about 49%, 50%.

Hilton Price: Well, I did mention that 650,000, which is all IFTNA, so that did impact IFTNA's margins. Our target for blended is 35%. Intimate apparel tends to be a bit higher, around about 49%, 50%. IFTNA, generally around 30% because we'll be dealing with major retailers. We do a work of higher volume, lower margin, and it depends on the product mix, what the ultimate margin for the quarter will be. If we do a higher proportion of intimates, we should see better margins. If we do a higher proportion of intelligent fabrics, the margins will drop.

Speaker #3: IFTNA is generally around 30% because we're dealing with major retailers. We do work off higher volume, lower margin, and it depends on the product mix what the ultimate margin for the quarter will be.

Speaker #3: We do a higher proportion of intimates, so we should see better margins. If we do a higher proportion of intelligent fabrics, the margins will drop.

Speaker #1: Okay. And then, talking about the marketing support to retailers, I think this is the first stated use of proceeds for the money that you raised.

Moderator: Okay. Talking about the marketing support to retailers, I think this is the first stated use of proceeds for the money that you raised. Should investors view this as a recurring cost of winning shelf space? What percentage of gross sales should we model for it going forward? Maybe you can just give it a little bit more color on what that program is.

Operator: Okay. Talking about the marketing support to retailers, I think this is the first stated use of proceeds for the money that you raised. Should investors view this as a recurring cost of winning shelf space? What percentage of gross sales should we model for it going forward? Maybe you can just give it a little bit more color on what that program is.

Speaker #1: Should investors view this as a recurring cost of winning shelf space? What percentage of gross sales should we model for it going forward? And maybe you can just give a little bit more color on what that program is?

Speaker #3: Yes, it will be recurring, but I think we're going to try and cut back on it and push back against retailers, because they just ask for a number, and quite frankly, we're no longer just accepting those kinds of numbers from retailers.

Hilton Price: Yes, it will be recurring, but I think we're gonna try and cut back on it, and push back against retailers because they just ask for a number. Quite frankly, we no longer just accept those kind of numbers from retailers. We'll fight back. I think we can do a better job. Yes, we still will provide some advertising directly to retailers, but our long-term strategy is to do the campaigns ourselves.

Speaker #3: We'll fight back. I think we can do a better job. So yes, we still will provide some advertising directly to retailers, but our long-term strategy is to do the campaigns ourselves.

Speaker #2: Yeah, and in fact, we've kind of already proved that strategy out with Target. On the Scrub program that we did, there was a big ask for some advertising dollars there that we pushed back and took on ourselves.

Giancarlo Beevis: Yeah. In fact, we've kind of already proved that strategy out with Target. On the scrub program that we did, there was a big ask for some advertising dollars there that we pushed back and took on ourselves and has really been doing well for us and for the program, and they're quite happy with it. I think we'll be successful doing that with further programs with them as well as the other retailers.

Speaker #2: And it has really been doing well for us and for the program, and they're quite happy with it. So I think we'll be successful doing that with further programs with them, as well as with the other retailers.

Speaker #1: Okay. And then, in July, you signed an agreement with GemStop SQ Inc. to formulate, manufacture, and commercialize active antimicrobial hard surface coating technology. Are you required to pay anything into this initiative?

Moderator: Okay. In July, you signed an agreement with GermstopSQ Inc. to formulate, manufacture, and commercialize active antimicrobial hard surface coating technology. Are you required to pay anything into this initiative, either a capital investment, marketing, or advertising support?

Operator: Okay. In July, you signed an agreement with GermstopSQ Inc. to formulate, manufacture, and commercialize active antimicrobial hard surface coating technology. Are you required to pay anything into this initiative, either a capital investment, marketing, or advertising support?

Speaker #1: Either a capital investment, marketing, or advertising support?

Speaker #3: Yes. We're going to pay all the development costs—we're going to pay for all testing, development. They will not charge us any fees. Obviously, all the work they do is their end of the contract.

Hilton Price: Yes. We're gonna foot all the development costs. We're gonna pay for all testing, development. They will not charge us any fees. Obviously, all the work they do is their end of the contract. But we'll pay for all the direct costs.

Speaker #3: But we'll pay for all the direct costs.

Speaker #1: Got it. And do you have any idea what the scope of that would be?

Moderator: Got it. Do you have any idea what the scope of that would be?

Operator: Got it. Do you have any idea what the scope of that would be?

Speaker #3: Well, it just depends how successful you are. The more we have to trial and error, the more extensive it will be. Obviously, if we get it right straight away, or in the short term, we'll obviously have a much lower cost.

Hilton Price: Well, it just depends how successful you are. The more we have to trial and error, the more expensive it will be. Obviously, if we get it right straight away or in the short term, we will obviously have a much lower cost.

Speaker #2: Yeah, and as we've done some preliminary work, we do have a decent base to start working off of. So we're hopeful it won't be too much trial and error.

Giancarlo Beevis: Yeah. As we have done some preliminary work, we do have a decent base to start working off of, so we are hopeful it will not be too much trial and error.

Speaker #1: Okay, I see a number of questions about Scrub, so maybe thematically we'll move into Scrub first. If anyone has questions related to that, please add them now so we can at least keep some sort of structure to the call.

Moderator: Okay. I see a number of questions about scrubs, so maybe thematically we will move into scrubs first. If anyone has questions related to that, please add them now so we can at least keep some sort of structure to the call. What is the status of Walmart U.S. adding more stores in 2026 and 2027?

Operator: Okay. I see a number of questions about scrubs, so maybe thematically we will move into scrubs first. If anyone has questions related to that, please add them now so we can at least keep some sort of structure to the call. What is the status of Walmart U.S. adding more stores in 2026 and 2027?

Speaker #1: So, what is the status of Walmart USA adding more stores in 2026 and 2027?

Speaker #2: Yeah, kind of same as where we were. As soon as there's space available for us, we'll add into additional stores. They have a lot of inventory from the incumbent that they're trying to move through.

Giancarlo Beevis: Yeah. So kind of same as where we were. As soon as there is space available for us, we will add into additional stores. They have a lot of inventory from the incumbent that they are trying to move through. But all signs are still, as we have mentioned previously, that we would look to be a good part of their business in the scrubs by fall of 2027.

Speaker #2: But all signs are still, as we've mentioned previously, that we would look to be a good part of their business in the Scrubs by fall of '27.

Speaker #1: And are you looking.

Hilton Price: And then

Hilton Price: Can I jump in here, John? Connor. Am I correct in saying that our bigger goal is to get more shelf space?

Speaker #2: Yeah. Can I jump in here?

Speaker #3: John Carter. John Carter. Am I correct in saying that our bigger goal is to get more shelf space?

Speaker #2: Our bigger goal is to get more shelf space, potentially introduce new brands that are owned by us as well, and to increase SKU count, as well as add doors.

Giancarlo Beevis: Our bigger goal is to get more shelf space, potentially introduce new brands that are owned by us as well, and to increase SKU count as well as add doors. It is a combination of all of it.

Speaker #2: It's a combination of all of it.

Hilton Price: Cool.

Speaker #3: Cool.

Speaker #1: And then, are you planning on launching Scrubs globally in 2027?

Moderator: Are you planning on launching scrubs globally in 2027?

Operator: Are you planning on launching scrubs globally in 2027?

Speaker #2: I think we'll obviously be looking to continue our international growth. We've seen that we've gone into Marks & Spencer with our PROTECs that we announced last year.

Giancarlo Beevis: I think we're obviously looking to continue our international growth. We've seen that we've gone into Marks & Spencer with our PROTX2 that we announced last year. We just announced this week the expansion of our swimwear program from North America into five European countries. Yes, it is on the radar, but I think what we'll do is we'll do it through our current retail partners. Costco sells globally. Walmart sells almost globally. So we'll continue to work through those partners as we grow international.

Speaker #2: We just announced this week the expansion of our swimwear program from North America into five European countries. So yes, it is on the radar, but I think what we'll do is we'll do it through our current retail partners.

Speaker #2: Costco sells globally. Walmart sells almost globally. So we'll continue to work through those partners as we grow internationally.

Speaker #1: And then will you consider a premium pricing for scrubs on future brands once it gets traction in the market, or once EPA approval is received?

Moderator: Will you consider a premium pricing for scrubs on future brands once it gets traction in the market or once EPA approval is received?

Operator: Will you consider a premium pricing for scrubs on future brands once it gets traction in the market or once EPA approval is received?

Speaker #2: Potentially. I mean, all of that's on the table. But right now, the strategy we took to be at the more available price point seems to be working.

Giancarlo Beevis: Potentially. I mean, all of that's on the table, but right now, the strategy we took to be at the more available price point seems to be working. If 60% of people in the US buy their scrubs at Walmart, that's where we want to be.

Speaker #2: If 60% of people in the U.S. buy their scrubs at Walmart, that's where we want to be.

Speaker #1: And what's the current time frame for replenishment orders for the scrubs retailers? Is it every three months? And if so, are scrubs being held in inventory for these retailers?

Moderator: What is the current timeframe for replenishment orders for the scrubs retailers? Is it every 3 months? If so, are scrubs being held in inventory for these retailers?

Operator: What is the current timeframe for replenishment orders for the scrubs retailers? Is it every 3 months? If so, are scrubs being held in inventory for these retailers?

Speaker #2: The Scrubs is a 52-week-a-year replenishment program, so we ship Scrubs every single week. And yes, we hold for Walmart anywhere between 12 and 16 weeks of stock in our warehouses.

Giancarlo Beevis: The scrubs is a 52-week-a-year replenishment program, so we ship scrubs every single week. Yes, we hold for Walmart anywhere between 12 and 16 weeks of stock in our warehouses.

Speaker #1: And my understanding is that Walmart is still working through some legacy Scrubs product. Do you have any update on that?

Moderator: My understanding is that Walmart is still working through some legacy scrubs product. Do you have any update on that?

Operator: My understanding is that Walmart is still working through some legacy scrubs product. Do you have any update on that?

Speaker #2: Just trying to get rid of it. The previous supplier had a huge amount of inventory in there that they are clearing out at their pace, given their markdown strategy and what they have available to do—what they need to do to get through it.

Giancarlo Beevis: Just trying to get rid of it. The previous supplier had a huge amount of inventory in there that they are clearing out at their pace, given their markdown strategy and what they have available to do, what they need to do to get through it. Outside of that, I do not.

Speaker #2: But outside of that, I don't.

Speaker #1: And are you expecting to be the only scrubs brand at Walmart?

Moderator: Are you expecting to be the only scrubs brand at Walmart?

Operator: Are you expecting to be the only scrubs brand at Walmart?

Speaker #2: I can't answer that. I don't know. Love to be.

Giancarlo Beevis: I can't answer that. I don't know. Love to be.

Speaker #3: I'd like to be. I'm just going to jump in. Even if we're not the only one, there's a high likelihood that we're going to supply more than one brand in the future.

Hilton Price: I'd like to. I'm just going to jump in. Even if we're not the only, there's a high likelihood that we're going to supply more than one brand in the future. So, there are plans to expand our opportunity there. So it might appear to look like two different suppliers, but it could very well both be us. But we'll be the only one with a clinically proven antibacterial. So I think that's where the benefit is for us.

Hylton Karon: I'd like to. I'm just going to jump in. Even if we're not the only, there's a high likelihood that we're going to supply more than one brand in the future. So, there are plans to expand our opportunity there. So it might appear to look like two different suppliers, but it could very well both be us.

Speaker #3: So, there are plans to expand our opportunity there. So, it might appear to look like two different suppliers, but it could very well both be us.

Speaker #3: But we'll be the only one with a clinically proven antibacterial, so I think that's where the benefit is for us.

Hilton Price: But we'll be the only one with a clinically proven antibacterial. So I think that's where the benefit is for us.

Speaker #2: Right.

Giancarlo Beevis: Right.

Hylton Karon: Right.

Speaker #1: And I think I just have one last question on scrubs, which is: Where are you at in the process for getting into a hospital network to purchase scrubs?

Moderator: I think I just have one last question on scrubs, which is where are you at in the process for getting into a hospital network to purchase scrubs, and, yeah, maybe you could provide an update there.

Operator: I think I just have one last question on scrubs, which is where are you at in the process for getting into a hospital network to purchase scrubs, and, yeah, maybe you could provide an update there.

Speaker #1: And, yeah, maybe you could provide an update there.

Speaker #2: Yeah, we're still working with the Memorial Care Group, which is where we did the clinical trial. It's a cyclical thing. They have contracts that we have to wait until they expire.

Giancarlo Beevis: Yeah. We are still working with the MemorialCare Group, which is where we did the clinical trial. It is a cyclical thing. They have contracts that we have to wait until they expire. So we are going through the process, but we are still beginning stages of that. Once we get in there, I think it will open up quite a few opportunities elsewhere. But in the last 6 months, we have been focused on executing the retail strategy that we decided was the lower-hanging fruit.

Speaker #2: So, we are going through the process, but we're still in the beginning stages of that. Once we get in there, I think it will open up quite a few opportunities elsewhere.

Speaker #2: But in the last six months, we've been focused on executing the retail strategy that we decided was the lower-hanging fruit.

Speaker #1: Got it. And then, how does the international growth playbook differ from North America? You touched on it a little bit when relating to scrubs, but I think this is more of a generic question for all brands.

Moderator: How does the international growth playbook differ from North America? You touched on it a little bit when relating to scrubs, but I think this is more of a generic question for all brands.

Operator: How does the international growth playbook differ from North America? You touched on it a little bit when relating to scrubs, but I think this is more of a generic question for all brands.

Speaker #3: Yeah.

Giancarlo Beevis: Yeah, I think kind of the same way.

Speaker #2: I think kind of the same way. I mean, our focus is North America because we're so entrenched in it, and we have the opportunity on our doorstep within the United States.

Hilton Price: Right.

Hylton Karon: Right.

Giancarlo Beevis: I mean, our focus is North America because we are so entrenched in it, and we have the opportunity on our doorstep within the United States. Those specific retailers in the US are actually coming to us with programs. So we will deal with that first because it is on our table currently. But internationally, we would like to grow. Obviously, there is Asda in the UK, which is the Walmart of the UK. We have had some discussions with Walmart de México. So it is there, it is ready to go. I think scrubs are a universal item. Everywhere needs them. So that will obviously be one that is a key for us, but same with a lot of our other product categories that we will get into, going forward probably into the later half of 2027.

Speaker #2: And those specific retailers in the U.S. are actually coming to us with programs. So we'll deal with that first because it's on our table currently.

Speaker #2: But internationally, we'd like to grow. Obviously, there's ASDA in the UK, which is the Walmart of the UK. We've had some discussions with Walmart Mexico, so it's there.

Speaker #2: It's ready to go. I think scrubs are a universal item—everywhere needs them. So that'll obviously be one that's key for us. But it's the same with a lot of our other product categories that we'll get into.

Speaker #2: Going forward, probably into the latter half of 2027.

Speaker #3: Yeah. And wasn't our peer review done by a UK medical journal?

Hilton Price: Yeah. Wasn't peer review done by a UK medical journal?

Speaker #2: Correct. Yes. Correct.

Giancarlo Beevis: Right. Yes, correct.

Speaker #3: Okay, so that may resonate there as well.

Hilton Price: Okay. That may resonate there as well.

Speaker #2: Yeah.

Giancarlo Beevis: Yeah.

Speaker #1: And is there any metrics you can give us as to how to measure royalties and commissions in selling costs? Do most of the commissions relate to new product introductions, or to—oh, sorry.

Moderator: Is there any metrics you can give us as to how to measure royalties and commissions in selling costs? Do most of the commissions relate to new product introductions or to all sales generally? In other words, should we expect selling costs to correlate directly to revenue growth? It's a long one. It's the top question in the box if you guys need to read it.

Operator: Is there any metrics you can give us as to how to measure royalties and commissions in selling costs? Do most of the commissions relate to new product introductions or to all sales generally? In other words, should we expect selling costs to correlate directly to revenue growth? It's a long one. It's the top question in the box if you guys need to read it.

Speaker #1: Do most of the commissions relate to new product introductions or to all sales generally? In other words, should we expect selling costs to correlate directly to revenue growth?

Speaker #1: It's a long one. It's the top question in the box if you guys need to read it.

Speaker #3: Yeah. The answer is yes, it will correlate. And no, we don't pay commissions on all our sales. I don't believe we pay any commissions on intermittent apparel.

Hilton Price: Yeah, the answer is yes, it will correlate, and no, we do not pay commissions on all our sales. I do not believe we pay any commissions on intimate apparel. It is very specific, Intelligent Fabric programs like for Walmart, where a representative or a consultant opens the door, and they get continual revenue stream from us. There might be others like it in the future. But it is not every product that we sell that generates commissions. Not every product generates royalties. Obviously, our own brands are royalty-free.

Speaker #3: It's very specific intelligent fabric programs for Walmart, where the representative or consultant opened the door and they get a continual revenue stream from us. There might be others like that in the future, but it's not every product that we sell that generates commissions.

Speaker #3: And not every product generates royalties. Obviously, our own product—our own brands—are royalty-free.

Speaker #1: Okay. And then, is management exploring structural melt extrusion or inherent physical fiber innovations for long-term product development, or is this strategic focus remaining strictly on proprietary chemical treatments applied to existing yarns and fabrics?

Moderator: Okay, and then, is management exploring structural melt extrusion or inherent physical fiber innovations for long-term product development? Or is the strategic focus remaining strictly on proprietary chemical treatments applied to existing yarns and fabrics?

Operator: Okay, and then, is management exploring structural melt extrusion or inherent physical fiber innovations for long-term product development? Or is the strategic focus remaining strictly on proprietary chemical treatments applied to existing yarns and fabrics?

Giancarlo Beevis: Yeah, we have done both. Yeah, we have done both in the past. We do have some fiber technologies that we are looking at as a long-term R&D project. But we have found topical a much more integratable way of using our technologies in the market. But yes, there are some developments on the horizon for us in that realm as well.

Speaker #3: We've done both.

Speaker #2: Yeah, we've done both in the past. We do have some fiber technologies that we're looking at as a long-term R&D project, but we've found topical a much more integratable way of using our technologies in the market.

Speaker #2: But yes, there are some developments on the horizon for us in that realm as well.

Moderator: Can you comment on sell-through as you have visibility?

Speaker #1: And can you comment on sell-through, as you have visibility?

Operator: Can you comment on sell-through as you have visibility?

Speaker #2: Yeah. I mean, our scrub programs have been doing well. All of our new intermittent apparel launches have been doing incredibly well. Leakproof continues to thrive.

Giancarlo Beevis: Yeah. I mean, our scrub programs have been doing well. All of our new intimate apparel launches have been doing incredibly well. Leak-proof continues to thrive. Giving exact sell-throughs, I don't think would be appreciated by our retailers. But we don't have anything that's not selling through, let's put it that way.

Speaker #2: Giving exact sell-throughs, I don't think we would be appreciated by our retailers. But everything is—we don't have anything that's not selling through, let's put it that way.

Speaker #1: And can you provide any guidance or any updates on how New Dish is doing?

Moderator: Can you provide any guidance or any updates on how Nudish is doing?

Operator: Can you provide any guidance or any updates on how Nudish is doing?

Speaker #2: It's taken off quite well. It's doing well at Target. It's doing well at Kohl's. And in fact, we're expanding that brand out to not only being the solution bra and bra accessory products, we'll be looking to launch more performance-type underwear and bras coming in the future, as well as some sleepwear and some loungewear that will also bear the new dish brand.

Giancarlo Beevis: Well, it's taken off quite well. It's doing well at Target. It's doing well at Kohl's, and in fact, we're expanding that brand out to not only being the solution bra and bra accessory products. We'll be looking to launch more performance type underwear and bras coming in the future, as well as some sleepwear and some loungewear that will also bear the Nudish brand. Then we have some other opportunities that we're looking at to use that brand as well.

Speaker #2: And then, we have some other opportunities that we're looking at to use that brand as well.

Speaker #1: And for Costco Roots Footwear, can you provide an update on how that program is going?

Moderator: For Costco Roots footwear, can you provide an update on how that program's going?

Operator: For Costco Roots footwear, can you provide an update on how that program's going?

Speaker #2: The first one's gone through, and we're busy finalizing one for the following year. So that's where we're at right now.

Giancarlo Beevis: The first one's gone through, and we're busy finalizing one for the following year. That's where we're at right now.

Speaker #1: And Roots Swimwear, is that still a program that's...?

Moderator: Roots swimwear, is that still a program that's-

Operator: Roots swimwear, is that still a program that's-

Speaker #2: Yeah, continuing into next year. Yeah.

Giancarlo Beevis: Yep, continuing into next year. Yep.

Speaker #1: How would you compare the sizes of those two programs? Obviously, footwear is larger.

Moderator: How would you compare the sizes of those two programs? Obviously, footwear is larger.

Operator: How would you compare the sizes of those two programs? Obviously, footwear is larger.

Speaker #2: Yeah, we generally don't give breakdowns on what our product mix is and how that leads to revenue, but they're both substantial programs and both doing very well, and look to be in for the foreseeable future.

Giancarlo Beevis: Yeah, we generally don't give breakdowns on what our product mix is and how that leads to revenue, but they're both substantial programs and both doing very well and look to be in for the foreseeable future.

Speaker #1: And could you provide an update on the commercial rollout and initial retailer feedback regarding the partnership with the LAD Collection to bring functional bedding to the North American market?

Moderator: Could you provide an update on the commercial rollout and initial retailer feedback regarding the partnership with the Lad Collective to bring functional bedding to the North American market?

Operator: Could you provide an update on the commercial rollout and initial retailer feedback regarding the partnership with the Lad Collective to bring functional bedding to the North American market?

Speaker #2: Yeah, that's something we're working on now. We expect it to be somewhere in the market in 2027. The acceptance has been, obviously, very good.

Giancarlo Beevis: Yeah, that's something we're working on now. We expect it to be somewhere in the market in 2027. The acceptance has been obviously very good. The physical properties of the bedding itself are incredible, as well as the technology that we're going to add to it. So the initial feedback has been great. We're fitting into retailer calendars to make sure we get a launch in the not so distant future.

Speaker #2: The physical properties of the bedding itself are incredible, as well as the technology that we're going to add to it. So, the initial feedback has been great.

Speaker #2: We're fitting into retailer calendars to make sure we get a launch in the not-so-distant future.

Speaker #1: Okay. I think that covers everything on specific programs. We saw a step up in G&A expenses over Q1. What is the baseline expectation in Q3 and Q4?

Moderator: Okay. I think that covers everything on specific programs. We saw a step in G&A expenses over Q1. What is the baseline expectation in Q3 and Q4?

Operator: Okay. I think that covers everything on specific programs. We saw a step in G&A expenses over Q1. What is the baseline expectation in Q3 and Q4?

Hilton Price: Baseline?

Speaker #3: Based on?

Speaker #1: G&A expenses.

Moderator: G&A expenses.

Operator: G&A expenses.

Hilton Price: Our goal remains to make 15% net after G&A, so I would rather look at it that way. Our G&A relative to, we are not a big company, so our G&A is actually very manageable. I do not see massive growth in our core G&A. If there is any growth, it is going to be in variable costs related to revenue.

Speaker #3: Our goal remains to make 15% net after G&A, so I'd rather look at it that way. We don't look at G&A relative to— I mean, we're not a big company, so G&A is actually very, very manageable.

Speaker #3: I don't see massive growth in our core G&A. If there's any growth, it's going to be in variable costs related to revenue. We will add people.

Moderator: Yeah.

Operator: Yeah.

Hilton Price: We will add people. We will be adding people, but we will also be using AI, so maybe we will get some kind of benefit there.

Speaker #3: We will be adding people, but we're also using AI, so maybe we'll get some kind of benefit there.

Speaker #1: Yeah. Next webinar is just chatbots, right, guys? It'll be AI.

Moderator: Yeah. Next webinar is just chatbots, right, guys?

Operator: Yeah. Next webinar is just chatbots, right, guys?

Hilton Price: Yeah.

Moderator: It will be AI.

Operator: It will be AI.

Hilton Price: I will be replaced by AI. You will not see me anymore.

Speaker #3: I've been replaced by AI. You won't see me.

Speaker #1: You and me both, Hilton. How should we think about selling expenses on a quarterly basis going forward, given the rollout of multiple new products?

Moderator: You and me both, Hilton. How should we think about selling expenses on a quarterly basis going forward, given the rollout of multiple new products? Will the share as a percent share of gross revenue change materially?

Operator: You and me both, Hilton. How should we think about selling expenses on a quarterly basis going forward, given the rollout of multiple new products? Will the share as a percent share of gross revenue change materially?

Speaker #1: Will this share as a percent share of gross revenue change materially?

Speaker #3: I don't believe so. At larger revenues, the increase will be fairly nominal, yeah.

Hilton Price: I do not believe so.

Moderator: Okay.

Operator: Okay.

Hilton Price: As larger revenues, the increase will be

Giancarlo Beevis: Very small.

Hilton Price: Fairly nominal. Yeah.

Speaker #1: Yeah. And can you talk about the investment in new product launches, broken down by capex, if any, and the hard surface chemicals and marketing campaigns to roll out in Target internationally, etc.?

Moderator: Yeah. Can you talk about the investment in new product launches broken down by CapEx, if any, and the hard surface chemicals and marketing campaigns to roll out and target internationally, et cetera?

Operator: Yeah. Can you talk about the investment in new product launches broken down by CapEx, if any, and the hard surface chemicals and marketing campaigns to roll out and target internationally, et cetera?

Giancarlo Beevis: The investment in new product launches, we do specifically, I'll go into the Target scrubs. As Hilton had mentioned, we took on the advertising there. It wasn't a massive investment, but we used it wisely, and I think probably better than would've been handled in-house. For example, if we would've done it through Target, they would've put it in their marketing machine and would've been marketing to the person looking for bananas at Target who's not necessarily looking for scrubs. By handling it ourselves, we're able to focus it and really dive into the customer, trying to let them know that now Target carries scrubs and how great those scrubs are. While I can't really give you the dollar figure of what we invested, it was substantially less than what they wanted, and substantially more effective than what we believe theirs would've been.

Speaker #2: The investment in new product launches—I mean, we do. Specifically, I'll go into the Target scrubs. As Hilton had mentioned, we took on the advertising there.

Speaker #2: It wasn't a massive investment, but we used it wisely, and I think probably better than it would have been handled in-house. For example, if we would have done it through Target, they would have put it into their marketing machine and would have been marketing to the person looking for bananas at Target, who’s not necessarily looking for scrubs.

Speaker #2: By handling it ourselves, we're able to focus it and really dive into the customer, trying to let them know that now Target carries scrubs and how great those scrubs are.

Speaker #2: So while I can't really give you the dollar figure of what we invested, it was substantially less than what they wanted, and substantially more effective than what we believe theirs would have been. When we started the scrubs at Walmart, we paid for some signage in every store where all of our scrubs went, and intimate apparels. We paid for some sidekicks that go in about 1,100 Walmart stores.

Giancarlo Beevis: When we started the scrubs at Walmart, we paid for some signage in every store where all of our scrubs went. In intimate apparels, we paid for some sidekicks that go in about 1,100 Walmart stores. But again, that's real estate now we own, so it's ours for the next however long. It's not going anywhere because we paid for it. So, I can't put a number on it, but there is small investments on major programs that we launch. For hard surface chemicals, it was a nominal fee that we started with, and as Hilton mentioned, we'll pay for all the direct cost testing, things of that nature. That's pretty much it. I think that's as best we can answer that.

Speaker #2: But again, that's real estate now we own, so it's ours for the next however long. It's not going anywhere because we paid for it.

Speaker #2: So I can't put a number on it, but there are small investments on major programs that we launch. I mean, for hard surface chemicals, it was a nominal fee that we started with, and as Hilton mentioned, we'll pay for all the direct costs, testing, things of that nature.

Speaker #2: That's pretty much it. I think that's the best we can answer that.

Speaker #1: And then, on the Target oral launch, the press release mentioned 400 stores. How should we think about the rollout across those locations? Is there an incumbent, like at Walmart?

Moderator: On the Target Aura launch, the press release mentioned 400 stores. How should we think about the rollout across those locations? Is there an incumbent like at Walmart?

Operator: On the Target Aura launch, the press release mentioned 400 stores. How should we think about the rollout across those locations? Is there an incumbent like at Walmart?

Speaker #2: No. So we are the only Target that didn't sell scrubs before this launch. We were the only ones. They put it out to all the major scrub companies in North America to be on the clinically validated study and technology that are on the scrubs.

Giancarlo Beevis: No. Target didn't sell scrubs before this launch. We were the only ones. They put it out to all the major scrub companies in North America to be the supplier. They chose us predicated primarily on the clinically validated study and technology that are on the scrubs. They saw the value. So those 400 stores would've launched almost all at the same time. They should've been at the same time, but over about a four to five-week span, most of the stores get them set. That just happened a couple of months ago. So those stores should be fully set by now. We know it's doing well. We know it's continuing through next year, so now it's really just to expand, same as Walmart, expand SKU count, expand store count, and continue to grow it.

Speaker #2: They saw the value. So those 400 stores would have launched almost all at the same time. They should have been at the same time, but over a span of four to five weeks, most of the stores got them set.

Speaker #2: And that just happened a couple of months ago. So those stores should be fully set by now. We know it's doing well. We know it's continuing through next year.

Speaker #2: So now it's really just to expand—same as Walmart—expand SKU count, expand store count, and continue to grow it.

Speaker #1: And how did they pick those 400 locations? Just out of curiosity, are there certain markets where they think they'll do well? Are there certain locations that they just use to test any new products?

Moderator: How did they pick those 400 locations, just out of curiosity? Are there certain markets that they think they will do well in? Are there certain locations that they just use to test any new products?

Operator: How did they pick those 400 locations, just out of curiosity? Are there certain markets that they think they will do well in? Are there certain locations that they just use to test any new products?

Giancarlo Beevis: Typically, we get told by a retailer. With this particular program, they asked for some of our guidance as to where we would see the best value. We put them near major medical systems, major medical schools, things of that nature. Not all of them went there because it depends on store space planning for Target. Yes, we were able to help them strategically pick some certain locations out of those 400 that we thought would benefit from having the scrubs and would possibly have more people walking into a Target looking for scrubs.

Speaker #2: Typically, we are told by a retailer with this particular program, and they asked for some of our guidance as to where we would see the best value.

Speaker #2: So, we put them near major medical systems, major medical schools, things of that nature. Not all of them went there, because it depends on source-based planning for target.

Speaker #2: But yes, we were able to help them strategically pick certain locations out of those 400 that we thought would benefit from having the scrubs, and would possibly have more people walking into a Target looking for scrubs.

Speaker #1: Got it. And have you thought about a B2C program for scrubs in the US, like direct-to-consumer?

Moderator: Got it. Have you thought about a B2C program for scrubs in the US?

Operator: Got it. Have you thought about a B2C program for scrubs in the US?

Moderator: Like direct to consumer?

Operator: Like direct to consumer?

Speaker #2: Currently, no. But we'll see in the future.

Giancarlo Beevis: Currently, no. We will see in the future.

Speaker #1: And there are a lot of moving parts in the near term. Do you have an update on the long-term strategy for growth beyond 2026 or 2027?

Moderator: There are a lot of moving parts in the near term. Do you have an update on long-term strategy for growth beyond 2026, 2027?

Operator: There are a lot of moving parts in the near term. Do you have an update on long-term strategy for growth beyond 2026, 2027?

Speaker #2: Hilton, do you want to take that, or do you want me to? Go for it. Okay. Sorry, I got distracted on that one.

Giancarlo Beevis: Hilton, do you want to take that or you want me to?

Hilton Price: Go for it.

Giancarlo Beevis: Okay. Sorry. I got distracted on that one. The long-term growth strategy, again, there is a lot of organic growth. We want to continue to grow in the retailers we are. We have so much ample opportunity. Scrubs at Walmart, we are 8 SKUs in 1,400 stores. It could be 12 SKUs in 4,800 stores. That is our focus in the near term. It might take more than the near term to fully execute all of that and get into all those stores and fully penetrate. Obviously, the same thing at Target. Scrubs is a major focus with us in all aspects. Internationally growing, having the VERZUS brand, regardless of what category it is, expand into five new countries is very important for us. We want to make that a prevalent brand that other retailers want to bring in and put in-store.

Speaker #2: I mean, the long-term growth strategy, again, is there a lot of organic growth? We want to continue to grow within the retailers we are in.

Speaker #2: We have so much ample opportunity. Scrubs at Walmart were eight SKUs in 1,400 stores. It could be 12 SKUs in 4,800 stores. So that's our focus in the near term.

Speaker #2: And it might take more than the near term to fully execute all of that and get into all those stores and fully penetrate—obviously, the same thing at Target.

Speaker #2: Scrubs is a major focus for us in all aspects. Internationally, we're growing. I mean, having the Versus brand—regardless of what category it is—expand to five new countries is very important for us.

Speaker #2: We want to make that a prevalent brand that other retailers want to bring in and put in-store. We think that the launch in Europe in-store will lead to North American in-store placement.

Giancarlo Beevis: We think that the launch in Europe in-store will lead to North American in-store placement, hopefully as soon as spring of next year. That is kind of where we are through 2026 and at least through 2027. Also, the new product categories that we have not announced as of yet that are not necessarily apparel, still textile-based but more hard, I do not want to call them hard surface, but hard product. That is a big focus on us to diversify the different categories that we are in through 2026 and 2027. Some cool new things launching that once we can say, we will say. I think that is pretty much it for 2026, 2027. We are already, believe it or not, starting to look at 2028. That is where we are.

Speaker #2: Hopefully as soon as spring of next year, so that’s kind of where we are through ’26 and at least through ’27.

Speaker #2: Also, the new product categories that we haven't announced as of yet, that are not necessarily apparel, are still textile-based but more hard—I want to call them hard surface—but hard product.

Speaker #2: That's a big focus for us—to diversify the different categories that we're in through '26 and '27. Some cool new things are launching that, once we can say, we will say.

Speaker #2: I think that's pretty much it for '26, '27. We're already, believe it or not, starting to look at '28. So that's where we are.

Speaker #1: And I think if not on this call, on previous ones, Hilton, you've mentioned a long-term EBITDA target of 15% to 20%. When do you think that sort of comes into play for investors?

Moderator: I think, if not on this call, on previous ones, Hylton, you have mentioned a long-term EBITDA target of 15% to 20%. When do you think that sort of comes into play for investors? Is that 2028, 2029?

Operator: I think, if not on this call, on previous ones, Hylton, you have mentioned a long-term EBITDA target of 15% to 20%. When do you think that sort of comes into play for investors? Is that 2028, 2029?

Speaker #1: Is that '28, '29?

Hilton Price: Well, it is almost looking good for this year, so we will see it later.

Speaker #2: Well, it's almost looking good for this year, so we'll see how it plays out.

Speaker #1: And at what point would you start to think about a possible dividend?

Moderator: At what point would you start to think about a possible dividend?

Operator: At what point would you start to think about a possible dividend?

Speaker #2: As soon as we need more money—no, I think we're cognizant of that. One of the problems was, when we're using credit lines, that becomes difficult.

Hilton Price: As soon as we need more money. No, I think we are cognizant of that. One of the problems was when we are using credit lines, that becomes difficult. If we maintain a cash situation, it could be sooner than you think, possibly within the next two years. We would like to get a dividend on the table. It might start small, but we would like to start with something.

Speaker #2: If we maintain a cash situation, it could be sooner than you think—possibly within the next two years. We would like to get a dividend on the table.

Speaker #2: It might start small, but we would like to start with something.

Speaker #1: Yeah, makes sense. I think also, you're considered high growth, so keeping cash for growth right now is probably what investors, for the most part, would want you to do.

Moderator: Yeah, makes sense. I think also, you are considered high growth, so keeping cash for growth right now is probably what investors, for the most part, would want you to do.

Operator: Yeah, makes sense. I think also, you are considered high growth, so keeping cash for growth right now is probably what investors, for the most part, would want you to do.

Speaker #2: Yeah, I think we're better off spending our money to develop IP, because IP will create the best long-term value. Certainly, it will create a lot more interest in our company.

Hilton Price: Yeah, I think we are better off spending our money to develop IP, because IP will create the best long-term value. Certainly, it will create a lot more interest in our company. I am not saying we will get bought out, but we will have a lot more big company eyes on us. For those big billion-dollar companies, 500 million, 1 billion is just a rounding difference.

Speaker #2: I'm not saying we'll get bought out, but we'll have a lot more big company eyes on us. And for those big billion-dollar companies, $500 million, $1 billion is just a rounding difference.

Moderator: Mm-hmm. What is the probability of securing sales agreements with Costco US? I am assuming that is specifically for scrubs.

Operator: Mm-hmm. What is the probability of securing sales agreements with Costco US? I am assuming that is specifically for scrubs.

Speaker #1: What's the probability of securing sales agreements with Costco USA? I'm assuming that's specifically for scrubs.

Speaker #2: I don't know how it relates to scrubs, but we're working on it. We signed a new license with a brand. As we noted, I think it was about a month ago, that we've gotten strategically for entry into Costco US and Sam's Club in the US.

Giancarlo Beevis: I do not know how it relates to scrubs, but we are working on it. We signed a new license with a brand, as we noted, I think it was about a month ago, that we have got strategically for entree into Costco US and Sam's Club in the US. I could shake my crystal ball and see what it says, but a high probability is my guess, but we are working on that currently.

Speaker #2: So, I mean, I could shake my crystal ball and see what it says, but I would say it's a high probability—that's my guess. But we're working on that currently.

Speaker #1: And I think you've already talked about the R&D pipeline, and the new initiative. I mean, you can't really relate any information on that one. The last question.

Moderator: I think you have already talked about R&D pipeline and new initiative. I mean, you cannot really relay any information on that one.

Operator: I think you have already talked about R&D pipeline and new initiative. I mean, you cannot really relay any information on that one.

Hilton Price: Can I just jump in here and say, Debra, we have got a whole lot of other technologies, some of which we have not actually brought to the forefront to create businesses out of. There is plenty within our current portfolio that when we start devoting some time and attention to them, they will represent growth points within the company.

Speaker #2: Excuse me. I'll just jump in here and say, Deborah, we've got a whole lot of other technologies, some of which we haven't actually brought to the forefront to create businesses out of.

Speaker #2: So there's plenty within our current portfolio that, when we start devoting some time and attention to them, will represent growth points within the company.

Giancarlo Beevis: It seems to be that the product pipeline seems to be a recurring theme here. Just a quick future state item talking about. We're working on a combination of PROTX2 with one of our other technologies called DreamSkin in a wound care environment, where DreamSkin is specifically developed to help your skin heal faster. So when we combine the two products together, obviously PROTX2 keeps the infection away while DreamSkin will help your wound heal in a faster state. That is something we're working on a wound care type of product. Just to give a little bit of carrot going forward, those are some of the markets that we're working on and some of the products we're working on for probably late 2027, early 2028.

Speaker #2: It seems to be that the product pipeline seems to be a recurring theme here. So just a quick future state item. Talking about, I mean, we're working on a combination of PROTACs with one of our other technologies called Dreamskin in a wound care environment where Dreamskin is specifically developed to help your skin heal faster.

Speaker #2: So when we combine the two products together, obviously, PROTACs keep the infection away, while Dreamskin will help your wound heal in a faster state.

Speaker #2: That is something we're working on—a wound care type of product. And just to give a little bit of a carrot going forward, those are some of the markets we're working on and some of the products we're working on for probably late 2027, early 2028.

Speaker #1: Would something like that require another clinical trial, or does the one that you've conducted sort of cover you off?

Moderator: Would something like that require another clinical trial, or does the one that you've conducted sort of cover you off?

Operator: Would something like that require another clinical trial, or does the one that you've conducted sort of cover you off?

Speaker #2: It wouldn't require a clinical trial. It requires some regulatory work, but last year, we announced—I believe it was last year, it could have been two years ago—that we registered as a medical device for some of our products.

Giancarlo Beevis: Wouldn't require a clinical trial. It would require some regulatory work. But last year, we announced, I believe it was last year, it could've been 2 years, that we registered as a medical device for some of our products. These types of products would fall under that registration and was part of why we started the medical device registration early.

Speaker #2: These types of products would fall under that registration, and it was part of why we started the medical device registration early.

Speaker #1: Do you require any other studies, inpatient studies, things like that?

Moderator: Do you require any other studies, in-hospital studies, things like that?

Operator: Do you require any other studies, in-hospital studies, things like that?

Speaker #2: We don't require it, but I saw the question there. Are we going to do any more? We may. I think that we will look to do something on other soft surfaces within a hospital—potentially ward curtains, potentially bed sheets, things of that nature.

Giancarlo Beevis: We don't require, but I saw the question there, are we going to do any more? We may. I think that we will look to do something on other soft surfaces within a hospital, potentially ward curtains, potentially bedsheets, things of that nature. We do have hospital groups that are in the US that are interested, MemorialCare being one. Another one that's probably the third-largest healthcare system in the US, who has expressed interest in doing some kind of study with us. The end of the question there is to prove that the scrubs reduce infection rates as opposed to loads on the scrubs. It's all part and parcel. If you reduce the amount of bacteria living in an environment, it can directly link, and there's theoretical proof that we can show that it does reduce infection rates. I don't know that doing another scrub study would really help.

Speaker #2: We do have hospital groups in the US that are interested—Memorial Care being one. Another one, which is probably the third largest healthcare system in the US, has also expressed interest in doing some kind of study with us.

Speaker #2: The end of the question there is to prove that the scrubs reduce infection rates, as opposed to loads on the scrubs. It's all part and parcel.

Speaker #2: If you reduce the amount of bacteria living in an environment, it can directly link, and there's theoretical proof that we can show that it doesn't reduce infection rates.

Speaker #2: So, I don't know that doing another scrub study would really help, but we would like to show it across multiple different soft surface items.

Giancarlo Beevis: We would like to show it across multiple different soft surface items.

Speaker #1: And just in terms of your strategy, your market is so huge—the end market for what you could possibly do. Is your strategy going to stay more specifically in your lane of textiles, fabrics, apparel, shoes, and then do licensing agreements for other sub-sectors or other industries?

Moderator: Just in terms of your strategy, your market's so huge, the end market for what you can possibly do. Is your strategy going to stay more specifically in your lane of textiles, fabrics, apparel, shoes, and then do licensing agreements for other sort of sub-sectors or other industries?

Operator: Just in terms of your strategy, your market's so huge, the end market for what you can possibly do. Is your strategy going to stay more specifically in your lane of textiles, fabrics, apparel, shoes, and then do licensing agreements for other sort of sub-sectors or other industries?

Speaker #2: We'll see. We'll take on where we think we can do it well and we can do it better. And if there are other items specifically—maybe the wound care is an opportunity where we license it to a Medline or a Cardinal Health or something like that.

Giancarlo Beevis: We'll see. We'll take on where we think we can do it well, and we can do it better, and if there are other items, specifically maybe the wound care is an opportunity where we license it to a Medline or a Cardinal Health or something like that is an opportunity. But where we think we can do the best job, we'll keep it in-house.

Speaker #2: That is an opportunity. But where we think we can do the best job, we'll keep it and have it.

Speaker #1: And would you license some of your core technologies to new markets like Asia or LatAm, or globally? Scrubs is huge, right? But that is something you would potentially look at?

Moderator: Would you license some of your core technologies to new markets like Asia or LATAM or?

Operator: Would you license some of your core technologies to new markets like Asia or LATAM or?

Giancarlo Beevis: Potentially

Moderator: I mean, globally, scrubs is huge, right?

Operator: I mean, globally, scrubs is huge, right?

Giancarlo Beevis: Yeah.

Moderator: But that is something you would potentially look at? One last question, I think, and if anyone has any additional ones, feel free to jam them in there, and we will try and cover them off. So appreciate the commentary on revenue seasonality. Given Q4, I am not sure that this is true, but they say given Q4 is expected to be the highest revenue quarter. I think that is generally seasonally, maybe not for 2026. But can you discuss how Q3 is tracking so far? I do not think you can really provide guidance, but maybe you could talk a little bit about what you are seeing for the H2 of the year.

Operator: But that is something you would potentially look at? One last question, I think, and if anyone has any additional ones, feel free to jam them in there, and we will try and cover them off. So appreciate the commentary on revenue seasonality. Given Q4, I am not sure that this is true, but they say given Q4 is expected to be the highest revenue quarter. I think that is generally seasonally, maybe not for 2026. But can you discuss how Q3 is tracking so far? I do not think you can really provide guidance, but maybe you could talk a little bit about what you are seeing for the H2 of the year.

Speaker #1: One last question, I think. And if anyone has any additional ones, feel free to add them in, and we'll try to cover them off.

Speaker #1: I appreciate the commentary on revenue seasonality. Given Q4, I'm not sure that this is true, but they say Q4 is expected to be the highest revenue quarter.

Speaker #1: I think that's generally seasonal—maybe not for 2026—but can you discuss how Q3 is tracking so far? I don't think you can really provide guidance, but maybe you could talk a little bit about what you're seeing for the second half of the year.

Speaker #2: Oh, I would anticipate Q3 being mainly replenishment-oriented. We may get some of the said programs started late in the quarter. John Carter can speak to that.

Hilton Price: I would anticipate Q3 being mainly replenishment-oriented. We may get some of the set programs start later in the quarter. Giancarlo can speak to that. Sometimes the timing does not always line up year-on-year, so it just depends at the end of the day.

Speaker #2: Sometimes the timing doesn't always line up. You're on your own. So it just depends at the end of the day. But as a rule, Q1 and Q4 will be our biggest quarters.

Giancarlo Beevis: Yeah.

Hilton Price: As a rule, Q1 and Q4 will be our biggest quarters.

Speaker #3: Yeah, and I think that Q3 will be an improvement over last year. I think we could squeeze maybe one program in. Again, it really depends on timing and when we actually ship the goods.

Giancarlo Beevis: Yeah. I think that Q3 will be an improvement over last year. I think we could squeeze maybe one program in. Again, really depends on timing and when we actually ship the goods. If it doesn't go in Q3, it'll just add to the bigger number in Q4. We like to look at the business as an annual business, not a quarter to quarter. That's what our goals are, is to make sure that the year-over-year numbers are where we expect them to be.

Speaker #3: But if it doesn't go in Q3, it'll just add to the bigger number in Q4. So, we like to look at the business as an annual business, not quarter to quarter.

Speaker #3: So, that's what our goals are: to make sure that the year-over-year numbers are where we expect them to be.

Speaker #4: I'm going to jump in. I think it's important for investors, when they're looking at our quarters, to compare this year's quarter to the same quarter last year.

Hylton Karon: I'm going to jump in.

Moderator: Yep.

Operator: Yep.

Hylton Karon: I think it's important for the investors, when they're looking at our quarters, to compare quarter this year to quarter last year. Don't look at Q2 and Q1 and say, "Well, you did so much in Q1. How does it relate to Q2?" It's more important for us because of seasonality to look at quarter this year to quarter last year. That's a better way of looking at the performance of the company, and we've exceeded every number from year to year. To Giancarlo's point, I really think that when you put the 12 months together, that's where you're really going to see quite impressive growth.

Speaker #4: Don't look at Q2 and Q1 and say, "Well, you did so much in Q1. How does it relate to Q2?" It's more important for us, because of seasonality, to look at this quarter this year compared to this quarter last year.

Speaker #4: That's a better way of looking at the performance of the company, and we've exceeded every number from year to year. And to John Carter's point, I really think that when you put the 12 months together, that's where you're really going to see quite impressive growth.

Speaker #1: So, investors should look at a trailing 12-month basis if they want to be looking at revenue and profitability.

Moderator: Investors should look at a trailing 12-month basis if they want to be looking at revenue and profitability.

Operator: Investors should look at a trailing 12-month basis if they want to be looking at revenue and profitability.

Hilton Price: Makes sense. Yep, sure.

Speaker #2: Yep. Sure.

Speaker #1: And just for clarity's sake, I think you've been very consistent all year since you reported Q1—that Q1 was an anomalous quarter. And, while you don't provide formal guidance,

Moderator: Just for clarity's sake, because I think you've been very consistent all year since you reported Q1, that Q1 was an anomalous quarter. While you do not provide formal guidance, investors should sort of look at a 20% growth quarter-over-quarter for the rest of the year. Is that still consistent with your messaging?

Operator: Just for clarity's sake, because I think you've been very consistent all year since you reported Q1, that Q1 was an anomalous quarter. While you do not provide formal guidance, investors should sort of look at a 20% growth quarter-over-quarter for the rest of the year. Is that still consistent with your messaging?

Speaker #1: Investors should sort of look at a 20% growth quarter-over-quarter for the rest of the year. Is that still consistent with your messaging?

Speaker #2: Look at the annual, and then let's look at the percentage growth. It'll be impressive, I think. Get out of this quarter-to-quarter thing.

Hilton Price: Look at the annual, then let's look at the percentage growth, and it will be impressive. I think get out of this quarter-to-quarter thing. It is an annual business.

Speaker #2: It's an annual business.

Speaker #1: All right. Well, it looks good annually so far. So, what are you guys most excited about for the company? Which categories, which regions, which geographies?

Moderator: All right. Well, looks good annually so far. So what are you guys most excited about for the company? Which categories, which regions, which geographies? What makes you the most excited right now?

Operator: All right. Well, looks good annually so far. So what are you guys most excited about for the company? Which categories, which regions, which geographies? What makes you the most excited right now?

Speaker #1: Just—yeah, what makes you the most excited right now?

Speaker #2: I think, obviously, scrubs is an easy one. I think that's one of them for sure. We're very excited about the opportunity with the hard surface.

Giancarlo Beevis: I think obviously scrubs is an easy one. I think that that is one of them for sure. We are very excited about the opportunity with the hard surface. We are super excited about bedding. The question about the Lad Collective was pertinent. There is a lot of interest around it. They have done a heck of a job on their end advertising and getting it out in their markets, and we think we can really capitalize on that here. Then I think the new categories that we have not announced yet, once we announce, the market will be really excited about. Probably things they never thought we would be in. But we have found a niche, and we believe it will resonate. So at least for me, that is the exciting part.

Speaker #2: We're super excited about betting. The question about the live collective was pertinent. There's a lot of interest around it. They've done a heck of a job on their end advertising and getting it out in their markets, and we think we can really capitalize on that here.

Speaker #2: And then I think the new categories that we haven't announced yet, once we announce them, the market will be really excited about—probably things they never thought we'd be in.

Speaker #2: But we've found a niche, and we believe it'll resonate. So, at least for me, that's the exciting part.

Speaker #1: Great. Well, I don't see any other questions. If anyone has any additional questions, feel free to reach out and I'll get those answered. If anyone wants a one-on-one call, we can arrange that as well.

Moderator: Great. Well, I do not see any other questions. If anyone has any additional questions, feel free to reach out, and I will get those answered. If anyone wants a one-on-one call, we can arrange that as well. Thanks to the audience for your participation, your questions, and thank you to the management team for your time, and congratulations on a great year so far. I mean, beyond the growth that you are showing, you have really changed the capitalization of the company. You have brought in some phenomenal shareholders as supporters. I think it has been a transformative year for iFabric in a number of different ways, so you should be really proud.

Operator: Great. Well, I do not see any other questions. If anyone has any additional questions, feel free to reach out, and I will get those answered. If anyone wants a one-on-one call, we can arrange that as well. Thanks to the audience for your participation, your questions, and thank you to the management team for your time, and congratulations on a great year so far. I mean, beyond the growth that you are showing, you have really changed the capitalization of the company. You have brought in some phenomenal shareholders as supporters. I think it has been a transformative year for iFabric in a number of different ways, so you should be really proud.

Speaker #1: Thank you to the audience for your participation and your questions. Thank you also to the management team for your time, and congratulations on a great year so far.

Speaker #1: I mean, beyond the growth that you're showing, you've really changed the capitalization of the company. You've brought in some phenomenal shareholders as supporters. I think it's been a transformative year for iFabric in a number of different ways.

Speaker #1: So you should be really proud.

Speaker #2: Thank you very much. Amy is not one to disappoint anyone.

Giancarlo Beevis: Thank you.

Hylton Karon: Thank you very much.

Hilton Price: Our aim is not to disappoint anyone.

Speaker #1: Definitely don't disappoint me, Hilton. I'm watching.

Moderator: Definitely don't disappoint me, Hilton. I'm watching.

Operator: Definitely don't disappoint me, Hilton. I'm watching.

Speaker #2: Okay. We are going to try our best to disappoint no one. You take care.

Hilton Price: Okay. Okay. We are going to try our best to disappoint no one.

Speaker #1: Okay. Thank you. Have a good afternoon. Bye.

Moderator: Okay. Thank you. Have a good afternoon.

Operator: Okay. Thank you. Have a good afternoon.

Hilton Price: You too.

Moderator: Bye.

Operator: Bye.

Operator: Goodbye

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